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Exhibit 10.8
EXECUTION COPY
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AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This
AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("the Agreement") is
made
and entered into as of October 23, 2007 (the "Effective Date") by
and between
WESTFIELD BANK, federally-chartered savings bank having an office
at 141 Elm
Street, Westfield, Massachusetts 01085 (the "Bank") and MICHAEL J.
JANOSCO,
JR., an individual residing at 41 Wilder Road, Sterling,
Massachusetts 01564
(the "Executive").
W I T N E S S E T H :
WHEREAS,
the Executive currently serves as Chief Financial Officer of
the
Bank, a subsidiary of Westfield Financial, Inc. (the
"Company");
WHEREAS,
the Bank desires to assure for itself the continued
availability
of the Executive's services as provided in this Agreement and the
ability of
the Executive to perform such services with a minimum of personal
distraction
in the event of a pending or threatened Change of Control (as
hereinafter
defined); and
WHEREAS,
the Executive is willing to continue to serve the Bank on the
terms and conditions hereinafter set forth;
NOW,
THEREFORE, in consideration of the premises and the mutual
covenants
and conditions hereinafter set forth, the Bank and the Executive
hereby agree
as follows:
Section 1.
Employment.
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The Bank
agrees to continue to employ the Executive, and the Executive
hereby agrees to such continued employment, during the period and
upon the
terms and conditions set forth in this Agreement.
Section 2.
Employment Period; Remaining Unexpired Employment Period.
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(a) The
terms and conditions of this Agreement shall be and remain in
effect during the period of employment established under this
section 2
("Employment Period"). The Employment Period shall be for an
initial term of
three years beginning on the Effective Date and ending on the third
anniversary
date of this Agreement, plus such extensions, if any, as are
provided pursuant
to section 2(b).
(b) The
Board of Directors of the Bank (the "Board") shall conduct an
annual review of the Executive's performance on or about each
anniversary of
the Effective Date (each, an "Anniversary Date") and may, on the
basis of such
review and by written notice to the Executive, offer to extend the
Employment
Period for an additional one (1)-year period. In such event, the
Employment
Period shall be deemed extended in the absence of objection from
the Executive
by written notice to the Bank given within ten (10) business days
after his
receipt of the Bank's offer of extension. Except as otherwise
expressly
provided in this Agreement, any reference in this Agreement to the
term
"Remaining Unexpired Employment Period" as of any date shall mean
the period
beginning on such date and ending on the day of the third (3rd)
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anniversary of the last Anniversary Date as of which the Employment
Period was
extended pursuant to this Section 2(b).
(c)
Nothing in this Agreement shall be deemed to prohibit the Bank at
any
time from terminating the Executive's employment during the
Employment Period
with or without notice for any reason; provided, however, that the
relative
rights and obligations of the Bank and the Executive in the event
of any such
termination shall be determined under this Agreement.
Section 3.
Duties.
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The
Executive shall serve as Chief Financial Officer of the Bank,
having
such power, authority and responsibility and performing such duties
as are
prescribed by or under the By-Laws of the Bank and as are
customarily
associated with such position. Subject to section 7 of this
Agreement, the
Executive shall devote his full business time and attention (other
than during
weekends, holidays, approved vacation periods, and periods of
illness or
approved leaves of absence) to the business and affairs of the Bank
and shall
use his best efforts to advance the interests of the Bank.
Section 4.
Cash Compensation.
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In
consideration for the services to be rendered by the Executive
hereunder, the Bank shall continue to pay to him a salary at an
annual rate of
$211,484, payable in approximately equal installments in
accordance
with the Bank's customary payroll practices for senior officers.
The Board
shall review the Executive's annual rate of salary at such times
during the
Employment Period as it deems appropriate, but not less frequently
than once
every twelve (12) months, and may, in its discretion, approve an
increase
therein. In addition to salary, the Executive may receive other
cash
compensation from the Bank for services hereunder at such times, in
such
amounts and on such terms and conditions as the Board may determine
from time
to time.
Section 5.
Employee Benefit Plans and Programs.
-----------------------------------
During the
Employment Period, the Executive shall be treated as an
employee of the Bank and shall be entitled to participate in and
receive
benefits under any and all qualified or non-qualified retirement,
pension,
savings, profit-sharing or stock bonus plans, any and all group
life, health
(including hospitalization, medical and major medical), dental,
accident and
long term disability insurance plans, and any other employee
benefit and
compensation plans (including, but not limited to, any incentive
compensation
plans or programs, stock option and appreciation rights plans and
restricted
stock plans) as may from time to time be maintained by, or cover
employees of,
the Bank in accordance with the terms and conditions of such
employee benefit
plans and programs and compensation plans and programs and
consistent with the
Bank's customary practices.
Section 6.
Indemnification and Insurance.
-----------------------------
(a) During
the Employment Period and for a period of six (6) years
thereafter, the Bank shall cause the Executive to be covered by and
named as an
insured under any policy or contract of insurance obtained by it to
insure its
directors and officers against personal liability
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for acts or omissions in connection with service as an officer or
director of
the Bank or service in other capacities at the request of the Bank.
The
coverage provided to the Executive pursuant to this section 6 shall
be of the
same scope and on the same terms and conditions as the coverage (if
any)
provided to other officers or directors of the Bank.
(b) To the
maximum extent permitted under applicable law, during the
Employment Period and for a period of six years thereafter, the
Bank shall
indemnify the Executive against and hold him harmless from any
costs, damages,
losses and exposures arising out of a bona fide action, suit or
proceeding in
which he may be involved by reason of his having been a director or
officer of
the Bank to the fullest extent and on the most favorable terms and
conditions
that similar indemnification is offered to any director or officer
of the Bank
or any subsidiary or affiliate thereof.
(c) The
Executive, the Company and the Bank agree that the termination
benefits described in this Section 6 are intended to be exempt from
Section
409A of the Internal Revenue Code ("Section 409A") pursuant to
Treasury
Regulation Section 1.409A-1(b)(10) as certain indemnification and
liability
insurance plans.
Section 7.
Outside Activities.
------------------
The
Executive may serve as a member of the boards of directors of
such
business, community and charitable organizations as he may disclose
to and as
may be approved by the Board (which approval shall not be
unreasonably
withheld); provided, however, that such service shall not
materially interfere
with the performance of his duties under this Agreement. The
Executive may also
engage in personal business and investment activities which do not
materially
interfere with the performance of his duties hereunder; provided,
however, that
such activities are not prohibited under any code of conduct or
investment or
securities trading policy established by the Bank and generally
applicable to
all similarly situated Executives. The Executive may also serve as
an officer
or director of the Company on such terms and conditions as the
Company and the
Bank may mutually agree upon, and such service shall not be deemed
to
materially interfere with the Executive's performance of his duties
hereunder
or otherwise result in a material breach of this Agreement. If the
Executive is
discharged or suspended, or is subject to any regulatory
prohibition or
restriction with respect to participation in the affairs of the
Bank, he shall
not directly or indirectly provide services to or participate in
the affairs of
the Bank in a manner inconsistent with the terms of such discharge
or
suspension or any applicable regulatory order.
Section 8.
Working Facilities and Expenses.
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The
Executive's principal place of employment shall be at the
Bank's
executive offices at the address first above written or at such
other location
as the Bank and the executive may mutually agree upon. The Bank
shall provide
the Executive at his principal place of employment with a private
office,
secretarial services and other support services and facilities
suitable to his
position with the Bank and necessary or appropriate in connection
with the
performance of his assigned duties under this Agreement. The Bank
shall provide
to the Executive for his exclusive use an automobile owned or
leased by the
Bank and appropriate to his position, to be used in the performance
of his
duties hereunder, including commuting to and from his personal
residence. The
Bank shall reimburse the Executive for his ordinary and necessary
business
expenses, including, without limitation, all expenses associated
with his
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business use of the aforementioned automobile, fees for memberships
in such
clubs and organizations as the Executive and the Bank shall
mutually agree are
necessary and appropriate for business purposes, and his travel
and
entertainment expenses incurred in connection with the performance
of his
duties under this Agreement, in each case upon presentation to the
Bank of an
itemized account of such expenses in such form as the Bank may
reasonably
require.
Section 9.
Termination of Employment with Severance Benefits.
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(a) The
Executive shall be entitled to the severance benefits described
in section 9(b) in the event that:
(i) his employment with the Bank terminates during the
Employment
Period as
a result of the Executive's voluntary resignation within ninety
(90) days
following:
(A) the failure of the Board to appoint or re-appoint or
elect or re-elect the Executive to the position with the Bank
stated in section 3 of this Agreement;
(B) if the Executive is a member of the Board, the failure of
the shareholders of the Bank to elect or re-elect the Executive
to
the Board or the failure of the Board (or the nominating
committee
thereof) to nominate the Executive for such election or
re-election;
(C) the expiration of a thirty (30)-day period following the
date on which the Executive gives written notice to the Bank of
its
material failure, whether by amendment of the Bank's Restated
Organization Certificate, the Bank's By-Laws, action of the
Board
or the Bank's shareholders or otherwise, to vest in the
Executive
the functions, duties, or responsibilities prescribed in section
3
of this Agreement, unless, during such thirty (30)-day period,
the
Bank cures such failure;
(D) the expiration of a thirty (30)-day period following the
date on which the Executive gives written notice to the Bank of
its
material breach of any term, condition or covenant contained in
this Agreement (including, without limitation any reduction of
the
Executive's rate of base salary in effect from time to time and
any
change in the terms and conditions of any compensation or
benefit
program in which the Executive participates which, either
individually or together with other changes, has a material
adverse
effect on the aggregate value of his total compensation
package),
unless, during such thirty (30)-day period, the Bank cures such
failure;
(E) a change in the Executive's principal place of employment
to a place that is not the principal executive office of the
Bank,
or a relocation of the Bank's principal executive office to a
location that is both more than twenty-five (25) miles away
from
the Executive's principal residence and more than twenty-five
(25)
miles away from the location of the Bank's principal executive
office on the date of this Agreement; or
(F) any material breach by the Bank of any material term,
condition or covenant contained in this Agreement; provided,
however, that the Executive shall
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have given notice of such materials adverse effect to the Bank,
and
the Bank has not fully cured such failure within thirty (30)
days
after such notice is deemed given; or
(ii) the Executive's employment with the Bank is terminated by
the
Bank for
any reason other than for "cause" as provided in section 11(a).
(b) Upon
the occurrence of any of the events described in section 9(a)
of
this Agreement, the Bank shall pay and provide to the Executive
(or, in the
event of his death thereafter and prior to payment, to his
estate):
(i) his earned but unpaid salary (including, without
limitation,
all items
which constitute wages under applicable law and the payment of
which is
not otherwise provided for in this section 9(b)) as of the date
of the
termination of his employment with the Company and the Bank,
such
payment to
be made at the time and in the manner prescribed by law
applicable
to the payment of wages but in no event later than thirty (30)
days after
termination of employment as defined in Treasury Regulation
Section
1.409A-1(h)(1)(ii);
(ii) the benefits, if any, to which he is entitled as a former
employee
under the employee benefit plans and programs and compensation
plans and
programs maintained for the benefit of the Company's and the
Bank's
officers and employees;
(iii) continued group life, health (including hospitalization,
medical
and major medical), dental, accident and long-term disability
insurance
benefits on substantially the same terms and conditions
(including
any required premium-sharing arrangements, co-payments and
deductibles) in effect for them immediately prior to the
Executive's
termination for the Remaining Unexpired Employment Period for
the
Executive
and his dependents. The coverage provided under this section
9(b)(iii)
may, at the election of the Company, be secondary to the
coverage
provided pursuant to section 9(b)(ii) and to any employer-paid
coverage
provided by a subsequent employer or through Medicare, with the
result
that benefits under the other coverages will offset the
coverage
required
by this section 9(b)(iii). The Executive, the Company and the
Bank agree
that the termination benefits described in this Section
9(b)(iii)
are intended to be exempt from Section 409A pursuant to
Treasury
Regulation Section 1.409A-1(b)(1) as non-taxable benefits;
(iv) a lump sum payment in an amount equal to the estimated
present
value of
the salary that the Executive would have earned if he had
continued
working for the Company and the Bank during the Remaining
Unexpired
Employment Period at the highest annual rate of salary achieved
during the
period of three (3) years ending immediately prior to the date
of
termination (the "Salary Severance Payment"). The Salary
Severance
Payment
shall be computed using the following formula:
n
(BS/PR)
SSP=3
[-------------------------------]
1
n
[1 + (I / PR)]
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where
"SSP" is the amount of the Salary Severance Payment (before the
deduction
of applicable federal, state and local withholding taxes); "BS"
is the
highest annual rate of salary achieved by the Executive during
the
period of
three (3) years ending immediately prior to the date of
termination; "PR" is the number of payroll periods that occur
during a
year under
the Company's normal payroll practices; "I" equals the
applicable
federal short term rate established under section 1274 of the
Internal
Revenue Code of 1986 (the "Code") for the month in which the
Executive's
termination of employment occurs (the "Short Term AFR") and
"n" equals
the product of the Remaining Unexpired Employment Period at
the
Executive's termination of employment (expressed in years and
fractions
of years) multiplied by the number of payroll periods that
occur
during a year under the Company's and the Bank's normal payroll
practices.
The Salary Severance Payment shall be made within five (5)
business
days after the Executive's termination of employment and shall
be in lieu
of any claim to a continuation of base salary which the
Executive
might otherwise have and in lieu of cash severance benefits
under any
severance benefits program which may be in effect for officers
or
employees of the Bank or the Company;
(v) a lump sum payment in an amount equal to the estimated
present
value of
the annual bonuses that the Executive would have earned if he
had
continued working for the Company and the Bank during the
Remaining
Unexpired
Employment Period at the highest annual rate of salary achieved
during the
period of three (3) years ending immediately prior to the date
of
termination (the "Bonus Severance Payment"). The Bonus
Severance
Payment
shall be computed using the following formula:
BSP = SSP x (ABP / ASP)
where
"BSP" is the amount of the Bonus Severance Payment (before the
deduction
of applicable federal, state and local withholding taxes);
"SSP" is
the amount of the Salary Severance Payment (before the
deduction
of
applicable federal, state and local withholding taxes); "BP" is
the
aggregate
of the annual bonuses paid or declared (whether or not paid)
for the
most recent period of three (3) calendar years to end on or
before the
Executive's termination of employment; and "SP" is the
aggregate
base salary actually paid to the Executive during such period
of three
(3) calendar years (excluding any year for which no bonus was
declared
or paid). The Bonus Severance Payment shall be made within five
(5)
business days after the Executive's termination of employment
and
shall be
in lieu of any claim to a continuation of participation in
annual bonus
plans of the Bank or the Company which the Executive might
otherwise
have;
(vi) a lump sum payment in an amount equal to the estimated
present
value of
the long-term incentive bonuses that the Executive would have
earned if he had
continued working for the Company and the Bank during
the
Remaining Unexpired Employment Period (the "Incentive Severance
Payment").
The Incentive Severance Payment shall be computed using the
following
formula:
ISP = (SSP / RUP) x (ALTIP / ALTSP) x Y
where
"ISP" is the amount of the Incentive Severance Payment (before
the
deduction
of applicable federal, state and local withholding taxes);
"SSP" is
the amount of the Salary
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Severance
Payment (before the deduction of applicable federal, state and
local
withholding taxes); "ALTIP" is the aggregate of the most
recently
paid or
declared (whether or not paid) long-term incentive compensation
payments
(but not more than three (3) such payments) for performance
periods
that end on or before the Executive's termination of
employment;
"ALTSP" is
the aggregate base salary actually paid to the Executive
during the performance
periods covered by the payments included in
"ALTIP"
and excluding base salary paid for any period for which no
long-term
incentive compensation payment was declared or paid; "RUP" is
the
Remaining Unexpired Employment Period, expressed in years and
fractions
of years; and "Y" is the aggregate (expressed in years and
fractions
of years) of the Remaining Unexpired Employment Period plus the
number of
years and fraction of years that have elapsed since the end of
the last
performance period for which a long-term incentive payment has
been
declared and paid. In the event that the Executive's employment
terminates
prior to the payment date under any long-term incentive
compensation plan, then for purposes of computing the Incentive
Severance
Payment,
the "ALTIP" shall be deemed to be the average of the target and
maximum
award level under such plan and the "ALTSP" shall be deemed to
be
the
Executive's annual base salary as in effect on the Executive's
termination of employment. The Incentive Severance Payment shall be
made
within
five (5) business days after the Executive's termination of
employment
and shall be in lieu of any claim to a continuation of
participation in cash long-term incentive compensation plans of the
Bank
or the
Company which the Executive might otherwise have;
(vii) a lump sum payment in an amount equal to the excess (if
any)
of: (A)
the present value of the aggregate benefits to which he would
be
entitled
under any and all tax-qualified and non-tax-qualified defined
benefit
plans maintained by, or covering employees of, the Company or
the
Bank (the
"Pension Plans") if he had continued working for the Company
and the
Bank during the Remaining Unexpired Employment Period; over (B)
the
present value of the benefits to which the Executive and his
spouse
and/or
designated beneficiaries are actually entitled under such plans
(the
"Pension Severance Payment"). The Pension Severance Payment shall
be
computed
according to the following formula:
PSP = PPB - APB
where
"PSP" is the amount of the Pension Severance Payment (before
deductions
for applicable federal, state and local withholding taxes);
"APB" is
the aggregate lump sum present value of the actual vested
pension
benefits payable under the Pension Plans in the form of a
straight
life annuity beginning at the earliest date permitted under the
Pension
Plans, computed on the basis of the Executive's life expectancy
at the
earliest date on which payments under the Pension Plans could
begin,
determined by reference to Table VI of section 1.72-9 of the
Income Tax
Regulations (the "Assumed Life Expectancy"), and on the basis
of an
interest rate assumption equal to the average bond-equivalent
yield
on United
States Treasury Securities with a Constant Maturity of thirty
(30) Years
for the month prior to the month in which the Executive's
termination of employment occurs (the "30-Year Treasury Rate"); and
"PPB"
is the
lump sum present value of the pension benefits (whether or not
vested)
that would be payable under the Pension Plans in the form of a
straight
life annuity beginning at the earliest date permitted under the
Pension
Plans, computed on the basis that the Executive's actual age at
termination of
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employment
is his attained age as of his last birthday that would occur
during the
Remaining Unexpired Employment Period, that his service for
benefit
accrual purposes under the Pension Plans is equal to the
aggregate of his
actual service plus the Remaining Unexpired Employment
Period,
that his average compensation figure used in determining his
accrued
benefit is equal to the highest annual rate of salary achieved
by
the
Executive during the period of three (3) years ending
immediately
prior to
the date of termination, that the Executive's life expectancy
at
the
earliest date on which payments under the Pension Plans could
begin
is the
Assumed Life Expectancy and that the interest rate assumption
used
is equal
to the 30-Year Treasury Rate. The Pension Severance Payment
shall be
made within five (5) business days after the Executive's
termination of employment and shall be in lieu of any claim to any
actual
increase
in his accrued benefit in the Pension Plans in respect of the
Remaining
Unexpired Employment Period;
(viii) a lump sum payment in an amount equal to the present
value
of the
additional employer contributions that would have been credited
directly
to his account(s) under any and all tax-qualified and
non-tax-qualified defined contribution plans maintained by, or
covering
employees
of, the Bank and the Company (the "Non-ESOP DC Plans"), plus
the fair market value
of the additional shares of employer securities or
other
property that would have been allocated to his account as a
result
of
employer contributions or dividends under any tax-qualified
leveraged
employee
stock ownership plan and any related non-tax-qualified
supplemental plan maintained by, or covering employees of, the Bank
and
the
Company (the "ESOP Plans") if he had continued in employment
during
the
Remaining Unexpired Employment Period (the "Defined
Contribution
Severance
Payment"). The Defined Contribution Severance Payment shall be
computed
according to
