This Employment Agreement involves
Title: CHICOPEE SAVINGS BANK THREE-YEAR EMPLOYMENT AGREEMENT
Governing Law: Massachusetts Date: 11/14/2006
CHICOPEE SAVINGS BANK
THREE-YEAR EMPLOYMENT AGREEMENT
THIS AGREEMENT (the “Agreement”), made this 19 th day of July, 2006, by and between CHICOPEE SAVINGS BANK , a Massachusetts-chartered financial institution (the “Bank”), and WILLIAM J. WAGNER (the “Executive”).
WHEREAS, Executive serves in a position of substantial responsibility; and
WHEREAS, the Bank wishes to assure Executive’s services for the term of this Agreement; and
WHEREAS, Executive is willing to serve in the employ of the Bank during the term of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and upon the other terms and conditions provided for in this Agreement, the parties hereby agree as follows:
1. Employment . Executive is employed as President and Chief Executive Officer of the Bank. Executive shall perform all duties and shall have all powers commonly incident to the offices of President and Chief Executive Officer or which, consistent with those offices, or delegated to him by the Board of Directors of the Bank (the “Board”). During the term of this Agreement, Executive also agrees to serve, if elected, as an officer and/or director of any subsidiary or affiliate of the Bank and to carry out the duties and responsibilities reasonably appropriate to those offices.
2. Location and Facilities . 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 Bank, or at such other site or sites customary for such offices.
3. Term .
|a.||The term of this Agreement shall include: (i) the initial term, consisting of the period commencing on the date of this Agreement (the “Effective Date”) and ending on the third anniversary of the Effective Date, plus (ii) any and all extensions of the initial term made pursuant to this Section 3.|
|b.||Commencing on the first anniversary of the Effective Date and continuing on each anniversary of the Effective Date thereafter, the disinterested members of the Board may extend the Agreement term for an additional year, so that the remaining term of the Agreement again becomes thirty-six (36) months, unless Executive elects not to extend the term of this Agreement by giving written notice in accordance with Section 19 of this Agreement. The Board will review the Agreement and Executive’s performance annually for purposes of determining whether to extend the Agreement term and will include the rationale and results of its review in the minutes of the meeting. The Board will notify Executive as soon as possible after its annual review whether the Board has determined to extend the Agreement.|
4. Base Compensation .
|a.||The Bank agrees to pay Executive during the term of this Agreement a base salary at the rate of $311,000 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 eligible to participate in discretionary bonuses or other incentive compensation programs that the Company or the Bank may award from time to time to senior management employees pursuant to bonus plans or otherwise.
6. Benefit Plans . Executive shall be eligible to participate in 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 Bank for the benefit of its employees.
7. Vacations 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 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 . Executive shall be reimbursed for all reasonable out-of-pocket business expenses incurred in connection with his services under this Agreement upon substantiation of such expenses in accordance with applicable policies of the Bank.
9. Automobile Allowance . During the term of this Agreement, the Executive shall be entitled to use of a Bank-owned automobile. The Bank shall provide car insurance, maintenance and gas for said automobile. Executive shall comply with reasonable reporting and expense limitations on the use of such automobile as may be established by the Bank from time to time, and the Bank shall annually include on Executive’s Form W-2 any amount of income attributable to Executive’s personal use of such automobile.
10. Loyalty and Confidentiality .
|a.||During the term of this Agreement, Executive will devote all his business time, attention, skill, and efforts to the faithful performance of his duties under this Agreement; 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 that will not present any conflict|
of interest with the Bank or any of its subsidiaries or affiliates, unfavorably affect the performance of Executive’s duties pursuant to this Agreement, or violate any applicable statute or regulation. Executive will not engage in any business or activity contrary to the business affairs or interests of the Bank or any of its subsidiaries or affiliates.
|b.||Nothing contained in this Agreement will prevent or limit Executive’s right to invest in the capital stock or other securities or interests of any business dissimilar from that of the Bank, 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 Bank; 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 Bank or its subsidiaries or affiliates to which he may be exposed during the course of his employment. 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 will he use the information in any way other than for the benefit of the Bank.|
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 will terminate upon his death during the term of this Agreement, in which event Executive’s estate will receive the compensation due to Executive through the last day of the calendar month in which his death occurred.|
|b.||Retirement . This Agreement will terminate upon Executive’s retirement under the retirement benefit plan or plans in which he participates pursuant to Section 6 of this Agreement or otherwise. Executive will receive the compensation due to him through his retirement date.|
|i.||The Board or Executive may terminate Executive’s employment after having determined Executive has a Disability. For purposes of this Agreement, “Disability” means a physical or mental infirmity that impairs Executive’s ability to substantially perform his duties under this Agreement and results in Executive becoming eligible for long-term disability benefits under any long-term disability plans of the Bank (or, if no such plans exists, that impairs Executive’s ability to substantially perform his duties under this Agreement for a period of one hundred eighty (180) consecutive days). The Board will determine whether or not Executive is and continues to be permanently disabled for purposes of this Agreement in good faith, based upon competent medical advice and other factors that the Board reasonably believes to be relevant. As a condition to any benefits, the Board may require Executive to submit to physical or mental evaluations and tests as the Board or its medical experts deem reasonably appropriate.|
|ii.||In the event of his Disability, Executive will no longer be obligated to perform services under this Agreement. The Bank will pay Executive, as Disability pay, an amount equal to one hundred percent (100%) of Executive’s bi-weekly rate of base salary in effect as of the date of his termination of employment due to Disability. The|
Bank will make Disability payments on a monthly basis commencing on the first day of the month following the effective date of Executive’s termination of employment due to Disability and ending on the earlier of: (A) the date he returns to full-time employment at the Bank in the same capacity as he was employed prior to his termination for Disability; (B) his death; (C) his attainment of age 65; or (D) the date this Agreement would have expired had Executive’s employment not terminated by reason of Disability. Such payments shall be reduced by the amount of any short- or long-term disability benefits payable to Executive under any other disability programs sponsored by the Bank. In addition, during any period of Executive’s Disability, the Bank will continue to provide Executive and his dependents, to the greatest extent possible, with continued coverage under all benefit plans (including, without limitation, retirement plans and medical, dental and life insurance plans) in which Executive and/or his dependent participated prior to his Disability on the same terms as if he remained actively employed by the Bank.
|d.||Termination for Cause .|
|i.||The Board may, by written notice to Executive in the form and manner specified in this paragraph, terminate his employment at any time for “Cause.” 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:|
|(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 Bank, 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 Bank, unless the Bank has delivered to Executive a copy of a resolution duly adopted at a meeting of the Board where in the good faith opinion of the Board, Executive was guilty of the conduct described above and specifying the particulars of this conduct.|
|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 Board. Upon Executive’s voluntary termination, he will receive only his compensation, and vested rights and benefits 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 Board 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 within ninety (90) days following an event constituting “Good Reason,” as defined below (a termination “With Good Reason”).|
|ii.||Subject to Section 12 of this Agreement, in the event of termination under this Section 11(f), Executive shall be entitled to receive his base salary in effect as of his termination date for the remaining term of the Agreement paid in one lump sum within ten (10) calendar days of such termination. Also, in such event, Executive shall, for the remaining term of the Agreement, receive 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) and continue to participate in any benefit plans of the Bank that provide health (including medical and dental), or life insurance, or similar coverage upon terms no less favorable than the most favorable terms provided to senior executives of the Bank during such period. In the event that the Bank is unable to provide such coverage by reason of Executive no longer being an employee, the Bank shall provide Executive with comparable coverage on an individual policy basis.|
|iii.||“Good Reason” exists if, without Executive’s express written consent, the Bank materially breaches any of its obligations under this Agreement. Without limitation, such a material breach will occur upon any of the following:|
|(1)||A material reduction in Executive’s responsibilities or authority in connection with his employment with the Bank;|
|(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 Executive to be nominated or renominated to the Board to the extent Executive is a Board member prior to the Effective Date;|
|(4)||A reduction in 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 Executive was entitled to receive 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 thirty-five (35) mile radius from the current main office and any branch of the Bank, or the assignment to Executive of duties that would reasonably require such a relocation; or|
|(7)||Liquidation or dissolution of the Bank.|
|iv.||Notwithstanding the foregoing, a reduction or elimination of Executive’s benefits under one or more benefit plans maintained by the Bank as part of a good faith, overall reduction or elimination of such plans or benefits, applicable to all participants in a mann|