Exhibit 10.3
ENFIELD FEDERAL SAVINGS AND LOAN ASSOCIATION
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (the "Agreement"), by and
among ENFIELD FEDERAL SAVINGS AND
LOAN ASSOCIATION, a federally-chartered
financial institution (the "Association"), and DAVID J.
O'CONNOR ("Executive"),
is hereby amended and restated effective as of November 12,
2008. References to
the "Company" herein shall mean NEW
ENGLAND BANCSHARES, INC., a Maryland
corporation and the Association's holding 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 Association pursuant to an employment
agreement between
the Association and the Executive
entered into as of December 28, 2005 (the
"Original Agreement");
WHEREAS, the
Association 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 Association.
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 Association or
which, consistent with those
offices, are delegated to him by the Board of
Directors of the Association.
During the term of this Agreement, Executive also
agrees to serve, if elected,
as an officer and/or director of any subsidiary of the
Association 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 Association,
or at such other site or sites
customary for such offices.
3. Term.
a. The term of
this Agreement shall be (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, provided, however, that all
changes
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intended to comply with Code
Section 409A shall be effective
retroactively to December 28, 2005; and provided
further, that no
retroactive changes shall affect the
compensation or benefits
previously provided to the Executive.
b. Commencing on
the first year anniversary date of this Agreement, and
continuing on each anniversary thereafter, the disinterested
members
of the boards of directors of the
Association may extend the
Agreement an additional year such that the
remaining term of the
Agreement shall be 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 of
Directors
of the Association (the "Board") will
review the Agreement and
Executive's performance annually for purposes of determining
whether
to extend the Agreement and the rationale and results thereof
shall
be included in the minutes of the Board's
meeting. The Executive
shall receive notice as soon as possible
after such review as to
whether the Agreement is to be extended.
4. Base
Compensation.
a. The
Association 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
Association 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
Association 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 Association for
the benefit of
their employees.
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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 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
Association. Such
reimbursements shall be paid promptly by the
Association 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
Association from time to time, and 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 Association 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 Association 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 Association.
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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 Association, 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 Association; 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 Association
to which he
may be 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 Association.
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.
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ii. In the event of such Disability,
Executive's obligation to
perform services under this Agreement will
terminate. 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 employment at the Association
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
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
Association,
in which Executive participated prior to his Disability on the
same terms as if Executive were
actively employed by the
Association.
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 Association, any felony conviction, any violation of
law involving moral turpitude or any
violation of a
final cease-and-desist order; or
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(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
Association 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
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 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 Association during such
period. In
the event that the Association is unable
to provide such
coverage by reason of Executive no longer being an
employee,
the Association shall pay the
Executive the value of such
benefits in a single cash lump sum
distribution within ten
(10) calendar days following his termination.
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iii. "Good Reason" shall exist if,
without Executive's express
written consent, the Association
materially breach any of
