EXHIBIT 10.1
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EMPLOYMENT AGREEMENT
This EMPLOYMENT
AGREEMENT ("Agreement") is made and entered into effective
as of December 17, 2003, by and between
WESTBANK CORPORATION, a Massachusetts
corporation ("Company") and DONALD R.
CHASE, an individual residing at 39 Timber
Ridge Road, West Springfield, MA 01089
("Executive"). Any reference to "Bank"
herein shall mean Westbank, a wholly-owned
subsidiary of the Company, or any
successor thereto.
W I T N E S S E T H:
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WHEREAS,
Executive has been elected to serve the Company in the capacity
of
President and Chief Executive Officer and
also has been elected to serve as
President and Chief Executive Officer of
the Bank;
WHEREAS, the
Company desires to assure for itself and for the Bank the
availability of Executive's services and
the ability of 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);
WHEREAS,
Executive is willing to serve the Company and the Bank on the
terms and conditions hereinafter set forth;
and
WHEREAS, this
Agreement is intended to supercede any and all prior
employment agreements between the Executive
and the Company or the Executive and
the Bank;
NOW, THEREFORE,
in consideration of the premises and the mutual covenants
and conditions hereinafter set forth, the
Company and Executive hereby agree as
follows:
SECTION 1.
EMPLOYMENT.
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The Company
agrees to continue to employ Executive, and 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 (3) years beginning on the date of
this Agreement and ending on the third
(3rd) anniversary date of this Agreement
(each, an "Anniversary Date"). Upon
each Anniversary Date of this Agreement,
the Board of Directors of the Company
("Board") shall review the terms of this
Agreement and the Executive's
performance of services hereunder and may,
in the absence of objection from the
Executive, approve an extension of the
Employment Agreement to a new three year
term. The "Remaining Unexpired Employment
Period" shall be the remaining period
of the Employment Period subject to such
extensions as the Board may determine
pursuant to this paragraph unless modified
by this Agreement.
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(b) Nothing in
this Agreement shall be deemed to prohibit the Company at
any time from terminating Executive's
employment during the Employment Period
with or without notice for any reason;
PROVIDED, HOWEVER, that the relative
rights and obligations of the Company and
Executive in the event of any such
termination shall be determined under this
Agreement.
(c) Nothing in
this Agreement shall be deemed to prohibit the Executive at
any time from terminating his employment
during the Employment Period with or
without notice for any reason; PROVIDED,
HOWEVER, that the relative rights and
obligations of the Company and Executive in
the event of any such termination
shall be determined under this
Agreement.
SECTION 3.
DUTIES.
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Executive shall
serve as President and Chief Executive Officer of the
Company and the Bank, and having such
power, authority and responsibility and
performing such duties as are prescribed by
or under the By-Laws of the Company
and the Bank and as are customarily
associated with such positions. 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 Company and the Bank and shall
use his best efforts to advance the
interests of the Company and the Bank.
SECTION 4. CASH
COMPENSATION.
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In consideration
for the services to be rendered by Executive hereunder,
the Company shall pay to him a salary at an
initial annual rate of FOUR HUNDRED
TWENTY-NINE THOUSAND TWO HUNDRED
THIRTY-FIVE DOLLARS ($429,235.00), payable in
approximately equal installments in
accordance with the Company's or Bank's
customary payroll practices for senior
officers. The Board shall review
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 months, and
may, in its discretion, approve an increase
in the Executive's annual rate of
salary. In addition to salary, Executive
may receive other cash compensation
from the Company or the Bank for services
hereunder at such times, in such
amounts and on such terms and conditions as
the Board, as applicable, may
determine from time to time.
SECTION 5.
EMPLOYEE BENEFIT PLANS AND PROGRAMS.
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During the
Employment Period, Executive shall be treated as an employee of
the Company and 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 Company or 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 Company's and Bank's
customary practices. 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.
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SECTION 6.
INDEMNIFICATION AND INSURANCE.
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(a) During the
Employment Period and for so long as the Executive is
subject for suit on claims related to his
performance of the duties described in
section 3 of this Agreement, the Company
shall cause Executive to be covered by
and named as an insured under any policy or
contract of insurance obtained by it
or the Bank to insure its directors and
officers against personal liability for
acts or omissions in connection with
service as an officer or director of the
Company or the Bank or service in other
capacities at the request of the Company
or the Bank. The coverage provided to
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 Company and the Bank.
(b) To the
maximum extent permitted under applicable law, during the
Employment Period and for so long as the
Executive is subject for suit on claims
related to his performance of the duties
described in section 3 of this
Agreement, the Company shall indemnify
Executive against and hold him harmless
from any costs, liabilities, losses and
exposures to the fullest extent and on
the most favorable terms and conditions
that similar indemnification is offered
to any director or officer of the Company,
the Bank, or any subsidiary or
affiliate thereof.
SECTION 7.
OUTSIDE ACTIVITIES.
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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. 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 Company and generally applicable to
all similarly situated executives.
Executive may also serve as an officer or
director of the Bank 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 Executive's performance of
his duties hereunder or otherwise
result in a material breach of this
Agreement. If 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 continue to
perform services for the Company in
accordance with this Agreement but 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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Executive's
principal place of employment shall be at the Company's
executive offices at the address first
above written, or at such other location
within Hampden County at which the Company
shall maintain its principal
executive offices, or at such other
location as the Company and Executive may
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mutually agree upon. The Company shall
provide or cause the Bank to 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 Company and necessary or
appropriate in connection with the
performance of his assigned duties under
this Agreement. The Company shall
provide to the Executive for his exclusive
use an automobile owned or leased by
the Company and appropriate to his
position, to be used in the performance of
his duties hereunder, including commuting
to and from his personal residence.
The Company shall reimburse Executive for
his ordinary and necessary business
expenses, including, without limitation,
all expenses associated with his
business use of the aforementioned
automobile, fees for memberships in such
clubs and organizations as Executive and
the Company 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 Company of an
itemized account of such expenses in such
form as the Company may reasonably
require.
SECTION 9.
TERMINATION OF EMPLOYMENT WITH SEVERANCE BENEFITS.
(a) Executive
shall be entitled to the severance benefits described in
section 9(b) herein in the event that his
employment with the Company or the
Bank terminates during the Employment
Period under any of the following
circumstances:
(i) Executive's voluntary resignation from employment with the
Company
within ninety
(90) days following:
(A) the failure of the Board to appoint or re-appoint or elect
or
re-elect Executive to the position stated in section 3 of this
Agreement (or a more senior office of the Company) or the failure
of
the Board of Directors of the Bank ("Bank Board") to appoint or
re-appoint or elect or re-elect Executive to the position stated
in
section 3 of this Agreement (or a more senior position of the
Bank);
(B) the failure of the stockholders of the Company or the Bank
to
elect or re-elect Executive to the Board or a member of the
Bank
Board, or the failure of the Board or the Bank Board (or the
nominating committee thereof) to nominate Executive for such
election
or re-election;
(C) the
expiration of a thirty (30) day period following the date
on which Executive gives written notice to the Company or the Bank,
as
the case may be, of its material failure, whether by amendment of
the
Company's organization certificate or By-Laws, or the Bank's
state
charter or By-Laws, action of the Board, Bank Board or the
Company's
stockholders or otherwise, to vest in Executive the functions,
duties,
or responsibilities prescribed in section 3 of this Agreement,
unless,
during such thirty (30) day period, such failure is cured in a
manner
determined by Executive, in his discretion, to be satisfactory;
or
(D) the expiration of a thirty (30) day period following the
date
on which Executive gives written notice to the Company or the Bank,
as
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the case may be, of its material breach of any term, condition
or
covenant contained in this Agreement (including, without
limitation
any reduction of 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 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, such failure is cured
in a
manner determined by Executive, in his discretion, to be
satisfactory;
or
(ii) subject to the provisions of section 10, the termination
of
Executive's
employment with the Company for any other reason not described
in section 9(a) other
than a termination of the Executive's employment for
"cause";
then, the Company shall provide (or cause
the Bank to pay and provide) the
benefits and pay to Executive the amounts
described in section 9(b).
(b) Upon the
termination of Executive's employment with the Company under
circumstances described in section 9(a) of
this Agreement, the Company shall pay
and provide (or cause the Bank to pay and
provide) to Executive (or, in the
event of his death, to his estate):
(i) the portion, if any, of the compensation earned by the
Executive
through the date
of the termination of his employment with the Company
which remains
unpaid as of such date, 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 the Executive's termination
of
employment;
(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 by the Company and the Bank for their
officers and
employees;
(iii) continued group life, health (including hospitalization,
medical
and major
medical), dental, accident and long-term disability coverage
plans under the
plans and programs maintained by the Bank for similarly
situated
employees until the earlier to occur of:
(A) the date the Executive first becomes eligible for such
benefit coverage plans under the plans or programs maintained by
a
subsequent employer; or
(B) the date the Remaining Unexpired Employment Period
terminates;
(iv) within thirty (30) days following his termination of
employment
with the
Company, a lump sum payment, in an amount equal to the present
value of the
salary that Executive would have earned if he had continued
working for the
Company during the Remaining Unexpired Employment Period at
the highest
annual rate of salary achieved during that portion of the
Employment
Period which is prior to Executive's termination of employment
with the
Company, where such present value is to be determined using a
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discount rate
equal to the applicable short-term federal rate prescribed
under section
1274(d) of the Internal Revenue Code of 1986 ("Code"),
compounded using
the compounding period corresponding to the Company's
regular payroll
periods for its officers, such lump sum (the "Salary
Severance
Payment") to be paid in lieu of all other payments of salary
provided for
under this Agreement in respect of the period following any
such
termination;
(v) within thirty (30) days following his termination of
employment
with the Company
and the Bank, 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 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); "ABP" 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 "ASP" 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 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) within thirty (30) days following his termination of
employment
with the
Company, a lump sum payment, in an amount equal to the value of
the additional
employer contributions that would have been credited
directly to the
Executive's accounts under the tax-qualified 401(k) plan,
tax-qualified
money purchase pension plan and the nonqualified excess
benefit plan
related to the money purchase pension plan that Executive
would have
earned if he had continued working for the Company during the
Remaining
Unexpired Employment Period, where such amounts are calculated
by
multiplying the
last annual amount credited to the Executive's account
under e
