Exhibit 10.3
AMENDED AND
RESTATED
SAVINGS INSTITUTE BANK AND TRUST
COMPANY
EMPLOYEE SEVERANCE COMPENSATION
PLAN
PLAN PURPOSE
The purpose of the Savings Institute
Bank and Trust Company Employee Severance Compensation Plan (the
“Plan”) is to assure the services of employees of the
Bank (and affiliates of the Bank that adopt the Plan) in the event
of a Change in Control of the Company (capitalized terms are
defined in Section 2.1). The benefits contemplated by the Plan
recognize the value to the Bank of the services and contributions
of the employees of the Bank and the effect upon the Bank resulting
from the uncertainties of continued employment, reduced employee
benefits, management changes and relocations that may arise in the
event of a Change in Control. The Board of Directors of the Bank
believes that the Plan will also aid the Bank in attracting and
retaining highly qualified individuals who are essential to its
success and the Plan’s assurance of fair treatment of the
Bank’s employees will reduce the distractions and other
adverse effects on employees’ performance in the event of a
Change in Control.
ARTICLE I
ESTABLISHMENT OF
PLAN
1.1 Establishment of
Plan
As of the Effective Date of the
Plan, the Bank hereby establishes an employee severance
compensation plan to be known as the “Savings Institute Bank
and Trust Company Employee Severance Compensation Plan.” The
Bank has amended and restated this Plan on December 17, 2008 to
conform with the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended (the
“Code”)
1.2 Applicability of
Plan
The benefits provided by this Plan
shall be available to all employees of the Bank, who, at or after
the Effective Date, meet the eligibility requirements of Article
III.
1.3 Contractual Right to
Benefits
This Plan establishes and vests in
each Participant a contractual right to the benefits to which each
Participant is entitled hereunder, enforceable by the Participant
against the Employer.
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ARTICLE II
DEFINITIONS AND
CONSTRUCTION
2.1 Definitions
Whenever used in the Plan, the
following terms shall have the meanings set forth below.
(a) “Annual
Compensation” of a Participant means and includes all cash
compensation paid or accrued by the Employer with respect to the
Participant’s service during the 12-consecutive month period
ending on the last business day of the month preceding the date the
Participant’s employment terminates.
(b) “Bank” means Savings
Institute Bank and Trust Company or any successor as provided for
in Article VII hereof.
(c) “Change in Control”
means any one of the following events occur:
(i) Merger : The Company
merges into or consolidates with another corporation, or merges
another corporation into the Company, and as a result less than a
majority of the combined voting power of the resulting corporation
immediately after the merger or consolidation is held by persons
who were stockholders of the Company immediately before the merger
or consolidation.
(ii) Acquisition of Significant
Share Ownership : The Company files, or is required to file, a
report on Schedule 13D or another form or schedule (other than
Schedule 13G) required under Sections 13(d) or 14(d) of the
Securities Exchange Act of 1934, if the schedule discloses that the
filing person or persons acting in concert has or have become the
beneficial owner of 25% or more of a class of the Company’s
voting securities, but this clause (b) shall not apply to
beneficial ownership of Company voting shares held in a fiduciary
capacity by an entity of which the Company directly or indirectly
beneficially owns 50% or more of its outstanding voting
securities.
(iii) Change in
Board Composition : During any period of two consecutive years,
individuals who constitute the Company’s Board of Directors
at the beginning of the two-year period cease for any reason to
constitute at least a majority of the Company’s Board of
Directors; provided, however, that for purposes of this clause
(iii), each director who is first elected by the board (or first
nominated by the board for election by the stockholders) by a vote
of at least two-thirds ( 2 / 3 ) of the directors who were
directors at the beginning of the two-year period shall be deemed
to have also been a director at the beginning of such period;
or
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(iv) Sale of Assets : The
Company sells to a third party all or substantially all of its
assets.
Notwithstanding anything in this
Plan to the contrary, in no event shall the conversion of the Bank
from mutual to stock form (including without limitation, through
the formation of a stock holding company) or the reorganization of
the Bank into the mutual holding company form of organization
constitute a “Change in Control” for purposes of this
Plan.
(d) “Company” means SI
Financial Group, Inc., a federally chartered
corporation.
(e) “Disability” means
the permanent and total inability by reason of mental or physical
infirmity, or both, of an employee to perform the work customarily
assigned to him. Additionally, a medical doctor selected or
approved by the Board of Directors must advise the Board that it is
either not possible to determine if or when such Disability will
terminate or that it appears probable that such Disability will be
permanent during the remainder of said employees
lifetime.
(f) “Effective Date”
means August 18, 2004.
(g) “Employer” means
(i) the Bank, (ii) the Company, or (iii) any
subsidiary of the Bank or the Company that adopts the
Plan.
(h) “ERISA” means
Employee Retirement Income Security Act of 1974, as
amended.
(i) “Participant” means
an employee of an employer who meets the eligibility requirements
of Article III.
(j) “Termination for
Cause” shall include termination because of a
Participant’s personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of
any law, rule or regulation (other than traffic violations or
similar offenses) or violation of any final cease-and desist order,
or material breach of any provision of the plan. In determining
incompetence, the acts or omissions shall be measured against
standards generally prevailing in the savings institutions
industry.
(k) “Leave of Absence”
and “LOA” mean (i) the taking of an authorized or
approved leave of absence under the provisions of the federal
Family and Medical Leave Act (“FMLA”), (ii) any
state law providing qualitatively similar benefits as the FMLA, or
(iii) a leave of absence authorized under the policies of the
Bank. “Leave of Absence” and “LOA” are
defined in this paragraph for the exclusive purposes of this
Plan.
(l) “Plan” means this
Savings Institute Bank and Trust Company Employee Severance
Compensation Plan, as amended and restated.
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(m) “Year of Service”
means each consecutive 12 month period, beginning with an
employee’s date of hire and running without a termination of
employment in which an employee is credited with at least one hour
of service in each of the 12 calendar months in such period. The
taking of an LOA shall not eliminate a period of time from being a
Year of Service if such period of time otherwise qualifies as such.
Further if a particular 12 month period of time would not otherwise
qualify under the Plan as a Year of Service because one hour of
service is not credited during each month of such period due to the
taking of a LOA, then such period of time shall be deemed to be a
Year of Service for all other sections of this Plan.
2.2 Applicable Law
The laws of the State of Connecticut
shall be the controlling law in all matters relating to the Plan to
the extent not preempted by Federal law.
2.3 Severability
If a provision of this Plan shall be
held illegal or invalid, the illegality or invalidity shall not
affect the remaining parts of the Plan and the Plan shall be
construed and enforced as if the illegal or invalid provision had
not been included.
ARTICLE III
ELIGIBILITY
3.1 Participation
All employees of the Employer who
have completed at least one (1) Year of Service with the
Employer at the time of any termination pursuant to
Section 4.2 of this Plan are eligible to participate in the
Plan. Notwithstanding the foregoing, persons who have entered into
and continue to be covered by an employment agreement with the
Employer shall not be entitled to participate in this
Plan.
3.2 Duration of
Participation
A Participant shall cease to be a
Participant in the Plan when the Participant ceases to be an
employee of an Employer, unless such Participant is entitled to
benefits under the Plan. A Participant entitled to benefits under
the Plan shall remain a Participant in this Plan until he has
received full payment of his Plan benefits.
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ARTICLE IV
BENEFITS
4.1 Right to
Benefits
A Participant shall be entitled to
receive from his respective Employer a severance benefit in the
amount provided in Section 4.3 of the Plan if there has been a
Change in Control of the Bank or the Company and if, within
twenty-four (24) months thereafter, the Participant’s
employment by an Employer shall terminate for any reason specified
in Section 4.2 of the Plan, whether the termination of
employment is voluntary or involuntary. A Participant shall not be
entitled to a benefit if termination occurs by reason of death,
voluntary retirement, voluntary termination other than for reasons
specified in Section 4.2 of the Plan, Disability, or as a
result of Termination for Cause.
4.2 Reasons for
Termination
Following a Change in Control, a
Participant shall be entitled to a benefit if employment by an
Employer is terminated, voluntarily or involuntarily, for any one
or more of the following reasons:
(a) The Employer reduces the
Participant’s base salary or rate of compensation as in
effect immediately prior to the Change in Control.
(b) The Employer materially changes
the Participant’s function, duties or responsibilities which
would cause the Participant’s position to be one of lesser
responsibility, importance or scope with the Employer than
immediately prior to the change in control.
(c) The Employer requires the
Participant to change the location of the Participant’s job
or office, so that such Participant will be based at a location
more than twenty-five (25) miles from the location of the
Participant’s job or office immediately prior to the Change
in Control provided that such new location is not closer to the
Participant’s home.
(d) The Employer materially reduces
the benefits and perquisites available to the Participant
immediately prior to the Change in Control, provided, however, that
a material reduction in benefits and perquisites generally provided
to all Employees of the Employer on a nondiscriminatory basis would
not trigger a payment pursuant to this Plan.
(e) A successor to the Bank fails or
refuses to assume the Employer’s obligations under this Plan,
as required by Article VII.
(f) The Bank or any successor to the
Bank breaches any other provisions of this Plan.
(g) The Employer terminates the
employment of a Participant at or after a Change in Control other
than for Termination for Cause.
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4.3 Amount of
Benefit
(a) Each Participant entitled to a
benefit under this Plan shall receive from the Bank, a lump sum
cash payment equal to one-twelfth of his Annu
