Exhibit 10.27
CHANGE IN
CONTROL/NONCOMPETITION AGREEMENT
This Change in
Control/Noncompetition Agreement (this “Agreement”) is
entered into as of the 15th day of December 2003 by and among
Enterprise Bancorp, Inc., a Massachusetts corporation (the
“Company”), and its wholly owned subsidiary, Enterprise
Bank and Trust Company, a Massachusetts bank and trust company with
its main office in Lowell, Massachusetts (the “Bank”)
(the Bank and the Company shall be hereinafter collectively
referred to as the “Employers”), and Paul M.
O’Connell, Jr. of 6134 Lexington Ridge Dr., Lexington,
Massachusetts (the “Executive”).
1.
Purpose . In order to allow the Executive to
consider the prospect of a Change in Control (as defined in
Section 2 hereof) in an objective manner and in consideration
of the Executive’s agreement to abide by the confidentiality
and noncompetition provisions set forth in Section 8 hereof
and the services to be rendered by the Executive to the Bank, and
in order to protect the ongoing business interests and
competitiveness of the Employers and in consideration of the
Employers’ agreement to provide the severance benefits to
protect the Executive in the event of a Change in Control as set
forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged by the Executive and the Employers, the parties have
entered into this Agreement and have mutually agreed to be bound by
the terms and conditions hereof.
2.
Change in Control
. For purposes of this
Agreement, the term “Change in Control” shall have the
same meaning as defined in the Company’s 2003 Stock Incentive
Plan, as the same may be amended and continue in effect from time
to time hereafter.
3.
Terminating Event
. For purposes of this
Agreement, the term “Terminating Event” shall mean any
termination of the employment of the Executive with the Bank for
any reason, whether or not such termination is initiated by the
Bank, including without limitation termination for cause or by
reason of the Executive’s death or disability, or by the
Executive, including without limitation resignation by reason of
retirement or for no reason at all.
4.
Severance Payments
.
(a)
If a Terminating Event occurs within
two (2) years after the date on which a Change in Control has
occurred, then the Executive shall be entitled to receive the
following:
(i)
an aggregate amount equal to 1.5
times the Executive’s “Highest Annual
Compensation” (as defined in paragraph (c) of this
Section 4), such amount to be paid out in equal periodic
installments in accordance with the Bank’s ordinary payroll
practices over the eighteen-month period commencing on the first
payroll payment date after the date on which the Executive’s
employment with the Bank terminates (the “Date of
Termination”);
(ii)
any base salary, commissions or
other compensation accrued or earned, but not yet paid, as of the
Date of Termination and any annual or other bonus actually awarded,
but not yet paid, as of the Date of Termination, such amounts to be
paid on the Date of Termination;
(iii)
reimbursement for all business
expenses for which the Executive would ordinarily be reimbursed by
the Employers in the ordinary course of business in accordance with
the Employers’ policies, programs, procedures or practices
incurred, but not yet paid, as of the Date of Termination, such
amount to be paid on the Date of Termination;
(iv)
payment of the per diem value of any
unused vacation days, whether deemed to be accrued or unaccrued,
that would be available to the Executive through the end of the
calendar year (but not beyond) in which the Date of Termination
occurs;
(v)
continuation of the Employers’
employee welfare benefit plans, programs and practices in which the
Executive and his spouse and any other eligible dependents
participate or are eligible to participate as of the Date of
Termination or, if more favorable to the Executive, as of the date
of a Change in Control, at the levels in effect on, and at the same
out-of-pocket costs to the Executive as of, the Date of Termination
or, if more favorable to the Executive, as of the date of a Change
in Control, for the eighteen-month period commencing on the Date of
Termination (or, if such continuation is not permitted by
applicable law or if the Bank’s Board of Directors so
determines in its sole discretion, the Bank shall pay to the
Executive a cash amount equal to the difference between (A) the
aggregate amount that would be required to be paid by the Executive
in order for the Executive to obtain a continuation of such
benefits and coverages for such eighteen-month period for himself,
his spouse and any other eligible dependents under or through one
or more plans, programs or other arrangements provided by one or
more unaffiliated third parties and (B) the out-of-pocket costs
that would be incurred by the Executive in accordance with the
terms hereof if such continuation of benefits and coverages were
provided under the Employers’ employee welfare benefit plans,
programs and practices);
(vi)
reimbursement for the reasonable
fees of a professional out-placement service selected by the
Executive within ninety (90) days after the Date of Termination,
such amount to be paid promptly after the expense is incurred;
and
(vii)
any other compensation and benefits
as may be provided in accordance with the terms of any applicable
plans, programs, policies, procedures or practices of the
Employers.
(b)
If a Terminating Event occurs within
one (1) year prior to the date on which a Change in Control occurs,
then the Executive shall be entitled to receive, as provided in
this paragraph (b), all of the payments and benefits that he would
have been entitled to receive under paragraph (a) of this
Section 4 if such Terminating Event had occurred within two
(2) years after the date on which a Change in Control has occurred,
unless such Terminating Event occurs as a result of a termination
for Cause (as such term is defined in paragraph (f) of
Section 8 below), in which case no increase or adjustments to
the amounts paid or benefits provided to the Executive in
connection with such Terminating Event shall be made under this
paragraph (b). If required in accordance with the immediately
preceding sentence, the amounts paid and benefits provided to the
Executive in connection with a Terminating Event that occurs within
one (1) year prior to the date on which a Change in Control occurs
shall be increased or otherwise adjusted to ensure that the
Executive receives the full payments and benefits contemplated by
paragraph (a) of this Section 4, as if such Terminating Event
had occurred within two (2) years after the date on which a Change
in Control has occurred. If the payments and/or benefits to
be received by the Executive in connection with a Terminating Event
that has occurred within one (1) year prior to the date on which a
Change in Control occurs are required to be increased or adjusted
under this paragraph (b), then the Executive shall be paid on the
first ordinary payroll payment date of the Bank following the
occurrence of such Change in Control the cash amount necessary to
ensure that as of such date the Executive shall have received the
full amounts of the payments and benefits that the Executive would
have received as of such date under paragraph (a) of this
Section 4 if such Terminating Event had occurred within two
(2) years after the date on which a Change in Control has occurred
(including without limitation the economic equivalent of any
noncash benefits that have not been provided to the Executive
during the period from the date on which such Terminating Event
occurred and the date on which such Change in Control occurred) and
from and after such payroll payment date the Executive shall
receive the full amounts of the remaining payments and benefits
that the Executive is required to receive under paragraph (a) of
this Section 4 in
accordance with the terms thereof
(including without limitation, to the extent that reimbursement for
the reasonable fees of a professional out-placement service
selected by the Executive has not already then been paid hereunder,
such reimbursement with respect to a professional out-placement
service selected by the Executive within ninety (90) days after the
occurrence of such Change in Control).
(c)
For purposes of this Section 4,
the Executive’s “Highest Annual Compensation”
shall mean, as determined as of any Date of Termination, the sum of
(i) the highest per annum rate of base salary paid by the Employers
to the Executive at any time during the three-year period prior to
such Date of Termination, (ii) the highest amount of commission or
other compensation (which is not otherwise included in the base
salary and bonus amounts referred in clauses (i) and (iii) of this
paragraph (c)) paid by the Employers to the Executive with respect
to any of the three most recently completed fiscal years of the
Bank prior to such Date of Termination, and (iii) the highest
annual incentive compensation or other bonus amount paid by the
Employers to the Executive (or which would have been paid but for
an election by the Executive to defer payment to a later period)
with respect to any of the three most recently completed fiscal
years of the Bank prior to such Date of Termination.
(d)
In the event of any dispute
concerning payments or other benefits to be received by the
Executive under this Section 4, the Executive shall be
entitled until the resolution of such dispute to be paid in
accordance with the Bank’s ordinary payroll practices his
then current base salary and to continue to receive all other
welfare benefits then being provided to him by the Employers, and
there shall be no reduction whatsoever of any amounts subsequently
paid to the Executive upon resolution of such dispute as a result
of, or in respect to, such interim payments or coverage.
(e)
In the event that any payments or
benefits are to be received by the Executive under this
Section 4, the Executive shall be under no obligation to seek
other employment or to mitigate damages and there shall be no
offset against any amount due the Executive under this Agreement
for any reason, including, without limitation, on account of any
remuneration or benefits attributable to any subsequent employment
that the Executive may obtain.
(f)
Anything in this Agreement or in any
other agreement, contract, understanding, plan or program entered
into or maintained by the Employers to the contrary
notwithstanding, in the event it shall be determined that any
payment or distribution by the Employers to or for the benefit of
the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise
(collectively, the “Payments”), would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the “Code”), and/or any
successor provision or section thereto (such excise tax,
together with any interest or penalties incurred by the Executive
with respect to such excise tax, collectively, the “Excise
Tax”), and if the Payments less the Excise Tax would be less
than the amount of the Payments that would otherwise be payable to
the Executive without imposition of the Excise Tax, then, to the
extent necessary to eliminate the imposition of the Excise Tax (and
taking into account any reduction in the Payments provided by
reason of Section 280G of the Code in any such other
agreement, contract, understanding, plan or program), the cash and
non-cash payments a
