EXHIBIT 10.1
CHANGE IN CONTROL AGREEMENT
---------------------------
THIS CHANGE IN CONTROL AGREEMENT (this "Agreement") is made as of
____________________, 2008 (the "Effective Date") by and between SALISBURY BANK
AND TRUST COMPANY, a Connecticut chartered bank and trust company with its main
office at 0 Xxxxxxx Xxxxxx, X.X. Xxx 0000, Xxxxxxxxx, Xxxxxxxxxxx 00000 (the
"Bank") and ________________ of ______________, _______________, ___________
(the "Executive").
WHEREAS, the Executive is currently rendering services to the Bank and
serves as a member of the executive management team of the Bank;
WHEREAS, the Executive has been employed by the Bank for at least three
years;
WHEREAS, the Board of Directors of the Bank (the "Board") recognizes
that there may be circumstances other than a voluntary disposition by sale or
merger of the Bank due to economic or financial exigencies in which an unsought
change in control in the Bank or in Salisbury Bancorp, Inc., the parent bank
holding company of the Bank, is possible and that the possibility of such a
change in control may create uncertainty and may result in the distraction or
departure of management personnel to the detriment of the Bank and the
shareholders of Salisbury Bancorp, Inc.;
WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued dedication of members of the
Bank's executive management team, including the Executive to their assigned
duties in the face of potential circumstances involving the possibility of such
an unsought change in control;
WHEREAS, the Bank wishes to avoid any distractions to Executive's
performance of services to the Bank, and in that interest the Bank desires to
afford certain protection to the Executive in the event of a Change in Control
(as defined in Section 2).
NOW THEREFORE, to further the above recited corporate objectives, and
for other good and valuable consideration, the receipt and adequacy of which
each party hereby acknowledges the Bank and the Executive agree as follows:
1. Term of Agreement; Not an Employment Agreement. This Agreement shall
----------------------------------------------
take effect when signed by all parties and shall remain in full force and effect
until September 30, 2010, provided that in the case of any Change in Control (as
defined in Section 2) occurring prior to September 30, 2010, this Agreement
shall remain in effect for twelve (12) months after the date of any such Change
in Control is consummated. The Executive serves as an employee at will of the
Bank. Notwithstanding the terms set forth in this Agreement, in no way shall
this Agreement create either an express or implied contract of employment with
the Bank or Salisbury Bancorp, Inc. and/or their successors. The purpose of this
Agreement is to provide
certain potential benefits to the Executive solely in the event of a Change in
Control (as defined in Section 2) and not to provide a contract for employment.
2. Change in Control. No benefits shall be payable hereunder unless
-----------------
there shall have been a Change in Control as set forth below, and the
Executive's employment with the Bank and/or its successor terminates or is
reassigned within twelve (12) months thereof in accordance with Section 3 below.
For purposes of this Agreement, a "Change in Control" shall mean the occurrence
of one or more of the following events:
(a) any "person" (as such term is used in Section 13(d) and 14(d) (2)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act))
becomes a "beneficial owner" (as such term is defined in Rule 13d-3
promulgated under the Exchange Act) (other than the Salisbury Bancorp,
Inc. any trustee or other fiduciary holding securities under an
employee benefit plan of Salisbury Bancorp, Inc. or any corporation
owned, directly or indirectly, by the shareholders of Salisbury
Bancorp, Inc., in substantially the same proportions as their ownership
of stock of Salisbury Bancorp, Inc.), directly or indirectly, of
securities of Salisbury Bancorp, Inc. or the Bank representing fifty
percent (50%) or more of the combined voting power of the then
outstanding securities of Salisbury Bancorp, Inc. or the Bank; or
(b) persons, who as of the Effective Date, constituted Salisbury
Bancorp, Inc.'s Board of Directors (the "Incumbent Board") cease for
any reason including, without limitation, as a result of a tender
offer, proxy contest, merger or similar transaction, to constitute at
least a majority of Salisbury Bancorp, Inc.'s Board of Directors,
provided that any person becoming a director of Salisbury Bancorp, Inc.
subsequent to the Effective Date whose election was approved by at
least a majority of the directors then comprising the Incumbent Board
shall for purposes of this Section 2(b), be considered a member of the
Incumbent Board; or
(c) the Board of Directors of Salisbury Bancorp, Inc. for reasons other
than a substantial decline in the earnings and/or stock price or
multiple or similar indications of economic or financial duress,
approve a merger or consolidation of Salisbury Bancorp, Inc. or the
Bank with any other corporation of other entity, other than a merger or
consolidation which would result in the voting securities of Salisbury
Bancorp, Inc. outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than fifty percent
(50%) of the combined voting power of the voting securities of
Salisbury Bancorp, Inc. or such surviving entity outstanding
immediately after such merger or consolidation; or
(d) the Board and/or the Board of Directors of Salisbury Bancorp, Inc.
approve a plan of complete liquidation of the Bank or Salisbury
Bancorp, Inc. or an agreement for the sale or disposition by Salisbury
Bancorp, Inc. of all or substantially all of the assets of Salisbury
Bancorp, Inc. or the Bank.
3. Termination Following Change in Control. If any of the events
-------------------------------------------
described in Section 2 hereof constituting a Change in Control shall have
occurred, the Executive shall be entitled to the benefits provided for in
Section 4(a) hereof upon (i) the termination of the Executive's employment as an
officer of the Bank and/or its successor or (ii) the reassignment of the
Executive as provided in this Section 3 within twelve (12) months after such
Change in Control, unless such employment is terminated or the Executive is
reassigned: (a) by any regulatory authority acting with proper jurisdiction; or
(b) by the Board or the Board of Directors of Salisbury Bancorp, Inc. and/or
their successors for cause; or (c) because of the Executive's death, retirement
or disability.
(a) Retirement; Disability.
----------------------
(i) Termination of employment by the Bank based on retirement,
in which event the Executive shall receive no benefit pursuant to
Section 4, shall mean the mandatory termination of employment in
accordance with the retirement policy of the Bank, including (at the
Executive's sole election and as set forth in writing) early
retirement, generally applicable to its salaried employees or in
accordance with any retirement arrangement established with the
Executive's consent with respect to the Executive.
(ii) Termination of employment by the Bank based on
disability, in which event the Executive shall receive no benefit
pursuant to Section 4, shall mean the Executive (i) 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 can be expected to last for a continuous period of
not less than twelve (12) months; or (ii) is receiving income
replacement benefits for a period of not less than three (3) months
under an accident and health plan covering the employees of the Bank 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 at least twelve (12) months. The Executive shall be deemed
disabled if (i) determined to be totally disabled by the Social
Security Administration or (ii) determined to be disabled in accordance
with a disability insurance program, provided that the definition of
disability applied under such program complies with the requirement of
the applicable regulations under Section 409A of the Internal Revenue
Code of 1986, as amended (the "Code").
(b) Notice of Termination. The Bank agrees that in the event of
-----------------------
termination it will promptly furnish the Executive with a written
Notice of Termination. Any purported termination of the Executive on
account of the Executive's reassignment as provided in Section 3(d)
hereof shall be communicated by written Notice of Termination from the
Executive to the Bank. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall include the specific
termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision
so indicated.
(c) Date of Termination. "Date of Termination" shall mean the date on
-------------------
which a Notice of Termination is given; provided that, if within five
(5) days after any Notice of Termination is given, the party receiving
such Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be the
date on which the dispute is finally determined, either by mutual
written agreement of the parties, by a binding and final arbitration
award or by a final judgment, order or decree of a court of competent
jurisdiction (the time for appeal therefrom having expired and no
appeal having been perfected).
(d) Reassignment. Reassignment shall mean a reduction in base salary or
------------
an involuntary reassignment of the Executive's duties,
responsibilities, or benefits inconsistent with those of an officer of
a bank or the involuntary relocation of the Executive's primary duties
and responsibilities to an office or location greater than fifty (50)
miles from Lakeville, Connecticut.
4. Compensation Upon Termination or Reassignment.
---------------------------------------------
(a) If, within twelve (12) months after a Change in Control, as defined
in Section 2 hereof, shall have occurred, the Bank terminates the
Executive's employment with the Bank or the Executive is reassigned as
defined in Section 3 (except if the Executive is terminated or
reassigned by (i) any regulatory authority acting with proper
jurisdiction, (ii) the Board or the Board of Directors of Salisbury
Bancorp, Inc. and/or their successors for cause or (iii) as a result of
death, retirement or disability), then the Bank and/or its successor
shall pay the Executive within thirty (30) days after the Date of
Termination a lump sum amount equal to the Executive's annual
compensation based upon the most recent aggregate base salary paid to
the Executive in the twelve (12) month period immediately preceding the
Executive's termination or reassignment less amounts previously paid to
the Executive from the date of Change in Control; provided, however,
notwithstanding this Section 4(a), if the Executive is considered a
Specified Employee, as defined in Section 409A of the Code and the
regulations thereunder, at the Date of Termination, payments hereunder
shall not be made earlier than six (6) months after such Date of
Termination.
(b) The Executive shall not be required to mitigate the amount of any
payment provided for in this Section 4 by seeking other employment or
otherwise, nor shall the amount of any payment provided for in this
Section 4 be reduced by any compensation earned by the Executive as the
result of employment after the Date of Termination.
(c) It is the intention of the parties to this Agreement that no
payments by the Bank to or for the Executive's benefit under this
Agreement shall be non-deductible to the Bank by reason of the
operation of Section 280G of the Code. Accordingly, notwithstanding any
other provision hereof, if by reason of the operation of said Section
280G of the Code, any such payments exceed the amount which can be
deducted by the Bank, the amount of such payments shall be reduced to
the maximum which can be deducted by the Bank. To the extent that
payments in excess of the amount which can be deducted by the Bank have
been made to and for the Executive's benefit, they shall be refunded
with interest at the applicable rate provided under Section 1274(d) of
the Code, or at such other rate as may be required in order that no
such payment to or for the Executive's benefit shall be non-deductible
pursuant to Section 280G of the Code. Any payments made hereunder which
are not deductible by the Bank as result of losses which have been
carried forward by the Bank for Federal tax purposes shall not be
deemed a non-deductible amount for purposes of this Section 4(c).
5. Continuation of Insurance Benefits. Notwithstanding any other
-------------------------------------
provision in this Agreement to the contrary, the Bank and/or its successor shall
maintain in full force and effect for Executive's continued benefit, for the
twelve (12) month period beginning upon a Change in Control, the same or
comparable life insurance, medical, health and accident and disability policies,
plans, programs or arrangements as those which were in effect immediately prior
to the Change in Control at levels and on terms and conditions which are at
least as favorable to Executive as those maintained by the Bank immediately
prior to the Change in Control.
6. Successors' Binding Agreement.
-----------------------------
(a) The Bank will require any successor (whether direct or indirect, by
purchase, merger, consolidation, acquisition of assets or assumption of
liabilities or otherwise) to all or substantially all of the business
and/or assets and/or deposits of the Bank, by agreement, to expressly
assume and agree to perform this Agreement in the same manner and to
the same extent that the Bank would be required to perform it if no
such succession had taken place. Failure of the Bank to obtain such
agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle the Executive to
compensation from the Bank in the same amount and on the same terms as
he would be entitled to hereunder if the Executive's employment had
terminated as a result of a Termination or Reassignment, as provided in
Section 3 hereof, after a Change in Control, except that for purposes
of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination. As used in
this Agreement, "Bank" shall mean the Bank as hereinbefore defined and
any successor to the business, assets, and/or deposits as aforesaid
which executes and delivers the agreement provided for in this Section
6 or which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law.
(b) This Agreement shall inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributes, devises and legatees.
If the Executive should die after any rights to receive the amounts
contemplated hereby have accrued to the Executive but before such
amounts have been paid, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to
the Executive's devisee, legatee or other designee or, if there be no
such designee, to the Executive's estate.
7. Notices. All notices and other communications provided for in this
-------
Agreement shall be in writing and shall be deemed to have been duly given when
delivered or mailed by United States registered mail, return receipt requested,
postage prepaid, addressed to the respective addresses set forth on the first
page of this Agreement, provided that all notices to the Bank shall be directed
to the attention of the Board with a copy to the Chairman of the Board of the
Bank or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notice of change of address shall be
effective only upon receipt.
8. Miscellaneous. No provision of this Agreement may be notified,
-------------
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such other officer as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other or failure to comply with any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. The validity, interpretation, construction performance
of this Agreement shall be governed by the laws of the State of Connecticut.
9. Validity. The invalidity or enforceability of any provision of this
--------
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
10. Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
11. Entire Agreement. This Agreement supersedes all prior agreements
-----------------
between the parties relating to the subject matter hereof and constitutes the
entire agreement between the Bank and the Executive as to the subject matter
hereof. No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which
are not expressly set forth in this Agreement. No rights are granted to the
Executive by virtue of this Agreement other than those specifically set forth
herein.
12. Compliance with Code Section 409A. This Agreement shall be
-------------------------------------
administered in a manner, and all provisions of this Agreement shall be
interpreted to be, compliant with the provisions of Section 409A of the Code,
and regulations and rulings issued thereunder, so as not to subject the benefits
accruing hereunder to taxation pursuant to Section 409A(a)(1) of the Code.
Agreed to this _________ day of _________ 2008 by and between _________________
and Salisbury Bank and Trust Company.
--------------------------------------------
--------------------------------------------
--------------------------------------------
SALISBURY BANK AND TRUST COMPANY
By:
--------------------------------------
Xxxx X. Xxxxxxx
Its Chairman of the Board and CEO
