EXHIBIT 10.10
GEORGETOWN SAVINGS BANK
Change-in-Control Agreement
THIS CHANGE-IN-CONTROL AGREEMENT (the "Agreement") is made effective
this 19th day of January 2007 (the "Effective Date"), between Georgetown Savings
Bank, a federally chartered savings bank with its principal office in
Georgetown, Massachusetts (the "Bank"), and Xxxxxxx X. Xxxxxxx ("Executive").
For purposes of this Agreement, any references to the "Company" shall mean
Georgetown Bancorp, Inc., the stock holding company of the Bank.
WITNESSETH
WHEREAS, Executive has accepted employment with the Bank in the
position of Senior Vice President/Chief Loan Officer (the "Executive Position");
WHEREAS, the Bank desires to be ensured of Executive's active
participation in the business of the Bank; and
WHEREAS, in order to induce Executive to accept employment with the
Bank and to provide further incentive to achieve the financial and performance
objectives of the Bank, the parties desire to specify the severance benefits
which shall be due Executive in the event that his employment with the Bank is
terminated under specified circumstances in connection with or following a
change in control of the Bank and/or the Company.
NOW THEREFORE, in consideration of the mutual agreements herein
contained, and upon the other terms and conditions hereinafter provided, the
parties hereby agree as follows:
1. Definitions. The following words and terms shall have the meanings
set forth below for the purposes of this Agreement:
(a) Annual Base Salary. Executive's "Base Salary" for purposes of this
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Agreement shall mean the base salary paid to Executive by the Bank (i) during
the calendar year in which the Date of Termination occurs (determined on an
annualized basis), or (ii) the calendar year immediately preceding the calendar
year in which the Date of Termination occurs, whichever is greater.
(b) Cause. Termination of Executive's employment for "Cause" shall mean
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termination because of personal dishonesty, 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 final cease-and-desist order. Executive's
employment shall not be terminated for "Cause" in accordance with this paragraph
for any act or action or failure to act which is undertaken or omitted in
accordance with a resolution of the Bank's board of directors ("Board of
Directors") or upon advice of the Bank's counsel.
(c) Change in Control. "Change in Control" shall mean a change in
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control of a nature that:
(i) would be required to be reported in response to Item 5.01 of the
current report on Form 8-K, as in effect on the date hereof, pursuant to Section
13 or 15(d) of the Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"); or
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(ii) results in a Change in Control of the Bank or the Company within
the meaning of the Home Owners' Loan Act, as amended ("HOLA"), and applicable
rules and regulations promulgated thereunder, as in effect at the time of the
Change in Control; or
(iii) without limitation such a Change in Control shall be deemed to
have occurred at such time as (a) any "person" (as the term is used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined voting power
of Company's outstanding securities except for any securities purchased by the
Bank's employee stock ownership plan or trust; or (b) individuals who constitute
the Board on the date hereof (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof, provided that any person becoming a
director subsequent to the date hereof whose election was approved by a vote of
at least three-quarters of the directors comprising the Incumbent Board, or
whose nomination for election by the Company's stockholders was approved by the
same Nominating Committee serving under an Incumbent Board, shall be, for
purposes of this clause (b), considered as though he were a member of the
Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of
all or substantially all the assets of the Bank or the Company or similar
transaction in which the Bank or Company is not the surviving institution
occurs; or (d) a proxy statement is distributed soliciting proxies from
stockholders of the Company, by someone other than the current management of the
Company, seeking stockholder approval of a plan of reorganization, merger or
consolidation of the Company or similar transaction with one or more
corporations, as a result of which the outstanding shares of the class of
securities then subject to the Plan are exchanged for or converted into cash or
property or securities not issued by the Company; or (e) a tender offer is made
for 25% or more of the voting securities of the Company and the shareholders
owning beneficially or of record 25% or more of the outstanding securities of
the Company have tendered or offered to sell their shares pursuant to such
tender offer and such tendered shares have been accepted by the tender offeror.
Notwithstanding anything in this subsection to the contrary, a Change in Control
shall not be deemed to have occurred upon the conversion of the Company's mutual
holding company parent to stock form, or in connection with any reorganization
used to effect such a conversion.
(d) Code. "Code" shall mean the Internal Revenue Code of 1986, as
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amended.
(e) Date of Termination. "Date of Termination" shall mean (i) if
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Executive's employment is terminated for Cause, the date on which the Notice of
Termination is given, and (ii) if Executive's employment is terminated for any
other reason, the date specified in the Notice of Termination.
(f) Good Reason. Termination by Executive of Executive's employment for
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"Good Reason" shall mean termination by Executive following a Change in Control
based on:
(i) the failure to elect or reelect or to appoint or reappoint
Executive to the Executive Position, unless consented to by Executive;
(ii) a substantial adverse and material change in Executive's function,
duties, or responsibilities;
(iii) a substantial and material reduction in Annual Compensation or
fringe benefits of Executive from those being provided immediately prior to the
Change in Control (except for any reduction that is part of an employee-wide
reduction in pay or benefits);
(iv) a liquidation or dissolution of the Bank;
(v) material breach of this Agreement by the Bank; or
(vi) a relocation of Executives principal place of employment more than
twenty five (25) miles from its location immediately prior to the Change in
Control.
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(g) Notice of Termination. Any purported termination of Executive's
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employment in connection with or following a Change in Control for any reason,
including without limitation for Cause, or by Executive for any reason,
including without limitation due to Retirement or for Good Reason, shall be
communicated by written "Notice of Termination" to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a dated notice
which (i) indicates the specific reasons for termination, (ii) in the event of a
termination for Good Reason sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive's
employment, and (iii) specifies a Date of Termination, which shall be not less
than thirty (30) nor more than ninety (90) days after such Notice of Termination
is given, except in the case of the Bank's termination of Executive's employment
for Cause, which shall be effective immediately; and (iv) is given in the manner
specified in Section 11 hereof.
(h) Retirement. "Retirement" shall mean termination of Executive's
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employment at age 65 or in accordance with any retirement policy established
with Executive's consent with respect to him. Upon termination of Executive upon
Retirement, no amounts or benefits shall be due Executive under this Agreement,
and Executive shall be entitled to all benefits under any retirement plan of the
Bank and other plans to which Executive is a party.
(i) Separation from Service. "Separation from Service" means
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Executive's death, Retirement, or other termination of employment by the Bank.
No Separation from Service shall be deemed to occur due to military
leave, sick leave or other bona fide leave of absence if the period of such
leave does not exceed six months or, if longer, so long as Executive's right to
reemployment is provided by law or contract. If the leave exceeds six months and
Executive's right to reemployment is not provided by law or by contract, then
Executive shall have a Separation from Service on the first date immediately
following such six-month period.
Executive shall not be treated as having a Separation from Service if
Executive provides more than insignificant services for the Bank following
Executive's actual or purported termination of employment with the Bank.
Services shall be treated as more than insignificant if such services are
performed at an annual rate that is at least equal to 20% of the services
rendered by the Executive for the Bank, on average, during the immediately
preceding three full calendar years of employment (or if employed less than
three years, such shorter period of employment) and the annual base compensation
for such services is at least equal to 20% of the average base compensation
earned during the final three full calendar years of employment (or if employed
less than three years, such shorter period of employment).
Where Executive continues to provide services to a previous employer in
a capacity other than as an employee, a Separation from Service will not be
deemed to have occurred if Executive is providing services at an annual rate
that is 50% or more of the services rendered, on average, during the immediate
preceding three full calendar years of employment (or if employed less than
three years, such lesser period) and the annual base compensation for such
services is 50% or more of the annual base compensation earned during the final
three full calendar years of employment (or if less, such lesser period).
(j) Specified Employee. "Specified Employee" means a key employee of
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the Bank within the meaning of Code Section 416(i) without regard to paragraph 5
thereof, determined in accordance with Code Section 409A and any proposed or
final regulations promulgated thereunder.
2. Term of Agreement. The term of this Agreement shall be for twelve
(12) months, commencing on the Effective Date. Commencing on the first
anniversary of the Effective Date, and on each annual anniversary thereafter,
the term of this Agreement shall automatically extend for an additional twelve
(12) months, unless
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the Board of Directors of the Bank gives notice in accordance with Section 11
hereof of a determination not to extend the term of this Agreement. Such written
notice of the election not to extend must be given not less than thirty (30)
days prior to any such anniversary date and such termination of this Agreement
shall take effect 12 months from such anniversary date. References herein to the
term of this Agreement shall refer both to the initial term and successive
terms.
3. Benefits Upon Termination. If Executive's employment by the Bank is
terminated subsequent to a Change in Control and during the term of this
Agreement by (i) the Bank for any reason other than Cause, or Executive's death
or (ii) Executive for Good Reason, then the Bank shall:
(a) pay to Executive, in a lump sum as of the Date of Termination, a
cash severance amount equal to one (1) times Executive's Annual Base Salary, and
(b) provide, at the Bank's expense, coverage of Executive (and family,
if applicable) under all life, medical and dental insurance offered by the Bank
in which Executive participated immediately prior to the Date of Termination,
except to the extent such coverage may be changed in its application to all Bank
employees. Such coverage shall cease twelve (12) months following the Date of
Termination. In the alternative, the Bank shall pay to Executive a cash amount
equal to Executive's cost of obtaining such benefits on his own, adjusted for
any federal or state income taxes Executive has to pay on the cash amount.
(c) Notwithstanding any provision to the contrary herein, and to the
extent necessary to comply with Code Section 409A, if applicable, no payment
shall be made to Executive pursuant to this Agreement until such time as
Executive has a Separation from Service. Further, if Executive is a Specified
Employee as of the Date of Termination, and if required by Code Section 409A, no
payments will be made to Executive hereunder prior to the first day of the
seventh month following his Separation from Service.
4. Limitation of Benefits under Certain Circumstances. If the payments
and benefits pursuant to Section 3 hereof, either alone or together with other
payments and benefits which Executive has the right to receive from the Bank,
would constitute a "parachute payment" under Section 280G of the Code, the
payments and benefits payable by the Bank pursuant to Section 3 hereof shall be
reduced, in the manner determined by Executive, by the amount, if any, which is
the minimum necessary to result in no portion of the payments and benefits
payable by the Bank under Section 3 being non-deductible to the Bank pursuant to
Section 280G of the Code and subject to the excise tax imposed under Section
4999 of the Code. The determination of any reduction in the payments and
benefits to be made pursuant to Section 3 shall be based upon the opinion of
independent counsel selected by the Bank's independent public accountants and
paid by the Bank. Such counsel shall prepare the foregoing opinion in no event
later than thirty (30) days from the Date of Termination, and may use any
actuaries as such counsel deems necessary or advisable. Nothing contained herein
shall result in a reduction of any payments or benefits to which Executive may
be entitled upon termination of employment under any circumstances other than as
specified in this Section 4, or a reduction in the payments and benefits
specified in Section 3 below zero.
5. No Mitigation; Exclusivity of Benefits.
(a) Executive shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise. The amount of
severance to be provided pursuant to Section 3(a) hereof shall not be reduced by
any compensation earned by Executive as a result of employment by another
employer after the Date of Termination or otherwise.
(b) The specific arrangements referred to herein are in addition to and
not intended to exclude any other benefits which may be available to Executive
upon a termination of employment with the Bank pursuant to employee benefit
plans of the Bank or otherwise.
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6. Withholding. All payments required to be made by the Bank hereunder
to Executive shall be subject to the withholding of such amounts, if any,
relating to tax and other payroll deductions as the Bank may reasonably
determine should be withheld pursuant to any applicable law or regulation.
7. Nature of Employment and Obligations.
(a) Nothing contained herein shall be deemed to create other than a
terminable at will employment relationship between the Bank and Executive, and
the Bank may terminate Executive's employment at any time, subject to providing
any payments specified herein in accordance with the terms hereof.
(b) Nothing contained herein shall create or require the Bank to create
a trust of any kind to fund any benefits which may be payable hereunder, and to
the extent that Executive acquires a right to receive benefits from the Bank
hereunder, such right shall be no greater than the right of any unsecured
general creditor of the Bank.
8. Source of Payments. It is intended by the parties hereto that all
payments provided in this Agreement shall be paid in cash or check from the
general funds of the Bank.
9. No Attachment.
(a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, reach and
apply action, sale, assignment, encumbrance, charge, pledge, or hypothecation,
or to execution, attachment, levy, or similar process or assignment by operation
of law, and any attempt, voluntary or involuntary, to affect any such action
shall be null, void, and of no effect.
(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive, the Bank, and their respective successors and assigns.
10. Assignability. The Bank may assign this Agreement and its rights
and obligations hereunder in whole, but not in part, to any corporation, bank or
other entity with or into which the Bank may hereafter merge or consolidate or
to which the Bank may transfer all or substantially all of its assets, if in any
such case said corporation, bank or other entity shall expressly in writing
assume all obligations of the Bank hereunder as fully as if it had been
originally made a party hereto, but may not otherwise assign this Agreement or
their rights and obligations hereunder. The Executive may not assign or transfer
this Agreement or any rights or obligations hereunder.
11. Notice. For the purposes of this Agreement, notices and all 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 certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
To the Bank: Georgetown Savings Bank
0 Xxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
To Executive: Xxxxxxx X. Xxxxxxx
00 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
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12. Amendment; Waiver. No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by Executive and such officer or officers as may be
specifically designated by the Board of Directors of the Bank to sign on behalf
of the Board of Directors. No waiver by any party hereto at any time of any
breach by any other party hereto of, or compliance 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.
13. Governing Law. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the Commonwealth of
Massachusetts.
14. Headings. The section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
15. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
16. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
17. Miscellaneous Provisions.
(a) This Agreement does not create any obligation on the part of the Bank
to make payments to (or to employ) Executive unless a Change in Control
of the Bank or the Company shall have occurred. Following a Change in
Control, Executive's employment may be terminated at any time, but any
termination, other than termination for Cause, shall not prejudice
Executive's right to compensation or other benefits under this
Agreement. The Executive shall not have the right to receive
compensation or other benefits for any period after termination for
Cause as defined in Section 1(b) hereof.
(b) The Bank's Board may terminate Executive's employment at any time, but
any termination by the Bank's Board other than termination for Cause as
defined in Section 1(b) hereof shall not prejudice Executive's right to
compensation or other benefits under this Agreement. Executive shall
have no right to receive compensation or other benefits for any period
after termination for Cause.
(c) If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Bank's affairs by a notice
served under Section 8(e)(3) (12 U.S.C. ss.1818(e)(3)) or 8(g)(1) (12
U.S.C. ss.1818(g)(1)) of the Federal Deposit Insurance Act ("FDIA"),
the Bank's obligations under this contract shall be suspended as of the
date of service, unless stayed by appropriate proceedings. If the
charges in the notice are dismissed, the Bank may in its discretion (i)
pay Executive all or part of the compensation withheld while its
contract obligations were suspended and (ii) reinstate (in whole or in
part) any of its obligations which were suspended.
(d) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued
under Section 8(e)(4) (12 U.S.C. ss.1818(e)(4)) or 8(g)(1) (12 U.S.C.
ss.1818(g)(1)) of the FDIA, all obligations of the Bank under this
contract shall terminate as of the effective date of the order, but
vested rights of the contracting parties shall not be affected.
(e) If the Bank is in default as defined in Section 3(x)(1) (12 U.S.C.
ss.1813(x)(1)) of the FDIA, all obligations of the Bank under this
contract shall terminate as of the date of default, but this paragraph
shall not affect any vested rights of the contracting parties.
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(f) All obligations under this contract shall be terminated, except to the
extent determined that continuation of the contract is necessary for
the continued operation of the Bank, (i) by the Director of the OTS or
his or her designee, at the time the FDIC enters into an agreement to
provide assistance to or on behalf of the Bank under the authority
contained in Section 13(c) (12 U.S.C. ss.1823(c)) of the FDIA; or (ii)
by Executive or his designee at the time Executive or his designee
approves a supervisory merger to resolve problems related to operation
of the Bank or when the Bank is determined by Executive to be in an
unsafe or unsound condition. Any rights of the parties that have
already vested, however, shall not be affected by such action.
(g) Notwithstanding any other provision of this Agreement to the contrary,
any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with
Section 18(k) of the FDIA (12 U.S.C. ss. 1828(k)) and the regulations
promulgated thereunder, including 12 C.F.R. Part 359.
18. Reinstatement of Benefits Under Section 17(g). In the event Executive is
suspended and/or temporarily prohibited from participating in the conduct of the
Bank's affairs by a notice described in Section 17(c) hereof (the "Notice")
during the term of this Agreement and a Change in Control, as defined herein,
occurs, the Bank will assume its obligation to pay and Executive will be
entitled to receive all of the termination benefits provided for under Section 3
of this Agreement upon the Bank's receipt of a dismissal of charges in the
Notice.
19. Arbitration. Any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration, conducted before a
panel of three arbitrators sitting in a location selected by the Bank within
fifty (50) miles from the location of the Bank's main office, in accordance with
the rules of the American Arbitration Association then in effect. Judgment may
be entered on the arbitrator's award in any court having jurisdiction; provided,
however, that Executive shall be entitled to seek specific performance of his
right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement, other
than in the case of a termination for Cause.
20. Payment of Costs and Legal Fees. All reasonable costs and legal fees paid or
incurred by Executive pursuant to any dispute or question of interpretation
relating to this Agreement shall be paid or reimbursed by the Bank if Executive
is successful on the merits pursuant to a legal judgment, arbitration or
settlement.
21. Confidentiality. Executive recognizes and acknowledges that the knowledge of
the business activities and plans for business activities of the Bank and
affiliates thereof, as it may exist from time to time, is a valuable, special
and unique asset of the business of the Bank. Executive will not, during or
after the term of his employment, disclose any knowledge of the past, present,
planned or considered business activities of the Bank or affiliates thereof to
any person, firm, corporation, or other entity for any reason or purpose
whatsoever (except for such disclosure as may be required to be provided to the
Office of Thrift Supervision, the Federal Deposit Insurance Corporation, or
other bank regulatory agency with jurisdiction over the Bank or Executive).
Notwithstanding the foregoing, Executive may disclose any knowledge of banking,
financial and/or economic principles, concepts or ideas which are not solely and
exclusively derived from the business plans and activities of the Bank or its
affiliates, and Executive may disclose any information regarding the Bank or its
affiliates which is otherwise publicly available or which Executive is otherwise
legally compelled to disclose. In the event of a breach by Executive of the
provisions of this Section 21, the Bank or its affiliates will be entitled to an
injunction restraining Executive from disclosing, in whole or in part, the
knowledge of the past, present, planned or considered business activities of the
Bank or affiliates thereof, or from rendering any services to any person, firm,
corporation, other entity to whom such knowledge, in whole or in part, has been
disclosed or is threatened to be disclosed. Nothing herein will be construed as
prohibiting the Bank or its affiliates from pursuing any other remedies
available to the Bank or its affiliates for such breach or threatened breach,
including the recovery of damages from Executive.
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22. Entire Agreement. This Agreement embodies the entire agreement between the
Bank and Executive with respect to the matters agreed to herein. All prior
agreements between the Bank and Executive with respect to the matters agreed to
herein are hereby superseded and shall have no force or effect, except that this
Agreement shall not affect or operate to reduce any benefit or compensation
inuring to Executive of a kind elsewhere provided. No provision of this
Agreement shall be interpreted to mean that Executive is subject to receiving
fewer benefits than those available to him without reference to this Agreement.
IN WITNESS WHEREOF, this Agreement is made effective as of the date
first above written.
GEORGETOWN SAVINGS BANK
Attest:
/s/ Xxxxx Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxx Xxxxxxx Xxxxxx X. Xxxxxxxx, President/CEO
Attest: EXECUTIVE
/s/ Xxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxx Xxxxxxx Xxxxxxx X. Xxxxxxx, SVP/CLO
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