Exhibit 10.15
NewMil Bank
Salary Continuation Agreement
This Salary Continuation Agreement is entered into as of this
1st day of January, 2002, by and between NewMil Bank, a
Connecticut-chartered, FDIC-insured savings bank with its main office
in New Milford, Connecticut (the "Bank"), and Xxxxxxxx X. Xxxxxxx,
Senior Vice President of NewMil Bank (the "Executive").
Whereas, the Executive has contributed substantially to the
success of the Bank and its parent corporation, NewMil Bancorp, Inc.,
and the Bank desires that the Executive continue in its employ,
Whereas, to encourage the Executive to remain an employee of the
Bank, the Bank is willing to provide salary continuation benefits to
the Executive, payable out of the Bank's general assets,
Whereas, none of the conditions or events included in the
definition of the term "golden parachute payment" that is set forth
in Section 18(k)(4)(A)(ii) of the Federal Deposit Insurance Act [12
U.S.C. Section 1828(k)(4)(A)(ii)] and in Federal Deposit Insurance
Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)] exists or,
to the best knowledge of the Bank, is contemplated insofar as the Bank
is concerned.
Now Therefore, in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
Article 1
Definitions
Whenever used in this Agreement, the following terms shall have
the meanings specified:
1.1 "Accrual Balance" means the amount reflected in Schedule A,
which is the amount required to be accrued by the Bank as required under
generally accepted accounting principles to account for benefits that
may become payable to the Executive under this Agreement.
1.2 "Change in Control" means if any one of the following events
occurs:
(a) Merger: NewMil Bancorp, Inc. merges into or consolidates
with another corporation, or merges another corporation into NewMil
Bancorp, Inc., 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 NewMil Bancorp, Inc. immediately before the merger or
consolidation. For purposes of this Agreement, the term person
means an individual, corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization or other entity,
(b) Acquisition of Significant Share Ownership: a report
on Schedule 13D or another form or schedule (other than Schedule
13G) is filed or is required to be filed 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 NewMil Bancorp, Inc.'s voting securities, but this clause (b)
shall not apply to beneficial ownership of NewMil Bancorp, Inc.
voting shares held in a fiduciary capacity by an entity of which
NewMil Bancorp, Inc. directly or indirectly beneficially owns 50%
or more of its outstanding voting securities,
(c) Change in Board Composition: during any period of two
consecutive years, individuals who constitute NewMil Bancorp,
Inc.'s Board of Directors at the beginning of the two-year period
cease for any reason to constitute at least a majority of NewMil
Bancorp, Inc.'s Board of Directors; provided, however, that for
purposes of this clause (c) each director who is first elected
by the board (or first nominated by the board for election by
stockholders) by a vote of at least two-thirds (2/3) of the
directors who were directors at the beginning of the period shall
be deemed to have been a director at the beginning of the two-year
period, or
(d) Sale of Assets: NewMil Bancorp, Inc. sells to a third
party all or substantially all of NewMil Bancorp, Inc.'s assets.
For purposes of this Agreement, sale of substantially all of
NewMil Bancorp, Inc.'s assets includes sale of the shares or
assets of NewMil Bank.
1.3 "Disability" means the Executive suffers a sickness, accident
or injury which has been determined by the carrier of any individual or
group disability insurance policy covering the Executive, or by the
Social Security Administration, to be a disability rendering the
Executive totally and permanently disabled. The Executive must submit
proof to the Bank of the carrier's or Social Security Administration's
determination upon the request of the Bank.
1.4 "Early Retirement Age" [Intentionally Left Blank]
1.5 "Early Termination" means the Executive's Termination of
Employment with the Bank before Normal Retirement Age for reasons other
than death, Disability, Termination for Cause or following a Change in
Control.
1.6 "Early Termination Date" means the month, day and year in
which Early Termination occurs.
1.7 "Effective Date" means as of January 1, 2002.
1.8 "Good Reason" for purposes of this Agreement shall be defined
as:
(a) a material reduction in Executive's title or responsibilities;
(b) a reduction in base salary as in effect on the date of a
Change in Control;
(c) relocation of the Bank's principal executive offices, or
requiring the Executive to change his principal work location,
to any location that is more than 15 miles from the location of
the Bank's principal executive offices on the date of this
Agreement;
(d) the adverse and substantial alteration in the nature and
quality of the office space within which the Executive performs
his duties, including the size and location thereof, as well as
the secretarial and administrative support provided to the
Executive;
(e) the failure by the Bank to continue to provide the Executive
with compensation and benefits substantially similar to those
provided to him under any of the employee benefit plans in which
the Executive becomes a participant, or the taking of any action
by the Bank which would directly or indirectly materially reduce
any of such benefits or deprive the Executive of any material
fringe benefit enjoyed by him at the time of the Change in
Control; or
(f) the failure of the Bank to obtain a satisfactory agreement
from any successor or assign of the Bank to assume and agree to
perform this Agreement, as contemplated in Section 7.5 hereof.
1.9 "Normal Retirement Age" means the Executive's 65th birthday.
1.10 "Normal Retirement Date" means the later of the Normal
Retirement Age or the Executive's Termination of Employment with the
Bank.
1.11 "Person" means an individual, corporation, partnership,
trust, association, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization or other entity.
1.12 "Plan Year" means a twelve-month period commencing on January
1, and ending on the last day of December of each year. The initial
Plan Year shall commence on the Effective Date of this Agreement.
1.13 "Termination for Cause" means the definition of termination
for cause specified in any severance agreement existing on the date
hereof or hereafter entered into between the Executive and NewMil
Bancorp, Inc. If the Executive is not a party to a severance agreement
containing a definition of termination for cause, Termination
for Cause means the Bank has terminated the Executive's employment
for any of the following reasons:
(a) Gross negligence or gross neglect of duties;
(b) Commission of a felony or of a gross misdemeanor
involving moral turpitude; or
(c) Fraud, disloyalty or willful violation of any law or
significant Bank policy committed in connection with
the Executive's employment and resulting in an adverse
effect on the Bank. No act, or failure to act, on the
Executive's part shall be considered "willful" unless
he has acted, or failed to act, with an absence of good
faith and without a reasonable belief that his action or
failure to act was in the best interest of the Bank.
1.14 "Termination of Employment" with the Bank means that the
Executive shall have ceased to be employed by the Bank for any reason
whatsoever, excepting a leave of absence approved by the Bank. For
purposes of this Agreement, if there is a dispute over the employment
status of the Executive or the date of termination of the Executive's
employment, the Bank shall have the sole and absolute right to decide
the dispute, unless a Change in Control shall have occurred.
Article 2
Lifetime Benefits
2.1 Normal Retirement Benefit. Upon the Executive's Termination
of Employment on or after the Normal Retirement Age for reasons other
than death, the Bank shall pay to the Executive the benefit described
in this Section 2.1 instead of any other benefit under this Agreement.
2.1.1 Amount of Benefit. The annual benefit under this Section
2.1 is $30,000. The Bank's Board of Directors may, in its
sole discretion, increase the annual benefit under this
Section 2.1.1, but any increase shall require recalculation
of Schedule A. The benefits reflected in Schedule A are
based on the assumption that the Executive retires at age
65. If the Executive instead continues to serve as an
officer of the Bank after the Normal Retirement Age, the
benefits reflected in Schedule A shall be recalculated
annually until the Executive's Normal Retirement Date,
using the same discount rate reflected in Schedule A.
2.1.2 Payment of Benefit. Beginning with the month after the
Executive's Normal Retirement Date, the Bank shall pay the
annual benefit to the Executive in 12 equal monthly
installments on the first day of each month. The annual
benefit shall be paid to the Executive for 15 years.
2.2 Early Termination Benefit. Upon Early Termination, the Bank
shall pay to the Executive the benefit described in this Section 2.2
instead of any other benefit under this Agreement.
2.2.1 Amount of Benefit. The benefit under this Section 2.2 is
the Early Termination Annual Benefit amount set forth in
Schedule A for the Plan Year ending immediately before the
Early Termination Date (except during the first Plan Year,
this benefit is the amount set forth for Plan Year 1). The
Bank's Board of Directors may, in its sole discretion,
increase the annual benefit under this Section 2.2.1, but
any increase shall require recalculation of Schedule A.
2.2.2 Payment of Benefit. Beginning with the month after the
Normal Retirement Age, the Bank shall pay the annual benefit
to the Executive in 12 equal monthly installments on the
first day of each month. The annual benefit shall be paid
to the Executive for 15 years.
2.3 Disability Benefit. If the Executive terminates employment
because of Disability before the Normal Retirement Age, the Bank shall
pay to the Executive the benefit described in this Section 2.3 instead
of any other benefit under this Agreement.
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is
the Disability Annual Benefit amount set forth in Schedule A
for the Plan Year ending immediately before the date on
which termination of the Executive's employment occurs
(except during the first Plan Year, this benefit is the
amount set forth for Plan Year 1). The Bank's Board of
Directors may, in its sole discretion, increase the
annual benefit under this Section 2.3.1, but any increase
shall require recalculation of Schedule A.
2.3.2 Payment of Benefit. Beginning with the month after the
Normal Retirement Age, the Bank shall pay the Disability
Annual Benefit amount to the Executive in 12 equal monthly
installments on the first day of each month. The annual
benefit shall be paid to the Executive for 15 years.
2.4 Change-in-Control Benefit. If the Executive=s employment
with the Bank terminates involuntarily within 24 months after the first
occurrence of a Change in Control or in the event the Executive
terminates employment voluntarily for Good Reason within 24 months of
such Change in Control, the Bank shall pay to the Executive the benefit
described in this Section 2.4 instead of any other benefit under this
Agreement. However, no benefits shall be payable under this Agreement
if the Executive's employment is terminated under Article 5 of this
Agreement.
2.4.1 Amount of Benefit. For a Change in Control occurring from
the Effective Date of this Agreement through March 31,
2005, the Change-in-Control Benefit is determined by taking
the Executive's Normal Retirement Age Accrual Balance
($271,369) and discounting that sum back to the
Executive's current age as if the Executive had an
additional 12 months of service and 12 additional months
of age on the date of the Executive's Termination of
Employment at a 4% discount rate. For example, assume
that a Change in Control occurs on January 30, 2003 and the
Executive is involuntarily terminated from employment with
the Bank on that date. The Executive's Change-in-Control
Benefit would be determined by taking the $271,369 Accrual
Balance that would exist at the Executive's Normal
Retirement Age and discounting that figure as if the
Executive had 26 months left to retirement at a 4% discount
rate, which produces a Change-in-Control Benefit of $248,877
payable no later than February 2, 2003. For a Change in
Control occurring from March 31, 2005 through the
Executive's Normal Retirement Age, the Change-in-Control
Benefit is $271,369.
2.4.2 Payment of Benefit: The Bank shall pay the
Change-in-Control benefit under Section 2.4 of this
Agreement to the Executive in one lump sum within three
days after the Executive's Termination of Employment.
2.5 Petition for Payment of Vested Normal Retirement Benefit,
Vested Early Termination Benefit or Vested Disability Benefit. To the
extent the Executive is entitled to the normal retirement benefit
provided by Section 2.1, the Early Termination benefit provided by
Section 2.2, or the Disability benefit provided by Section 2.3, the
Executive may petition the Board of Directors to have the Accrual
Balance amount corresponding to that particular benefit paid to the
Executive in a single lump sum after (i) deduction of any normal
retirement benefits, Early Termination benefits or Disability benefits
already paid and (ii) addition of interest at the rate of 7.5% on the
Accrual Balance not yet paid for the period from Termination of
Employment to payment of the lump sum amount. The Board of Directors
shall have sole and absolute discretion about whether to pay the
remaining Accrual Balance in a lump sum. If payment of the remaining
Accrual Balance is paid in a single lump sum, the Bank shall have no
further obligations under this Agreement.
2.6 Change-in-Control Payout of Vested Normal Retirement Benefit,
Vested Early Termination Benefit or Vested Disability Benefit Being
Paid to the Executive at the Time of a Change in Control. If a Change
in Control occurs at any time during the entire 15-year salary
continuation benefit payment period and if at the time of that
Change in Control the Executive is receiving the benefit provided by
Section 2.1.2, Section 2.2.2 or Section 2.3.2, the Bank shall pay the
remaining salary continuation benefits to the Executive, his
beneficiaries, or estate in a lump sum within three days after the
Change in Control. The lump-sum payment due to the Executive, his
beneficiaries or estate as a result of a Change in Control shall be an
amount equal to the Accrual Balance amount corresponding to that
particular benefit then being paid to the Executive, his estate or
beneficiaries pursuant to Section 2.1.2, Section 2.2.2 or Section 2.3.2
after (i) deduction of any normal retirement benefits, Early Termination
benefits or Disability benefits already paid and (ii) addition of
interest at the rate of 7.5% on the Accrual Balance not yet paid for
the period from Termination of Employment to payment of the lump sum
amount.
2.7 Contradiction in Terms of Agreement and Schedule A. If there
is a contradiction in the terms of this Agreement and the Schedule A
attached hereto with the actual amount of a particular benefit amount
due the Executive pursuant to Section 2.2, 2.3, or 2.4 hereof, then the
actual amount of said benefit set forth in the Agreement shall control.
Article 3
Death Benefits
3.1 Death During Active Service. Except as provided in Section
5.2, if the Executive dies in active service to the Bank before Normal
Retirement Age, instead of any benefit payable under this Agreement the
Bank shall pay to the Executive's beneficiary(ies) the benefit described
in the Split Dollar Agreement and Endorsement attached to this Agreement
as Addendum A.
3.2 Death During Benefit Period. If the Executive dies after
benefit payments under Article 2 of this Agreement have commenced but
before receiving all such payments, the Bank shall pay the remaining
benefits to the Executive's beneficiary(ies) at the same time and in
the same amounts they would have been paid to the Executive had the
Executive survived. In that case, no death benefit shall be payable
under this Article 3.
3.3 Death After Termination of Employment But Before Benefit
Payments Commence. If the Executive is entitled to benefit payments
under Article 2 but dies before payments commence, the benefits shall
be payable to the Executive's beneficiary(ies), but payments shall
commence on the first day of the month after the date of the Executive's
death. Payments shall be made in the same amounts they would have been
paid to the Executive had the Executive survived.
3.4 Petition for Benefit Payments. To the extent that the
Executive dies before receiving any or all benefit payments to which he
is entitled under Section 2.1, Section 2.2, or Section 2.3,
respectively, the Executive's beneficiary(ies) or estate may petition
the Board of Directors to have the Accrual Balance corresponding to
that particular benefit paid to the Executive's beneficiary(ies) or
estate in a single lump sum after (i) deduction of any normal retirement
benefits, Early Termination benefits or Disability benefits already paid
and (ii) addition of interest at the rate of 7.5% on the Accrual Balance
not yet paid for the period from the Executive's Termination of
Employment to payment of the lump sum amount. The Board of Directors
shall have sole and absolute discretion about whether to pay the
remaining Accrual Balance in a lump sum. If payment of the remaining
Accrual Balance is paid in a single lump sum, the Bank shall have no
further obligations under this Agreement.
3.5 Change-in-Control Payout of Vested Normal Retirement
Benefit, Vested Early Termination Benefit or Vested Disability Benefit
Being Paid to the Executive's Estate or Beneficiaries at the Time of a
Change in Control. If a Change in Control occurs at any time during
the entire 15-year salary continuation benefit payment period and if
at the time of that Change in Control the Executive's estate or
beneficiaries is receiving the benefit provided by Section 2.1.2,
Section 2.2.2 or Section 2.3.2, the Bank shall pay the remaining
salary continuation benefits to the Executive's beneficiaries or estate
in a lump sum within three days after the Change in Control. The
lump-sum payment due to the Executive's beneficiaries or estate as a
result of a Change in Control shall be an amount equal to the Accrual
Balance amount corresponding to that particular benefit then being
paid to the Executive's estate or beneficiaries pursuant to Section
2.1.2, Section 2.2.2 or Section 2.3.2 after (i) deduction of any
normal retirement benefits, Early Termination benefits or Disability
benefits already paid and (ii) addition of interest at the rate of
7.5% on the Accrual Balance not yet paid for the period from
Termination of Employment to payment of the lump sum amount.
Article 4
Beneficiaries
4.1 Beneficiary Designations. The Executive shall designate a
beneficiary or beneficiaries by filing a written designation with the
Bank. The Executive may revoke or modify the designation at any time
by filing a new designation. However, designations will be effective
only if signed by the Executive and accepted by the Bank during the
Executive's lifetime. The Executive's beneficiary designation shall
be deemed automatically revoked if the beneficiary predeceases the
Executive, or if the Executive names a spouse as beneficiary and the
marriage is subsequently dissolved. If the Executive dies without a
valid beneficiary designation, all payments shall be made to the
Executive's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to
a person declared incapacitated, or to a person incapable of handling
the disposition of his or her property, the Bank may pay such benefit
to the guardian, legal representative or person having the care or
custody of such minor, incapacitated person or incapable person. The
Bank may require such proof of incapacity, minority or guardianship as
the Bank deems appropriate before distribution of the benefit.
Distribution shall completely discharge the Bank from all liability
for such benefit.
Article 5
General Limitations
5.1 Termination for Cause. Notwithstanding any provision of this
Agreement to the contrary, the Bank shall not pay any benefit under this
Agreement if Termination of Employment is due to the Executive's actions
resulting in Termination for Cause.
5.2 Suicide or Misstatement. The Bank shall not pay any benefit
under this Agreement if the Executive commits suicide within three years
after the date of this Agreement. In addition, the Bank shall not pay
any benefit under this Agreement if the Executive has made any material
misstatement of fact on any application or resume provided to the Bank,
or on any application for any benefits provided by the Bank to the
Executive.
5.3 Removal. If the Executive is removed from office or
permanently prohibited from participating in the conduct of the Bank's
affairs by an order issued under Section 8(e)(4) or (g)(1) of the
Federal Deposit Insurance Act, 12 U.S.C. Section 1818(e)(4) or (g)(1),
all obligations of the Bank under this Agreement shall terminate as of
the effective date of the order.
5.4 Insolvency. If the Commissioner of the Connecticut Department
of Banking appoints the Federal Deposit Insurance Corporation as
receiver for the Bank under General Statutes of Connecticut Section
36a-220, all obligations under this Agreement shall terminate as of the
date of the Bank's declared insolvency.
Article 6
Claims and Review Procedures
6.1 Claims Procedure. A person or beneficiary ("claimant")
who has not received benefits under the Agreement that he or she
believes should be paid shall make a claim for such benefits as follows:
6.1.1 Initiation Written Claim. The claimant initiates a
claim by submitting to the Bank a written claim for the
benefits.
6.1.2 Timing of Bank Response. The Bank shall respond to such
claimant within 90 days after receiving the claim. If
the Bank determines that special circumstances require
additional time for processing the claim, the Bank can
extend the response period by an additional 90 days by
notifying the claimant in writing, prior to the end of
the initial 90-day period, that an additional period is
required. The notice of extension must set forth
the special circumstances and the date by which the Bank
expects to render its decision.
6.1.3 Notice of Decision. If the Bank denies part or all of
the claim, the Bank shall notify the claimant in writing
of such denial. The Bank shall write the notification in
a manner calculated to be understood by the claimant.
The notification shall set forth:
6.1.3.1 The specific reasons for the denial,
6.1.3.2 A reference to the specific provisions of
the Agreement on which the denial is
based,
6.1.3.3 A description of any additional information
or material necessary for the claimant to
perfect the claim and an explanation of why
it is needed,
6.1.3.4 An explanation of the Agreement's review
procedures and the time limits applicable
to such procedures, and
6.1.3.5 A statement of the claimant's right to bring
a civil action under ERISA (Employees
Retirement Income Security Act) Section 502(a)
following an adverse benefit determination on
review.
6.2 Review Procedure. If the Bank denies part or all of the
claim, the claimant shall have the opportunity for a full and fair
review by the Bank of the denial, as follows:
6.2.1 Initiation - Written Request. To initiate the review,
the claimant, within 60 days after receiving the Bank's
notice of denial, must file with the Bank a written
request for review.
6.2.2 Additional Submissions - Information Access. The
claimant shall then have the opportunity to submit
written comments, documents, records and other
information relating to the claim. The Bank shall
also provide the claimant, upon request and free of
charge, reasonable access to, and copies of, all
documents, records and other information relevant
(as defined in applicable ERISA regulations) to the
claimant's claim for benefits.
6.2.3 Considerations on Review. In considering the review,
the Bank shall take into account all materials and
information the claimant submits relating to the
claim, without regard to whether such information was
submitted or considered in the initial benefit
determination.
6.2.4 Timing of Bank Response. The Bank shall respond in
writing to such claimant within 60 days after
receiving the request for review. If the Bank
determines that special circumstances require
additional time for processing the claim, the Bank
can extend the response period by an additional 60
days by notifying the claimant in writing, prior to
the end of the initial 60-day period, that an
additional period is required. The notice of
extension must set forth the special circumstances
and the date by which the Bank expects to render its
decision.
6.2.5 Notice of Decision. The Bank shall notify the claimant
in writing of its decision on review. The Bank shall
write the notification in a manner calculated to be
understood by the claimant. The notification shall set
forth:
6.2.5.1 The specific reasons for the denial,
6.2.5.2 A reference to the specific provisions of
the Agreement on which the denial is
based,
6.2.5.3 A statement that the claimant is entitled
to receive, upon request and free of
charge, reasonable access to, and copies
of, all documents, records and other
information relevant (as defined in
applicable ERISA regulations) to the
claimant's claim for benefits, and
6.2.5.4 A statement of the claimant's right to
bring a civil action under ERISA Section
502(a).
Article 7
Miscellaneous
7.1 Amendments and Termination. This Agreement may be amended
or terminated only by a written agreement signed by the Bank and the
Executive.
7.2 Binding Effect. This Agreement shall bind the Executive and
the Bank, and their beneficiaries, survivors, executors, successors,
administrators and transferees.
7.3 No Guarantee of Employment. This Agreement is not an
employment policy or contract. It does not give the Executive the
right to remain an employee of the Bank, nor does it interfere with
the Bank's right to discharge the Executive. It also does not require
the Executive to remain an employee nor interfere with the Executive's
right to terminate employment at any time.
7.4 Non-Transferability. Benefits under this Agreement cannot be
sold, transferred, assigned, pledged, attached, or encumbered in any
manner.
7.5 Successors; Binding Agreement. By an assumption agreement
in form and substance satisfactory to the Executive, the Bank will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business
or assets of the Bank 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 this Agreement if no such succession had
occurred. The Bank's failure to obtain such an assumption agreement
before the succession becomes effective shall be considered a breach of
this Agreement and shall entitle the Executive to the Change-in-Control
benefit provided in Section 2.4.
7.6 Tax Withholding. The Bank shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
7.7 Applicable Law. Except to the extent preempted by the laws
of the United States of America, the validity, interpretation,
construction, and performance of this Agreement shall be governed
by and construed in accordance with the laws of the State of
Connecticut, without giving effect to the principles of conflict of
laws of such state.
7.8 Unfunded Arrangement. The Executive and his beneficiary(ies)
are general unsecured creditors of the Bank for the payment of benefits
under this Agreement. The benefits represent the mere promise by the
Bank to pay such benefits. The rights to benefits are not subject in
any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, or garnishment by creditors. Any
insurance on the Executive's life is a general asset of the Bank to
which the Executive and beneficiary(ies) have no preferred or secured
claim.
7.9 Administration. The Bank shall have the powers that are
necessary to administer this Agreement, including but not limited to
the power to:
(a) interpret the provisions of the Agreement,
(b) establish and revise the method of accounting for the
Agreement,
(c) maintain a record of benefit payments, and
(d) establish rules and prescribe forms necessary or desirable
to administer the Agreement.
7.10 Named Fiduciary. The Bank shall be the named fiduciary and
plan administrator under this Agreement. The named fiduciary may
delegate to others certain aspects of the management and operation
responsibilities of the plan, including the employment of advisors and
the delegation of ministerial duties to qualified individuals.
7.11 Severability. If for any reason any provision of this
Agreement is held invalid, such invalidity shall not affect any other
provision of this Agreement not held so invalid, and each such other
provision shall, to the full extent consistent with the law, continue
in full force and effect. If any provision of this Agreement shall be
held invalid in part, such invalidity shall in no way affect the
remainder of such provision, not held so invalid, and the remainder of
such provision, together with all other provisions of this Agreement
shall, to the full extent consistent with the law, continue in full
force and effect.
7.12 Headings. The headings of Sections herein are included
solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement.
7.13 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand or mailed, certified or registered
mail, return receipt requested, with postage prepaid, to the following
addresses or to such other address as either party may designate by like
notice.
(a) If to the Bank, to:
Board of Directors
NewMil Bank
00 Xxxx Xxxxxx
X.X. Xxx 000
New Milford, Connecticut 06776-0600
(b) If to the Executive, to:
Xxxxx Xxxxxxx
00 Xxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000
and to such other or additional person or persons as either
party shall have designated to the other party in writing by
like notice.
In Witness Whereof, the Executive and a duly authorized Bank
officer have signed this Agreement as of the day and year first written
above.
The Executive: The Bank:
NewMil Bank
/s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxx
----------------------- --------------------
Xxxxxxxx X. Xxxxxxx Its: President & CEO
Beneficiary Designation
NewMil Bank
Salary Continuation Agreement
Xxxxxxxx X. Xxxxxxx
I designate the following as beneficiary of any death benefits
under this Salary Continuation Agreement:
Primary:-----------------------------------------
Contingent:--------------------------------------
Note: To name a trust as beneficiary, please provide the name of the
trustee(s) and the exact name and date of the trust agreement.
I understand that I may change these beneficiary designations by
filing a new written designation with the Bank. I further understand
that the designations will be automatically revoked if the beneficiary
predeceases me, or if I have named my spouse as beneficiary and our
marriage is subsequently dissolved.
Signature: /s/ Xxxxxxxx X. Xxxxxxx
-----------------------
Xxxxxxxx X. Xxxxxxx
Date: January 2, 2002
Accepted by the Bank this 2 day of January, 2002.
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Title: Executive VP & Secretary
Schedule A
NewMil Bank
Salary Continuation Agreement
Xxxxxxxx X. Xxxxxxx
Early
Plan year Executive's Accrual Termination
Plan ending Age at Plan balance vesting
year December 31 Year End at 7.5%(1) Schedule (2)
---- ----------- ----------- ---------- ------------
1 2002 61 $57,280 100%
2 2003 62 $119,006 100%
3 2004 63 $185,524 100%
4 2005 64 $257,207 100%
5 2006 65 $263,806 (5) 100%
6 2007 66 $253,039 N/A
7 2008 67 $241,436 N/A
8 2009 68 $228,932 N/A
9 2010 69 $215,457 N/A
10 2011 70 $200,937 N/A
11 2012 71 $185,289 N/A
12 2013 72 $168,426 N/A
13 2014 73 $150,254 N/A
14 2015 74 $130,672 N/A
15 2016 75 $109,569 N/A
16 2017 76 $86,828 N/A
17 2018 77 $62,322 N/A
18 2019 78 $35,913 N/A
19 2020 79 $7,454 N/A
20 2021 80 $0 N/A
(1) The Accrual balance reflects payment at the beginning of each
month during retirement.
(2) Participant is 100 percent vested in the accrued liability
balance.
(3) Benefit is based on present value of the annual payment stream
beginning at age 65 of the current vested accrual balance using
a standard discount rate (7.5%).
(4) The "Change-in-Control Benefit" is determined pursuant to Section
2.4.1 of the Salary Continuation Agreement. The numbers shown in
this column reflect the Change-in-Control Benefit due the Executive
if the Executive's Termination of Employment occurred at the Plan
Year end indicated following a Change in Control. The numbers
shown as of the Plan Year end indicated are derived pursuant to
the calculation methodology specified in Section 2.4.1 of the
Salary Continuation Agreement. For calculation of the
Change-in-Control Benefit due the Executive at any time other than
Plan Year end, this benefit would be determined pursuant to Section
2.4 and Section 2.4.1 as of the date on which the Executive's
Termination of Employment occurs following a Change in Control.
(5) Projected retirement occurs March 6, 2006, with the first normal
monthly retirement benefit commencing April 2006. The accrual
balance at the end of March, 2006 will be $271,369.
N/A means not applicable.
Early Disability
Termination Annual
Annual Benefit Benefit
payable at payable at Change-in-Control
Vested Normal Normal Benefit
accrual Retirement Retirement payable in a
balance Age (3) Age (3) lump sum (4)
------- -------------- ---------- -----------------
$57,280 $8,074 $8,074 $248,050
$119,006 $15,566 $15,566 $258,156
$185,524 $22,519 $22,519 $268,673
$257,207 $28,971 $28,971 $271,369
$263,806 N/A N/A (5)
$253,039 N/A N/A
$241,436 N/A N/A
$228,932 N/A N/A
$215,457 N/A N/A
$200,937 N/A N/A
$185,289 N/A N/A
$168,426 N/A N/A
$150,254 N/A N/A
$130,672 N/A N/A
$109,569 N/A N/A
$86,828 N/A N/A
$62,322 N/A N/A
$35,913 N/A N/A
$7,454 N/A N/A
$0 N/A N/A
(1) The Accrual balance reflects payment at the beginning of each
month during retirement.
(2) Participant is 100 percent vested in the accrued liability
balance.
(3) Benefit is based on present value of the annual payment stream
beginning at age 65 of the current vested accrual balance using
a standard discount rate (7.5%).
(4) The "Change-in-Control Benefit" is determined pursuant to Section
2.4.1 of the Salary Continuation Agreement. The numbers shown in
this column reflect the Change-in-Control Benefit due the Executive
if the Executive's Termination of Employment occurred at the Plan
Year end indicated following a Change in Control. The numbers
shown as of the Plan Year end indicated are derived pursuant to
the calculation methodology specified in Section 2.4.1 of the
Salary Continuation Agreement. For calculation of the
Change-in-Control Benefit due the Executive at any time other than
Plan Year end, this benefit would be determined pursuant to Section
2.4 and Section 2.4.1 as of the date on which the Executive's
Termination of Employment occurs following a Change in Control.
(5) Projected retirement occurs March 6, 2006, with the first normal
monthly retirement benefit commencing April 2006. The accrual
balance at the end of March, 2006 will be $271,369.
N/A means not applicable.
Addendum A
NewMil Bank
Split Dollar Agreement
This Split Dollar Agreement is entered into as of this 1st day of
January, 2002, by and between NewMil Bank, a Connecticut-chartered,
FDIC-insured savings bank with its main office in New Milford,
Connecticut (the "Bank") and Xxxxxxxx X. Xxxxxxx, its Senior Vice
President of NewMil Bank (the "Executive"). This Split Dollar
Agreement shall append the Split Dollar Endorsement entered into on
even date herewith, or as subsequently amended, by and between the
aforementioned parties.
To encourage the Executive to remain an employee of the Bank, the
Bank is willing to divide the death proceeds of a life insurance policy
on the Executive's life to be effective until the Executive's Normal
Retirement Age of 65. The Bank will pay life insurance premiums from
its general assets.
Article 1
General Definitions
Capitalized terms not otherwise defined in this Split Dollar
Agreement are used herein as defined in the Salary Continuation
Agreement of even date herewith. The following terms shall have the
meanings specified:
"Insurer" means Massachusetts Mutual Life Insurance Company.
"Policy" means insurance policy no. 0046721 issued by the Insurer.
"Insured" means the Executive.
Article 2
Policy Ownership/Interests
2.1 Bank Ownership. The Bank is the sole owner of the Policy and
shall have the right to exercise all incidents of ownership. The Bank
shall be the beneficiary of any death proceeds remaining after the
Executive's interest has been paid under Section 2.2 of this Split
Dollar Agreement.
2.2 Executive's Interest. The Executive shall have the right to
designate the beneficiary(ies) of death proceeds in the amount of
$271,369. The Executive shall also have the right to elect and change
settlement options specified in the Policy that may be permitted.
However, the Executive, the Executive's transferee or the Executive's
beneficiary(ies) shall have no rights or interests in the Policy for
that portion of the death proceeds designated in this Section 2.2 if
the Executive is not in the full-time employment of the Bank at the
time of death, except for reason of a leave of absence approved by the
Bank.
2.3 Option to Purchase. The Bank shall not sell, surrender or
transfer ownership of the Policy while this Split Dollar Agreement is
in effect without first giving the Executive or the Executive's
transferee a right of first refusal to purchase the Policy for the
Policy's interpolated terminal reserve value. The right of first
refusal to purchase the Policy must be exercised within 60 days from
the date the Bank gives written notice of the Bank's intention to sell,
surrender or transfer ownership of the Policy. This provision shall
not impair the right of the Bank to terminate this Split Dollar
Agreement.
2.4 Comparable Coverage. Upon execution of this Agreement, the
Bank shall maintain the Policy in full force and effect, and the Bank
shall not amend, terminate or otherwise abrogate the Executive's
interest in the Policy unless the Bank (a) replaces the Policy with a
comparable insurance policy to cover the benefit provided under this
Split Dollar Agreement and (b) executes a new Split Dollar Agreement
and Endorsement for the comparable insurance policy. The Policy or
any comparable policy shall be subject to the claims of the Bank's
creditors.
Article 3
Premiums
3.1 Premium Payment. The Bank shall pay any premiums due on the
Policy.
3.2 Imputed Income. The Bank shall impute income to the Executive
in an amount equal to (a) the current term rate for the Executive's age,
multiplied by (b) the net death benefit payable to the Executive's
beneficiary(ies). The "current term rate" is the minimum amount
required to be imputed under Revenue Rulings 64-328 and 66-110, or any
subsequent applicable authority.
Article 4
Assignment
The Executive may assign without consideration all interests in
the Policy and in this Split Dollar Agreement to any person, entity
or trust. If the Executive transfers all of the Executive's interest
in the Policy, then all of the Executive's interest in the Policy and
in the Split Dollar Agreement shall be vested in the Executive's
transferee, who shall be substituted as a party hereunder, and the
Executive shall have no further interest in the Policy or in this Split
Dollar Agreement.
Article 5
Insurer
The Insurer shall be bound only by the terms of the Policy. Any
payments the Insurer makes or actions it takes in accordance with the
Policy shall fully discharge it from all claims, suits and demands of
all entities or persons. The Insurer shall not be bound by or be
deemed to have notice of the provisions of this Split Dollar Agreement.
Article 6
Claims Procedure
6.1 Claims Procedure. A person or beneficiary ("claimant") who
has not received benefits under the Agreement that he or she believes
should be paid shall make a claim for such benefits as follows:
6.1.1 Initiation - Written Claim. The claimant initiates a
claim by submitting to the Bank a written claim for the
benefits.
6.1.2 Timing of Bank Response. The Bank shall respond to such
claimant within 90 days after receiving the claim. If
the Bank determines that special circumstances require
additional time for processing the claim, the Bank can
extend the response period by an additional 90 days by
notifying the claimant in writing, prior to the end of
the initial 90-day period, that an additional period is
required. The notice of extension must set forth the
special circumstances and the date by which the Bank
expects to render its decision.
6.1.3 Notice of Decision. If the Bank denies part or all of
the claim, the Bank shall notify the claimant in writing
of such denial. The Bank shall write the notification
in a manner calculated to be understood by the claimant.
The notification shall set forth:
6.1.3.1 The specific reasons for the denial,
6.1.3.2 A reference to the specific provisions of the
Agreement on which the denial is based,
6.1.3.3 A description of any additional information or
material necessary for the claimant to perfect
the claim and an explanation of why it is needed,
6.1.3.4 An explanation of the Agreement's review procedures
and the time limits applicable to such procedures,
and
6.1.3.5 A statement of the claimant's right to bring a
civil action under ERISA (Employees Retirement
Income Security Act) Section 502(a) following an
adverse benefit determination on review.
6.2 Review Procedure. If the Bank denies part or all of the
claim, the claimant shall have the opportunity for a full and fair
review by the Bank of the denial, as follows:
6.2.1 Initiation - Written Request. To initiate the review,
the claimant, within 60 days after receiving the Bank's
notice of denial, must file with the Bank a written
request for review.
6.2.2 Additional Submissions - Information Access. The
claimant shall then have the opportunity to submit
written comments, documents, records and other
information relating to the claim. The Bank shall also
provide the claimant, upon request and free of charge,
reasonable access to, and copies of, all documents,
records and other information relevant (as defined in
applicable ERISA regulations) to the claimant's claim
for benefits.
6.2.3 Considerations on Review. In considering the review,
the Bank shall take into account all materials and
information the claimant submits relating to the claim,
without regard to whether such information was submitted
or considered in the initial benefit determination.
6.2.4 Timing of Bank Response. The Bank shall respond in
writing to such claimant within 60 days after receiving
the request for review. If the Bank determines that
special circumstances require additional time for
processing the claim, the Bank can extend the response
period by an additional 60 days by notifying the
claimant in writing, prior to the end of the initial
60-day period, that an additional period is required.
The notice of extension must set forth the special
circumstances and the date by which the Bank expects to
render its decision.
6.2.5 Notice of Decision. The Bank shall notify the claimant
in writing of its decision on review. The Bank shall
write the notification in a manner calculated to be
understood by the claimant. The notification shall set
forth:
6.2.5.1 The specific reason for the denial,
6.2.5.2 A reference to the specific provisions of the
Agreement on which the denial is based,
6.2.5.3 A statement that the claimant is entitled to
receive, upon request and free of charge,
reasonable access to, and copies of, all documents,
records and other information relevant (as defined
in applicable ERISA regulations) to the claimant's
claim for benefits, and
6.2.5.4 A statement of the claimant's right to bring a
civil action under ERISA Section 502(a).
Article 7
Amendments and Termination
This Split Dollar Agreement may be amended or terminated only by a
writing signed by the Bank and the Executive. However, unless otherwise
agreed to by the Bank and the Executive, this Split Dollar Agreement
will automatically terminate upon the Executive's 65th birthday.
Article 8
Miscellaneous
8.1 Binding Effect. This Split Dollar Agreement shall bind the
Executive and the Bank and their beneficiaries, survivors, executors,
administrators and transferees, and any Policy beneficiary.
8.2 No Guarantee of Employment. This Split Dollar Agreement is
not an employment policy or contract. It does not give the Executive
the right to remain an employee of the Bank, nor does it interfere with
the Bank's right to discharge the Executive. It also does not require
the Executive to remain an employee nor interfere with the Executive's
right to terminate employment at any time.
8.3 Successors; Binding Agreement. By an assumption agreement
in form and substance satisfactory to the Executive, the Bank shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business
or assets of the Bank to expressly assume and agree to perform this
Split Dollar Agreement in the same manner and to the same extent that
the Bank would be required to perform this Split Dollar Agreement if
no succession had occurred. The Bank's failure to obtain such an
assumption agreement before succession becomes effective shall be
considered a breach of the Split Dollar Agreement and shall entitle
the Executive to the Change-in-Control Benefits payable under Section
2.4 of the Salary Continuation Agreement between the Bank and the
Executive of even date herewith.
8.4 Applicable Law. The Split Dollar Agreement and all rights
hereunder shall be governed by and construed according to the laws of
the State of Connecticut, except to the extent preempted by the laws
of the United States of America.
8.5 Entire Agreement. This Split Dollar Agreement constitutes
the entire agreement between the Bank and the Executive concerning the
subject matter hereof. No rights are granted to the Executive under
this Split Dollar Agreement other than those specifically set forth
herein.
8.6 Administration. The Bank shall have powers which are
necessary to administer this Split Dollar Agreement, including but not
limited to the power to:
(a) interpret the provisions of the Split Dollar Agreement,
(b) establish and revise the method of accounting for the Split
Dollar Agreement,
(c) maintain a record of benefit payments, and
(d) establish rules and prescribe forms necessary or desirable
to administer the Split Dollar Agreement.
8.7 Named Fiduciary. The Bank shall be the named fiduciary and
plan administrator under this Split Dollar Agreement. The Bank may
delegate to others certain aspects of management and operational
responsibilities, including the employment of advisors and the
delegation of ministerial duties to qualified individuals.
8.8 Severability. If for any reason any provision of this Split
Dollar Agreement is held invalid, such invalidity shall not affect any
other provision of this Split Dollar Agreement not held so invalid, and
each such other provision shall, to the full extent consistent with the
law, continue in full force and effect. If any provision of this Split
Dollar Agreement shall be held invalid in part, such invalidity shall
in no way affect the remainder of such provision, not held so invalid,
and the remainder of such provision, together with all other provisions
of this Split Dollar Agreement shall, to the full extent consistent with
the law, continue in full force and effect.
8.9 Headings. The headings of Sections herein are included solely
for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Split Dollar Agreement.
8.10 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to
have been duly given if delivered by hand or mailed, certified or
registered mail, return receipt requested, with postage prepaid, to
the following addresses or to such other address as either party may
designate by like notice.
(a) If to the Bank, to:
Board of Directors
NewMil Bank
00 Xxxx Xxxxxx
X.X. Xxx 000
New Milford, Connecticut 06776-0600
(b) If to the Executive, to:
Xxxxxxxx X. Xxxxxxx
00 Xxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000
and to such other or additional person or persons as either party shall
have designated to the other party in writing by like notice.
In Witness Whereof, the Bank and the Executive have signed this
Split Dollar Agreement as of the date and year first written above.
The Executive: The Bank:
NewMil Bank
/s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxx
----------------------- --------------------
Xxxxxxxx X. Xxxxxxx Its: President & CEO
Split Dollar Policy Endorsement
NewMil Bank
Split Dollar Agreement
Policy No. 0046721 Insured: Xxxxxxxx X. Xxxxxxx
Supplementing and amending the application for insurance to
Massachusetts Mutual Life Insurance Company ("Insurer") on December 18,
2001 (the application date), the applicant requests and directs that:
Beneficiaries
1. NewMil Bank, located in New Milford, Connecticut (the
"Bank"), shall be the beneficiary of any death proceeds remaining
after the Insured's interest has been paid under paragraph (2) below.
2. The Insured or the Insured's transferee shall designate
the beneficiary(ies) of death proceeds in the amount of $271,369,
subject to the provisions of paragraph (5) below.
Ownership
3. The Owner of the Policy shall be the Bank. The Owner shall
have all ownership rights in the Policy except as may be specifically
granted to the Insured or the Insured's transferee in paragraph (4) of
this endorsement.
4. The Insured or the Insured's transferee shall have the right
to assign his or her rights and interests in the Policy with respect to
that portion of the death proceeds designated in paragraph (2) of this
endorsement, and to exercise all settlement options with respect to
such death proceeds.
5. Notwithstanding the provisions of paragraph (4) above, the
Insured, the Insured's transferee or the Insured's beneficiary(ies)
shall have no rights or interests in the Policy with respect to that
portion of the death proceeds designated in paragraph (2) of this
endorsement if the Insured is not in the full-time employment of the
Bank at the time of death, except for reason of a leave of absence
approved by the Bank.
Modification of Assignment Provisions of the Policy
6. Upon the death of the Insured, the interest of any collateral
assignee of the Owner of the Policy designated in (3) above shall be
limited to the portion of the proceeds described in paragraph (1) above.
Owner's Authority
7. The Insurer is hereby authorized to recognize the Owner's
claim to rights hereunder without investigating the reason for any
action taken by the Owner, including the Owner's statement of the
amount of premiums the Owner has paid on the Policy. The signature of
the Owner shall be sufficient for the exercise of any rights under this
Endorsement and the receipt of the Owner for any sums received by it
shall be a full discharge and release therefore to the Insurer. The
Insurer may rely on a sworn statement in form satisfactory to it
furnished by the Owner, its successors or assigns, as to their interest
and any payments made pursuant to such statement shall discharge the
Bank accordingly.
8. Any transferee's rights shall be subject to this Endorsement.
9. The Owner accepts and agrees to this split dollar endorsement.
10. The undersigned is signing in a representative capacity and
warrants that he or she has the authority to bind the entity on whose
behalf this document is being executed.
Signed at New Milford, Connecticut, this --- day of January, 2002.
NewMil Bank
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Its: Executive VP & Secretary
The Insured accepts and agrees to the foregoing and, subject to
the rights of the Owner as stated above, designates ---------------,
(relationship: -------------------------) as primary beneficiary(s)
and -------------------------, (relationship: ---------------------)
as secondary beneficiary of the portion of the proceeds described in
(2) above.
Signed at New Milford, Connecticut, this 2nd day of January, 2002.
The Insured
/s/ Xxxxxxxx X. Xxxxxxx
-----------------------
Xxxxxxxx X. Xxxxxxx
