**EXHIBIT 10.26**

 

Execution Copy

 

**SPECIAL TERMINATION AGREEMENT**

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THIS AGREEMENT is dated as of thetwenty-fourth day of October, 2002 by and among Abington Bancorp, Inc., aMassachusetts corporation (the “Company”), its subsidiary, Abington SavingsBank, a Massachusetts savings bank with its main office in Abington,Massachusetts (the “Bank”; the Company and Bank are sometimes collectivelyreferred to herein as the “Employers”), and Julie Jenkins, an individualcurrently employed by the Bank in the capacity of Senior Vice President (the“Executive”).

 

# 1.   **Purpose**.  In order to allow the Executive to considerthe prospect of a Change in Control (as defined in Section 2) in an objectivemanner and in consideration of the services rendered and to be rendered by theExecutive to the Employers, and other good and valuable consideration, thereceipt and sufficiency of which is hereby acknowledged by the Employers, theEmployers are willing to provide, subject to the terms of this Agreement,certain severance benefits to protect the Executive from the consequences of aTerminating Event (as defined in Section 3) occurring subsequent to a Change inControl.

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# 2.   **Change inControl**.  A “Change inControl” shall be deemed to have occurred in any of the following events:

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### (i) if therehas occurred a change in control which the Company would be required to reportin response to Item 1 of Form 8-K promulgated under the Securities Exchange Actof 1934, as amended (the “1934 Act”), or, if such Form is no longer in effectin its present form, any Form or regulation promulgated by the Securities andExchange Commission pursuant to the 1934 Act which is intended to serve similarpurposes; or

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### (ii) when any“person” (as such term is used in Sections 13(d) and 14(d)(2) of the 1934 Act)becomes a “beneficial owner” (as such term is defined in Rule 13d-3 promulgatedunder the 1934 Act), directly or indirectly, of securities of the Company orthe Bank representing twenty-five percent (25%) or more of the total number ofvotes that may be cast for the election of directors of the Company or theBank; or

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### (iii) ifduring any period of two consecutive years (not including any period prior tothe execution of this Agreement), individuals who are Continuing Directors (asherein defined) cease for any reason to constitute at least a majority of theBoard of Directors of the Company.  Forthis purpose, a “Continuing Director” shall mean (a) an individual who was adirector of the Company at the beginning of such period or (b) any new director(other than a director designated by a person who has entered into anyagreement with the Company to effect a transaction described in clause (i) or(ii) of this Section 2 whose election by the Board or nomination for electionby the Company’s stockholders was approved by a vote of at least two-thirds(2/3) of the directors then still in office who either were directors at thebeginning of such period or whose election or nomination for election waspreviously so approved; or

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### (iv) thestockholders of the Company approve a merger or consolidation of the Companywith any other bank or corporation, other than (a) a merger or consolidationwhich would result in the voting securities of the Company outstandingimmediately prior thereto continuing to represent (either by remainingoutstanding or by being converted into voting securities of the survivingentity) more than 80% of the combined voting power of the voting securities ofthe Company or such surviving entity outstanding immediately after such mergeror consolidation, or (b) a merger or consolidation effected to implement arecapitalization of the Company (or similar transaction) in which no “person”(as defined above) acquires more than 30% of the combined voting power of theCompany’s then outstanding securities; or

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### (v) thestockholders of the Company approve a plan of complete liquidation of theCompany or an agreement for the sale or disposition by the Company of all orsubstantially all of its assets.

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# 3.   **TerminatingEvent**.  A “Terminating Event”shall mean either of the following:

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## (a)   termination by either of the Employers ofthe employment of the Executive as Executive Vice President of the Bank for any reason other than (i)death, (ii) deliberate dishonesty of the Executive with respect to the Companyor the Bank or any subsidiary or affiliate thereof, or (iii) conviction of theExecutive of a crime involving moral turpitude, or

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## (b)   resignation of the Executive from theemploy of the Company or the Bank, while the Executive is not receivingpayments or benefits from the Company or the Bank by reason of the Executive’sdisability, subsequent to the occurrence of any of the following events:

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### (i) asignificant change in the nature or scope of the Executive’s responsibilities,authorities, powers, functions or duties from the responsibilities,authorities, powers, functions or duties exercised by the Executive at theCompany or the Bank immediately prior to the Change in Control; or

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### (ii) areasonable determination by the Executive that, as a result of a Change inControl, she is unable to exercise the responsibilities, authorities, powers,functions or duties exercised by the Executive at the Company or the Bankimmediately prior to such Change in Control; or

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### (iii) adecrease in the total annual compensation payable by the Company or the Bank tothe Executive other than as a result of a salary reduction similarly affectingthe Executive and all other executive officers of the Company or the Bank onthe basis of the Company’s or the Bank’s financial performance; or

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### (iv) thefailure by the Company or the Bank to continue in effect any materialcompensation, incentive, bonus or benefit plan in which the Executiveparticipates immediately prior to the Change in Control, unless an equitablearrangement (embodied in an ongoing substitute or alternative plan) has beenmade with respect to such plan, or the failure by the Company or the Bank tocontinue the Executive’s participation therein (or in such substitute oralternative plan) on a basis not materially less favorable, both in terms ofthe amount of benefits provided and the level of the Executive’s participationrelative to other participants, than the basis when existed at the time of theChange of Control; or

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### (v) thefailure of the Company or the Bank to obtain a satisfactory agreement from anysuccessor to assume and agree to perform this Agreement.

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# 4.   **SeverancePayment**.  In the event aTerminating Event occurs within three (3) years after a Change in Control, theEmployers shall pay to the Executive an amount equal to (x) three times the“base amount” (as defined in Section 280G(b)(3) of the Internal Revenue Code of1986, as amended (the “Code”)) applicable to the Executive, less (y) One Dollar($1.00), payable in one lump-sum payment on the date of termination.

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# 5.   **Limitationon Benefits**.

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## (a)   It is the intention of the Executive and ofthe Employers that no payments by the Employers to or for the benefit of theExecutive under this Agreement or any other agreement or plan pursuant to whichshe is entitled to receive payments or benefits shall be non-deductible to theEmployers by reason of the operation of Section 280G of the Code relating toparachute payments.  Accordingly, andnotwithstanding any other provision of this Agreement or any such agreement orplan, if by reason of the operation of said Section 280G, any such paymentsexceed the amount which can be deducted by the Employers, such payments shallbe reduced to the maximum amount which can be deducted by the Employers.  To the extent that payments exceeding suchmaximum deductible amount have been made to or for the benefit of theExecutive, such excess payments shall be refunded to the Employers withinterest thereon at the applicable Federal Rate determined under Section1274(d) of the Code, compounded annually, or at such other rate as may berequired in order that no such payments shall be non-deductible to theEmployers by reason of the operation of said Section 280G.  To the extent that there is more than onemethod of reducing the payments to bring them within the limitations of saidSection 280G, the Executive shall determine which method shall be followed,provided that if the Executive fails to make such determination withinforty-five days after the Employers have sent her written notice of the needfor such reduction, the Employers may determine the method of such reduction intheir sole discretion.

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## (b)   If any dispute between the Employers andthe Executive as to any of the amounts to be determined under this Section 5 orthe method of calculating such amounts cannot be resolved by the Employers andthe Executive, either party after giving three days written notice to theother, may refer the dispute to a partner in a Massachusetts office of a firmof independent certified public accountants selected jointly by the Employersand the Executive.  The determination ofsuch partner as to the amounts to be determined under Section 5(a) and themethod of calculating such amounts shall be final and binding on both theEmployers and the Executive.  TheEmployers shall bear the costs of any such determination.

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## (c)   The Executive confirms that she is aware ofthe fact that the Federal Deposit Insurance Corporation has the power topreclude the Bank from making payments to the Executive under this Agreementunder certain circumstances.  TheExecutive agrees that the Bank shall not be deemed to be in breach of thisAgreement if it is precluded from making a payment otherwise payable hereunderby reason of regulatory requirements binding on the Bank.

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# 6.   **EmploymentStatus**.  This Agreement isnot an agreement for the employment of the Executive and shall confer no rightson the Executive except as herein expressly provided.

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# 7.   **Term**.  This Agreement shall take effect on the datefirst written above, and shall terminate upon the earlier of (a) thetermination by the Employers of the employment of the Executive because ofdeath, deliberate dishonesty of the Executive with respect to the Company orthe Bank or any subsidiary or affiliate thereof, or conviction of the Executiveof a crime involving moral turpitude, (b) the resignation or termination ofemployment with the Company or the Bank by the Executive for any reason priorto a Change in Control, or (c) the resignation from employment of the Executiveafter a Change in Control for any reason other than the occurrence of any ofthe events enumerated in Section 3(b) of this Agreement.

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# 8.   **Withholding**.  All payments made by the Employers underthis Agreement shall be paid net of, and after deduction of, any tax or otheramounts required to be withheld by the Employers under applicable law.

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# 9.   **Assignment**.  Neither the Employers nor the Executive maymake any assignment of this Agreement or any interest herein, by operation oflaw or otherwise, without the prior written consent of the other party.  This Agreement shall inure to the benefitof, and be binding upon, the Employers and the Executive, and their respectiveheirs, legal representatives, successors and permitted assigns.  In the event of the Executive’s death priorto the completion by the Employers of all payments due her under thisAgreement, the Employers shall continue such payments to the Executive’sbeneficiary designated in writing to the Employers prior to her death (or toher estate, if she fails to make such designation).

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# 10.   **Enforceability**.  If any portion or provision of thisAgreement shall to any extent be declared illegal or unenforceable by a courtof competent jurisdiction, then the remainder of this Agreement, or theapplication of such portion or provision in circumstances other than those asto which it is so declared illegal or unenforceable, shall not be affectedthereby, and each portion and provision of this Agreement shall be valid andenforceable to the fullest extent permitted by law.

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# 11.   **Waiver**.  No waiver of any provision hereof shall beeffective unless made in writing and signed by the waiving party.  The failure of either party to require theperformance of any term or obligation of this Agreement, or the waiver byeither party of any breach of this Agreement, shall not prevent any subsequentenforcement of such term or obligation or be deemed a waiver of any subsequentbreach.

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# 12.   **Notices**.  Any notices, requests, demands and othercommunications provided for by this Agreement shall be sufficient if in writingand delivered in person or sent by registered or certified mail, postage prepaid,to the Executive at 58 Sheldon Street, Milton, MA 02186, or to such otheraddress as the Executive has filed in writing with the Employers or, in thecase of the Employers, at their main office, attention of the Clerk or theSecretary.

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# 13.   **Effect onOther Agreements**.  Anelection by the Executive to resign after a Change in Control under theprovisions of this Agreement shall not constitute a breach by the Executive ofany employment agreement between the Employers and the Executive and shall notbe deemed a voluntary termination of employment by the Executive for thepurpose of interpreting the provisions of any of the Employer’s benefit plans,programs or policies.  Nothing

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# in this Agreement shall beconstrued to limit the rights of the Executive under any employment agreementshe may then have with the Employers.

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# 14.   **Amendment**.  This Agreement may be amended or modifiedonly by a written instrument signed by the Executive and by a duly authorizedrepresentative of the Executive Committee of the Board of Directors of each ofthe Employers.

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# 15.   **GoverningLaw**.  This Agreement shall begoverned by, and construed and enforced in accordance with, the substantivelaws of The Commonwealth of Massachusetts without regard for its principles ofconflicts of laws.

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IN WITNESSWHEREOF, this Agreement has been executed as a sealed instrument by the Companyand the Bank, by their duly authorized officers, and by the Executive, as ofthe date first above written.

 
| ATTEST:  | ABINGTON BANCORP, INC. |
|----------|------------------------|
|     |                   |
|     |                   |
|     |                   | By: |   |   |
| Clerk    |                   |
|     | Title:                 |   |   |
|     |                   |
| [Seal]   |                   |
|     |                   |
| WITNESS: |                   |
|     |                   |
| ATTEST:  | ABINGTON SAVINGS BANK  |
|     |                   |
|     |                   |
|     |                   | By: |   |   |
| Clerk    |                   |
|     | Title:                 |   |   |
|     |                   |
| [Seal]   |                   |
|     |                   |
| WITNESS: |                   |
|     |                   |
|     |                   |   |   |
|     | Julie Jenkins          |
|          |                        |  |  |  |  |  |

 

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