Document:

ex101-8k_102915.htm

CHICOPEE SAVINGS BANK

THREE-YEAR EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is entered into as of October 28, 2015 (the “Effective Date”), by and between Chicopee Savings Bank, a Massachusetts-chartered financial institution (the “Bank”) and Guida R. Sajdak (the “Executive”).  Any reference to the “Company” means Chicopee Bancorp, Inc., the stock holding company of the Bank.  The Company is a signatory to this Agreement for the purpose of guaranteeing the Bank’s performance hereunder.

WHEREAS, Executive is presently Senior Vice President and Chief Financial Officer of the Company and the Bank; and is a party to a change in control agreement with the Bank, dated June 18, 2010 (the “Prior Agreement”); and

WHEREAS, in recognition of the Executive’s valuable contributions to the Company and the Bank, the parties desire to enter into this Agreement in order to induce Executive to continue her employment with the Company and the Bank, and to provide further incentive for Executive to achieve the financial and performance objectives of the Company and the Bank; and

WHEREAS, the Company and the Bank desire to set forth the rights and responsibilities of Executive and the compensation payable to Executive, as modified from time to time; and

WHEREAS, the parties agree that this Agreement will take effect, and supersede and replace the Prior Agreement, as of the Effective Date.

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and upon the other terms and conditions provided for in this Agreement, the parties hereby agree as follows:

1.           Employment.   During the term of this Agreement, Executive agrees to serve as Senior Vice President and Chief Financial Officer of the Company and the Bank, and will perform the duties and will have all powers associated with such position as set forth in any job description provided to Executive by the Bank, and as may be set forth in the bylaws of the Bank.  During the term of this Agreement, Executive also agrees to serve, if elected, as an officer of any subsidiary or affiliate of the Bank and in such capacity carry out such duties and responsibilities reasonably appropriate to that office.

2.           Location and Facilities.  Executive’s working facilities and staff will be the same as in effect immediately prior to the Effective Date.  The location of such facilities and staff will be the same as in effect immediately prior to the Effective Date.

3.           Term.

	
  

	
a.

	
The term of this Agreement will begin as of the Effective Date and will continue for thirty-six (36) full calendar months.

	
  

	
b.

	
Commencing on the first anniversary of the Effective Date (the “Anniversary Date”) and continuing on each anniversary of the Effective Date thereafter, the term of this Agreement will renew for an additional year such that the remaining term is three years; provided, however, that in order for this Agreement to renew, the disinterested members of the Board of Directors of the Bank (the “Board”) must take the following actions prior to each Anniversary Date:  (i) conduct a comprehensive performance evaluation and review of Executive for purposes of determining whether to extend this Agreement; and (ii) affirmatively approve the renewal of this Agreement and include such decision in the minutes of the Board’s meeting.  If the disinterested members of the Board decide not to renew this Agreement, then the Board will provide Executive with a written notice of non-renewal (“Non-Renewal Notice”) no later than five business days after such action is taken, in which event this Agreement will terminate at the end of twenty-four (24) months following such Anniversary Date. The failure of the disinterested members of the Board to take the actions set forth herein before any Anniversary Date will result in the automatic non-renewal of this Agreement, even if the Board fails to affirmatively issue the Non-Renewal Notice to Executive.  If the Board fails to inform Executive of its determination regarding the renewal or non-renewal of this Agreement, the Executive may request that the Board provide Executive with the reason(s) for its action (or non-action), and the Board will respond to Executive within 30 days of the receipt of such request.  Reference herein to the term of this Agreement will refer to both such initial term and such extended terms.

 

  

  

  

4.           Base Compensation.

	
  

	
a.

	
The Bank agrees to pay Executive during the term of this Agreement a base salary at the rate of $186,000 per year, payable in accordance with customary payroll practices.

	
  

	
b.

	
The Board will review annually the rate of the Executive’s base salary based upon factors they deem relevant, and may maintain or increase her salary, provided that no such action will reduce the rate of salary below the rate in effect on the Effective Date.

	
  

	
c.

	
In the absence of action by the Board, the Executive will continue to receive salary at the annual rate specified on the Effective Date or, if another rate has been established under the provisions of this Section 4, the rate last properly established by action of the Board under the provisions of this Section 4.

5.           Bonuses.  The Executive will be eligible to participate in discretionary bonuses or other incentive compensation programs that the Company or the Bank may award from time to time to senior management employees pursuant to bonus plans or otherwise.

6.           Benefit Plans.  Executive will be eligible to participate in life insurance, medical, dental, pension, profit sharing, retirement and stock-based compensation plans and other programs and arrangements as may be approved from time to time by the Bank for the benefit of its employees.  Nothing in this Agreement shall create a right to participate in a supplemental executive retirement plan.

7.           Vacations and Leave.

	
  

	
a.

	
The Executive will be entitled to vacation and other leave in accordance with policy for senior executives, or otherwise as approved by the Board.

	
  

	
b.

	
In addition to paid vacation and other leave, the Executive will be entitled, without loss of pay, to absent herself voluntarily from the performance of her employment for such additional periods of time and for such valid and legitimate reasons as the Board may in its discretion determine.  Further, the Board may grant to the Executive a leave or leaves of absence, with or without pay, at such time or times and upon such terms and conditions as the Board in its discretion may determine.

 

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8.           Expense Payments and Reimbursements.  Executive will be reimbursed for all reasonable out-of-pocket business expenses incurred in connection with her services under this Agreement upon substantiation of such expenses in accordance with applicable policies of the Bank.

9.           [Reserved]

10.           Loyalty and Confidentiality.

	
  

	
a.

	
During the term of this Agreement, Executive will devote all her business time, attention, skill, and efforts to the faithful performance of her duties under this Agreement; provided, however, that from time to time, Executive may serve on the boards of directors of, and hold any other offices or positions in, companies or organizations that will not present any conflict of interest with the Bank or any of its subsidiaries or affiliates, unfavorably affect the performance of Executive’s duties pursuant to this Agreement, or violate any applicable statute or regulation.  Executive will not engage in any business or activity contrary to the business affairs or interests of the Bank or any of its subsidiaries or affiliates.

	
  

	
b.

	
Nothing contained in this Agreement will prevent or limit Executive’s right to invest in the capital stock or other securities or interests of any business dissimilar from that of the Bank, or, solely as a passive, minority investor, in any business.

	
  

	
c.

	
Executive agrees to maintain the confidentiality of any and all information concerning the operation or financial status of the Bank; the names or addresses of any of its borrowers, depositors and other customers; any information concerning or obtained from such customers; and any other information concerning the Bank or its subsidiaries or affiliates to which she may be exposed during the course of her employment.  Executive further agrees that, unless required by law or specifically permitted by the Board in writing, she will not disclose to any person or entity, either during or subsequent to her employment, any of the above-mentioned information which is not generally known to the public, nor will she use the information in any way other than for the benefit of the Bank.

11.           Termination and Termination Pay.  Subject to Section 12 of this Agreement, Executive’s employment under this Agreement may be terminated in the following circumstances:

	
  

	
a.

	
Death.  Executive’s employment under this Agreement will terminate upon her death during the term of this Agreement, in which event Executive’s estate will receive the compensation due to Executive through the last day of the calendar month in which her death occurred.

	
  

	
b.

	
Retirement.  This Agreement will terminate upon Executive’s retirement under the retirement benefit plan or plans in which she participates pursuant to Section 6 of this Agreement or otherwise.  Executive will receive the compensation due to her through her retirement date.

     c.        Disability.

	
  

	
i.

	
In the event of Executive’s Disability, Executive will be entitled to disability benefits, if any, provided under a long-term disability plan sponsored by the Bank, if applicable.  For purposes of this Agreement, “Disability” will be deemed to have occurred if: (i) Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death, or last for a continuous period of not less than 12 months; (ii) by reason of any medically determinable physical or mental impairment that can be expected to result in death, or last for a continuous period of not less than 12 months, Executive is receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Bank or the Company; or (iii) Executive is determined to be totally disabled by the Social Security Administration, and in all cases Disability will satisfy the definition of Disability under Section 409A of the Code.

 

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ii.

	
In the event of her Disability, Executive will no longer be obligated to perform services under this Agreement.  The Bank will pay Executive, as Disability pay, an amount equal to one hundred percent (100%) of Executive’s bi-weekly rate of base salary in effect as of the date of her termination of employment due to Disability. The Bank will make Disability payments on a monthly basis commencing on the first day of the month following the effective date of Executive’s termination of employment due to Disability and ending on the earlier of: (A) the date she returns to full-time employment at the Bank in the same capacity as she was employed prior to her termination for Disability; (B) her death; (C) her attainment of age 65; or (D) the date this Agreement would have expired had Executive’s employment not terminated by reason of Disability. Such payments will be reduced by the amount of any short- or long-term disability benefits payable to Executive under any other disability programs sponsored by the Bank.  In addition, during any period of Executive’s Disability, the Bank will continue to provide Executive and her dependents, to the greatest extent possible, with continued coverage under all benefit plans (including, without limitation, medical, dental and life insurance plans) in which Executive and/or her dependent participated prior to her Disability on the same terms as if she remained actively employed by the Bank.

d.           Termination for Cause.

	
  

	
i.

	
The Board may, by written notice to Executive in the form and manner specified in this paragraph, terminate her employment at any time for “Cause.”  Executive will have no right to receive compensation or other benefits for any period after termination for Cause.  Termination for Cause will mean termination because of, in the good faith determination of the Board, Executive’s:

	
  

	
(1)

	
Personal dishonesty;

	
  

	
(2)

	
Incompetence;

	
  

	
(3)

	
Willful misconduct;

	
  

	
(4)

	
Breach of fiduciary duty involving personal profit;

	
  

	
(5)

	
Intentional failure to perform stated duties;

	
  

	
(6)

	
Willful violation of any law, rule or regulation (other than traffic violations or similar offenses) that reflects adversely on the reputation of the Bank, any felony conviction, any violation of law involving moral turpitude or any violation of a final cease-and-desist order; or

 

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(7)

	
Material breach by Executive of any provision of this Agreement.

	
  

	
ii.

	
Notwithstanding the foregoing, Executive will not be deemed to have been terminated for Cause by the Bank, unless the Bank has delivered to Executive a copy of a resolution duly adopted at a meeting of the Board where in the good faith opinion of the Board, Executive was guilty of the conduct described above and specifying the particulars of this conduct.

	
  

	
e.

	
Voluntary Termination by Executive.  In addition to her other rights to terminate under this Agreement, Executive may voluntarily terminate employment during the term of this Agreement upon at least sixty (60) days prior written notice to the Board. Upon Executive’s voluntary termination, she will receive only her compensation, and vested rights and benefits to the date of her termination.

	
  

	
f.

	
Without Cause or With Good Reason.

	
  

	
i.

	
In addition to termination pursuant to Sections 11(a) through 11(e), the Board may, by written notice to Executive, immediately terminate her employment at any time for a reason other than Cause (a termination “Without Cause”) and Executive may, by written notice to the Board, terminate her employment under this Agreement for “Good Reason,” as defined below (a termination “With Good Reason”).

	
  

	
ii.

	
Subject to Section 12 of this Agreement, in the event of termination under this Section 11(f), Executive will be entitled to receive her base salary in effect as of her termination datefor the remaining term of the Agreement payable in one lump sum within ten (10) calendar days of such termination.  Also, in such event, Executive will receive a cash lump sum payment, payable within ten (10) calendar days of such termination, equal to the benefits she would have received during the remaining term of the Agreement under any retirement programs (whether tax-qualified or non-qualified) in which Executive participated prior to her termination (with the amount of the benefits determined by reference to the benefits received by the Executive or accrued on her behalf under such programs during the twelve (12) months preceding her termination) and continue to participate in any benefit plans of the Bank that provide health (including medical and dental), or life insurance, or similar coverage upon terms no less favorable than the most favorable terms provided to senior executives of the Bank during such period.  If the Bank cannot provide one or more of the benefits set forth in this Section because Executive is no longer an employee, applicable rules and regulations prohibit such benefits in the manner contemplated, or it would subject the Bank to penalties, then the Bank shall pay Executive a cash lump sum payment reasonably estimated to be equal to the value of such benefits or the value of the remaining benefits at the time of such determination.  Such cash payment shall be made in a lump sum within thirty (30) days after the later of Executive’s date of termination or the effective date of the rules or regulations prohibiting such benefits or subjecting the Bank to penalties.

 

	
  

	
iii.

	
For purposes of this Agreement “Good Reason” will mean the occurrence of any of the following events without the Executive’s consent:

	
  

	
(1)

	
The assignment to Executive of duties that constitute a material diminution of her authority, duties, or responsibilities (including reporting requirements);

 

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(2)

	
A material diminution in Executive’s Base Salary;

	
  

	
(3)

	
Relocation of Executive to a location outside of Hampden County or Hampshire County, Massachusetts; or

	
  

	
(4)

	
Any other action or inaction by the Bank that constitutes a material breach of this Agreement;

provided, that within ninety (90) days after the initial existence of such event, the Bank will be given notice and an opportunity, not less than thirty (30) days, to effectuate a cure for such asserted “Good Reason” by Executive.  Executive’s resignation hereunder for Good Reason will not occur later than one hundred fifty (150) days following the initial date on which the event Executive claims constitutes Good Reason occurred.

	
  

	
g.

	
Continuing Covenant Not to Compete or Interfere with Relationships.  Regardless of anything herein to the contrary, following a termination by the Bank or Executive pursuant to Section 11(f):

	
  

	
i.

	
Executive’s obligations under Section 10(c) of this Agreement will continue in effect; and

 

	
  

	
ii.

	
 
During the period ending on the first anniversary of such termination, Executive will not serve as an officer, director or employee of any bank holding company, bank, savings association, savings and loan holding company, mortgage company or other financial institution that offers products or services competing with those offered by the Bank and that is located within Hampden County or Hampshire County, Massachusetts and, further, Executive will not interfere with the relationship of the Bank, its subsidiaries or affiliates and any of their employees, agents, or representatives.

12.           Termination in Connection with a Change in Control.

	
  

	
a.

	
For purposes of this Agreement, a “Change in Control” means any of the following events:

 

	
  

	
i.

	
 
Merger: The Company or the Bank merges into or consolidates with another entity, or merges another corporation into the Company or the Bank, 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 the Company immediately before the merger or consolidation;

 

	
  

	
ii.

	
 
Acquisition of Significant Share Ownership:  There is filed, or is required to be filed, a report on Schedule 13D or another form or schedule (other than Schedule 13G) required under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, 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 the Company’s voting securities, but this clause (ii) will not apply to beneficial ownership of Company voting shares held in a fiduciary capacity by an entity of which the Company directly or indirectly beneficially owns 50% or more of its outstanding voting securities;

 

 

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iii.

	
Change in Board Composition:  During any period of two consecutive years, individuals who constitute the Company’s or the Bank’s Board of Directors at the beginning of the two-year period cease for any reason to constitute at least a majority of the Company’s or the Bank’s Board of Directors; provided, however, that for purposes of this clause (iii), each director who is first elected by the board (or first nominated by the board for election by the members) by a vote of at least two-thirds (2/3) of the directors who were directors at the beginning of the two-year period will be deemed to have also been a director at the beginning of such period; or

	
  

	
iv.

	
Sale of Assets:  The Company or the Bank sells to a third party all or substantially all of its assets.

 

	
  

	
b.

	
 
Termination.  If within the period ending two (2) years after a Change in Control, (i) the Bank terminates Executive’s employment Without Cause, or (ii) Executive voluntarily terminates her employment With Good Reason, the Bank will, within ten calendar days of the termination of Executive’s employment, make a lump-sum cash payment to her equal to three (3) times Executive’s “Total Compensation.”   Total Compensation is the greater of: (i) the Total Compensation earned in the calendar year immediately preceding the calendar year of the Change in Control, or (ii) the Total Compensation earned in the calendar year immediately preceding the year of the termination of employment.  “Total Compensation” includes: (x) base salary and any other taxable income, including, but not limited to, amounts related to the granting, vesting or exercise of restricted stock or stock option awards, commissions, bonuses, retirement benefits, and fringe benefits paid to Executive or accrued for Executive’s benefit, and (y) any profit sharing, employee stock ownership plan and other retirement contributions or benefits, including to any tax-qualified plan or arrangement (whether or not taxable) made or accrued on behalf of Executive for such year.  The cash payment made under this Section 12(b) will be made in lieu of any payment also required under Section 11(f) of this Agreement because of Executive’s termination of employment; however, Executive’s rights under Section 11(f) are not otherwise affected by this Section 12.  Also, in such event, the Executive will, for a thirty-six (36) month period following her termination of employment, continue to participate in any benefit plans of the Bank that provide health (including medical and dental), or life insurance, or similar coverage upon terms no less favorable than the most favorable terms provided to senior executives of the Bank during such period.   If the Bank cannot provide one or more of the benefits set forth in this Section because Executive is no longer an employee, applicable rules and regulations prohibit such benefits in the manner contemplated, or it would subject the Bank to penalties, then the Bank shall pay Executive a cash lump sum payment reasonably estimated to be equal to the value of such benefits or the value of the remaining benefits at the time of such determination.  Such cash payment shall be made in a lump sum within thirty (30) days after the later of Executive’s date of termination or the effective date of the rules or regulations prohibiting such benefits or subjecting the Bank to penalties.

 

 

	
  

	
c.

	
The provisions of Section 12 and Sections 14 through 27, including the defined terms used in such sections, will continue in effect until the later of the expiration of this Agreement or one year following a Change in Control.

 

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13. Indemnification and Liability Insurance.  Subject to, and limited by Section 26 of this Agreement, the Bank will provide the following:

	
  

	
a.

	
Indemnification.  The Bank agrees to indemnify Executive (and her heirs, executors, and administrators), and to advance expenses related to this indemnification, to the fullest extent permitted under applicable law and regulations against any and all expenses and liabilities that Executive reasonably incurs in connection with or arising out of any action, suit, or proceeding in which she may be involved by reason of her service as a director or Executive of the Bank or any of its subsidiaries or affiliates (whether or not she continues to be a director or Executive at the time of incurring any such expenses or liabilities).  Covered expenses and liabilities include, but are not limited to, judgments, court costs, and attorneys’ fees and the costs of reasonable settlements, subject to Board approval, if the action is brought against Executive in her capacity as an Executive or director of the Bank or any of its subsidiaries. Indemnification for expenses will not extend to matters related to Executive’s termination for Cause.  Notwithstanding anything in this Section 13(a) to the contrary, the Bank will not be required to provide indemnification prohibited by applicable law or regulation.  The obligations of this Section 13 will survive the term of this Agreement by a period of six (6) years.

	
  

	
b.

	
 
Insurance.  During the period for which the Bank must indemnify Executive, the Bank will provide Executive (and her heirs, executors, and administrators) with coverage under a directors’ and officers’ liability policy at the Bank’s expense, that is at least equivalent to the coverage provided to directors and senior executives of the Bank.

14.              Reimbursement of Executive’s Expenses to Enforce this Agreement.   The Bank will reimburse the Executive for all reasonable out-of-pocket expenses, including, without limitation, reasonable attorney’s fees, incurred by the Executive in connection with successful enforcement by the Executive of the obligations of the Bank to the Executive under this Agreement.  Successful enforcement will mean the grant of an award of money or the requirement that the Bank take some action specified by this Agreement:  (i) as a result of court order; or (ii) otherwise by the Bank following an initial failure of the Bank to pay such money or take such action promptly after written demand therefor from the Executive stating the reason that such money or action was due under this Agreement at or prior to the time of such demand.

15.           Limitation On Payments Under Certain Circumsances.  In no event shall the payments or benefits to be made or provided to Executive under Section 12(b) hereof (the “Termination Benefits”) constitute an “excess parachute payment” under Section 280G of the Code or any successor thereto, and in order to avoid such a result, Termination Benefits will be reduced, if necessary, to an amount, the value of which is one dollar ($1.00) less than an amount equal to three (3) times Executive’s “base amount,” as determined in accordance with Section 280G of the Code.  The reduction of the Termination Benefits provided by this Section 3 shall be applied to the cash severance benefits otherwise payable under Section 12(b) hereof.

16.           Injunctive Relief.  Upon a breach or threatened breach of Section 11(g) of this Agreement or the prohibitions upon disclosure contained in Section 10(c) of this Agreement, the parties agree that there is no adequate remedy at law for such breach, and the Bank will be entitled to injunctive relief restraining Executive from such breach or threatened breach, but such relief will not be the exclusive remedy for a breach of this Agreement.  The parties further agree that Executive, without limitation, may seek injunctive relief to enforce the obligations of the Bank under this Agreement.

 

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17.           Successors and Assigns.

	
  

	
a.

	
This Agreement will inure to the benefit of and be binding upon any corporate or other successor of the Bank which will acquire, directly or indirectly, by merger, consolidation, purchase or otherwise, all or substantially all of the assets or stock of the Bank.

	
  

	
b.

	
Since the Bank is contracting for the unique and personal skills of Executive, Executive will not assign or delegate her rights or duties under this Agreement without first obtaining the written consent of the Bank.

18.           No Mitigation.  Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise and no such payment will be offset or reduced by the amount of any compensation or benefits provided to Executive in any subsequent employment.

19.           Notices.  All notices, requests, demands and other communications in connection with this Agreement will be made in writing and will be deemed to have been given when delivered by hand or 48 hours after mailing at any general or branch United States Post Office, by registered or certified mail, postage prepaid, addressed to the Bank at their principal business offices and to Executive at her home address as maintained in the records of the Bank.

20.           No Plan Created by this Agreement.  Executive and the Bank expressly declare and agree that this Agreement was negotiated among them and that no provision or provisions of this Agreement are intended to, or will be deemed to, create any plan for purposes of the Employee Retirement Income Security Act of 1974 (“ERISA”) or any other law or regulation, and each party expressly waives any right to assert the contrary.  Any assertion in any judicial or administrative filing, hearing, or process that an ERISA plan was created by this Agreement will be deemed a material breach of this Agreement by the party making the assertion.

21.           Amendments.  No amendments or additions to this Agreement will be binding unless made in writing and signed by all of the parties, except as herein otherwise specifically provided.

22.           Applicable Law.  Except to the extent preempted by federal law, the laws of the Commonwealth of Massachusetts will govern this Agreement in all respects, whether as to its validity, construction, capacity, performance or otherwise.

23.           Severability.  The provisions of this Agreement will be deemed severable and the invalidity or unenforceability of any one provision will not affect the validity or enforceability of the other provisions of this Agreement.

24.           Headings.  Headings contained in this Agreement are for convenience of reference only.

25.           Entire Agreement.  This Agreement, together with any modifications subsequently agreed to in writing by the parties, will constitute the entire agreement among the parties with respect to the foregoing subject matter, other than written agreements applicable to specific plans, programs or arrangements described in Sections 5 and 6.

 

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26.           Required Provisions.  In the event any of the foregoing provisions of this Agreement conflict with the terms of this Section 26, this Section 26 will prevail.

	
  

	
a.

	
The Bank’s board of directors may terminate Executive’s employment at any time, but any termination by the Bank, other than termination for Cause, will not prejudice Executive’s right to compensation or other benefits under this Agreement.  Executive will not have the right to receive compensation or other benefits for any period after termination for Cause as defined in Section 11(d) of this Agreement.

	
  

	
b.

	
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) or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1818(e)(3) or (g)(1), the Bank’s obligations under this contract will 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 their contract obligations were suspended; and (ii) reinstate (in whole or in part) any of the obligations which were suspended.

	
  

	
c.

	
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) or 8(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 contract will terminate as of the effective date of the order, but vested rights of the contracting parties will not be affected.

	
  

	
d.

	
If the Bank is in default as defined in Section 3(x)(1) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1813(x)(1), all obligations under this contract will terminate  as of the date of default, but this paragraph will not affect any vested rights of the contracting parties.

	
  

	
e.

	
All obligations under this contract will terminate, except to the extent determined that continuation of the contract is necessary for the continued operation of the institution:  (i) by the Director of the OTS (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) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1823(c), or (ii) by the Director of the OTS (or her designee) at the time the Director (or her designee) approves a supervisory merger to resolve problems related to the operations of the Bank or when the Bank is determined by the Director to be in an unsafe or unsound condition.  Any rights of the parties that have already vested, however, will not be affected by such action.

	
  

	
f.

	
Any payments made to Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. Section 1828(k) and FDIC Regulation 12 C.F.R. Part 359, Golden Parachute and Indemnification Payments.

27.           Section 409A of the Code.

	
  

	
a.

	
This Agreement is intended to comply with the requirements of Section 409A of the Code, and specifically, with the “short-term deferral exception” under Treasury Regulation Section 1.409A-1(b)(4) and the “separation pay exception” under Treasury Regulation Section 1.409A-1(b)(9)(iii), and will in all respects be administered in accordance with Section 409A of the Code.  If any payment or benefit hereunder cannot be provided or made at the time specified herein without incurring sanctions on Executive under Section 409A of the Code, then such payment or benefit will be provided in full at the earliest time thereafter when such sanctions will not be imposed.  For purposes of Section 409A of the Code, all payments to be made upon a termination of employment under this Agreement may only be made upon a “separation from service” (within the meaning of such term under Section 409A of the Code), each payment made under this Agreement will be treated as a separate payment, the right to a series of installment payments under this Agreement (if any) is to be treated as a right to a series of separate payments, and if a payment is not made by the designated payment date under this Agreement, the payment will be made by December 31 of the calendar year in which the designated date occurs.  To the extent that any payment provided for hereunder would be subject to additional tax under Section 409A of the Code, or would cause the administration of this Agreement to fail to satisfy the requirements of Section 409A of the Code, such provision will be deemed null and void to the extent permitted by applicable law, and any such amount will be payable in accordance with b. below.  In no event will Executive, directly or indirectly, designate the calendar year of payment.

 

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b.

	
If when separation from service occurs Executive is a “specified employee” within the meaning of Section 409A of the Code, and if the cash severance payment under Section 11(f)(ii) or 12(b) of this Agreement would be considered deferred compensation under Section 409A of the Code, and, finally, if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not available (i.e., the “short-term deferral exception” under Treasury Regulations Section 1.409A-1(b)(4) or the “separation pay exception” under Treasury Section 1.409A-1(b)(9)(iii)), the Bank or the Company will make the maximum severance payment possible in order to comply with an exception from the six month requirement and make any remaining severance payment under Section 11(f)(ii) or 12(b) of this Agreement to Executive in a single lump sum without interest on the first payroll date that occurs after the date that is six (6) months after the date on which Executive separates from service.

	
  

	
c.

	
If (x) under the terms of the applicable policy or policies for the insurance or other benefits specified in Section 11(f)(ii) or 12(b) of this Agreement it is not possible to continue coverage for Executive and her dependents, or (y) when a separation from service occurs Executive is a “specified employee” within the meaning of Section 409A of the Code, and if any of the continued insurance coverage or other benefits specified in Section 11(f)(ii) or 12(b) of this Agreement would be considered deferred compensation under Section 409A of the Code, and, finally, if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not available for that particular insurance or other benefit, the Bank or the Company will pay to Executive in a single lump sum an amount in cash equal to the value of the Bank’s projected cost to maintain that particular insurance benefit had Executive’s employment not terminated, assuming continued coverage for 36 months.  The lump-sum payment will be made thirty (30) days after employment termination or, if Section 27(b) applies, on the first payroll date that occurs after the date that is six (6) months after the date on which Executive separates from service.

	
  

	
d.

	
References in this Agreement to Section 409A of the Code include rules, regulations, and guidance of general application issued by the Department of the Treasury under Internal Revenue Section 409A of the Code.

[Signature Page to Follow]

  

  

  

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Time.

CHICOPEE BANCORP, INC.

By: /s/ William J. Wagner_______________________________

William J. Wagner

CHICOPEE SAVINGS BANK

By: /s/ William J. Wagner_______________________________

William J. Wagner

EXECUTIVE

By: /s/ Guida R. Sajdak_______________________________

Guida R. SajdakEX-4.2

 Exhibit 4.2 

FORM OF 
 4.200% SUBORDINATED NOTE
DUE 2025 
 THIS IS A SECURITY IN GLOBAL FORM WITHIN THE MEANING OF THE SUBORDINATED INDENTURE REFERRED TO HEREINAFTER. 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE “DEPOSITARY”) TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
 TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT
IN PART, TO NOMINEES OF THE DEPOSITARY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE SUBORDINATED
INDENTURE REFERRED TO ON THE REVERSE HEREOF. 
 THIS SECURITY IS NOT A SAVINGS ACCOUNT, DEPOSIT OR OTHER OBLIGATION OF A BANK AND IS NOT INSURED BY THE
FDIC OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY. 
  

					
	CUSIP No. [    ]	 		  	
	ISIN No. [    ]	 		  	
	No. [    ]	 		  	Principal Amount $[        ]

 CAPITAL ONE FINANCIAL CORPORATION 

4.200% SUBORDINATED NOTES DUE 2025 

Capital One Financial Corporation, a Delaware corporation (the “Company”), for value received, hereby promises to pay to
Cede & Co. or registered assigns the principal sum of [            ] United States Dollars, at the Company’s office or agency for said purposes, on October 29, 2025 (the
“Stated Maturity”). 
 Interest Payment Dates: April 29 and October 29 

Regular Record Dates: April 14 and October 14 

 Reference is made to the further provisions set forth on the reverse hereof, including the
definitions of certain capitalized terms. Such further provisions shall for all purposes have the same effect as though fully set forth at this place. 

This Security shall not be valid or obligatory until the certificate of authentication hereon shall have been duly signed by the Trustee
acting under the Subordinated Indenture. 

  
 2 

 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. 

Dated: October 29, 2015 
  

							
	CAPITAL ONE FINANCIAL CORPORATION
		
	By:	 	  

		 	Name:	 	Daniel H. Rosen
		 	Title:	 	Managing Vice President, Treasury Capital Markets
		
	Attest By:	 	  

		 		 	Name:	 	Kelly A. Ledman
		 		 	Title:	 	Assistant Secretary

 TRUSTEE’S CERTIFICATE OF AUTHENTICATION 

This is one of the Securities issued under the within-mentioned Subordinated Indenture. 

Dated: October 29, 2015 
  

			
	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
		
	By:	 	  

		 	Authorized Signatory

 REVERSE OF SECURITY 

Capital One Financial Corporation 

4.200% Subordinated Notes Due 2025 

This Security is one of a duly authorized issue of debt securities of the Company, of the series hereinafter specified, all issued or to be
issued under a Subordinated Indenture, dated as of August 29, 2006 (the “Subordinated Indenture”), and duly executed and delivered by the Company to The Bank of New York Mellon Trust Company, N.A., formerly known as The Bank of New
York Trust Company, N.A., as successor to Harris Trust and Savings Bank, as trustee (hereinafter, the “Trustee”). Reference to the Subordinated Indenture and the Officers’ Certificate thereunder establishing the terms of this Security
is hereby made for a description of the respective rights and duties thereunder of the Trustee, the Company and the Holders of the Securities. This Security is one of a series designated as the “4.200% Subordinated Notes Due 2025” of the
Company (hereinafter called the “Notes”), issued under the Subordinated Indenture. Each Holder by accepting a Note, agrees to be bound by all terms and provisions of the Subordinated Indenture, as amended from time to time, applicable to
the Notes. 
 Neither the Subordinated Indenture nor the Notes limit or otherwise restrict the amount of indebtedness which may be incurred
or other securities which may be issued by the Company. The Notes issued under the Subordinated Indenture are direct, unsecured obligations of the Company and will mature on October 29, 2025. The Notes are subordinated in right of payment to
the Senior Indebtedness of the Company as provided in Article Sixteen of the Subordinated Indenture, and will rank equal in right of payment to all of the Company’s existing and future unsecured and subordinated indebtedness. 

The Company promises to pay interest on the principal amount of this Security at the rate of 4.200% per annum. The Company will pay
interest semi-annually in arrears on April 29 and October 29 of each year (each, an “Interest Payment Date”), commencing on April 29, 2015. Interest on this Security will accrue from October 29, 2015 or from the most recent
October 29 or April 29, as the case may be, to which interest on the Notes has been paid or duly provided for, until payment of said principal sum has been made or duly provided for. Interest on the Notes will be computed on the basis of a
360-day year of twelve 30-day months. The Company will pay interest to the Person in whose name this Security is registered at the close of business on April 14 and October 14, as the case may be, next preceding the applicable Interest
Payment Date, except that the Company will pay the interest payable at the Stated Maturity of this Security to the Person or Persons to whom principal is payable. The Company will pay interest in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of public and private debts. The Company will make payments in respect of Notes in global form (including principal and interest) to the Holder thereof or a nominee of the Holder, by
wire transfer of immediately available funds as of the close of business on the date such payments are due. 
 If the Company defaults in
the payment of interest due on any Interest Payment Date after taking into account any applicable grace period, such defaulted interest shall be paid as set forth in the Subordinated Indenture. 

 The Notes are not entitled to any sinking fund. 

The Notes are subject to defeasance pursuant to Section 402 of the Subordinated Indenture. 

The provisions in Section 305 of the Subordinated Indenture are applicable to the Notes. 

The subordination provisions of Article Sixteen of the Subordinated Indenture are applicable to the Notes. 

The Notes are not convertible into common stock of the Company. 

Solely with respect to the Notes, and not with respect to any other series of Securities, Sections 501(e) and 501(f) of the Indenture shall be
modified as follows: 
 “(e) the entry by a court having competent jurisdiction of: 

(1) a decree or order for relief in respect of the Company in an involuntary proceeding under any applicable bankruptcy,
insolvency, reorganization or other similar law and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or 

(2) a decree or order adjudging the Company to be insolvent, or approving a petition seeking reorganization, arrangement,
adjustment or composition of the Company and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or 

(3) a final and non-appealable order appointing a custodian, receiver, liquidator, assignee, trustee or other similar official
of the Company or of any substantial part of the property of the Company, or ordering the winding up or liquidation of the affairs of the Company; 

(f) the commencement by the Company of a voluntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law
or of a voluntary proceeding seeking to be adjudicated insolvent or the consent by the Company to the entry of a decree or order for relief in an involuntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law
or to the commencement of any insolvency proceedings against it, or the filing by the Company of a petition or answer or consent seeking reorganization or relief under any applicable law, or the consent by the Company to the filing of such petition
or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee or similar official of the Company or any substantial part of the property of the Company or the making by the Company of an assignment for the
benefit of creditors, or the taking of corporate action by the Company in furtherance of any such action; or” 
 Solely with respect to
the Notes, and not with respect to any other series of Securities, the definition of “Senior Indebtedness” as set forth in the Indenture shall be modified as follows: 

““Senior Indebtedness” means (a) the principal of and premium, if any, and interest, on, whether outstanding now or
incurred later, (1) all indebtedness for money borrowed by the Company, including indebtedness of others guaranteed by the Company, other than any 

 
subordinated debt securities, junior subordinated debt securities and other indebtedness that is expressly stated as not senior, and (2) any amendments, renewals, extensions, modifications
and refundings of any indebtedness, unless in any such case the instrument evidencing the indebtedness provides that it is not senior in right of payment to the Securities; (b) all of the Company’s capital lease obligations and any
synthetic lease or tax retention operating lease; (c) all of the Company’s obligations issued or assumed as the deferred purchase price of property, and all conditional sale or title retention agreements, but excluding trade accounts
payable in the ordinary course of business; (d) all of the Company’s obligations, contingent or otherwise, in respect of any letters of credit, bankers acceptances, security purchase facilities and similar credit transactions; (e) all
of the Company’s obligations in respect of interest rate swap, cap or similar agreements, interest rate future or options contracts, currency swap agreements, currency future or option contracts, commodity contracts and other similar
agreements; (f) all obligations of the type referred to in clauses (a) through (e) of other persons for the payment of which the Company is responsible or liable as obligor, guarantor or otherwise, whether or not such obligation is
classified as a liability on a balance sheet prepared in accordance with generally accepted accounting principles, and direct credit substitutes; and (g) all obligations of the type referred to in clauses (a) through (f) of other
persons secured by any lien on any of the Company’s property or assets whether or not such obligation is assumed by the Company.” 

At any time after September 29, 2025 (the “Redemption Date”), the Notes will be redeemable at the option of the Company, upon
not less than 15 nor more than 45 days’ prior notice given to the holders of the Notes to be redeemed, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus in each case accrued and unpaid interest to the
Redemption Date. 
 If money sufficient to pay the redemption price of and accrued interest on the Notes (or portions thereof) to be
redeemed on the Redemption Date is deposited with the Trustee on or before the Redemption Date and certain other conditions are satisfied, then on and after the Redemption Date, interest will cease to accrue on such Notes (or such portion thereof)
called for redemption and such Notes will cease to be outstanding. If the Redemption Date is not a business day, the Issuer will pay the redemption price on the next business day without any interest or other payment due to the delay. 

If fewer than all of the Notes are to be redeemed, the Depository will select the Notes for redemption on a pro rata basis, by lot or by such
other method in accordance with the procedures of the Depository. No Notes of $1,000 or less will be redeemed in part. 
 In case an Event
of Default shall have occurred and is continuing with respect to the Notes, the principal hereof may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the
Subordinated Indenture. The Subordinated Indenture provides that in certain circumstances such declaration and its consequences may be waived by the Holders of not less than a majority in aggregate principal amount of the Notes then Outstanding.
However, any such consent or waiver by the Holder shall not affect any subsequent default or impair any right consequent thereon. 
 The
Holder of this Security will have an absolute right to receive payment of the interest on this Security on or after the dates expressed herein and to institute a suit for the enforcement 

 
of any such payment, but there is no right of acceleration in the case of any default other than certain events of bankruptcy or insolvency of the Company and accordingly no right of acceleration
in the case of a default by the Company of principal or interest on the Notes or the performance of any other obligation by the Company under the Notes or the Subordinated Indenture. 

The Subordinated Indenture permits the Company and the Trustee, without the consent of the Holders of the Notes for certain situations and
with the consent of not less than two-thirds of the Holders in aggregate principal amount of the Outstanding Notes of each series affected by such supplemental indenture in other situations, to execute supplemental indentures adding to, modifying,
or changing various provisions of, the Subordinated Indenture; provided that no such supplemental indenture, without the consent of the Holder of each Outstanding Note affected thereby, shall (i) change the Stated Maturity of the principal of
or any installment of interest on the Notes; (ii) reduce the principal amount thereof or the rate of interest thereon, or adversely affect the right of repayment of any Holder; (iii) change the Place of Payment or Currency in which the
principal of or interest on the Notes is payable, or impair the right to institute suit for the enforcement of any payment on or after the Stated Maturity thereof; (iv) reduce the percentage in principal amount of the Outstanding Notes, the
consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of the Subordinated Indenture or certain defaults thereunder and their
consequences) provided for in the Subordinated Indenture, or reduce the requirements of Section 1504 for quorum or voting; (v) modify any of the provisions of Sections 902, 513 or 1008 of the Subordinated Indenture, except to increase any
such percentage or provide that certain other provisions of the Subordinated Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Note affected thereby; or (vi) modify the provisions of the Subordinated
Indenture with respect to the subordination of the Notes in a manner adverse to the Holders. 
 The Company may omit in any particular
instance to comply with any term, provision or condition set forth in Section 1007 of the Subordinated Indenture, if before the time it would have to comply, the Holders of at least a majority in principal amount of the Outstanding Notes, by
act of such Holders, either shall waive such compliance in such instance or generally shall have waived compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect. 

No reference herein to the Subordinated Indenture and no provision of this Security or of the Subordinated Indenture shall alter or impair the
obligations of the Company, which are absolute and unconditional, to pay the principal of or interest on this Security at the respective times and at the rate herein prescribed. 

The Notes are issuable in registered form without coupons in minimum denominations of $2,000 and in integral multiples of $1,000 in excess
thereof. A Holder may exchange the Notes for a like aggregate principal amount of Notes of other authorized denominations in the manner and subject to the limitations provided in the Subordinated Indenture. 

 Upon due presentment for registration of transfer of the Notes at the office or agency for said
purpose of the Company, a new Note or Notes of authorized denominations, for a like aggregate principal amount, will be issued to the transferee as provided in the Subordinated Indenture. No service charge shall be made for any such transfer, but
the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto. 

Prior to due presentation of this Security for registration of transfer, the Company, the Trustee, and any agent of the Company or the
Trustee, may deem and treat the Holder hereof as the owner of this Security (whether or not any payment with respect to this Security shall be overdue), for the purpose of receiving payment of principal of and (subject to the provisions of the
Subordinated Indenture) interest hereon and for all other purposes whatsoever, whether or not any payment with respect to this Security shall be overdue, and neither the Company, nor the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary. 
 No recourse shall be had for the payment of the principal of or interest on this Security, for any
claim based hereon, or otherwise in respect hereof, or based on or in respect of the Subordinated Indenture or any indenture supplemental thereto, or because of the creation of any indebtedness represented thereby, against any incorporator,
shareholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. 

THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 

All terms used in this Security (and not otherwise defined in this Security) that are defined in the Subordinated Indenture shall have the
meanings assigned to them in the Subordinated Indenture.

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