Document:

a50593032ex10_10.htm

Exhibit 10.10

	CHANGE IN CONTROL SEVERANCE AGREEMENT
	SIMSBURY BANK AND TRUST COMPANY

 

                                                                                                           

This Agreement is made and entered into, effective as of the 24th day of October, 2012, by and between Simsbury Bank & Trust Company, a state bank and trust company with its principal office and place of business at 981 Hopmeadow Street, Simsbury, Connecticut 06070 (“Bank”) and Gary W. Burdick, a resident of West Simsbury, Connecticut (“Executive”).

 

W I T N E S S E T H:

 

WHEREAS, Executive is employed by Bank as Senior Vice President – Chief Commercial Banking Officer;

 

WHEREAS, the Board of Directors of Bank considers it to be in the best interests of Bank and the stockholders of Bank to foster the continued employment of Executive in the event of a Potential Change-in-Control (as hereinafter defined), although no specific such event is now contemplated or foreseen;

 

WHEREAS, Bank desires to assure Executive of what it considers to be fair and reasonable terms in the event of a Change-in-Control (as hereinafter defined), and Executive so agrees;

 

NOW THEREFORE, in consideration of the promises and mutual covenants herein contained, the parties hereto, intending to be legally bound, do hereby mutually covenant and agree as follows:

 

1.           Term of Agreement.

 

(a)           Generally.  Except as provided in Section 1(b) hereof, (i) this Agreement shall be effective as of the date and year first above written, and shall continue in effect through December 31, 2012, and (ii) commencing on January 1, 2013, and each January 1 thereafter, this Agreement shall be automatically extended for one additional year unless, not later than September 30th of the preceding year, either party to this Agreement gives written notice to the other that the Agreement shall not be extended under this Section 1(a); provided, however, that no such notice by Bank shall be effective if prior to the date of such notice (i) a “Potential Change in Control” shall have occurred and the event giving rise thereto has not been terminated, abandoned or rescinded, or (ii) a “Change in Control” shall have occurred.

 

(b)           Upon a Change in Control.  If a Change in Control shall have occurred at any time during the period in which this Agreement is effective, this Agreement shall continue in effect for (i) the remainder of the month in which the Change in Control occurred and (ii) a term of 12 months beyond the month in which such Change in Control occurred (such entire period hereinafter referred to as the "Protected Period").  Note that in certain circumstances defined and set forth below, provisions of this Agreement shall survive for longer than the period described above.

 

  

  

  

 

2.           Definitions.

 

For purposes of this Agreement, the following terms shall have the following meanings:

 

(a)           A "Change in Control" shall be deemed to have occurred if, during the term of this Agreement:

 

(i)           any Person directly or indirectly or acting through one or more other Persons first acquires ownership, control, or power to vote 25% or more of the voting common stock of Bank or a Controlling Person; or

 

(ii)           any Person acquires or agrees to acquire all or substantially all of the assets and business of Bank or a Controlling Person; or

 

(iii)           any Person (A) is a party to a merger, consolidation, or any other form of reorganization having substantially the same effect as a merger or consolidation, with Bank or a Controlling Person and (B) immediately prior to such transaction the Person had total assets as of the end of its most recent fiscal year equal to or greater than 100% of the total assets of Bank or the Controlling Person, as applicable, as of the end of its most recent fiscal year; or

 

(iv)            during any period of twenty-four (24) consecutive months, individuals who at the beginning of such period constitute the Board of Directors of Bank cease for any reason to constitute a majority of such Board, unless the election, or the nomination for election, of each new Director was approved by a vote of at least two-thirds (2/3) of the Directors then still in office who were Directors at the beginning of such period; or

 

(v)           the Board of Directors of Bank, by vote of a majority of all the Directors (excluding Executive if Executive is a Director), adopts a resolution to the effect that a “Change in Control” has occurred for purposes of this Agreement.

 

(b)           A "Potential Change in Control" shall be deemed to have occurred if:

 

(i)           Bank or any Controlling Person enters into a letter of intent, memorandum of understanding, or definitive agreement providing for, or publicly announces that it is considering, one or more transactions, the consummation of which would result in the occurrence of a Change in Control;

 

(ii)           any Person (including Bank) publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change in Control; or

 

(iii)           the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred.

 

  

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(c)           A “Person” shall include a natural person, corporation, or other entity.  When two or more persons act as a partnership, limited partnership, syndicate, or other group for the purpose of acquiring, holding, or disposing of Bank common stock, such partnership, syndicate, or group shall be considered a Person.  Beneficial ownership shall be determined under the then current provisions of Securities Exchange Act Rule 13d-3; 17 C.F.R. § 240.13d-3.

 

(d)           A “Controlling Person” shall mean a Person who directly or indirectly or acting through one or more other Persons owns, controls or has power to vote 50% or more of the voting common stock of Bank.

 

(e)           Notwithstanding the definitions contained in Section 2 hereof, the formation by Bank of a bank holding company that is approved by the Board and the shareholders of Bank shall not in and of itself constitute either a Change in Control or a Potential Change in Control.

 

3.           Duties Upon Potential Change-in-Control.

 

In the event that a Potential Change-in-Control shall occur while Executive is employed by Bank, Executive agrees to remain in the employ of Bank, and in such event Bank agrees to continue to employ Executive in the offices then held by Executive with Bank and on the terms of employment then in effect until the earlier to occur of the following:  (i) the event giving rise to the Potential Change-in-Control shall have been abandoned or terminated; (ii) a Change-in-Control occurs; or (iii) the Board of Directors of Bank shall determine by vote of at least two-thirds (2/3) of all the Directors (excluding Executive if Executive is a Director) that Executive’s obligations under this Section 3 shall cease.  During the period covered by the preceding sentence, Executive shall render, to the best of Executive’s ability, such services as shall be required of Executive in order to explore and pursue fully the Potential Change-in-Control in accordance with directions, policies and determinations from time to time made by the Board of Directors of Bank and communicated to Executive.  During said period, Executive shall use reasonable best efforts to fulfill Executive’s responsibilities to Bank in the interests of Bank and the shareholders of Bank and as reasonably requested of Executive for such purposes.  The employment of Executive pursuant to the first sentence of this Section 3 may be terminated, without breach of this Agreement, either by Bank for Cause, Disability or Material Breach, or by Executive for Good Reason (as such terms are defined in Section 4(f) below).

 

4.           Termination.

 

(a)           Termination by Bank for Cause, by Executive Without Good Reason, or by Reason of Death, Disability or Retirement.  If during the Protected Period Executive’s employment by Bank is terminated by Bank for Cause, by Executive without Good Reason, or because of Executive’s death, Disability or voluntary Retirement, Bank shall not be obligated to make any payments to Executive by reason of this Agreement other than (i) payment of amounts otherwise accrued and owing but not yet paid and (ii) any amounts payable under then-existing employee benefit programs at the time such amounts are due.

 

  

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(b)           Termination by Bank Without Cause or by Executive for Good Reason.  If during the Protected Period Executive’s employment by Bank is terminated by Bank without Cause or by Executive for Good Reason, subject to the provisions of Section 6 hereof, Executive shall be entitled to the compensation and benefits described in this Section 4(b).  If Executive’s employment by Bank is terminated prior to a Change in Control at the request of a Person engaging in a transaction or series of transactions that would result in a Change in Control, the Protected Period shall commence upon the subsequent occurrence of a Change in Control, Executive’s actual termination shall be deemed a termination occurring during the Protected Period and covered by this Section 4(b), Executive’s Date of Termination shall be deemed to have occurred immediately following the Change in Control, and Notice of Termination shall be deemed to have been given by Bank immediately prior to Executive’s actual termination.  Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any circumstances constituting Good Reason hereunder.

 

The compensation and benefits provided under this Section 4(b) are as follows:

 

(i)           Bank shall pay Executive’s full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, no later than the fifth day following the Date of Termination, and Executive shall receive all other vested amounts to which Executive is entitled under any benefit plan of Bank, at the time such payments are due under the terms of such benefit plan of Bank.

 

(ii)           At the time specified in Section 4(d) hereof, Bank shall pay to Executive, in lieu of amounts which may otherwise be payable to Executive under any bonus plan for the year in which the Date of Termination occurs, an amount in cash equal to Executive’s annual target bonus that would be payable in cash for such year, multiplied by a fraction, (A) the numerator of which equals the number of days in such annual performance period during which Executive was employed by Bank and (B) the denominator of which is 365.

 

(iii)           At the time specified in Section 4(d) hereof, Bank shall pay Executive, in lieu of any further salary, bonus or severance payments under the Bank’s Severance Plan or otherwise for periods subsequent to the Date of Termination, a lump sum amount in cash equal to two times the sum of:

 

(A)           the greater of (I) Executive’s annual base salary in effect immediately prior to the Change in Control of Bank or (II) Executive’s annual base salary in effect at the time Notice of Termination is given; and

 

(B)           the greater of (I) Executive’s annual target bonus for the year in which the Change in Control occurs or, (II) if no such target bonus has yet been determined for such year, Executive’s annual target bonus actually earned by Executive in the year immediately preceding the year in which the Change in Control occurs.

 

  

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(iv)           Stock options or restricted stock held by Executive at the time of Executive’s termination, the vesting of which is service based, if not then vested and exercisable, will become fully vested and exercisable at the date of such termination notwithstanding anything to the contrary set forth in the plans and programs and the agreements and other documents pursuant to which such options or restricted stock were granted, and, in all other respects (including the period following termination during which such options may be exercised), such options or restricted stock shall be governed by the plans and programs and the agreements and other documents pursuant to which such options or restricted stock were granted.

 

(v)           Any performance objectives upon which the earning of performance-based restricted stock or deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards are conditioned shall be deemed to have been met at target level at the date of termination, and restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards (to the extent then or previously earned, in the case of performance-based awards) shall become fully vested and non-forfeitable at the date of such termination notwithstanding anything to the contrary set forth in the plans and programs and the agreements and other documents pursuant to which such awards were granted, and, in all other respects, such awards shall be governed by the plans and programs and the agreements and other documents pursuant to which such awards were granted.

 

(vi)           For the 24 consecutive month period immediately following Executive’s termination of employment, Bank shall arrange to provide Executive with health insurance benefits no less favorable than those which Executive was receiving immediately prior to the Notice of Termination.  If Executive elects after termination of employment continued coverage under Bank’s health plan in accordance with the applicable provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), then Executive shall continue to receive such individual and/or family health benefits coverage as Executive was receiving at the time of termination of employment with Bank with Executive paying the same portion of the cost of such coverage as existed at the time of Executive’s termination of employment, for so long during the continuation period as Executive elects to continue coverage and pays Executive’s portion of the costs of coverage.

 

(vii)           At the time specified in Section 4(d) hereof, an amount equal to the aggregate amounts that Bank would have contributed on behalf of Executive under Bank’s 401(k) Plan, or similar qualified plan if any such plan shall be in effect, for a 24-month period following Executive’s termination of employment (plus a fixed earnings rate of 7% thereon) had Executive continued in the employ of Bank until the end of said period and made contributions under said plan at a rate, as a percentage of salary, equal to the rate at which Executive had made contributions to said plan in the plan year immediately preceding Executive’s termination.

 

(viii)           At the time specified in Section 4(d) hereof, access to outplacement and job search services (including, but not limited to, office and secretarial expenses), with a value not to exceed $10,000, provided that such access shall apply only during the 24-month period following Executive’s termination of employment.

 

  

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(ix)           Bank shall not be obligated to continue any disability or disability income insurance or life insurance on behalf of Executive following the date of Executive’s termination of employment.  To the extent permitted under any contracts, programs or policies of such nature in effect at the time of such termination, Executive may continue at Executive’s sole cost and expense coverage thereunder for a period of up to 24 months.

 

(x)           For a 24-month period following Executive’s termination of employment, to the extent permissible under the governing arrangement, Executive shall continue to receive such perquisites, other than those specified in the preceding subparagraphs above, as Executive was receiving at the time of termination of employment with, to the extent applicable, the same cost sharing with Bank as was in effect immediately prior to Executive’s termination of employment.

 

(xi)           Bank shall reimburse Executive for the amount of any reasonable legal fees and expenses incurred by Executive in any successful action (whether or not arbitration or litigation shall be involved) to obtain or enforce any right or benefit provided to Executive by Bank hereunder or as confirmed or acknowledged hereunder.

 

(c)           Section 280G Limit.  Notwithstanding any other provision of this Agreement, in the event that any payment or benefit received or to be received by Executive, whether payable pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Bank, its successors, or any person affiliated with Bank (“Affiliate”) within the meaning of Section 1504 of the Internal Revenue Code of 1986, as amended (the “Code”) (collectively “Total Payments”) would, in the determination of the independent certified public accounting firm then retained by Bank (the “Tax Advisor”), not be deductible (in whole or in part) by Bank, an affiliate of Bank or other person making such payment or providing such benefit as a result of Section 280G of the Code, or any successor to such Section, payments and benefits pursuant to this Agreement shall be reduced until no portion of the Total Payments is not deductible as a result of Section 280G of the Code, or payments and benefits pursuant to this Agreement are reduced to zero.  At the time of Executive’s termination, Bank shall obtain an appraisal of the then current present value of the covenants by Executive set forth in Sections 7 and 8 of this Agreement, an amount of the total payments to be made to Executive under clause (ii) of Section 4(b) equal to said amount shall be for all purposes treated as a payment to Executive in consideration of such covenants and the remainder, if any, shall be treated as supplemental wage payments to Executive.  For purposes of the limitation contained in this Section 4(c), (i) no portion of the Total Payments the receipt of which Executive, in the determination of the Tax Advisor, shall have effectively waived prior to the date which is fifteen (15) days following termination of employment and prior to the earlier of the date of constructive receipt and the date of payment thereof shall be taken into account; and (ii) any reduction in the payments and benefits pursuant to Section 4(b) above shall be made from the payments and benefits to be made pursuant to clauses (i) through (xi) of Section 4(b) hereof, in such order as may be determined by Executive, except to the extent that such payments and benefits, in the determination of the Tax Advisor, are reasonable compensation within the meaning of Section 280G of the Code.  The determination of the Tax Advisor as to the deductibility of the Total Payments shall be completed not later than forty-five (45) days following Executive’s termination of employment, and such determination shall be communicated in writing to Bank, with a copy to Executive, within said forty-five (45) day period.  The determination of the Tax Advisor as to the deductibility of the Total Payments shall be deemed conclusive and binding on Bank and Executive and shall not be subject to the arbitration provisions of this Agreement. Bank shall pay the fees and other costs of the Tax Advisor hereunder.  In the event that the independent certified public accounting firm then retained by Bank is unable or declines to serve as Tax Advisor for purposes of making the foregoing determinations, Bank shall appoint another accounting firm of national reputation to serve as Tax Advisor.

 

  

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(d)           Time of Payment.  The payments provided for in clauses (ii), (iii), (vii) and (viii) of Section 4(b) hereof shall be made not later than the fifteenth day following the Date of Termination; provided, however, that if the amount of such payments cannot be finally determined on or before such day, Bank shall pay to Executive on such day an estimate, as determined in good faith by Bank, of the minimum amount of such payments and shall pay the remainder of such payments (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth day after the Date of Termination.  Notwithstanding the above, the Bank may delay any payment provided for herein until a date no later than the date that is six months following the Executive’s termination of employment, if, in the opinion of the Bank’s certified public accountants, such delay is necessary in order to avoid the imposition of an excise tax upon the Executive under Section 409A of the Code.  In all events, the Bank and the Executive intend that this Agreement shall be complaint with, and payments shall be made in accordance with, Section 409A of the Code, and this Agreement is to be interpreted accordingly.  Reimbursement amounts will be paid within the time frame set forth in Treas. Reg. § 1.409A-3(i)(1)(iv)(A).

 

(e)           Notice.  During the Protected Period, any purported termination of Executive’s employment by Bank or by Executive shall be communicated by written Notice of Termination to the other party hereto.

 

(f)           Certain Definitions.  Except as otherwise indicated in this Agreement, all definitions in this Section 4(f) shall be applicable during the Protected Period.

 

(i)           Disability.  "Disability" shall mean Executive’s absence from the full-time performance of Executive’s duties with Bank for six consecutive months as a result of Executive’s incapacity due to physical or mental illness or disability, and within 30 days after written Notice of Termination is thereafter given Executive shall not have returned to the full-time performance of Executive’s duties.

 

(ii)           Cause.  "Cause" shall mean termination on account of (A) the willful and continued failure by Executive to substantially perform Executive's duties with Bank (other than any such failure resulting from Executive's incapacity due to physical or mental illness or Disability or any failure after the issuance of a Notice of Termination by Executive for Good Reason) which failure is demonstrably and materially damaging to the financial condition or reputation of Bank and/or its affiliates, and which failure continues more than 48 hours after a written demand for substantial performance is delivered to Executive by the Board, which demand specifically identifies the manner in which the Board believes that Executive has not substantially performed Executive’s duties or (B) the willful engaging by Executive in conduct which is demonstrably and materially injurious to Bank or its affiliates, monetarily or otherwise.  No act, or failure to act, on Executive’s part shall be deemed "willful" unless done, or omitted to be done, by Executive not in good faith and without reasonable belief that Executive’s action or omission was in the best interest of Bank.  Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to Executive a copy of the resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board (after reasonable notice to Executive and an opportunity for Executive, together with Executive’s counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, Executive was guilty of conduct set forth above in this Section 4(f)(ii) and specifying the particulars thereof in detail.

 

  

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(iii)           Good Reason.  "Good Reason" shall mean, without Executive's express written consent, the occurrence upon or within two years after a Change in Control of any of the following circumstances.  The Executive must give written notice to the Company of the Good Reason condition within 90 days of the initial existence of such condition, and the Company will be afforded the right to fully cure the condition within 30 days following receipt of such notice:

 

(A)           the assignment to Executive of any material duties inconsistent with the position in Bank that Executive held immediately prior to the Change in Control, or a material adverse alteration in the nature or status of Executive's responsibilities or the conditions of Executive's employment from those in effect immediately prior to such Change in Control (excluding inadvertent actions that are promptly remedied);

 

(B)           a material reduction in Executive’s annual base salary as in effect immediately prior to the Change in Control;

 

(C)           a material reduction in Executive’s perquisites as in effect immediately prior to the Change in Control as the same may be increased from time to time except for across-the-board perquisite reductions similarly affecting all senior executives of Bank and all senior executives of any Person in control of Bank;

 

(D)           the relocation of the principal place of Executive’s employment to a location more than 50 miles from Executive’s principal place of employment immediately prior to the Change in Control;

 

(E)           the failure by Bank to pay to Executive any portion of Executive’s compensation or to pay to Executive any portion of an installment of deferred compensation under any deferred compensation program of Bank within seven days of the date such compensation is due;

 

  

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(F)           the failure by Bank to continue in effect any material compensation or benefit plan in which Executive participated immediately prior to the Change in Control, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by Bank to continue Executive’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amounts of benefits provided and the level of Executive’s participation relative to other participants, as existed at the time of the Change in Control;

 

(G)           the failure of Bank to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement, as contemplated in Section 11 hereof; or

 

(H)           any purported termination of Executive's employment that is not effected pursuant to a Notice of Termination satisfying the requirements of Section 4(f)(v) hereof, which purported termination shall not be effective for purposes of this Agreement.

 

(iv)           Retirement. “Retirement” shall mean Executive’s voluntary retirement from Bank in accordance with the retirement policy of Bank, including early retirement, generally applicable to its executives or in accordance with any retirement arrangement with respect to Executive established by the Board with the consent of Executive.

 

(v)           Notice of Termination.  "Notice of Termination" shall mean notice indicating the specific termination provision in this Agreement relied upon and setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated.

 

(vi)           Date of Termination.  "Date of Termination" shall mean (A) if Executive’s employment is terminated for Disability, 30 days after Notice of Termination is given (provided that Executive shall not have returned to the full-time performance of Executive’s duties during such 30-day period) or (B) if Executive’s employment is terminated for any other reason, the date specified in the Notice of Termination (which, in the case of a termination for Cause, shall not be less than 30 days from the date such Notice of Termination is given and, in the case of a termination for Good Reason, shall not be less than 30 nor more than 60 days from the date such Notice of Termination is given).  In all cases, however, the Date of Termination shall be determined in a manner consistent with the “separation from service” rules in effect under Section 409A of the Code.

 

5.           Mitigation.

 

So long as Executive shall not be in breach of any provisions of Sections 7 or 8, Executive shall not be required to mitigate the amount of payment provided for under this Agreement by seeking other employment or otherwise, nor shall the amount of payment or benefit provided for under this Agreement be reduced by any compensation earned by Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by Executive to Bank, or otherwise.

 

  

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6.           Release.

 

As a condition of receiving payments or benefits provided for in this Agreement, at the request of Bank, or its successor, Executive shall execute and deliver for the benefit of Bank and any Controlling Person, a general release in substantially the form set forth in Attachment A hereto, and such release shall become effective in accordance with its terms. The failure or refusal of Executive to sign such a release or the revocation of such a release shall cause the termination of any and all obligations of Bank to make payments or provide benefits hereunder, and the forfeiture of Executive's right to receive any such payments and benefits, and will not absolve the Executive from his or her obligations hereunder.  Executive acknowledges that Bank has advised Executive to consult with an attorney prior to signing this Agreement and that Executive has had an opportunity to do so.  If any payments hereunder are conditioned upon the Executive’s execution of a general release, and if the period for consideration and revocation of the general release spans two of the Executive’s tax years, then the payment or payments at issue will be paid upon the later of (i) the end of the revocation period (assuming no revocation is made), or (ii) the first pay period occurring in the second tax year.

 

7.           Confidential Information. 

 

Executive understand that in the course of Executive's employment by Bank, Executive will receive or have access to confidential information concerning the business or purposes of Bank which Bank desires to protect.  Such confidential information shall be deemed to include, but not be limited to, Bank’s customer lists and information, and employee lists, including, if known, personnel information and data.  Executive agrees that Executive will not, at any time during the period ending two years after the Date of Termination, reveal to anyone outside Bank or use for Executive's own benefit any such information without specific written authorization by Bank.  Executive further agrees not to use any such confidential information or trade secrets in competing with Bank at any time.

 

8.           Non-Competition and Non-Disclosure; Non-Disparagement; Certain Forfeitures.

 

(a)           Non-Competition.  In consideration for the compensation and benefits provided under this Agreement, without the consent in writing of the Board of Bank, Executive will not, at any time during the term of this Agreement and for a period of two years following Executive’s termination of employment during the Protected Period, acting alone or in conjunction with others, directly or indirectly (i) engage (either as owner, investor, partner, stockholder, employer, employee, consultant, advisor, or director) in any business of any bank, bank holding company, savings bank, savings and loan association, savings and loan holding company, or other institution engaged in the business of accepting deposits or making loans, or any direct or indirect subsidiary or affiliate of any such entity, that maintains an office in any town in which Bank maintains an office as of Executive’s date of termination or in any town in which Bank had plans to open an office within six months after Executive’s date of termination; (ii) induce any customers of Bank or any of its affiliates with whom Executive had contacts or relationships, directly or indirectly, during and within the scope of Executive’s employment with Bank, to curtail or cancel their business with Bank or any such affiliate; (iii) induce or attempt to influence any employee of Bank or any affiliate to terminate employment; or (iv) solicit, hire or retain as an employee or independent contractor, or assist any third party in the solicitation, hire, or retention as an employee or independent contractor, any person who during the previous twelve months was an employee of Bank or any such affiliate; provided, however, that activities engaged in by or on behalf of Bank are not restricted by this covenant. The provisions of clauses (i), (ii), (iii), and (iv) above are separate and distinct commitments, each independent of the other subparagraphs.  It is agreed that the ownership of not more than one percent (1%) of the equity securities of any company having securities listed on an exchange or regularly traded in the over-the-counter market shall not, of itself, be deemed inconsistent with clause (i) of this Section 8(a).

 

  

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(b)           Non-Disparagement.  Executive shall not, at any time during the term of this Agreement or thereafter, make statements or representations, or otherwise communicate, directly or indirectly, in writing, orally, or otherwise, or take any action which may, directly or indirectly, disparage Bank or any of its affiliates or their respective officers, directors, employees, advisors, businesses or reputations.  Notwithstanding the foregoing, nothing in this Agreement shall preclude Executive from making truthful statements that are required by applicable law, regulation or legal process.

 

(c)           Injunction.  Executive hereby acknowledges that Executive’s services are unique and extraordinary, and are not readily replaceable, and hereby expressly agrees that Bank, in enforcing the covenants contained in Sections 7 and 8 herein, in addition to any other remedies provided for herein or otherwise available at law, shall be entitled in any court of equity having jurisdiction to an injunction restraining him in the event of a breach, actual or threatened, of the agreements and covenants contained in such Sections.

 

(d)           Scope.  The parties hereto believe that the restrictive covenants contained in Sections 7 and 8 hereof are reasonable.  However, if at any time it shall be determined by any court of competent jurisdiction that these Sections or any portion of them as written, are unenforceable because the restrictions are unreasonable, the parties hereto agree that such portions as shall have been determined to be unreasonably restrictive shall thereupon be deemed so amended as to make such restrictions reasonable in the determination of such court, and the said covenants, as so modified, shall be enforceable between the parties to the same extent as if such amendments had been made prior to the date of any alleged breach of said covenants.

 

(e)           Provision Not Applicable.  The provisions of this Section 8 shall not apply if Bank shall be prohibited under Section 14 below from making any payments to Executive pursuant to Section 4(b) above.

 

9.           Right of Discharge.

 

Subject to the obligations to make the payments specified in Section 4(b), and subject to the obligations of Bank under any employment agreement that may exist between Bank and Executive, it is expressly agreed that, except as set forth in Section 3 above, Bank shall have the right to discharge or terminate Executive at any time and for any reason, or no reason.

 

  

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10.           Exclusivity.

 

It is understood and agreed that if any payments are due and made to Executive under this Agreement then no payments will be due or required, and Bank shall not in any respect be obligated to Executive, under any severance pay plan, agreement, or arrangement that might otherwise be applicable to Executive, or under or by reason of any employment severance pay or similar agreement between Bank and Executive, including without limitation the Executive Severance Pay Agreement executed on the same date as this Agreement.

 

11.           Successors; Binding Agreement.

 

(a)           Bank shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of Bank, and in the case of an acquisition of Bank in which the corporate existence of Bank continues, the ultimate parent company following such acquisition, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that Bank would be required to perform it if no such succession had taken place.  As used in this Agreement, "Bank" shall mean Bank as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

 

(b)           This Agreement shall inure to the benefit of and be enforceable by Executive and Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  In the event of Executive's death following becoming entitled to payments hereunder but prior to completion of such payments, all amounts otherwise payable to Executive hereunder shall, unless otherwise provided herein, be paid in accordance with the terms of this Agreement to Executive's devisee, legatee or other designee or, if there is no such designee, to Executive's estate.

 

12.           Notice.

 

Notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when (a) personally delivered, (b) sent by Federal Express or other similar overnight service or (c) mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.  In the case of Federal Express or other similar overnight service, such notice or advice shall be effective when sent, and, in the cases of certified or registered mail, shall be effective two days after deposit into the mail by delivery to the U.S. Post Office.

 

  

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If to Executive, to:

 

Gary W. Burdick

                        25 Saddle Ridge Drive

            West Simsbury, CT 06092

 

If to Bank, to:

 

Simsbury Bank & Trust Company

            981 Hopmeadow Street

            Simsbury, CT 06070

            Attn: President and Chief Executive Officer

 

13.           Dispute Resolution.

 

(a)           Negotiation.  Bank and Executive shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiation between the designated representative of the Board of Bank and Executive.  Any party may give the other party written notice of any dispute in accordance with the notice procedures set forth in Section 12.  Within 15 days after delivery of the notice, the receiving party shall submit to the other, in accordance with the notice procedures set forth in Section 12, a written response.  The notice and response shall include a statement of that party’s position and summary of arguments supporting that position.  Within 30 days after delivery of the initial notice, the parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to attempt to resolve the dispute.  All negotiations pursuant to this clause are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence.

 

(b)           Mediation.  If the dispute has not been resolved by negotiation as provided herein within 45 days after delivery of the initial notice of negotiation, or if the parties failed to meet within 30 days after delivery, the parties shall endeavor to settle the dispute by mediation under the CPR Mediation Procedure then currently in effect; provided, however, that if one party fails to participate in the negotiation as provided herein, the other party may initiate mediation prior to the expiration of the 45 days.  Unless otherwise agreed, the parties will select a mediator from the CPR Panels of Distinguished Neutrals.

 

(c)           Arbitration.  Any dispute arising under or in connection with this Agreement which has not been resolved by mediation as provided herein within 45 days after initiation of the mediation procedure, shall be finally resolved by arbitration in accordance with the CPR Rules for Non-Administered Arbitration then currently in effect, by three independent and impartial arbitrators, of whom each party shall designate one and the two so designated shall designate the third; provided, however, that if one party fails to participate in either the negotiation or mediation as agreed herein, the other party may commence arbitration prior to the expiration of the time periods set forth above.  The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§1-16, and judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof.  The place of arbitration shall be Hartford, Connecticut.  For purposes of entering any judgment upon an award rendered by the arbitrators, Bank and Executive hereby consent to the jurisdiction of any or all of the following courts: (i) the United States District Court for the District of Connecticut, (ii) any of the courts of the State of Connecticut, or (iii) any other court having jurisdiction.  Bank and Executive hereby agree that a judgment upon an award rendered by the arbitrators may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Subject to subsection (e) of this Section 13, Bank shall bear all costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 13(c). Notwithstanding any provision in this Section 13(c), Executive shall be entitled to seek specific performance of Executive’s right to be paid during the pendency of any dispute or controversy arising under or in connection with this Agreement.

 

  

13

  

 

(d)           Interest on Unpaid Amounts.  Any amount which has become payable pursuant to the terms of this Agreement or any decision by arbitrators or judgment by a court of law pursuant to this Section 13 but which has not been timely paid shall bear interest at the prime rate as quoted by Bank at the time such amount first becomes payable.

 

(e)           Costs of Proceedings.  Bank shall pay all costs and expenses, including all attorneys' fees and disbursements, of Bank and, at least monthly, Executive, in connection with any proceedings undertaken pursuant to this Section 13, whether or not instituted by Bank, or Executive, relating to the interpretation or enforcement of any provision of this Agreement; provided that if Executive instituted the proceeding and a finding is entered that Executive instituted the proceeding in bad faith, Executive shall pay all of Executive’s costs and expenses, including attorneys' fees and disbursements.  Any payments made under this Section 13(e) shall be in conformance with Section 4(b)(xi) above.

 

14.           Regulatory Limitation. 

 

Notwithstanding any other provision of this Agreement, Bank shall not be obligated to make, and Executive shall have no right to receive, any payment, benefit or amount under this Agreement which would violate any law, regulation or regulatory order applicable to Bank or its parent at the time such payment, benefit or amount is due, including, without limitation, Section 1828(k)(1) of Title 12 of the United States Code and any regulation or order thereunder of the Federal Deposit Insurance Corporation (“Prohibited Payment”).  If and to the extent Bank shall at a later date be relieved of the restriction on its ability to make any Prohibited Payment, then at such time Bank shall promptly make payment of any such amounts to Executive.

 

15.           Miscellaneous.

 

No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by Executive and such officer as may be designated by the Board.  No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the time or at any prior or subsequent time.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Connecticut without regard to its conflicts of law principles.  All references to sections of the Exchange Act or the Code shall be deemed also to refer to any successor provisions to such sections.  Any payments provided for hereunder shall be paid net of any applicable withholding required under federal, state or local law.  The obligations of Bank and Executive under this Agreement shall survive the expiration of this Agreement to the extent necessary to give effect to this Agreement.

  

14

  

16.           Validity.

 

The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

17.           Counterparts.

 

This Agreement may be executed in counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

18.           Entire Agreement.

 

This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and during the term of this Agreement supersedes the provisions of all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereof with respect to the subject matter contained herein.  No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.  Notwithstanding anything to the contrary in this Agreement, the procedural provisions of this Agreement shall apply to all benefits payable as a result of a Change in Control (or other change in control) under any employee benefit plan, agreement, program, policy or arrangement of Bank.

IN WITNESS WHEREOF, Bank has caused this Agreement to be executed by a duly authorized officer, and Executive has executed this Agreement, as of the 24th day of October, 2012.

 

	
SIMSBURY BANK AND TRUST COMPANY

	 
	 	 	 
	
By: 

	/s/ Martin J. Geitz	 
	 	Martin J. Geitz	 
	 	 	 
	 	 	Its President and Chief Executive Officer	 

 

  

15

  

 

	
EXECUTIVE

	 
	 	 	 
	
By: 

	/s/ Gary W. Burdick	 
	 	
Gary W. Burdick

	 
	 	 	 
	 	 	 

 

  

16

  

 

ATTACHMENT A

 

RELEASE

 

We advise Executive to consult an attorney before Executive sign this Release.  Executive have until the date which is seven (7) days after the Release is signed and returned to Simsbury Bank and Trust Company (“Bank”) to change Executive’s mind and revoke this Release.  Executive’s Release shall not become effective or enforceable until after that date.

 

In consideration for the benefits provided under Executive’s Change in Control Severance Agreement with Bank effective [              ] (the “Agreement”), and more specifically enumerated in Exhibit 1 hereto, by Executive’s signature below, Executive, for and on behalf of Executive, Executive’s heirs, executors, agents, representatives, successors and assigns, hereby release and forever discharge Bank its past and present parent corporations, subsidiaries, divisions, subdivisions, affiliates and related companies (collectively, the “Company”) and the Company’s past, present and future agents, directors, officers, employees, representatives, successors and assigns (hereinafter  “those associated with the Company”) with respect to any and all claims, demands, actions and liabilities, whether in law or equity, which Executive may have against the Company or those associated with the Company of whatever kind, including but not limited to those arising out of Executive’s employment with the Company or the termination of that employment.  Executive agree that this release covers, but is not limited to, claims arising under the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq., the Fair Labor Standards Act, 29 U.S.C. § 201 et seq., the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., the Connecticut Fair Employment Practices Act, C.G.S. § 46a-51 et seq., and any other local, state or federal law, regulation or order dealing with discrimination in employment on the basis of sex, race, color, national origin, veteran status, marital status, religion, disability, handicap, or age.  Executive also agree that this release includes claims based on wrongful termination of employment, breach of contract (express or implied), tort, or claims otherwise related to Executive’s employment or termination of employment with the Company and any claim for attorneys’ fees, expenses or costs of litigation.

 

This Release covers all claims based on any facts or events, whether known or unknown by Executive, that occurred on or before the date of this Release. Except to enforce this Release, Executive agree that Executive will never commence, prosecute, or cause to be commenced or prosecuted any lawsuit or proceeding of any kind against the Company or those associated with the Company in any forum and agree to withdraw with prejudice all complaints or charges, if any, that Executive have filed against the Company or those associated with the Company.

 

Anything in this Release to the contrary notwithstanding, this Release does not include a release of:  (i) Executive’s rights under the Agreement or Executive’s right to enforce the Agreement;  (ii) any rights Executive may have to indemnification under any agreement, law, Company organizational document or policy, or otherwise; (iii) except as expressly provided in the Agreement, any rights Executive may have to benefits under the Company’s benefit plans; or (iv) Executive’s right to enforce this Release.

 

  

17

  

 

By signing this Release, Executive further agree as follows:

 

i.           Executive has read this Release carefully and fully understand its terms;

 

ii.           Executive has had at least twenty-one (21) days to consider the terms of the Release;

 

iii.           Executive has seven (7) days from the date Executive signs this Release to revoke it by written notification to the Company.  After this seven (7) day period, this Release is final and binding and may not be revoked;

 

iv.           Executive has been advised to seek legal counsel and have had an opportunity to do so;

 

v.           Executive would not otherwise be entitled to the benefits provided under Executive’s Agreement had Executive not agreed to execute this Release; and

 

vi.           Executive’s agreement to the terms set forth above is voluntary.

 

IN WITNESS WHEREOF, Executive has executed and delivered this release at Simsbury, Connecticut on the date indicated below.

 

 

Name:______________________________________

Signature:___________________________________             Date:

 

18a50593032ex10_11.htm

Exhibit 10.11

The Simsbury Bank & Trust Company

Supplemental Executive Retirement Agreement

 

THE SIMSBURY BANK & TRUST COMPANY 

SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

 

 

This SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT (this “Agreement”) is adopted this 24th day of October, 2012, by and between THE SIMSBURY BANK & TRUST COMPANY a state-chartered commercial bank located in Simsbury, Connecticut (the “Bank”), and GARY W. BURDICK (the “Executive”).

The purpose of this Agreement is to provide specified benefits to the Executive, a member of a select group of management or highly compensated employees who contribute materially to the continued growth, development and future business success of the Bank.  This Agreement shall be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended from time to time.

 

Article 1

Definitions

Whenever used in this Agreement, the following words and phrases shall have the meanings specified:

	
1.1

	
“Accrual Balance” means the liability that should be accrued by the Bank, under Generally Accepted Accounting Principles (“GAAP”), for the Bank’s obligation to the Executive under this Agreement, by applying Accounting Principles Board Opinion Number 12 as amended by Statement of Financial Accounting Standards Number 106 and the Discount Rate.  Any one of a variety of amortization methods may be used to determine the Accrual Balance.  However, once chosen, the method must be consistently applied.

 

	
1.2

	
“Beneficiary” means each designated person or entity, or the estate of the deceased Executive, entitled to any benefits upon the death of the Executive pursuant to Article 4.

	
1.3

	
“Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Executive completes, signs and returns to the Plan Administrator to designate one or more Beneficiaries.

	
1.4

	
“Board” means the Board of Directors of the Bank as from time to time constituted.

	
1.5

	
“Change in Control” means a change in the ownership or effective control of the Bank, or in the ownership of a substantial portion of the assets of the Bank, as such change is defined in Code Section 409A and regulations thereunder.

 

  

  

  

 

	
1.6

	
“Code” means the Internal Revenue Code of 1986, as amended, and all regulations and guidance thereunder, including such regulations and guidance as may be promulgated after the Effective Date.

 

	
1.7

	
“Disability” means the Executive: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees or directors of the Bank.  Medical determination of Disability may be made by either the Social Security Administration or by the provider of disability insurance covering employees or directors of the Bank provided that the definition of “disability” applied under such insurance program complies with the requirements of the preceding sentence.  Upon the request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of the Social Security Administration’s or the provider’s determination.

	
1.8

	
“Discount Rate” means the rate used by the Plan Administrator for determining the Accrual Balance.  The initial Discount Rate is six percent (6%).  However, the Plan Administrator, in its discretion, may adjust the Discount Rate to maintain the rate within reasonable standards according to GAAP and/or applicable bank regulatory guidance.

	
1.9

	
“Early Termination” means the Executive’s Separation from Service before attainment of Normal Retirement Age except when such Separation from Service occurs within twenty-four (24) months following a Change in Control or due to death or Termination for Cause.

	
1.10

	
“Effective Date” means October 24, 2012.

	
1.11

	
“Normal Retirement Age” means the Executive’s age sixty-five (65).

	
1.12

	
“Plan Administrator” means the Board or such committee or person as the Board shall appoint.

	
1.13

	
“Plan Year” means each twelve (12) month period commencing on January 1 and ending on December 31 of each year.  The initial Plan Year shall commence on the Effective Date of this Agreement and end on the following December 31.

	
1.14

	
“Separation from Service” means termination of the Executive’s employment with the Bank for reasons other than death or Disability.  Whether a Separation from Service has occurred is determined in accordance with the requirements of Code Section 409A based on whether the facts and circumstances indicate that the Bank and Executive reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Executive would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding thirty-six (36) month period (or the full period of services to the Bank if the Executive has been providing services to the Bank less than thirty-six (36) months).

 

  

  

  

 

	
1.15

	
“Specified Employee” means an employee who at the time of Separation from Service is a key employee of the Bank, if any stock of the Bank is publicly traded on an established securities market or otherwise.  For purposes of this Agreement, an employee is a key employee if the employee meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding section 416(i)(5)) at any time during the twelve (12) month period ending on December 31 (the “identification period”).  If the employee is a key employee during an identification period, the employee is treated as a key employee for purposes of this Agreement during the twelve (12) month period that begins on the first day of April following the close of the identification period.

	
1.16

	
“Termination for Cause” means Separation from Service for:

 

	
  

	
(a)

	
Gross negligence or gross neglect of duties to the Bank;

	
  

	
(b)

	
Conviction of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executive’s employment with the Bank; or

	
  

	
(c)

	
Fraud, disloyalty, dishonesty or willful violation of any law or significant Bank policy committed in connection with the Executive’s employment and resulting in a material adverse effect on the Bank.

 

Article 2

Distributions During Lifetime

	
2.1

	
Normal Retirement Benefit.  Upon or after the Executive’s attainment of Normal Retirement Age, the Bank shall distribute to the Executive the benefit described in this Section 2.1 in lieu of any other benefit under this Article.

	
  

	
2.1.1

	
Amount of Benefit.  The annual benefit under this Section 2.1 is Ten Thousand Dollars ($10,000).

	
  

	
2.1.2

	
Distribution of Benefit.  The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following Normal Retirement Age.  The annual benefit shall be distributed to the Executive for fifteen (15) years.

	
2.2

	
Early Termination Benefit.  If Early Termination occurs, the Bank shall distribute to the Executive the benefit described in this Section 2.2 in lieu of any other benefit under this Article.

 

  

  

  

 

	
  

	
2.2.1

	
Amount of Benefit.  The benefit under this Section 2.2 is the Accrual Balance determined as of the end of the month preceding Separation from Service.

 

	
  

	
2.2.2

	
Distribution of Benefit.  The Bank shall distribute the benefit to the Executive in one hundred eighty (180) equal monthly installments commencing on the first day of the month following Normal Retirement Age.

	
2.3

	
Disability Benefit.  If the Executive experiences a Disability prior to Normal Retirement Age, the Bank shall distribute to the Executive the benefit described in this Section 2.3 in lieu of any other benefit under this Article.

	
  

	
2.3.1

	
Amount of Benefit.  The annual benefit under this Section 2.3 is Ten Thousand Dollars ($10,000).

	
  

	
2.3.2

	
Distribution of Benefit.  The Bank shall distribute the benefit to the Executive in one hundred eighty (180) equal monthly installments commencing on the first day of the month following Normal Retirement Age.

	
2.4

	
Change in Control Benefit.  If a Change in Control occurs prior to Normal Retirement Age, followed within twenty-four (24) months by Separation from Service, the Bank shall distribute to the Executive the benefit described in this Section 2.4 in lieu of any other benefit under this Article.

 

	
  

	
2.4.1

	
Amount of Benefit.  The annual benefit under this Section 2.4 is Ten Thousand Dollars ($10,000).

	
  

	
2.4.2

	
Distribution of Benefit.  The Bank shall distribute the benefit to the Executive in one hundred eighty (180) equal monthly installments commencing on the first day of the month following Normal Retirement Age.

	
  

	
2.4.3

	
Parachute Payments.  Notwithstanding any provision of this Agreement to the contrary, and to the extent allowed by Code Section 409A, if any benefit payment under this Section 2.4 would be treated as an “excess parachute payment” under Code Section 280G, the Bank shall reduce such benefit payment to the extent necessary to avoid treating such benefit payment as an excess parachute payment.

	
2.5

	
Restriction on Commencement of Distributions.  Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee, the provisions of this Section 2.5 shall govern all distributions hereunder.  If benefit distributions which would otherwise be made to the Executive due to Separation from Service are limited because the Executive is a Specified Employee, then such distributions shall not be made during the first six (6) months following Separation from Service.  Rather, any distribution which would otherwise be paid to the Executive during such period shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following Separation from Service.  All subsequent distributions shall be paid in the manner specified.

 

  

  

  

 

	
2.6

	
Distributions Upon Taxation of Amounts Deferred. If, pursuant to Code Section 409A, the Federal Insurance Contributions Act or other state, local or foreign tax, the Executive becomes subject to tax on the amounts deferred hereunder, then the Bank may make a limited distribution to the Executive in a manner that conforms to the requirements of Code Section 409A.  Any such distribution will decrease the Executive’s benefits distributable under this Agreement.

	
2.7

	
Change in Form or Timing of Distributions.  For distribution of benefits under this Article 2, the Executive and the Bank may, subject to the terms of Section 8.1, amend this Agreement to delay the timing or change the form of distributions.  Any such amendment:

 

	
  

	
(a)

	
may not accelerate the time or schedule of any distribution, except as provided in Code Section 409A;

	
  

	
(b)

	
must, for benefits distributable under Sections 2.1, 2.2 and 2.4, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made; and

	
  

	
(c)

	
must take effect not less than twelve (12) months after the amendment is made.

Article 3

Distribution at Death

	
3.1

	
Death During Active Service.  If the Executive dies prior to Separation from Service, the Bank shall distribute to the Beneficiary the benefit described in this Section 3.1.  This benefit shall be distributed in lieu of any benefit under Article 2.

	
  

	
3.1.1

	
Amount of Benefit.  The annual benefit under this Section 3.1 is Ten Thousand Dollars ($10,000).

	
  

	
3.1.2

	
Distribution of Benefit.  The Bank shall distribute the annual benefit to the Beneficiary in twelve (12) equal monthly installments for fifteen (15) years commencing on the first day of the fourth month following the Executive’s death. The Beneficiary shall be required to provide to the Bank the Executive’s death certificate.

 

	
3.2

	
Death During Distribution of a Benefit.  If the Executive dies after any benefit distributions have commenced under this Agreement but before receiving all such distributions, the Bank shall distribute to the Beneficiary the remaining benefits at the same time and in the same amounts they would have been distributed to the Executive had the Executive survived.

 

  

  

  

 

	
3.3

	
Death Before Benefit Distributions Commence. If the Executive is entitled to benefit distributions under this Agreement but dies prior to the date that commencement of said benefit distributions are scheduled to be made under this Agreement, the Bank shall distribute to the Beneficiary the same benefits to which the Executive was entitled prior to death, except that the benefit distributions shall be paid in the manner specified in Section 3.1.2 and shall commence on the first day of the fourth month following the Executive’s death.

 

Article 4

Beneficiaries

	
4.1

	
In General.  The Executive shall have the right, at any time, to designate a Beneficiary to receive any benefit distributions under this Agreement upon the death of the Executive.  The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designated under any other plan of the Bank in which the Executive participates.

	
4.2

	
Designation.  The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the Plan Administrator or its designated agent.  If the Executive names someone other than the Executive’s spouse as a Beneficiary, the Plan Administrator may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by the Plan Administrator, executed by the Executive’s spouse and returned to the Plan Administrator.  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.  The Executive shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures.  Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled.  The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator prior to the Executive’s death.

	
4.3

	
Acknowledgment.  No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Plan Administrator or its designated agent.

	
4.4

	
No Beneficiary Designation.  If the Executive dies without a valid beneficiary designation, or if all designated Beneficiaries predecease the Executive, then the Executive’s spouse shall be the designated Beneficiary.  If the Executive has no surviving spouse, any benefit shall be paid to the Executive's estate.

 

	
4.5

	
Facility of Distribution.  If the Plan Administrator determines in its discretion that a benefit is to be distributed to a minor, to a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person.  The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit.  Any distribution of a benefit shall be a distribution for the account of the Executive and the Beneficiary, as the case may be, and shall completely discharge any liability under this Agreement for such distribution amount.

 

  

  

  

 

Article 5

General Limitations

	
5.1

	
Termination for Cause.  Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if the Executive’s employment with the Bank is terminated by the Bank or an applicable regulator due to a Termination for Cause.

 

	
5.2

	
Suicide or Misstatement.  No benefit shall be distributed if the Executive commits suicide within two (2) years after the Effective Date, or if an insurance company which issued a life insurance policy covering the Executive and owned by the Bank denies coverage (i) for material misstatements of fact made by the Executive on an application for such life insurance, or (ii) for any other reason.

	
5.3

	
Removal. Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if the Executive is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act.  Notwithstanding anything herein to the contrary, any payments made to the Executive pursuant to this Agreement, or otherwise, shall be subject to and conditioned upon compliance with 12 U.S.C. 1828 and FDIC Regulation 12 CFR Part 359, Golden Parachute Indemnification Payments and any other regulations or guidance promulgated thereunder.

	
5.4

	
Forfeiture Provision.  The Executive shall forfeit any non-distributed benefits under this Agreement if during the term of this Agreement and within twelve (12) months following a Separation from Service, the Executive, directly or indirectly, either as an individual or as a proprietor, stockholder, partner, officer, director, employee, agent, consultant or independent contractor of any individual, partnership, corporation or other entity (excluding an ownership interest of three percent (3%) or less in the stock of a publicly-traded company):

	
  

	
(i)

	
becomes employed by, participates in, or becomes connected in any manner with the ownership, management, operation or control of any bank, savings and loan or other similar financial institution, if the Executive’s responsibilities will include providing banking or other financial services to a financial institution that maintains its main office in the Farmington Valley of Connecticut as of the date of the termination of the Executive’s employment;

 

  

  

  

 

	
  

	
(ii)

	
participates in any way in hiring or otherwise engaging, or assisting any other person or entity in hiring or otherwise engaging, on a temporary, part-time or permanent basis, any individual who was employed by the Bank as of the date of termination of the Executive’s employment;

 

	
  

	
(iii)

	
assists, advises, or serves in any capacity, representative or otherwise, any third party in any action against the Bank or transaction involving the Bank;

	
  

	
(iv)

	
sells, offers to sell, provides banking or other financial services, assists any other person in selling or providing banking or other financial services, or solicits or otherwise competes for, either directly or indirectly, any orders, contract, or accounts for services of a kind or nature like or substantially similar to the financial services performed or financial products sold by the Bank (the preceding hereinafter referred to as “Services”), to or from any person or entity from whom the Executive or the Bank, to the knowledge of the Executive provided banking or other financial services, sold, offered to sell or solicited orders, contracts or accounts for Services during the three (3) year period immediately prior to the termination of the Executive’s employment;

	
  

	
(v)

	
divulges, discloses, or communicates to others in any manner whatsoever, any confidential information of the Bank, to the knowledge of the Executive, including, but not limited to, the names and addresses of customers or prospective customers, of the Bank, as they may have existed from time to time, of work performed or services rendered for any customer, any method and/or procedures relating to projects or other work developed for the Bank, earnings or other information concerning the Bank. The restrictions contained in this subparagraph (v) apply to all information regarding the Bank, regardless of the source who provided or compiled such information.  Notwithstanding anything to the contrary, all information referred to herein shall not be disclosed unless and until it becomes known to the general public from sources other than the Executive.

 

	
5.5

	
Change in Control.  The forfeiture provision detailed in Section 5.4 hereof shall not be enforceable following a Change in Control.

Article 6

Administration of Agreement

	
6.1

	
Plan Administrator Duties.  The Plan Administrator shall administer this Agreement according to its express terms and shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administra­tion of this Agreement and (ii) decide or resolve any and all ques­tions, including interpretations of this Agreement, as may arise in connection with this Agreement to the extent the exercise of such discretion and authority does not conflict with Code Section 409A.

 

  

  

  

 

	
6.2

	
Agents.  In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as the Plan Administrator sees fit, including acting through a duly appointed representative, and may from time to time consult with counsel who may be counsel to the Bank.

	
6.3

	
Binding Effect of Decisions.  Any decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation or application of this Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Agreement.

	
6.4

	
Indemnity of Plan Administrator.  The Bank shall indemnify and hold harmless the Plan Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator.

	
6.5

	
Bank Information.  To enable the Plan Administrator to perform its functions, the Bank shall supply full and timely information to the Plan Administrator on all matters relating to the date and circum­stances of the Executive’s death, Disability or Separation from Service, and such other pertinent information as the Plan Administrator may reasonably require.

Article 7

Claims And Review Procedures

	
7.1

	
Claims Procedure.  An Executive or Beneficiary (“claimant”) who has not received benefits under this Agreement that he or she believes should be distributed shall make a claim for such benefits as follows:

	
  

	
7.1.1

	
Initiation – Written Claim.  The claimant initiates a claim by submitting to the Plan Administrator a written claim for the benefits.  If such a claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after such notice was received by the claimant.  All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred.  The claim must state with particularity the determination desired by the claimant.

 

	
  

	
7.1.2

	
Timing of Plan Administrator Response.  The Plan Administrator shall respond to such claimant within ninety (90) days after receiving the claim.  If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional ninety (90) days by notifying the claimant in writing, prior to the end of the initial ninety (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 Plan Administrator expects to render its decision.

 

  

  

  

 

	
  

	
7.1.3

	
Notice of Decision.  If the Plan Administrator denies part or all of the claim, the Plan Administrator shall notify the claimant in writing of such denial.  The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

	
  

	
(a)

	
The specific reasons for the denial;

	
  

	
(b)

	
A reference to the specific provisions of this Agreement on which the denial is based;

	
  

	
(c)

	
A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed;

	
  

	
(d)

	
An explanation of this Agreement’s review procedures and the time limits applicable to such procedures; and

	
  

	
(e)

	
A statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

	
7.2

	
Review Procedure.  If the Plan Administrator denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Plan Administrator of the denial as follows:

	
  

	
7.2.1

	
Initiation – Written Request.  To initiate the review, the claimant, within sixty (60) days after receiving the Plan Administrator’s notice of denial, must file with the Plan Administrator a written request for review.

	
  

	
7.2.2

	
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 Plan Administrator 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.

	
  

	
7.2.3

	
Considerations on Review.  In considering the review, the Plan Administrator 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.

	
  

	
7.2.4

	
Timing of Plan Administrator Response.  The Plan Administrator shall respond in writing to such claimant within sixty (60) days after receiving the request for review.  If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional sixty (60) days by notifying the claimant in writing, prior to the end of the initial sixty (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 Plan Administrator expects to render its decision.

 

  

  

  

 

	
  

	
7.2.5

	
Notice of Decision.  The Plan Administrator shall notify the claimant in writing of its decision on review.  The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

	
  

	
(a)

	
The specific reasons for the denial;

	
  

	
(b)

	
A reference to the specific provisions of this Agreement on which the denial is based;

	
  

	
(c)

	
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

	
  

	
(d)

	
A statement of the claimant’s right to bring a civil action under ERISA Section 502(a).

Article 8

Amendments and Termination

	
8.1

	
Amendments.  This Agreement may be amended only by a written agreement signed by the Bank and the Executive.  However, the Bank may unilaterally amend this Agreement to conform with written directives to the Bank from its auditors or banking regulators or to comply with legislative changes or tax law, including without limitation Code Section 409A.

	
8.2

	
Plan Termination Generally.  This Agreement may be terminated only by a written agreement signed by the Bank and the Executive.  The benefit shall be the Accrual Balance as of the date this Agreement is terminated.  Except as provided in Section 8.3, the termination of this Agreement shall not cause a distribution of benefits under this Agreement.  Rather, upon such termination benefit distributions will be made at the earliest distribution event permitted under Article 2 or Article 3.

	
8.3

	
Plan Terminations Under Code Section 409A.  Notwithstanding anything to the contrary in Section 8.2, if the Bank terminates this Agreement in the following circumstances:

	
  

	
(a)

	
Within thirty (30) days before or twelve (12) months after a Change in Control, provided that all distributions are made no later than twelve (12) months following such termination of this Agreement and further provided that all the Bank's arrangements which are substantially similar to this Agreement are terminated so the Executive and all participants in the similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of such termination;

 

  

  

  

 

	
  

	
(b)

	
Upon the Bank’s dissolution or with the approval of a bankruptcy court provided that the amounts deferred under this Agreement are included in the Executive's gross income in the latest of (i) the calendar year in which this Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the distribution is administratively practical; or

 

	
  

	
(c)

	
Upon the Bank’s termination of this and all other arrangements that would be aggregated with this Agreement pursuant to Treasury Regulations Section 1.409A-1(c) if the Executive participated in such arrangements (“Similar Arrangements”), provided that (i) the termination and liquidation does not occur proximate to a downturn in the financial health of the Bank, (ii) all termination distributions are made no earlier than twelve (12) months and no later than twenty-four (24) months following such termination, and (iii) the Bank does not adopt any new arrangement that would be a Similar Arrangement for a minimum of three (3) years following the date the Bank takes all necessary action to irrevocably terminate and liquidate the Agreement;

the Bank may distribute the Accrual Balance, determined as of the date of the termination of this Agreement, to the Executive in a lump sum subject to the above terms.

Article 9

Miscellaneous

	
9.1

	
Binding Effect.  This Agreement shall bind the Executive and the Bank and their beneficiaries, survivors, executors, administrators and transferees.

	
9.2

	
No Guarantee of Employment.  This Agreement is not a contract for employment.  It does not give the Executive the right to remain as an employee of the Bank nor interfere with the Bank's right to discharge the Executive.  It does not require the Executive to remain an employee nor interfere with the Executive's right to terminate employment at any time.

	
9.3

	
Non-Transferability.  Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner.

	
9.4

	
Tax Withholding and Reporting.  The Bank shall withhold any taxes that are required to be withheld, including but not limited to taxes owed under Code Section 409A from the benefits provided under this Agreement.  The Executive acknowledges that the Bank’s sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authorities.  The Bank shall satisfy all applicable reporting requirements, including those under Code Section 409A.

	
9.5

	
Applicable Law.  This Agreement and all rights hereunder shall be governed by the laws of the State of Connecticut, except to the extent preempted by the laws of the United States of America.

 

  

  

  

 

	
9.6

	
Unfunded Arrangement.  The Executive and the Beneficiary are general unsecured creditors of the Bank for the distribution of benefits under this Agreement.  The benefits represent the mere promise by the Bank to distribute 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 or other informal funding asset is a general asset of the Bank to which the Executive and Beneficiary have no preferred or secured claim.

	
9.7

	
Reorganization. The Bank shall not merge or consolidate into or with another bank, or reorganize, or sell substantially all of its assets to another bank, firm or person unless such succeeding or continuing bank, firm or person agrees to assume and discharge the obligations of the Bank under this Agreement.  Upon the occurrence of such an event, the term “Bank” as used in this Agreement shall be deemed to refer to the successor or survivor entity.

	
9.8

	
Entire Agreement. This Agreement constitutes the entire agreement between the Bank and the Executive as to the subject matter hereof.  No rights are granted to the Executive by virtue of this Agreement other than those specifically set forth herein.

	
9.9

	
Interpretation.  Wherever the fulfillment of the intent and purpose of this Agreement requires and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural.

	
9.10

	
Alternative Action.  In the event it shall become impossible for the Bank or the Plan Administrator to perform any act required by this Agreement due to regulatory or other constraints, the Bank or Plan Administrator may perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Bank, provided that such alternative act does not violate Code Section 409A.

	
9.11

	
Headings.  Article and section headings are for convenient reference only and shall not control or affect the meaning or construction of any provision herein.

	
9.12

	
Validity.  If any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal or invalid provision had never been included herein.

	
9.13

	
Notice.  Any notice or filing required or permitted to be given to the Bank or Plan Administrator under this Agreement shall be sufficient if in writing and hand-delivered or sent by registered or certified mail to the address below:

 

  

  

  

 

	 	
The Simsbury Bank & Trust Company

	 
	 	
981 Hopmeadow Street,

P.O. Box 248

	 
	 	
Simsbury, CT 06070

	 

 

Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

Any notice or filing required or permitted to be given to the Executive under this Agreement shall be sufficient if in writing and hand-delivered or sent by mail to the last known address of the Executive.

	
9.14

	
Deduction Limitation on Benefit Payments.  If the Bank reasonably anticipates that the Bank’s deduction with respect to any distribution under this Agreement would be limited or eliminated by application of Code Section 162(m), then to the extent deemed necessary by the Bank to ensure that the entire amount of any distribution from this Agreement is deductible, the Bank may delay payment of any amount that would otherwise be distributed under this Agreement.  The delayed amounts shall be distributed to the Executive (or the Beneficiary in the event of the Executive's death) at the earliest date the Bank reasonably anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of Code Section 162(m).

	
9.15

	
Compliance with Section 409A.  This Agreement shall be interpreted and administered consistent with Code Section 409A.

IN WITNESS WHEREOF, the Executive and a duly authorized representative of the Bank have signed this Agreement.

 

 

	
EXECUTIVE

	 	 	
THE SIMSBURY BANK & TRUST COMPANY

	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
/s/  Gary W. Burdick

	 	 By:	
/s/  Martin J. Geitz

	 
	
Gary W. Burdick

	 	 	
Title: President & CEO

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