Document:

ap-ex1030_319.htm

 

EXHIBIT 10.30

 

  

726 Bell Avenue, Suite 301

Carnegie, PA 15106

 

March 6, 2019

 

Mr. Samuel C. Lyon

Union Electric Steel Corporation

726 Bell Avenue, Suite 101 
Carnegie, PA  15106

 

Dear Sam:

This Agreement (this “Agreement”) is entered into among you, Ampco-Pittsburgh Corporation (the "Corporation") and Union Electric Steel Corporation (“UES”), on March 6, 2019 (the “Effective Date”).

The Corporation and UES recognize your experience and potential contribution to the success of UES and the Corporation and desire to assure UES of your continued employment.  In this connection, the Board of Directors of the Corporation (the “Board”) and the Board of Directors of UES (the “UES Board”) recognize that, the possibility of a change in control may exist and that such possibility, and the uncertainty that it may raise among the Corporation's and UES’ management, may result in the departure or distraction of management personnel to the detriment of UES, the Corporation and the Corporation’s shareholders. 

The Board and the UES Board have each determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Corporation's and UES’ management, including you, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a change in control of the Corporation.

In order to induce you to remain in the employ of UES, the Corporation and UES each agrees that you shall receive the severance benefits set forth in this letter agreement ("Agreement") in the event your employment with UES is terminated subsequent to a "Change in Control" (as defined in Section 2 hereof) under the circumstances described below.

1.Term of Agreement.  This Agreement will commence effective as of the date hereof and shall continue in effect until March 6, 2021; provided, however, that commencing on March 6, 2021 and on each anniversary thereafter, the term of this Agreement shall automatically be extended for one additional year unless, not later than thirty (30) days prior to such date, either the Corporation or UES shall have given notice that it does not wish to extend this 

 

Mr. Samuel C. Lyon2

Agreement; provided, further, however, that if a Change in Control shall have occurred during the term of this Agreement, this Agreement cannot be cancelled. 

2.Change in Control.

(a)Except as provided in Section 6 of this Agreement, no benefits shall be payable hereunder unless there shall have been a Change in Control as set forth below.  For purposes of this Agreement, a "Change in Control" shall be deemed to have occurred if:

(i)any "person" (as defined in Sections 13(d) and 14(d) of the Exchange Act) other than the persons or the group of persons in control of the Corporation on the date hereof is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing fifty percent (50%) or more of the combined voting power of the Corporation's then outstanding securities;

(ii)within any period of two consecutive years (not including any period prior to the execution of this Agreement) there shall cease to be a majority of the Board comprised as follows:  individuals who at the beginning of such period constitute the Board and any new director(s) whose election was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved;

(iii)the shareholders of the Corporation approve a merger of, or consolidation involving, the Corporation in which (A) the Corporation's Common Stock, par value $1.00 per share (such stock, or any other securities of the Corporation into which such stock shall have been converted through a reincorporation, recapitalization or similar transaction, hereinafter called "Common Stock of the Corporation"), is converted into shares or securities of another corporation, or into cash or other property, or (B) the Common Stock of the Corporation is not converted as described in Clause (A), but in which more than forty percent (40%) of the Common Stock of the surviving corporation in the merger is owned by Shareholders other than those who owned such amount prior to the merger; or any other transaction after which the Corporation's Common Stock is no longer to be publicly traded; in each case, other than a transaction solely for the purpose of reincorporating the Corporation in another jurisdiction or recapitalizing the Common Stock of the Corporation; or

(iv)the shareholders of the Corporation approve a plan of complete liquidation of the Corporation or an agreement for the sale or disposition by the Corporation of all or substantially all the Corporation's assets, either of which is followed by a distribution of all or substantially all of the proceeds to the shareholders.

3.Agreement of Employee.  You agree that in the event of a Potential Change in Control, you will not terminate employment with UES for any reason until the occurrence of a Change in Control.

For purposes of this Agreement, a "Potential Change in Control" shall be deemed to have occurred if (i) the Corporation enters into an agreement, the consummation of which would result in the occurrence of a Change in Control, (ii) any person (including the Corporation) 

 

Mr. Samuel C. Lyon3

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 of the Corporation has occurred.

4.Termination Following a Change in Control.  

(a)If any of the events described in Section 2 constituting a Change in Control shall have occurred, you shall be entitled to the benefits provided in Section 5(d) upon the termination of your employment within twenty-four (24) months after the Change in Control has occurred, or pursuant to Section 6 prior to the Change in Control, unless such termination is (i) because of your death or Disability, (ii) by UES for Cause, or (iii) by you other than for Good Reason.

(b)For purposes of this Agreement, "Disability" shall mean that if, as a result of your incapacity due to physical or mental illness, you shall have been absent from the full-time performance of your duties with UES for six (6) consecutive months, and within thirty (30) days after written notice of termination shall have been given to you, you shall not have returned to the full-time performance of your duties.

(c)For purposes of this Agreement, termination by UES of your employment for "Cause" shall mean termination upon:

(i)the willful and continued failure by you to substantially perform duties consistent with your position with UES (other than any such failure resulting from incapacity due to physical or mental illness or termination by you for Good Reason), after a demand for substantial performance is delivered to you by the UES Board, together with a copy of the resolution of the UES Board that specifically identifies the manner in which the Board believes that you have not substantially performed your duties, which resolution must be passed by at least two-thirds (2/3) of the entire UES Board at a meeting called for the purpose and after an opportunity for you and your counsel to be heard by the UES Board, and you have failed to resume substantial performance of your duties on a continuous basis within fourteen (14) days of receiving such demand, 

(ii)the willful engaging by you in conduct that is demonstrably and materially injurious to UES or the Corporation, monetarily or otherwise, as set forth in a resolution of the UES Board, which resolution must be passed by at least two-thirds (2/3) of the entire UES Board at a meeting called for the purpose and after an opportunity for you and your counsel to be heard by the UES Board, or

(iii)your conviction of a felony, or conviction of a misdemeanor involving assets of UES or the Corporation.

For purposes of this Section 4(c), no act, or failure to act, on your part shall be deemed "willful" unless done, or omitted to be done, by you not in good faith and without reasonable belief that your action or omission was in the best interest of UES and the Corporation.

(d)For purposes of this Agreement, "Good Reason" shall mean, without your express written consent, the occurrence after a Change in Control of any one or more of the following conditions, which condition continues without timely and complete remedy by the Corporation after notice, as provided below:

 

Mr. Samuel C. Lyon4

(i)If, following a Change in Control, your status as President of UES shall not continue or you shall not be afforded the authority, responsibilities and prerogatives of such position and report directly to the Chief Executive Officer of the Corporation or the Parent Corporation, as the case may be; 

(ii)a reduction by UES in your base salary as in effect immediately before the Change in Control, a failure to increase such base salary at the same intervals as prevailed before the Change in Control in an amount at least equal to the same percentage increase as the last increase prior to the Change in Control, or a reduction in bonus after the Change in Control over the last bonus paid before the Change in Control unless there are equivalent reductions in bonuses for all executives of UES;

(iii)the requirement that you be based at a location in excess of twenty-five (25) miles from the location where you are currently based; 

(iv)the failure by UES to continue in effect any of the UES employee benefit plans, policies, practices or arrangements in which you participate or under which you are entitled to benefits, or the failure by UES to continue your participation therein or benefits thereunder on substantially the same basis, both in terms of the amount of benefits provided and the level of your participation relative to other participants, as existed immediately prior to the Change in Control; or

(v)the breach of this Agreement by the Corporation or UES, as applicable, because of the Corporation's or UES’ failure to obtain a satisfactory agreement from any successor to the Corporation or UES, respectively, to assume and agree to perform this Agreement, as contemplated in Section 7.

The foregoing notwithstanding, you shall notify the Corporation within 90 days of the initial existence of a particular condition described above in this Section 4(d), and the Corporation shall have 30 days from such notice completely to remedy such particular condition so that the you are in the same position as if the condition had never occurred.  If the Corporation timely and completely remedies the condition as required above, then the particular occurrence of the particular condition for which you gave notice shall no longer constitute Good Reason.  If the Corporation does not timely and completely remedy the particular occurrence of the particular condition for which you gave notice, you shall be deemed to terminate employment for Good Reason on the 31st day following your notice to the Corporation.

(e)For purposes of this Agreement, "Parent Corporation" shall mean any "affiliate" of the Corporation that is the ultimate controlling entity of the Corporation or its successor and shall include, without limiting the generality of the foregoing, any entity (and affiliated persons and entities) that beneficially owns, directly or indirectly, fifty percent (50%) or more of the combined voting power of the then outstanding voting stock of the Corporation, or any entity that beneficially owns, directly or indirectly, forty percent (40%) or more (but less than fifty percent (50%) of the combined voting power of the then outstanding voting stock of the Corporation if such entity (or affiliated persons or entities) has at least one representative on the Board of Directors of the Corporation.

(f)"Good Reason" may be established notwithstanding your possible incapacity due to physical or mental illness, provided that Disability has not been established 

 

Mr. Samuel C. Lyon5

pursuant to Section 4(b).  Your continued employment following the Change in Control shall not constitute a waiver of any rights hereunder including, but not limited to, rights with respect to any circumstance constituting Good Reason or rights under Section 8.

5.Compensation Upon Termination or During Incapacity.  Following a Change in Control, upon termination of your employment, or during a period of incapacity but before termination for Disability, you shall be entitled to the following benefits:

(a)During any period prior to termination for Disability in which you fail to perform your full-time duties with UES as a result of incapacity due to physical or mental illness, you shall continue to receive your Base Salary at the rate in effect at the commencement of any such period.  Following termination for Disability, your benefits shall be determined in accordance with the UES’ retirement, insurance and other applicable programs and plans then in effect.

(b)If your employment shall be terminated by UES for Cause or by you other than for Good Reason, UES shall pay to you your full Base Salary through the date of termination of your employment at the rate then in effect, plus all other amounts to which you are entitled under any compensation or benefit plans of UES at the time such amounts are due, and neither UES nor the Corporation shall have no further obligations to you under this Agreement.

(c)If your employment terminates by reason of your death, your benefits shall be determined in accordance with UES' retirement, survivor's benefits, insurance and other applicable programs and plans then in effect.

(d)If your employment by UES shall be terminated within twenty-four (24) months after the Change in Control, unless such termination is (i) by UES for Cause, (ii) because of your death or Disability, or (iii) by you other than for Good Reason, you shall be entitled to the following benefits (the "Severance Payments"):

(A)UES shall pay to you your full Base Salary through the date of termination of your employment at the rate then in effect;

 

(B)UES shall pay to you, as severance benefits, a lump sum severance payment equal to the sum of (i) three times your annual base salary either at the time of the Change in Control or at termination, whichever is higher, and (ii) three times your bonus paid for the prior year;

 

(C)as more completely described in Section 5(i), for a twenty-four (24) month period after such termination, UES will arrange to provide you at its expense with benefits under UES health, dental, disability, life insurance, and other similar employee benefit insurance plans applicable to salaried employees, or benefits substantially similar to the benefits you were receiving under such plans immediately prior to the termination of your employment; 

 

(D)any unearned Restricted Stock Units of the Corporation granted to you under the any Stock Incentive Plan of the Corporation approved by the shareholders shall become immediately earned and vested as of the date of the termination of your employment; and

 

Mr. Samuel C. Lyon6

 

(E)all benefits payable to you under the Ampco-Pittsburgh Corporation Retirement Plan, the Ampco-Pittsburgh Corporation Supplemental Executive Retirement Plan, or any other defined benefit or retirement plan in effect at the time of such termination, in accordance with the terms and provisions thereof.

 

(e)Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by UES to you or for your benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (the "Payments") would be subject to the excise tax imposed by Section 4999 (or any successor provisions) of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalty is incurred by you with respect to such excise tax (such excise tax, together with any such interest and penalties, is hereinafter collectively referred to as the "Excise Tax"), then the Payments shall be reduced (but not below zero) if and to the extent that such reduction would result in you retaining a larger amount, on an after-tax basis (taking into account federal, state and local income taxes and the imposition of the Excise Tax), than if you received all of the Payments.  UES shall reduce or eliminate the Payments, by first reducing or eliminating the portion of the Payments which are not payable in cash and then by reducing or eliminating cash payments, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the determination.  All determinations required to be made under this Section 5(e), including whether and when an adjustment to any Payments is required and, if applicable, which Payments are to be so adjusted, shall be made by an accounting firm selected by the Corporation (the "Accounting Firm") which shall provide detailed supporting calculations both to UES and to you within fifteen (15) business days of the receipt of notice from you that there has been a Payment, or such earlier time as is requested by UES.  In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, you shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by UES.  If the Accounting Firm determines that no Excise Tax is payable by you, it shall furnish you with a written opinion that failure to report the Excise Tax on your applicable federal income tax return would not result in the imposition of a negligence or similar penalty.  Any determination by the Accounting Firm shall be binding upon UES and you.  

(f)The payments provided for in Sections 5(d)(A) and (B) shall be made not later than the fifth day following your termination of employment pursuant to the provisions of Section 5(d); provided, however, that if the amounts of such payments cannot be finally determined on or before such day, UES shall pay to you on such day an estimate as determined in good faith by UES 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 such termination.  Such payments will be made in all events within 2-1/2 months following the calendar year in which such termination of employment occurred.  If the amount of the estimated payments exceeds the amount 

 

Mr. Samuel C. Lyon7

subsequently determined to have been due, such excess shall constitute a loan by UES to you payable on the fifth day after demand by the Corporation (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code).

(g)UES shall also pay to you all legal fees and expenses incurred by you as a result of, and related to, such termination of your employment by UES for Cause, by UES other than for Cause, or by you for Good Reason (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of Section 4999 of the Code to any payment or benefit provided hereunder).

(h)You shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Agreement be reduced by any compensation earned by you as the result of employment by another employer after the date of termination of your employment, or otherwise.

(i)With respect to the continuation of certain employee benefits for twenty-four (24) months pursuant to Section 5(d)(C), the following shall apply:

(A)During the 18-month COBRA Continuation Period, the Corporation will provide coverage as follows:

 

(i)If you elect COBRA Continuation Coverage, you shall continue to participate in all medical, dental and vision insurance plans you were participating in on the termination date, and the Corporation shall pay the entire applicable premium.  During the COBRA Continuation Period, you shall be entitled to benefits on substantially the same basis and cost as would have otherwise been provided had you not separated from service.  To the extent that such benefits are available under the above-referenced benefit plans and you had such coverage immediately prior to termination of employment, such continuation of benefits for you shall also cover your dependents for so long as you are receiving benefits under this Section 5.  The COBRA Continuation Period for medical and dental insurance under this Section 5(i) shall be deemed to run concurrent with the continuation period federally mandated by COBRA (generally 18 months), or any other legally mandated and applicable federal, state, or local coverage period for benefits provided to terminated employees under the health care plan.  For purposes of this Agreement, (1) "COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and (2) "COBRA Continuation Period" shall mean the continuation period for medical and dental insurance to be provided under the terms of this Agreement which shall commence on the first day of the calendar month following the month in which the date of your termination falls and generally shall continue for an 18 month period.

 

 

Mr. Samuel C. Lyon8

(ii)Following the conclusion of the 18-month COBRA Continuation Period, the Corporation will provide coverage as follows:

 

(1)If the relevant plan is self-insured (within the meaning of Section 105(h) of the Code), and such plan permits coverage for you, then the Corporation will continue to provide coverage under the plan for an additional eighteen (18) months and will annually impute income to you for the fair market value of the premium.

(2)If, however, any such plan does not permit the continued participation following the end of the COBRA Continuation Period as contemplated above, then the Corporation shall take all commercially reasonable efforts to provide you with, or assist you in obtaining, continued medical and dental coverage comparable to the coverage you had during the COBRA Continuation Period.  It is specifically acknowledged by you that if such coverage is provided under a Corporation sponsored self-insured plan, it will be provided on an after- tax basis and you will have income imputed to you annually equal to the fair market value of the premium.  If this coverage cannot be provided by the Corporation, (or where such continuation would adversely affect the tax status of the plan pursuant to which the coverage is provided), then as an alternative, the Corporation will reimburse you in lieu of such coverage an amount equal to your actual and reasonable cost of continuing comparable coverage.

(B)With respect to the continuation of disability, life insurance, and other similar employee benefit insurance plans applicable to salaried employees for twenty-four (24) months pursuant to Section 5(d)(C), the following shall apply:

 

(i)To the extent your coverage for disability, life insurance, and other similar employee benefit insurance plans applicable to salaried employees, cannot be provided under the Corporation's insurance plans, the Corporation will reimburse you for your premium cost to obtain comparable insurances coverages.

 

(C)Reimbursement to you pursuant to Section 5(i)(A) or (B) above will be available only to the extent that (1) such expense is actually incurred for any particular calendar year and reasonably substantiated; (2) reimbursement shall be made no later than the end of the calendar year following the year in which such expense is incurred by you; (3) no reimbursement provided for any expense incurred in one taxable year will affect the amount available in another taxable year; and (4) the right to this reimbursement is not subject to liquidation or exchange for another benefit.  Notwithstanding the foregoing, no reimbursement will be provided for any expense incurred following the thirty-six month period of benefit continuation or for any expense which relates to coverage after such date.

 

(j)Notwithstanding any provision of this Agreement to the contrary, to the extent that a payment hereunder is subject to Section 409A of the Code (and not excepted therefrom) and payable on account of your separation from service, such payment shall be 

 

Mr. Samuel C. Lyon9

delayed for a period of six months after your termination date (or, if earlier, your death) if you are a Specified Employee (namely, a "key employee", as defined in Section 416(i) of the Code without regard to paragraph (5) thereof, of the Corporation, as determined in accordance with the regulations issued under Code Section 409A and the procedures established by the Corporation).  Any such payment that would otherwise have been due or owing during such six-month period will be paid immediately following the end of the six-month period in the month following the month containing the 6-month anniversary of your date of termination, together with interest at the rate provided in Section 1274(b)(2)(B) of the Code.

6.Notice of Termination Before a Change in Control.  Notwithstanding any other provisions of this Agreement, if prior to a Change in Control there has been any statement made by the person (or an affiliate of such person) involved in such Change in Control to the effect that following such Change in Control any action or actions will be taken that would have the effect of creating a condition described in Section 4(d) that would permit you following a Change in Control to terminate your employment for Good Reason, and such statements have appeared in any proxy statement or other proxy soliciting materials, any tender offer, exchange offer, or prospectus or any other document or press release publicly issued or filed with the Securities and Exchange Commission or other governmental agency in connection with the contemplated Change in Control (including any such documents issued by the Corporation in which such statement is reported), then you shall have the right to notify the Corporation that, unless the condition that would constitute Good Reason is completely remedied prior to the effective date of the Change of Control, you intend to terminate your employment for Good Reason as of the effective date of the Change in Control, in which case your employment shall terminate on the effective date of the Change in Control and you shall be entitled to receive the payments due under Section 5(d) and (e) pursuant to the payment provisions described in Section 5(f).

7.Successors; Binding Agreement.

(a)The Corporation will 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 the Corporation or of any division or subsidiary thereof employing you to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place.  Failure of the Corporation to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle you to compensation from the Corporation in the same amount and on the same terms as you would be entitled hereunder if you terminated your employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed to be the date of termination of your employment.

(b)This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes any other agreements and understandings, including the Original Agreement.

8.Notice.  For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given 

 

Mr. Samuel C. Lyon10

when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth on the first page of this Agreement, or to any changed address notice of which either of us shall have given to the other.

9.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 you and such officer as may be specifically designated by the Board.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the Commonwealth of Pennsylvania.

10.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.

* * *

 

 

 

If this letter sets forth our agreement on the subject matter hereof, kindly sign and return to the Corporation the enclosed copy of this letter, which will then constitute our agreement on this subject.

Sincerely,

AMPCO-PITTSBURGH CORPORATION 

By: /s/ J. Brett McBrayer

Name: J. Brett McBrayer

Title: Chief Executive Officer

 

UNION ELECTRIC STEEL CORPORATION 

 

By: /s/ Rose Hoover

Name: Rose Hoover

Title: Vice President

 

 

Accepted and Agreed to 
this 6th day of March, 2019.

/s Samuel C. Lyon

Samuel C. Lyoncatc-ex1018_450.htm

 

EX: 10.18

 

EXECUTION VERSION

 

Cambridge Bancorp 1336 Massachusetts Avenue

Cambridge, Massachusetts 02138

 

December 5, 2018

 

 

Daniel R. Morrison

Optima Bank & Trust Company Two Harbour Place Portsmouth, NH 03801

 

Dear Dan:

 

Cambridge Bancorp (the “Company”) considers it essential to the best interest of its stockholders to foster the continuous employment of key management personnel of the Company and its subsidiary, Cambridge Trust Company (the “Bank”). The Board of Directors of the Company (the “Board”) recognizes that, as is the case with many publicly held corporations, the possibility of a change in control of the Company may exist and that such possibility, and the uncertainty and questions that it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its stockholders.

 

The Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company’s and the Bank’s management, including yourself, to their assigned duties in the face of the potentially disturbing circumstances arising from the possibility of a change in control of the Company.

 

In order to induce you to remain in the employ of the Bank and in consideration of your agreement set forth in Section 2 hereof, this letter agreement (the “Agreement”) sets forth the severance benefits that the Company agrees will be provided to you in the event your employment with the Bank is terminated under the circumstances described below.

 

Whenever used in this Agreement, additional capitalized words and phrases have the meanings set forth in Section 15 below.

 

	
1.
	
Term of Agreement. This Agreement shall commence as of the “Effective Date” (as defined in that certain Agreement and Plan of Merger, dated as of December 5, 2018, by and among the Company, the Bank, and Optima Bank & Trust Company), and each January 1 thereafter, the term of this Agreement shall automatically be extended for one (1) additional year unless not later than September 30 of the preceding year the Company shall have given notice that it does not wish to extend this Agreement. However, if a Change in Control or Potential Change in Control of the Company, as applicable, shall have occurred during the original or any extended term of this Agreement, this Agreement shall continue in effect for a period of twelve
	
 

(12) months beyond the month in which the Change in Control or Potential Change in Control, as applicable, occurred notwithstanding notice from the Company that it does not wish to extend the Agreement.

 

 

Daniel R. Morrison December 5, 2018

Page 2
 
 

	
2.
	
Potential Change in Control. You agree that, subject to the terms and conditions of this Agreement, in the event of a Potential Change in Control you will not voluntarily terminate your employment with the Bank until the earliest of:
	
 

 

	
 
	
(i)
	
The date that is twelve (12) months from the occurrence of the Potential Change in Control;
	
 

 

	
 
	
(ii)
	
The termination by you of your employment by reason of death, Disability or Retirement;
	
 

 

	
 
	
(iii)
	
The occurrence of a Change in Control; or

 

	
 
	
(iv)
	
The date the Board adopts a resolution to the effect that, for purposes of this Agreement, the basis upon which the Board concluded that a Potential Change in Control had occurred no longer exists.
	
 

 

	
3.
	
Termination Following a Change in Control or a Potential Change in Control. If a Change in Control or a Potential Change in Control shall have occurred, you shall be entitled to the benefits provided in Section 4 hereof upon your Separation from Service within twelve (12) months after a Change in Control, or within the period described in Section 2 hereof after a Potential Change in Control, unless such Separation from Service is (i) because of your death,
	
 

(ii) by the Bank for Cause or Disability or (iii) by you other than for Good Reason.

 

	
4.
	
Compensation Upon Termination. Following a Change in Control or a Potential Change in Control, upon Separation from Service you shall be entitled to the following benefits.
	
 

 

	
 
	
(i)
	
If your employment shall be terminated for Cause or your death, the Company shall pay you (or if applicable, your estate) your full Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
	
 

 

	
 
	
(ii)
	
If your employment by the Bank shall be terminated (1) by the Bank other than for Cause or Disability or (2) by you for Good Reason, then you shall be entitled to the benefits provided below:
	
 

 

(A)The Company shall pay you your full Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan at the time such payments are due.

 

(B)The Company shall pay you, in lieu of any further salary or bonus payments to you for periods subsequent to the Date of Termination, a lump sum severance payment (the “Severance Payment”) equal to the product of (I) your Final Average Compensation multiplied by (II) two (2).

 

 

Daniel R. Morrison December 5, 2018

Page 3
 
 

(C)Any Severance Payment shall be made not later than the fifth (5th) day following the Date of Termination; provided, however, that notwithstanding anything contained herein to the contrary, if you are a Specified Employee at the time of your Separation from Service, the Bank shall pay you the Severance Payment in a lump sum on the earlier of (I) the first (1st) business day that is six

(6) months and one (1) day following the date of your Separation from Service or

(II) the date of your death, but only to the extent such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2).

 

	
 
	
(iii)
	
Unless you are terminated for Cause or you terminate your employment other than for Good Reason, the Company shall cause the Bank to maintain in full force and effect for your continued benefit for a period of up to one (1) year all employee welfare benefit plans and programs or arrangements in which you are entitled to participate at any time within the six (6) months immediately prior to the Notice of Termination, provided that your continued participation is possible under the general terms and provisions of such plans and programs and that such continuation does not cause the Bank’s group health or dental coverage to violate any applicable non- discrimination laws. Benefits continued under this Section 4(iii) shall be paid by you. Benefits otherwise receivable by you pursuant to this Section 4(iii) shall be reduced to the extent comparable benefits are actually received by you from sources other than the Company or the Bank during the one (1)-year period following your termination, and any such benefits actually received by you shall be reported to the Company.
	
 

 

	
 
	
(iv)
	
You shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer after the Date of Termination, or otherwise except as specifically provided in this Section 4.
	
 

 

	
5.
	
Golden Parachute. If any of the payments provided for in this Agreement, together with any other payments or benefits that you have the right to receive from the Company, Bank or any member of an affiliated group of corporations (as defined in Code Section 1504, without regard to Code Section 1504(b)) of which either Company or Bank is a member (together, the “Payments”) would constitute a parachute payment (as defined in Code Section 280G(b)(2)) that is subject to the excise tax imposed by Code Section 4999 (the “Excise Tax”), the Company will cause to be determined, before any Payments are made, which of the following two (2) alternatives would maximize your after-tax proceeds: (i) payment in full of
	
 

the entire amount of the Payments; or (ii) payment of only a part of the Payments, reduced to the minimum extent necessary so that you receive the largest Payments possible without the

imposition of the Excise Tax (“Reduced Payments”). If it is determined that Reduced Payments will maximize your after-tax benefit, then (1) cash compensation subject to the six (6)-month delay rule in Code Section 409A(a)(2)(B)(i) shall be reduced first, then cash payments that are not so subject shall be reduced, (2) the Payments shall be paid only to the extent permitted under the Reduced Payments alternative, and (3) you will have no rights to any additional payments and/or benefits constituting the Payments. Unless you and the Company otherwise agree in writing, any determination required under this Section 5 shall be made in writing by independent

 

 

Daniel R. Morrison December 5, 2018

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public accountants agreed to by you and the Company (the “Accountants”), who shall be paid solely by the Company and whose determination shall be conclusive and binding upon you and the Company for all purposes. For purposes of making the calculations required by this Section 5, the Accountants may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. You and the Company shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make the required determinations.

 

	
6.
	
Non-Competition. In the event your employment terminates and you are entitled to receive a Severance Payment hereunder, for a period of one (1) year following the Date of
	
 

Termination (the “Non-Compete Term”) you shall not, directly or indirectly, as an executive of any person or entity (whether or not engaged in business for profit), individual proprietor, partner, stockholder, director, officer, joint venturer, investor, lender or in any other capacity whatever (otherwise than as holder of less than ten percent (10%) of any securities publicly traded in the market) compete with the Company and any subsidiary or affiliate of the Company in any city or town in which the Company or such subsidiary or affiliate operates at any time during the term of this Agreement, and any contiguous city or town.

 

	
 
	
7.
	
Successors; Binding Agreement.

 

	
 
	
(i)
	
The Company will 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 the Company, by agreement in form and substance satisfactory to you, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle you to compensation from the Company in the same amount and on the same terms as you would be entitled hereunder if you terminated your employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, the “Company” shall mean the Company as hereinbefore defined and any successor to its business, and/or assets, as aforesaid that executes and delivers the agreement provided for in this Section 7 or that otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.
	
 

 

	
 
	
(ii)
	
This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you should die while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee or, if there be no such designee, to your estate.
	
 

 

	
8.
	
Notices. All notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States certified mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth on the first page of this Agreement; provided, however, that all notices to the
	
 

 

 

Daniel R. Morrison December 5, 2018

Page 5
 
 

Company shall be directed to the attention of the Board with a copy to the Clerk of the Company, 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.

 

	
9.
	
Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by you and such officers as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto, or of failure to comply with any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party that are not expressly set forth in this Agreement. The obligations of the Company under Section 4 shall survive the expiration of the term of this Agreement. All reference to sections of any statute, including the Code, shall be deemed also to refer to any successor provisions thereof. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts. This Agreement is made under seal.
	
 

 

	
10.
	
Tax Withholding. The Bank shall withhold any taxes that are required to be withheld from the benefits provided under this Agreement. You acknowledge that the Bank’s sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authority(ies) and to satisfy all applicable reporting requirements.
	
 

 

	
11.
	
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.
	
 

 

	
12.
	
Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
	
 

 

	
13.
	
Section 409A. It is the intention of the Company and you that the Agreement and all amounts payable to you under the Agreement that are subject thereto meet the requirements of Code Section 409A, to the extent applicable to the Agreement and such payments. To the extent applicable, this Agreement shall be interpreted in accordance with Code Section 409A and regulations and other interpretive guidance issued thereunder. If any compensation or benefits payable under this Agreement do not comply with Code Section 409A and related guidance, the Company and you agree to amend this Agreement or take such actions as the Company deems necessary or appropriate to comply with the requirements of Code Section 409A while preserving, as nearly as possible, the same economic effect as under this Agreement.
	
 

 

	
14.
	
Entire Agreement. This Agreement constitutes the entire agreement and understanding between the parties hereto in respect of the subject matter hereof and supersedes any prior or contemporaneous agreement or understanding between the parties, written or oral, which relates to the subject matter hereof.
	
 

 

 

Daniel R. Morrison December 5, 2018

Page 6
 
 

	
15.
	
Definitions. Capitalized terms not defined in this Agreement shall have the meaning set forth in your Supplemental Executive Retirement Agreement (the “SERP”), if any, or the Cambridge Trust Company Executive Deferred Compensation Plan (the “EDCP”), as applicable.
	
 

 

	
 
	
(i)
	
“Base Salary” means the annual cash compensation from the Bank relating to services performed (or to be performed) during any calendar year, excluding distributions from nonqualified deferred compensation plans, bonuses, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive payments, non- monetary awards and other fees, and automobile and other allowances paid to you for services rendered (whether or not such allowances are included in your gross income). Base Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by you pursuant to all qualified or non-qualified plans of the Bank and shall be calculated to include amounts not otherwise included in your gross income under Code Sections 125, 132(f), 402(e)(3), 402(h) or 403(b) pursuant to plans established by the Bank; provided, however, that all such amounts will be included in compensation only to the extent that had there been no such plan, the amount would have been payable in cash to you.
	
 

 

	
 
	
(ii)
	
“Bonus” means the short-term incentive cash bonus, if any, awarded to you (generally during the first quarter of the Plan Year) for services performed during the preceding Plan Year from the Bank.
	
 

 

	
 
	
(iii)
	
“Cause” means termination by the Bank upon:

 

(A)The willful failure by you to substantially perform your duties with the Bank (other than any such failure resulting from your incapacity due to physical or mental illness or any such actual or anticipated failure resulting from your resignation for Good Reason), within ten (10) days after a demand for substantial performance is delivered to you by the Board that specifically identifies the manner in which the Board believes that you have not substantially performed your duties;

 

(B)The willful engagement by you in misconduct that is or foreseeably will be materially injurious to the Bank, monetarily or otherwise; or

 

(C)A breach of a fiduciary duty, fraud or dishonesty relating to the Bank, or conviction of (or plea of nolo contendere to) a crime.

 

For purposes of this Section 15(iii), no act or failure to act, on your part shall be considered “willful” unless done, or omitted to be done, by you not in good faith and without reasonable belief that your action or omission was in the best interest of the Bank.

 

Notwithstanding the foregoing, you shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to you a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3⁄4) of the entire membership of the Board (with you not voting if you are a member)

 

 

Daniel R. Morrison December 5, 2018

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at a meeting of the Board called and held for the purpose (after reasonable notice to you and an opportunity for you, together with your counsel, to be heard before the Board) finding that in the good faith opinion of the Board you engaged in the conduct set forth above in this Section 15(iii) and specifying the particulars thereof in detail.

 

	
 
	
(iv)
	
“Change in Control” means either of the following:

 

(A)A change in control of a nature that would be required to be reported by the Company or the Bank in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as

amended (the “Exchange Act”), whether or not the Company or the Bank in fact is required to comply with Regulation 14A thereunder; or

 

(B)The acquisition of “control” as defined in the Bank Holding Company Act of 1956, as amended, or the regulations thereunder, or as defined in the Change in Bank Control Act of 1978, as amended, or the regulations or guidance thereunder, of Company or Bank by any person, company or other entity other than Company; provided that, without limitation, such a Change in Control shall be deemed to have occurred if:

 

	
 
	
(1)
	
Any “person” (as that term is used in Section 13(d) and 14(d) of the Exchange Act) other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or the Bank or a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing twenty-five percent (25%) or more of the combined voting power of the Company’s then outstanding securities; or
	
 

 

	
 
	
(2)
	
During any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in this Section 15(iv)(B)(1) or with the Company or the Bank to effect a transaction described in Section 15(iv)(B)(3) whose election by the Board or nomination for election by the Company’s or the Bank’s stockholders was approved by a vote of at least two-thirds (2⁄3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or
	
 

 

	
 
	
(3)
	
The stockholders of the Company or the Bank approve a merger or consolidation of the Company or the Bank with any other corporation, other than a merger or consolidation that would result in the
	
 

 

 

Daniel R. Morrison December 5, 2018

Page 8
 
 

voting securities of the Company or the Bank outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least two-thirds (2⁄3) of the combined voting power of the voting securities of the Company or the Bank or such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the Company or the Bank approve a plan of complete liquidation of the Company or the Bank or an agreement for the sale or disposition by the Company or the Bank of all or substantially all the Company’s or the Bank’s assets. Notwithstanding anything to the contrary contained in this Agreement, the acquisition by a person (or persons acting in concert) of less than twenty-five percent (25%) of the voting securities of the Company, under circumstances where the Federal Reserve Board (under regulations or guidance pursuant to the Change in Bank Control Act of 1978, as amended) presumes that such acquisition constitutes the acquisition of control of the Company, shall not be deemed a “Change in Control” for any purpose under this Agreement.

 

	
 
	
(v)
	
“Date of Termination” means:

 

(A)If your employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that you shall not have returned to the performance of your duties on a full-time basis during such thirty (30) day period);

 

(B)If your employment is terminated for Cause, the date specified in the Notice of Termination; and

 

(C)If your employment is terminated by Bank for any other reason, or by you for Good Reason, the date on which a Notice of Termination is given.

 

	
 
	
(vi)
	
“Disability” means termination because of your inability, as a result of incapacity due to physical or mental illness, to perform the services required of you as an employee for a period aggregating six (6) months or more within any twelve (12) month period, unless within thirty (30) days after notice of termination is given by the Bank you shall have returned to the full time performance of you duties.
	
 

 

	
 
	
(vii)
	
“Final Average Compensation” means the average of your highest three

(3) consecutive calendar years of annual Base Salary and Bonus. For purposes of calculating the average of your highest three (3) consecutive calendar years of Base Salary and Bonus, (a) Base Salary and Bonus for the calendar year in which you experience a Separation from Service shall be annualized, (b) Base Salary and Bonus for other calendar years shall not be annualized, and (c) if you have been employed less than three (3) full calendar years (counting the final year of employment as an annualized full calendar year), your Final Average Compensation shall be based on the number of full calendar years in which you were an employee of the Bank (again counting the final year of employment as an annualized full calendar year).

 

 

Daniel R. Morrison December 5, 2018

Page 9
 
 

	
 
	
(viii)
	
“Good Reason” means:

 

(A)In the case of a Change in Control described in Section 15(iv)(B)(1) when fifty percent (50%) is substituted for twenty-five percent (25%) or following consummation of a Change in Control described in Section 15(iv)(B)(3) when one-half (1⁄2) is substituted for two-thirds (2⁄3), termination by you for any reason or for no reason during the period beginning six (6) months and ending twelve (12) months following such event; or

 

(B)Without your prior consent, the occurrence after a Change in Control of any of the following circumstances:

 

	
 
	
(1)
	
A material diminution in the nature or status of your responsibilities, authority or duties (provided that your entitlement to terminate employment for this reason following a Change in Control shall only be effective during the period beginning six (6) months and ending twelve (12) months after the Change in Control);
	
 

 

	
 
	
(2)
	
A material diminution in your base salary; or

 

	
 
	
(3)
	
A relocation of your principal place of employment to a location that is more than forty (40) miles from the Bank’s current principal executive office;
	
 

 

; provided, however, that the Bank shall have a thirty (30) day period to cure any such cause for “Good Reason” after being notified by you in writing.

 

Your right to terminate employment for Good Reason shall not be affected by your incapacity due to physical or mental illness. Your continued employment shall not constitute consent to, or a waiver of rights with respect to, any circumstance constituting Good Reason hereunder.

 

	
 
	
(ix)
	
“Notice of Termination” means a notice that indicates the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated.
	
 

 

	
 
	
(x)
	
“Potential Change in Control” means:

 

(A)Company or Bank enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;

 

(B)Any person (including Company) publicly announces an intention to take or to consider taking actions that if consummated, would constitute a Change in Control;

 

 

Daniel R. Morrison December 5, 2018

Page 10
 
 

(C)Any person, other than a trustee or other fiduciary holding securities under an employee benefit plan of Company or Bank or a corporation owned, directly or indirectly, by the stockholders of Company in substantially the same proportions as their ownership of stock of Company, is or becomes the beneficial owner, directly or indirectly, of securities of parent representing twenty percent (20%) or more of the combined voting power of Company’s then outstanding securities; or

 

(D)The Board of Directors of Company or Bank adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control of Company has occurred.

 

	
 
	
(xi)
	
“Retirement” means the termination of your employment in accordance with the Bank’s retirement policy, including (at your sole election, as set forth in writing) early retirement, generally applicable to its salaried employees or in accordance with any retirement arrangement established with your consent with respect to you.
	
 

 

	
16.
	
Right to Consult with Counsel. You acknowledge that you have the right to consult with counsel prior to executing the Agreement.
	
 

 

*   *   *   *   *

 

 

If this letter correctly sets forth our agreement on the subject matter hereof, kindly sign and return to the Company the enclosed copy of this letter, which will then constitute our agreement on this subject.

CAMBRIDGE BANCORP
 

By:    /s/   Denis K. Sheahan                        

Name: Denis K. Sheahan

Title: Chairman and Chief Executive Officer

 

Agreed:

 

 

Daniel R. Morrison

 

 

If this letter correctly sets forth our agreement on the subject matter hereof, kindly sign and return to the Company the enclosed copy of this letter, which will then constitute our agreement on this subject.

CAMBRIDGE BANCORP
 
 

 

 

 

By:                                                         

Name: Denis K. Sheahan

Title: Chairman and Chief Executive Officer

 

Agreed:

 

   /s/ Daniel R. Morrison

Daniel R. Morrison

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