Document:

catc-ex1031_292.htm

 

Exhibit 10.31

 

EXECUTION VERSION

 

Cambridge Bancorp 

1336 Massachusetts Avenue 

Cambridge, Massachusetts 02138

 

December 5, 2019

 

Thomas J. Fontaine 

Wellesley Bancorp, Inc.

40 Central Street 

Wellesley, MA 02482 

Dear Thomas: 

 

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, 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 14 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, 2019, by and among the Company, the Bank, Wellesley Bancorp, Inc. and Wellesley Bank), 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 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 occurred notwithstanding notice from the Company that it does not wish to extend the Agreement. 

 

 

 

Thomas J. Fontaine 

December 5, 2019 

Page 2

 

 

 

2.Termination Following a Change in Control. If a Change in Control shall have occurred, you shall be entitled to the benefits provided in Section 3 hereof upon your Separation from Service within twelve (12) months after a 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. 

3.Compensation Upon Termination. Following a 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, or shall cause the Bank to, 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, and the Company and the Bank 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, or shall cause the Bank to, 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, or shall cause the Bank to, 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) three (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 Company shall, or shall cause the Bank to, 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 3(iii) shall be paid by you. Benefits otherwise receivable by you pursuant to this Section 3(iii) shall be reduced to the extent comparable benefits are actually received by you from 

 

Thomas J. Fontaine 

December 5, 2019 

Page 3

 

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 3 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 3 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 3. 

 

4.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 4 shall be made in writing by independent 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 4, 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. 

5.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. 

 

6.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 

 

Thomas J. Fontaine 

December 5, 2019 

Page 4

 

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 6 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. 

 

7.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 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. 

8.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 3 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. 

 

9.Tax Withholding. The Company shall, or shall cause the Bank to, withhold any taxes that are required to be withheld from the benefits provided under this Agreement. You acknowledge that the Company’s and 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. 

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. 

11.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. 

 

Thomas J. Fontaine 

December 5, 2019 

Page 5

 

12.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. 

13.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. 

14.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. 

 

Thomas J. Fontaine 

December 5, 2019 

Page 6

 

For purposes of this Section 14(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) 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 14(iii) and specifying the particulars thereof in detail. 

 

(iv)“Change in Control” means the occurrence of a “Reorganization Event” as defined in the Company’s 2017 Equity and Cash Incentive Plan, as such plan may be amended or amended and restated from time to time, and any successor plan. 

 

(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 your 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). 

 

 

Thomas J. Fontaine 

December 5, 2019 

Page 7

 

(viii)“Good Reason” means, without your prior consent, the occurrence after a Change in Control of any of the following circumstances: 

 

(A)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); 

 

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

 

(C)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 Company and 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)“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. 

 

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

*  *  *  *  * 

 

 

Thomas J. Fontaine 

December 5, 2019 

Page 8

 

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

	
 
	
 
	
Its:
	
 
	
Chief Executive Officer 

	
 
	
 
	
 
	
 
	
 

	
Agreed:
	
 
	
 
	
 
	
 

	
/s/ Thomas J. Fontaine 
	
 
	
 
	
 
	
 

	
Thomas J. Fontainecatc-ex1032_291.htm

Exhibit 10.32

 

CAMBRIDGE TRUST COMPANY

SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

THIS SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT (the “Agreement”) is adopted as of [Date of Hire] by and between CAMBRIDGE TRUST COMPANY, a Massachusetts corporation located in Cambridge, Massachusetts (the “Bank”), and Thomas J. Fontaine (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 read in conjunction with the Cambridge Trust Company Executive Deferred Compensation Plan, as amended and in effect from time to time (the “EDCP”), the record keeper for which is currently Principal Financial Group. The terms and conditions of the EDCP, including without limitation, provisions governing investments, distributions, death benefits, and claims, shall apply to the benefit provided hereunder, except to the extent this Agreement explicitly provides otherwise. Capitalized terms not defined herein shall have the meaning set forth in the EDCP. 

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 

Contributions

	
1.1
	
Bank Contribution. Except to the extent Section 1.3 applies, for each Plan Year beginning on or after [date] the Bank shall credit, consistent with Section 4.2(a) of the EDCP Adoption Agreement, the Executive's Deferred Compensation Account with the following amount: 

	
 
	
(a)
	
Ten percent (10%) of the Executive's Base Salary, as in effect as of the beginning of the Plan Year; and 

	
 
	
(b)
	
Ten percent (10%) of the Executive's Bonus. 

	
1.2
	
Timing of Contribution. Fifty percent (50%) of the amount determined for a Plan Year pursuant to Section 1.1(a) (after any adjustment pursuant to Section 1.3) shall be credited in arrears, and fifty percent (50%) of the amount determined for a Plan Year pursuant to Section 1.1(b) shall be credited, as part of the first payroll following each June 30 and December 31. 

	
1.3
	
Adjustment to Contribution and Timing in the Event of Termination. With respect to the year in which the Executive's employment with the Bank and any of its affiliates terminates: 

	
 
	
(a)
	
The amount determined in Section 1.1(a) shall be adjusted to reflect the completed number of months of employment during the Plan Year prior to termination; and 

	
 
	
(b)
	
Any remaining amount to be contributed (after taking into the account the adjustment pursuant to Section 1.3(a) and contributions made pursuant to Section 1.2) shall be included in the next payroll processed following termination. 

 

 

 

 

 

	
 
	
 
	
 

 

 

Article 2 

General Limitations

	
2.1
	
Termination for Cause. Notwithstanding any provision of this Agreement to the contrary, the benefit provided under this Agreement via the Employer Credit in the EDCP (the "SERP Benefit") shall be forfeited if the Executive's service is terminated by the Board for Cause. 

	
2.2
	
Removal. Notwithstanding any provision of this Agreement to the contrary, the Bank shall not be legally obligated to provide the SERP Benefit if at the time such distribution is due, 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. 

	
2.3
	
Non-compete Provision. 

	
 
	
2.3.1
	
In General. The Executive shall forfeit any non-distributed SERP Benefit 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), without the prior written consent of the Board: 

	
 
	
(a)
	
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 within twenty-five (25) miles of any office (sites solely with an ATM not being deemed to be an office for this purpose) maintained by the Bank as of the date of the termination of the Executive's employment; 

	
 
	
(b)
	
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; 

	
 
	
(c)
	
Assists, advises or serves in any capacity, representative or otherwise, any third party in any legal action against the Bank; 

	
 
	
(d)
	
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; or 

	
 
	
(e)
	
Divulges, discloses or communicates to others in any manner whatsoever, any confidential information of the Bank, 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 Section 2.3 .1(e) apply to all confidential information 

 

	
 
	
2
	
 

 

 

	
 
		
regarding the Bank, regardless of the source who provided or compiled such information. Notwithstanding anything to the contrary, all confidential information referred to herein may be disclosed to the extent it becomes known to the general public from sources other than the Executive. 

	
 
	
2.3.2
	
Judicial Remedies. In the event of a breach or threatened breach by the Executive of any provision of the restrictions set forth in this Section 2.3, the Executive recognizes the substantial and immediate harm that a breach or threatened breach will impose upon the Bank, and further recognizes that in such event monetary damages may be inadequate to fully protect the Bank. Accordingly, in the event of a breach or threatened breach of these restrictions, the Executive agrees that the Bank may obtain preliminary, interlocutory, temporary or permanent injunctive or any other equitable relief protecting and fully enforcing the Bank's rights hereunder and preventing the Executive from further breaching any of his obligations set forth herein. Nothing herein shall be construed as prohibiting the Bank from pursuing any other remedies available to the Bank at law or in equity for such breach or threatened breach, including the recovery of damages from the Executive. The Executive expressly acknowledges and agrees that: (a) the restrictions set forth in this Section 2.3 are reasonable, in terms of scope, duration, geographic area, and otherwise; (b) the protections afforded the Bank in Section 2.3.1 are necessary to protect its legitimate business interest; (c) the restrictions set forth in this Section 2.3 will not be materially adverse to the Executive's employment with the Bank; and (d) his agreement to observe such restrictions forms a material part of the consideration for this Agreement. 

	
 
	
2.3 .3
	
Overbreadth of Restrictive Covenant. It is the intention of the parties that if any restrictive covenant in this Agreement is determined by a court of competent jurisdiction to be overly broad, then the court should enforce such restrictive covenant to the maximum extent permitted under the law as to area, breadth, and duration. 

	
 
	
2.3.4
	
Change in Control. The provisions of Section 2.3 hereof shall terminate and shall thereafter have no further force or effect if, following a Change in Control, Executive shall be entitled to receive benefits pursuant to any Change in Control Agreement. 

	
 
	
2.3.5
	
Definition of Bank. For purposes of this Section 2.3, references to “Bank” shall include both Bank and its Parent. 

	
2.4
	
Release. No SERP Benefit on Separation from Service shall be payable hereunder unless a Release Agreement has been duly executed by Executive and delivered to Bank and any applicable revocation period has expired within a sixty (60) day period following Separation from Service. Such payment will not be made prior to the sixtieth (60th) day following Separation from Service. 

Article 3

Administration of Agreement

The Committee, which shall serve as the Administrator of this Agreement, shall administer this Agreement according to its express terms and shall also have the discretion and authority to (a) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Agreement and (b) decide or resolve any and all questions, including interpretations of this Agreement, as may arise in connection with the Agreement to the extent the exercise of such discretion and authority would not result in adverse tax consequences to the Executive under Code Section 409A. 

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

 

	
 
	
3
	
 

 

 

Article 4

Amendments and Termination

This Agreement may be amended or terminated only by a written agreement signed by the Bank and the Executive; provided, however, that if the Board determines in good faith that the Executive, while still employed by the Bank, is no longer a member of a select group of management or highly compensated employees, as that phrase applies to ERISA, the Bank may terminate this Agreement and upon termination, no further contributions pursuant to Article 1 shall be credited. Additionally, the Bank may amend this Agreement, if necessary to conform with written directives to the Bank from its banking regulators, provided that any such amendment shall preserve to the maximum extent permissible the benefits provided to the Executive hereunder. 

Article 5 

Miscellaneous

	
5.1
	
Binding Effect. This Agreement shall be binding on and inure to the benefit of the Executive and the Bank, and their respective beneficiaries, survivors, executors, administrators, successors, assigns, and transferees. 

	
5.2
	
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 does it interfere with the Bank's right to discharge the Executive. It also does not require the Executive to remain an employee nor interfere with the Executive's right to terminate employment at any time. 

	
5.3
	
Non-Transferability. Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner. 

	
5.4
	
Tax Withholding. The Bank shall withhold any taxes that are required to be withheld, including but not limited to taxes owed as a result of the application of 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 authority(ies) and to satisfy all applicable reporting requirements, including those under Code Section 409A. 

	
5.5
	
Applicable Law. The Agreement and all rights hereunder shall be governed by the laws of the Commonwealth of Massachusetts, except to the extent preempted by the laws of the United States of America. 

	
5.6
	
Unfunded Arrangement. The Executive (and any Beneficiary) is a general unsecured creditor of the Bank for the distribution of benefits under this Agreement. The benefits represent the mere promise by the Bank to distribute such benefits. Any insurance on the Executive's life or other informal fund asset is a general asset of the Bank to which the Executive (and any Beneficiary) has no preferred or secured claim. 

	
5.7
	
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 event, the term "Bank" as used in this Agreement shall be deemed to refer to the successor or survivor bank. 

	
5.8
	
Entire Agreement. This Agreement, and the EDCP, constitute 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 or in the EDCP. 

	
5.9
	
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. 

 

	
 
	
4
	
 

 

 

	
5.10
	
Alternative Action. In the event it shall become impossible for the Bank or the Committee to perform any act required by this Agreement due to regulatory or other constraints, the Bank or Committee may perform such alternative act as most nearly carries out the intent and purpose of this Agreement, is in the best interests of the Bank, and is consistent with Code Section 409A. 

	
5.11
	
Headings. Article and section headings are for convenient reference only and shall not control or affect the meaning or construction of any of its provisions. 

	
5.12
	
Validity. ln case 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 and invalid provision has never been inserted herein. 

	
5.13
	
Notice. Any notice or filing required or permitted to be given to the Bank or Committee under this Agreement shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below: 

Cambridge Trust Company

1336 Massachusetts Avenue

Cambridge, MA 02138

Attention: SVP, Human Resources Director

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 requires 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 on the records of the Bank. 

	
5. 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) and subject to the requirements of Treas. Reg. § 1.409A-2(b)(7)(i). 

	
5.15
	
Code Section 409A. It is the intention of the Bank and Executive that this Agreement and all amounts payable hereunder 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 Bank and Executive agree to amend this Agreement or take such actions as the Bank 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. 

Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee, benefit distributions that would otherwise be made to the Executive due to Separation from Service hereunder shall not be made during the first six (6) months following Separation from Service. Rather, any distribution that 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 (7th) month following 

 

	
 
	
5
	
 

 

 

Separation from Service. All subsequent distributions shall be paid in the manner specified herein and in the EDCP. 

IN WTINESS WHEREOF, the Executive and a duly authorized representative of the Bank have signed this Agreement as of the day and year first above written. 

 

	
EXECUTIVE
	
 
	
CAMBRIDGE TRUST COMPANY

	
/s/ Thomas J. Fontaine
	
 
	
By:
	
/s/ Pilar Pueyo

	
Thomas J. Fontaine
	
 
	
 
	
Its: SVP, Human Resources Director

 

 

	
 
	
6

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