þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
For the Fiscal Year Ended December 31, 2010 | ||
OR
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
Connecticut
|
27-3577029 | |
(State or other jurisdiction
of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
|
25 Park Street, Rockville, Connecticut
|
06066 | |
(Address of principal executive
offices)
|
(Zip Code) |
Title of Class
|
Name of Each Exchange Where Registered
|
|
Common Stock, no par value
|
NASDAQ Global Select Stock Market |
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o |
2
44
45
85
87
89
119
Local, regional and national business or economic conditions may
differ from those expected.
The effects of and changes in trade, monetary and fiscal
policies and laws, including the U.S. Federal Reserve
Boards interest rate policies, may adversely affect our
business.
The ability to increase market share and control expenses may be
more difficult than anticipated.
Changes in laws and regulatory requirements (including those
concerning taxes, banking, securities and insurance) may
adversely affect us or our businesses.
Changes in accounting policies and practices, as may be adopted
by regulatory agencies, the Public Company Accounting Oversight
Board or the Financial Accounting Standards Board, may affect
expected financial reporting.
Future changes in interest rates may reduce our profits which
could have a negative impact on the value of our stock.
We are subject to lending risk and could incur losses in our
loan portfolio despite our underwriting practices. Changes in
real estate values could also increase our lending risk.
Changes in demand for loan products, financial products and
deposit flow could impact our financial performance.
Strong competition within our market area may limit our growth
and profitability.
We may not manage the risks involved in the foregoing as well as
anticipated.
We recently opened new branches which may not become profitable
as soon as anticipated, if at all.
If our allowance for loan losses is not sufficient to cover
actual loan losses, our earnings could decrease.
Our stock value may be negatively affected by federal
regulations restricting takeovers.
Further implementation of our stock benefit plans could increase
our costs, which could reduce our income.
Because we intend to continue to increase our commercial real
estate and commercial business loan originations, our lending
risk may increase, and downturns in the real estate market or
local economy could adversely affect our earnings.
The trading volume in our stock is less than in larger publicly
traded companies which can cause price volatility, hinder your
ability to sell our common stock and may lower the market price
of the stock.
3
Table of Contents
The Emergency Economic Stabilization Act (EESA) of
2008 has and may continue to have a significant impact on the
banking industry. The Dodd-Frank Wall Street Reform and Consumer
Protection Act was signed into law on July 21, 2010 and is
expected to result in dramatic regulatory changes that will
affect the industry in general, and impact the Companys
competitive position in ways that cant be predicted at
this time.
Item 1.
Business
4
Table of Contents
At December 31,
2010
2009
2008
2007
2006
Amount
Percent
Amount
Percent
Amount
Percent
Amount
Percent
Amount
Percent
(Dollars in thousands)
$
719,925
50.54
%
$
754,838
54.98
%
$
746,041
57.26
%
$
666,003
59.18
%
$
640,076
61.46
%
489,511
34.37
426,028
31.03
351,474
26.97
284,460
25.28
232,550
22.33
78,627
5.52
71,078
5.18
89,099
6.84
70,617
6.27
63,902
6.14
130,303
9.15
113,240
8.25
106,684
8.19
92,869
8.25
97,234
9.34
5,921
0.42
7,742
0.56
9,629
0.74
11,469
1.02
7,607
0.73
1,424,287
100.00
%
1,372,926
100.00
%
1,302,927
100.00
%
1,125,418
100.00
%
1,041,369
100.00
%
523
632
1,417
1,529
1,813
(14,312
)
(12,539
)
(12,553
)
(10,620
)
(9,827
)
$
1,410,498
$
1,361,019
$
1,291,791
$
1,116,327
$
1,033,355
(1)
Residential mortgage loans include
one-to-four
family mortgage loans, home equity loans, and home equity lines
of credit. Residential mortgage loans held for sale were
$380,000 at December 31, 2010 and are not included above.
There were no loans held for sale at December 31, 2009.
(2)
Construction loans include commercial and residential loans and
are reported net of undisbursed construction funds of
$87.5 million, $86.5 million, $93.9 million,
$96.8 million and $93.6 million as of
December 31, 2010, 2009, 2008, 2007 and 2006, respectively.
5
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6
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7
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8
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9
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Loans Maturing
After One
Within One
But Within
After Five
Year
Five Years
Years
Total
(In thousands)
$
2,297
$
38,535
$
679,093
$
719,925
20,488
103,607
365,416
489,511
17,912
15,510
45,205
78,627
37,467
50,531
42,305
130,303
265
3,667
1,989
5,921
$
78,429
$
211,850
$
1,134,008
$
1,424,287
Due After December 31, 2011
Fixed
Adjustable
Total
(In thousands)
$
425,473
$
292,155
$
717,628
205,483
263,540
469,023
49,879
10,836
60,715
43,919
48,917
92,836
5,656
5,656
$
730,410
$
615,448
$
1,345,858
(1)
Residential mortgage loans include
one-to-four
family mortgage loans, home equity loans, and home equity lines
of credit.
10
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11
Table of Contents
Loans Delinquent For
60-89 Days
90 Days and Over
Total
Number
Amount
Number
Amount
Number
Amount
(Dollars in thousands)
15
$
1,634
24
$
2,952
39
$
4,586
3
2,347
3
2,347
2
187
6
2,646
8
2,833
2
119
5
445
7
564
1
4
3
34
4
38
20
$
1,944
41
$
8,424
61
$
10,368
11
$
2,072
17
$
1,970
28
$
4,042
1
421
5
2,242
6
2,663
7
6,630
7
6,630
3
220
3
61
6
281
15
$
2,713
32
$
10,903
47
$
13,616
9
$
1,237
14
$
1,685
23
$
2,922
2
652
2
1,202
4
1,854
4
3,021
4
3,021
3
923
2
372
5
1,295
3
47
2
11
5
58
17
$
2,859
24
$
6,291
41
$
9,150
(1)
Residential mortgage loans include
one-to-four
family mortgage loans, home equity loans, and home equity lines
of credit.
12
Table of Contents
At December 31,
2010
2009
2008
2007
2006
(Dollars in thousands)
$
4,638
$
3,106
$
2,607
$
407
$
422
2,675
2,242
2,726
74
311
2,646
6,630
4,385
714
61
334
692
114
34
7
11
5
8
10,707
12,046
10,063
1,178
855
78
1,653
372
391
560
12,360
12,046
10,435
1,569
1,493
990
3,061
$
13,350
$
15,107
$
10,435
$
1,569
$
1,493
0.87
%
0.88
%
0.80
%
0.14
%
0.14
%
0.80
%
0.96
%
0.68
%
0.12
%
0.12
%
(1)
Residential mortgage loans include
one-to-four
family mortgage loans, home equity loans, and home equity lines
of credit.
(2)
The amount of income that was contractually due but not
recognized on non-accrual loans totaled $677,000 and $233,000
for the years ended December 31, 2010 and 2009,
respectively.
13
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14
Table of Contents
At or for the Years Ended December 31,
2010
2009
2008
2007
2006
(Dollars in thousands)
$
12,539
$
12,553
$
10,620
$
9,827
$
8,675
4,109
1,961
2,393
749
1,681
(1,951
)
(1,471
)
(257
)
(21
)
(45
)
(391
)
(593
)
(314
)
(76
)
(498
)
(34
)
(49
)
(50
)
(76
)
(78
)
(2,376
)
(2,113
)
(621
)
(173
)
(621
)
11
8
9
5
5
10
114
122
191
70
19
16
30
21
17
40
138
161
217
92
(2,336
)
(1,975
)
(460
)
44
(529
)
$
14,312
$
12,539
$
12,553
$
10,620
$
9,827
115.79
%
104.09
%
120.30
%
676.86
%
658.20
%
1.00
%
0.91
%
0.96
%
0.94
%
0.94
%
0.17
%
0.15
%
0.04
%
0.00
%
0.05
%
(1)
Real estate loans include
one-to-four
family residential mortgage loans, home equity loans, home
equity lines of credit, commercial real estate and construction
loans.
15
Table of Contents
At December 31,
2010
2009
2008
% of
% of Loans
% of
% of Loans
% of
% of Loans
Allowance
Allowance
in Category
Allowance
Allowance
in Category
Allowance
Allowance
in Category
for Loan
for Loan
to Total
for Loan
for Loan
to Total
for Loan
for Loan
to Total
Losses
Losses
Loans
Losses
Losses
Loans
Losses
Losses
Loans
(Dollars in thousands)
$
4,644
32.45
%
50.54
%
$
4,243
33.84
%
54.97
%
$
3,952
31.48
%
57.26
%
5,469
38.21
%
34.37
4,662
37.18
31.03
3,978
31.69
26.97
2,331
16.29
%
5.52
1,490
11.88
5.18
1,925
15.33
6.84
1,653
11.55
%
9.15
1,832
14.61
8.25
2,180
17.37
8.19
89
0.62
%
0.42
103
0.82
0.57
306
2.44
0.74
126
0.88
%
209
1.67
212
1.69
$
14,312
100.00
%
100.00
%
$
12,539
100.00
%
100.00
%
$
12,553
100.00
%
100.00
%
At December 31,
2007
2006
% of
% of Loans
% of
% of Loans
Allowance
Allowance
in Category
Allowance
Allowance
in Category
for Loan
for Loan
to Total
for Loan
for Loan
to Total
Losses
Losses
Loans
Losses
Losses
Loans
(Dollars in thousands)
$
2,673
25.17
%
59.18
%
$
1,051
10.70
%
61.46
%
3,387
31.89
25.28
4,241
43.16
22.33
1,285
12.10
6.27
959
9.76
6.14
2,102
19.79
8.25
1,959
19.93
9.34
335
3.16
1.02
55
0.56
0.73
838
7.89
1,562
15.89
$
10,620
100.00
%
100.00
%
$
9,827
100.00
%
100.00
%
16
Table of Contents
At December 31,
2010
2009
2008
Amortized
Amortized
Amortized
Cost
Fair Value
Cost
Fair Value
Cost
Fair Value
(In thousands)
$
35,018
$
34,327
$
7,017
$
7,052
$
2,031
$
2,048
67,047
70,390
72,537
75,967
117,517
120,395
5,895
4,008
5,879
4,656
4,831
4,887
722
731
725
739
11,282
16,722
10,509
14,345
10,678
13,181
$
119,242
$
125,447
$
96,664
$
102,751
$
135,782
$
141,250
17
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18
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19
Table of Contents
More than One Year
More than Five Years
One Year or Less
Through Five Years
Through Ten Years
More than Ten Years
Total Securities
Wighted-
Wighted-
Wighted-
Wighted-
Wighted-
Fair
Average
Fair
Average
Fair
Average
Fair
Average
Fair
Average
Value
Yield
Value
Yield
Value
Yield
Value
Yield
Value
Yield
(Dollars in thousands)
$
3,017
0.21
%
$
11,880
2.35
%
$
19,430
2.01
%
$
%
$
34,327
1.97
%
1,921
4.38
9,559
3.87
58,910
4.81
70,390
4.67
100
4.91
2,958
0.40
950
0.85
4,008
0.62
$
3,117
0.36
%
$
16,759
2.24
%
$
28,989
2.62
%
$
59,860
4.75
%
$
108,725
3.67
%
16,722
$
125,447
20
Table of Contents
At December 31,
2010
2009
2008
Wighted-
Wighted-
Wighted-
Average
Average
Average
Balance
Percent
Yield
Balance
Percent
Yield
Balance
Percent
Yield
(Dollars in thousands)
$
168,736
13.9
%
0.00
%
$
150,484
13.3
%
0.00
%
$
116,113
11.1
%
0.00
%
117,325
9.6
0.29
108,099
9.6
0.34
86,943
8.4
0.43
162,090
13.3
0.33
143,601
12.7
0.30
121,527
11.7
0.60
227,007
18.6
0.52
234,737
20.8
0.65
188,110
18.0
1.78
272
2.04
247
2.04
227
2.04
675,430
55.4
0.32
637,168
56.4
0.36
512,920
49.2
0.87
543,830
44.6
1.92
491,940
43.6
2.29
529,588
50.8
3.57
$
1,219,260
100.0
%
1.01
%
$
1,129,108
100.0
%
1.20
%
$
1,042,508
100.0
%
2.24
%
At December 31,
2010
2009
2008
(In thousands)
$
129,405
$
56,155
$
1,987
255,896
204,712
632
87,706
101,412
132,356
41,323
82,360
296,257
26,343
42,259
87,475
3,157
5,042
10,881
$
543,830
$
491,940
$
529,588
21
Table of Contents
Percentage
Over One
Over Two
Over Three
Over Four
of Total Time
One Year
Year to
Years to
Years to
Years to
Deposit
and Under
Two Years
Three Years
Four Years
Five Years
Thereafter
Total
Accounts
(Dollars in thousands)
$
128,770
$
635
$
$
$
$
$
129,405
23.80
%
176,915
76,900
1,984
98
255,897
47.05
47,687
5,159
9,150
7,392
18,308
10
87,706
16.13
5,036
3,680
8,557
3,031
21,019
41,323
7.60
9,417
10,457
4,593
480
90
1,305
26,342
4.84
1,606
1,264
262
25
3,157
0.58
$
369,431
$
98,095
$
24,546
$
11,001
$
39,417
$
1,340
$
543,830
100.00
%
Years Ended December 31,
2010
2009
2008
(In thousands)
$
978,624
$
926,395
$
851,660
60,489
32,858
49,666
11,411
19,371
25,069
71,900
52,229
74,735
$
1,050,524
$
978,624
$
926,395
22
Table of Contents
23
Table of Contents
24
Table of Contents
25
Table of Contents
26
Table of Contents
27
Table of Contents
28
Table of Contents
29
Table of Contents
30
Table of Contents
31
Table of Contents
32
Table of Contents
Item 1A.
Risk
Factors
Commercial and Industrial Loans.
Repayment is
generally dependent upon the successful operation of the
borrowers business.
Commercial Real Estate Loans.
Repayment is
dependent on income being generated in amounts sufficient to
cover operating expenses and debt service.
Consumer Loans.
Consumer loans are
collateralized, if at all, with assets that may
not
provide an adequate source of payment of the loan due to
depreciation, damage or loss.
33
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34
Table of Contents
35
Table of Contents
36
Table of Contents
37
Table of Contents
38
Table of Contents
Connecticut Banking Regulations.
Connecticut
banking regulations prohibit, for a period of three years
following the completion of a conversion, the direct or indirect
acquisition of more than 10.0% of any class of our equity
securities without the prior approval of the Connecticut Banking
Commissioner.
Certificate of Incorporation.
Provisions of
the certificate of incorporation and bylaws of Rockville
Financial may make it more difficult and expensive to pursue a
takeover attempt that management opposes, even if the takeover
is favored by a majority of our shareholders. These provisions
also would make it more difficult to remove our current Board of
Directors or management, or to elect new directors.
Specifically, our certificate of incorporation prohibits for a
period of five years following the completion of a conversion,
subject to certain limitations, the direct or indirect
acquisition of more than 10.0% of any class of our equity
securities without the prior approval of the Connecticut Banking
Commissioner. Additional provisions include the election of
directors to staggered terms of four years, the prohibition of
cumulative voting in the election of directors and the
requirement that a director may be removed from office only upon
the affirmative vote of at least two-thirds of the directors
then in office or by the affirmative vote of the holders of at
least 80.0% of the voting power of the issued and outstanding
shares entitled to vote for the election of directors. Our
bylaws also contain provisions regarding the timing and content
of shareholder proposals and nominations and qualification for
service on the Board of Directors.
Issuance of stock options.
We intend to adopt
one or more stock benefit plans no earlier than six months after
the completion of the conversion and offering, pursuant to which
we will grant stock options to key employees and directors that
will require payments to these persons in the event of a change
in control of New Rockville Financial. These payments may have
the effect of increasing the costs of acquiring New Rockville
Financial, thereby discouraging future takeover attempts.
Employment and change in control
agreements.
Rockville Financial has employment
agreements with certain of its executive and other officers that
will remain in effect following the stock offering. Rockville
Financial intends to enter into an employment agreement and
change in control agreement with its new Chief Executive Officer
and new Chief Operating Officer following the stock offering.
These agreements may have the effect of increasing the costs of
acquiring Rockville Financial, thereby discouraging future
takeover attempts.
Item 1B.
Unresolved
Staff Comments
Item 2.
Properties
39
Table of Contents
Number of Offices:
13
1
8
22
Item 3.
Legal
Proceedings
Item 4.
Removed
and Reserved
Item 5.
Market
For The Registrants Common Equity and Related Stockholder
Matters
Common Stock (per Share)
Market Price
Dividends
High
Low
Declared
$
12.42
$
8.82
$
0.06
12.64
10.50
0.06
12.91
11.06
0.06
12.47
10.50
0.065
$
14.46
$
6.17
$
0.05
12.50
8.44
0.05
14.79
9.88
0.05
11.68
9.68
0.05
40
Table of Contents
(1)
Securities
Authorized for Issuance Under Equity Compensation
Plans
Number of
Securities
Remaining
Weighted-
Available for
Number of
Average
Future Issuance
Securities
Exercise
Under Equity
To Be Issued
Price of
Compensaction
Upon Exercise
Outstanding
Plans (Excluding
of Options,
Options,
Securities
Warrants
Warrants
Reflected in
and Rights
and Rights
Column (A))
(A)
(B)
(C)
557,885
$
12.80
304,690
557,885
$
12.80
304,690
41
Table of Contents
12/31/2005
12/31/2006
12/31/2007
12/31/2008
12/31/2009
12/31/2010
1248.29
1418.30
1468.36
903.25
1115.1
1257.64
2
%
6
%
(4
)%
(23
)%
5
%
10
%
0.49
%
0.51
%
0.50
%
0.61
%
0.54
%
0.53
%
2.08
%
6.69
%
(3.33
)%
(21.94
)%
6.02
%
10.73
%
105.7
122.4
129.1
81.4
102.9
111.9
12/31/2005
12/31/2006
12/31/2007
12/31/2008
12/31/2009
12/31/2010
95.80
101.18
76.46
59.90
45.39
53.66
3
%
(14
)%
(17
)%
4
%
15
%
0.70
%
0.80
%
0.72
%
0.51
%
0.48
%
4.11
%
(13.57
)%
(16.12
)%
4.73
%
15.51
%
100.0
108.5
84.7
69.1
53.8
64.8
12/31/2005
12/31/2006
12/31/2007
12/31/2008
12/31/2009
12/31/2010
13.05
17.85
12.20
13.97
10.50
12.22
(2
)%
23
%
(14
)%
(11
)%
(2
)%
6
%
0.00
%
0.28
%
0.28
%
0.32
%
0.47
%
0.57
%
(2.17
)%
23.46
%
(14.17
)%
(10.98
)%
(1.86
)%
6.92
%
124.5
171.2
118.3
137.5
105.3
100.5
42
Table of Contents
Item 6.
Selected
Financial Data
At December 31,
2010
2009
2008
2007
2006
(In thousands)
$
1,678,073
$
1,571,134
$
1,533,073
$
1,327,012
$
1,232,836
125,447
102,751
141,250
136,372
132,467
13,679
19,074
24,138
17,007
17,007
17,007
11,168
9,836
1,410,498
1,361,019
1,291,791
1,116,327
1,033,355
60,708
19,307
14,901
23,998
22,381
1,219,260
1,129,108
1,042,508
951,038
884,511
6,131
6,385
6,077
5,568
5,320
261,423
263,802
322,882
201,741
178,110
166,428
157,428
145,777
156,373
155,064
14,312
12,539
12,553
10,620
9,827
12,360
12,046
10,435
1,569
1,493
(1)
Non-performing loans include loans for which the Bank does not
accrue interest (non-accrual loans), loans 90 days past due
and still accruing interest and loans that have gone through
troubled debt restructurings.
43
Table of Contents
Years Ended December 31,
2010
2009
2008
2007
2006
(Dollars in thousands, except per share amounts)
$
75,699
$
76,062
$
77,545
$
73,877
$
63,952
22,161
29,775
34,946
35,577
27,649
53,538
46,287
42,599
38,300
36,303
4,109
1,961
2,393
749
1,681
49,429
44,326
40,206
37,551
34,622
9,404
6,972
(8,987
)
5,194
4,625
39,850
36,631
33,762
30,301
29,025
18,983
14,667
(2,543
)
12,444
10,222
6,732
4,935
(956
)
4,116
3,368
$
12,251
$
9,732
$
(1,587
)
$
8,328
$
6,854
$
12,251
$
9,732
$
(1,587
)
$
8,328
$
6,854
$
0.66
$
0.53
$
(0.09
)
$
0.44
$
0.36
$
0.66
$
0.53
$
(0.09
)
$
0.44
$
0.36
$
0.245
$
0.20
$
0.20
$
0.16
$
0.08
Table of Contents
At or for the Years Ended December 31,
2010
2009
2008
2007
2006
0.76
%
0.63
%
(0.11
)%
0.65
%
0.59
%
7.48
6.44
(1.03
)
5.32
4.42
3.19
2.73
2.63
2.52
2.75
3.49
3.10
3.09
3.13
3.30
2.48
2.36
2.35
2.37
2.52
63.31
68.78
100.45
69.67
70.92
120.68
118.55
118.50
120.77
122.01
0.37
0.38
0.36
0.22
9.92
10.02
9.51
11.78
12.58
10.21
9.74
10.76
12.27
13.47
13.73
14.07
14.16
16.60
18.00
12.62
12.98
12.88
15.49
16.87
10.39
10.15
10.43
11.74
12.75
1.00
0.91
0.96
0.94
0.94
115.79
104.09
120.30
676.86
658.20
0.17
0.16
0.04
0.05
0.87
0.88
0.80
0.14
0.14
0.80
0.96
0.68
0.12
0.12
18
18
17
16
14
4
4
4
4
4
(1)
Represents the difference between the weighted-average yield on
average interest-earning assets and the weighted-average cost of
interest-bearing liabilities.
(2)
Represents net interest income as a percent of average
interest-earning assets.
(3)
Represents non-interest expense divided by the sum of net
interest income and non-interest income.
Item 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operation
Table of Contents
46
Table of Contents
Years Ended December 31,
2010
2009
2008
Interest
Interest
Interest
Average
and
Yield/
Average
and
Yield/
Average
and
Yield/
Balance
Dividends
Cost
Balance
Dividends
Cost
Balance
Dividends
Cost
(Dollars in thousands)
$
1,378,032
$
70,677
5.13
%
$
1,333,770
$
69,517
5.21
%
$
1,193,416
$
68,458
5.74
%
126,111
5,012
3.97
140,494
6,544
4.66
168,913
8,580
5.08
17,007
17,007
13,812
473
3.42
13,556
10
0.07
931
1
0.11
2,376
34
1.43
1,534,706
75,699
4.93
1,492,202
76,062
5.10
1,378,517
77,545
5.63
68,992
59,606
57,255
$
1,603,698
$
1,551,808
$
1,435,772
$
346,702
1,541
0.44
$
312,439
2,494
0.80
$
249,038
4,728
1.90
160,192
544
0.34
136,981
607
0.44
128,467
824
0.64
496,584
9,532
1.92
524,041
16,270
3.10
514,222
19,517
3.80
1,003,478
11,617
1.16
973,461
19,371
1.99
891,727
25,069
2.81
268,274
10,544
3.93
285,258
10,404
3.65
271,545
9,877
3.64
1,271,752
22,161
1.74
%
1,258,719
29,775
2.37
%
1,163,272
34,946
3.00
%
168,193
142,017
117,983
1,439,945
1,400,736
1,281,255
163,753
151,072
154,517
$
1,603,698
$
1,551,808
$
1,435,772
$
53,538
$
46,287
$
42,599
3.19
%
2.73
%
2.63
%
$
262,954
$
233,483
$
215,245
3.49
%
3.10
%
3.09
%
120.68
%
118.55
%
118.50
%
(1)
Includes mortgagors and investors escrow accounts
(2)
Net interest rate spread represents the difference between the
yield on average interest-earning assets and the cost of average
interest-bearing liabilities.
(3)
Net interest-earning assets represent total interest-earning
assets less total interest-bearing liabilities.
(4)
Net interest margin represents the annualized net interest
income divided by average total interest-earning assets.
47
Table of Contents
Year Ended December 31, 2010
Year Ended December 31, 2009
Compared to December 31, 2009
Compared to December 31, 2008
Increase (Decrease)
Increase (Decrease)
Due To
Due To
Volume
Rate
Net
Volume
Rate
Net
(In thousands)
$
2,283
$
(1,123
)
$
1,160
$
7,637
$
(6,578
)
$
1,059
(81
)
(1,442
)
(1,523
)
(1,210
)
(1,332
)
(2,542
)
2,202
(2,565
)
(363
)
6,427
(7,910
)
(1,483
)
250
(1,203
)
(953
)
991
(3,225
)
(2,234
)
93
(156
)
(63
)
52
(269
)
(217
)
(813
)
(5,925
)
(6,738
)
367
(3,614
)
(3,247
)
(470
)
(7,284
)
(7,754
)
1,410
(7,108
)
(5,698
)
(641
)
781
140
500
27
527
(1,111
)
(6,503
)
(7,614
)
1,910
(7,081
)
(5,171
)
$
3,313
$
3,938
$
7,251
$
4,517
$
(829
)
$
3,688
48
Table of Contents
Years Ended December 31,
2010
2009
$ Change
(In thousands)
$
53,538
$
46,287
$
7,251
4,109
1,961
2,148
9,404
6,972
2,432
39,850
36,631
3,219
18,983
14,667
4,316
6,732
4,935
1,797
$
12,251
$
9,732
$
2,519
49
Table of Contents
50
Table of Contents
Years Ended December 31,
2010
2009
$ Change
% Change
(Dollars in thousands)
$
20,032
$
18,571
$
1,461
7.9
%
4,048
3,872
176
4.6
4,292
4,380
(88
)
(2.0
)
1,807
1,131
676
59.8
1,450
1,156
294
25.4
1,616
2,222
(606
)
(27.3
)
1,435
69
1,366
1,979.7
5,170
5,230
(60
)
(1.2
)
$
39,850
$
36,631
$
3,219
8.8
%
(1)
Includes Directors fees and expenses for the years ended
December 31, 2010 and 2009 of $803,000 and $769,000,
respectively.
51
Table of Contents
Years Ended December 31,
2010
2009
$ Change
% Change
(Dollars in thousands)
$
803
$
769
$
34
4.4
%
375
463
(88
)
(19.0
)
(285
)
(47
)
(238
)
(506.4
)
216
174
42
24.1
418
395
23
5.8
317
331
(14
)
(4.2
)
230
215
15
7.0
165
188
(23
)
(12.2
)
356
328
28
8.5
2,575
2,414
161
6.7
$
5,170
$
5,230
$
(60
)
(1.1
)%
52
Table of Contents
Years Ended December 31,
2009
2008
$ Change
% Change
(Dollars in thousands)
$
46,287
$
42,599
$
3,688
8.7
%
1,961
2,393
(432
)
(18.1
)
6,972
(8,987
)
15,959
177.6
36,631
33,762
2,869
8.5
14,667
(2,543
)
17,210
676.8
4,935
(956
)
5,891
616.2
$
9,732
$
(1,587
)
$
11,319
713.2
%
53
Table of Contents
54
Table of Contents
Years Ended December 31,
2009
2008
$ Change
% Change
(Dollars in thousands)
$
18,571
$
17,150
$
1,421
8.3
%
3,872
3,808
64
1.7
4,380
4,103
277
6.8
1,131
1,484
(353
)
(23.8
)
1,156
1,315
(159
)
(12.1
)
2,222
654
1,568
239.8
5,299
5,248
51
1.0
$
36,631
$
33,762
$
2,869
8.5
%
(1)
Includes Directors fees and expenses for the years ended
December 31, 2009 and 2008 of $769,000 and $829,000,
respectively.
55
Table of Contents
Year Ended December 31,
2009
2008
$ Change
% Change
(Dollars in thousands)
$
769
$
829
$
(60
)
(7.2
)%
463
29
434
1518.9
(47
)
230
(277
)
(120.4
)
174
202
(28
)
(13.9
)
395
383
12
3.1
331
344
(13
)
(3.8
)
215
228
(13
)
(5.7
)
188
183
5
2.7
328
431
(103
)
(23.9
)
2,483
2,389
94
3.9
$
5,299
$
5,248
$
51
1.0
%
56
Table of Contents
57
Table of Contents
More than
More than
One Year
Three Years
One Year
Through
Through
Over Five
Total
or Less
Three Years
Five Years
Years
(In thousands)
$
261,423
$
73,320
$
100,400
$
65,912
$
21,791
25,531
8,814
11,408
3,671
1,638
13,064
791
1,499
1,338
9,436
1,561
121
268
308
864
$
301,579
$
83,046
$
113,575
$
71,229
$
33,729
(1)
Secured under a blanket security agreement on qualifying assets,
principally, mortgage loans.
(2)
Represents non-cancelable operating leases for offices and
office equipment.
(3)
Consists of estimated benefit payments over the next ten years
to retirees under unfunded nonqualified pension plans.
58
Table of Contents
More than
More than
One Year
Three Years
One Year
Through
Through
Over Five
Total
or Less
Three Years
Five Years
Years
(Dollars in thousands)
$
48,620
$
31,022
$
$
12,500
$
5,098
20,373
4,612
5,650
955
9,156
60,587
10,815
3,744
30
45,998
143,904
1,214
5,230
30,805
106,655
87,544
46,908
17,531
650
22,455
94
94
10,368
8,904
864
600
$
371,490
$
103,475
$
33,019
$
45,540
$
189,456
(1)
Commitments for loans are extended to customers for up to
180 days after which they expire.
(2)
Unused portions of home equity lines of credit are available to
the borrower for up to 10 years.
(3)
Unused portion of checking overdraft lines of credit are
available to customers in good standing.
Item 7A.
Quantitative
and Qualitative Disclosures about Market Risk
59
Table of Contents
Percentage Increase (Decrease)
in Estimated
Net Interest Income Over
12 Months
8.21
%
(3.33
)
60
Table of Contents
Item 8.
Financial
Statements and Supplementary Data
Page
62
63
65
66
67
68
69
71
61
Table of Contents
/s/ John T. Lund
John T. Lund
Senior Vice President, Chief Financial
Officer and Treasurer
62
Table of Contents
63
Table of Contents
64
Table of Contents
65
Table of Contents
66
Table of Contents
2010
2009
2008
(In thousands, except share data)
$
70,677
$
69,517
$
68,458
4,558
6,116
7,406
454
428
1,647
10
1
34
75,699
76,062
77,545
11,617
19,371
25,069
10,544
10,404
9,877
22,161
29,775
34,946
53,538
46,287
42,599
4,109
1,961
2,393
49,429
44,326
40,206
(362
)
(13,315
)
(1,566
)
(362
)
(14,881
)
7,377
5,221
5,131
190
936
381
1,746
782
91
395
382
9,404
6,972
(8,987
)
20,032
18,571
17,150
4,048
3,872
3,808
4,292
4,380
4,103
1,807
1,131
1,484
1,450
1,156
1,315
1,616
2,222
654
1,435
69
5,170
5,230
5,248
39,850
36,631
33,762
18,983
14,667
(2,543
)
6,732
4,935
(956
)
$
12,251
$
9,732
$
(1,587
)
$
0.66
$
0.53
$
(0.09
)
$
0.66
$
0.53
$
(0.09
)
$
18,537,498
$
18,469,092
$
18,428,158
$
18,551,398
$
18,473,665
$
18,428,158
67
Table of Contents
Consolidated Statements of
Changes in Stockholders Equity
For the Years Ended December 31,
2010, 2009 and 2008
(In thousands, Except Share Data)
Accumulated
Additional
Unearned
Other
Total
Common Stock
Paid-in
Compensation
Retained
Treasury Stock
Comprehensive
Stockholders
Shares
Amount
Capital
ESOP
Earnings
Shares
Amount
Income (Loss)
Equity
(In thousands)
19,568,284
$
85,249
$
3,009
$
(5,734
)
$
81,383
496,730
$
(7,293
)
$
(241
)
$
156,373
(1,587
)
(1,587
)
420
420
(4,272
)
(4,272
)
(5,439
)
291,082
(3,787
)
(3,787
)
1,956
699
2,655
(1,371
)
(92,559
)
1,371
(214
)
(214
)
(3,691
)
(3,691
)
(120
)
(120
)
19,568,284
85,249
3,380
(5,035
)
75,985
695,253
(9,709
)
(4,093
)
145,777
1,034
(1,034
)
9,732
9,732
1,441
1,441
2,653
2,653
13,826
20,000
(198
)
(198
)
827
827
71
857
928
(9,200
)
(152
)
(92
)
(16,427
)
244
(4,310
)
(44
)
(44
)
(3,688
)
(3,688
)
19,554,774
85,249
4,082
(4,178
)
82,971
698,826
(9,663
)
(1,033
)
157,428
12,251
12,251
17
17
(266
)
(266
)
12,002
775
775
103
700
803
(125
)
(43
)
(11,144
)
168
(3,717
)
(46
)
(46
)
(4,534
)
(4,534
)
19,551,057
$
85,249
$
4,789
$
(3,478
)
$
90,645
687,682
$
(9,495
)
$
(1,282
)
$
166,428
68
Table of Contents
2010
2009
2008
(In thousands)
$
12,251
$
9,732
$
(1,587
)
(171
)
(160
)
(59
)
775
827
1,743
803
928
912
4,109
1,961
2,393
(190
)
(936
)
(381
)
362
14,881
(71,443
)
(43,958
)
71,063
43,958
441
(16
)
866
1,435
1,608
1,502
1
34
3
(674
)
(1,242
)
(5,528
)
(383
)
(371
)
(383
)
(109
)
784
113
111
349
(480
)
2,009
(5,884
)
(2,339
)
(192
)
2,484
9,905
2,602
167
28,460
10,386
15,780
399
21,171
5,870
29,723
2,500
14,850
21,166
25,525
17,596
5,470
5,135
1,842
(73,580
)
(8,091
)
(57,030
)
(25,948
)
(5,839
)
161
8,175
5,120
1,859
(2,529
)
(26,212
)
(57,835
)
(74,509
)
(159,933
)
(461
)
(1,100
)
(3,558
)
(69,998
)
(29,878
)
(230,187
)
69
Table of Contents
2010
2009
2008
(In thousands)
18,252
34,371
16,735
71,900
52,229
74,735
(254
)
308
509
(15,000
)
(51,000
)
38,000
37,800
8,112
113,320
(25,179
)
(16,192
)
(30,179
)
(198
)
(4,119
)
(46
)
(44
)
(4,534
)
(3,688
)
(3,691
)
82,939
23,898
205,310
41,401
4,406
(9,097
)
19,307
14,901
23,998
$
60,708
$
19,307
14,901
$
22,235
$
29,901
$
34,683
9,520
4,401
1,751
4,356
4,904
10,534
70
Table of Contents
Note 1.
MUTUAL
HOLDING COMPANY REORGANIZATION AND MINORITY STOCK
ISSUANCE
Note 2.
BASIS OF
PRESENTATION, PRINCIPLES OF CONSOLIDATION AND SIGNIFICANT
ACCOUNTING POLICIES
71
Table of Contents
72
Table of Contents
73
Table of Contents
74
Table of Contents
75
Table of Contents
76
Table of Contents
77
Table of Contents
78
Table of Contents
79
Table of Contents
Note 3.
RECENT
ACCOUNTING PRONOUNCEMENTS
80
Table of Contents
Note 4.
EARNINGS
PER SHARE
Years Ended December 31,
2010
2009
2008
(In thousands)
$
12,251
$
9,732
$
(1,587
)
18,537
18,469
18,428
14
5
18,551
18,474
18,428
81
Table of Contents
Note 5.
FAIR
VALUE MEASUREMENT
82
Table of Contents
2010
2009
(In thousands)
$
73
$
2,114
43
(2,084
)
$
73
$
73
$
$
43
83
Table of Contents
84
Table of Contents
2010
2009
Carrying
Fair
Carrying
Fair
Amount
Value
Amount
Value
(In thousands)
$
60,708
$
60,708
$
19,307
$
19,307
125,447
125,447
102,751
102,751
13,679
14,638
19,074
20,011
380
380
1,410,498
1,415,387
1,361,019
1,360,789
17,007
17,007
17,007
17,007
4,176
4,176
4,287
4,287
1,219,260
1,200,517
1,129,108
1,135,815
6,131
6,131
6,385
6,385
261,423
274,557
263,802
276,619
Note 6.
RESTRICTIONS
ON CASH AND DUE FROM BANKS
Table of Contents
Note 7.
INVESTMENT
SECURITIES
Gross
Gross
Amortized
Unrealized
Unrealized
Fair
Cost
Gains
Losses
Value
(In thousands)
$
35,018
$
$
691
$
34,327
67,047
3,358
15
70,390
5,895
1,887
4,008
107,960
3,358
2,593
108,725
1,256
3,366
9
4,613
1,134
67
24
1,177
1,151
326
30
1,447
283
58
63
278
387
44
343
695
313
20
988
742
93
835
2,666
100
2,766
754
608
1,362
228
142
370
662
103
5
760
294
57
351
1,030
420
18
1,432
11,282
5,653
213
16,722
$
119,242
$
9,011
$
2,806
$
125,447
$
13,679
$
959
$
$
14,638
86
Table of Contents
Gross
Gross
Amortized
Unrealized
Unrealized
Fair
Cost
Gains
Losses
Value
(In thousands)
$
7,017
$
36
$
1
$
7,052
72,537
3,431
1
75,967
5,879
1,223
4,656
722
9
731
86,155
3,476
1,225
88,406
1,256
2,470
173
3,553
839
40
17
862
948
158
41
1,065
284
217
501
387
3
19
371
639
134
13
760
742
69
811
1,030
263
6
1,287
2,621
62
2,683
754
353
12
1,095
342
173
515
354
15
339
313
190
503
10,509
4,132
296
14,345
$
96,664
$
7,608
$
1,521
$
102,751
$
19,074
$
937
$
$
20,011
Table of Contents
Available for Sale
Held to Maturity
Amortized
Fair
Amortized
Fair
Cost
Value
Cost
Value
(In thousands)
$
3,120
$
3,117
$
$
14,966
14,838
19,999
19,430
2,828
950
40,913
38,335
67,047
70,390
13,679
14,638
$
107,960
$
108,725
$
13,679
$
14,638
Less Than Twelve Months
Over Twelve Months
Total
Fair
Unrealized
Fair
Unrealized
Fair
Unrealized
Value
Losses
Value
Losses
Value
Losses
(In thousands)
$
34,327
$
691
$
$
$
34,327
$
691
5,046
14
30
1
5,076
15
3,908
1,887
3,908
1,887
39,373
705
3,938
1,888
43,311
2,593
1,097
152
624
61
1,721
213
$
40,470
$
857
$
4,562
$
1,949
$
45,032
$
2,806
88
Table of Contents
Less Than Twelve Months
Over Twelve Months
Total
Fair
Unrealized
Fair
Unrealized
Fair
Unrealized
Value
Losses
Value
Losses
Value
Losses
(In thousands)
$
2,018
$
1
$
$
$
2,018
$
1
58
1
58
1
4,556
1,223
4,556
1,223
2,018
1
4,614
1,224
6,632
1,225
1,097
184
1,099
112
2,196
296
$
3,115
$
185
$
5,713
$
1,336
$
8,828
$
1,521
Table of Contents
Note 8.
LOANS AND
ALLOWANCE FOR LOAN LOSSES
December 31,
2010
2009
(In thousands)
$
719,925
$
754,838
489,511
426,028
78,627
71,078
1,288,063
1,251,944
130,303
113,240
4,036
5,783
1,885
1,959
1,424,287
1,372,926
523
632
(14,312
)
(12,539
)
$
1,410,498
$
1,361,019
90
Table of Contents
December 31,
2010
2009
2008
(In thousands)
$
2,233
$
5,854
$
2,840
10,127
6,192
7,595
$
12,360
$
12,046
$
10,435
$
358
$
381
$
473
$
13,112
$
13,356
$
5,358
$
343
$
250
$
508
91
Table of Contents
Installment
Residential
Commercial
and
Real Estate
Real Estate
Construction
Commercial
Collateral
(In thousands)
$
711,949
$
451,723
$
70,647
$
125,280
$
5,876
2,047
22,838
2,960
1,869
11
5,929
14,950
5,020
3,154
34
$
719,925
$
489,511
$
78,627
$
130,303
$
5,921
December 31,
2010
2009
2008
(In thousands)
$
12,539
$
12,553
$
10,620
4,109
1,961
2,393
(2,376
)
(2,113
)
(621
)
40
138
161
$
14,312
$
12,539
$
12,553
Installment
Residential
Commercial
and
Real Estate
Real Estate
Construction
Commercial
Collateral
Unallocated
Total
(In thousands)
$
156
$
21
$
$
176
$
5
$
$
358
4,532
5,448
1,653
2,120
76
125
13,954
5,976
2,990
2,646
714
34
12,360
713,949
486,521
75,981
129,589
5,887
1,411,927
92
Table of Contents
Past Due 90
30-59 Days
60-89 Days
Greater than
Total
Days or More
Loans on
Past Due
Past Due
90 Days
Past Due
and Still Accruing
Non-accrual
(In thousands)
$
7,899
$
1,634
$
2,952
$
12,486
$
$
5,976
2,347
2,347
2,990
1,101
187
2,646
3,934
2,646
200
119
445
764
714
11
4
34
48
34
$
9,211
$
1,944
$
8,424
$
19,579
$
$
12,360
December 31, 2010
Unpaid
Recorded
Principal
Related
Investment
Balance
Allowance
(In thousands)
$
4,804
$
4,804
$
2,393
2,393
2,646
2,646
277
277
7
7
10,127
10,127
1,016
1,172
156
576
597
21
261
437
176
22
27
5
1,875
2,233
358
$
12,002
$
12,360
$
358
93
Table of Contents
Years Ended December 31,
2010
2009
(In thousands)
$
3,719
$
4,050
(261
)
860
868
(590
)
(938
)
$
3,989
$
3,719
Years Ended December 31,
2010
2009
(In thousands)
$
475
$
68
497
446
114
39
$
858
$
475
$
1,011
$
481
Note 9.
OTHER
REAL ESTATE OWNED
94
Table of Contents
Years Ended
December 31,
2010
2009
(In thousands)
$
3,061
$
4,356
4,904
(866
)
(5,120
)
(1,859
)
(441
)
16
$
990
$
3,061
Note 10.
PREMISES
AND EQUIPMENT
December 31,
Estimated
2010
2009
Useful Lives
(In thousands)
$
440
$
236
N/A
15,371
15,675
39.5 years
9,454
9,483
3 -10 years
3,882
3,762
5 -10 years
29,147
29,156
(14,235
)
(13,293
)
$
14,912
$
15,863
95
Table of Contents
Note 11.
DEPOSITS
December 31,
2010
2009
(In thousands)
$
286,061
$
258,583
162,090
143,601
227,007
234,737
272
247
543,830
491,940
$
1,219,260
$
1,129,108
(In thousands)
$
369,431
98,095
24,546
11,001
39,417
1,340
$
543,830
December 31,
2010
2009
2008
(In thousands)
$
4,064
$
3,101
$
5,552
7,553
16,270
19,517
$
11,617
$
19,371
$
25,069
Note 12.
FEDERAL
HOME LOAN BANK BORROWINGS AND STOCK
96
Table of Contents
2010
2009
Weighted
Weighted
Average
Average
Amount
Rate
Amount
Rate
(Dollars in thousands)
$
%
$
40,170
2.78
%
73,320
3.70
73,320
3.70
37,400
4.21
37,400
4.21
63,000
4.12
63,000
4.12
26,912
4.13
26,912
4.13
39,000
2.95
21,791
3.61
23,000
4.12
$
261,423
3.80
%
$
263,802
3.81
%
Note 13.
PENSION
PLANS AND OTHER POST-RETIREMENT BENEFITS:
97
Table of Contents
Other Post-Retirement
Pension Plans
Benefits
December 31,
December 31,
2010
2009
2010
2009
(In thousands)
$
21,842
$
20,529
$
2,189
$
1,753
831
904
17
11
1,275
1,237
122
107
26
26
455
118
(1
)
1,394
(585
)
201
406
(411
)
(361
)
(115
)
(113
)
$
25,386
$
21,842
$
2,440
$
2,189
$
17,385
$
13,032
$
$
2,499
3,687
928
1,027
90
88
25
25
(411
)
(361
)
(115
)
(113
)
$
20,401
$
17,385
$
$
$
(4,985
)
$
(4,457
)
$
(2,440
)
$
(2,189
)
$
(4,985
)
$
(4,457
)
$
(2,440
)
$
(2,189
)
$
376
$
(116
)
$
10
$
28
6,817
7,022
859
716
7,193
6,906
869
744
(2,451
)
(2,348
)
(296
)
(253
)
$
4,742
$
4,558
$
573
$
491
(1)
Includes amendments to the pension plans for the addition of
four executive management personnel into the plans.
98
Table of Contents
Pension Plans
Other Post-Retirement Benefits
2010
2009
2008
2010
2009
2008
(In thousands)
$
831
$
904
$
870
$
17
$
11
$
9
1,275
1,237
1,123
122
107
99
(1,459
)
(1,050
)
(1,335
)
558
956
408
59
24
19
(37
)
321
312
18
20
19
117
1,168
2,368
1,495
216
162
146
354
(3,221
)
7,150
203
404
120
455
118
(1
)
(558
)
(956
)
(408
)
(60
)
(24
)
(19
)
36
(321
)
(312
)
(18
)
(19
)
(19
)
(39
)
287
(4,380
)
6,391
125
360
82
$
1,455
$
(2,012
)
$
7,886
$
341
$
522
$
228
Other Post-
Pension
Retirement
Plans
Benefits
(In thousands)
$
572
$
75
(10
)
10
$
562
$
85
2010
2009
6.00%/5.55%(1)
6.00%/5.55%(2)
4.0%
4.0%
99
Table of Contents
(1)
The discount rate was 6.00% for the Pension Plan and was 5.55%
for the Supplemental and SERP plans with measurement dates of
December 31, 2010.
(2)
The discount rate was 6.00% for the Pension Plan and was 5.55%
for the Supplemental and SERP plans with measurement dates of
December 31, 2009.
Supplemental Plans
Pension Plan
and SERPs
2010
2009
2010
2009
(In thousands)
$
20,617
$
17,855
$
4,769
$
3,987
17,597
14,835
4,769
3,750
20,401
17,385
2010
2009
2008
6.00%/6.55%
6.00%/6.40%
6.30%/6.20%
8.25%
8.25%
8.25%
4.50%
4.50%
4.50%
(1)
The discount rate was 6.00% for the Pension Plan and 6.55% for
the supplemental and
SERP
plans with measurement dates of December 31, 2010.
100
Table of Contents
1%
1%
Increase
Decrease
(In thousands)
$
284
$
(240
)
18
(15
)
December 31, 2010
Level 1
Level 2
Level 3
Fair Value
(In thousands)
$
10,574
$
$
$
10,574
2,043
2,043
203
203
5,517
5,517
1,029
1,029
1,035
1,035
$
20,401
$
$
$
20,401
101
Table of Contents
Other Post-
Pension
Retirement
Plans
Benefits
(In thousands)
$
4,399
$
121
714
129
756
139
788
149
874
159
5,996
864
Note 14.
SHARE-BASED
COMPENSATION
102
Table of Contents
Weighted
Average
Weighted
Remaining
Average
Contractual
Aggregate
Stock
Exercise
Term
Intrinsic
Options
Price
(In Years)
Value
445,875
$
13.18
112,010
11.25
557,885
$
12.80
7.3
$
514
428,977
$
13.38
7.6
$
Weighted
Average
Number of
Grant Date
Shares
Fair Value
115,635
$
3.04
112,010
4.55
(98,737
)
3.97
128,908
$
3.64
103
Table of Contents
2010
2009
2008
$
4.55
$
3.05
$
2.72
1.84
%
2.23
%
3.24
%
51.54
%
29.85
%
22.11
%
2.31
%
2.16
%
1.67
%
6.0 years
6.0 years
6.0 years
Options Outstanding
Exercisable Options
Weighted
Average
Weighted
Remaining
Weighted
Average
Contractual
Average
Exercise
Life
Exercise
Prices
Shares
(In Years)
Shares
Prices
126,250
8.3
81,580
$9.24
112,010
9.9
59,922
11.25
121,125
7.2
94,875
11.98
78,000
6.7
72,100
14.35
120,500
6.0
120,500
17.77
104
Table of Contents
Weighted
Average
Number of
Grant Date
Shares
Fair Value
41,695
$
13.47
11,144
11.25
(25,189
)
15.17
27,650
$
11.03
105
Table of Contents
Note 15.
INCOME
TAXES
2010
2009
2008
(In thousands)
$
7,406
$
6,177
$
4,572
(674
)
(1,242
)
(5,528
)
$
6,732
$
4,935
$
(956
)
December 31,
2010
2009
(In thousands)
$
5,009
$
4,389
4,939
5,127
2,719
2,433
575
471
563
606
13,805
13,026
(2,172
)
(2,129
)
(306
)
(289
)
(2,478
)
(2,418
)
$
11,327
$
10,608
106
Table of Contents
December 31,
2010
2009
2008
(In thousands)
$
6,644
$
4,986
$
(865
)
136
(134
)
(126
)
(130
)
(89
)
(76
)
(234
)
(5
)
(11
)
(16
)
14
40
42
243
166
122
4
$
6,732
$
4,935
$
(956
)
Note 16.
COMMITMENTS
AND CONTINGENCIES
(In thousands)
$
791
759
740
673
664
9,437
$
13,064
107
Table of Contents
(In thousands)
$
327
318
318
318
318
210
$
1,809
108
Table of Contents
December 31,
2010
2009
(In thousands)
$
68,993
$
36,650
87,544
86,492
143,904
125,511
60,587
57,713
10,368
10,555
94
94
$
371,490
$
317,015
Note 17.
REGULATORY
MATTERS
109
Table of Contents
Minimum
To Be Well
Required
Capitalized Under
Minimum
Prompt Corrective
Actual
Ratios
Action Provisions
Amount
Ratio
Amount
Ratio
Amount
Ratio
(Dollars in thousands)
$
167,793
12.7
%
$
105,530
8.0
%
$
131,913
10.0
%
153,090
11.6
52,744
4.0
79,116
6.0
153,090
9.1
67,515
4.0
84,394
5.0
$
158,870
13.1
%
$
96,976
8.0
%
$
121,220
10.0
%
145,654
12.0
48,488
4.0
72,732
6.0
145,654
9.3
62,478
4.0
78,097
5.0
$
181,178
13.7
%
$
105,566
8.0
%
N/A
N/A
166,475
12.6
$
52,765
4.0
N/A
N/A
166,475
10.4
$
64,090
4.0
N/A
N/A
$
170,559
14.1
%
$
96,976
8.0
%
N/A
N/A
157,343
13.0
48,489
4.0
N/A
N/A
157,343
10.1
62,028
4.0
N/A
N/A
110
Table of Contents
Note 18.
ACCUMULATED
OTHER COMPREHENSIVE (LOSS) INCOME
Cumulative
Effect
Unrealized
Adjustment
Gains on
of a
Accumulated
Minimum
Available-
Change in
Other
Pension
for Sale
Accounting
Comprehensive
Liability
Securities
Principle(1)
Loss
(In thousands)
$
(3,430
)
$
3,189
$
$
(241
)
(4,272
)
420
(3,852
)
(7,702
)
3,609
(4,093
)
2,653
1,441
(1,034
)
3,060
(5,049
)
5,050
(1,034
)
(1,033
)
(266
)
17
(249
)
$
(5,315
)
$
5,067
$
(1,034
)
$
(1,282
)
(1)
The effect of the adoption of FASB Staff Position
FAS 115-2
(ASC 320)
Years Ended December 31,
2010
2009
2008
(In thousands)
$
12,251
$
9,732
$
(1,587
)
118
2,184
637
(101
)
(743
)
(217
)
17
1,441
420
(412
)
4,019
(6,474
)
146
(1,366
)
2,202
(266
)
2,653
(4,272
)
(249
)
4,094
(3,852
)
$
12,002
$
13,826
$
(5,439
)
111
Table of Contents
Note 19.
PARENT
COMPANY FINANCIAL INFORMATION
December 31,
2010
2009
(In thousands)
$
5,477
$
5,129
1
1
32
23
153,043
145,739
5,668
5,002
2,431
1,724
$
166,652
$
157,618
$
224
$
190
166,428
157,428
$
166,652
$
157,618
Years Ended December 31,
2010
2009
2008
(In thousands)
$
16
$
46
$
224
16
46
224
123
519
512
568
519
512
568
(380
)
(466
)
(344
)
78
157
116
(302
)
(309
)
(228
)
12,553
10,041
(1,359
)
$
12,251
$
9,732
$
(1,587
)
112
Table of Contents
For the Years Ended December 31,
2010
2009
2008
(In thousands)
$
12,251
$
9,732
$
(1,587
)
1,578
1,755
2,655
(12,553
)
(10,041
)
1,359
(9
)
(5
)
289
4
13
(666
)
(704
)
(1,457
)
(707
)
910
594
34
22
45
(72
)
1,673
1,911
5,000
(10,000
)
5,000
(10,000
)
(198
)
(4,119
)
(46
)
(44
)
(4,534
)
(3,688
)
(3,691
)
(4,580
)
(3,930
)
(7,810
)
348
(2,257
)
(15,899
)
5,129
7,386
23,285
$
5,477
$
5,129
$
7,386
$
9,600
$
4,401
$
1,751
113
Table of Contents
Note 20.
SELECTED
QUARTERLY CONSOLIDATED INFORMATION
(UNAUDITED):
December 31,
September 30,
June 30,
March 31,
December 31,
September 30,
June 30,
March 31,
2010
2010
2010
2010
2009
2009
2009
2009
(In thousands, except per share data)
$
19,069
$
19,069
$
18,620
$
18,941
$
18,940
$
18,684
$
19,114
$
19,324
5,641
5,516
5,461
5,543
6,517
7,384
7,813
8,061
13,428
13,553
13,159
13,398
12,423
11,300
11,301
11,263
995
1,302
909
903
658
700
304
299
12,433
12,251
12,250
12,495
11,765
10,600
10,997
10,964
2,606
2,746
2,365
1,687
1,590
1,809
2,582
991
10,947
9,876
9,392
9,635
8,970
8,842
9,715
9,104
4,092
5,121
5,223
4,547
4,385
3,567
3,864
2,851
1,418
1,862
1,759
1,693
1,503
1,227
1,270
935
$
2,674
$
3,259
$
3,464
$
2,854
$
2,882
$
2,340
$
2,594
$
1,916
$
0.14
$
0.18
$
0.19
$
0.15
$
0.16
$
0.13
$
0.14
$
0.10
$
12.47
$
12.91
$
12.64
$
12.42
$
11.68
$
14.79
$
12.50
$
14.46
$
10.50
$
11.06
$
10.50
$
8.82
$
9.68
$
9.88
$
8.44
$
6.17
(1)
In the first quarter of 2009, non-interest income included
other-than-temporary
impairment charges of $65,000 related to one mutual fund and
$292,000 related to three equity securities. No material charges
were taken in the remainder of 2009. There were no
other-than-temporary
charges taken in 2010. Refer to Note 7
Investment Securities for additional information on
other-than-temporary
impairments. In 2010, quarterly gains of loans held for sale
were $159,000, $364,000, $669,000 and $554,000 for the first
quarter through the fourth quarter, respectively. In the second
quarter of 2009, the Company recorded $867,000 of security gains
and $289,000 of gains on the sale of
one-to-four
family fixed rate residential loans.
(2)
In the fourth quarter of 2010, increases in salaries and
benefits expense of $495,000 due to additional bonus option and
restricted stock expense , professional fees of $293,000, due to
regulatory compliance reviews and marketing and promotions
expense of $285,000 resulting from additional marketing
promotions were noted over the prior quarter.
Note 21.
Second
Step Conversion
114
Table of Contents
115
Table of Contents
Item 9.
Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure
Item 9A.
Controls
and Procedures
Pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company;
Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with accounting principles generally accepted in the
United States of America, and that our receipts and expenditures
are being made only in accordance with authorizations of the
Companys management and Directors; and
Provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of our
assets that could have a material effect on our financial
statements.
Item 9B.
Other
Information
116
Table of Contents
Item 10.
Directors,
Executive Officers and Corporate Governance
Item 11.
Executive
Compensation
Item 12.
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Item 13.
Certain
Relationships and Related Transactions, and Director
Independence
Item 14.
Principal
Accountant Fees and Services
Item 15.
Exhibits,
Financial Statements and Financial Statement
Schedules
117
Table of Contents
3.
Exhibits:
2
.1
Amended and Restated Plan of Conversion and Reorganization
(incorporated herein by reference to Exhibit 2.1 to the
Registration Statement filed on the
Form S-1
for Rockville Financial New, Inc. on September 16, 2010)
3
.1
Certificate of Incorporation of Rockville Financial New, Inc.
(incorporated herein by reference to Exhibit 3.1 to the
Registration Statement on the
Form S-1
filed for Rockville Financial New, Inc. on September 16,
2010)
3
.1.1
Amendment of Certificate of Incorporation of Rockville Financial
New, Inc. (incorporated herein by reference to
Exhibit 3.1.1 to the Registration Statement on the
Form S-1
filed for Rockville Financial New, Inc. on September 16,
2010)
3
.2
Bylaws of Rockville Financial New, Inc. (incorporated herein by
reference to Exhibit 3.2 to the Registration Statement on
the
Form S-1
filed for Rockville Financial New, Inc. on September 16,
2010)
4
.1
Form of Common Stock Certificate of Rockville Financial New,
Inc. (incorporated herein by reference to Exhibit 4.1 to
the Registration Statement on the
Form S-1
filed for Rockville Financial New, Inc. on September 16,
2010)
10
.1
Employment Agreement as amended and restated by and among
Rockville Financial, Inc., Rockville Bank and William J.
McGurk, effective January 1, 2009 (incorporated by
reference to Exhibit 10.1 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2008 filed on
March 11, 2009)
10
.1.1
Rockville Bank Extension Notice Agreement by and among Rockville
Financial, Inc., Rockville Bank and William J. McGurk, effective
January 1, 2010 (incorporated by reference to
Exhibit 10.1.1 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2009 filed on
March 10, 2010)
10
.1.2
Advisory Agreement entered into by and between Rockville Bank
and William J. McGurk (incorporated herein by reference to
Exhibit 10.1 to the Current Report on the Companys
Form 8-K
filed on January 26, 2011)
10
.2
Employment Agreement as amended and restated by and among
Rockville Financial, Inc., Rockville Bank and Joseph F.
Jeamel, Jr., effective January 1, 2009 (incorporated by
reference to Exhibit 10.2 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2008 filed on
March 11, 2009)
10
.2.1
Rockville Bank Extension Notice Agreement by and among Rockville
Financial, Inc., Rockville Bank and Joseph F. Jeamel, Jr.,
effective January 1, 2010 (incorporated by reference to
Exhibit 10.2.1 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2009 filed on
March 10, 2010)
10
.3
Employment Agreement by and among Rockville Financial, Inc.,
Rockville Bank and John T. Lund, effective January 4, 2010
(incorporated herein by reference to Exhibit 3.1 to the
Current Report on the Companys
Form 8-K
filed on January 7, 2010)
10
.3.1.
Supplemental Executive Retirement Agreement of Rockville Bank by
and among John T. Lund effective December 6, 2010 filed
herewith
10
.3.2
Employment Agreement as amended and restated by and among
Rockville Financial, Inc., Rockville Bank and John L. Lund,
effective January 1, 2011 (incorporated herein by reference
to Exhibit 10.15 to the Current Report on the
Companys
Form 8-K
filed on January 10, 2011)
10
.4
Employment Agreement as amended and restated by and among
Rockville Financial, Inc., Rockville Bank and Christopher
E. Buchholz, effective January 1, 2009 (incorporated by
reference to Exhibit 10.4 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2008 filed on
March 11, 2009)
10
.4.1
Rockville Bank Extension Notice Agreement by and among Rockville
Financial, Inc., Rockville Bank and Christopher E.
Buchholz, effective January 1, 2010 (incorporated by
reference to Exhibit 10.4.1 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2009 filed on
March 10, 2010)
118
Table of Contents
10
.4.2
Employment Agreement as amended and restated by and among
Rockville Financial, Inc., Rockville Bank Christopher E.
Buchholz, effective January 1, 2011 (incorporated herein by
reference to Exhibit 10.3 to the Current Report on the
Companys
Form 8-K
filed on January 10, 2011)
10
.5
Employment Agreement as amended and restated by and among
Rockville Financial, Inc., Rockville Bank and Richard J.
Trachimowicz, effective January 1, 2009 (incorporated by
reference to Exhibit 10.5 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2008 filed on
March 11, 2009)
10
.5.1
Rockville Bank Extension Notice Agreement by and among Rockville
Financial, Inc., Rockville Bank and Richard J. Trachimowicz,
effective January 1, 2010 (incorporated by reference to
Exhibit 10.5.1 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2009 filed on
March 10, 2010)
10
.5.2
Supplemental Executive Retirement Agreement of Rockville Bank by
and among Richard J. Trachimowicz effective December 6,
2010 filed herewith
10
.5.3
Employment Agreement as amended and restated by and among
Rockville Financial, Inc., Rockville Bank and Richard J.
Trachimowicz, effective January 1, 2011 (incorporated
herein by reference to Exhibit 10.5 to the Current Report
on the Companys
Form 8-K
filed on January 10, 2011)
10
.6
Supplemental Savings and Retirement Plan of Rockville Bank as
amended and restated effective December 31, 2007
(incorporated herein by reference to Exhibit 10.5 to the
Current Report on
Form 8-K
filed for Rockville Financial, Inc. filed on December 18,
2007)
10
.7
Rockville Bank Officer Incentive Compensation Plan (incorporated
herein by reference to Exhibit 10.2.3 to the Companys
Annual Report on
Form 10-K
for the year ended December 31, 2005 filed on
March 31, 2006)
10
.8
Rockville Bank Supplemental Executive Retirement Agreement for
Joseph F. Jeamel, Jr. (incorporated herein by reference to
Exhibit 10.9 to the Registration Statement filed on
Form S-1
filed for Rockville Financial, Inc. filed on December 17,
2004)
10
.8.1
First Amendment to the Supplemental Executive Retirement
Agreement for Joseph F. Jeamel, Jr. (incorporated herein by
reference to Exhibit 10.7.1 to the Current Report on
Form 8-K
filed for Rockville Financial, Inc. filed on December 18,
2007)
10
.9
Executive Split Dollar Life Insurance Agreement for Joseph F.
Jeamel, Jr. (incorporated herein by reference to
Exhibit 10.11 to the Registration Statement filed on
Form S-1
filed for Rockville Financial, Inc. filed on December 17,
2004)
10
.10
Rockville Bank Supplemental Executive Retirement Plan as amended
and restated effective December 31, 2007 (incorporated
herein by reference to Exhibit 10.9 to the Current Report
on
Form 8-K
filed for Rockville Financial, Inc. filed on December 18,
2007)
10
.11
Rockville Financial, Inc. 2006 Stock Incentive Award Plan
(incorporated herein by reference to Appendix B in the
Definitive Proxy Statement on Form 14A for Rockville
Financial, Inc. filed on July 3, 2006)
10
.12
Employment Agreement by and among Rockville Financial, Inc.,
Rockville Bank and William H.W. Crawford IV, effective
January 3, 2011 (incorporated herein by reference to
Exhibit 10.15 to the Current Report on the Companys
Form 8-K
filed on January 6, 2011)
10
.13
Supplemental Executive Retirement Agreement of Rockville Bank by
and among Mark A. Kucia effective December 6, 2010 filed
herewith
10
.13.1
Employment Agreement as amended and restated by and among
Rockville Financial, Inc., Rockville Bank and Mark A. Kucia,
effective January 1, 2011 filed herewith
14
Rockville Financial, Inc., Rockville Bank, Standards of Conduct
Policy Employees (incorporated herein by reference
to Exhibit 14 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2007 filed on
March 17, 2008)
21
Subsidiaries of Rockville Financial, Inc. and Rockville Bank
filed herewith.
23
.1
Consent of Independent Registered Public Accounting Firm,
Wolf & Company, P.C. filed herewith.
23
.2
Consent of Independent Registered Public Accounting Firm,
Deloitte & Touche, LLP filed herewith.
31
.1
Rule 13a-14(a)/15d-14(a)
Certification of the Chief Executive Officer filed herewith.
31
.2
Rule 13a-14(a)/15d-14(a)
Certification of the Chief Financial Officer filed herewith.
32
.0
Section 1350 Certification of the Chief Executive Officer
and Chief Financial Officer attached hereto
Table of Contents
By:
and Director
By:
Financial Officer and Treasurer
120
Table of Contents
President, Chief Executive Officer and Director
(
Principal Executive Officer
)
March 10, 2011
Senior Vice President, Chief Financial Officer and Treasurer
(
Principal Financial and Accounting Officer
)
March 10, 2011
Vice Chairman
March 10, 2011
Director
March 10, 2011
Senior Executive Vice President and Director
March 10, 2011
Director
March 10, 2011
Director
March 10, 2011
Director
March 10, 2011
Director
March 10, 2011
Chairman
March 10, 2011
Director
March 10, 2011
Director
March 10, 2011
Director
March 10, 2011
Director
March 10, 2011
121
2
3
4
5
6
7
8
9
10
11
12
13
ROCKVILLE BANK
|
||||
By | /s/ Richard J. Trachimowicz | |||
Its Richard J. Trachimowicz | ||||
ROCKVILLE FINANCIAL, INC.
|
||||
By | /s/ Richard J. Trachimowicz | |||
Its Richard J. Trachimowicz | ||||
/s/ John T. Lund | ||||
John T. Lund | ||||
14
Primary Beneficiary | ||||||
Beneficiary(ies)
|
||||||
|
||||||
Address and
|
||||||
|
||||||
Zip Code
|
||||||
|
||||||
Birth Date
|
||||||
|
||||||
Soc. Sec. No.
|
||||||
|
||||||
Relationship
|
||||||
|
||||||
Percentage
|
||||||
|
Alternate Beneficiary | ||||||
Beneficiary(ies)
|
||||||
|
||||||
Address and
|
||||||
|
||||||
Zip Code
|
||||||
|
||||||
Birth Date
|
||||||
|
||||||
Soc. Sec. No.
|
||||||
|
||||||
Relationship
|
||||||
|
||||||
Percentage
|
||||||
|
Signature of Witness | John T. Lund | |
Witness Signature Date | Date |
15
2
3
4
5
6
7
8
9
10
11
12
13
ROCKVILLE BANK
|
||||
By | /s/ Anne McConnell | |||
Anne McConnell | ||||
VP Human Resources Officer | ||||
ROCKVILLE FINANCIAL, INC.
|
||||
By | /s/ Judy Keppner Clark | |||
Its Judy Keppner Clark | ||||
AVP/Corporate Secretary | ||||
/s/ Richard J. Trachimowicz | ||||
Richard J. Trachimowicz |
14
Primary Beneficiary | ||||||||
Beneficiary(ies)
|
||||||||
|
||||||||
Address and
|
||||||||
|
||||||||
Zip Code
|
||||||||
|
||||||||
Birth Date
|
||||||||
|
||||||||
Soc. Sec. No.
|
||||||||
|
||||||||
Relationship
|
||||||||
|
||||||||
Percentage
|
||||||||
|
Alternate Beneficiary | ||||||||
Beneficiary(ies)
|
||||||||
|
||||||||
Address and
|
||||||||
|
||||||||
Zip Code
|
||||||||
|
||||||||
Birth Date
|
||||||||
|
||||||||
Soc. Sec. No.
|
||||||||
|
||||||||
Relationship
|
||||||||
|
||||||||
Percentage
|
|
||
Signature of Witness
|
Richard J. Trachimowicz | |
|
||
|
||
Witness Signature Date
|
Date |
15
2
3
4
5
6
7
8
9
10
11
12
13
ROCKVILLE BANK
|
||||
By | ||||
Its | ||||
ROCKVILLE FINANCIAL, INC.
|
||||
By | ||||
Its | ||||
Mark A. Kucia | ||||
14
Beneficiary(ies)
|
||||||
|
||||||
Address and
|
||||||
|
||||||
Zip Code
|
||||||
|
||||||
Birth Date
|
||||||
|
||||||
Soc. Sec. No.
|
||||||
|
||||||
Relationship
|
||||||
|
||||||
Percentage
|
||||||
|
Beneficiary(ies)
|
||||||
|
||||||
Address and
|
||||||
|
||||||
Zip Code
|
||||||
|
||||||
Birth Date
|
||||||
|
||||||
Soc. Sec. No.
|
||||||
|
||||||
Relationship
|
||||||
|
||||||
Percentage
|
||||||
|
|
||||
Signature of Witness
|
Mark A. Kucia | |||
|
||||
|
||||
Witness Signature Date
|
Date |
15
1. Employment
|
1 | |||
2. Term
|
1 | |||
3. Offices and Duties
|
2 | |||
(a) Generally
|
2 | |||
(b) Place of Employment
|
2 | |||
4. Salary and Annual Incentive Compensation
|
2 | |||
(a) Base Salary
|
3 | |||
(b) Annual Incentive Compensation
|
3 | |||
5. Long-Term Compensation, Including Stock Options, Benefits, Deferred
Compensation, and Expense Reimbursement
|
3 | |||
(a) Executive Compensation Plans
|
3 | |||
(b) Employee and Executive Benefit Plans
|
3 | |||
(c) Acceleration of Awards Upon Termination Within Two Years
After a Change in Control
|
4 | |||
(d) Deferral of Compensation
|
4 | |||
(e) Company Registration Obligations
|
4 | |||
(f) Reimbursement of Expenses
|
5 | |||
(g) Limitations Under Code Section 409A
|
5 | |||
6. Termination Due to Retirement, Death, or Disability
|
5 | |||
(a) Retirement
|
5 | |||
(b) Death
|
6 | |||
(c) Disability
|
7 | |||
(d) Other Terms of Payment Following Retirement, Death, or Disability
|
9 | |||
7. Termination of Employment For Reasons Other Than Retirement, Death or Disability
|
10 | |||
(a) Termination by the Bank for Cause
|
10 |
i
(b) Termination by Executive Other Than For Good Reason
|
10 | |||
(c) Termination by the Bank Without Cause Prior to or More than Two Years After a Change in
Control
|
11 | |||
(d) Termination by Executive for Good Reason Prior to or More than Two Years After a Change in
Control
|
13 | |||
(e) Termination by the Bank Without Cause Within Two Years After a Change in Control
|
15 | |||
(f) Termination by Executive for Good Reason Within Two Years After a Change in Control
|
17 | |||
(g) Other Terms Relating to Certain Terminations of Employment; Reimbursements; Section 409A
Exemptions; Delayed Payments Under Section 409A
|
19 | |||
8. Definitions Relating to Termination Events
|
22 | |||
(a) Cause
|
22 | |||
(b) Change in Control
|
23 | |||
(c) Compensation Accrued at Termination
|
24 | |||
(d) Disability
|
24 | |||
(e) Good Reason
|
24 | |||
(f) Potential Change in Control
|
26 | |||
(g) Specified Employee
|
26 | |||
9. Limitation on Change in Control Payments
|
26 | |||
10. Non-Competition and Non-Disclosure; Executive Cooperation;
Non-Disparagement; Certain Forfeitures
|
27 | |||
(a) Non-Competition
|
27 | |||
(b) Non-Disclosure; Ownership of Work
|
27 | |||
(c) Cooperation With Regard to Litigation
|
28 | |||
(d) Non-Disparagement
|
28 | |||
(e) Release of Employment Claims
|
28 | |||
(f) Forfeiture of Outstanding Options
|
28 | |||
(g) Forfeiture of Certain Bonuses and Profits
|
29 | |||
(h) Forfeiture Due to Regulatory Restrictions
|
29 | |||
(i) Survival
|
29 | |||
11. Governing Law; Disputes
|
29 | |||
(a) Governing Law
|
29 | |||
(b) Reimbursement of Expenses in Enforcing Rights
|
30 | |||
(c) Dispute Resolution
|
30 |
ii
(d) Interest on Unpaid Amounts
|
32 | |||
12. Miscellaneous
|
32 | |||
(a) Integration
|
32 | |||
(b) Successors; Transferability
|
32 | |||
(c) Beneficiaries
|
32 | |||
(d) Notices
|
33 | |||
(e) Reformation
|
33 | |||
(f) Headings
|
33 | |||
(g) No General Waivers
|
33 | |||
(h) No Obligation To Mitigate
|
33 | |||
(i) Offsets; Withholding
|
34 | |||
(j) Successors and Assigns
|
34 | |||
(k) Counterparts
|
34 | |||
13. Indemnification
|
34 | |||
|
||||
Attachment A
|
iii
2
3
(i) | Executive will participate as Senior Vice President in all executive and employee vacation and time-off programs; | ||
(ii) | The Bank will provide Executive with coverage as Senior Vice President with respect to long-term disability insurance; | ||
(iii) | Executive will be covered by Bank-paid group term life insurance; and | ||
(iv) | Executive will be entitled to benefits under the Supplemental Savings and Retirement Plan (the SERP) in accordance with the terms thereof, with the effective date of Executives participation therein to be the Effective Date. |
4
(i) | Executives Compensation Accrued at Termination (as defined in Section 8(c)); | ||
(ii) | In lieu of any annual incentive compensation under Section 4(b) for the year in which Executives employment terminated, a lump sum amount equal to the portion of annual incentive compensation that would have become payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for that year if his employment had not terminated, based on performance actually achieved in that year (determined by the Committee following completion of the performance year and paid at the time specified in the applicable plan), multiplied by a fraction the numerator of which is the number of days Executive was employed in the year of termination and the denominator of which is the total number of days in the year of termination; |
5
(iii) | The vesting and exercisability of stock options held by Executive at termination and all other terms of such options shall be governed by the plans and programs and the agreements and other documents pursuant to which such options were granted (subject to Section 10(f) hereof); | ||
(iv) | All restricted stock and deferred stock awards, including outstanding stock plan awards, all other long-term incentive awards, and all deferral arrangements under Section 5(d), shall be governed by the plans and programs under which the awards were granted or governing the deferral, and all rights under the SERP and any other benefit plan shall be governed by such plans; and | ||
(v) | Upon Retirement, if Executive is not eligible for retiree coverage under the Banks health plan (the Health Plan) or Medicare and provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive a lump sum amount equal on an after-tax basis to the present value of the total cost of medical coverage under the Health Plan that would have been incurred by both Executive and the Bank on behalf of Executive (and his spouse and eligible dependents, if any, for whom coverage had been provided under the Health Plan immediately prior to Executives Retirement) from the date of Executives Retirement until Executives attainment of Social Security retirement age had Executive remained employed by the Bank during such period, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year of Executives Retirement. Such lump sum amount shall be calculated by an actuary selected by the Bank and paid in cash at the time specified in Section 6(d). Such amount shall not be subject to reduction or forfeiture by reason of any coverage for which Executive may thereafter become eligible by reason of subsequent employment or otherwise. For purposes of this Section, present value shall be calculated on the basis of the discount rate set forth in the Banks qualified retirement plan for the determination of lump sum payments. |
(i) | Executives Compensation Accrued at Termination; | ||
(ii) | In lieu of any annual incentive compensation under Section 4(b) for the year in which Executives death occurred, a lump sum amount equal to the portion of annual incentive compensation that would have become payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for that year if his employment had not |
6
terminated, based on performance actually achieved in that year (determined by the Committee following completion of the performance year and paid at the time specified in the applicable plan), multiplied by a fraction the numerator of which is the number of days Executive was employed in the year of his death and the denominator of which is the total number of days in the year of death; |
(iii) | The vesting and exercisability of stock options held by Executive at death and all other terms of such options shall be governed by the plans and programs and the agreements and other documents pursuant to which such options were granted; | ||
(iv) | All restricted stock and deferred stock awards, including outstanding stock plan awards, all other long-term incentive awards, and all deferral arrangements under Section 5(d), shall be governed by the plans and programs under which the awards were granted or governing the deferral, and all rights under the SERP and any other benefit plan shall be governed by such plans; | ||
(v) | If Executives surviving spouse (and eligible dependents, if any) elects continued coverage under the Banks Health Plan in accordance with the applicable provisions of COBRA, the Bank shall pay to Executives surviving spouse on a monthly basis during such COBRA continuation period and in accordance with Section 7(g) of this Agreement an amount equal on an after-tax basis to the total cost of such coverage. No further benefits shall be paid under this Section after the expiration of the maximum COBRA continuation period available to Executives surviving spouse and eligible dependents, if any. |
(i) | Executives Compensation Accrued at Termination; | ||
(ii) | In lieu of any annual incentive compensation under Section 4(b) for the year in which Executives employment terminated, a lump sum amount equal to the portion of annual incentive compensation that would have become payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for that year if his employment had not terminated, based on performance actually achieved in that year (determined by the Committee following completion of the performance year and paid at the time specified in the applicable plan), multiplied by a fraction the numerator of which is the number of days Executive was |
7
employed in the year of termination and the denominator of which is the total number of days in the year of termination; |
(iii) | Stock options held by Executive at termination shall be governed by the plans and programs and the agreements and other documents pursuant to which such options were granted; | ||
(iv) | Any performance objectives upon which the earning of performance-based restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards is conditioned shall be deemed to have been met at target level at the date of termination, and restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards (to the extent then or previously earned, in the case of performance-based awards) shall become fully vested and non-forfeitable at the date of such termination, and, in other respects, such awards shall be governed by the plans and programs and the agreements and other documents pursuant to which such awards were granted; | ||
(v) | Disability benefits shall be payable in accordance with the Banks plans, programs and policies, including the SERP, and all deferral arrangements under Section 5(d) will be settled in accordance with the plans and programs governing the deferral; | ||
(vi) | Upon termination of Executives employment due to Disability, if Executive is not eligible for retiree coverage under the Banks Health Plan or Medicare and provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive a lump sum amount equal on an after-tax basis to the present value of the total cost of medical coverage under the Health Plan that would have been incurred by both Executive and the Bank on behalf of Executive (and his spouse and eligible dependents, if any, for whom coverage had been provided under the Health Plan immediately prior to Executives termination of employment) from the date of Executives termination of employment until Executives attainment of Social Security retirement age had Executive remained employed by the Bank during such period, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year of Executives termination of employment. Such lump sum amount shall be calculated by an actuary selected by the Bank and paid in cash at the time specified in Section 6(d). Such amount shall not be subject to reduction or forfeiture by reason of any coverage for which Executive may thereafter become eligible by reason of subsequent employment or otherwise. In addition, provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive at the time specified in Section 6(d) a lump sum amount equal on an after-tax basis to the present value of the sum of (A) the amount that Executive and the Bank would have paid, had |
8
he remained employed, for coverage under the Banks group long-term disability policy from the date of Executives termination of employment until Executives attainment of Social Security retirement age, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year in which Executives termination occurred; and (B) the amount that Executive and the Bank would have paid to continue Executives group life insurance coverage, had he remained employed, from the date of Executives termination of employment until Executives attainment of Social Security retirement age, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year in which Executives termination occurred. For purposes of this Section, present value shall be calculated on the basis of the discount rate set forth in the Banks qualified retirement plan for the determination of lump sum payments. |
9
(i) | Executives Compensation Accrued at Termination (as defined in Section 8(c)); | ||
(ii) | All stock options, restricted stock and deferred stock awards, including outstanding stock plan awards, and all other long-term incentive awards will be governed by the terms of the plans and programs under which the awards were granted; and | ||
(iii) | All deferral arrangements under Section 5(d) will be settled in accordance with the plans and programs governing the deferral, and all rights, if any, under the SERP and any other benefit plan shall be governed by such plans. |
(i) | Executives Compensation Accrued at Termination; | ||
(ii) | All stock options, restricted stock and deferred stock awards, including outstanding stock plan awards, and all other long-term incentive awards will be governed by the terms of the plans and programs under which the awards were granted; | ||
(iii) | All deferral arrangements under Section 5(d) will be settled in accordance with the plans and programs governing the deferral, and all rights under the SERP and any other benefit plan shall be governed by such plans. |
10
(i) | Executives Compensation Accrued at Termination; | ||
(ii) | Cash in an aggregate amount equal to one and one-half (1.5) times the sum of (A) Executives Base Salary under Section 4(a) immediately prior to termination plus (B) an amount equal to the greater of (x) the portion of Executives annual target incentive compensation potentially payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for the year of termination or (y) the portion of Executives annual incentive compensation that became payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for the latest year preceding the year of termination based on performance actually achieved in that latest year. The amount determined to be payable under this Section 7(c)(ii) shall be payable a lump sum; | ||
(iii) | In lieu of any annual incentive compensation under Section 4(b) for the year in which Executives employment terminated, a lump sum amount equal to the portion of Executives annual target incentive compensation potentially payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for the year of termination, multiplied by a fraction the numerator of which is the number of days Executive was employed in the year of termination and the denominator of which is the total number of days in the year of termination; | ||
(iv) | Stock options held by Executive at termination, if not then vested and exercisable, will become fully vested and exercisable at the date of such termination, and, in other respects (including the period following termination during which such options may be exercised), such options shall be governed by the plans and programs and the agreements and other documents pursuant to which such options were granted; |
11
(v) | Any performance objectives upon which the earning of performance-based restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards is conditioned shall be deemed to have been met at target level at the date of termination, and restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards (to the extent then or previously earned, in the case of performance-based awards) shall become fully vested and non-forfeitable at the date of such termination, and, in other respects, such awards shall be governed by the plans and programs and the agreements and other documents pursuant to which such awards were granted; | ||
(vi) | All deferral arrangements under Section 5(d) will be settled in accordance with the plans and programs governing the deferral; | ||
(vii) | All rights under the SERP shall be governed by such plan; | ||
(viii) | Upon termination of Executives employment hereunder, if Executive is not eligible for retiree coverage under the Banks Health Plan or Medicare and provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive a lump sum amount equal on an after-tax basis to the present value of the total cost of medical coverage under the Health Plan that would have been incurred by both Executive and the Bank on behalf of Executive (and his spouse and eligible dependents, if any, for whom coverage had been provided under the Health Plan immediately prior to Executives termination of employment) from the date of Executives termination of employment until the third anniversary of such date, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year of Executives termination of employment. Such lump sum amount shall be calculated by an actuary selected by the Bank and paid in cash at the time specified in Section 7(g). Such amount shall not be subject to reduction or forfeiture by reason of any coverage for which Executive may thereafter become eligible by reason of subsequent employment or otherwise. In addition, provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive at the time specified in Section 7(g) a lump sum amount equal on an after-tax basis to the present value of the sum of (A) the amount that Executive and the Bank would have paid, had he remained employed, for coverage under the Banks group long-term disability policy from the date of Executives termination of employment until the third anniversary of Executives termination of employment, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year in which Executives termination occurred; and (B) the amount that Executive and the Bank would have paid to continue Executives group life insurance coverage, had he remained employed, from the date of Executives termination of employment until |
12
the third anniversary of Executives termination of employment, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year in which Executives termination occurred. For purposes of this Section, present value shall be calculated on the basis of the discount rate set forth in the Banks qualified retirement plan for the determination of lump sum payments. |
(i) | Executives Compensation Accrued at Termination; | ||
(ii) | Cash in an aggregate amount equal to one and one-half (1.5) times the sum of (A) Executives Base Salary under Section 4(a) immediately prior to termination plus (B) an amount equal to the greater of (x) the portion of Executives annual target incentive compensation potentially payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for the year of termination or (y) the portion of Executives annual incentive compensation that became payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for the latest year preceding the year of termination based on performance actually achieved in that latest year. The amount determined to be payable under this Section 7(d)(ii) shall be payable in a lump sum; | ||
(iii) | In lieu of any annual incentive compensation under Section 4(b) for the year in which Executives employment terminated, a lump sum amount equal to the portion of Executives annual target incentive compensation potentially payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for the year of termination, multiplied by a fraction the numerator of which is the number of days Executive was employed in the year of termination and the denominator of which is the total number of days in the year of termination; | ||
(iv) | Stock options held by Executive at termination, if not then vested and exercisable, will become fully vested and exercisable at the date of such termination, and, in other respects (including the period following termination during which such options may be exercised), such options |
13
shall be governed by the plans and programs and the agreements and other documents pursuant to which such options were granted; |
(v) | Any performance objectives upon which the earning of performance-based restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards is conditioned shall be deemed to have been met at target level at the date of termination, and restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards (to the extent then or previously earned, in the case of performance-based awards) shall become fully vested and non-forfeitable at the date of such termination, and, in other respects, such awards shall be governed by the plans and programs and the agreements and other documents pursuant to which such awards were granted; | ||
(vi) | All deferral arrangements under Section 5(d) will be settled in accordance with the plans and programs governing the deferral; | ||
(vii) | All rights under the SERP shall be governed by such plan; and | ||
(viii) | Upon termination of Executives employment hereunder, if Executive is not eligible for retiree coverage under the Banks Health Plan or Medicare and provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive a lump sum amount equal on an after-tax basis to the present value of the total cost of medical coverage under the Health Plan that would have been incurred by both Executive and the Bank on behalf of Executive (and his spouse and eligible dependents, if any, for whom coverage had been provided under the Health Plan immediately prior to Executives termination of employment) from the date of Executives termination of employment until the third anniversary of such date, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year of Executives termination of employment. Such lump sum amount shall be calculated by an actuary selected by the Bank and paid in cash at the time specified in Section 7(g). Such amount shall not be subject to reduction or forfeiture by reason of any coverage for which Executive may thereafter become eligible by reason of subsequent employment or otherwise. In addition, provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive at the time specified in Section 7(g) a lump sum amount equal on an after-tax basis to the present value of the sum of (A) the amount that Executive and the Bank would have paid, had he remained employed, for coverage under the Banks group long-term disability policy from the date of Executives termination of employment until the third anniversary of Executives termination of employment, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year in which Executives termination occurred; |
14
and (B) the amount that Executive and the Bank would have paid to continue Executives group life insurance coverage, had he remained employed, from the date of Executives termination of employment until the third anniversary of Executives termination of employment, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year in which Executives termination occurred. For purposes of this Section, present value shall be calculated on the basis of the discount rate set forth in the Banks qualified retirement plan for the determination of lump sum payments. |
(i) | Executives Compensation Accrued at Termination; | ||
(ii) | Cash in an aggregate amount equal to three times the sum of (A) Executives Base Salary under Section 4(a) immediately prior to termination plus (B) an amount equal to the greater of (x) the portion of Executives annual target incentive compensation potentially payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for the year of termination or (y) the portion of Executives annual incentive compensation that became payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for the latest year preceding the year of termination based on performance actually achieved in that latest year. The amount determined to be payable under this Section 7(e)(ii) shall be paid by the Bank in a lump sum; |
15
(iii) | In lieu of any annual incentive compensation under Section 4(b) for the year in which Executives employment terminated, a lump sum amount equal to the portion of Executives annual target incentive compensation potentially payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for the year of termination, multiplied by a fraction the numerator of which is the number of days Executive was employed in the year of termination and the denominator of which is the total number of days in the year of termination; | ||
(iv) | Stock options held by Executive at termination, if not then vested and exercisable, will become fully vested and exercisable at the date of such termination, and any such options granted on or after the Effective Date shall remain outstanding and exercisable until the stated expiration date of the Option as though Executives employment did not terminate, and, in other respects, such options shall be governed by the plans and programs and the agreements and other documents pursuant to which such options were granted; | ||
(v) | Any performance objectives upon which the earning of performance-based restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards is conditioned shall be deemed to have been met at target level at the date of termination, and restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards (to the extent then or previously earned, in the case of performance-based awards) shall become fully vested and non-forfeitable at the date of such termination, and, in other respects, such awards shall be governed by the plans and programs and the agreements and other documents pursuant to which such awards were granted; | ||
(vi) | All deferral arrangements under Section 5(d) will be settled in accordance with the plans and programs governing the deferral; | ||
(vii) | All rights under the SERP shall be governed by such plan; and | ||
(viii) | Upon termination of Executives employment hereunder, if Executive is not eligible for retiree coverage under the Banks Health Plan or Medicare and provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive a lump sum amount equal on an after-tax basis to the present value of the total cost of medical coverage under the Health Plan that would have been incurred by both Executive and the Bank on behalf of Executive (and his spouse and eligible dependents, if any, for whom coverage had been provided under the Health Plan immediately prior to Executives termination of employment) from the date of Executives termination of employment until the third anniversary of such date, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year of Executives termination of employment. Such lump sum |
16
amount shall be calculated by an actuary selected by the Bank and paid in cash at the time specified in Section 7(g). Such amount shall not be subject to reduction or forfeiture by reason of any coverage for which Executive may thereafter become eligible by reason of subsequent employment or otherwise. In addition, provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive at the time specified in Section 7(g) a lump sum amount equal on an after-tax basis to the present value of the sum of (A) the amount that Executive and the Bank would have paid, had he remained employed, for coverage under the Banks group long-term disability policy from the date of Executives termination of employment until the third anniversary of Executives termination of employment, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year in which Executives termination occurred; and (B) the amount that Executive and the Bank would have paid to continue Executives group life insurance coverage, had he remained employed, from the date of Executives termination of employment until the third anniversary of Executives termination of employment, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year in which Executives termination occurred. For purposes of this Section, present value shall be calculated on the basis of the discount rate set forth in the Banks qualified retirement plan for the determination of lump sum payments. |
(i) | Executives Compensation Accrued at Termination; | ||
(ii) | Cash in an aggregate amount equal to three times the sum of (A) Executives Base Salary under Section 4(a) immediately prior to termination plus (B) an amount equal to the greater of (x) the portion of Executives annual target incentive compensation potentially payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for the year of termination or (y) the portion of Executives annual incentive compensation that became payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash |
17
awards) for the latest year preceding the year of termination based on performance actually achieved in that latest year. The amount determined to be payable under this Section 7(f)(ii) shall be paid by the Bank in a lump sum; |
(iii) | In lieu of any annual incentive compensation under Section 4(b) for the year in which Executives employment terminated, a lump sum amount equal to the portion of Executives annual target incentive compensation potentially payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for the year of termination, multiplied by a fraction the numerator of which is the number of days Executive was employed in the year of termination and the denominator of which is the total number of days in the year of termination; | ||
(iv) | Stock options held by Executive at termination, if not then vested and exercisable, will become fully vested and exercisable at the date of such termination, and any such options granted on or after the Effective Date shall remain outstanding and exercisable until the stated expiration date of the Option as though Executives employment did not terminate, and, in other respects, such options shall be governed by the plans and programs and the agreements and other documents pursuant to which such options were granted; | ||
(v) | Any performance objectives upon which the earning of performance-based restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards is conditioned shall be deemed to have been met at target level at the date of termination, and restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards (to the extent then or previously earned, in the case of performance-based awards) shall become fully vested and non-forfeitable at the date of such termination, and, in other respects, such awards shall be governed by the plans and programs and the agreements and other documents pursuant to which such awards were granted; | ||
(vi) | All deferral arrangements under Section 5(d) will be settled in accordance with the plans and programs governing the deferral; | ||
(vii) | All rights under the SERP shall be governed by such plan; and | ||
(viii) | Upon termination of Executives employment hereunder, if Executive is not eligible for retiree coverage under the Banks Health Plan or Medicare and provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive a lump sum amount equal on an after-tax basis to the present value of the total cost of medical coverage under the Health Plan that would have been incurred by both Executive and the Bank on behalf of Executive (and his spouse and eligible dependents, if any, for whom coverage had been provided under |
18
the Health Plan immediately prior to Executives termination of employment) from the date of Executives termination of employment until the third anniversary of such date, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year of Executives termination of employment. Such lump sum amount shall be calculated by an actuary selected by the Bank and paid in cash at the time specified in Section 7(g). Such amount shall not be subject to reduction or forfeiture by reason of any coverage for which Executive may thereafter become eligible by reason of subsequent employment or otherwise. In addition, provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive at the time specified in Section 7(g) a lump sum amount equal on an after-tax basis to the present value of the sum of (A) the amount that Executive and the Bank would have paid, had he remained employed, for coverage under the Banks group long-term disability policy from the date of Executives termination of employment until the third anniversary of Executives termination of employment, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year in which Executives termination occurred; and (B) the amount that Executive and the Bank would have paid to continue Executives group life insurance coverage, had he remained employed, from the date of Executives termination of employment until the third anniversary of Executives termination of employment, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year in which Executives termination occurred. For purposes of this Section, present value shall be calculated on the basis of the discount rate set forth in the Banks qualified retirement plan for the determination of lump sum payments. |
(i) | Whether the Executive has had a termination of employment shall be determined on the basis of all relevant facts and circumstances and with reference to Regulations Section 1.409A-1(h). | ||
(ii) | Whether a termination is deemed to be at or within two years after a Change in Control for purposes of Sections 7(c), (d), (e), or (f) is determined at the date of termination, regardless of whether the Change in Control had occurred at the time a notice of termination was given. In the event Executives employment terminates for any reason set forth in |
19
Section 7(b) through (f), Executive will be entitled to the benefit of any terms of plans or agreements applicable to Executive which are more favorable than those specified in this Section 7 (except in the case of annual incentives in lieu of which amounts are paid hereunder). | |||
(iii) | Amounts payable under this Section 7 following Executives termination of employment, other than those expressly payable on a deferred basis, will be paid in the payroll period next following the payroll period in which termination of employment occurs except as otherwise provided in this Section 7. | ||
(iv) | Any reimbursements made or in-kind benefits provided under this Agreement shall be subject to the following conditions: |
(A) | the amount of expenses eligible for reimbursement or in-kind benefits provided in any one taxable year of Executive shall not affect the amount of expenses eligible for reimbursement or in-kind benefits provided in any other taxable year of Executive; | ||
(B) | the reimbursement of any expense shall be made each calendar quarter not later than the last day of Executives taxable year following Executives taxable year in which the expense was incurred (unless this Agreement specifically provides for reimbursement by an earlier date); | ||
(C) | the right to reimbursement of an expense or payment of an in-kind benefit shall not be subject to liquidation or exchange for another benefit. |
In addition, with respect to any reimbursement made under Section 6(b)(v) for expenses for medical coverage purchased by Executives spouse, any such reimbursement made during the period of time Executives spouse or dependents would be entitled to continuation coverage under the Banks Health Plan pursuant to COBRA if Executives spouse or dependents had elected such coverage and paid the applicable premiums shall be exempt from Section 409A of the Code and the six-month delay in payment described hereinbelow pursuant to Section 1.409A-1(b)(9)(v)(B) of the Regulations. |
(v) | Executives right to reimbursements under this Agreement shall be treated as a right to a series of separate payments under Section 1.409A-2(b)(2)(iii) of the Regulations. | ||
(vi) | Any tax gross-up payments made under this Agreement, within the meaning provided by Section 1.409A-3(i)(1)(v) of the Regulations, shall be made by the end of Executives taxable year next following Executives taxable year in which he remits |
20
the related taxes (unless this Agreement specifically provides for payment by an earlier date). | |||
(vii) | It is intended that payments made under this Agreement due to Executives termination of employment which are paid on or before the 15th day of the third month following the end of Executives taxable year in which his termination of employment occurs shall be exempt from compliance with Section 409A of the Code pursuant to the exemption for short-term deferrals set forth in Section 1.409A-1(b)(4) of the Regulations (the Exempt Short-Term Deferral Payments); and that payments under this Agreement, other than Exempt Short-Term Deferral Payments, that are made on or before the last day of the second taxable year following the taxable year in which Executive terminates employment in an aggregate amount not exceeding two times the lesser of: (A) the sum of Executives annualized compensation based on his annual rate of pay for the taxable year preceding the taxable year in which he terminates employment (adjusted for any increase during that year that was expected to continue indefinitely if he had not terminated employment); or (B) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Executive terminates employment shall be exempt from compliance with Section 409A of the Code pursuant to the exception for payments under a separation pay plan as set forth in Section 1.409A-1(b)(9)(iii) of the Treasury Regulations. If, under the terms of this Agreement, it is possible for a payment that is subject to Section 409A to be made in two separate taxable years, payment shall be made in the later taxable year. | ||
(viii) | Anything in this Agreement to the contrary notwithstanding, payments to be made under this Agreement upon termination of Executives employment which are subject to Section 409A of the Code shall be delayed for six months following such termination of employment if Executive is a Specified Employee as defined in Section 8(g) on the date of his termination of employment. Any payment or reimbursement due within such six-month period shall be delayed to the end of such six-month period. The Bank will adjust the payment or reimbursement to reflect the deferred payment date by multiplying the payment or reimbursement by the product of the six-month CMT Treasury Bill annualized yield rate as published by the U.S. Treasury for the date on which such payment or reimbursement would have been made but for the delay multiplied by a fraction, the numerator of which is the number of days by which such payment or reimbursement was delayed and the denominator of which is 365. In the event of a reimbursement that is required by |
21
other terms of this Agreement to be made on an after-tax basis and which is subject to the six-month delay provided herein, the reimbursement as adjusted in accordance with this Section 7(g) to reflect the deferred payment date shall be paid to Executive on an after-tax and fully grossed-up basis so that Executive is held economically harmless. The Bank will pay the adjusted payment or reimbursement at the beginning of the seventh month following Executives termination of employment. Notwithstanding the foregoing, if calculation of the amounts payable by any payment date specified in this Section 7(g) is not administratively practicable due to events beyond the control of Executive (or Executives beneficiary or estate) and for reasons that are commercially reasonable, payment will be made as soon as administratively practicable in compliance with Section 409A of the Code and the Regulations thereunder. In the event of Executives death during such six-month period, payment will be made in the payroll period next following the payroll period in which Executives death occurs. |
(i) | Executives willful and continued failure to substantially perform his duties hereunder (other than any such failure resulting from incapacity due to physical or mental illness or Disability or any failure after the issuance of a notice of termination by Executive for Good Reason) which failure is demonstrably and materially damaging to the financial condition or reputation of the Company, the Bank and/or their affiliates, and which failure continues more than 48 hours after a written demand for substantial performance is delivered to Executive by the Board, which demand specifically identifies the manner in which the Board believes that Executive has not substantially performed his duties hereunder and the demonstrable and material damage caused thereby; or | ||
(ii) | the willful engaging by Executive in conduct which is demonstrably and materially injurious to the Company, the Bank or their affiliates, monetarily or otherwise. |
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(i) | the Company, or the mutual holding company parent of the Company, whether it remains a mutual holding company or converts to the stock form of organization (the Mutual Holding Company), merges into or consolidates with another corporation, or merges another corporation into the Company or the Mutual Holding Company, and as a result, with respect to the Company, less than a majority of the combined voting power of the resulting corporation immediately after the merger or consolidation is held by Persons as such term is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act) who were stockholders of the Company immediately before the merger or consolidation or, with respect to the Mutual Holding Company, less than a majority of the directors of the resulting corporation immediately after the merger or consolidation were directors of the Mutual Holding Company immediately before the merger or consolidation; | ||
(ii) | following a conversion of the Mutual Holding Company to the stock form of organization, any Person (other than any trustee or other fiduciary holding securities under an employee benefit plan of the Bank or the Company), becomes the Beneficial Owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the resulting corporation representing 50% or more of the combined voting power of the resulting corporations then-outstanding securities; | ||
(iii) | during any period of twenty-four months (not including any period prior to the Effective Date of this Agreement), individuals who at the beginning of such period constitute the board of directors of the Company, and any new director (other than (A) a director nominated by a Person who has entered into an agreement with the Company to effect a transaction described in Sections (8)(b)(i), (ii) or (iv) hereof, (B) a director nominated by any Person (including the Company) who publicly announces an intention to take or to consider taking actions (including, but not limited to, an actual or threatened proxy contest) which if consummated would constitute a Change in Control or (C) a director nominated by any Person who is the Beneficial Owner, directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Companys securities) whose election by the board of directors of the Company or nomination for election by the Companys stockholders was approved in advance 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 |
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or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof; | |||
(iv) | the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Companys assets; or | ||
(v) | the board of directors of the Company adopts a resolution to the effect that, for purposes of this Agreement, a Change in Control has occurred. |
(i) | The unpaid portion of annual base salary at the rate payable, in accordance with Section 4(a) hereof, at the date of Executives termination of employment, pro rated through such date of termination, payable in a lump sum at the time specified in Section 6(d) or 7(g) as the case may be; | ||
(ii) | All vested, nonforfeitable amounts owing or accrued at the date of Executives termination of employment under any compensation and benefit plans, programs, and arrangements set forth or referred to in Sections 4(b) and 5(a) and 5(b) hereof (including any earned and vested annual incentive compensation and long-term incentive award) in which Executive theretofore participated, payable in accordance with the terms and conditions of the plans, programs, and arrangements (and agreements and documents thereunder) pursuant to which such compensation and benefits were granted or accrued; and | ||
(iii) | Reasonable business expenses and disbursements incurred by Executive prior to Executives termination of employment, to be reimbursed to Executive, as authorized under Section 5(f), in accordance the Companys reimbursement policies as in effect at the date of such termination, and payable in a lump sum in accordance with Section 7(g). |
(i) | the assignment to Executive of duties materially inconsistent with Executives position and status as Senior Vice President, or an alteration, materially adverse to Executive, in Executives position and status as Senior Vice President or in the nature of Executives duties, |
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responsibilities, and authorities or conditions of Executives employment from those relating to Executive position and status as Senior Vice President (excluding changes in assignments permitted under Section 3); except the foregoing shall not constitute Good Reason if occurring in connection with the termination of Executives employment for Cause, Disability, Retirement, as a result of Executives death, or as a result of action by or with the consent of Executive; | |||
(ii) | (A) a material reduction by the Bank in Executives Base Salary, (B) the setting of Executives annual target incentive opportunity or payment of earned annual incentive not in material conformity with Section 4 hereof, (C) a change in compensation or benefits not in material conformity with Section 5, or (D) a material reduction, after a Change in Control, in perquisites from the level of such perquisites as in effect immediately prior to the Change in Control or as the same may have been increased from time to time after the Change in Control, except for across-the-board perquisite reductions similarly affecting all senior executives of the Bank and all senior executives of any Person in control of the Company; | ||
(iii) | the relocation of the principal place of Executives employment to a site that is outside of a fifty mile radius of his principal place of employment prior to such relocation; for this purpose, required travel on the Banks business will not constitute a relocation so long as the extent of such travel is substantially consistent with Executives customary business travel obligations in periods prior to the Effective Date; | ||
(iv) | the failure by the Bank to pay to Executive any material portion of Executives compensation or to pay to Executive any material portion of an installment of deferred compensation under any deferred compensation program of the Bank within a reasonable time after the date such compensation is due; | ||
(v) | the failure by the Bank to continue in effect any material compensation or benefit plan in which Executive participated immediately prior to a Change in Control, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Bank to continue Executives participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amounts of compensation or benefits provided and the level of Executives participation relative to other participants, as existed at the time of the Change in Control; | ||
(vi) | the failure of the Bank to obtain a satisfactory agreement from any successor to the Bank, the Company or the Mutual Holding Company to fully assume the Banks and the Companys obligations and to perform under this Agreement, as contemplated in Section 12(b) hereof, in a form reasonably acceptable to Executive; or |
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(vii) | any other failure by the Bank or the Company to perform any material obligation under, or breach by the Bank or the Company of any material provision of, this Agreement; |
(i) | the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control; | ||
(ii) | any Person (including the Company) publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change in Control; or | ||
(iii) | the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred. |
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(i) | Negotiation . The Bank and the Company (collectively, the Employer) and Executive shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiation between the Chief Executive Officer of the Bank and Executive. Any party may give the other party written notice of any dispute in accordance with the notice procedures set forth in Section 12(d). Within 15 days after delivery of the notice, the receiving party shall submit to the other, in accordance with the notice procedures set forth in Section 12(d), a written response. The notice and response shall include a statement of that partys position and summary of arguments supporting that position. Within 30 days after delivery of the initial notice, the parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to attempt to resolve the dispute. All negotiations pursuant to this clause (i) are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence. | ||
(ii) | Mediation . If the dispute has not been resolved by negotiation as provided herein within 45 days after delivery of the initial notice of negotiation, or if the parties failed to meet within 30 days after delivery, the parties shall endeavor to settle the dispute by mediation under the CPR Mediation Procedure then currently in effect; provided, however, that if one party fails to participate in the negotiation as provided herein, the other party can initiate mediation prior to the expiration of the 45 days. Unless otherwise agreed, the parties will select a mediator from the CPR Panels of Distinguished Neutrals. | ||
(iii) | Arbitration . Any dispute arising under or in connection with this Agreement which has not been resolved by mediation as provided herein within 45 days after initiation of the mediation procedure, shall be finally resolved by arbitration in accordance with the CPR Rules for Non-Administered Arbitration then currently in effect, by three independent and impartial arbitrators, of whom each party shall designate one; provided, however, that if one party fails to participate in either the negotiation or mediation as agreed herein, the other party can commence arbitration prior to the expiration of the time periods set forth above. The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§1-16, and judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof. The place of arbitration shall be Hartford, Connecticut. For purposes of entering any judgment upon an award rendered by the arbitrators, the Company, the Bank and Executive hereby consent to the jurisdiction of any or all of the following courts: (i) the United States District Court for the District of Connecticut, (ii) any of the courts of the State of Connecticut, or (iii) any other court having jurisdiction. The Company, the Bank and Executive hereby agree that a judgment upon an award rendered by the arbitrators may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Subject to Section 11(b) of this Agreement, the |
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Bank shall bear all costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 11(c) in accordance with the provisions of Section 7(g) of this Agreement, but not later than the last day of the year in which the expense was incurred. Notwithstanding any provision in this Section 11(c), Executive shall be entitled to seek specific performance of Executives right to be paid during the pendency of any dispute or controversy arising under or in connection with this Agreement. |
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If to the Bank or the Company: | |||
ROCKVILLE BANK
1645 Ellington Road South Windsor, CT 06074 Att: Chief Executive Officer |
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If to Executive: | |||
Mark A. Kucia
23 Highwood Road Farmington, CT 06032 |
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ROCKVILLE BANK
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By: | /s/ Richard J. Trachimowicz | |||
Name: | Richard J. Trachimowicz | |||
Title: | EVP | |||
ROCKVILLE FINANCIAL, INC.
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By: | /s/ Richard J. Trachimowicz | |||
Name: | Richard J. Trachimowicz | |||
Title: | EVP | |||
/s/ Mark A. Kucia | ||||
Mark A. Kucia | ||||
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Name:
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Signature:
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Date: | |
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Received By:
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Date: |
2
By: |
/s/ William
J. McGurk
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By: |
/s/ John
T. Lund
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