SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPOT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report:
April 17, 2006
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Century Bancorp, Inc.
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(Exact name of registrant as specified in its charter)
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Massachusetts
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0-15752
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04-2498617
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(State or other jurisdiction
of incorporation)
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(Commission File No.)
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(IRS Employer
Identification No.)
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400 Mystic Avenue
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Medford, MA
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02155
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(Address of principal executive offices)
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(Zip Code)
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(781) 391-4000
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(Registrant’s telephone number, including area code)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01
Entry into a Material Definitive Agreement
Century Bancorp, Inc. (the “Company”) announced on April 14, 2006 it was entering into agreements
with Marshall M. Sloane and Paul V. Cusick, Jr. pursuant to which each would perform future
consulting services for the Company as approved by the Board of Directors of the Company at its
Annual Meeting on April 11, 2004. The material terms and conditions of such agreements were
contained in the Company’s Press Release of April 14, 2006, which is attached hereto as Exhibit
99.1. In the Consulting Services Agreement with Mr. Sloane, which is attached as Exhibit 10.1, Mr.
Sloane also undertakes noncompetition and confidentiality constraints for the protection of the
Company. The agreement provides in addition that in the event the Company is ever sold, any
acquiring company would be required to honor the Agreement dated as of December 28, 2001 that the
Company’s subsidiary, Century Bank and Trust Company had entered into with Mr. Sloane providing for
the freezing of benefits under Mr. Sloane’s Supplemental Executive/Insurance Retirement Income Plan
in consideration for the Company’s acquisition of split dollar life insurance with a death benefit
to Mr. Sloane’s assignee of $25 million. The policy, which is owned by the Company, would also at
the present time pay a benefit to the Company of approximately $9.9 million. The Company also
entered into a letter agreement with Mr. Cusick, attached as Exhibit 10.2, to be followed by a
formal Consulting Services Agreement at the time of his retirement containing the terms of the
letter. Mr. Cusick’s Consulting Services Agreement will also contain noncompetition and
confidentiality constraints.
Item 5.02
Departure of Directors or Principal Officers, Election of Directors, Appointment of Principal Officers
On April 11, 2006, Marshall M. Sloane completed a management transition plan previously announced
and retired as Chief Executive Officer of Century Bancorp, Inc. and, as expected, was succeeded by
his two sons, Barry and Jonathan Sloane, as Co-CEOs of the Company. See the Company’s Press
Release dated April 14, 2006 attached as Exhibit 99.1.
Item 9.01
Financial Statements and Exhibits
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(c)
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Exhibits
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10.1 Consulting Services Agreement between Century Bancorp, Inc. and Marshall M. Sloane dated
as of April 14, 2006
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10.2 Letter agreement between Century Bancorp, Inc. and Paul V. Cusick dated as of April 14, 2006.
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99.1 Century Bancorp, Inc. press release dated April 14, 2006.
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SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CENTURY BANCORP, INC.
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/s/ Paul V. Cusick, Jr.
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Paul V. Cusick, Jr.
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Vice President and Treasurer
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Dated: April 17, 2006
Exhibit 10.1
CONSULTING SERVICES AGREEMENT
This Agreement is made as of the 14
th
day of April 2006 by and between Marshall M.
Sloane (hereinafter the “Consultant”) and Century Bancorp, Inc. (the “Company”) and its subsidiary,
Century Bank and Trust Company (the “Bank”) (hereinafter collectively referred to as “Century”).
WHEREAS, Century desires to engage Consultant as an independent contractor to provide services
to Century based on Consultant’s long and extensive experience and knowledge of Century and the
banking industry;
WHEREAS, Consultant desires in connection with retirement from his position as Chief Executive
Officer of the Company to accept such engagement on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and other valuable consideration and of the
mutual covenants and agreement contained herein the parties hereby agree as follows:
1.
CONSULTING SERVICES
. Consultant agrees to provide services as an independent contractor.
Services as an independent consultant shall be comprised of general consulting services as
requested by the board of directors of the Company and its Co-Chief Executive Officers, which
services would involve providing the Co-Chief Executive Officers with advice on strategic planning
and operational management, assisting Century in connection with business development efforts and
clients, participation in public relations and community outreach efforts and such other duties as
may be requested by the Board of Directors of the Company and agreed to by the Consultant.
2.
ADDITIONAL SERVICES
. Consultant also agrees to act in the capacities of Chairman of the
Board of the Company and the Bank and serve as a director of the Company and the Bank
Consultant’s role and responsibilities as Chairman of the Company and the Bank and as a
director shall be governed by the Company’s and the Bank’s respective Articles of Organization,
by-laws, policies and resolutions relating thereto. Remuneration for serving in these positions
shall be determined by the applicable Board of Directors. Service in these capacities and
positions shall be at the option of the Consultant and not a requirement of this Agreement.
3.
TERM.
Consultant shall commence services on May 1, 2006 and shall continue until April 30,
2007, provided on April 30, 2007 and each successive one-year anniversary of
4.
this Agreement, its term will automatically renew for an additional one-year term, unless
this Agreement is terminated by mutual agreement of the Company and the Consultant or as otherwise
provided in paragraph 10 hereof or as otherwise provided in paragraph 10 hereof.
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5.
COMPENSATION; EXPENSES.
The Company shall pay the Consultant an annual contract fee of
$275,000 per year beginning on the date hereof, such fee to be payable monthly throughout the year
on the last day of each month. In addition, the Company shall reimburse Consultant for all related
business expenses, including Consultant’s dues in such organizations as the Consultant shall
reasonably determine would be in the best interests of Century. Additionally, the Consultant shall
be reimbursed for the expense of obtaining health insurance comparable to that Century provided to
the Consultant while Consultant was Chief Executive Officer of the Company.
6.
MAINTENANCE OF OFFICE.
During the term of this Agreement, the Company shall continue to
provide and make available to the Consultant his present office facilities, together with the
services of an executive secretary.
7.
PRIOR AGREEMENT.
The Company acknowledges the Agreement between the Bank and the
Consultant dated as of December 28, 2001 (the “Insurance Agreement”) providing for freezing of the
Consultant’s supplemental executive retirement benefit in consideration for certain undertakings by
the Bank. The Company agrees that if it enters into a transaction involving a change in the
control of the Company requiring the approval of the Class A stockholders of the Company, the
Company as a condition of entering into such a transaction will require its counterparty to
specifically agree to honor and perform the Insurance Agreement.
8.
OTHER ACTIVITIES.
Because Consultant will have access to certain confidential information
of Century during the term of this consulting engagement, Consultant agrees that he will not engage
in any competing business activities without specific prior written consent of the Company.
Consultant may conduct other business that does not directly or indirectly compete with that of
Century.
9.
CONFIDENTIALITY.
Consultant shall treat as confidential and shall not divulge, furnish or
make known to or accessible to, or use for his own benefit or for the benefit of anyone other than
Century, any: customer list, customer names, customer financial information, marketing data and
information, pricing information, sales policies, commission structures or any other business
information (hereinafter “Proprietary Information”). Consultant agrees that upon termination of
this Agreement, he will not take with him or copy, damage or destroy any Proprietary Information,
including but not limited to any book, customer list or information, supplier list or information,
record, document, file, data or object relating in any way to the work done or to be done by
Century or its affiliates without prior written consent from the Company. (For the purposes of
this Agreement, “Proprietary Information” shall not include information known to Consultant prior
to any disclosure by Century pursuant hereto, information that becomes available to the Consultant
on a non-confidential basis from a third party unrelated to Century not under a confidentiality
constraint to Century and information which is publicly available, other than as a result of
disclosure by Consultant.)
10.
SPECIFIC PERFORMANCE.
The Consultant acknowledges that the harm to Century will be
irreparable in the event of a violation of the provisions of paragraphs 7 and 8
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hereof and that in
such event the damages Century would sustain would be impossible to ascertain in advance.
Therefore, it is agreed that if Consultant should breach the obligations of referenced paragraphs
then the Company shall be entitled to seek injunctive relief and monetary damages including an
award of reasonable attorney’s fees.
11.
CERTAIN TERMINATION EVENTS.
The Agreement may be terminated by the mutual agreement of
the Company and the Consultant. If Consultant is unable to continue to fully perform the services
contemplated under this Agreement due to his illness, death, disability or other incapacity, the
Company shall be entitled to cease making payments under this Agreement.
12.
TERMINATION PAYMENT
. In the event Consultant’s services are terminated due to
Consultant’s illness, death, disability or other incapacity, the Company will make a one-time lump
sum termination payment of $275,000 to Consultant or his estate, as the case may be.
13.
OUTSTANDING STOCK OPTIONS
. For as long as Consultant remains as a director of the
Company, options to purchase Company Class A common stock previously granted to the Consultant
shall remain exercisable for their full respective option periods.
14.
INDEPENDENT CONTRACTOR STATUS
. Notwithstanding Consultant’s roles as a director and as
Chairman of the Board of Directors of the Company and the Bank, Consultant’s relationship to the
Company under this Agreement shall be that of an independent contractor and not an employee for any
purpose whatsoever of Century. As an independent contractor, Consultant shall have the sole
authority to control and direct the performance of his services, subject to the performance
criteria outlined by the Company. All services shall be subject to the Company’s general rights of
review to assure their satisfactory completion. Consultant agrees that no income, Social Security
or other tax or amount will be withheld or accrued by Century for Consultant. Consultant shall be
fully responsible for Consultant’s own taxes, including self-employment taxes.
15.
MEDIATION AND ARBITRATION.
If any dispute arises under this Agreement, the Consultant and
the Company shall negotiate in good faith to settle such dispute. If the parties cannot resolve
such dispute themselves, then either party may submit the dispute to mediation by a mediator
approved by both parties. If the parties cannot agree to any mediator, or if either party does not
wish to abide by any decision of the mediator, they shall submit the dispute to arbitration by any
mutually acceptable arbitrator, or the American Arbitration Association (AAA). If the AAA is
selected, the arbitration shall take place under the auspices of the Boston, Massachusetts branch.
The costs of arbitration proceeding shall be borne according to the decision of the arbitrator, who
may apportion costs equally, or in accordance with any finding of fault or lack of good faith of
either party. The arbitrator’s award shall be non-appealable and enforceable in any court of
competent jurisdiction.
16.
INDEMNIFICATION
. The Consultant agrees to indemnify and hold harmless Century and their
respective directors, officers, employees and agents from and against any
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losses, claims, damages,
expenses and liabilities, joint or several, (including reasonable attorney’s fees), due to actions,
inactions or claims arising out of, or directly or indirectly related to, the Consultant’s
performance of the Services, the breach of the confidentiality provisions of this Agreement or
Consultant’s failure to comply with any applicable law or regulation.
17.
INDEMNIFICATION BY CENTURY.
The Company will indemnify and hold harmless Consultant
against any and all losses, claims, damages, liabilities, actions, costs or expenses, joint or
several, to which he may become subject (including any legal or other expenses reasonably incurred
by or in connection with investigating any claim against him and defending any action and any
amounts paid in settlement or compromise, provided the Company shall have given its prior written
approval of such expenses, settlement or compromise), insofar as such losses, claims, damages,
liability actions, costs or expenses arise out of or are based upon; (i) the failure of Century or
its employees to comply with applicable laws, rules and regulations in connection with this
Agreement; (ii) personal injury death or property damage occurring on the premises of Century,
including any space used by Consultant; or (iii) the negligence or intentional conduct of Century
or its employees.
The foregoing indemnification is in addition to indemnification from Century, to which
Consultant is entitled (i) in his prior capacities at Century and (ii) in his capacities as a
director and as Chairman of the Company and the Bank and (iii) to which Consultant may be entitled
in connection with Consultant’s acting on behalf of Century under the respective Articles of
Organization and by-laws of the Company and the Bank.
18.
NOTICES.
All notices, requests, demands, and other communications shall be deemed to have
been given if the same shall be in writing and shall be delivered personally or sent by registered
or certified mail, postage prepaid, and addressed as set forth below:
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A.
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If to Consultant:
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B.
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If to Century:
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Marshall M. Sloane
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Barry R. Sloane and Jonathan G. Sloane
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Chairman of the Board
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Co-Chief Executive Officer
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Century Bancorp, Inc.
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Century Bancorp, Inc.
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400 Mystic Avenue
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400 Mystic Avenue
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Medford, Massachusetts 02155
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Medford, Massachusetts 02155
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19.
MISCELLANEOUS.
This Agreement shall be governed by and interpreted under and according to
the laws of the Commonwealth of Massachusetts. This Agreement may not be amended or changed, unless
such amendment or change is made in writing and approved by both the Consultant and the Company.
This Agreement superseded any and all prior oral agreements or understandings relating to this
matter between the Company and the Consultant.
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IN WITNESS WHEREOF, the parties hereto have executed this Consulting Services Agreement as of
the day and year first above written and in duplicate counterparts each of which shall be deemed to
be an original, but both of which together shall constitute one and the same instrument.
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MARSHALL M. SLOANE
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By:
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/s/ Marshall M. Sloane
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Name:
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Marshall M. Sloane
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Title:
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Chairman of the Board
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CENTURY BANCORP, INC.
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By:
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/s/ Barry R. Sloane
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Name:
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Barry R. Sloane
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Title:
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Co-CEO and Co-President
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By:
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/s/ Jonathan G. Sloane
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Name:
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Jonathan G. Sloane
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Title:
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Co-CEO and Co-President
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Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
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Contact:
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Paul V. Cusick, Jr.
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pcusick@century-bank.com
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Phone:
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781-393-4601
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Fax:
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781-393-4071
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CENTURY BANCORP’S BOARD OF DIRECTORS ELECTS BARRY & JONATHAN SLOANE CO-CEOS;
MARSHALL SLOANE REMAINS CHAIRMAN; CFO, PAUL CUSICK TO RETIRE.
Medford, MA, April 14, 2006—
The Board of Directors of Century Bancorp, Inc. (“the
Company”), (NASDAQ:CNBKA) (
www.century-bank.com
), voted unanimously on Tuesday to
elect Barry R. Sloane and Jonathan G. Sloane as Co-CEOs of Century Bancorp, Inc. Barry and
Jonathan also serve as Co-Presidents and Co-CEOs of Century Bank, the Company’s principal
operating unit. Marshall Sloane will remain Chairman of Century Bancorp, Inc., and Century
Bank and Trust Company.
Additionally, Marshall M. Sloane announced that Paul V. Cusick, Jr., Vice President and
Treasurer
of Century Bancorp, Inc., and Executive Vice President, CFO and Treasurer of Century Bank and
Trust Company, announced his plan to retire. He will remain in his current position until a
replacement is in place. Mr. Cusick has been with the Company since 1988. Messrs Sloane
and Cusick will enter into consulting agreements with the Company.
Mr. Sloane’s contract becomes effective May 1, 2006, calling for payment of $275,000
annually,
reimbursement for health insurance and reasonable business expenses, renewing annually and
providing for a one time payment of $275,000 upon death or disability.
Mr. Cusick will enter into his consulting agreement when his replacement is hired. The
agreement will remain effective until August 1, 2009, paying $85,000 annually and providing
reimbursement for reasonable business expenses.
Barry and Jonathan Sloane issued the following statement: “Century has been the life work and
passion of our Dad. We are honored that he and the Board have entrusted the future of the
institution in our hands. We will build upon Century’s legacy of creating value for our
shareholders, clients, associates, and communities.”
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Barry and Jonathan Sloane continued, “We are fortunate that our Dad will remain involved and
available as Chairman. Paul Cusick has played an integral role in Century’s growth, and we
are grateful for his contribution and look forward to his continuing counsel on his successor
and financial matters for years to come.”
Century Bancorp, Inc., through its subsidiary bank, Century Bank and Trust Company, a state
chartered full service commercial bank, operating twenty-three full-service branches in the
Greater Boston area, offers a full range of Business, Personal and Institutional Services.
Century Bank and Trust Company is a member of the FDIC and is an Equal Housing Lender.
This press release contains certain “forward-looking statements” with respect to the
financial condition, results of operations and business of the Company. Actual results may
differ from those contemplated by these statements. The Company wishes to caution readers not
to place undue reliance on any forward-looking statements. The Company disclaims any intent
obligation to update publicly any such forward-looking statements, whether in response to new
information, future events or otherwise.
