Cto Employment Agreement

EXHIBIT 10.6


EMPLOYMENT AGREEMENT WITH CHRISTOPHER J. FLYNN


GRANITE BANK


EMPLOYMENT AGREEMENT


This Agreement is made effective as of the 31st day of October, 1997 by and between Granite Bank, a New Hampshire bank (the "Bank"), with its principal administrative office at 122 West Street, Keene, New Hampshire 03431-0627, and Christopher J. Flynn (the "Executive"). Any reference to "Company" herein shall mean Granite State Bankshares, Inc., the stock holding company parent of the Bank or any successor thereto.


WHEREAS, the Bank and Company entered into an Agreement and Plan of Reorganization (the "Merger Agreement") with Primary Bank on April 29, 1997; and


WHEREAS, Executive is willing to forego payment under the Employment Agreement currently in effect by and between Primary Bank and Executive as a result of the Merger Agreement; and


WHEREAS, the Bank wishes to assure itself of the services of Executive for the period provided in this Agreement; and


WHEREAS, Executive is willing to serve in the employ of the Bank on a full-time basis for said period.


NOW, THEREFORE, in consideration of the mutual covenants herein contained, and upon the other terms and conditions hereinafter provided, the parties hereby agree as follows:


1. POSITION AND RESPONSIBILITIES


During the period of his employment hereunder, Executive agrees to serve as President of the Bank. The Executive shall render administrative and management services to the Bank such as are customarily performed by persons in a similar executive capacity. During said period, Executive also agrees to serve, if elected, as an officer and director of any subsidiary or affiliate of the Bank. Pursuant to the Merger Agreement, and as of the date hereof, Executive shall be elected to the Board of Directors of the Bank and the Company.


2. TERMS AND DUTIES


(a) The period of Executive's employment under this Agreement shall begin as of the date first above written and shall continue for a period of thirty-six (36) full calendar months thereafter. During said term the Executive shall perform the normal and customary duties associated with the position of President. The board of directors of the Bank ("Board") will review the Agreement and the Executive's performance annually for the purpose of determining whether to extend the Agreement and, unless the Board determines that there exists some basis not to extend this Agreement, this Agreement shall be extended for an additional year, so that the remaining term shall be thirty-six (36) months. Nothing in this provision shall be interpreted as restricting the Bank's right to remove Executive for Cause in accordance with Section 7 of this Agreement, or to remove Executive for any reason and pay Executive the benefits set forth in Section 4 or 5, as applicable.


(b) During the period of his employment hereunder, except for periods of absence occasioned by illness, reasonable vacation periods, and reasonable leaves of absence, Executive shall devote substantially all his business time, attention, skill, and efforts to the faithful performance of his duties hereunder including activities and services related to the organization, operation and management of the Bank; provided, however, that, with the approval of the Board, as evidenced by a resolution of such Board, from time to time, Executive may serve, or continue to serve, on the boards of directors of, and hold any other offices or positions in, business companies or business organizations, which, in such Board's judgment, will not present any conflict of interest with the Bank, or materially affect the performance of Executive's duties pursuant to this Agreement (it being understood that membership in social, religious, charitable, educational, or similar organizations does not require Board approval pursuant to this Section 2(b)).


3. COMPENSATION AND REIMBURSEMENT


(a) The compensation specified under this Agreement shall constitute the salary and benefits paid for the duties described in Section 2(b). The Bank shall pay Executive as compensation a salary of not less than $205,000 per year ("Base Salary"). Such Base Salary shall be payable bimonthly. During the period of this Agreement, Executive's Base Salary shall be reviewed at least annually. Such review shall be conducted by a Committee designated by the Board, and the Board may increase, but not decrease, Executive's Base Salary (any increase in Base Salary shall become the "Base Salary" for purposes of this Agreement). In addition to the Base Salary provided in this Section 3(a), the Bank shall provide Executive with all such other benefits as are provided uniformly to full-time officers of the Bank. Base salary shall include any amounts of compensation deferred by Executive under a qualified plan maintained by the Bank.


(b) Executive will be entitled to participate in or receive benefits under any employee benefit plans including but not limited to, retirement plans, supplemental retirement plans, pension plans, profit-sharing plans, health-and-accident plans, medical coverage or any other employee benefit plan or arrangement made available by the Bank in the future to its senior executives and key management employees, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements. Executive will be entitled to incentive compensation and bonuses as provided in any plan of the Bank in which Executive is eligible to participate. Nothing paid to the Executive under any such plan or arrangement will be deemed to be in lieu of other compensation to which the Executive is entitled under this Agreement. The Bank shall provide Executive with an annual allowance toward any dues, initiation fees, and/or assessments required to maintain the Executive as a member of a country club in the Bank's market area, and shall provide him with the use of a Bank-owned, late model automobile (as to which the Bank pay, or reimburse Executive for, all maintenance costs related to usage for business purposes).


(c) In addition to the Base Salary provided for by this Section 3(a), the Bank shall pay or reimburse Executive for all reasonable travel and other reasonable expenses incurred by Executive performing his obligations under this Agreement and may provide such additional compensation in such form and such amounts as the Board may from time to time determine in accordance with standards set by the Board of Directors.


4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION


The provisions of this Section shall in all respects be subject to the terms and conditions stated in Sections 9 and 10.


(a) The provisions of this Section shall apply upon the occurrence of an Event of Termination (as herein defined) during the Executive's term of employment under this Agreement. As used in this Agreement, an "Event of Termination" shall mean and include any one or more of the following:


(i) the termination by the Bank of Executive's full-time employment hereunder for any reason other than (A) Disability or Retirement, as defined in Section 6 hereof, or Death, (B) following a Change in Control, as defined in Section 5(a) hereof, or (C) Termination for Cause as defined in Section 7 hereof; or


(ii) Executive's resignation from the Bank's employ, upon any:


(A) failure to elect or reelect or to appoint or reappoint Executive as President during the term of this Agreement in accordance with Section 2(a) of this Agreement,


(B) without Executive's written consent, a material change in Executive's function, duties, or responsibilities, which change would cause Executive's position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, hereof,


(C) a relocation of Executive's principal place of employment by more than 50 miles from its location at the effective date of this Agreement, or a material reduction in the benefits and perquisites to the Executive from those being provided as of the effective date of this Agreement,


(D) liquidation or dissolution of the Bank or Company other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of Executive, or


(E) breach of this Agreement by the Bank.


Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D) or (E), of this Section 4(a), Executive shall have the right to elect to terminate his employment under this Agreement by resignation upon thirty (30) days prior written notice which must be given by Executive within a reasonable period of time not to exceed four calendar months after the initial event giving rise to said right to elect, which shall be deemed to constitute an "Event of Termination." Other than as set forth in the preceding sentence, the voluntary resignation of Executive from the Bank shall not constitute an Event of Termination.


(b) Upon the occurrence of an Event of Termination, on the Date of Termination, as defined in Section 8, the Bank shall pay Executive, or, in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to the Base Salary due for the remaining term of the Agreement; provided however, that if the Bank is not in compliance with its minimum capital requirements or if such payments would cause the Bank's capital to be reduced below its minimum capital requirements, such payments shall be deferred until such time as the Bank is in capital compliance. At the election of the Executive, which election is to be made on an annual basis during the month of January, and which election is irrevocable for the year in which made and upon the occurrence of an Event of Termination, any payments shall be made in a lump sum or paid monthly during the remaining term of this Agreement following the Executive's termination. In the event that no election is made, payment to the Executive will be made on a monthly basis during the remaining term of this Agreement.


(c) Upon the occurrence of an Event of Termination, the Bank, in its sole discretion, shall cause Executive to be continued under the Bank's existing employee benefit plans, life, medical, dental and disability coverage substantially identical to the coverage maintained by the Bank for Executive prior to his termination, except to the extent such coverage may be changed in its application to all Bank employees, or if coverage under the Bank's existing plans is unavailable, the Bank shall pay the cost of providing Executive with substantially equivalent covererage. Such coverage shall cease upon the expiration of the remaining term of this Agreement, or upon the date that Executive obtains employment.


(d) Upon the occurrence of an Event of Termination, the Executive will be entitled to receive benefits due him and accrued pursuant to any retirement, incentive, profit sharing, bonus, performance, disability or other employee benefit plan maintained by the Bank.


(e) If it is determined that the Bank has breached the terms of this Agreement, the only remedy to which Executive is entitled is to receive the payments and benefits as set forth in this Section 4.


(f) Apart from the right granted to Executive to voluntary resign as set forth in (a) above, Executive shall have the right upon thirty (30) days written notice to the Bank to terminate the Agreement ("Voluntary Termination"). Such Voluntary Termination shall not be deemed to constitute an Event of Termination as defined above; however, Executive shall be entitled to receive a lump sum payment from the Bank, upon the effective date of the Voluntary Termination, in an amount equal to Base Salary.


5. CHANGE IN CONTROL


(a) No benefit shall be payable under this Section 5 unless there shall have been a Change in Control of the Bank or Company, as set forth below. For purposes of this Agreement, a "Change in Control" of the Bank or Company shall mean an event of a nature that: (i) would be required to be reported in response to Item 1(a) of th ...