SEVERANCE AGREEMENT
This Agreement is entered into by and between Xxxxxxxx Xxxxxxx, Vice
President/Retail Banking of Ipswich Savings Bank (the "Executive") and Ipswich
Savings Bank (the "Bank") and shall be effective as of the 18th day of August,
1999 (the "Effective Date").
WHEREAS, the Board of Directors of the Bank desires to assure that the
Executive, in the Executive's capacity as an officer of the Bank, will consider
the prospect of a "Change in Control" (as defined in Section 1(a) below) of the
Bank or of Ipswich Bancshares, Inc. (the "Company"), the holding company for the
Bank, in an objective manner; and
WHEREAS, the Executive desires to commit herself to serve the Bank to the best
of her ability;
NOW, THEREFORE, in consideration of the foregoing and the agreements of the
parties herein contained, the parties hereto agree as follows:
I. Consequences of Termination of the Executive's Employment Following Change in
Control. If there is a "Change in Control" (as defined in subsection (a) below)
during the "Term" (as defined in Section 3 below), the provisions of this
Section shall apply and shall continue to apply throughout the remainder of the
Term. If, within one year following a "Change in Control" (as defined in
subsection (a) below), the Executive's employment is terminated by the Executive
following a reduction of the Executive's annual compensation (other than a
reduction which is based on the Bank's financial performance and is similar to
the reduction made to the compensation provided to each other officer of the
Bank), the Executive (or the Executive's estate, if applicable) shall receive
such compensation as is provided to the Executive pursuant to subsection (c)
below. Similarly, if the Executive's employment is terminated without "cause"
(as defined in subsection (b) below) by the Bank within one year following a
"Change in Control" (as defined in subsection (a) below), the Executive (or the
Executive's estate, if applicable) shall receive such compensation as is
provided to the Executive pursuant to subsection (c) below.
(a) For the purposes of this Section "Change in Control" shall mean the
occurrence of any one or more of the following events: (i) after the Effective
Date, any "person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934), other than the Company or the Bank, becomes a
"beneficial owner" (as such term is defined in Rule 13d-3 as promulgated under
the Securities Exchange Act of 1934) directly or indirectly of securities
representing 25% or more of the total number of votes that may be cast for the
election of Directors of the Company or the Bank and two thirds of the Board of
Directors of the Company or the Bank (the "Board") has not consented to such
event prior to its occurrence or within sixty (60) days thereafter, provided
that if the consent occurs after the event, it shall only be valid for the
purposes of this paragraph (i) if a majority of the consenting Board of
theCompany or the Bank is comprised of Directors of the Company or the Bank who
were Directors of the Company or the Bank immediately prior to the event;
(ii) within two years after a merger, consolidation or sale of assets involving
the Company or the Bank, or a contested election of a Company or a Bank
Director, or any combination of the foregoing, the individuals who were
Directors of the Company or the Bank immediately prior thereto shall cease to
constitute a majority of the Board; or
(iii) within two years after a tender offer or exchange offer for voting
securities of the Company or the Bank (other than by the Company), the
individuals who were Directors of the Company or the Bank immediately prior
thereto shall cease to constitute a majority of the Board.
(b) For purposes of this Section 1, "cause" shall mean activities which have had
an adverse effect on the financial strength or stability of the Company or the
Bank; neglect of duties for which employed (other than on account of a medically
determinable disability which renders the Executive incapable of performing such
services); committing fraud, misappropriation or embezzlement in the performance
of duties as an employee of the Company or the Bank; conviction of a felony
involving a crime of moral turpitude; or willfully engaging in conduct injurious
to the Company or the Bank.
(c) If the Executive becomes entitled to receive compensation pursuant to this
Section, she shall receive a lump-sum payment from the Bank within 30 days of
the termination of her employment in the amount of one (1) year's salary of the
Executive (at the then applicable annual base salary rate of the Executive,
exclusive of bonuses).
I. Employment Status. This Agreement is not an agreement for the employment of
the Executive and shall confer no rights on the Executive except as herein
expressly provided.
I. Term and One-Year Extension. The term of this Agreement shall be one year
commencing with the Effective Date hereof (the "Term"). The Term of this
Agreement will, however, be automatically extended for additional periods of one
year commencing on the first anniversary of the Effective Date and on each
subsequent anniversary thereafter, unless either party notifies the other in
writing at least three months prior to the date of such anniversary of the
Effective Date that the Agreement is not to be extended.
I. Exclusivity Covenant; Non-Competition.
(a) Except with the prior written consent of the Board, the Executive will not
while in the employ of the Bank, undertake or engage in any other employment
occupation or business enterprise. Further, the Executive agrees not to acquire,
assume or participate in, directly or indirectly, any position, investment or
interest, in the areas where the Bank maintains banking offices, adverse or
antagonistic to the Bank, its business or prospects, financial or otherwise, or
take any action towards any of the foregoing, except for any investment
representing less than one percent (1%) of the voting shares of any
publicly-held corporation.
(b) During the Executive's employment by the Bank hereunder and during a period
of one year following the date of termination of her employment with the Bank
for any reason, the Executive will not, directly or indirectly whether as owner,
partner, shareholder, consultant, agent, employee, co-venturer or otherwise, or
through any Person (as defined below), compete in the Bank's market area
(defined as Essex County, Massachusetts) with the banking or any other business
conducted by the Bank or any Subsidiary during the period of her employment
hereunder, nor will she attempt to hire any employee of the Bank, assist in such
hiring by any other Person, encourage any such employee to terminate his or her
relationship with the Bank or encourage any customer to conduct with any other
Person any business or activity which such customer conducts or could conduct
with the Bank.
For purposes of this subsection, (i) the Executive shall not be deemed
to be competing with the Bank if she is employed outside of the Bank's market
area for a bank or corporation which has its headquarters outside of the Bank's
market area, even if such bank or corporation has a branch or office in the
Bank's market area and (ii) the term "Person" shall mean an individual, a
corporation, an association, a partnership, an estate, a trust and any other
entity or organization.
I. Assignment. This Agreement and the rights and obligations of the parties
hereto shall bind and inure to the benefit of each of the parties hereto and
shall also bind and inure to the benefit of any successor or successors of the
Bank by reorganization, merger or consolidation and any assignee of all or
substantially all of its business and properties, but, except as to any such
successor or assignee of the Company or the Bank, neither this Agreement nor any
rights or benefits hereunder may be assigned by the Company or the Bank or by
the Executive.
I. Withholding. All payments made by the Bank under this Agreement shall be net
of any tax or other amounts required to be withheld by the Bank under applicable
Federal and state law.
I. Governing Law. This Agreement shall be construed in accordance with, and
governed for all purposes by, the laws of The Commonwealth of Massachusetts,
without regard to its principles of conflicts of laws.
I. Interpretation. In case any one or more of the provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Agreement, but this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never been contained
herein.
I. Enforcement. Any legal expenses incurred by the Executive in enforcing her
rights hereunder (regardless of whether the provisions of this Agreement have
terminated) shall be paid by the Bank, provided that both the Executive prevails
on the merits of her claim or claims and the Bank's rights of appeal with
respect to such claim or claims have been exhausted or have otherwise expired.
The Bank shall pay such legal expenses (or reimburse the Executive, if
appropriate) within thirty (30) days after the later of the date on which the
conditions specified inthe previous sentence are fulfilled or the date on which
the Executive submits evidence of such legal expenses to the Board.
I. Amendment and Waiver. This Agreement may not be amended, supplemented or
waived except by a writing signed by the party against which such amendment or
waiver is to be enforced. The waiver by any party of a breach of any provision
of this Agreement shall not operate to, or be construed as a waiver of, any
other breach of that provision nor as a waiver of any breach of another
provision.
I. Binding Effect. Subject to the provisions of Section 5 hereof, this Agreement
shall be binding on the successors and assigns of the parties hereto.
I. Notices. Any notices, requests, demands and other communications provided for
by the Agreement shall be sufficient if in writing and delivered in person or
sent by registered or certified mail, postage prepaid, in the case of the
Executive, at the last address the Executive has filed in writing with the Bank
or, in the case of the Bank, at its main office, attention of the President
(with a copy to Xxxxx Xxxxxxxxx Pratt, Foley, Xxxx & Eliot, llp, Xxx Xxxx Xxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000).
I. Counterparts. This Agreement may be executed in any number of counterparts,
each of which is an original but which shall together constitute one and the
same instrument.
IN WITNESS WHEREOF, the Company, the Bank and the Executive have executed this
Agreement under seal as of the date first set forth above.
IPSWICH SAVINGS BANK EXECUTIVE
By: /s/ Xxxxx X. Xxxx /s/ Xxxxxxxx Xxxxxxx
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Xxxxx X. Xxxx, President Xxxxxxxx Xxxxxxx
The undersigned hereby guarantees the
obligations of Ipswich Savings Bank under
the foregoing agreement.
IPSWICH BANCSHARES, INC.
By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx, President
