EXHIBIT 10.1
------------
EMPLOYMENT AGREEMENT
AGREEMENT made as of the first day of January, 1993, by and between
GLOUCESTER BANK & TRUST COMPANY, a Massachusetts trust company with its
main office in Gloucester, Massachusetts (the "Bank") and XXXXX X. XXXXX
of Gloucester, Massachusetts (the "Executive").
WITNESSETH:
WHEREAS, the parties hereto desire to provide for the Executive's
continued employment by the Bank;
NOW THEREFORE, in consideration of the mutual covenants contained
herein, the Bank and the Executive agree as follows:
1. Employment. The Bank agrees to employ the Executive and the
Executive agrees to continue in the employ of the Bank on the terms and
conditions hereinafter set forth.
2. Capacity. The Executive shall serve the Bank as its President
and Chief Executive Officer, subject to his election by the Board of
Directors. In this capacity the Executive shall, subject to the By-laws of
the Bank and to the direction of the Board of Directors, have
responsibility for the general supervision and management of the Bank's
business.
3. Effective Date and Term. The commencement date (the
"Commencement Date") of this Agreement shall be the day first written
above. Subject to the provisions of Section 6, the term of the Executive's
employment hereunder shall be for two years from the Commencement Date;
provided, however, that the term shall be extended automatically for
periods of one year commencing on the first anniversary of the
Commencement Date and on each subsequent anniversary thereafter, unless
either party gives written notice to the other, prior to the date of any
such anniversary, of such party's election not to extend the term of this
Agreement. The last day of such term, as so extended from time to time, is
herein sometimes referred to as the "Expiration Date."
4. Compensation and Benefits. The regular compensation and
benefits payable to the Executive under this Agreement shall be as
follows:
(a) Salary. For all services rendered by the Executive under
this Agreement, the Bank shall pay the Executive a salary at the
rate of $90,000
90
per year, subject to increase for the next year based upon a review to
be made by the Board of Directors or its subcommittee during December
of each year. The increase shall be based upon an evaluation made by a
majority of the Board of Directors exclusive of the Executive based
upon an evaluation of the Executive's performance and comparisons with
the salary levels of executives at peer banks. The Executive's salary
shall be payable in periodic installments in accordance with the Bank's
usual practice for its senior executives.
(b) Bonus. The Executive shall be eligible for an annual
incentive bonus based upon an evaluation made by a majority of the
Board of Directors exclusive of the Executive. The primary criteria
shall be the return on equity and the profitability of the Bank for
the preceding fiscal year.
(c) Regular Benefits. The Executive shall also be entitled
to participate in any and all employee benefit plans, medical
insurance plans, life insurance plans, disability income plans,
retirement plans, bonus incentive plans and other benefit plans from
time to time in effect for senior executives of the Bank. Such
participation shall be subject to (i) the terms of the applicable
plan documents, (ii) generally applicable Bank policies and (iii)
the discretion of the Board of Directors or any administrative or
other committee provided for in or contemplated by such plan. In
addition, the Executive shall be entitled to receive a life
insurance policy, the premiums and other direct costs of which shall
be paid by the Bank, providing for a death benefit of not less than
$500,000 to be paid to a beneficiary of the Executive's choosing.
(d) Business Expenses. The Bank shall reimburse the
Executive for all reasonable travel and other business expenses
incurred by him in the performance of his duties and
responsibilities, subject to such reasonable requirements with
respect to substantiation and documentation as may be specified by
the Bank. A mileage allowance shall be based upon the then current
government standard rate.
(e) Vacation. The Executive shall be entitled to not less than
four (4) weeks of vacation per year, to be taken at such times and
intervals as shall be determined by the Executive with the approval
of the Bank, which approval shall not be unreasonably withheld.
5. Extent of Service. During his employment hereunder, the
Executive shall, subject to the direction and supervision of the Board of
Directors, devote his full business time, best efforts and business
judgment, skill and
91
knowledge to the advancement of the Bank's interests and to the discharge of
his duties and responsibilities hereunder. He shall not engage in any other
business activity, except as may be approved by the Board of Directors;
provided, however, that nothing herein shall be construed as preventing the
Executive from:
(a) investing his assets in a manner not prohibited by
Section 8(a) hereof, and in such form or manner as shall not require
any material services on his part in the operations or affairs of
the companies or other entities in which such investments are made;
(b) serving on the board of directors of any company,
subject to the prohibitions set forth in Section 8(a) and provided
that he shall not be required to render any material services with
respect to the operations or affairs of any such company; or
(c) engaging in religious, charitable or other community or
non-profit activities which do not impair his ability to fulfill his
duties and responsibilities under this Agreement.
6. Termination and Termination Benefits.
Notwithstanding the provisions of Section 3, the Executive's
employment hereunder shall terminate under the following circumstances:
(a) Death. In the event of the Executive's death during the
Executive's employment hereunder, the Executive's employment shall
terminate on the date of his death; provided, however, that the Bank
shall continue to pay $75,000 to the Executive's beneficiary
designated in writing to the Bank prior to his death (or to his
estate if he fails to make such designation) in equal installments
for six months after the date of the Executive's death or upon
written notification to the Bank from the Executive's designated
beneficiary or, if none, from the personal representative of his
estate, the Bank shall pay the entire sum or any sum remaining
unpaid, within thirty days of receipt of such notice. Installment
payments are to be made on the same periodic dates as salary
payments would have been made to the Executive had he not died.
(b) Termination by the Bank for Cause. The Executive's
employment hereunder may be terminated without further liability on
the part of the Bank effective immediately by a two-thirds vote of
all of the members of the Board of Directors for cause by written
notice to the Executive setting forth in reasonable detail the
nature of such cause. Only
92
the following shall constitute "cause" for such termination:
(1) Deliberate dishonesty of the Executive with
respect to the Bank or any subsidiary or affiliate thereof.
(2) Conviction of the Executive of a crime involving
moral turpitude.
(3) Gross and willful failure to perform a substantial
portion of his duties and responsibilities hereunder, which
failure continues for more than thirty days after written
notice given to the Executive pursuant to a two-thirds vote of
all of the members of the Board of Directors, such vote to set
forth in reasonable detail the nature of such failure.
(c) Termination by the Executive. The Executive's employment
hereunder may be terminated effective immediately by the Executive
by written notice to the Board of Directors in the event of the
following:
(1) Failure of the Board of Directors to elect the
Executive to the offices of President and Chief Executive
Officer of the Bank, or to continue the Executive in such
offices; or
(2) Failure by the Bank to comply with the provisions
of Section 4(a) or material breach by the Bank of any other
provision of this Agreement.
(d) Termination by the Bank Without Cause. The Executive's
employment with the Bank may be terminated without cause by a
two-thirds vote of all of the members of the Board of Directors on
written notice to the Executive.
(e) Certain Termination Benefits. In the event of
termination pursuant to Sections 6(c) or (d), or in the event the
Bank elects not to extend the term of this Agreement as provided for
in Section 3, the Executive shall be entitled to the following
benefits:
(1) termination benefit of $150,000, which shall be
payable at the rate at which the Bank then currently pays the
Executive, unless the Executive shall elect to receive the
termination benefit (or the amount then remaining due on such
benefit) in one sum, in which event he shall give written
notice to the Bank of such election and the Bank shall make
such payment
93
within thirty days of receipt of notice.
(2) For the period subsequent to the date of
termination until the earlier of (i) the expiration of
eighteen (18) months or (ii) the Executive commencing
employment which provides a comparable benefit to that
provided by the Bank, the Executive shall continue to receive
all benefits described in Section 4(c) above existing on the
date of termination (except for any cash bonus plans which
shall be pro-rated through the date of termination). For
purposes of application of such benefits the Executive shall
be treated as if he had remained in the employ of the Bank,
with an annual salary at the rate in effect on the date of
termination, with increases as provided in Section 4(a), and
service credits will continue to accrue during such period as
if the Executive had remained in the employ of the Bank.
(3) If, in spite of the provisions of Section 6(e)(2)
above, benefits or service credits under any benefit plan
shall not be payable or provided under any such plan to the
Executive, or to the Executive's dependents, beneficiaries or
estate, because the Executive is no longer deemed to be an
employee of the Bank, the Bank itself shall pay or provide for
payments of such benefits and service credits for such
benefits to the Executive, or to the Executive's dependents,
beneficiaries or estate.
7. Disability. If, due to physical or mental illness, the
Executive shall be disabled so as to be unable to perform substantially
all of his duties and responsibilities hereunder, the Board of Directors
may designate another executive to act in his place during the period of
such disability. Notwithstanding any such designation, the Executive shall
continue to receive his full salary and benefits under Section 4 of this
Agreement until he becomes eligible for disability income under the Bank's
disability income plan. While receiving disability income payments under
such plan, the Executive shall not receive any salary under Section 4(a),
but shall continue to participate in the Bank's benefit plans and to
receive other benefits as specified in Section 4 until the Expiration
Date. In the absence of a disability income plan at the time of such
disability, or if the disability income plan of the Bank then in effect
provides for lower benefits than those the Executive would be entitled to
receive if the Bank's current disability income plan were in effect at
such time, then the Bank shall pay the Executive benefits equal to those
the Executive would have received if the Bank's current disability income
plan were in effect at such time. If any question shall arise as to
whether during any period the Executive was disabled so as to be unable to
perform substantially all of his duties and responsibilities hereunder
94
due to physical or mental illness, the Executive may, and at the request of
the Bank will, submit to the Bank a certification in reasonable detail by
a physician selected by the Executive or his guardian to whom the Bank has
no reasonable objection as to whether the Executive was so disabled and
such certification shall for the purposes of this Agreement be conclusive
of the issue. If such question shall arise and the Executive shall fail to
submit such certification, the Bank's determination of such issue shall be
binding on the Executive.
8. Noncompetition and Confidential Information.
(a) Noncompetition. For the period expiring on the later of
(1) the last day of the one-year period following the
date of termination of the Executive's employment with the
Bank by the Executive as a result of his resignation or
election not to extend pursuant to Section 3 or by the Bank
for cause pursuant to Section 6(b) hereof, or
(2) the last day of the period during which the Bank
continues to provide termination benefits to the Executive
pursuant to Section 6(e)(1)-(3) hereof, 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 in Section 10),
compete principally in the Bank's market area (defined as the
communities of Manchester, Essex, Gloucester and Rockport,
Massachusetts) with the banking or any other business
conducted by the Bank during the period of his employment
hereunder, nor will he 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 solicit or encourage any customer of the Bank to
terminate its relationship with the Bank or to conduct with
any other Person any business or activity which such customer
conducts or could conduct with the Bank; provided, however,
that this Section 8(a) shall not apply in any situation in
which the Executive is entitled to receive a severance payment
pursuant to Section 4 of that certain Special Termination
Agreement dated December 30, 1986, between the Executive and
the Bank.
(b) Confidential Information. The Executive will not
disclose to any other Person (except as required by applicable law
or in connection with the performance of his duties and
responsibilities hereunder), or use for his own benefit or gain, any
confidential information of the Bank
95
obtained by him incident to his employment with the Bank. The term
"confidential information" includes, without limitation, financial
information and business plans, but does not include any information
which has become part of the public domain by means other than the
Executive's non-observance of his obligations hereunder.
(c) Relief; Interpretation. The Executive agrees that the
Bank shall be entitled to injunctive relief for any breach by him of
the covenants contained in Sections 8(a) or 8(b). In the event that
any provision of this Section 8 shall be determined by any court of
competent jurisdiction to be unenforceable by reason of its being
extended over too great a period of time, too large a geographic
area, or too great a range of activities, it shall be interpreted to
extend only over the maximum period of time, geographic area, or
range of activities as to which it may be enforceable. For purposes
of this Section 8, the term "Bank" shall mean the Bank and any of
its subsidiaries and affiliates.
9. Conflicting Agreements. The Executive hereby represents and
warrants that the execution of this Agreement and the performance of his
obligations hereunder will not breach or be in conflict with any other
agreement to which he is a party or is bound, and that he is not now
subject to any covenants against competition or similar covenants which
would affect the performance of his obligations hereunder.
10. Definition of "Person," "Director" and "Board of Directors."
For purposes of this Agreement: the term "Person" shall mean an
individual, a corporation, an association, a partnership, an estate, a
trust and any other entity or organization; and the terms "Director" and
"Board of Directors" shall mean a Director and the Board of Directors,
respectively, of the Bank.
11. 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 law.
12. Arbitration of Disputes. Any controversy or claim arising out
of or relating to this Agreement or the breach thereof shall be settled by
arbitration in accordance with the laws of the Commonwealth of
Massachusetts by three arbitrators, one of whom shall be appointed by the
Bank, one by the Executive and the third by the first two arbitrators. If
the first two arbitrators cannot agree on the appointment of a third
arbitrator, then the third arbitrator shall be appointed by the American
Arbitration Association in the City of Boston. Such arbitration shall be
conducted in the City of Boston in accordance with the rules of the
American Arbitration Association, except with respect to the selection of
96
arbitrators which shall be as provided in this Section 12. Judgment upon
the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. In the event that it shall be necessary or desirable
for the Executive to retain legal counsel and/or incur other costs and
expenses in connection with the enforcement of any or all of the
Executive's rights under this Agreement, the Bank shall pay (or the
Executive shall be entitled to recover from the Bank, as the case may be)
the Executive's reasonable attorneys' fees and other reasonable costs and
expenses in connection with the enforcement of said rights (including the
enforcement of any arbitration award in court) regardless of the final
outcome, unless and to the extent the arbitrators shall determine that
under the circumstances recovery by the Executive of all or a part of any
such fees and costs and expenses would be unjust.
13. Assignment; Successors and Assigns, etc. Neither the Bank nor
the Executive may make any assignment of this Agreement or any interest
herein; by operation of law or otherwise, without the written consent of
the other party; provided, however, that the Bank may assign its rights
under this Agreement without the consent of the Executive in the event the
Bank shall hereafter effect a reorganization, consolidate with or merge
into any other Person, or transfer all or substantially all of its
properties or assets to any other Person. This Agreement shall inure to
the benefit of and be binding upon the Bank and the Executive, their
respective successors, executors, administrators, heirs and permitted
assigns.
14. Enforceability. If any portion or provision of this Agreement
shall to any extent be declared illegal or unenforceable by a court of
competent jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other than those
as to which it is so declared illegal or unenforceable, shall not be
affected thereby, and each portion and provision of this Agreement shall
be valid and enforceable to the fullest extent permitted by law.
15. Waiver. No waiver of any provision hereof shall be effective
unless made in writing and signed by the waiving party. The failure of
either party to require the performance of any term or obligation of this
Agreement, or the waiver by either party of any breach of this Agreement,
shall not prevent any subsequent enforcement of such term or obligation or
be deemed a waiver of any subsequent breach.
16. Notices. Any notices, requests, demands and other
communications provided for by this Agreement shall be sufficient if in
writing and delivered in person or sent by registered or certified mail,
postage prepaid, to the Executive at the last address the Executive has
filed in writing with the
97
Bank or, in the case of the Bank, at its main office, attention of the Clerk.
17. Amendment. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by a duly authorized
representative of the Bank.
18. Governing Law. This is a Massachusetts contract and shall be
construed under and be governed in all respects by the laws of the
Commonwealth of Massachusetts.
19. Prior Employment Agreement. The Employment Agreement dated
December 30, 1986, is hereby terminated by the mutual agreement of the
parties.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Bank, by its duly authorized officer, and by the
Executive, as of the date first written above.
ATTEST: GLOUCESTER BANK & TRUST COMPANY
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxx, Xx.
------------------------------ ------------------------------------
Title: Chairman
WITNESS:
/s/ Xxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxx
------------------------------ ------------------------------------
Xxxxx X. Xxxxx
Dated: April 21, 1993
98
