Exhibit 10.m
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is made on August 24, 1999 (the
"Commencement Date"), by and between The Washington Trust Company of Westerly, a
Rhode Island financial institution with its headquarters located in Westerly,
Rhode Island (the "Employer"), and Xxxxxx X. XxXxxxx (the "Executive").
WHEREAS, the Executive has been employed by PierBank, Inc., a Rhode Island
financial institution ("PierBank"), as its President and Chief Executive
Officer;
WHEREAS, PierBank has merged with and into the Employer upon the terms and
conditions set forth in the Agreement and Plan of Merger dated as of February
22, 1999, by and among the Employer, Washington Trust Bancorp, Inc. (the
"Bancorp") and PierBank (the "Merger Agreement");
WHEREAS, in connection with the transactions contemplated by the Merger
Agreement, the Employer and the Executive have agreed to enter into an
Employment Agreement as set forth herein; and
WHEREAS, the Executive is desirous of committing to serve the Employer on the
terms herein provided.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the parties agree as follows:
1. Employment.
The Employer agrees to employ the Executive and the Executive agrees to be
employed by the
Employer on the terms and conditions set forth in this Agreement.
2. Position and Duties; Location.
(a) The Executive shall serve the Employer as its Senior Vice President,
Regional Manager. In such capacity or capacities, the Executive shall perform
such services and duties in connection with the business, affairs and operations
of the Employer as may be assigned or delegated to the Executive from time to
time by or under the authority of the Board of Directors and which are
appropriate for an executive at the Senior Vice President level.
(b) The Employer shall make every reasonable effort to maintain the Executive's
office in the Narragansett and South Kingstown area of Rhode Island.
3. Term.
Subject to the provisions of Section 6, the term of the Executive's employment
pursuant to this Agreement shall be from the Commencement Date until December
31, 2001 (the "Term End Date"), unless otherwise earlier terminated in
accordance with Section 6 hereof (the "Term"). In no event shall the term of
this Agreement be extended beyond the Term End Date. After the Term End Date,
the Executive's continued employment by the Employer shall be at-will and shall
not be covered by any employment agreement.
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
Employer shall pay the Executive a salary (the "Salary") at the annual rate of
One Hundred Twenty-Five Thousand Dollars ($125,000), subject to increase after
the first year of the Term from time to time in the sole discretion of the Board
of Directors. The Salary shall be payable in periodic installments in accordance
with the Employer's usual practice for its senior executives.
(b) Regular Benefits. The Executive shall also be entitled to participate in any
employee benefit plans, medical insurance plans, life insurance plans,
disability income plans, retirement plans, vacation plans, expense reimbursement
plans and other benefit plans which the Employer may from time to time have in
effect for all or most of its senior executives. Such participation shall be
subject to the terms of the applicable plan documents, generally applicable
policies of the Employer, applicable law and the discretion of the Board of
Directors, the Compensation Committee or any administrative or other committee
provided for in or contemplated by any such plan. Notwithstanding the preceding
sentence, the Employer shall recognize the Executive's prior service with
PierBank (which commenced on November 22, 1993) for all employment, compensation
and personnel purposes, except that with respect to The Washington Trust Company
401(k) Plan and The Washington Trust Company Pension Plan (the "Pension Plan"),
such prior service with PierBank shall be recognized only for purposes of
eligibility and vesting but not for purposes of benefit accrual. Nothing
contained in this Agreement shall be construed to create any obligation on the
part of the Employer to establish any such plan or to maintain the effectiveness
of any such plan which may be in effect from time to time.
(c) Executive Benefits.
(i) Short-Term Incentive Plan. The Executive shall be eligible to
participate in the Employer's Short-Term Incentive Plan as of the
Commencement Date and shall be eligible for an award thereunder for 1999.
(ii) SERP. The Executive shall be eligible to participate in The Washington
Trust Company Supplemental Pension Benefit and Profit Sharing Plan (the
"SERP"). The Employer shall amend the SERP to provide the Executive with a
benefit under the SERP equal to the equivalent benefit credit and vesting
service that he would have accrued under the Pension Plan for his PierBank
service.
(d) Vacations. The Executive shall be entitled to accrue vacation days at the
rate of twenty (20) days per calendar year, which shall accrue at the rate of
one and two-thirds (1 2/3) days per month, with a maximum vacation accrual of
twenty (20) days. The Executive shall also be entitled to all paid holidays
given by the Employer to its executives.
(e) Additional Benefits. The Employer shall provide the following additional
benefits to the Executive:
(i) Automobile Lease. The Employer shall assume the automobile lease which
is in place as of the Commencement Date for the company car in use by the
Executive as of the Commencement Date and shall pay for or reimburse the
Executive for all reasonable business-related expenses associated with the
lease of such automobile and its maintenance and operation, all in
accordance with Employer's current policies regarding company cars. The
provision of such company car shall terminate on the Term End Date or the
termination of the Executive's employment hereunder, if earlier. The
Employer shall not provide any tax gross-up or reimbursement payments to
the Executive with respect to any taxes payable by the Executive for any
personal use of such automobile.
(ii) Country Club Membership. The Employer shall pay the Executive's
membership fees at the Quidnessett Country Club through the Term End Date
or the termination of the Executive's employment hereunder, if earlier. The
Employer shall not provide any tax gross-up or reimbursement payments to
the Executive with respect to any taxes payable by the Executive for any
personal use of the Quidnessett Country Club.
(iii) Professional Membership. The Employer shall reimburse the Executive
or pay, on the Executive's behalf, the professional membership fees
incurred by the Executive with respect to those organizations which have
received the prior approval of the Chairman and Chief Executive Officer.
(iv) Business Expenses. The Employer shall provide the Executive with
prompt reimbursement for all usual and customary business expenses, subject
to the provision by the Executive of proper receipts and other
documentation as required under the Employer's standard policies.
(v) Stock Option. To the extent not prohibited by the pooling-of-interest
accounting rules, the Executive will also be given one stock option award
in 1999 in an amount commensurate with his position.
(f) Taxation of Payments and Benefits. The Employer shall undertake to make
deductions, withholdings and tax reports with respect to payments and benefits
under this Agreement to the extent that it reasonably and in good faith believes
that it is required to make such deductions, withholdings and tax reports.
Payments under this Agreement shall be in amounts net of any such deductions or
withholdings. Nothing in this Agreement shall be construed to require the
Employer to make any payments to compensate the Executive for any adverse tax
effect associated with any payments or benefits or for any deduction or
withholding from any payment or benefit.
5. Extent of Service.
During the Executive's employment under this Agreement, the Executive shall
devote the Executive's full business time, best efforts and business judgment,
skill and knowledge to the advancement of the Employer's interests and to the
discharge of the Executive's duties and responsibilities under this Agreement.
The Executive shall not engage in any other business activity, except as may be
approved by the Board of Directors; provided that nothing in this Agreement
shall be construed as preventing the Executive from:
(a) investing the Executive's assets in any company or other entity in a manner
not prohibited by Section 7(d) and in such form or manner as shall not require
any material activities on the Executive's part in connection with the
operations or affairs of the companies or other entities in which such
investments are made; or
(b) engaging in religious, charitable or other community or non-profit
activities that do not impair the Executive's ability to fulfill the Executive's
duties and responsibilities under this Agreement.
6. Termination and Termination Benefits.
Notwithstanding the provisions of Section 3, the Executive's employment under
this Agreement shall terminate under the following circumstances set forth in
this Section 6.
(a) Termination by the Employer for Cause. The Executive's employment under this
Agreement may be terminated for Cause without further liability on the part of
the Employer, effective immediately upon a vote of the Board of Directors and
written notice to the Executive. Only the following actions or inactions by the
Executive shall constitute "Cause" for such termination:
(i) misappropriation of the Employer's or the Bancorp's funds;
(ii) intentionally and materially damaging the property of the Employer or
the Bancorp;
(iii) intentionally and materially damaging the business reputation of the
Employer or the Bancorp; and
(iv) willfully neglecting his duties and responsibilities as Senior Vice
President of the Employer.
(b) Termination by the Executive. The Executive's employment under this
Agreement may be terminated by the Executive by written notice to the Board of
Directors and the Chairman and Chief Executive Officer at least sixty (60) days
prior to such termination.
(c) Termination by the Employer Without Cause. Subject to the payment of
Termination Benefits pursuant to Section 6(d), the Executive's employment under
this Agreement may be terminated by the Employer without Cause upon written
notice to the Executive by a vote of the Board of Directors. Termination of the
Executive's employment hereunder due to the Executive's death or by the Employer
due to the Executive's Disability shall not be deemed to be a termination
without Cause. For purposes hereof, "Disability" shall be defined as the
incapacity of the Executive due to physical or mental illness, which incapacity
results in the Executive being absent from his duties hereunder on a full-time
basis for one hundred eighty (180) calendar days in the aggregate in any twelve
(12) month period.
(d) Certain Termination Benefits. Unless otherwise specifically provided in this
Agreement or otherwise required by law, all compensation and benefits payable to
the Executive under this Agreement shall terminate on the date of termination of
the Executive's employment under this Agreement. Notwithstanding the foregoing,
in the event of termination of the Executive's employment with the Employer by
the Employer without Cause, the Employer shall provide to the Executive the
following termination benefits ("Termination Benefits"):
(i) continuation of the Executive's Salary at the rate then in effect
pursuant to Section 4(a); and
(ii) continuation of group health plan benefits on the same basis as
similarly situated active employees of the Employer.
The Termination Benefits set forth in (i) and (ii) above shall continue until
the Term End Date. Notwithstanding the foregoing, in the event of the
termination of the Executive's employment during the Term following a Change in
Control of the Bancorp (as defined in the Change in Control Agreement entered
into among the Employer, the Bancorp and the Executive (the "Change in Control
Agreement")) and the Executive becomes entitled to receive severance benefits
under the Change in Control Agreement, the Executive shall receive the severance
benefits set forth in the Change in Control Agreement in lieu of the Termination
Benefits payable hereunder which shall in no event be less than the Termination
Benefits.
7. Confidential Information, Noncompetition and Cooperation.
(a) Confidential Information. As used in this Agreement, "Confidential
Information" means information belonging to the Employer or the Bancorp which is
of value to the Employer or the Bancorp in the course of conducting its business
and the disclosure of which could result in a competitive or other disadvantage
to the Employer or the Bancorp. Confidential Information includes, without
limitation, financial information, reports, and forecasts; inventions,
improvements and other intellectual property; trade secrets; know-how; designs,
processes or formulae; software; market or sales information or plans; customer
lists; and business plans, prospects and opportunities (such as possible
acquisitions or dispositions of businesses or facilities) which have been
discussed or considered by the management of the Employer or the Bancorp.
Confidential Information includes information about the Employer or the Bancorp
developed by the Executive in the course of the Executive's employment by the
Employer, as well as other information about the Employer or the Bancorp to
which the Executive may have access in connection with the Executive's
employment. Confidential Information also includes the confidential information
of others with which the Employer or the Bancorp has a business relationship.
Notwithstanding the foregoing, Confidential Information does not include
information in the public domain, unless due to breach of the Executive's duties
under Section 7(b).
(b) Confidentiality. The Executive understands and agrees that the Executive's
employment creates a relationship of confidence and trust between the Executive
and the Employer with respect to all Confidential Information. At all times,
both during the Executive's employment with the Employer and after its
termination, the Executive shall keep in confidence and trust all such
Confidential Information, and shall not use or disclose any such Confidential
Information without the written consent of the Employer, except as may be
necessary in the ordinary course of performing the Executive's duties to the
Employer.
(c) Documents, Records, etc. All documents, records, data, apparatus, equipment
and other physical property, whether or not pertaining to Confidential
Information, which are furnished to the Executive by the Employer or are
produced by the Executive in connection with the Executive's employment shall be
and remain the sole property of the Employer. The Executive shall return to the
Employer all such materials and property as and when requested by the Employer.
In any event, the Executive shall return all such materials and property
immediately upon termination of the Executive's employment for any reason. The
Executive shall not retain with the Executive any such material or property or
any copies thereof after such termination.
(d) Noncompetition and Nonsolicitation. During the Term and while the Executive
is receiving any Termination Benefits or Severance Benefits, the Executive (i)
shall not, directly or indirectly, whether as owner, partner, shareholder,
consultant, agent, employee, co-venturer or otherwise, engage, participate,
assist or invest in any Competing Business (as hereinafter defined); (ii) shall
refrain from directly or indirectly employing, attempting to employ, recruiting
or otherwise soliciting, inducing or influencing any person to leave employment
with the Employer (other than terminations of employment of subordinate
employees undertaken in the course of the Executive's employment with the
Employer); and (iii) shall refrain from soliciting or encouraging any customer
or supplier to terminate or otherwise modify adversely its business relationship
with the Employer; notwithstanding any provision contained herein, the Executive
may invest in any publicly held company, whether or not such company is a
Competing Business, as long as the Executive does not engage in an active
management role in such company. The Executive understands that the restrictions
set forth in this Section 7(d) are intended to protect the Employer's and the
Bancorp's interest in its Confidential Information and established employee,
customer and supplier relationships and goodwill, and agrees that such
restrictions are reasonable and appropriate for this purpose. For purposes of
this Agreement, the term "Competing Business" shall mean a business conducted
anywhere in the geographic area for which the Executive was primarily
responsible during the Term which is competitive with any business which the
Employer, the Bancorp, or any of its affiliates conducts at any time during the
employment of the Executive.
(e) Third-Party Agreements and Rights. The Executive hereby confirms that the
Executive is not bound by the terms of any agreement with any previous employer
or other party which restricts in any way the Executive's use or disclosure of
information or the Executive's engagement in any business. The Executive
represents to the Employer that the Executive's execution of this Agreement, the
Executive's employment with the Employer and the performance of the Executive's
proposed duties for the Employer shall not violate any obligations the Executive
may have to any such previous employer or other party. In the Executive's work
for the Employer, the Executive shall not disclose or make use of any
information in violation of any agreements with or rights of any such previous
employer or other party, and the Executive shall not bring to the premises of
the Employer any copies or other tangible embodiments of non-public information
belonging to or obtained from any such previous employment or other party.
(f) Litigation and Regulatory Cooperation. During and after the Executive's
employment, the Executive shall reasonably cooperate with the Employer and the
Bancorp in the defense or prosecution of any claims or actions now in existence
or which may be brought in the future against or on behalf of the Employer
and/or the Bancorp which relate to events or occurrences that transpired while
the Executive was employed by the Employer. The Executive's reasonable
cooperation in connection with such claims or actions shall include, but not be
limited to, being available to meet with counsel to prepare for discovery or
trial and to act as a witness on behalf of the Employer and/or the Bancorp at
mutually convenient times. During and after the Executive's employment, the
Executive also shall reasonably cooperate with the Employer and the Bancorp in
connection with any investigation or review of any federal, state or local
regulatory authority as any such investigation or review relates to events or
occurrences that transpired while the Executive was employed by the Employer.
During the Term, the Employer shall reimburse the Executive for any reasonable
out-of-pocket expenses incurred in connection with the Executive's performance
of his obligations pursuant to this Section 7(f). If such cooperation is
required after the Term, the Employer shall provide the Executive with
compensation for his services under this Section 7(f) on an hourly basis,
calculated at the Executive's final salary rate, and shall also reimburse the
Executive for any reasonable out-of-pocket expenses incurred in connection with
the Executive's performance of his obligations pursuant to this Section 7(f).
(g) Injunction. The Executive agrees that it would be difficult to measure any
damages caused to the Employer and/or the Bancorp which might result from any
breach by the Executive of the promises set forth in this Section 7, and that in
any event money damages would be an inadequate remedy for any such breach.
Accordingly, subject to Section 8 of this Agreement, the Executive agrees that
if the Executive breaches, or proposes to breach, any portion of this Agreement,
the Employer shall be entitled, in addition to all other remedies that it may
have, to an injunction or other appropriate equitable relief to restrain any
such breach without showing or proving any actual damage to the Employer and/or
the Bancorp.
8. Non-Disparagement.
During and after the Term, the Executive shall not take any action or make any
statement, written, oral or by means of nonverbal communication, to any current
or former employee of the Employer or the Bancorp or to any other person which
(a) disparages or criticizes the Employer or the Bancorp or any officer,
director, employee or agent thereof, its management or its practices, or (b)
disrupts or impairs the normal operations of the Employer or the Bancorp,
including actions that would (i) harm the reputation of the Employer or the
Bancorp with its clients, suppliers or the public; (ii) interfere with existing
contractual or employment relationships of the Employer or the Bancorp with
clients, suppliers or employees; or (iii) result in the filing of any claims,
lawsuits or charges against the Employer or the Bancorp.
9. Indemnification.
The Employer shall indemnify and hold harmless the Executive on the same basis
as the indemnification made available to other Senior Vice Presidents of the
Employer pursuant to the terms of the by-laws of the Employer.
10. Arbitration of Disputes.
Any controversy or claim arising out of or relating to this Agreement or the
breach thereof or otherwise arising out of the Executive's employment or the
termination of that employment (including, without limitation, any claims of
unlawful employment discrimination whether based on age or otherwise) shall, to
the fullest extent permitted by law, be settled by arbitration in any forum and
form agreed upon by the parties or, in the absence of such an agreement, under
the auspices of the American Arbitration Association ("AAA") in Providence,
Rhode Island in accordance with the Employment Dispute Resolution Rules of the
AAA, including, but not limited to, the rules and procedures applicable to the
selection of arbitrators. In the event that any person or entity other than the
Executive or the Employer may be a party with regard to any such controversy or
claim, such controversy or claim shall be submitted to arbitration subject to
such other person or entity's agreement. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. This Section
10 shall be specifically enforceable. Notwithstanding the foregoing, this
Section 10 shall not preclude either party from pursuing a court action for the
sole purpose of obtaining a temporary restraining order or a preliminary
injunction in circumstances in which such relief is appropriate; provided that
any other relief shall be pursued through an arbitration proceeding pursuant to
this Section 10.
11. Consent to Jurisdiction.
To the extent that any court action is permitted consistent with or to enforce
Section 10 of this Agreement, the parties hereby consent to the jurisdiction of
the Superior Court of the State of Rhode Island and the United States District
Court for the District of Rhode Island. Accordingly, with respect to any such
court action, the Executive (a) submits to the personal jurisdiction of such
courts; (b) consents to service of process; and (c) waives any other requirement
(whether imposed by statute, rule of court, or otherwise) with respect to
personal jurisdiction or service of process.
12. Integration.
This Agreement constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes all prior agreements between the
parties with respect to any related subject matter.
13. Assignment; Successors and Assigns, etc.
Neither the Employer nor the Executive may make any assignment of this Agreement
or any interest herein, by operation of law or otherwise, without the prior
written consent of the other party; provided that the Employer may assign its
rights under this Agreement without the consent of the Executive in the event
that the Employer or the Bancorp shall effect a reorganization, consolidate with
or merge into any other corporation, partnership, organization or other entity,
or transfer all or substantially all of its properties or assets to any other
corporation, partnership, organization or other entity. This Agreement shall
inure to the benefit of and be binding upon the Employer and the Executive,
their respective successors, executors, administrators, heirs and permitted
assigns.
14. Enforceability.
If any portion or provision of this Agreement (including, without limitation,
any portion or provision of any section 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 any party to require the performance
of any term or obligation of this Agreement, or the waiver by any 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 a
nationally recognized overnight courier service or by registered or certified
mail, postage prepaid, return receipt requested, to the Executive at the last
address the Executive has filed in writing with the Employer or, in the case of
the Employer, at its main offices, attention of the Chairman and Chief Executive
Officer, and shall be effective on the date of delivery in person or by courier
or three (3) days after the date mailed.
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 Employer.
18. Governing Law.
This is a Rhode Island contract and shall be construed under and be governed in
all respects by the laws of the State of Rhode Island, without giving effect to
the conflict of laws principles of such State. With respect to any disputes
concerning federal law, such disputes shall be determined in accordance with the
law as it would be interpreted and applied by the United States Court of Appeals
for the First Circuit.
19. Counterparts.
This Agreement may be executed in any number of counterparts, each of which when
so executed and delivered shall be taken to be an original; but such
counterparts shall together constitute one and the same document.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by
the Employer, by its duly authorized officer, and by the Executive, as of the
date first written above.
The Washington Trust Company of Westerly
By: Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
Xxxxxx X. XxXxxxx
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Xxxxxx X. XxXxxxx
