Exhibit 10.10
EMPLOYMENT AGREEMENT
Agreement made as of the _____ day of _______________, 199__, by and
among First Essex Bancorp, Inc., a Delaware corporation (the "Company"), and its
subsidiary, First Essex Bank, FSB, a federal savings bank, with its main office
in Lawrence, Massachusetts (the "Bank" and together with the Company, referred
to herein as the "Employers") and Xxxxx X. Xxxxxxxx of Amherst, Massachusetts
(the "Executive").
WITNESSETH:
WHEREAS, the parties hereto desire to provide for the Executive's
employment by the Employers;
NOW THEREFORE, in consideration of the mutual covenants contained
herein, the Employers and the Executive agree as follows:
1. Employment. The Employers agree to employ the Executive and the
Executive agrees to continue in the employ of the Employers on the terms and
conditions set forth.
2. Capacity. The Executive shall serve the Bank and the Company as
Executive Vice President, responsible for overseeing corporate banking
activities, subject to his election by the Company's and the Bank's respective
Boards of Directors. The Executive's principal office location will be
maintained at the Employers' executive offices located in Andover,
Massachusetts.
3. Effective Date and Term. The commencement (the "Commencement Date")
of this Agreement shall be the date hereof. Subject to the provisions of
Sections 6 and 7, the term of the Executive's employment hereunder shall be from
the Commencement Date through December 31, 1998; provided, however, that the
term shall be extended for periods of one year commencing on January 1, 1998 and
on each subsequent January 1 thereafter, with the consent of the Executive and
upon the approval of the Board of Directors of the Employers prior to such date.
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 and Bonus. For all services rendered by the
Executive under this Agreement, the Employers shall pay the Executive a
total salary at the rate of $150,000 per year, subject to increase from
time to time in accordance with the usual practice of the Employers
with respect to review of compensation of its senior executives. The
Executive's salary shall be payable in periodic installments in
accordance with the Employers' usual practice for its senior
executives. During the term of this Agreement, Executive shall be paid
an annual bonus of up to thirty percent (30%) of Executive's total
salary for the preceding calendar year of employment with the
Employers, such bonus to be paid in accordance with the Employers'
established terms and conditions for payment of annual incentive
bonuses to senior executives.
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(b) 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 Employers and Parent. Such
participation shall be in accordance with the provisions of Section
5.12(a) of the Agreement and Plan of Reorganization dated as of August
5, 1996, as amended, by and among the Company, Finest Financial Corp.
("Finest") and Pelham Bank and Trust Company ("Pelham") (the
"Acquisition Agreement"), to the extent applicable, and subject to (i)
the terms of the applicable plan documents, (ii) generally applicable
policies of the Employers, and (iii) the discretion of the respective
Boards of Directors of the Employers or any administrative or other
committee provided for in or contemplated by such plan.
(c) Business Expenses. The Employers 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 Employers. The Employers
shall also reimburse the Executive for costs and expenses related to
the relocation by the Executive of his primary personal residence from
Amherst, Massachusetts, to a location within reasonable proximity for
commuting purposes to the Employers' executive offices in Andover,
Massachusetts, such reimbursement to be in accordance with the
Employers' customary practices and procedures pertaining to senior
executive offices relation expense coverage, including reasonable
requirements with respect to substantiation and documentation as may be
specified by the Employers.
(d) 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 Employers, which approval shall not be unreasonably withheld.
(e) Other Benefits. The Executive shall be provided with the
use of an automobile at the Employers' expense. The Employers shall
also pay the reasonable annual membership fee for the country club of
Executive's choice.
5. Extent of Service. During his employment hereunder, the Executive
shall, subject to the direction and supervision of the respective Boards of
Directors of the Employers, devote his full business time, best efforts and
business judgment, skill and knowledge to the advancement of the Employers'
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 Boards 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
9(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 9(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
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(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
Employers shall continue to pay an amount equal to the Executive's
salary to the Executive's beneficiary designated in writing to the
Employers prior to his death (or to his estate, if he fails to make
such designation) for a period of six months after the date of the
Executive's death, at the salary rate in effect on the date of his
death, said payments 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 Employers for Cause. The Executive's
employment hereunder may be terminated by the Employers without further
liability on the part of either Employer effective immediately by a
two-thirds vote of all of the members of the Board of Directors of the
Employers for Cause by written notice to the Executive setting forth in
reasonable detail the nature of such Cause. Termination of the
Executive for "Cause" shall include termination because of Executive's
personal dishonesty, incompetence willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule or regulation
(other than traffic violations or similar offenses) or final cease and
desist order, or material breach of any provision of this Agreement.
(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 of each of the Employers in
the event of the failure of the Boards of Directors of the Employers to
elect the Executive to the office of Executive Vice President or to
continue the Executive in such office, the failure by the Employers to
comply with the provisions of Section 4(a) or material breach by the
Employers of any other provision of this Agreement. In addition to the
foregoing, Executive shall be permitted to terminate his employment
hereunder for any reason at any time during the first twelve months
under this Agreement.
(d) Termination by the Employers Without Cause. The
Executive's employment with the Employers may be terminated without
cause by a two-thirds vote of all of the members of the Board of
Directors of either of the Employers on written notice to the
Executive.
(e) Termination by Operation of Law. The Executive's
employment with the Employers shall terminate:
(i) if the Executive is removed and/or permanently
prohibited from participating in the conduct of the Bank's
affairs by an order issued under Section
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8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12
U.S.C. ss.1818(e)(4) or (g)(1)), as of the effective date of
the order;
(ii) if the Bank is in default (as defined in Section
3(x)(1) of the Federal Deposit Insurance Act), as of the date
of default; or
(iii) except to the extent determined that
continuation of this Agreement is necessary for the continued
operation of the Bank, by the Director of the Office of Thrift
Supervision (the "Director") or his or her designee, (x) at
the time the Federal Deposit Insurance Corporation or the
Resolution Trust Corporation enters into an agreement to
provide assistance to or on behalf of the Bank under the
authority contained in Section 13(c) of the Federal Deposit
Insurance Act; or (y) at the time the Director or his or her
designee approves a supervisory merger to resolve problems
related to operation of the Bank or when the Bank is
determined by the Director to be in an unsafe or unsound
condition.
(f) Certain Termination Benefits. In the event of termination
pursuant to the first sentence of Section 6(c) or pursuant to Section
6(d), the Executive shall be entitled to reimbursement under the second
sentence of Section 4(c) for actual costs and expenses incurred or
contractually committed to be paid by the Executive as of the date of
such termination, if any, and the following additional benefits:
(i) For the period subsequent to the date of
termination until the Expiration Date the Employers shall
continue to pay the Executive a total salary at the rate in
effect on the date of termination.
(ii) For the period subsequent to the date of
termination until the Expiration Date, the Executive shall
continue to receive all benefits described in Section 4(b)
above existing on the date of termination (except for any cash
bonus plans which shall be prorated 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 Employers, with a total annual salary at the rate in
effect on the date of termination, and service credits will
continue to accrued during such period as if the Executive had
remained in the employ of the Employers.
(iii) If, in spite of the provision of Section
6(f)(ii) 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 Employers, the Employers shall pay or provide
for payment of such benefits and service credits for such
benefits to the Executive, or to the Executive's dependents,
beneficiaries or estate.
In the event of termination pursuant to the second sentence of Section
6(c), Executive shall be entitled to receive a lump sum payment of $225,000 and
all of the benefits described in Section 6(f)(ii) and (iii) above, except for
any payments of any amount under any bonus or other compensation plans.
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In the event of termination pursuant to Section 6(e), all obligations
of the Employers under this Agreement shall terminate as of the date indicated,
but vested rights of the parties hereunder shall not be affected.
(g) Set-off. The Employers shall be entitled to set off
against any cash compensation to be provided to the Executive under
Section 6(f)(i) above one-half of the amount of any cash compensation
received by the Executive from other employment during the period in
which the Executive receives cash compensation under Section 6(f)(i).
The Executive shall inform the Employers of any such amounts of cash
compensation and shall refund to the Employers any amounts which the
Employers has paid which exceed the amounts due from the Employers
after application of the set-off provided for in this paragraph.
Notwithstanding the foregoing and any other provision of this
Agreement, the Executive shall be under no obligation to seek or accept
any employment after termination of employment with the Employers for
any reason.
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 Employers, acting through 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 Employers'
disability income plan. While receiving disability income payments under such
plan, the Executive shall receive a salary from the Employers which when
combined with the Executive's disability income payments will equal sixty (60%)
percent of the Executive's prior salary from the Employers, and shall continue
to participate in the Employers' 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, the Employers shall pay the
Executive benefits equal to those the Executive would have received if the
Employers' current disability income plan was 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 due to physical or mental illness, the Executive may,
and at the request of the Employers will, submit to the Employers a
certification in reasonable detail by a physician selected by the Executive or
his guardian to whom the Employers 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 Employers' determination
of such issue shall be binding on the Executive.
8. Suspension of Agreement.
Notwithstanding the provisions of Section 3, the Executive's employment
hereunder shall be suspended if the Executive is suspended and/or temporarily
prohibited from participating in the conduct of the Bank's affairs by a notice
served under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (12
U.S.C. ss. 1818(e)(3) and (g)(1)) as of the date of service unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the Bank
may in its discretion (i) pay the Executive all or part of the compensation
withheld while the Agreement was suspended pursuant to this Section 8 and (ii)
reinstate (in whole or in part) any of its obligations which were suspended.
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9. Noncompetition and Confidential Information.
(a) Noncompetition. During
(i) a period of one year following the date of
termination of the Executive's employment with the Employers
(x) by the Executive as a result of his election not to extend
pursuant to Section 3 or by the Employers for cause pursuant
to Section 6(b) hereof or (y) by the Executive in the event
that such termination constitutes a material breach by the
Executive of any of the provisions of this Agreement, and
(ii) the period during which the Employers continues
to provide benefits to the Executive pursuant to Section
6(f)(i)-(iii) hereof (other than to the extent that benefits
are provided under Section 6(f)(ii) or 6(f)(iii) following the
Executive's termination pursuant to the second sentence of
Section 6(c)), 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 11), compete in the Bank's market area
(defined as all cities and towns in which the Bank or an
affiliate has an office or a branch on the date of termination
and all areas within a ten mile radius of each such office and
branch) with the banking or any other business conducted by
the Employers during the period of his employment hereunder,
nor will he attempt to hire any employee of the Employers,
assist in such hiring by any other Person, encourage any such
employee to terminate his or her relationship with the
Employers, or solicit or encourage any customer of the
Employers to terminate its relationship with the Employers or
to conduct with any other Person any business or activity
which such customer conducts or could conduct with the
Employers.
(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 hist duties and responsibilities
hereunder), or use for his own benefit or gain, any confidential
information of the Employers obtained by him incident to his employment
with the Employers. The term "confidential information" includes,
without limitation, financial information, business plans, prospects
and opportunities (such as lending relationships, financial product
developments, or possible acquisitions or dispositions of businesses or
facilities) which have been discussed or considered by the management
of the Employers but does not include any information which has become
part of the public domain by means other than the Executive's
nonobservance of his obligations hereunder.
(c) Relief; Interpretation. The Executive agrees that the
Employers shall be entitled to injunctive relief for any breach by him
of the covenants contained in Sections 9(a) or 9(b). In the event that
any provision of this Section 9 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 are, or range of
activities as to which it may be enforceable. For purposes of this
Section 9, the term
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"Employers" shall mean the Company, the Bank and any of their
respective subsidiaries and affiliates.
10. 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.
11. Definition of "Person". 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.
12. Withholding. All payments made by the Employers under this
Agreement shall be net of any tax or other amounts required to be withheld by
the Employers under applicable law.
13. 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 Employers, 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 arbitrators which shall be as provided in this
Section 13. 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 Employers shall pay (or the
Executive shall be entitled to recover from the Employers, 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 aware 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.
14. Assignment; Successors and Assigns, etc. Neither the Employers 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 and without such consent any attempted transfer or assignment shall be
null and of no effect; provided, however, that the Employers may assign their
rights under this Agreement without the consent of the Executive in the event
the Employers 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 Employers and the Executive, their respective successors,
executives, administrators, heirs and permitted assigns. In the event of the
Executive's death prior to the completion by the Employers of all payments due
him under this Agreement, the Employers shall continue such payments to the
Executive's beneficiary designated in writing to the Employers prior to his
death (or to his estate, if he fails to make such designation).
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15. 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 provisions 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.
16. 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.
17. 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
Employers or, in the case of the Employers, at their executive offices,
attention of the Board of Directors.
18. Amendment. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by the duly authorized
representative of the Employers.
19. 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.
20. Prior Agreements. This Agreement, together with that certain
Special Termination Agreement of even date herewith by and among the Company,
the Bank and the Executive contains the entire agreement and understanding of
the parties with respect to its subject matter and supersedes the Employment
Agreement dated October 1, 1995 by and among Finest, Pelham (the predecessors
through merger to the Company and the Bank, respectively) and the Executive and
any provisions contained in the Acquisition Agreement, including without
limitation Schedule 5.12 thereto, other than those provisions contained in
Section 5.12(a) of the Acquisition Agreement referred to in Section 4(b) above,
which prior agreement and said provisions shall be of no further force or effect
as of the date hereof.
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IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Employers, by their duly authorized officers, and by the
Executive, as of the date first above written.
ATTEST: FIRST ESSEX BANCORP, INC.
______________________________ By:_________________________________
Secretary President and Chief Executive Officer
ATTEST: FIRST ESSEX BANK, FSB
______________________________ By:_________________________________
Secretary President and Chief Executive Officer
WITNESS: EXECUTIVE
______________________________ ____________________________________
Xxxxx X. Xxxxxxxx
