XXXXXXX NATIONAL CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT
AGREEMENT
For
Xxxxx X. Xxxxxxxx
December 24, 1996
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SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
THIS AGREEMENT, made and entered into this 24th day of December, 1996 by
and between Xxxxxxx National Corporation, its subsidiaries and affiliates,
(hereinafter called the "Corporation") and Xxxxx X. Xxxxxxxx (hereinafter called
the "Executive").
WITNESSETH:
WHEREAS, the Executive has been in the employ of the Corporation and/or its
subsidiaries and is now serving the Corporation as its Vice President/Cashier
and Chief Operations Officer; and,
WHEREAS, because of the Executive's experience, knowledge
of affairs of the Corporation, and reputation and contacts in the industry, the
Corporation deems the Executive's continued employment with the Corporation
important for its future growth; and,
WHEREAS, it is the desire of the Corporation and in its best interest that
the Executive's service be retained; and,
WHEREAS, in order to induce the Executive to continue in the employ of the
Corporation and in recognition of her past service, the Board of Directors
voted on December 10, 1996 to authorize the Corporation to enter into an
Agreement to provide her certain benefits;
NOW, THEREFORE, in consideration of services performed in the past and to
be performed in the future as well as of the mutual promises and covenants
herein contained, it is agreed as follows:
ARTICLE ONE
1.01 Employment. The Corporation may employ the Executive in such capacity as
the Corporation may from time to time determine. Notwithstanding anything
contained herein, this Agreement is not an agreement of employment and nothing
herein shall restrict the Corporation concerning the terms and conditions of
the Executive's employment.
The benefits provided by this Agreement are not part of any salary reduction
plan or an arrangement deferring a bonus or a salary increase. The Executive
has no option to take any current payment or bonus in lieu of these salary
continuation benefits.
ARTICLE TWO
2.01 Normal Retirement Benefits.
(a) If the Executive shall continue in the employment of the Corporation
until the first of the month coincident with or next following her
sixty- fifth (65th) birthday (hereinafter referred to as the "Normal
Retirement Date"), she shall be entitled to a Normal Retirement Benefit,
determined as of the effective date of her actual retirement and
continuing for twenty (20) years, payable monthly, in the annual amount
of sixty percent (60%) of her Benefit Computation Base (hereinafter
defined), reduced by the sum of (1), (2), and (3) below.
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1. Fifty percent (50%) of the Executive's (actual or projected)
annual primary social security retirement benefit projected as of
the Executive's social security normal retirement age based on
her Benefit Computation Base in effect on the date of termination
of the Executive's employment with the Corporation;
2. The annual amount of benefits payable to the Executive (or her
beneficiaries) at the Normal Retirement Date calculated on a
single life annuity basis from any qualified defined benefit
pension plan maintained and funded by the Corporation, as such
plan or plans may be amended or modified from time to time;
3. The annual amount of benefits payable at the Normal Retirement
Date calculated on a single life annuity basis from any other
non-qualified supplemental retirement plan maintained and funded
by the Corporation, as such plan or plans may be amended or
modified from time to time.
(b) If the Executive has (or will have) completed fewer than twenty-five
(25) years (or 300 months) of service with the Corporation as of her
Normal Retirement Date, then the Normal Retirement Benefit shall be the
amount determined by multiplying the amount which would otherwise be the
Normal Retirement Benefit under paragraph (a) above, by a fraction, not
to exceed one (1), the numerator of which is the actual number of months
of the Executive's employment with the Corporation, and the denominator
of which is three hundred (300) months.
(c) The aggregate amount of Normal Retirement Benefit shall be further
reduced by any consulting fees received by the Executive from a
Consulting Agreement entered into between the Corporation and the
Executive on December 24, 1996.
2.02 Benefit Computation Base. The Executive's Benefit Computation Base shall
be the average of the Executive's annual compensation (including base salary,
bonus, and any salary reduction amounts pursuant to Sections 401(k) or 125 of
the Internal Revenue Code of 1986, as amended) paid during the thirty-six (36)
consecutive calendar months during the Executive's period of employment by the
Corporation in which such compensation is the highest.
2.03 Accrued Benefit. As used herein for the purposes of Section 3.01, 4.01,
5.01, or 5.02, the term "Accrued Benefit" shall mean the benefit amount the
Executive would be entitled to under Section 2.01, commencing at the
Executive's Normal Retirement Date with the following exceptions:
1. The event of (a) death, (b) disability, (c) termination of
employment, (d) early retirement, or (e) merger, consolidation
or sale (in the event of (e), as modified by Section 10.1
hereof) as the case may be, the benefit to which the Executive
will be entitled shall be determined by multiplying the Normal
Retirement Benefit amount by a fraction, not to exceed (1), the
numerator of which is the actual number of months of the
Executive's employment with the Corporation, and the denominator
of which is three hundred (300) months. The Corporation
recognizes and acknowledges that the Executive has been employed
for three hundred (300) months.
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2. If the Executive employment terminates for any reason prior to
her Normal Retirement Date, in calculating her Accrued Benefit,
(i) the offset for primary social security retirement benefit
shall be calculated on the basis of the amount projected to be
payable at the Executive's social security normal retirement age
assuming continued earnings by the Executive at the rate in
effect at termination of employment until the Executive's social
security normal retirement age; (ii) the offset for any
qualified defined benefit plan shall be calculated on the basis
of the Executive's accrued benefit in said plan upon termination
of employment projected to be payable at the Executive's Normal
Retirement Date; and (iii) the offset for any other non-
qualified supplemental retirement plan shall be calculated on
the basis of the Executive's accrued benefit in said plan upon
termination of employment projected to be payable at the
Executive's Normal Retirement Date.
2.04 Optional Forms of Payment. In lieu of the twenty (20) year certain
payments provided in Section 2.01 above, or whenever an Accrued Benefit is
payable under Section 4.01 or 5.01 of this Agreement, the Executive may elect
in the calendar year prior to the calendar year in which payments are to begin,
an optional form of payment which shall be the actuarial equivalent (factors
defined in the Corporation's qualified defined benefit pension plan) of the
said twenty (20) year certain payments. The optional form of payment shall be
any optional form of payment which is provided to the Executive under the terms
of the Corporation's qualified defined benefit pension plan.
ARTICLE THREE
3.01 Death of Executive.
(a) If the Executive dies while employed by the Corporation but prior to the
commencement of the payment of benefits under Section 2.01, 4.01, 5.01,
5.02, or 10.01, the Corporation will pay to the Executive's named
beneficiaries, for a period of twenty (20) years certain commencing on
the first day of the month next following the delivery to the Corporation
of a death certificate, a total annual amount equal to the Accrued
Benefit as of the Executive's date of death.
(b) If the Executive dies following the commencement of the payment of
benefits under Section 2.01, 4.01, 5.01, 5.02, or 10.01, such payment of
benefits shall continue to the named beneficiaries of the Executive until
all such benefits have been paid.
(c) If the Executive dies following the termination of her employment with
the Corporation and prior to the commencement of the payment of benefits
under Section 2.01, 4.01, 5.01, 5.02, or 10.01, the Corporation shall pay
to the Executive's named beneficiaries an annual benefit which shall be
the Executive's Accrued Benefit as of the date of her termination of her
employment. Such benefits shall be payable monthly, commencing on the
first day of the month next following the Normal Retirement Date, or any
date prior tothe Normal Retirement Date approved by the Corporation, and
continuing for twenty (20) years.
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3.02 Beneficiaries. The Executive may designate, in writing to the
Corporation, one or more beneficiaries. If no beneficiary is so named or if no
named beneficiary is living at the time a payment is due, benefit payments
shall be made, when due, to the Executive's estate.
ARTICLE FOUR
4.01 Disability Prior to Retirement. In the event the Executive shall become
disabled, the Corporation will pay no disability benefits hereunder.
Disability benefits (if any) will be paid to the Executive through such
insurance programs as may be sponsored by the Corporation. Upon the
Executive's attainment of the Normal Retirement Date, the Executive shall
commence receiving payment of her Accrued Benefit determined as of the date of
the disability. The Accrued Benefit shall be paid monthly, for twenty (20)
years certain commencing on the first day of the month following the later of
the termination of such benefits or the Normal Retirement Date, or in the
manner provided in Section 2.04.
4.02 Re-employment following Disability. In the event the Executive returns to
work with the Corporation after terminating employment because of disability,
this Agreement shall continue in full force and effect as though such disability
had not occurred.
ARTICLE FIVE
5.01 Early Retirement, Termination of Service or Discharge. Except to the
extent otherwise provided in Sections 5.03 and 5.04, in the event that the
Executive's employment with the Corporation is terminated, voluntarily or
involuntarily, before the Executive attains the Normal Retirement Date, for
reasons other than death or disability, the Executive shall be entitled to an
annual benefit, which shall be her Accrued Benefit as of the date of her
termination of employment. Such benefit shall be payable monthly, commencing
on the first day of the month next following the Normal Retirement Date and
continuing for twenty (20) years. The Executive may elect to receive such
benefit provided in this Section 5.01 prior to the Normal Retirement Date at
any date between age 55 and the Normal Retirement Date. Such early
commencement will result in a .25 percent reduction for each month payment
commences prior to age 65.
5.02 Optional Forms of Payment. In lieu of the twenty (20) year certain
payments provided in Section 5.01, the benefits payable under such Sections may
be payable in the manner provided in Section 2.04.
5.03 Employment by Competition. Anything to the contrary in this Agreement
notwithstanding, in the event that either (a) prior to the Normal Retirement
Date, the Executive's employment with the Corporation, shall have terminated
for whatever reason or (b) after she shall have begun to receive benefits under
this Agreement, and in either such event the Executive shall compete with the
business of the Corporation, then all payments which might otherwise be due and
payable hereunder shall be immediately forfeited and all rights of the
Executive and her beneficiaries hereunder shall become void. The Executive
will be deemed to have competed with the business of the Corporation if, during
the one-year period following termination of her employment with the
Corporation, she, directly or indirectly, whether as partner, shareholder
(other than as the owner of less than 2% of the outstanding capital stock of a
publicly traded corporation), consultant, agent, employee, co-venturer, or
otherwise, or through any Person (as hereafter defined),
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(i) competes in the Corporation's market area (defined as the area
within 20 miles of any branch or facility of the Corporation)
with, or is employed in such market area by a Person which competes
with, the banking or any other business conducted by the
Corporation during the period of her employment,
(ii) attempts to hire any employee of the Corporation, assist in such
hiring by any other Person, or encourages any such employee to
terminate her or her relationship with the Corporation, or
(iii) solicits or encourages any customer of the Corporation to terminate
its relationship with the Corporation or to conduct with any other
Person any business or activity which such customer conducts or
could conduct with the Corporation.
For purposes of this Section 5.03, the term "Person" shall mean an individual,
a corporation, an association, a partnership, an estate, a trust and any other
entity or organization, and shall include an affiliate office within the
Corporation's "market area" as defined in Section 5.03 above of a Person whose
headquarters or parent organization is located outside the "market area" as so
defined.
5.04 Forfeiture. Anything to the contrary in this Agreement notwithstanding
(other than Section 10.01), benefits under this Agreement shall be immediately
forfeited and all rights of the Executive and her beneficiaries hereunder shall
become null and void, if the Executive's employment with the Corporation is
terminated forcause. For this purpose, a termination shall be a termination for
"Cause" only if the termination is for one or more of the following:
(i) the willful and continued failure of her to substantially perform
her duties (other than any such failure resulting from her
incapacity due to physical or mental illness) after a demand for
substantial performance is delivered to her by the Corporation or
the Board which specifically identifies the manner in which such
Board believes that she has not substantially performed her duties,
or
(ii) willful misconduct by her which is materially injurious to the
Corporation monetarily or otherwise.
For purposes of this paragraph, no act, or failure to act, on the Executive's
part shall be considered "willful" unless done, or omitted to be done, by her
not in good faith and without reasonable belief that her action or omission was
in the best interests of the Corporation.
Notwithstanding the foregoing, she shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to her a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board of Directors of the
Corporation or the Board at a meeting of such Board called and held for the
purpose (after reasonable notice to her and an opportunity for her, together
with her counsel, to be heard before such Board), finding that in the good
faith opinion of such Board she was guilty of conduct set forth above in
clauses (i) or (ii) of this Section 5.04 and specifying the particulars thereof
in detail.
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ARTICLE SIX
6.01 Interest. Any payment that is required to be made hereunder that is
delayed beyond the date specified in this Agreement shall bear interest at a
variable rate which shall be the rate of interest on one year U.S. Treasury
Bills determined at the first auction of each calendar year or part thereof
during the period of which interest is to be applied to any obligation
hereunder.
ARTICLE SEVEN
7.01 Alienability. Neither the Executive, nor any beneficiary under this
Agreement shall have any power or right to transfer, assign, anticipate,
hypothecate, mortgage, commute, modify, or otherwise encumber in advance any of
the benefits payable hereunder, nor shall any of said benefits be subject to
seizure for the payment of any debts, judgments, alimony or separate
maintenance, owed by the Executive or her beneficiary or any of them, or be
transferable by operation of law in the event of bankruptcy, or otherwise.
ARTICLE EIGHT
8.01 Participation in Other Plans. Nothing contained in this Agreement shall
be construed to alter, abridge, or in any manner affect the rights and
privileges of the Executive to participate in and be covered by any pension,
profit sharing, group insurance, bonus or any other employee plan or plans
which the Corporation may have or hereafter have.
ARTICLE NINE
9.01 Funding.
(a) The Corporation reserves the right at its sole and exclusive discretion to
insure or otherwise provide for the obligations of the Corporation
undertaken by this Agreement or to refrain from same, and to determine the
extent, nature and method thereof, including the establishment of one or
more trusts. Should the Corporation elect to insure this Agreement, in
whole or inpart, through the medium of insurance or annuities, or both,
the Corporation shall be the owner and beneficiary of the policy or
annuity. At no time shall the Executive be deemed to have any right, title
or interest in or to any specified asset or assets of the Corporation, or
any trust or escrow arrangement, including, but not by way of restriction,
any insurance or annuity contracts or the proceeds therefrom.
(b) Any such policy, contract or asset shall not in any way be considered to
be security for the performance of the obligations of this Agreement.
(c) If the Corporation purchases a life insurance or annuity policy on the
life of the Executive, the Executive agrees to sign any papers that may be
required for that purpose and to undergo any medical examination or tests
(at the Corporation's expense) which may be necessary, and generally
cooperate with the Corporation in securing such policy.
(d) To the extent the Executive acquires a right to receive benefits under
this Agreement, such right shall be equivalent to the right of an
unsecured general creditor of the Corporation.
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ARTICLE TEN
10.01 Reorganization. The Corporation shall not merge or consolidate into or
with another corporation if such merger or consolidation shall result in the
other corporation being the survivor corporation, nor shall it sell
substantially all of its assets to another corporation, firm or person, unless
and until:
(a) The Executive and such other corporation, firm or person agree (i) that
if the Executive is then employed by the Corporation, she shall continue
in the employ of the succeeding, continuing or acquiring corporation,
firm or person, and (ii) that such other corporation, firm or person
agrees in writing without further qualification to assume and discharge
the obligations ofthe Corporation under this Agreement, or;
(b) If the Executive and such corporation, firm or person do not agree (i)
that the Executive if then employed by the Corporation shall continue in
the employ of such corporation, firm or person, and (ii) such
corporation, firm or person does not so agree to assume and discharge
such obligations, the Corporation shall pay to the Executive, in one lump
sum, her Accrued Benefit as of the date of such merger, consolidation or
sale. All calculations of the Accrued Benefit, for purposes of this
Section 10.1(b), shall further be discounted to present value in
accordance with the actuarial tables used in the Corporation's defined
benefit pension plan.
Upon the occurrence of any such event and the written unqualified assumption of
the obligations of the Corporation by such successor corporation, firm or
person, the term "Corporation" as used in this Agreement shall be deemed to
refer to such successor or survivor corporation, firm or person.
ARTICLE ELEVEN
11.01 Benefits and Burdens. This Agreement shall be binding upon and inure to
the benefit of the Executive and her personal representatives, the Corporation,
and any successor organization which shall succeed to substantially all of the
Corporation's assets and business without regard to the form of such succession.
11.02 Corporation. As used in this Agreement, Corporation shall mean the
Beverly National Corporation, a Massachusetts Corporation, and any affiliated
entity, successor organization, parent, subsidiary or holding company.
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ARTICLE TWELVE
12.01 Communications. Any notice or communication required of either party
with respect to this Agreement shall be made in writing and may either be
delivered personally or sent by First Class mail, as the case may be:
To the Corporation:
c/o Clerk of the Corporation
Beverly National Corporation
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
To the Executive:
Xxxxx X Xxxxxxxx
000 Xxxxxxxxx Xxxx
Xxxxxx, XX 00000
Each party shall have the right by written notice to change the place to which
any notice may be addressed.
ARTICLE THIRTEEN
13.01 Claims Procedure. In the event that benefits under this Agreement are
not paid to the Executive (or her beneficiary in the case of the Executive's
death), and such person feels entitled to receive them, a claim shall be made
in writing to the Corporation within sixty (60) days after written notice from
the Corporation to the Executive or her beneficiary or personal representative
that payments are not being made or are not to be made under this Agreement.
Such claim shall be reviewed by the Corporation. If the claim is approved or
denied, in full or in part, the Corporation shall provide a written notice of
approval or denial within sixty (60) days from the date of receipt of the claim
setting forth the specific reason for denial, specific reference to the
provision of this Agreement upon which the denial is based, and any additional
material or information necessary to perfect the claim, if any. Also, such
written notice shall indicate the steps to be taken if a review of the denial
is desired. If a claim is denied (a claim shall be deemed denied if the
Corporation does not take action within the aforesaid sixty (60) day period)
and a review is desired, the Executive (or beneficiary in thecase of the
Executive's death), shall notify the Corporation in writing within twenty (20)
days. In requesting a review, the Executive or her beneficiary may review this
Agreement or any document relating to it and submit any written issues and
comments he or she may feel appropriate. In its sole discretion the
Corporation shall then review the claim and provide a written decision within
sixty (60) days. This decision likewise shall state the specific reasons for
the decision and shall include reference to specific provisions of this
Agreement on which the decision is based. Any decision of the Corporation
shall not be binding on the Executive, her personal representative, or any
beneficiary without consent, nor shall it preclude further action by the
Executive, her personal representatives or beneficiary.
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ARTICLE FOURTEEN
14.01 Entire Agreement. This instrument may be altered or amended only by
written agreement signed by the parties hereto.
14.02 Jurisdiction. The parties, terms and conditions of this Agreement are
subject to and shall be governed by the laws of the Commonwealth of
Massachusetts.
14.03 Gender. Any reference in this Agreement to the masculine shall be
deemed to include the feminine where the context so requires.
14.04 Operation of Law on Corporation's Obligations. In the event that any
governmental entity promulgates any statute, rule, regulation, policy or order
which restricts or prohibits the Corporation from making payments or affects
any operation of the Agreement to the Executive under this Agreement, then the
Corporation's obligations to make payments to the Executive (or her
beneficiary) hereunder shall terminate or be restricted or suspended
(consistent with such law or binding regulation, policy or order) for so long
as such restriction or prohibition applies to the Corporation. Nothing in this
Agreement is intended to require or shall be construed as requiring the
Corporation to do or fail to do any act in violation of any applicable law or
binding regulation, policy or order. Provisions other than payment provisions
which are found to be invalid or illegal will not be given effect and the
Agreement will be enforced as if those provisions had never been inserted.
IN WITNESS WTHEREOF, the Corporation has caused this Agreement to be duly
executed by its duly authorized officer and its Corporate Seal affixed at
Beverly, Massachusetts the day and year first above written.
BEVERLY NATIONAL CORPORATION
Attest:
/s/ Xxxx X. Good III /s/ Xxxxxxxx X. Xxxxx
__________________________ By__________________________
Chairman, Compensation President
Committee of the
Board of Directors
/s/ Xxxxxxxx X. Xxxxx /s/ Xxxxx X. Xxxxxxxx
__________________________ _____________________________
Witness Executive
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