EMPLOYMENT AGREEMENT
Exhibit 10.17
This
EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of the 20th day of
July, 2009 (the “Effective Date”) by and between EAST BOSTON SAVINGS BANK, a
bank organized under the laws of the Commonwealth of Massachusetts with its
headquarters located in East Boston, Massachusetts (the “Bank”), and Xxxxxx X.
Xxxxxxx (the “Executive”).
WITNESSETH
WHEREAS, pursuant to an Agreement and
Plan of Merger, dated as of July 20, 2009 (the “Merger Agreement”), between the
Bank, Meridian Interstate Bancorp, Inc., a Massachusetts corporation, Meridian
Financial Services, Incorporated, a Massachusetts mutual holding company and Mt.
Washington Cooperative Bank, a Massachusetts cooperative bank (“MWCB”), MWCB
shall, as of the Merger Effective Time (as defined in the Merger Agreement),
merge with and into the Bank, with the Bank being the surviving entity (the
“Merger”);
WHEREAS, the Executive is currently
employed as President and Chief Executive Officer of MWCB pursuant to an
employment agreement entered into between MWCB and the Executive as of August 1,
2007 (the “MWCB Employment Agreement”) and, effective as of the Merger Effective
Time, the Executive agrees to waive any amounts and benefits under the MWCB
Employment Agreement in consideration for entering into this
Agreement;
WHEREAS,
upon consummation of the Merger, the Bank wishes to provide for the employment
by the Bank of the Executive as of the Effective Date, and the Executive wishes
to serve the Bank as of the Effective Date, on the terms and conditions set
forth in this Agreement; and
WHEREAS,
in order to induce Executive to accept employment with the Bank, the parties
desire to specify the severance benefits which shall be due the Executive by the
Bank in the event that his employment with the Bank is terminated under
specified circumstances.
NOW THEREFORE, in consideration of the
mutual agreements herein contained, and upon the other terms and conditions
hereinafter provided, the parties hereby agree as follows:
1. Employment. The Bank
agrees to employ the Executive and the Executive agrees to be employed by the
Bank on the terms and conditions set forth in this Agreement, effective as of
the Merger Effective Time.
2. Duties and
Responsibilities. The Executive shall serve the Bank as President, Mt.
Washington Division, subject to regulatory approval, as a member of the senior
management team and shall serve under the direction of the Board of Directors of
the Bank (the “Board of Directors”) and under the direction of and report to the
Chief Executive Officer of the Bank. The Executive shall also serve
the Bank in additional services, duties and responsibilities as the Executive
may be requested by the Chief Executive Officer or Board of Directors, including
overseeing the former operations of MWCB. In such capacity or
capacities, the Executive shall perform such services and duties in connection
with the business, affairs and operations of the Bank as may be assigned or
delegated to the Executive from time to time by or under the
authority
of the Chief Executive Officer or Board of Directors, and the Executive shall
adhere to all policies established by the Board of Directors or Committees
thereof at all times. The Executive’s office shall be located at 000
Xxxx Xxxxxxxx, Xxxxxx, Xxxxxxxxxxxxx.
3. Term.
(a) The
term of this Agreement shall be (i) the initial term, consisting of the period
commencing on the Effective Date and ending on the second anniversary of the
Effective Date, plus (ii) any and all extensions of the initial term made
pursuant to this Section 3.
(b) Commencing
on the first anniversary date of the Effective Date (the “Anniversary Date”) and
continuing on each Anniversary Date thereafter, the term of this Agreement shall
automatically extend for an additional year such that the remaining term shall
be two (2) years, unless written notice of non-renewal is provided to Executive
by the Board at least thirty (30) days prior to any such Anniversary Date, in
which case the term of this Agreement will become fixed and will terminate at
the end of the one (1) year period following the Anniversary
Date. Prior to each Anniversary Date, the disinterested members of
the Board will conduct a comprehensive performance evaluation and review of
Executive for purposes of determining whether to allow this Agreement to
automatically extend, and the results thereof will be included in the minutes of
the Board’s meeting.
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 (the “Salary”) at the annual rate of (i) $275,000 for the
first six (6) months following the Effective Date, (ii) $250,000 for the seventh
(7th)
through twelfth (12th)
months following the Effective Date, and (iii) $225,000 commencing on the first
anniversary of the Effective Date, subject to increase from time to time in the
discretion of the Board of Directors. The 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 entitled to participate in an annual incentive program
established by the Board of Directors with such terms as may be established in
the sole discretion of the Board of Directors.
(c) 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 or credit card privileges which the Bank may from time to time have in
effect for its senior executives. Such participation shall be subject to the
terms of the applicable plan documents, generally applicable policies of the
Bank, applicable law and the discretion of the Board of Directors or any
administrative or other committee provided for in or contemplated by any such
plan. Nothing contained in this Agreement shall be construed to create any
obligation on the part of the Bank to establish any such plan or to maintain the
effectiveness of any such plan which may be in effect from time to
time.
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(d) Taxation of Payments and
Benefits. The Bank 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 Bank 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.
(e) Exclusivity of Salary and
Benefits. The Executive shall not be entitled to any payments or benefits
other than those provided under this Agreement.
(f) SERP. The
Executive shall be entitled to receive benefits under a supplemental executive
retirement plan, which the Bank and Executive shall execute concurrent with
signing this Agreement on the terms set forth as Exhibit ___ to the Merger
Agreement.
(g) Joint Beneficiary
Designation Agreement. The Executive shall be entitled to the
benefits provided under the terms of the Joint Beneficiary Designation
Agreement, effective as of September 1, 2004, between the Executive and MWCB,
which the Bank has agreed to assume and honor pursuant to the terms of the
Merger Agreement.
(h) Automobile. For
a period of twelve (12) months following the Effective Date, the Executive shall
be provided with the use of an automobile at the Bank’s expense. The
Executive agrees to comply with such reasonable reporting and expense
limitations on the use of the automobile as may be established from time to time
by the Bank. The Bank shall include annually on the Executive’s Form
W-2 any amount attributable to his personal use of such
automobile. The Bank acknowledges and understands that the automobile
currently used by the Executive is leased by MWCB, that such lease does not
expire until September 2011, and that Executive shall be under no obligation to
purchase such automobile or assume such lease from the Bank after his right to
use such automobile hereunder terminates.
(i) Club
Dues. In addition to other compensation payable to Executive
hereunder, for a period of twelve (12) months following the Effective Date, the
Bank shall pay to Executive an amount which shall be sufficient to compensate
Executive for the cost of the dues payable as a member of Wollaston Golf
Club.
5.
Extent of
Service. During the Executive’s employment under this Agreement, the
Executive shall, subject to the direction and supervision of the Board of
Directors, devote the Executive’s full business time, best efforts and business
judgment, skill and knowledge to the advancement of the Bank’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:
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(a) investing
the Executive’s assets in any company or other entity in a manner not prohibited
by Section 9(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;
(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; or
(c) conducting
bookkeeping and other services for family-related
businesses.
6. Termination. The
Executive’s employment under this Agreement shall terminate under the following
circumstances set forth in this Section 6.
(a) Termination by the Bank for
Cause. The Executive’s employment under this Agreement may be terminated
for Cause without further liability on the part of the Bank effective
immediately upon a vote of the Board of Directors and written notice to the
Executive. Only the following shall constitute “Cause” for such
termination:
(i) the
conviction of the Executive for any felony involving deceit, dishonesty or
fraud;
(ii) a
material act or acts of dishonesty in connection with the performance of the
Executive’s duties, including without limitation, material misappropriation of
funds or property;
(iii) an
act or acts of gross misconduct by the Executive; or
(iv) continued,
willful and deliberate non-performance by the Executive of duties (other than by
reason of illness or disability) which has continued for more than 30 days
following written notice of non-performance from the Board of Directors (or
Executive Committee) which specifically describes the alleged
non-performance.
A
determination of whether the Executive’s employment shall be terminated for
Cause shall be made at a meeting of the Board of Directors called and held for
such purpose, at which the Board of Directors makes a finding that in the good
faith opinion of the Board of Directors an event set forth in subclauses (i),
(ii), (iii) or (iv) has occurred and specifying the particulars thereof in
detail.
(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 within
sixty (60) days following an event constituting “Good Reason.” The
Executive’s termination of employment shall become effective on the thirty-first
(31st) day
following such notice, provided the Bank has not remedied the condition giving
rise to the event of “Good Reason.” For purposes of this Agreement,
“Good Reason” shall mean:
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(i) a
material diminution or other substantial adverse change, not consented to by
Executive, in the nature or scope of the Executive’s responsibilities and
authorities as set forth in this Agreement, including a change in the
Executive’s line of reporting so that he no longer reports directly to the
Bank’s Chief Executive Officer;
(ii) the
assignment to Executive of any duties materially inconsistent with Executive’s
position, including any material change in status or duties, excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in bad faith
and that is remedied by the Bank reasonably promptly after receipt of notice
thereof given by the Executive;
(iii) a
material reduction in the Executive’s base salary except for across-the-board
reductions similarly affecting all or substantially all officers;
(iv) involuntary
relocation of the Bank’s offices in which the Executive is principally employed
by more than 20 miles (10 miles in the event of a Change in Control);
or
(v) failure
of the Bank to comply with material terms of this Agreement.
(c) Termination by the Bank
Without Cause. The Executive’s employment under this Agreement
may be terminated by the Bank without Cause (which, for purposes of
clarification, shall not include a termination of Executive’s employment under
this Agreement due to Executive’s death or Disability) upon written notice to
the Executive. A determination of whether the Executive’s employment shall be
terminated without Cause will be made solely by the Executive Committee of the
Board of Directors.
(d) Disability. If
the Executive shall be disabled so as to be unable to perform the essential
functions of the Executive’s then existing position or positions under this
Agreement with or without reasonable accommodation, for a total of more than 90
days in any calendar year, the Board of Directors may terminate the Executive’s
employment upon written notice to the Executive. If any question shall arise as
to whether during any period the Executive is disabled so as to be unable to
perform the essential functions of the Executive’s then existing position or
positions with or without reasonable accommodation, the Executive may, and at
the request of the Bank shall, submit to the Bank a certification in reasonable
detail by a physician selected by the Bank to whom the Executive or the
Executive’s guardian has no reasonable objection as to whether the Executive is
so disabled, and such certification shall for the purposes of this
Agreement be conclusive of the issue. The physician shall be board-certified in
the area of medicine applicable to the particular disability involved. The
Executive shall cooperate with any reasonable request of the physician in
connection with such certification. If such question shall arise and the
Executive shall fail to submit such certification (unless the failure results
from matters beyond the control of the Executive), the Bank’s determination will
determine the issue of whether the Executive is disabled. Nothing in this
Section 6(d) shall be construed to waive the Executive’s rights, if any, under
existing law including, without limitation; the Family and
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Medical
Leave Act of 1993, 29 U.S.C. §2601 et seq., the Americans with
Xxxxxxxxxxxx Xxx, 00 X.X.X. §00000 et seq, Massachusetts
General Laws Chapter 151B, and Section 10 below.
(e) Death. The
Executive’s employment hereunder shall terminate upon his death.
(f) Termination and Board
Membership. To the extent Executive is a member of the board
of directors or trustees of the Bank or any of its affiliates on the date of
termination of employment with the Bank (other than a termination due to normal
retirement), Executive will resign from all of the boards of directors and
trustees immediately following such termination of employment with the
Bank. Executive will be obligated to tender this resignation
regardless of the method or manner of termination (other than termination due to
normal retirement), and such resignation will not be conditioned upon any event
or payment.
7. Certain Compensation Upon
Termination.
(a) Compensation Upon Voluntary
Termination. If the Executive shall resign (including by
retirement) and voluntarily terminate employment without Good Reason, the Bank
shall pay to the Executive the Executive’s accrued and unpaid salary, accrued
and unpaid vacation pay and all rights and benefits that the Executive is
entitled to receive under the terms of the Bank’s benefit plans or arrangements,
including the Executive’s rights under any Supplemental Executive Retirement
Plan and Joint Beneficiary Designation Agreement (upon death) in effect between
the Bank and the Executive (the “Accrued Obligations”).
(b) Compensation Upon
Death. In the event the Executive’s employment shall terminate
in the event of his death, his surviving spouse (or estate if there is no
surviving spouse) shall be entitled to receive the Accrued Obligations,
including a pro-rata bonus through the date of his death. His surviving spouse
(or estate if there is no surviving spouse) shall also be entitled to any death
benefit provided under the Bank’s life insurance plans.
(c) Compensation Upon
Disability. In the event the Executive’s employment shall
terminate by reason of disability as provided in Section 6(d) above, he shall be
entitled to his Accrued Obligations, including a pro-rata bonus through the date
of his disability, and such disability benefits as determined in accordance with
any short or long-term disability plans then in effect for executives of the
Bank.
(d) Compensation Upon
Termination by the Bank for Cause. In the event the
Executive’s employment shall be terminated by the Bank for Cause as provided by
Section 6(a) above, he shall be entitled to receive his Accrued Obligations
only.
(e) Compensation Upon
Termination of the Bank Without Cause or by the Executive for Good Reason
More Than One Year Following the Effective Date. In the event
the Executive’s employment shall be terminated by the Bank without Cause as
provided in Section 6(c) above, or by the Executive for Good Reason as provided
in Section 6(b) above after the first anniversary of the Effective Date, he
shall be entitled to receive the Accrued Obligations. In addition,
subject to the Executive’s agreement to a release of any and all legal claims in
a form
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satisfactory
to the Bank and the expiration of the applicable revocation period and subject
to compliance with the provisions of Section 9 hereof, the Bank shall pay the
Executive an amount equivalent to the sum of (i) two (2) times the (a)
Executive’s Salary at the rate then in effect pursuant to Section
4(a), and (b) the average of the cash bonuses earned in each of the
three (3) calendar years preceding the year of termination; and (ii) the value
of 24 months of health insurance premiums for health insurance coverage provided
by the Bank, based on the coverage provided to the Executive immediately prior
to his termination. The Bank shall make this in a single lump sum
cash payment within ten (10) days following the termination of
employment. No cash payment shall be made under this Section 7(e) if
a payment is required to be made (and is made) under Section 8(b) of this
Agreement because of the Executive’s termination of employment.
(f) Compensation Upon
Termination of the Bank Without Cause or by the Executive for Good Reason
Within One Year Following the Effective Date. In the event the
Executive’s employment shall be terminated by the Bank without Cause as provided
in Section 6(c) above, or by the Executive for Good Reason as provided in
Section 6(b) above on or before the first anniversary of the Effective Date, he
shall be entitled to receive the Accrued Obligations. In addition, subject to
the Executive’s agreement to a release of any and all legal claims in a form
satisfactory to the Bank and the expiration of the applicable revocation period
and subject to compliance with the provisions of Section 9 hereof, the Bank
shall pay the Executive an amount equivalent to the sum of 2.99 times his “base
amount” (as defined for purposes of Section 280G of the Code) less any other
“parachute payments” (as also defined for purposes of Section 280G of the Code)
made to the Executive. No cash payment shall be made under this
Section 7(f) if a payment is required to be made (and is made) under Section
8(b) of this Agreement because of the Executive’s termination of
employment. The Bank shall make this in a single lump sum cash
payment within ten (10) days following the termination of
employment.
(g) If
the Executive is a “specified employee” (as defined below) of a publicly traded
company, the payments pursuant to this Agreement, including Sections 7(e) and
7(f), may be delayed and paid to the Executive on the first day of the seventh
month following termination of employment if required to avoid penalty under
Section 409A of the Internal Revenue Code (“Code”). For purposes of
this Agreement, the Executive shall not have a “termination of employment” until
he has a “separation from service” within the meaning of Code Section 409A and
the regulations promulgated thereunder. Also for purposes of this
Agreement, Executive is a specified employee if Executive is a “key employee”
within the meaning of Code Section 416(i) (without regard to paragraph (i)
thereof).
8. Termination in Connection
with a Change in Control.
(a) For
purposes of this Agreement, a “Change in Control” means a change in control of
the Bank or Meridian Interstate Bancorp, Inc. (the “Company”) as defined in
Section 409A of the Internal Revenue Code of 1986 (the “Code”), as amended, and
rules, regulations, and guidance of general application thereunder, including
the following:
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i. Change in ownership:
A change in ownership of the Bank or the Company occurs on the date any one
person or group of persons accumulates ownership of more than 50% of the total
fair market value or total voting power of the Bank or the Company,
or
ii. Change in effective
control: A change in effective control occurs when either (i) any one
person or more than one person acting as a group acquires within a 12-month
period ownership of stock of the Company possessing 30% or more of the total
voting power of the Company; or (ii) a majority of the Bank’s or Company’s Board
of Directors is replaced during any 12-month period by Directors whose
appointment or election is not endorsed in advance by a majority of the Bank’s
or Company’s Board of Directors (as applicable), or
iii. Change in ownership of a
substantial portion of assets: A change in the ownership of a substantial
portion of the Company's assets occurs if, in a 12 month period, any one person
or more than one person acting as a group acquires assets from the Company
having a total gross fair market value equal to or exceeding 40% of the total
gross fair market value of the Company’s entire assets immediately before the
acquisition or acquisitions. For this purpose, “gross fair market value” means
the value of the Company’s assets, or the value of the assets being disposed of,
determined without regard to any liabilities associated with the
assets.
Notwithstanding
anything in this Agreement to the contrary, in no event shall the Merger, or the
reorganization of Meridian Financial Services, Incorporated, the Company or Bank
solely within its corporate structure constitute a “Change in Control” for
purposes of this Agreement, provided that there is no reduction in the
Executive’s compensation and benefits.
(b) Termination. If
within the period ending one year after a Change in Control, (i) the Bank
terminates the Executive’s employment without Cause, or (ii) the Executive
voluntarily terminates his employment with Good Reason, the Bank will, within
ten (10) calendar days of the termination of the Executive’s employment, make a
lump-sum cash payment to him equal to 2.99 times his “base amount” (as defined
for purposes of Section 280G of the Code) less any other “parachute payments”
(as also defined for purposes of Section 280G of the Code) made to the
Executive. The cash payment made under this Section 8(b) shall be
made in lieu of any payment also required under Section 7 of this Agreement
because of the Executive’s termination of employment. For purposes of
this Section 8(b), the Executive shall not have a “termination of employment”
until he has a “separation from service” within the meaning of Section 409A of
the Internal Revenue Code (“Code”) and the regulations promulgated
thereunder.
(c) The
provisions of Section 9, including the defined terms used in such sections,
shall continue in effect until the later of the expiration of this Agreement or
one year following a Change in Control, except the non-compete provisions in
Section 9(d) shall not be applicable in the event of a Change in
Control.
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(d) Limitation of Benefits Under
Certain Circumstances. If the payments and
benefits pursuant to this Section 8 of this Agreement, either alone or together
with other payments and benefits the Executive has the right to receive from the
Bank, would constitute a “parachute payment” under Section 280G of the Code, the
payments and benefits shall be reduced or revised, by the amount, if any, which
is the minimum necessary to result in no portion of the payments and benefits
under this Agreement or otherwise being non-deductible to the Bank pursuant to
Section 280G of the Code and subject to the excise tax imposed under Section
4999 of the Code. The reduction will be made in the manner determined
by the Executive, unless it is determined that permitting the Executive to make
the determination would violate Code Section 409A. In such case, the
reduction will be made first from the cash severance payment payable under this
Section 8. The
Bank’s independent public accountants will determine any reduction in the
payments and benefits to be made pursuant to this Agreement or otherwise; the
Bank will pay for the accountant’s opinion. If the Bank and/or the
Executive do not agree with the accountant’s opinion, the Bank will pay to the
Executive the maximum amount of payments and benefits pursuant to this Section
8, as selected by the Executive, that the opinion indicates have a high
probability of not causing any of the payments and benefits to be non-deductible
to the Bank and subject to the excise tax imposed under Section 4999 of the
Code. The Bank may also request, and the Executive has the right to
demand that the Bank request, a ruling from the Internal Revenue Service (“IRS”)
as to whether the disputed payments and benefits pursuant to this Section 8 have
such tax consequences. The Bank will promptly prepare and file
the request for a ruling from the IRS, but in no event will the Bank make this
filing later than thirty (30) days from the date of the accountant’s opinion
referred to above. The request will be subject to the Executive’s
approval prior to filing; the Executive shall not unreasonably withhold his
approval. The Bank and the Executive agree to be bound by any ruling
received from the IRS and to make appropriate payments to each other to reflect
any IRS rulings, together with interest at the applicable federal rate provided
for in Section 7872(f)(2) of the Code. Nothing contained in this Agreement shall
result in a reduction of any payments or benefits to which the Executive may be
entitled upon termination of employment other than pursuant to this Section 8,
or a reduction in the payments and benefits specified in this Section 8, below
zero.
9. Confidential Information,
Noncompetition and Cooperation.
(a) Confidential
Information. As used in this Agreement, “Confidential
Information” means information belonging to the Bank which is of value to the
Bank in the course of conducting its business and the disclosure of which could
result in a competitive or other disadvantage to the Bank. 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
Bank. Confidential Information includes information developed by the Executive
in the course of the Executive’s employment by the Bank, as well as other
information 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 Bank has a business relationship.
Notwithstanding the foregoing, Confidential Information does
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not
include information in the public domain, unless due to breach of the
Executive’s duties under Section 9(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 Bank with
respect to all Confidential Information. At all times, both during the
Executive’s employment with the Bank and after its termination, the Executive
will keep in confidence and trust all such Confidential Information, and will
not use or disclose any such Confidential Information without the written
consent of the Bank, except as may be necessary in the ordinary course of
performing the Executive’s duties to the Bank.
(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 Bank or are produced by the
Executive in connection with the Executive’s employment will be and remain the
sole property of the Bank. The Executive will return to the Bank all such
materials and property as and when requested by the Bank. In any event, the
Executive will return all such materials and property immediately upon
termination of the Executive’s employment for any reason. The Executive will not
retain with the Executive any such material or property or any copies thereof
after such termination.
(d) Noncompetition and
Nonsolicitation. During the period in which the Executive is
employed by the Bank and for two (2) years thereafter, the Executive (i) will
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) will refrain from
directly or indirectly employing, attempting to employ, recruiting or otherwise
soliciting, inducing or influencing any person to leave employment with the Bank
(other than terminations of employment of subordinate employees undertaken in
the course of the Executive’s employment with the Bank); and (iii) will refrain
from soliciting or encouraging any customer or supplier to terminate or
otherwise modify adversely its business relationship with the Bank. The
Executive understands that the restrictions set forth in this Section 9(d) are
intended to protect the Bank’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 cities of Boston or Quincy, Massachusetts,
which is competitive with any business which the Bank or any of its affiliates
conducts or has taken affirmative action to begin conducting at any time during
the employment of the Executive. Notwithstanding the foregoing, the Executive
may own up to one percent (1%) of the outstanding stock of a publicly held
corporation which constitutes or is affiliated with a Competing
Business.
(e) Litigation and Regulatory
Cooperation. During and after the Executive’s employment, the
Executive shall cooperate fully with the Bank 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 Bank which relate to events or occurrences that
transpired while the Executive was employed by the Bank. The Executive’s full
cooperation in connection with such claims or actions shall include, but not be
limited to, being available to meet with counsel to prepare for
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discovery
or trial and to act as a witness on behalf of the Bank at mutually convenient
times. During and after the Executive’s employment, the Executive also shall
cooperate fully with the Bank 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 Bank. The Bank shall reimburse the Executive for any reasonable
out-of-pocket expenses incurred in connection with the Executive’s performance
of obligations pursuant to this Section 9(e).
(f) Injunction. The
Executive agrees that it would be difficult to measure any damages caused to the
Bank which might result from any breach by the Executive of the promises set
forth in this Section 9, and that in any event money damages would be an
inadequate remedy for any such breach. Accordingly, subject to Section 10 of
this Agreement, the Executive agrees that if the Executive breaches, or proposes
to breach, any portion of this Agreement, the Bank 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 Bank.
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 Boston, Massachusetts 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 Bank 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. The cost of
all arbitration proceedings (other than the Executive’s legal fees, which are
subject to section 15 of this Agreement) shall be paid by the Bank.
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 Commonwealth of Massachusetts and the United States District Court for
the District of Massachusetts. 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.
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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 Bank 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 Bank may
assign its rights under this Agreement without the consent of the Executive in
the event that the Bank 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 Bank 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. Payment of Legal
Fees. All reasonable legal fees paid or incurred by the
Executive pursuant to any dispute or question of interpretation relating to this
Agreement shall be paid or reimbursed by the Bank, only if the Executive is
successful pursuant to a legal judgment, arbitration or
settlement. Such payment or reimbursement shall be made no later than
two and one-half months after the successful conclusion in Executive’s favor of
the dispute by judgment, arbitration or settlement.
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 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 Bank or, in the case of the Bank, at its
main offices, attention of the Board of Directors, and shall be effective on the
date of delivery in person or by courier or three (3) days after the date
mailed.
18. 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.
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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, without giving effect
to the conflict of laws principles of such Commonwealth. 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.
20. Federal Deposit Insurance
Act Compliance. All payments made by the Bank to the Executive under any
provision of this Agreement shall be subject to and conditioned upon compliance
with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. § 1828(k) and
any regulations promulgated hereunder.
21. 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.
22. Entire Agreement.
This Agreement contains the entire agreement of the parties relating to the
subject matter hereof, and supersedes in its entirety any and all understandings
or representations relating to the subject matter hereof, including the MWCB
Employment Agreement. This Agreement may not be modified or amended
except by an instrument in writing signed by each of the parties
hereto.
23. Effectiveness.
Notwithstanding anything to the contrary contained herein, this Agreement
shall be subject to consummation of the Merger in accordance with the terms of
the Merger Agreement, as the same may be amended by the parties thereto in
accordance with its terms. In the event the Merger Agreement is terminated
for any reason, this Agreement shall be deemed null and void and the MWCB
Employment Agreement shall remain in effect in accordance with its
terms.
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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 Effective
Date.
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EAST
BOSTON SAVINGS BANK
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By:
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/s/
Xxxxxxx X. Xxxxxxxxx
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Name:
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Xxxxxxx
X. Xxxxxxxxx
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Title:
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Chairman
of the Board and CEO
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EXECUTIVE
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/s/
Xxxxxx X. Xxxxxxx
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Xxxxxx
X. Xxxxxxx
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