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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
AGREEMENT dated as of May 16, 1991, by and among ANDOVER BANCORP, INC., a
Delaware corporation (the "Company") and its subsidiary, ANDOVER SAVINGS BANK, a
Massachusetts savings bank with its main office in Andover, Massachusetts (the
"Bank") (the Bank and the Company shall be hereinafter sometimes collectively
referred to as the "Employers") and XXXXXX X. XXXXXXXX, currently of West
Roxbury, 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 hereinafter set forth.
2. CAPACITY. The Executive shall serve the Company and the Bank as
President and Chief Executive Officer, subject to his election by the respective
Boards of Directors of the Company and the Bank.
3. EFFECTIVE DATE AND TERM. The commencement date (the "Commencement
Date") of this Agreement shall be the date first above written. Subject to the
provisions of Section 7, the term of the Executive's employment hereunder shall
be for three years from the Commencement Date; provided, however, that the term
hereof shall automatically extend for periods of one year commencing on the
third anniversary of the Commencement Date and on each subsequent anniversary
date thereafter unless the Company or the Bank, as the case may be, gives
written notice to the Executive at least six months prior to such anniversary
date that such term is not being extended. The last day of such term, as may be
so extended from time to time, is herein sometimes referred to as the
"Expiration Date."
4. COMPENSATION AND BENEFITS. The 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 Employers shall pay the Executive a total salary at the rate
of $190,000 per year.
The Executive's salary shall be payable in periodic installments in accordance
with the Employers' usual practices for their senior executives.
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(b) REGULAR BENEFITS. The Executive shall also be entitled to
participate in any and all bonus incentive plans, stock option plans,
employee stock ownership plans, employee benefit plans, medical insurance
plans, life insurance plans, disability income plans, retirement plans, and
other benefit plans from time to time in effect for senior executives of
the Employers. Such participation shall be subject to (i) the terms of the
applicable plan documents and applicable federal and state laws, (ii)
generally applicable policies of the Employers, and (iii) the discretion of
the respective Boards of Directors or of the Company and the Bank or any
administrative or other committee provided for in or contemplated by such
plan.
(c) OTHER BENEFITS. The Employers shall also provide the Executive
with the use of an American-model automobile having a listed purchase price
not in excess of $25,000, and payment of the initial registration and
annual membership fees in the Xxxxx Club.
(d) 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.
(e) VACATION. The Executive shall be entitled to four 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.
(f) STOCK OPTIONS. In addition to the regular stock options
contemplated by Section 4(b) above, following execution of this agreement,
and subject to approval by the Board of Directors of the Company, the
Company shall grant to the Executive stock options evidencing the right to
purchase 20,000 shares of the Common Stock of the Company at a purchase
price per share equal to the fair market value of a share of the Company's
Common Stock as of the grant date, which options shall vest as follows:
10,000 on May 16, 1991, 5,000 on May 16, 1992, and 5,000 on May 16, 1993.
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 Company and the Bank, 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 any be
approved by their respective Boards of Directors; PROVIDED, HOWEVER, that
nothing herein shall be construed as preventing the Executive from:
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(a) investing his assets in a manner not prohibited by Section 9(a)
hereof, and in such from 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
prohibition 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
(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.
5. Relocation and Residence.
(a) The Executive agrees to relocate and established his principal
resident and domicile within the Towns of Andover, North Andover or
Boxford, Massachusetts on or before September 1, 1991. The Executive
further agrees to maintain his principal residence and domicile with in the
Towns of Andover, North Andover or Boxford, Massachusetts for the term of
this Agreement. The Executive hereby acknowledges that the Employers have
relied upon the Executive's covenant in this Section 6 in executing this
Agreement and have conditioned his continued employment with them on the
Executive's continued compliance with said covenant.
(b) The employers shall reimburse the Executive for all reasonable
moving expenses incurred by the Executive in transporting the personal
property of the Executive and his family to the Towns of Andover, North
Andover or Boxford, Massachusetts, subject to such reasonable and
documentation as may be specified by the Employers. In the event that such
moving expenses are deemed not deductible by the Executive for federal
income tax purposes, the Employers shall pay the Executive an additional
sum sufficient to cover the Executive" federal income taxes on any such
taxable moving expenses.
(c) Upon written request by the Executive given at any time during
the six months following the execution of this Agreement, the Employers
shall purchase the Executive's present residence located within West
Roxbury, Massachusetts (the "Residence") in accordance with the terms and
conditions set forth below. Following receipt by the Employers of written
notice from the Executive requesting their purchase of the residence, the
executive and the Employers shall each select a professional real estate
appraiser who shall render an opinion as to the fair market value of the
Residence. If the lower of the two appraised values is more than or equal
to 90% of the higher
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appraised value, the Employers shall purchase the Residence from the
Executive at a purchase price equal to one-half of the sum of the two
appraised values. If the lower of the two appraised values is less than 90%
of the higher appraised value, the Executive and the Employers (or the two
appraisers, if the Executive and the Employers cannot agree) shall select a
third professional appraiser who shall render an opinion as to the fair
market value of the Residence. Thereupon, the Employers shall purchase the
Residence from the Executive at a purchase price equal to one-third of the
sum of the three appraised values. The reasonable fees and disbursements of
the appraisers shall be borne by the Employers.
7. 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 Executive's
beneficiary or estate, as the case may be, shall be entitled to any unpaid
amounts of compensation accrued to the date of death, plus the following
benefits:
(i) For a period of six months subsequent to the date of the
Executive's death, 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) at the salary
rate in effect on the date of his death (unless an increased rate
shall previously have been authorized to take effect as of a
later date, in which case such increased rate shall apply), said
payments to be made on the same periodic dates as salary payments
would have been made to the Executive had he not died.
(ii) For a period of six months subsequent to the date of the
Executive's death, 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) shall continue to receive all
benefits described in Section 4(b) above existing on the date of
death (except for any cash bonus plans which shall be pro-rated
through the date of death). For purposes of application of such
benefits, the Executive shall be treated as if he had remained in
the employ of the Employers, with an annual total salary at the
rate in effect on the date of death (unless an increased rate
shall previously have been authorized to take effect as of a
later date, in which case such increased rate shall
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apply), and service credits will continue to accrue during such
period as if the Executive has remained in the employ of the
Employers.
(iii) If, in spite of the provisions of Section 7(a)(ii) above,
benefits or service credits under any benefit plan shall not be
payable or accrued under any such plan to the Executive, or to
the Executive's beneficiary or estate, because the Executive is
no longer deemed to be an employee of the employers, the
Employers themselves shall pay or provide for payment of such
benefits (calculated as if all such service credits had been
accrued) to or for the benefit of the Executive, or to the
Executive's beneficiary or estate.
(b) TERMINATION BY THE EMPLOYERS FOR CAUSE. The Executive's
employment hereunder may be terminated without further liability on the
part of the Employers effective immediately by a resolution of the Board of
Directors of the Company or the Bank, as the case may be, for cause by
written notice to the Executive setting forth in reasonable detail the
nature of such cause. Only the following shall constitute "cause" for such
termination:
(i) Deliberate dishonesty of the Executive with respect to the
Employers or any subsidiary or affiliate thereof.
(ii) Conviction of the Executive of a crime involving moral
turpitude.
Gross and willful failure to perform a substantial portion of his duties and
responsibilities hereunder.
(a) TERMINATION BY THE EXECUTIVE. The Executive's employment
hereunder may be terminated effective immediately by the Executive by
written notice to the Board immediately by the Executive by written notice
to the Board of Directors of the Company or the Bank, as the case may be,
in the event of material breach by either of the Employers of this
Agreement. From and after the effective date of any termination by the
Executive of his employment hereunder, in the absence of such a breach by
the Company or the Bank, as the case may be, the Employers will have no
further liability to the Executive for salary or other compensation or
benefits, except as provided pursuant to compensation or benefits, except
as provided pursuant to any other agreement to which the Executive and the
Employers are parties or any compensation or benefit plan of the Employers
in which the Executive is a participant.
(b) TERMINATION BY THE EMPLOYERS WITHOUT CAUSE. The Executive's
employment with the Company or the Bank, as the case may be, may be
terminated without cause by a resolution of the
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Board of Directors of the Company or the Bank, respectively, on written
notice to the Executive.
(c) CERTAIN TERMINATION BENEFITS. In the event of termination
pursuant to the first sentence of Section 7(c) or pursuant to Section 7(d),
the Executive shall be entitled to the following 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 (unless an increased rate shall previously have been
authorized to take effect as of a later date, in which case such
increased rate shall apply).
(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
pro-rated through the date of termination). For purposes of
application of such benefits, the Executive shall be treated as
if he had remained in the employ of the employers, with an annual
total salary at the rate in effect on the date of termination
(unless an increased rate shall previously have been authorized
to take effect as of a later date, in which case such increased
rate shall apply) and service credits will continue to accrue
during such period as if the Executive had remained in the employ
of the Employers.
(iii) If, in spite of the provisions of Section 7(e)(ii) above,
benefits or service credits under any benefit plan shall not be
payable or accrued 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 themselves shall pay or provide for payment of such
benefits (calculated as if all such service credits had been
accrued) to or for the benefit of the Executive or the
Executive's dependents, beneficiaries or estate.
(a) SET-OFF. The Employers shall be entitled to set off against
any cash compensation to be provided to the Executive under Section
7(e)(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 7(e)(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 have 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.
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8. DISABILITY. If, due to physical or mental illness, the Executive shall
be disabled so as to be unable to perform substantially all of his duties and
responsibilities hereunder, the Board of Directors of the Company or the Bank,
as the case may be, 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 not receive any salary under Section 4(a),
but 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 were in effect at
such time. If any question shall arise as to whether during any period the
Executive was disabled so as to be unable to perform substantially all of his
duties and responsibilities 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 have 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 Employer's
determination of such issue shall be binding on the Executive.
9. NONCOMPETITION AND CONFIDENTIAL INFORMATION.
(a) NONCOMPETITION. During the term of the Executive's employment
hereunder, and either (i) a period of one year following the date of
termination of the Executive's employment with either the Company or the
Bank by the Executive or by either of the Employers for cause pursuant to
Section 7(b) hereof, or (ii) the period during which the Employers continue
to provide benefits to the Executive pursuant to Sections 7(e)(i) - (iii)
hereof in the event of termination pursuant to the first sentence of
Section 7(c) or pursuant to Section 7(d), the Executive shall not directly
or indirectly, whether as owner, 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, of or
through any Person (as defined in Section 11) having its main office in the
Employers' market area (defined as the Massachusetts municipalities of
Andover, North Andover, Xxxxxxxx, Methuen and Tewksbury) compete in said
market area with the banking or any other business conducted by either of
the Employers during the period of his employment hereunder, nor will he
attempt to hire any employee of either of the Employers, assist in such
hiring by any other Person, encourage any such
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employee to terminate his or her relationship with either of the Employers,
or solicit or encourage any customer of either of the Employers to
terminate its relationship with such Employer or to conduct with any other
Person any business or activity which such customer conducts or could
conduct with such Employer.
(b) CONFIDENTIAL INFORMATION. The Executive will not disclose to any
other Person (except as required by applicable law or in connection with
the performance of his duties and responsibilities hereunder), or use for
his own benefit or gain, any confidential information of either 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 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 non-observance of his obligations
hereunder. Notwithstanding anything to the contrary herein, this provision
shall survive any termination of this Agreement.
(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 area, or range of activities as to which it may
be enforceable. For purposes of this Section 9, the term "Employers" shall
mean the Company, the Bank and any of their respective subsidiaries or
affiliates.
10. CONFLICTING AGREEMENTS. The Executive hereby represents and warrants
that the execution of this Agreement and the performance of hi 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 convenants 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.
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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 costa and
expenses in connection the enforcement of said rights (including the enforcement
of any arbitration award in court) regardless of the final outcome, unless and
to the extent the arbitrators shall determine that under the circumstances
recovery by the Executive of all or a part of any such fees and costs and
expenses would be unjust.
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; provided, however, that the Employers may assign its rights under this
Agreement without the consent of the Executive in the event either of 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,
executors, 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).
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 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.
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16. ALLOCATION OF OBLIGATIONS BETWEEN EMPLOYERS. The obligations of the
Employers under this Agreement are intended to be the joint and several
obligations of the Bank and the Company and the Employers shall, as between
themselves, allocate these obligations in a manner agreed upon by them.
17. 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.
18. 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 Bank, at its main offices, attention of the
Clerk or, in the case of the Company, at its main office, attention of the
Secretary.
19. AMENDMENT. This Agreement may be amended or modified only be a written
instrument signed by the Executive and by a duly authorized representative of
each of the Employers.
20. 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.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument
by the Executive and by the Employers, by its duly authorized officer, as of the
date first above written.
/s/Xxxxxx X. Xxxxxxxx
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XXXXXX X. XXXXXXXX
ANDOVER SAVINGS BANK
/s/Xxxxxx X. Xxxxxxxxx
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Title: Chairman
ANDOVER BANCORP, INC.
/s/ Xxxxxx X. Xxxxxxxxx
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Title: Chairman
