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Exhibit 10.1
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of July 1, 2000, by and between GLOUCESTER BANK AND
TRUST COMPANY., a Massachusetts trust company with its main office in
Gloucester, Massachusetts (the "Employer"), and XXXXX X. XXXXX, currently of
Gloucester, Massachusetts (the "Executive").
WITNESSETH
WHEREAS, the parties hereto desire to provide for the Executive's
employment by the Employer;
NOW THEREFORE, in consideration of the mutual covenants contained herein,
the Employer and the Executive agree as follows:
1. EMPLOYMENT. The Employer agrees to employ the Executive and the
Executive agrees to continue in the employ of the Employer on the terms and
conditions hereinafter set forth.
2. CAPACITY. The Executive shall serve the Employer as President and
Chief Executive Officer, subject to his election by the Board of Directors of
the Employer. The Employer further agrees that it will not unreasonably reduce
the Executive's duties or responsibilities. In addition, the Employer agrees not
to relocate the Executive's office to a location in excess of 25 miles from its
present location unless consented to by the Executive.
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. The last day of such term 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 $147,000 per year. The Executive's salary shall be payable in periodic
installments in accordance with the Employer's usual practice for its
senior executives.
(b) REGULAR BENEFITS. The Executive shall also be entitled to
participate in any 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 Employer. 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 Employer, and (iii) the discretion of
the Employer's sole stockholder or any administrative or other committee
provided for or contemplated by such plan.
(c) BUSINESS EXPENSES. The Employers shall reimburse the Executive
for all reasonable travel and other business expenses incurred by him in
the performance of his duties and responsibilities, subject to such
reasonable requirements with respect to substantiation and documentation as
may be specified by the Employers.
(d) VACATION. The Executive shall be entitled to four weeks of
vacation per year, to be taken at such times and intervals as shall be
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determined by the Executive with the approval of the Employers, which
approval shall not be unreasonably withheld.
5. EXTENT OF SERVICE. During his employment hereunder, the Executive
shall, subject to the direction and supervision of the Board of Directors of the
Employer and the Employer's sole stockholder, devote his full business time,
best efforts and business judgment, skill and knowledge to the advancement of
the Employer's interests and to the discharge of his duties and responsibilities
hereunder. He shall not engage in any other business activity, except as
approved by the Employer's sole stockholder; PROVIDED, HOWEVER, that nothing
herein shall be construed as preventing the Executive from:
(a) investing his assets in a manner not prohibited by Section 9(a)
hereof, and in such form or manner as shall not require any material
services on his part in the operations or affairs of the companies or other
entities in which such investments are made;
(b) serving on the board of directors of any company subject to the
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 nonprofit
activities which do not impair his ability to fulfill his duties and
responsibilities under this Agreement.
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 Employer shall continue to pay an amount equal
to the Executive's salary to the Executive's beneficiary designated in
writing to the Employer 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 Employer 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 Employer,
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 apply), and service credits will continue to accrue during such
period as if the Executive has remained in the employ of the Employer.
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(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 Employer, the Employer itself 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 EMPLOYER FOR CAUSE. The Executive's employment
hereunder may be terminated without further liability on the part of the
Employer effective immediately by a resolution of the Board of Directors of
the Employer or by the Employer's sole stockholder, 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
Employer or any subsidiary or affiliate thereof.
(ii) Conviction of the Executive for a crime involving moral
turpitude.
(iii) Gross and willful failure to perform a substantial portion
of his duties and responsibilities hereunder.
(c) TERMINATION BY THE EXECUTIVE. The Executive's employment
hereunder may be terminated effective immediately by the Executive by
written notice to the Employer's sole stockholder in the event of a
material breach of any provision of this Agreement by the Employer. 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 Employer, the
Employer will have no further liability to the Executive for salary or
other compensation or benefits, except as provided pursuant to any other
agreement to which the Executive and the Employer are parties or any
compensation or benefit plan of the Employer in which the Executive is a
participant.
(d) TERMINATION BY THE EMPLOYER WITHOUT CAUSE. The Executive's
employment with the Employer may be terminated without cause by a
resolution of the Board of Directors of the Employer or by the Employer's
sole stockholder, as the case may be, on written notice to the Executive.
(e) 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) The Employer shall pay the Executive the total salary, at
the rate in effect on the date of termination, for the period
subsequent to the date of termination until the Expiration Date.
(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 Employer, with an annual total salary at the rate in
effect on the date of termination and service credits will continue to
accrue during such period as if the Executive had remained in the
employ of the Employer.
(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
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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 Employer, the Employer itself
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.
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 Employer may designate
another executive to act in his place during the period of such disability
(subject to approval by the Employer's sole stockholder). 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 Employer's 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 Employer's
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 Employer shall pay the Executive benefits equal to those the
Executive would have received if the Employer's 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 hereunder due to physical
or mental illness, the Executive may, and at the request of the Employer will,
submit to the Employer a certification in reasonable detail by a physician
selected by the Executive or his guardian to whom the Employer 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 the Employer by the
Executive or by the Employer for cause pursuant to Section 7(b) hereof, or
(ii) the period during which the Employer continues 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 Employer's market area
(defined as the Massachusetts communities of Manchester, Essex, Gloucester,
Rockport, and Woburn) compete in said market area with the banking or any
other business conducted by the Employer or its subsidiaries or affiliates
during the period of his employment hereunder, nor will he attempt to hire
any employee of the Employer or its subsidiaries or affiliates, assist in
such hiring by any other Person, encourage any such employee to terminate
his or her relationship with the Employer or its subsidiaries or
affiliates, or solicit or encourage any customer of the Employer or its
subsidiaries or affiliates to terminate its relationship with the Employer
or its subsidiaries or affiliates or to conduct with any other Person any
business or activity which such customer conducts or could conduct with
such Employer or its subsidiaries or affiliates.
(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
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benefit or gain, any confidential information of the Employer or its
subsidiaries or affiliates obtained by him incident to his employment with
the Employer. The term "confidential information" includes, without
limitation, financial information, business plans, prospects and
opportunities (such as lending relationships, financial product
developments, or possible acquisitions or dispositions of businesses or
facilities) which have been discussed or considered by the management of
the Employer or its subsidiaries or affiliates 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 Employer
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.
10. CONFLICTING AGREEMENTS. The Executive hereby represents and warrants
that the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which he
is a party or is bound, and that he is not now subject to any covenants against
competition or similar covenants which would affect the performance of his
obligations hereunder.
11. DEFINITION OF "PERSON". For purposes of this Agreement, the term
"Person" shall mean an individual, a corporation, an association, a partnership,
an estate, a trust and any other entity or organization.
12. WITHHOLDING. All payments made by the Employer under this Agreement
shall be net of any tax or other amounts required to be withheld by the Employer
under applicable law.
13. ARBITRATION OF DISPUTES. Any controversy or claim arising out of or
relating to this Agreement or the breach thereof shall be settled by arbitration
in accordance with the laws of The Commonwealth of Massachusetts by three
arbitrators, one of whom shall be appointed by the Employer, 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 Employer shall pay (or the
Executive shall be entitled to recover from the Employer, as the case may be)
the Executive's reasonable attorneys' fees and other reasonable costs and
expenses in connection with the enforcement of said rights (including the
enforcement of any arbitration 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 Employer nor the
Executive may make any assignment of this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent of the other
party; PROVIDED, HOWEVER, that the Employer may assign its rights under this
Agreement
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without the consent of the Executive in the event either the Employer 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 Employer 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 Employer of all payments due him under this
Agreement, the Employer shall continue such payments to the Executive's
beneficiary designated in writing to the Employer 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. For purposes of enforcing the Executive's or
the Employer's rights under this Agreement, any action or decision taken by the
sole stockholder of the Employer under this Agreement shall be deemed to be an
action or decision taken by the Employer. The Executive acknowledges that his
sole recourse with respect to any dispute arising under or in connection with
this Agreement shall be against the Employer.
16. WAIVER. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of any party to
require the performance of any term or obligation of this Agreement, or the
waiver by any party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
17. NOTICES. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by registered or certified mail, postage prepaid, to the
Executive at the last address the Executive has filed in writing with the
Employer or, in the case of the Employer, at its main offices, attention of the
Clerk or, in the case of the Employer's sole stockholder, at its main office,
attention of the Secretary.
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
each of the Employer.
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.
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IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument
by the Executive and by the Employer, by its duly authorized officer, as of the
date first above written.
/s/ Xxxxx X. Xxxxx
---------------------------
XXXXX X. XXXXX
GLOUCESTER BANK & TRUST COMPANY
By: /s/ Xxxxx X. Xxxxx
------------------------
Name: Xxxxx X. Xxxxx
Title: President
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ANDOVER BANCORP, INC.
August 11, 2000 /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
President and
Chief Executive Officer
August 11, 2000 /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Chief Financial Officer
and Treasurer
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