Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made effective as of
July 1, 2008 (the "Effective Date"), by and between Georgetown Savings Bank, a
federally chartered savings Bank with its principal office in Georgetown,
Massachusetts (the "Bank"), and Xxxxxx X. Xxxxxxxx ("Executive"). The Board of
Directors of the Bank shall be the authority for the enforcement of this
Agreement. Any reference herein to the "Company" shall mean Georgetown Bancorp,
Inc., the stock holding company of the Bank, which has executed this Agreement
for the sole purpose of guaranteeing the Bank's performance as contemplated by
Section 22 hereof.
WHEREAS, Executive and the Bank entered into an Employment Agreement,
effective January 1, 2005 (the "2005 Agreement"), pursuant to which Executive
agreed to serve as President of the Bank pursuant to the terms thereof; and
WHEREAS, Section 409A of the Internal Revenue Code (the "Code"),
effective January 1, 2005, requires deferred compensation arrangements,
including those set forth in employment agreements, to comply with its
provisions and restrictions and limitations on payments of deferred
compensation; and
WHEREAS, Code Section 409A and the Final Treasury Regulations issued
thereunder necessitate changes to the 2005 Agreement; and
WHEREAS, Executive has agreed to such changes and other amendments to
the 2005 Agreement as provided herein; and
WHEREAS, the parties hereto desire to set forth the terms of a revised
employment agreement and the continuing employment relationship between the Bank
and Executive.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and upon the other terms and conditions hereinafter provided, the
parties hereby agree as follows:
1. POSITION AND RESPONSIBILITIES
During the period of his employment hereunder, Executive agrees to
serve as President and Chief Executive Officer of the Bank (the "Executive
Position"). During said period, Executive also agrees to serve, if elected, as
an officer and director of any subsidiary or affiliate of the Bank. Failure to
reelect Executive to Executive position without the consent of Executive during
the term of this Agreement (except for any Termination for Cause, as defined
herein) shall constitute a breach of this Agreement. Executive shall have the
responsibilities designated by the Board or as may be set forth in the Charter
or Bylaws of the Bank. In addition, Executive shall be responsible for
establishing the business objectives, policies and strategic plans of the Bank
and the Company, in conjunction with the Board of Directors (the "Board").
Executive shall also be responsible for providing leadership and direction to
all departments or divisions of the Bank and shall be the primary contact
between the Board and officers of the Bank.
2. TERM AND PERFORMANCE OF DUTIES
(a) The term of this Agreement and the period of Executive's employment
under this Agreement shall begin as of the date first above written and shall
continue for a period of thirty-six (36) full calendar months thereafter.
Commencing on the first anniversary date of this Agreement ("Anniversary Date"),
and continuing at each Anniversary Date thereafter, the Agreement shall renew
for an additional year such that the remaining term shall be thirty-six (36)
full calendar months, unless written notice of non renewal ("Non-Renewal
Notice") is provided to Executive at least ten (10) days and not more than
thirty (30) days prior to any Anniversary Date, in which case the employment of
Executive hereunder shall cease at the end of thirty-six (36) months following
such Anniversary Date. On an annual basis prior to each notice period set forth
above, the disinterested members of the Board shall conduct a comprehensive
performance evaluation and review of Executive for purposes of determining
whether to extend the Agreement or provide a Non-Renewal Notice, and the results
thereof shall be included in the minutes of the Board's meeting.
(b) During the period of his employment hereunder, except for periods
of absence occasioned by illness, reasonable vacation periods, and reasonable
leaves of absence approved by the Board, Executive shall devote substantially
all his business time, attention, skill, and efforts to the faithful performance
of his duties hereunder including activities and services related to the
organization, operation and management of the Bank; provided, however, that,
with the approval of the Board, as evidenced by a resolution of such Board, from
time to time, Executive may serve, or continue to serve, on the boards of
directors of, and hold any other offices or positions in, business companies or
business organizations, which, in such Board's judgment, will not present any
conflict of interest with the Bank, or materially affect the performance of
Executive's duties pursuant to this Agreement (it being understood that
membership in and service on boards or committees of social, religious,
charitable or similar organizations does not require Board approval pursuant to
this Section 2(b). For purposes of this Section 2(b), Board approval shall be
deemed provided as to service with any such business companies or organizations
that Executive was serving as of the date of this Agreement as set forth in
Exhibit A hereto.
3. COMPENSATION, BENEFITS AND REIMBURSEMENT
(a) The compensation specified under this Agreement shall constitute
the salary and benefits paid for the duties described in Section 2(b). The Bank
shall pay Executive as compensation a salary of not less than $181,200 per year
("Base Salary"). Such Base Salary shall be payable in accordance with the
customary payroll practices of the Bank. During the period of this Agreement,
Executive's Base Salary shall be reviewed at least annually. Such review -may be
conducted by the compensation committee (the "Committee") designated by the
Board and the Board may increase, but not decrease Executive's Base Salary
(except for a decrease that is not in excess of any decrease that is generally
applicable to all employees of the Bank). Any increase in Base Salary shall
become the Base Salary for purposes of this Agreement.
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(b) In addition to the Base Salary provided in this Section 3(a), the
Bank shall provide Executive all such other benefits as are provided to
permanent full-time employees of the Bank
(c) Bank will provide Executive with employee benefit plans,
arrangements and perquisites substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from immediately prior
to the beginning of the term of this Agreement. Without limiting the generality
of the foregoing provisions of this Subsection (c), Executive will be entitled
to participate in or receive benefits under any employee benefit plans
including, but not limited to, the Supplemental Executive Retirement Plan,
retirement plans, pension plans, profit-sharing plans, health-and-accident
insurance plans, medical coverage or any other employee benefit plan or
arrangement made available by the Bank or the Company in the future to its
senior executives and key management employees, subject to and on a basis
consistent with the terms, conditions and overall administration of such plans
and arrangements. Executive will be eligible for annual incentive compensation
and bonuses which shall be paid in cash at the discretion of the Committee. Bank
will also provide Executive with long-term disability insurance coverage to
replace 66% of Executive's Base Salary as of July 1, 2008, and bonus as of June
30, 2008, in the event of Executive's long-term disability. It is expected that
such coverage will be provided in part through the Bank group disability policy
and in part, through a policy owned by Executive, the premium of which shall be
paid by the Bank. The Bank shall review the Executive's disability coverage on a
tri-annual basis. Nothing paid to Executive under any such plan or arrangement
will be deemed to be in lieu of other compensation to which Executive is
entitled under this Agreement.
(d) In consideration of the termination of a collateral assignment
equity split dollar agreement between Bank and Executive, Bank shall enter into
an endorsement split dollar arrangement with Executive which will provide
Executive with a pre-retirement death benefit of Two Million Dollars
($2,000,000). In addition, for each year during the term of this Agreement,
Executive shall be paid a tax adjusted payment for life insurance for the
purpose of and contingent upon Executive's use of the after-tax portion of said
payment to acquire a life insurance policy with a death benefit of One Million
Dollars ($1,000,000). The amount of the tax adjusted payment shall be set forth
in a Schedule executed by Executive and Bank, which Schedule shall be attached
to this Agreement and which Schedule can be modified from time to time by mutual
written consent of Executive and Bank.
(e) The Bank or the Company shall pay or reimburse Executive for all
reasonable travel and other reasonable expenses incurred by Executive performing
his obligations under this Agreement and in such amounts as the Board may from
time to time determine. The Bank shall reimburse Executive for his ordinary and
necessary business expenses, including, without limitation, fees for memberships
in such clubs and organizations as Executive and the Board shall mutually agree
are necessary and appropriate for business purposes, and travel and
entertainment expenses, incurred in connection with the performance of his
duties under this Agreement, upon presentation to the Board, or its designee,
for approval of an itemized account of such expenses in such form as the Board
may reasonably require.
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4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION
(a) Upon the occurrence of an Event of Termination (as herein defined)
during Executive's term of employment under this Agreement, the provisions of
this section shall apply. As used in this Agreement, an "Event of Termination"
shall mean and include any one or more of the following:
(i) the termination by the Bank of Executive's full-time
employment hereunder, for any reason, including a termination following
a Change in Control, but not including a termination for Cause, a
termination upon Retirement, or a termination for Disability; or
(ii) Executive's resignation from the Bank's employ for "Good
Reason," including resignation for Good Reason following a Change in
Control. Good Reason shall mean any of the following:
(A) failure to elect or reelect or to appoint or
reappoint Executive to the Executive Position, unless
consented to by Executive,
(B) a substantial adverse and material change in
Executive's function, duties, or responsibilities,
(C) a material reduction to Base Salary or benefits
of Executive from that being provided as of the effective date
of this Agreement (except for any reduction that is part of an
employee-wide reduction in pay or benefits),
(D) a liquidation or dissolution of the Bank,
(E) a relocation of Executive's principal place of
employment more than twenty-five (25) miles from the principal
office on the Effective Date, or
(F) a material breach of this Agreement by the Bank.
Upon the occurrence of any event described in clauses (ii) (A) through (F)
above, Executive shall have the right to elect to terminate his employment under
this Agreement by resignation upon not less than thirty (30) days prior written
notice given within a reasonable period of time (not to exceed, except in case
of a continuing breach, ninety (90) days) after the event giving rise to said
right to elect, which termination by Executive shall be an Event of Termination.
The Bank shall have at least thirty (30) days to remedy any condition set forth
in clause (ii) (A) through (F), provided, however, that the Bank shall be
entitled to waive such period and make an immediate payment hereunder. No
payments or benefits shall be due to Executive under this Agreement upon the
termination of Executive's employment except as provided in Section 4.
(b) Upon the occurrence of an Event of Termination the Bank shall pay
Executive, as severance pay or liquidated damages, or both, a cash amount equal
to three (3) times the sum of the highest annual rate of Base Salary paid to
Executive at any time under the Agreement.
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(c) Upon the occurrence of an Event of Termination the Bank shall pay
Executive a cash amount equal to three (3) times the Executive's bonus payment
as provided for in Section 3(d), to be used for a post-retirement death benefit
life insurance policy.
(d) Upon the occurrence of an Event of Termination, the Bank will
provide at the Bank's expense, life insurance (including the life insurance
provided under the endorsement split dollar life insurance agreement between
Executive and Bank) and non-taxable medical and dental coverage substantially
comparable, as reasonably or customarily available, to the coverage maintained
by the Bank for Executive prior to his termination, except to the extent such
coverage may be changed in its application to all Bank employees. Such coverage
shall cease thirty-six (36) months following the Event of Termination.
(e) The payments under 4(b) and 4(c) shall be payable in a single cash
lump-sum distribution within thirty (30) days following the occurrence of an
Event of Termination.
(f) Upon the occurrence of an Event of Termination, any non-vested
stock options or restricted stock granted to Executive will fully vest.
(g) For purposes of Section 4, Event of Termination shall mean
"Separation from Service" as defined in Code Section 409A and the Treasury
Regulations promulgated thereunder, provided, however, that the Bank and
Executive reasonably anticipate that the level of bona fide services Executive
would perform after termination would permanently decrease to a level that is
less than 50% of the average level of bona fide services performed (whether as
an employee or an independent contractor) over the immediately preceding
36-month period.
(h) Notwithstanding the preceding paragraphs of this Section 4, in the
event that the aggregate payments or benefits to be made or afforded to
Executive under said paragraphs (the "Termination Benefits") would be deemed to
include an "excess parachute payment" under Section 280G of the Code or any
successor thereto, then such Termination Benefits will be reduced to an amount
(the "Non-Triggering Amount"), the value of which is one dollar ($1.00) less
than an amount equal to the total amount of payments permissible under Section
280G of the Code or any successor thereto.
5. CHANGE IN CONTROL DEFINED
(a) For purposes of this Agreement, the term "Change in Control" shall
mean:
(i) a change in control of a nature that would be required to
be reported in response to Item 5.01(a) of the current report on Form
8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"); or
(ii) a change in control of the Bank within the meaning of the
Home Owners' Loan Act, as amended ("HOLA"), and applicable rules and
regulations promulgated thereunder, as in effect at the time of the
Change in Control; or
(iii) any of the following events, upon which a Change in
Control shall be deemed to have occurred:
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(A) any "person" (as the term is used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Bank or any holding company of the
Bank representing 25% or more of the combined voting power of such
outstanding securities, except for any securities purchased by any
employee stock ownership plan or trust established by the Bank; or
(B) individuals who constitute the Board on the
Effective Date (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof, provided that any person
becoming a director subsequent to the Effective Date whose election was
approved by a vote of at least three-quarters of the directors
comprising the Incumbent Board, or whose nomination for election by
stockholders of the Bank or any holding company of the Bank was
approved by the same Nominating Committee serving under an Incumbent
Board, shall be, for purposes of this subsection (B), considered as
though they were members of the Incumbent Board; or
(C) a sale of all or substantially all the assets of
the Bank or any holding company of the Bank, or a plan of
reorganization, merger, consolidation, or similar transaction occurs in
which the security holders of the Bank or any holding company of the
Bank immediately prior to the consummation of the transaction do not
own at least 50.1% of the securities of the surviving entity to be
outstanding upon consummation of the transaction; or
(D) a proxy statement is issued soliciting proxies
from stockholders of the Bank or any holding company of the Bank by
someone other than the current management of the Bank or any holding
company of the Bank, seeking stockholder approval of a plan of
reorganization, merger or consolidation of the Bank or any holding
company of the Bank, or similar transaction with one or more
corporations as a result of which the outstanding shares of the class
of securities then subject to the plan are to be exchanged for or
converted into cash or property or securities not issued by the Bank or
any holding company of the Bank; or
(E) a tender offer is made for 25% or more of the
voting securities of the Bank or any holding company of the Bank, and
stockholders owning beneficially or of record 25% or more of the
outstanding securities of the Bank or any holding company of the Bank
have tendered or offered to sell their shares pursuant to such tender
offer and such tendered shares have been accepted by the tender
offeror.
(F) Notwithstanding anything in this subsection
to the contrary, a Change in Control shall not be deemed to have
occurred upon the subsequent conversion of the mutual holding company
parent of the Company to stock form, or in connection with any
reorganization used to effect such a conversion.
(b) In the event of a Change in Control, the term "Bank" shall be
defined to include any successor to the Bank.
6. TERMINATION FOR DISABILITY OR DEATH
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(a) Disability. Termination of Executive's employment based on
"Disability" shall mean termination because of any permanent and total physical
or mental impairment that restricts the Executive from performing all the
essential functions of normal employment. A determination as to whether the
Executive has suffered a Disability shall be made by the Board with objective
medical input.
The Bank will cause to be continued life insurance and non-taxable
medical and dental coverage substantially comparable, as reasonable or
customarily available, to the coverage maintained by the Bank for Executive
prior to his termination for Disability, except to the extent such coverage may
be changed in its application to all Bank employees or not available on an
individual basis to an employee terminated for Disability. This coverage shall
cease upon the earlier of (i) the date Executive returns to the full-time
employment of the Bank in the same capacity as he was employed prior to his
termination for Disability and pursuant to an employment agreement between
Executive and the Bank; (ii) Executive's full-time employment by another
employer; (iii) Executive attaining the age of 65; (iv) Executive's death; or
(v) twenty four (24) months from the date of Disability.
(b) Death. In the event of the death of the Executive while in the
active employment of the Bank, the Executive's beneficiary shall be entitled to
Executive's interest in the life insurance policy proceeds covered by the
endorsement split dollar agreement between the Executive and the Bank referenced
in Section 3(c) hereof. No further amounts or benefits shall be due hereunder.
7. TERMINATION UPON RETIREMENT
Termination of Executive's employment based on "Retirement" shall mean
termination of Executive's employment at age 65 or in accordance with any
retirement policy established by the Board. Upon termination of Executive based
on Retirement, no amounts or benefits shall be due Executive under this
Agreement, and Executive shall be entitled to all benefits under any retirement
plan of the Bank and other plans to which Executive is a party. Notwithstanding
the foregoing, Executive shall have the right to participate in the Bank's
health insurance plans for the applicable COBRA period, at the expense of
Executive.
8. TERMINATION FOR CAUSE
The term "Termination for Cause" shall mean termination because of
Executive's personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, material breach of the Bank's Code of
Ethics, material violation of the Xxxxxxxx-Xxxxx requirements for officers of
public companies that in the reasonable opinion of the Board will likely cause
substantial financial harm or substantial injury to the reputation of the Bank,
willfully engaging in actions that in the reasonable opinion of the Board will
likely cause substantial financial harm or substantial injury to the business
reputation of the Bank, intentional failure to perform stated duties, willful
violation of any law, rule or regulation (other than routine traffic violations
or similar offenses) or final cease-and-desist order, or material breach of any
provision of this Agreement. Notwithstanding the foregoing, Executive shall not
be deemed to have been Terminated for Cause unless and until there shall have
been delivered to him a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the members of
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the Board at a meeting of the Board called and held for that purpose, finding
that in the good faith opinion of the Board, Executive was guilty of conduct
justifying Termination for Cause and specifying the particulars thereof in
detail. Executive shall not have the right to receive compensation or other
benefits for any period after Termination for Cause. Any non-vested stock
options granted to Executive under any stock option plan of the Bank, the
Company or any subsidiary or affiliate thereof, shall become null and void
effective upon Executive's receipt of Notice of Termination for Cause pursuant
to Section 9 hereof, and shall not be exercisable by Executive at any time
subsequent to such Termination for Cause (unless it is determined in arbitration
that grounds for Termination for Cause did not exist, in which event all terms
of the options as of the date of termination shall apply, and any time periods
for exercising such options shall commence from the date of resolution in
arbitration).
9. NOTICE OF TERMINATION
(a) Any purported termination by the Bank for Cause shall be
communicated by Notice of Termination to Executive. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated. If, within thirty (30) days after any Notice of Termination for Cause
is given, Executive notifies the Bank that a dispute exists concerning the
termination, the parties shall promptly proceed to arbitration. Notwithstanding
the pendency of any such dispute, the Bank may discontinue to pay Executive
compensation until the dispute is finally resolved in accordance with this
Agreement. If it is determined that Executive is entitled to compensation and
benefits under Section 4 of this Agreement, the payment of such compensation and
benefits by the Bank shall commence immediately following the date of resolution
by arbitration, with interest due Executive on the cash amount that would have
been paid pending arbitration (at the prime rate as published in The Wall Street
Journal from time to time).
(b) Any other purported termination by the Bank or by Executive shall
be communicated by a Notice of Termination to the other party. For purposes of
this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in detail the facts and circumstances claimed to provide a
basis for termination of employment under the provision so indicated. "Date of
Termination" shall mean the date of the Notice of Termination. If, within thirty
(30) days after any Notice of Termination is given, the party receiving such
Notice of Termination notifies the other party that a dispute exists concerning
the termination, the parties shall promptly proceed to arbitration as provided
in Section 18 of this Agreement. Notwithstanding the pendency of any such
dispute, the Bank shall continue to pay Executive his Base Salary, and other
compensation and benefits in effect when the notice giving rise to the dispute
was given (except as to termination of Executive for Cause). In the event of the
voluntary termination by Executive of his employment, which is disputed by the
Bank, and if it is determined in arbitration that Executive is not entitled to
termination benefits pursuant to this Agreement, he shall return all cash
payments made to him pending resolution by arbitration, with interest thereon at
the prime rate as published in The Wall Street Journal from time to time if it
is determined in arbitration that Executive's voluntary termination of
employment was not taken in good faith and not in the reasonable belief that
grounds existed for his voluntary termination.
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10. NON-COMPETITION AND POST-TERMINATION OBLIGATIONS
(a) All payments and benefits to Executive under this Agreement shall
be subject to Executive's compliance with paragraph (b), (c) , (d) and (e) of
this Section 10.
(b) Executive shall, upon reasonable notice, furnish such information
and assistance to the Bank as may reasonably be required by the Bank in
connection with any litigation in which it or any of its subsidiaries or
affiliates is, or may become, a party.
(c) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Bank and affiliates
thereof, as it may exist from time to time, is a valuable, special and unique
asset of the business of the Bank. Executive will not, during or after the term
of his employment, disclose any knowledge of the past, present, planned or
considered business activities (all of which is considered to be a trade secret)
of the Bank or affiliates thereof to any person, firm, corporation, or other
entity for any reason or purpose whatsoever (except for such disclosure as may
be required to be provided to the Office of Thrift Supervision ("OTS"), the
Federal Deposit Insurance Corporation ("FDIC"), or other bank regulatory agency
with jurisdiction over the Bank or Executive). In the event of a breach or
threatened breach by Executive of the provisions of this Section 10, the Bank
will be entitled to a temporary restraining order, preliminary injunction and
permanent injunction restraining Executive from disclosing, in whole or in part,
the knowledge of the past, present, planned or considered business activities of
the Bank or affiliates thereof, or from rendering any services to any person,
firm, corporation, other entity to whom such knowledge, in whole or in part, has
been disclosed or is threatened to be disclosed. Nothing herein will be
construed as prohibiting the Bank from pursuing any other remedies available to
the Bank for such breach or threatened breach, including the recovery of damages
from Executive.
(d) Upon any termination of Executive's employment pursuant to which
Executive is receiving compensation under Section 4(a)(i) hereof or 4(a)(ii)
hereof, provided, however, this Section 10(d) shall not be applicable in the
event such termination occurs following a Change in Control (as defined in
Section 5 of this Agreement), Executive agrees not to compete with the Bank for
a period of two (2) years following such termination in any area within a radius
of 25 miles from any offices of the Bank or any of the Bank's affiliates.
Executive agrees that during such period and within said area, Executive shall
not: (i) work for or advise, consult or otherwise serve with, directly or
indirectly, any entity whose business materially competes with the depository,
lending or other business activities of the Bank or any of its affiliates; (ii)
solicit, offer employment to, or take any other action intended (or that a
reasonable person acting in like circumstances would expect) to have the effect
of causing any officer or employee of the Bank or of any affiliate, to terminate
his or her employment and accept employment or become affiliated with, or
provide services for compensation in any capacity whatsoever to, any business
whatsoever that competes with the business of the Bank or any affiliate that has
headquarters or offices within 25 miles of the locations in which the Bank has
business operations or has filed an application for regulatory approval to
establish an office; or (iii) solicit, provide any information, advice or
recommendation or take any other action intended (or that a reasonable person
acting in like circumstances would expect) to have the effect of causing any
customer of the Bank to terminate an existing business or commercial
relationship with the Bank.
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(e) The parties hereto, recognizing that irreparable injury will result
to the Bank, its business and property in the event of Executive's breach of
this Section 10 agree that in the event of any such breach by Executive, the
Bank will be entitled, in addition to any other remedies and damages available,
to an a temporary restraining order, preliminary injunction and permanent
injunction to restrain the violation hereof by Executive, Executive's partners,
agents, servants, employers, employees and all persons acting for or with
Executive. Executive represents and admits that Executive's experience and
capabilities are such that Executive can obtain employment in a business engaged
in other lines and/or of a different nature than the Bank, and that the
enforcement of a remedy by way of injunction will not prevent Executive from
earning a livelihood. Nothing herein will be construed as prohibiting the Bank
from pursuing any other remedies available to it for such breach or threatened
breach, including the recovery of damages from Executive.
11. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior employment agreement between the Bank or any
predecessor of the Bank and Executive, including the 2005 Agreement, except that
this Agreement shall not affect or operate to reduce any benefit or compensation
inuring to Executive of a kind elsewhere provided in writing.
12. NO ATTACHMENT; BINDING ON SUCCESSORS
(a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.
(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive, his estate, and the Bank and its respective successors and assigns.
13. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.
14. REQUIRED PROVISIONS
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(a) The Bank's Board may terminate Executive's employment at any time,
but any termination by the Bank's Board other than Termination for Cause as
defined in Section 8 hereof shall not prejudice Executive's right to
compensation or other benefits under this Agreement. Executive shall have no
right to receive compensation or other benefits for any period after Termination
for Cause.
(b) If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) (12 U.S.C. ss.1818(e)(3)) or 8(g)(1) (12 U.S.C. ss.1818(g)(1))
of the Federal Deposit Insurance Act, the Bank's obligations under this
Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the Bank
may in its discretion (i) pay Executive all or part of the compensation withheld
while its Agreement obligations were suspended and (ii) reinstate (in whole or
in part) any of its obligations which were suspended.
(c) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Section 8(e)(4) (12 U.S.C. ss.1818(e)(4)) or 8(g)(1) (12 U.S.C. ss.1818(g)(1))
of the Federal Deposit Insurance Act, all obligations of the Bank under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected.
(d) If the Bank is in default as defined in Section 3(x)(1) (12 U.S.C.
ss.1813(x)(1)) of the Federal Deposit Insurance Act, all obligations of the Bank
under this Agreement shall terminate as of the date of default, but this
paragraph shall not affect any vested rights of the contracting parties.
(e) All obligations under this Agreement shall be terminated, except to
the extent determined that continuation of the contract is necessary for the
continued operation of the Bank, (i) by the Director of the OTS or his or her
designee, at the time the FDIC enters into an agreement to provide assistance to
or on behalf of the Bank under the authority contained in Section 13(c) (12
U.S.C. ss.1823(c)) of the Federal Deposit Insurance Act; or (ii) by the Director
or his or her designee at the time the Director or his or her designee approves
a supervisory merger to resolve problems related to operation of the Bank or
when the Bank is determined by the Director to be in an unsafe or unsound
condition. Any rights of the parties that have already vested, however, shall
not be affected by such action.
(f) Notwithstanding anything herein contained to the contrary, any
payments to Executive by the Company, whether pursuant to this Agreement or
otherwise, are subject to and conditioned upon their compliance with Section
18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the
regulations promulgated thereunder in 12 C.F.R. Part 359.
15. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
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16. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
17. GOVERNING LAW
This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts but only to the extent not superseded by federal law.
18. ARBITRATION
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators in Massachusetts in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of his right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
19. PAYMENT OF LEGAL FEES
All reasonable legal fees paid or incurred by Executive pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid
or reimbursed by the Bank within two and one-half months following the date on
which such fees are incurred, provided that the dispute or interpretation has
been settled by Executive and the Bank or resolved in Executive's favor.
20. INDEMNIFICATION
(a) The Bank shall provide Executive (including his heirs, executors
and administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, and shall indemnify Executive (and
his heirs, executors and administrators) for the term of the Agreement and for a
period of 6 years thereafter to the fullest extent permitted under applicable
law against all expenses and liabilities reasonably incurred by him in
connection with or arising out of any action, suit or proceeding in which he may
be involved by reason of his having been a director or officer of the Bank or
the Company (whether or not he continues to be a director or officer at the time
of incurring such expenses or liabilities), such expenses and liabilities to
include, but not be limited to, judgments, court costs and attorneys' fees and
the cost of reasonable settlements (such settlements must be approved by the
Board or the board of directors of the Company, as appropriate), provided,
however, neither the Bank nor Company shall be required to indemnify or
reimburse Executive for legal expenses or liabilities incurred in connection
with an action, suit or proceeding arising from any illegal or fraudulent act
committed by Executive. Any such indemnification shall be made consistent with
Section 545.121 of the OTS Regulations.
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(b) Notwithstanding the foregoing, no indemnification shall be made
unless the Bank gives the OTS at least sixty (60) days' notice of its intention
to make such indemnification. Such notice shall state the facts on which the
action arose, the terms of any settlement, and any disposition of the action by
a court. Such notice, a copy thereof, and a certified copy of the resolution
containing the required determination by the Board shall be sent to the Regional
Director of the OTS, who shall promptly acknowledge receipt thereof. The notice
period shall run from the date of such receipt. No such indemnification shall be
made if the OTS advises the Bank in writing within such notice period, of its
objection thereto.
21. NOTICE
For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
To the Bank: Georgetown Savings Bank
0 Xxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
To Executive: Xxxxxx X. Xxxxxxxx
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
22. SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Bank. Any holding company established with
respect to the Bank may accede to this Agreement but only for the purpose of
guaranteeing payment and provision of all amounts and benefits due hereunder to
Executive.
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SIGNATURES
IN WITNESS WHEREOF, the Bank and the Company have authorized this
Agreement to be executed by their duly authorized representatives, and Executive
has signed this Agreement, on the day and date first above written.
ATTEST: GEORGETOWN SAVINGS BANK
/s/Xxxx X. Xxxxxxxx By:/s/ Xxxxxxx X. Xxxxxxx
------------------------------- ---------------------------------------
ATTEST: GEORGETOWN BANCORP, INC.
/s/Xxxx X. Xxxxxxxx By:/s/ Xxxxxxx X. Xxxxxxx
------------------------------- ---------------------------------------
WITNESS: EXECUTIVE:
/s/Xxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxx
------------------------------- ------------------------------------------
Xxxxxx X. Xxxxxxxx
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