EXHIBIT 10.7
EXECUTION COPY
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AGREEMENT made as of the 16th day of December, 1999, by and among
FIRST ESSEX BANK, FSB, a federal savings bank, with its main office in
Lawrence, Massachusetts (the "Bank"), FIRST ESSEX BANCORP, INC., a Delaware
corporation (the "Holding Company") and the parent company of the Bank (the
Bank and the Holding Company shall be hereinafter collectively referred to as
the "Employers"), and Xxxxx X. Xxxxxxxx of Amherst, Massachusetts (the
"Executive").
WITNESSETH
WHEREAS, the Bank desires to continue to provide for the Executive's
employment by the Bank and in connection therewith desires to amend and
restate the existing employment agreement between the Bank and the Executive;
NOW THEREFORE, in consideration of the mutual covenants contained
herein, the Bank and the Executive agree as follows:
1. EMPLOYMENT The Executive shall serve the Bank and the Holding
Company as its President and Chief Operating Officer. In such positions, the
Executive shall have the duties, responsibilities and authorities and
authority as determined and designated from time to time by the Chief
Executive Officer or the Boards of Directors. Notwithstanding the above, the
Executive shall not be required to perform any duties and responsibilities
(a) which would result in a noncompliance with or violation of any applicable
law or regulation or (b) on a regular basis in any locations outside the
counties in which the Bank now has branch offices, unless agreed upon by the
Executive. During the pendency of any temporary or permanent suspension or
termination from the Bank, the Executive shall not perform, in any respect,
directly or indirectly, duties and responsibilities formerly performed at the
Bank as part of his duties and responsibilities as an officer of the Holding
Company.
2. EFFECTIVE DATE AND TERM. The commencement date (the "Commencement
Date") of this Agreement shall be January 1, 1999. The initial term of the
Executive's employment hereunder shall be for three years from the
Commencement Date. The parties intend that, at any point in time during the
Executive's employment hereunder, the then-remaining term of his employment
under this Agreement shall be three years. Accordingly, the term of
employment shall be automatically extended by one day for each day that the
Executive remains employed by the Bank or the Holding Company, unless the
Executive elects not to continue to extend the term of this Agreement by
giving written notice in accordance with Section 7.2 of this Agreement, or
the Board elects not to continue to extend the term of this Agreement (in
which event the provisions of Section 7.1 shall apply). The last day of such
term as so extended from time to time, is herein sometimes referred to as the
"Expiration Date" and the time period from the Commencement Date through the
Expiration Date shall be the "Term of Employment". At least once in each
calendar year the Board will review the Agreement and the Executive's
performance for purposes of determining whether to continue to extend the
Agreement and the rationale and results thereof shall be included in the
minutes of the Board's meeting. The Board shall give notice to the Executive
as soon as possible after such
review as to whether the Agreement is to continue to be extended.
3. COMPENSATION AND BENEFITS. The compensation and benefits payable to
the Executive under this Agreement shall be as follows:
3.1 SALARY. For all services rendered by the Executive to the
Holding Company and its Subsidiaries, the Executive shall be entitled to
receive a base salary at the rate of $$233,500 per year, subject to
increase from time to time in accordance with the usual practices of the
Bank with respect to review of compensation of its senior executives. In
addition, if the Board increases the Executive's annual base salary at
any time before the Expiration Date, such increased annual base salary
shall become a floor below which such annual base salary shall not fall
(OTHER THAN concurrently with across-the-board salary reductions based
on the Employers' financial performance similarly affecting all senior
management personnel of the Bank) at any future time during the Term of
Employment without the Executive's written consent. The Executive's
salary shall be payable in periodic installments in accordance with the
Bank's usual practice for its senior executives.
3.2 REGULAR BENEFITS. The Executive shall also be entitled to
participate in any and all employee benefit plans, medical insurance
plans, disability income plans, retirement plans, bonus incentive plans,
and other benefit plans from time to time in effect for senior
executives of the Bank. Such participation shall be subject to (i) the
terms of the applicable plan documents, (ii) generally applicable
policies of the Bank and (iii) the discretion of the Board of Directors
of the Bank or any administrative or other committee provided for in or
contemplated by such plan.
3.3 OTHER BENEFITS
(a) AUTOMOBILE. The Executive shall be also be provided with
the use of an automobile at the Employers' expense. The Executive
shall 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.
(b) BUSINESS MEMBERSHIPS. The Executive shall also be
reimbursed for the reasonable annual membership fee for the country
club of the Executive's choice.
(c) LIFE INSURANCE. The Executive shall be entitled to receive
life insurance with aggregate coverage equal to a total of four (4)
times the Executives then-current base salary. The amount of all
life insurance provided to the Executive as a senior executive of
the Bank shall be included in the calculation of the life insurance
coverage in this section.
3.4 BUSINESS EXPENSES. The Bank 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 Bank. The Employers shall also reimburse the
Executive for costs and expenses related to the relocation by the
Executive of his primary personal residence from Amherst, Massachusetts,
to a location within reasonable proximity for commuting purposes to the
Employers' executive offices in Andover, Massachusetts, such
reimbursement to be in accordance with the Employers' customary
practices and procedures pertaining to senior executive officers
relocation expense coverage, including reasonable
requirements with respect to substantiation and documentation as may be
specified by the Employers.
3.5 VACATION. The Executive shall be entitled to not less than four
(4) 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 Bank,
which approval shall not be unreasonably withheld.
3.6 GENERAL. Nothing paid to the Executive under any plan, policy
or arrangement cur- rently in effect or made available in the future
shall be deemed to be in lieu of other compensation to the Executive as
described in this Agreement.
4. EXTENT OF SERVICE. During the Term of Employment, the Executive
shall, subject to the direction and supervision of the Board of Directors of
the Bank, devote his full 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 may be approved by the Board of Directors;
PROVIDED, HOWEVER, that nothing herein shall be construed as preventing the
Executive from:
(a) investing his assets in such form or manner as shall not
require any material services on his part in the operations or
affairs of the companies or the other entities in which such
investments are made;
(b) serving on the board of directors of any company, 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. TERMINATION UPON DEATH. In the event of the Executive's death during
the Term of Employment, the Executive's employment shall terminate on the
date of his death; PROVIDED, HOWEVER, that the Bank shall pay to the
Executive's beneficiary designated in writing to the Bank prior to his death
(or to his estate, if he fails to make such designation), (i) any base salary
or other compensation earned (together with a PRO RATA portion of the bonus
payable with respect to the year in which death occurred) but not paid to the
Executive prior to the date of death, plus (ii) the base salary that the
Executive would have earned for a period of six months following his death,
plus (iii) an amount equal to any bonus payments or other incentive
compensation that the Executive would have earned if he had been employed for
six months after his death, plus (iv) any death benefits that the Executive
is entitled to under the Bank's policies in effect on the Executive's date of
death. The foregoing bonus payments shall be payable at the time of payment
of similar bonus payments to other executives of the Bank and shall be
computed on the assumption that all the Executive's individual goals (if any)
under any applicable bonus plans were achieved. In addition, the Bank shall
continue in effect the medical benefits of the Executive and the Executive's
dependents, or any of the same, at the level in effect on, and at the same
out-of-pocket cost to the Executive as of, the date of death for a six-month
period commencing on the date of death (or, if such continuation is not
permitted by applicable law or if the Board so determines in its sole
discretion, the Bank shall
provide the economic equivalent in lieu thereof). Such medical benefits shall
be deemed to have been provided under the provisions of COBRA.
6. TERMINATION BY THE BANK FOR CAUSE.
6.1 TERMINATION BY BANK. The Executive's employment hereunder may
be terminated by the Bank, without further liability on the part of the
Bank, effective immediately, by a two-thirds vote of all of the members
of the Board of Directors of the Bank for Cause (as such term is defined
in Section 6.2) by written notice to the Executive setting forth in
reasonable detail the nature of such Cause, PROVIDED that the Board has
complied with the provisions of Section 6.3.
6.2 CAUSE. Termination for "Cause" shall mean
(a) willful or gross neglect of duties for which employed
(OTHER THAN on account of a medically determinable disability which
renders the Executive incapable of performing such services);
(b) committing fraud, misappropriation or embezzlement in the
performance of duties as an employee of the Bank or the Holding
Company;
(c) conviction of a felony involving a crime of moral
turpitude;
(d) willfully engaging in violations of material banking
regulations; or
(e) willfully engaging in conduct materially injurious to the
Bank or the Holding Company in violation of the covenants contained
in this Agreement.
6.3 BOARD TERMINATION PROCEDURE. In each case, in determining Cause
the alleged acts or omissions of the Executive shall be measured against
standards prevailing in the banking industry generally and the ultimate
existence of Cause must be confirmed by not less than two-thirds of the
Board at a meeting prior to any termination therefor.
6.4 TERMINATION OF OBLIGATIONS. In the event of termination
pursuant to Section 6, all obligations of the Bank under this Agreement
shall terminate as of the date indicated, but vested rights of the
parties hereunder shall not be affected.
7. TERMINATION BY THE EXECUTIVE
7.1 TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The Executive
shall be entitled to terminate his employment hereunder for Good Reason
(as defined in Section 7.4) effective immediately by giving written
notice to the Board of Directors. Upon any such termination, the
Executive shall be entitled to receive the benefits set forth in Section
10.
7.2 OTHER VOLUNTARY TERMINATION BY THE EXECUTIVE. During the Term
of Employment, the Executive may effect, upon sixty (60) days prior
written notice to the Bank, a Voluntary Termination of his employment
hereunder and thereupon the Term of Employment (if not already expired)
shall end. A "Voluntary Termination" shall mean a termination of
employment by the Executive on his own initiative OTHER THAN (a) a
termination due to death or becoming Disabled (as defined in Section
12), (b) a termination for Good Reason, (c) a termination due to
Retirement (as defined in Section 7.3), or (d) a termination as
a result of the normal expiration of the full Term of Employment. If,
during the Term of Employment, the Executive's employment is so
terminated due to Voluntary Termination, the Term of Employment shall
thereupon end and the Employers shall pay to the Executive the payments
and benefits which the Executive would be entitled to in the event of a
termination of his employment by the Employers for Cause.
7.3 TERMINATION DUE TO RETIREMENT. "Retirement" means the
termination of the Executive's employment with the Bank for any reason
by the Executive at any time after the Executive attains "Retirement
Age" (as hereinafter defined). "Retirement Age" shall mean the earliest
to occur of (X) age 65, (Y) (if applicable) any lesser age at which the
Executive is entitled to retire from the Employers and receive
retirement benefits under the Employers' qualified pension plan, and (Z)
an age of 62 or greater at which the Employers permit the Executive to
retire. The Executive may terminate the Executive's employment hereunder
due to Retirement upon thirty (30) days prior written notice to the
Bank. If, during the Term of Employment, the Executive's employment is
so terminated due to Retirement, the Term of Employment shall thereupon
end and the Executive shall be entitled to (i) continuation of the
Executive's medical benefits at the level in effect on, and at the same
out-of-pocket cost to the Executive as of, the date of termination for
the one year period following the termination of the Executive's
employment due to Retirement (or, if such continuation is not permitted
by applicable law or if the Board so determines in its sole discretion,
the Bank shall provide the economic equivalent in lieu thereof), and
(ii) any other compensation and benefits as may be provided in
accordance with the terms and provisions of any applicable plans and
programs, if any, of the Bank. Such medical benefits shall be deemed to
have been provided under the provisions of COBRA.
7.4 GOOD REASON. For purposes of this Agreement, the term "Good
Reason" shall mean any of the following:
(a) the failure of the Board of Directors of the Bank to elect
the Executive to the office of President and Chief Operating
Officer, or to continue the Executive in such offices;
(b) the failure by the Bank to comply with the provisions of
Section 3.1;
(c) any failure by the Bank to timely pay the amounts (OTHER
THAN base salary) or provide the benefits described in this
Agreement, OTHER THAN an isolated failure not occurring in bad faith
and which is remedied promptly after receipt of written notice
thereof given by Executive;
(d) any reduction in the Executive's base salary or any
material reduction in other benefits in effect for the Executive on
the date hereof or as set forth in this Agreement;
(e) a material breach by the Bank of any of the provisions of
this Agreement which failure or breach shall have continued for
thirty (30) days after written notice from the Executive to the Bank
specifying the nature of such failure or breach; and
(f) a determination by the Board not to continue to extend the
term of this Agreement as provided in Section 2.
In addition,"Good Reason" shall include the following events but only if they
shall occur
within two years following a "Change in Control" (which term shall have the
meaning defined in the Special Termination Agreement between the Executive
and the Holding Company):
(g) there occurs any material change by the Bank to the
Executive's function, duties, or responsibilities in effect on the
date hereof or as set forth in this Agreement, which change would
cause the Executive's position with the Bank to become one of lesser
responsibility, importance, or scope from the position and
attributes thereof in effect on the date hereof or as set forth in
this Agreement;
(h) the failure by the Bank to continue to provide the
Executive with benefits substantially similar to those available to
the Executive under any of the life insurance, medical, health and
accident, or disability plans or any other material benefit plans in
which the Executive was participating at the time of the Change in
Control, or the taking of any action by the Bank which would
directly or indirectly materially reduce any of such benefits, or
the failure by the Bank to provide the Executive with the number of
paid vacation days to which the Executive is entitled on the basis
of years of service with the Bank in accordance with the Bank's
normal vacation policy in effect at the time of the Change in
Control;
(i) A reasonable determination by the Executive that, as a
result of a Change in Control, he is unable to exercise the
responsibilities, authorities, powers, functions or duties exercised
by the Executive immediately prior to such Change in Control; or
(j) A reasonable determination by the Executive that, as a
result of a Change in Control, his working conditions have
significantly worsened.
8. TERMINATION BY THE BANK WITHOUT CAUSE. The Executive's employment
with the Bank may be terminated without cause by a two-thirds vote of all of
the members of the Board of Directors of the Bank on written notice to the
Executive, PROVIDED, HOWEVER, that the Bank shall have the obligation upon
any such termination to make the payments to the Executive provided for under
Section 10 of this Agreement.
9. TERMINATION BY OPERATION OF LAW. The Executive's employment with
the Bank shall terminate:
(a) if the Executive is removed or permanently prohibited from
participating in the conduct of the Bank's affairs by an order
issued under Section 8(e)(4) or (g)(1) of the Federal Deposit
Insurance Act (12 U.S.C. Section 1818(e)(4) or (g)(1) as of the
effective date oF the order.
(b) if the Bank is in default (as defined in Section 3(x)(1)
of the Federal Deposit Insurance Act) as of the date of the default;
or
(c) except to the extent determined that continuation of this
Agreement is necessary for the continued operation of the Bank, by
the Director of the Office of Thrift Supervision (the "Director") or
his or her designee, (x) at the time the Federal Deposit Insurance
Corporation or the Resolution Trust Corporation enters into an
agreement to provide assistance to or on behalf of the Bank under
the authority contained in Section 13(c) of the Federal Deposit
Insurance Act; or (y) at the time the Director or his 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.
10. CERTAIN TERMINATION BENEFITS. In the event of termination pursuant
to Section 7.1 or 8, the Executive shall be entitled to each of the following
benefits:
10.1 EARNINGS TO DATE OF TERMINATION. An amount equal to the sum of
(a) base salary or other compensation earned through the date of
termination, plus (b) the Executive's PRO RATA share (based on the
portion of the fiscal year during which the Executive was employed) of
the highest annual bonus paid during the three fiscal years preceding
the termination of employment, plus (c) all accrued vacation and
deferred compensation.
10.2 LUMP SUM PAYMENT OF REMAINING SALARY OBLIGATION. A lump sum
severance benefit equal to three times the Executive's Highest Total
Compensation during the three preceding fiscal years. Total Yearly
Compensation shall equal the aggregate of all base compensation and any
commissions, or bonuses paid during or accrued with respect to such
year, together with any contributions or accruals made on behalf of
Executive to any profit sharing plan or pension or retirement plan, by
the Bank or the Holding Company (or any predecessor in interest) for the
benefit of the Executive for the calendar year. If the Executive is a
participant in a defined benefit pension or retirement plan, the
increase in the actuarial value of the Executive's benefits under such
plan between the start of the calendar year and the end of the calendar
year shall be deemed to have been "paid" by the Executive's employer for
the benefit of the Executive during such calendar year and shall be
included in the calculation of Total Yearly Compensation.
10.3 BENEFIT CONTINUATION. For the period subsequent to the date of
termination until the Expiration Date, the Executive shall continue to
receive the disability and medical benefits described in Section 3.2
existing on the date of termination at the level in effect on, and at
the same out-of-pocket cost to the Executive as of, the date of
termination. Any cash bonus plans shall be prorated through the date of
termination.
10.4 PENSION ADJUSTMENT. An amount equal to the excess of (a) the
actuarial value of the benefits which the Executive would have accrued
under the Employers' qualified pension plan and non-qualified
supplemental retirement plan if the Executive's employment had continued
for a period of three years following his date of termination, over (b)
the actuarial equivalent of the Executive's actual benefit under the
pension plan and the non-qualified supplemental retirement plan.
11. ADJUSTMENT FOR UNAVAILABILITY OF BENEFITS. If, in spite of the
provisions of Section 10, benefits or service credits under any benefit plan
provided by a third party shall not be payable or provided 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 Bank, the
Bank shall pay or provide for payment of such benefits and service credits for
such benefits to the Executive, or to the Executive's dependents, beneficiaries
or estate.
12. 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 Bank, acting through its Board of Directors,
may designate another executive to act in his place during the period of his
disability. Notwithstanding any such designation, the Executive shall
continue to receive his full salary and benefits under Section 3 of this
Agreement until the earlier of (X) the Expiration Date or (Y) the date on
which he becomes eligible for disability income under the Employer's
disability income plan (at which time the Executive shall be considered to be
"Disabled"). While receiving disability payments under such plan, the
Executive shall receive a salary from the Bank which when combined with the
Executive's disability income payments will equal eighty (80%) percent of the
Executive's prior salary from the Bank, and shall continue to participate in
the Employers' benefit plans and to receive other benefits as specified in
Section 3.2 until the Expiration Date, with all such benefits to be at the level
in effect on, and at the same out-of-pocket cost to the Executive as of, the
date of disability. In the absence of a disability income plan at the time of
such disability, the Bank shall pay the Executive benefits equal to those the
Executive would have received if the Bank's current disability plan were in
effect at such time. Upon the Executive being able to return to full-time
employment after being Disabled but before the expiration of the Term of
Employment, the Executive shall be offered an equivalent available position
and otherwise be subject to the provisions of this Agreement. Nothing
contained in this Section 12 shall preclude the Holding Company from terminating
the Executive's employment without cause, subject to its payment of benefits
as provided in Section 10.
13. LIMITATION ON PAYMENTS. In no event shall payments pursuant to
Section 10, in the aggregate, exceed three times the Executive's average annual
compensation for the five most recent taxable years that Executive has been
employed by the Bank or its predecessor in interest, or such lesser number of
years in the event that Executive shall have been employed by the Bank or its
predecessor in interest for less than five years. In the event the Bank is
not in compliance with its minimum capital requirements or if such payments
pursuant to Section 10 would cause the Bank's capital to be reduced below its
minimum regulatory capital requirements, such payments shall be deferred
until such time as the Bank or successor thereto is in capital compliance.
14. SUSPENSION OF AGREEMENT. The Executive's employment hereunder shall
be suspended if the Executive is suspended or temporarily prohibited from
participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) or(g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
Section 1818(e)(3) and (g)(1)) 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 the Executive all or part of the compensation
withheld while this Agreement was suspended pursuant to this Section and (ii)
reinstate (in whole or in part) any of its obligations which were suspended.
15. 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 Employer obtained by
him incident to his employment with the Bank. 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 business or
facilities) which have been discussed or
considered by the management of the Bank but does not include any information
which has become part of the public domain by means other than the
Executive's nonobservance of his obligations hereunder.
16. NO MITIGATION; NO OFFSET. In the event of any termination of
employment under this Agreement, the Executive shall be under no obligation
to seek other employment or to mitigate damages, and there shall be no offset
against any amounts due to him under this Agreement for any reason,
including, without limitation, on account of any remuneration attributable to
any subsequent employment that the Executive may obtain. Any amounts due
under this Agreement are in the nature of severance payments or liquidated
damages, or both, and are not in the nature of a penalty.
17. MISCELLANEOUS.
17.1 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.
17.2 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.
17.3 WITHHOLDING. All payments made by the Bank under this
Agreement shall be net of any tax or other amounts required to be
withheld by the Bank under applicable law.
17.4 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 Bank, 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 17.4. 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 or incur other costs and expenses in connection with the
enforcement of any or all of the Executive's rights under this
Agreement, the Bank shall pay (or the Executive shall be entitled to
recover from the Bank, 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.
17.5 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 and without such consent
any attempted transfer or assignment shall be null and of no effect;
PROVIDED, HOWEVER, that the Bank may assign its rights under this
Agreement without the consent of the Executive in the event either
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 Bank and the Executive, and their
respective successors, executors, administrators, heirs and permitted
assigns. In the event of the Executive's death prior to the completion
by the Bank of all payments due him under this Agreement, the Bank shall
continue such payments to the Executive's beneficiary designated in
writing to the Bank prior to his death (or to his estate, if he fails to
make such designation).
17.6 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.
17.7 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.
17.8 PRIOR AGREEMENTS. This Agreement supersedes the Amended and
Restated Employment Agreement made as of October 9, 1997 by and among
the Executive, the Holding Company and the Bank.
17.9 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 Bank or, in the case of the Bank, at its main
office, attention of the Board of Directors.
17.10 AMENDMENT. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by duly authorized
representatives of the Bank.
17.11 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.
18. SOURCE OF PAYMENTS.
18.1 HOLDING COMPANY GUARANTY. All payments provided in this
Agreement shall be timely paid in cash or check from the general funds
of the Bank. The Holding Company, however, unconditionally guarantees
payment and provision of all amounts and benefits due hereunder to the
Executive and, if such amounts and benefits due from the Bank are not
timely paid or provided by the Bank, such amounts and benefits shall be
paid or provided by the Holding Company.
18.2 PAYMENTS BY HOLDING COMPANY. Notwithstanding any provision
herein to
the contrary, to the extent that payments and benefits, as provided by this
Agreement, are paid to or received by the Executive under the Amended and
Restated Employment Agreement dated as of the date hereof between the
Executive and the Holding Company, such compensation payments and benefits
paid by the Holding Company will be subtracted from any amounts due
simultaneously to the Executive under similar provisions of this Agreement.
Under no circumstances shall the Executive be entitled to receive duplicate
payments or benefits under this Agreement and such other Employment
Agreement. Payments pursuant to this Agreement and the Holding Company
Agreement shall be allocated in proportion to the services rendered and
time expended on such activities by the Executive as determined by the Holding
Company and the Bank on a quarterly basis.
19. NONCOMPETITION.
19.1 WHILE EMPLOYED. During such time as the Executive is employed
hereunder, the Executive will not compete 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 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.
19.2 POST-EMPLOYMENT. The provisions of this Section 19.2 shall
not be binding on the Executive after a Change in Control shall have
occurred. During the one year period following the date of termination
of the Executive's employment (x) by the Executive on his own initiative
for any reason OTHER THAN (1) death, (2) becoming Disabled (as defined
in Section 12), or (3) Retirement (as defined in Section 7.3), or (y) by
either Employer for Cause or under circumstances which result in the
Executive receiving termination benefits pursuant to Section 10 hereof,
the Executive will not compete from an office within 20 miles of the
Bank's main office 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, or encourage any such
employee to terminate his or her relationship with either of the
Employers.
* * * * *
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IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Employers, by their duly authorized officers, and by the
Executive, as of the date first above written.
ATTEST: FIRST ESSEX BANK, FSB
/s/ XXXXXXX XXXXXXXX By: /s/ XXXXXXX X. XXXXXX
-------------------------- ------------------------------
Title: Chairman and CEO
[Seal]
WITNESS EXECUTIVE
/s/ XXXXXXX XXXXX /s/ XXXXX X. XXXXXXXX
-------------------------- ------------------------------
Xxxxx X. Xxxxxxxx
The undersigned hereby guarantees the
obligations of First Essex Bank, FSB,
under the foregoing agreement
FIRST ESSEX BANCORP, INC.
By: /s/ XXXXXXX X. XXXXXX
------------------------------
Title: Chairman & CEO
[Seal]
