EMPLOYMENT AGREEMENT
Exhibit
10.1
This
AGREEMENT (the "Agreement") is made as of September 30, 1997 (the "Effective
Date"), by and between Xxxxxxxx Financial, Inc., a New Hampshire chartered
corporation ("Xxxxxxxx"), The Berlin City Bank, a New Hampshire chartered bank
and wholly owned subsidiary of Xxxxxxxx with its principal offices located
in
Berlin, New Hampshire (Xxxxxxxx and The Berlin City Bank shall hereinafter
collectively be referred to as the "Employer"), and Xxxxxxx X. Xxxxxxxx (the
"Executive"). In consideration of the mutual covenants contained in this
Agreement, the Employer and the Executive agree as follows:
(a)
investing the Executive's assets in any company or other entity in a manner
not
prohibited by Section 7(d) and in such form or manner as shall not require
any
material activities on the Executive's part in connection with the operations
or
affairs of the companies or other entities in which such investments are made;
or
(b)
engaging in religious, charitable or other community or non-profit activities
that do not impair the Executive's ability to fulfill the Executive's duties
and
responsibilities under this Agreement; or
(c)
continuing to advise and consult regularly the activities of Xxxxxxxxxxxx &
Xxxxxxxx, Inc. in his current positions with the same, provided that such advice
and consultation does not unreasonably interfere with the performance of the
Executive's duties hereunder.
(i)
dishonest statements or acts of the Executive with respect to the business
of
the Employer or any affiliate of the Employer;
(ii)
the
commission by or indictment of the Executive for (A) a felony or (B) any
misdemeanor involving moral turpitude, deceit, dishonesty or fraud
("indictment," for these purposes, meaning an indictment, probable cause hearing
or any other procedure pursuant to which an initial determination of probable
or
reasonable cause with respect to such offense is made);
(iii)
material failure to perform to the reasonable satisfaction of the Board of
Directors a substantial portion of the Executive's duties and responsibilities
assigned or delegated under this Agreement, which failure continues, in the
reasonable judgment of the Board of Directors, for sixty (60) days after written
notice given to the Executive by the Board of Directors;
(iv)
gross negligence, willful misconduct or insubordination of the Executive with
respect to the Employer or any affiliate of the Employer; or
(v)
material breach by the Executive of any of the Executive's obligations under
this Agreement.
(i)
continuation of the Executive's Salary at the rate then in effect pursuant
to
Section 4(a); and
(ii)
continuation of group health plan benefits to the extent authorized by and
consistent with 29 U.S.C. ss. 1161 et seq. (commonly known as "COBRA"), with
the
cost of the regular premium for such benefits shared in the same relative
proportion by the Employer and the Executive as in effect on the date of
termination.
The
Termination Benefits set forth in (i) and (ii) above shall continue effective
until the expiration of the Term; provided that in the event that the Executive
commences any employment or self-employment during the period during which
the
Executive is entitled to receive Termination Benefits (the "Termination Benefits
Period"), the remaining amount of Salary due pursuant to Section 6(d)(i) for
the
period from the commencement of such employment (other than in connection with
the activities of Xxxxxxxxxxxx & Xxxxxxxx, Inc.) or self-employment to the
end of the Termination Benefits Period shall be reduced by one-half of the
salary the Executive receives from such employment or self-employment and,
if
the Executive receives benefits from such employment or self-employment
comparable to those benefits provided by the Employer, the payments provided
under Section 6(d)(ii) shall cease effective as of the date of commencement
of
such employment or self-employment. The Employer's liability for Salary
continuation pursuant to Section 6(d)(i) shall be reduced by the amount of
any
severance pay due or otherwise paid to the Executive pursuant to any severance
pay plan or stay bonus plan of the Employer. Notwithstanding the foregoing,
nothing in this Section 6(d) shall be construed to affect the Executive's right
to receive COBRA continuation entirely at the Executive's own cost to the extent
that the Executive may continue to be entitled to COBRA continuation after
the
Executive's right to cost sharing under Section 6(d)(ii) ceases. The Executive
shall be obligated to give prompt notice of the date of commencement of any
employment or self-employment during the Termination Benefits Period and shall
respond promptly to any reasonable inquiries concerning any employment or
self-employment in which the Executive engages during the Termination Benefits
Period.
(i)
Change of Control shall mean the occurrence of one or more of the following
events:
(A)
any
"person" (as such term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) becomes a "beneficial
owner" (as such term is defined in Rule 13d-3 promulgated under the Exchange
Act) (other than the Employer, any trustee or other fiduciary holding securities
under an employee benefit plan of the Employer, or any corporation owned,
directly or indirectly, by the stockholders of the Employer, in substantially
the same proportions as their ownership of stock of Xxxxxxxx), directly or
indirectly, of securities of Xxxxxxxx, representing fifty percent (50%) or
more
of the combined voting power of Xxxxxxxx'x then outstanding securities;
or
(B)
persons who, as of the Effective Date, constituted Xxxxxxxx'x Board of Directors
(the "Incumbent Board") cease for any reason including, without limitation,
as a
result of a tender offer, proxy contest, merger or similar transaction, to
constitute at least a majority of Xxxxxxxx'x Board of Directors, provided that
any person becoming a director of Xxxxxxxx subsequent to the Effective Date
whose election was approved by at least a majority of the directors then
comprising the Incumbent Board shall, for purposes of this Section 6(f), be
considered a member of the Incumbent Board; or
(C)
the
stockholders of Xxxxxxxx approve a merger or consolidation of Xxxxxxxx with
any
other corporation or other entity, other than (1) a merger or consolidation
which would result in the voting securities of Xxxxxxxx outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than fifty
percent (50%) of the combined voting power of the voting securities of Xxxxxxxx
or such surviving entity outstanding immediately after such merger or
consolidation or (2) a merger or consolidation effected to implement a
recapitalization of Xxxxxxxx (or similar transaction) in which no "person"
(as
hereinabove defined) acquires more than fifty percent (50%) of the combined
voting power of Xxxxxxxx'x then outstanding securities; or
(D)
the
stockholders of Xxxxxxxx approve a plan of complete liquidation of Xxxxxxxx
or
an agreement for the sale or disposition by Xxxxxxxx of all or substantially
all
of Xxxxxxxx'x assets.
(ii)
The
events referred to in Section 6(f) above shall be as follows:
(A)
a
reduction of the Executive's salary other than a reduction that (1) is based
on
the Employer's financial performance or (2) is similar to the reduction made
to
the salaries provided to all or most other senior executives of the Employer;
or
(B)
a
significant change in the Executive's responsibilities and/or duties which
constitutes, when compared to the Executive's responsibilities and/or duties
before the Change of Control, a demotion; or
(C)
a
material loss of title or office; or
(D)
the
relocation of the offices at which the Executive is principally employed as
of
the Change of Control to a location more than fifty (50) miles from such
offices, which relocation is not approved by the Executive.
(iii)
The
Executive shall provide the Employer with reasonable notice and an opportunity
to cure any of the events listed in Section 6(f)(ii) and shall not be entitled
to compensation pursuant to this Section 6(f) unless the Employer fails to
cure
within a reasonable period; and
(iv)
It
is the intention of the Executive and of the Employer that no payments by the
Employer to or for the benefit of the Executive under this Agreement or any
other agreement or plan, if any, pursuant to which the Executive is entitled
to
receive payments or benefits shall be nondeductible to the Employer by reason
of
the operation of Section 280G of the Code relating to parachute payments or
any
like statutory or regulatory provision. Accordingly, and notwithstanding any
other provision of this Agreement or any such agreement or plan, if by reason
of
the operation of said Section 280G or any like statutory or regulatory
provision, any such payments exceed the amount which can be deducted by the
Employer, such payments shall be reduced to the maximum amount which can be
deducted by the Employer. To the extent that payments exceeding such maximum
deductible amount have been made to or for the benefit of the Executive, such
excess payments shall be refunded to the Employer with interest thereon at
the
applicable Federal rate determined under Section 1274(d) of the Code, compounded
annually, or at such other rate as may be required in order that no such
payments shall be nondeductible to the Employer by reason of the operation
of
said Section 280G or any like statutory or regulatory provision. To the extent
that there is more than one method of reducing the payments to bring them within
the limitations of said Section 280G or any like statutory or regulatory
provision, the Executive shall determine which method shall be followed,
provided that if the Executive fails to make such determination within
forty-five (45) days after the Employer has given notice of the need for such
reduction, the Employer may determine the method of such reduction in its sole
discretion.
(d)
Noncompetition and Nonsolicitation. During the Term and for one (1) year
thereafter (or during the Termination Benefits Period, if longer), the Executive
(i) will not, directly or indirectly, whether as owner, partner, shareholder,
consultant, agent, employee, co-venturer or otherwise, engage, participate,
assist or invest in any Competing Business (as hereinafter defined); (ii) will
refrain from directly or indirectly employing, attempting to employ, recruiting
or otherwise soliciting, inducing or influencing any person to leave employment
with the Employer (other than terminations of employment of subordinate
employees undertaken in the course of the Executive's employment with the
Employer); and (iii) will refrain from soliciting or encouraging any customer
or
supplier to terminate or otherwise modify adversely its business relationship
with the Employer; provided, however, that the foregoing one-year restriction
shall not apply in the event the Executive's employment under this Agreement
is
terminated pursuant to Section 6(c) hereof. The Executive understands that
the
restrictions set forth in this Section 7(d) are intended to protect the
Employer's interest in its Confidential Information and established employee,
customer and supplier relationships and goodwill, and agrees that such
restrictions are reasonable and appropriate for this purpose. For purposes
of
this Agreement, the term "Competing Business" shall mean a business (other
than
Xxxxxxxxxxxx & Xxxxxxxx, Inc.) conducted anywhere in the State of New
Hampshire which is competitive with any business which the Employer or any
of
its affiliates conducts or proposes to conduct at any time during the employment
of the Executive. Notwithstanding the foregoing, the Executive may own up to
one
percent (1%) of the outstanding stock of a publicly held corporation which
constitutes or is affiliated with a Competing Business.
8.
Arbitration of Disputes. Any controversy or claim arising out of or relating
to
this Agreement or the breach thereof or otherwise arising out of the Executive's
employment or the termination of that employment (including, without limitation,
any claims of unlawful employment discrimination whether based on age or
otherwise) shall, to the fullest extent permitted by law, be settled by
arbitration in any forum and form agreed upon by the parties or, in the absence
of such an agreement, under the auspices of the American Arbitration Association
("AAA") in Boston, Massachusetts in accordance with the Employment Dispute
Resolution Rules of the AAA, including, but not limited to, the rules and
procedures applicable to the selection of arbitrators, except that the
arbitrator shall apply the law as established by decisions of the U.S. Supreme
Court, the Court of Appeals for the First Circuit and the U.S. District Court
for the District of New Hampshire in deciding the merits of claims and defenses
under federal law or any state or federal anti-discrimination law, and any
awards to the Executive for violation of any anti-discrimination law shall
not
exceed the maximum award to which the Executive could be entitled under the
applicable (or most analogous) federal anti-discrimination or civil rights
laws.
In the event that any person or entity other than the Executive or the Employer
may be a party with regard to any such controversy or claim, such controversy
or
claim shall be submitted to arbitration subject to such other person or entity's
agreement. Judgment upon the award rendered by the arbitrator may be entered
in
any court having jurisdiction thereof. This Section 8 shall be specifically
enforceable. Notwithstanding the foregoing, this Section 8 shall not preclude
either party from pursuing a court action for the sole purpose of obtaining
a
temporary restraining order or a preliminary injunction in circumstances in
which such relief is appropriate; provided that any other relief shall be
pursued through an arbitration proceeding pursuant to this Section
8.
9.
Consent to Jurisdiction. To the extent that any court action is permitted
consistent with or to enforce Section 8 of this Agreement, the parties hereby
consent to the jurisdiction of the Superior Court of the State of New Hampshire
and the United States District Court for the District of New Hampshire.
Accordingly, with respect to any such court action, the Executive (a) submits
to
the personal jurisdiction of such courts; (b) consents to service of process;
and (c) waives any other requirement (whether imposed by statute, rule of court,
or otherwise) with respect to personal jurisdiction or service of
process.
16.
Governing Law. This is a New Hampshire contract and shall be construed under
and
be governed in all respects by the laws of the State of New Hampshire, without
giving effect to the conflict of laws principles of such State.
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XXXXXXXX
FINANCIAL, INC.
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Attest:
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By:
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/s/
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Xxxxx
X. X'Xxxxxx
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By:
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/s/
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Xxxxxxxx
X. Xxxxx
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Name:
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Xxxxx
X. X'Xxxxxx
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Name:
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Xxxxxxxx
X. Xxxxx
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Title:
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Executive
Vice President
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Title:
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Vice
Chairman
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and
Chief Financial Officer
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THE
BERLIN CITY BANK
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Attest:
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By:
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/s/
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Xxxxx
X. X'Xxxxxx
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By:
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/s/
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Xxxxxxx
X. Xxxxxxxx
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Name:
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Xxxxx
X. X'Xxxxxx
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Name:
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Xxxxxxx
X. Xxxxxxxx
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Title:
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Executive
Vice President
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Title:
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President
and Chief
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and
Chief Financial Officer
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Executive
Officer
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EMPLOYEE
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/s/
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Xxxxxxx
X. Xxxxxxxx
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Xxxxxxx
X. Xxxxxxxx
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