Exhibit 10.20
NON-SOLICITATION AND CONFIDENTIALITY AGREEMENT
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This Non-Solicitation and Confidentiality Agreement ("Agreement") is
made this 10th day of November, 2003 by Sovereign Bancorp, Inc. and Sovereign
Bank (collectively, "Sovereign") and Xxxxxxx X. Xxxxxx ("Xxxxxx"), an individual
residing in Andover, Massachusetts.
WHEREAS, Sovereign has entered into an Agreement and Plan of Merger
(the "Merger Agreement") with First Essex Bancorp, Inc. and First Essex Bank
(collectively, "First Essex"), which will result in the merger of Sovereign and
First Essex ("the Merger") at a date to be determined (the "Closing"); and
WHEREAS, Xxxxxx is the Chief Executive Officer and a director and
shareholder of First Essex and will receive substantial payments and other
benefits as a result of the Merger;
NOW, THEREFORE, in consideration of the payments and benefits Xxxxxx
will receive as a result of the Merger and pursuant to this Agreement, and
intending to be legally bound, Sovereign and Xxxxxx agree as follows:
1. Non-Solicitation of Commercial Loan Customers. Xxxxxx covenants that
he will not, directly or indirectly, during the period between the date of this
Agreement and Closing and for a period of one year after the Closing, solicit or
encourage or assist others to solicit any business from any person or entity
which, together with its affiliates, had commercial loans outstanding from First
Essex, or any of its subsidiaries, which in the aggregate amounted to $1,000,000
or more at any time within the 60 day period prior to, or at any time after the
date of the execution of the Merger Agreement ("Commercial Loan Customers").
This covenant shall not be construed to prohibit any of Xxxxxx'x future
employers from making general public announcements to the effect that Xxxxxx has
become affiliated with such new employer or holding receptions to introduce him
to persons other than Commercial Loan Customers. Xxxxxx agrees to inform any
potential new employer of the covenant set forth in this Section 1 prior to
accepting employment during the one year period following the Closing.
2. Non-Solicitation of Employees. Xxxxxx covenants that he will not,
for a period of one year after the Closing, directly or indirectly, (i) solicit
or encourage any person who was employed by First Essex on the date of execution
of this Agreement to leave his or her employment at First Essex, or (ii)
encourage or assist any person with whom he has an employment or consulting or
other similar relationship in identifying, recruiting or soliciting any
commercial loan officer or relationship manager who was employed by First Essex
on the Closing or at any time during the three month period prior to the
Closing, or assisting such person in formulating an employment package for such
officer or manager to the extent such assistance involves the use of
Confidential Information (as that term is defined in Section 3). The covenants
set forth in this Section 2 shall not be construed to prohibit any person who
employs Xxxxxx as an employee or consultant from advertising generally for
employees in the markets served by First Essex or from hiring any candidate,
whether or not such person was employed by First Essex, so long as Xxxxxx does
not breach the covenants set forth in this Section 2. Xxxxxx agrees to inform
any potential new employer of the covenants set forth this Section 2 prior to
accepting employment during the one year period following the Closing.
3. Confidential Information. Xxxxxx acknowledges that while he was
employed by First Essex he was privy to confidential information belonging to
First Essex including, but not limited to, customer-specific records and
information, price lists and fee schedules, market studies, business plans,
financial statements, financial projections and budgets, historical and
projected sales, information regarding key personnel, data and data
compilations, customer lists, current and anticipated customer requirements, and
other confidential information concerning the business and affairs of First
Essex which is not in the public domain (collectively, "Confidential
Information"). Xxxxxx represents that he has not and agrees that he will not
remove, physically, electronically, or otherwise, from the premises of First
Essex any Confidential Information and, at any time during the two-year period
following the Closing, disclose to any person or entity or use for his own
benefit or for the benefit of any third party any Confidential Information,
whether the Confidential Information is embodied in writing or not. Xxxxxx
agrees to inform any potential new employer of the provisions of this Section 3
prior to accepting employment during the two-year period following the Closing.
4. De Novo Bank. Xxxxxx covenants that he will not, for a two-year
period following the Closing, participate as an organizer, promoter, senior
executive officer; board member or significant shareholder in the formation or
organization of any de novo bank or thrift or other depository institution
headquartered, or proposed to be headquartered, in Essex County, Massachusetts.
5. Consideration. In consideration of the covenants of Xxxxxx contained
in this Agreement, Sovereign agrees to pay to Xxxxxx an amount equal to $400,000
at the Closing of the Merger.
6. Severability and Reformation. If any covenant in this Agreement is
held to be unreasonable, arbitrary, or against public policy, such covenant will
be considered to be divisible with respect to scope, time, and geographic area,
and such lesser scope, time, or geographic area, or all of them, as a court of
competent jurisdiction may determine to be reasonable, not arbitrary, and not
against public policy, will be effective, binding, and enforceable against
Xxxxxx.
7. Notice. While any covenant under this Agreement is in effect, Xxxxxx
will give notice to Sovereign, within ten days after accepting employment with
any other bank, bank holding company or other financial institution of the
identity of his employer. Sovereign may notify such employer that Xxxxxx is
bound by this Agreement and, at Sovereign's election, furnish such employer with
a copy of this Agreement or relevant portions thereof.
8. Injunctive Relief And Additional Remedy. Xxxxxx acknowledges that
the injury that would be suffered by Sovereign and its affiliated companies as a
result of a breach of the provisions of this Agreement would be irreparable and
that an award of monetary damages for such a breach would be an inadequate
remedy. Consequently, Sovereign will have the right, in addition to any other
rights it may have, to obtain injunctive relief to restrain any breach or
threatened breach or otherwise to specifically enforce any provision of this
Agreement.
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9. Waiver. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by either
party in exercising any right, power, or privilege under this Agreement will
operate as a waiver of such right, power, or privilege, and no single or partial
exercise of any such right, power, or privilege will preclude any other or
further exercise of such right, power, or privilege or the exercise of any other
right, power, or privilege. To the maximum extent permitted by applicable law,
(a) no claim or right arising out of this Agreement can be discharged by one
party, in whole or in part, by a waiver or renunciation of the claim or right
unless in writing signed by the other party; (b) no waiver that may be given by
a party will be applicable except in the specific instance for which it is
given; and (c) no notice to or demand on one party will be deemed to be a waiver
of any obligation of such party or of the right of the party giving such notice
or demand to take further action without notice or demand as provided in this
Agreement.
10. Binding Effect; Delegation Of Duties Prohibited. This Agreement
shall inure to the benefit of, and shall be binding upon, the parties hereto and
their respective successors, assigns, heirs, and legal representatives. Xxxxxx
specifically agrees that Sovereign or any of its affiliated companies may assign
its rights and obligations hereunder to another entity that succeeds to their
business. The duties and covenants of Xxxxxx under this Agreement, being
personal, may not be delegated or assigned.
11. Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by facsimile (with written confirmation of receipt), provided that a copy
is mailed by registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and facsimile
numbers set forth below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):
If to Sovereign:
Attention: Xx. Xxx Xxxxx
Chief Executive Officer
Sovereign Bank
XX Xxx 00000
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
With a copy to: Mr. Xxxxx Xxxxxxxxx
General Counsel & Senior Vice President
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
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and
Xxxxxx X. Xxxxxxx, Esquire
000 Xxxxx Xxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxx, XX 00000-0000
Facsimile No.: (000) 000-0000
If to Xxxxxx: Xxxxxxx X. Xxxxxx
0 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
12. Withholding. Sovereign may withhold from any amounts payable under
this Agreement such federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
13. Entire Agreement; Amendments. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral or written, between the
parties hereto with respect to the subject matter hereof. This Agreement may not
be amended orally, but only by an agreement in writing signed by the parties
hereto.
14. Governing Law. This Agreement will be governed by the laws of The
Commonwealth of Massachusetts, without regard to conflicts of laws principles.
15. Jurisdiction. Any action or proceeding seeking to enforce any
provision of, or based on any right arising out of, this Agreement may be
brought against either of the parties in the County of Essex, Massachusetts or,
if it has or can acquire jurisdiction, in a United States District Court in
Massachusetts, and each of the parties consents to the jurisdiction of such
courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on either
party anywhere in the world.
16. Section Headings, Construction. The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Agreement unless otherwise specified.
All words used in this Agreement will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly provided, the
word "including" does not limit the preceding words or terms.
17. Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
18. Legal Fees. 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 Executives's rights under
this Agreement, Sovereign shall pay (or the Executive shall be entitled to
recover from Sovereign, 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 regardless of the final outcome, unless and to the
extent the mediator, arbitrators or court (as applicable) 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.
19. Waiver Of Jury Trial. THE PARTIES HERETO HEREBY WAIVE A JURY TRIAL
IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
SOVEREIGN BANCORP, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx, Xx.
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Name: Xxxxxxxx X. Xxxxxxxx, Xx.
Title: Vice Chariman
SOVEREIGN BANK
By: /s/ Xxxxxxxx X. Xxxxxxxx, Xx.
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Name: Xxxxxxxx X. Xxxxxxxx, Xx.
Title: Chief Operating Officer
EXECUTIVE
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
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