Exhibit 10.29
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XXXXX X. XXXXX
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of January 1, 1997, among XXXXXXX BANK (the
"Bank"), XXXXXXX FINANCIAL CORPORATION (the "Company") and XXXXX X. XXXXX (the
"Employee").
WHEREAS, the respective Boards of Directors of the Company and the Bank
have approved and authorized the entry into this Agreement with the Employee;
WHEREAS, the Employee is currently serving as the Chief Executive
Officer of both the Company and the Bank under an Employment Agreement dated as
of January 1, 1995 (the "Prior Agreement");
WHEREAS, the parties desire to enter into this Agreement to set forth
the terms and conditions for the employment relationships of the Employee with
the Company and the Bank and to replace and supersede the Prior Agreement.
NOW, THEREFORE, it is AGREED as follows:
1. Employment. The Prior Agreement is hereby replaced and superseded
and the Prior Agreement shall be of no further force or effect after the date of
this Agreement. The Employee is employed as the Chief Executive Officer of both
the Company and the Bank from the date hereof through the term of this
Agreement. As an executive of the Company and of the Bank, the Employee shall
render executive, policy, and other management services to the Company and the
Bank of the type customarily performed by persons serving in similar executive
officer capacities. The Employee shall also perform such duties as the Boards of
Directors of the Company and of the Bank may from time to time reasonably
direct. During the term of this Agreement, there shall be no material increase
or decrease in the duties and responsibilities of the Employee otherwise than as
provided herein, unless the parties otherwise agree in writing. During the term
of this Agreement, the Employee shall not be required to relocate to an area
more than 35 miles from the Bank's home office in order to perform the services
hereunder.
2. Salary. The Bank agrees to pay the Employee during the term of this
Agreement a base salary as follows: from the date hereof through December 31,
1997, a salary at an annual rate equal to $475,000, which salary may be adjusted
in January of each subsequent year during the term of this Agreement as
determined by the Boards of Directors of the Company and the Bank. In
determining salary adjustments, the Board of Directors may compensate the
Employee for increases in the cost of living and may also provide for
performance or merit adjustments. The salary under this Section 2 shall be
payable by the Bank to the Employee not less frequently than monthly. The
Company shall reimburse the Bank for a portion of the salary paid to the
Employee hereunder, which portion shall represent an
appropriate allocation for the services rendered to the Company hereunder. The
Employee shall not be entitled to receive fees for serving as a director of the
Company or of the Bank or for serving as a member of any committee of the Board
of Directors of the Company or of the Bank if he is elected to such positions.
3. Discretionary Bonuses. In addition to his salary under Section 2
hereof, the Employee shall be eligible to receive such discretionary bonuses as
may be authorized, declared, and paid by the Board of Directors of the Company
or of the Bank. No other compensation provided for in this Agreement shall be
deemed a substitute for such bonuses when and as declared by the Board of
Directors of the Company or the Bank.
4. Participation in Retirement and Employee Benefit Plans; Fringe
Benefits. The Employee shall be eligible to participate in any plan of the
Company or of the Bank relating to stock options, stock purchases, pension,
thrift, profit sharing, employee stock ownership, group life insurance, medical
coverage, disability insurance, education, or other retirement or employee
benefits that the Bank or the Company has adopted or may adopt for the benefit
of its executive employees. The Employee shall also be eligible to participate
in any other fringe benefits which are now or may be or become applicable to the
Company's or the Bank's executive employees. In addition, the Employee shall be
provided with a standard automobile or an automobile allowance for business use.
Participation in these plans and fringe benefits shall not reduce the salary
payable to the Employee under Section 2 hereof.
5. Term. The initial term of employment under this Agreement shall be
for a period commencing on the date hereof and ending on December 31, 1999. The
Company and the Bank may renew this Agreement by written notice to the Employee
for one additional year on December 31, 1997 and each subsequent December 31
during the term of this Agreement, unless the Employee gives contrary written
notice to the other parties hereto prior to such renewal date. Each initial term
and all such renewed terms are collectively referred to herein as the term of
this Agreement.
6. Standards. The Employee shall perform the Employee's duties and
responsibilities under this Agreement in accordance with such reasonable
standards as may be established from time to time by the Boards of Directors of
the Company or the Bank. The reasonableness of such standards shall be measured
against standards for executive performance generally prevailing in the savings
institutions industry.
7. Voluntary Absences; Vacations. The Employee shall be entitled,
without loss of pay, to be absent voluntarily for reasonable periods of time
from the performance of the duties and responsibilities under this Agreement.
All such voluntary absences shall count as paid vacation time, unless the Board
of Directors of the Company or the Bank otherwise approves. The Employee shall
be entitled to an annual paid vacation of at least four weeks per year or such
longer period as the
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Board of Directors of the Company or the Bank may approve. The timing of paid
vacations shall be scheduled in a reasonable manner by the Employee. The
Employee shall not be entitled (i) to receive any additional compensation from
the Bank on account of failure to take a paid vacation or (ii) to accumulate
more than two weeks of unused paid vacation time from one fiscal year to the
next.
8. Termination of Employment.
(a) (i) The Board of Directors of the Company or the Bank may
terminate the Employee's employment at any time, but any termination by such
Board of Directors other than termination for cause shall not prejudice the
Employee's right to compensation or other benefits under this Agreement. The
Employee shall have no right to receive compensation or other benefits for any
period after termination for cause. The term "termination for cause" shall mean
termination because of the Employee's personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule, or
regulation (other than traffic violations or similar offenses) or final
cease-and-desist order, or material breach of any provision of this Agreement.
In determining incompetence, the acts or omissions shall be measured against
standards generally prevailing in the savings institutions industry; provided,
that it shall be the Company's or the Bank's burden to prove the alleged acts
and omissions and the prevailing nature of the standards the Company or the Bank
shall have alleged are violated by such acts and/or omissions.
(ii) The parties acknowledge and agree that damages
which will result to Employee for termination without cause shall be extremely
difficult or impossible to establish or prove, and agree that, unless the
termination is for cause, the Bank shall be obligated, concurrently with such
termination, to make a lump sum cash payment to the Employee as liquidated
damages of an amount equal to the sum of (a) the Employee's then current annual
base salary under Section 2 of this Agreement and (b) the amount of any bonuses
paid to the Employee pursuant to the Xxxxxxx Financial Corporation and Xxxxxxx
Bank Annual Incentive Compensation Plan during the then current fiscal year
multiplied by a fraction the numerator of which is the number of full months
during the then current fiscal year in which the Employee was employed hereunder
and the denominator of which is 12. The Employee agrees that, except for such
other payments and benefits to which the Employee may be entitled as expressly
provided by the terms of this Agreement, such liquidated damages shall be in
lieu of all other claims which Employee may make by reason of such termination.
Such payment to the Employee shall be made on or before the Employee's last day
of employment with the Company or the Bank. The liquidated damages amount shall
not be reduced by any compensation which the Employee may receive for other
employment with another employer after termination of his employment with the
Company or the Bank.
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(iii) In addition to the liquidated damages above described that are
payable to the Employee for termination without cause, the following shall apply
in the event of any termination without cause (other than a termination subject
to Section 9 hereof): (1) the Employee shall continue to be entitled to medical
and dental coverage as if his employment had not been terminated until the
earliest of (A) the expiration of one year after the date his employment
terminates, (B) the expiration of the remaining term of this Agreement under
Section 5, and (C) the date on which the Employee accepts other employment on a
substantially full time basis and (2) all insurance or other provisions for
indemnification, defense or hold-harmless of officers or directors of the
Company or the Bank which are in effect on the date the notice of termination is
sent to the Employee shall continue for the benefit of the Employee with respect
to all of his acts and omissions while an officer or director as fully and
completely as if such termination had not occurred, and until the final
expiration or running of all periods of limitation against action which may be
applicable to such acts or omissions.
(b) If the Employee is suspended and/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, as amended, the
Company's and 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 the Employee
all or part of the compensation withheld while such contractual obligations were
suspended, and (ii) reinstate in whole or in part any of its obligations which
were suspended.
(c) If the Employee 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) or (g)(1) of the Federal Deposit Insurance Act, as amended, all
obligations of the Company and the Bank under this Agreement shall terminate as
of the effective date of the order, but vested rights of the parties shall not
be affected.
(d) If the Bank is in default (as defined in Section 3(x)(1)
of the Federal Deposit Insurance Act, as amended), all obligations under this
Agreement shall terminate as of the date of default, but this paragraph shall
not affect any vested rights of the parties.
(e) All obligations under this Agreement shall be terminated,
except to the extent determined that continuation of this Agreement is necessary
for the continued operation of the Bank, (i) by the Director of the Office of
Thrift Supervision (the "Director") or his or her designee, at the time the
Federal Deposit Insurance Corporation or Resolution Trust Company 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, as amended, 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 or his or
her designee to be in an unsafe or unsound
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condition. Any rights of the parties that have already vested, however, shall
not be affected by any termination hereunder.
(f) The Employee shall have no right to terminate employment
under this Agreement prior to the end of the term of this Agreement, unless such
termination is approved by the Board of Directors of the Company or the Bank or
is in connection with or within two years after a change in control (as defined
in Section 9(b) hereof) of the Company or the Bank. In the event that the
Employee violates this provision, the Company and the Bank shall be entitled, in
addition to its other legal remedies, to enjoin the employment of the Employee
with any significant competitor of the Bank for a period of one year or the
remaining term of this Agreement plus six months, whichever is less. The term
"significant competitor" shall mean any commercial bank, savings bank, savings
and loan association, or mortgage banking company, or a holding company
affiliate of any of the foregoing, which at the date of its employment of the
Employee has an office out of which the Employee would be primarily based within
35 miles of the Bank's home office.
(g) In the event the employment of the Employee is terminated
by the Company or the Bank without cause under Section 8(a) hereof or the
Employee's employment is terminated voluntarily or involuntarily in accordance
with Section 9 hereof and the Bank fails to make timely payment of the amounts
then owed to the Employee under this Agreement, the Employee shall be entitled
to reimbursement for all reasonable costs, including attorneys' fees, incurred
by the Employee in taking action to collect such amounts or otherwise to enforce
this Agreement, plus interest on such amounts at the rate of one percent above
the prime rate (defined as the base rate on corporate loans at large U.S. money
center commercial banks as published by The Wall Street Journal), compounded
monthly, for the period from the date the payment is due to be paid to the
Employee until payment is made. Such reimbursement and interest shall be in
addition to all rights which the Employee is otherwise entitled to under this
Agreement.
(h) If during the term of this Agreement, the Employee's
employment with the Company and the Bank is terminated (whether voluntarily or
involuntarily), the Employee agrees to maintain the confidentiality of, and not
to use, any non-public information which he acquired during his employment
concerning the Company or the Bank, their respective subsidiaries, or any
director, officer, employee or agent of the aforesaid entities, including any
information as to the customers, business or personnel practices of such
entities. The Employee agrees, for a period of one year after the date of
termination of his employment with the Company and the Bank (other than in
connection with or within two years after a change in control (as defined in
Section 9(b) hereof) of the Company or the Bank), that he will not (i) offer
employment (or a consulting, agency, independent contractor or other similar
paid position) to any employee of the Company, the Bank or any of their
respective subsidiaries, or (ii) induce, encourage or solicit any such employee
to accept
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employment (or any aforesaid position) with any company or entity with which the
Employee may then be employed or otherwise affiliated.
9. Change in Control.
(a) If during the term of this Agreement there is a change in
control of the Company or the Bank, the Employee shall be entitled to receive as
a severance payment for services previously rendered to the Company and the
Bank, a lump sum cash payment as provided for herein (subject to Section 9(c)
below) in the event the Employee's employment is terminated, voluntarily or
involuntarily, in connection with or within two years after the change in
control of the Company or the Bank, unless such termination is for cause (as
defined in Section 8(a)(i) hereof), is a voluntary termination without "Good
Reason" (as defined below) in connection with or after a "Technical Change" (as
defined below), or occurs by virtue of normal retirement, permanent and total
disability (as defined in Section 22(e) of the Code) or death. Subject to
Section 9(c) below, the amount of the payment shall be equal to (i) one year's
salary plus any bonuses paid during the then current fiscal year, if the
Employee voluntarily terminates his employment without "Good Reason" (as
hereinafter defined) other than in connection with or following a "Technical
Change" (as defined below) or (ii) three times the Employee's annual base salary
in effect immediately before the change in control plus an amount equal to three
times the aggregate amount of bonuses that were paid to the Employee by the
Company and the Bank during the 24 calendar months preceding the change in
control divided by two, if the Employee's termination of employment was either
voluntary with Good Reason or involuntary, except as provided below in the case
of a Technical Change; provided, however, that in the case of a change in
control described in Section 9(b)(vii) below (and not described in any other
subsection of Section 9(b)) in which the persons who were directors of the
Company before the transaction described in such subsection shall constitute at
least 50% of the Board of Directors of the Company or any successor corporation
(a "Technical Change"), no amount shall be payable under clause (i) above and,
subject to Section 9(c) below, the amount payable under clause (ii) above shall
be two times the Employee's annual base salary in effect immediately before the
change in control, plus two times the amount of any bonuses paid during the
fiscal year preceding the fiscal year in which such change in control occurs.
"Good Reason" shall include a material reduction in the position, authority,
duties or responsibilities of the Employee from those which existed prior to the
change in control or a reduction in the Employee's job stature as reflected in
his title. If the Employee notifies the Boards of Directors of the Company and
the Bank that he intends to terminate his employment voluntarily for Good
Reason, he shall state in his notice the reasons why he believes that Good
Reason exists. Unless the Company and the Bank, within 30 days of the date of
the Employee's notice of resignation or termination, reject the Employee's
statement that Good Reason exists, the Employee's entitlement to the severance
payment payable under clause (ii) above shall be conclusive. If both Boards of
Directors reject the Employee's statement of Good Reason within such 30-day
period, the dispute shall be settled by arbitration in
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accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof, but the Company and the Bank
shall have the burden of proving in such arbitration that their rejection of the
Employee's statement was proper. Payment under this Section 9(a) shall be in
lieu of any amount owed to the Employee as liquidated damages for termination
without cause under Section 8(a) hereof. However, payment under this Section
9(a) shall not be reduced by any compensation which the Employee may receive
from other employment with another employer after termination of the Employee's
employment. In addition, subject to Section 9(c) below, in the case of any
termination of employment within the scope of this Section 9(a) for which a
severance payment is payable to the Employee, the following shall apply: (1) the
Employee shall also be entitled to continued medical, dental, group term life
insurance and long-term disability insurance coverage and to continued
eligibility for benefits under any other employee welfare benefit plan (within
the meaning of Section 3(1) of the Employee Retirement Income Security Act of
1974, as amended) in which he was eligible to participate before the change in
control, on a basis no less favorable to him than that in effect during the
fiscal year preceding the fiscal year in which the change in control occurs, as
if his employment had not been terminated, which coverage and eligibility shall
continue: (A) in the case of a voluntary termination of employment described in
clause (i) above, for one year after the termination or the remaining term of
this Agreement, whichever is less; (B) in the case of a termination described in
clause (ii) above and a change in control other than a Technical Change, for the
remaining term of this Agreement; or (C) in the case of a termination described
in clause (ii) above in connection with or following a Technical Change, for two
years after the termination or the remaining term of this Agreement, whichever
is less; and (2) all insurance or other provisions for indemnification, defense
or hold-harmless of officers or directors of the Company or the Bank that are in
effect on the date the notice of termination is given by or to the Employee
shall continue for the benefit of the Employee with respect to all of his acts
and omissions while an officer or director as fully and completely as if such
termination had not occurred, and until the final expiration or running of all
periods of limitation against action which may be applicable to such acts or
omissions.
(b) A "change in control" of the Company, for purposes of this
Agreement, shall be deemed to have taken place if: (i) any person becomes the
beneficial owner of 25 percent or more of the total number of voting shares of
the Company; (ii) any person becomes the beneficial owner of 10 percent or more,
but less than 25 percent, of the total number of voting shares of the Company,
unless the Director has approved a rebuttal agreement filed by such person or
such person has filed a certification with the Director; (iii) any person (other
than the persons named as proxies solicited on behalf of the Board of Directors
of the Company) holds revocable or irrevocable proxies, as to the election or
removal of two or more directors of the Company, for 25 percent or more of the
total number of voting shares of the Company; (iv) any person has received the
approval of the Director under Section 10
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of the Home Owners' Loan Act, as amended (the "Holding Company Act"), or
regulations issued thereunder, to acquire control of the Company; (v) any person
has received approval of the Director under Section 7(j) of the Federal Deposit
Insurance Act, as amended (the "Control Act"), or regulations issued thereunder,
to acquire control of the Company; (vi) any person has commenced a tender or
exchange offer, or entered into an agreement or received an option, to acquire
beneficial ownership of 25 percent or more of the total number of voting shares
of the Company, whether or not the requisite approval for such acquisition has
been received under the Holding Company Act, the Control Act, or the respective
regulations issued thereunder; or (vii) as the result of, or in connection with,
any cash tender or exchange offer, merger, or other business combination, sale
of assets or contested election, or any combination of the foregoing
transactions, the persons who were directors of the Company before such
transaction shall cease to constitute at least two-thirds of the Board of
Directors of the Company or any successor corporation. Notwithstanding the
foregoing, a "change in control" will not be deemed to have occurred under
clauses (ii), (iii), (iv), (v) or (vi) of this section 9(b), if within 30 days
of such action, the Board of Directors of the Company (by a two-thirds
affirmative vote of the directors in office before such action occurred) makes a
determination that such action does not and is not likely to constitute a
"change in control" of the Company. For purposes of this Section 9(b), a
"person" includes an individual, corporation, partnership, trust, association,
joint venture, pool, syndicate, unincorporated organization, joint-stock company
or similar organization or group acting in concert. A person for these purposes
shall be deemed to be a beneficial owner as that term is used in Rule 13d-3
under the Securities Exchange Act of 1934.
A "change in control" of the Bank, for purposes of this Agreement,
shall be deemed to have taken place if the Company's beneficial ownership of the
total number of voting shares of the Bank is reduced to less than 50 percent.
(c) Notwithstanding any other provisions of this Agreement or
of any other agreement, contract, or understanding heretofore or hereafter
entered into by the Employee with the Company or the Bank, except an agreement,
contract, or understanding hereafter entered into that expressly modifies or
excludes application of this Section 9(c) (the "Other Agreements"), and
notwithstanding any formal or informal plan or other arrangement heretofore or
hereafter adopted by the Company or the Bank for the direct or indirect
provision of compensation to the Employee (including groups or classes of
participants or beneficiaries of which the Employee is a member), whether or not
such compensation is deferred, is in cash, or is in the form of a benefit to or
for the Employee (a "Benefit Plan"), the Employee shall not have any right to
receive any payment or other benefit under this Agreement, any Other Agreement,
or any Benefit Plan if such payment or benefit, taking into account all other
payments or benefits to or for the Employee under this Agreement, all Other
Agreements, and all Benefit Plans, would cause any payment to the Employee under
this Agreement to be considered a "parachute payment" within the meaning of
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code")
(a
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"Parachute Payment"). In the event that the receipt of any such payment or
benefit under this Agreement, any Other Agreement, or any Benefit Plan would
cause the Employee to be considered to have received a Parachute Payment under
this Agreement, then the Employee shall have the right, in the Employee's sole
discretion, to designate those payments or benefits under this Agreement, any
Other Agreements, and/or any Benefit Plans, which should be reduced or
eliminated so as to avoid having the payment to the Employee under this
Agreement be deemed to be a Parachute Payment.
10. Disability. If the Employee shall become disabled or incapacitated
to the extent that the Employee is unable to perform the Employee's duties and
responsibilities hereunder, the Employee shall be entitled to receive disability
benefits of the type provided for other executive employees of the Company and
the Bank and the obligations of the Company and the Bank hereunder shall be
limited to providing such benefits for the period of such disability.
11. No Assignments. This Agreement is personal to each of the parties
hereto. No party may assign or delegate any rights or obligations hereunder
without first obtaining the written consent of the other party hereto. However,
in the event of the death of the Employee all rights to receive payments
hereunder shall become rights of the Employee's estate.
12. Other Contracts. The Employee shall not, during the term of this
Agreement, have any other paid employment other than with a subsidiary of the
Company, except with the prior approval of the Boards of Directors of the
Company and the Bank.
13. Amendments or Additions; Action by Board of Directors. No
amendments or additions to this Agreement shall be binding unless in writing and
signed by all parties hereto. The prior approval by the Boards of Directors of
the Company and the Bank shall be required in order for the Company and the Bank
to authorize any amendments or additions to this Agreement, to give any consents
or waivers of provisions of this Agreement, or to take any other action under
this Agreement including any termination of employment with or without cause
under Section 8(a) hereof.
14. Section Headings. The section headings used in this Agreement are
included solely for convenience and shall not affect, or be used in connection
with, the interpretation of this Agreement.
15. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
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16. Governing Law. This Agreement shall be governed by the laws of the
United States to the extent applicable and otherwise by the laws of the State of
Connecticut, excluding the choice of law rules thereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, or caused this Agreement to be duly executed on their behalf, as of
the day and year first above written.
Attest: XXXXXXX FINANCIAL CORPORATION
/s/ Xxxx X. Xxxxxxxx By /s/ Xxxxxx X. Xxxxxxxxxxxx
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Asst (Secretary) Its:
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Chairman, Personnel Resources
Committee
Attest: XXXXXXX BANK
/s/ Xxxx X. Xxxxxxxx By /s/ Xxxxxx X. Xxxxxxxxxxxx
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Asst (Secretary) Its:
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Chairman, Personnel Resources
Committee
EMPLOYEE
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
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