Exhibit 10.12
FIRST ESSEX BANK, FSB
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
_______ __, 1996
Xx. Xxxxxx X. Xxxx
0 Xxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Re: Employment and Severance Arrangements
Dear Xx. Xxxx:
This letter agreement (this "Agreement") sets forth the parties'
understanding and agreement as to certain employment and severance arrangements
between you (the "Employee") and First Essex Bank, FSB (the "Employer").
1. Employment and Compensation.
(a) From and after the date hereof, the Employee shall be
employed by the Employer as an employee at will. During his employment
hereunder, the Employee shall, subject to the direction and supervision
of the Board of Directors of the Employer, devote his full business
time, best efforts and business judgment, skill and knowledge to the
advancement of the Employer's 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 Employee from:
(i) 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 other entities in which such investments
are made;
(ii) 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
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(iii) 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.
(b) The Employee shall be paid a total salary at the rate of
$100,000 per year. The Employee's salary shall be payable in periodic
installments in accordance with the Employer's usual practice for
employees employed in a management capacity.
2. Benefits. During the term of his employment hereunder, the Employee
shall be entitled to participate in any and all employee benefit plans, medical
insurance plans, life insurance plans, disability income plans, retirement
plans, bonus incentive plans and other benefit plans from time to time in effect
for employees of the Employer employed in a management capacity. Such
participation shall be in accordance with the provisions of Section 5.12(a) of
the Agreement and Plan of Reorganization dated as of August 5, 1996, as amended,
by and among First Essex Bancorp, Inc. ("Parent"), Finest Financial Corp.
("Finest") and Pelham Bank and Trust Company ("Pelham") (the "Acquisition
Agreement"), to the extent applicable, and subject to (i) the terms of the
applicable plan documents, (ii) generally applicable policies of the Employer
and (iii) the discretion of the Board of Directors of the Employer or any
administrative or other committee provided for in or contemplated by such plan.
3. Outplacement Services. In the event of the termination of the
Employee's employment under the provisions of Section 4(a) hereof, the Employee
shall be entitled to such reasonable outplacement services as may be agreed to
by the parties for a period of up to one (1) year or earlier if the Employee
finds comparable employment prior thereto. The Employer shall contribute up to
$12,000 for payment of such outplacement services.
4. Termination and Termination Benefits.
(a) Either the Employer or the Employee may terminate the
Employee's employment hereunder for any reason, with or without cause,
at any time. If, at any time hereafter up to the first anniversary of
the date hereof, either the Employee terminates his employment or the
Employer terminates such employment without cause, then upon such
termination the Employee shall be paid a lump sum severance payment
equal to the sum of (x) the remaining balance, if any, of the
Employee's total salary payable for such full year of employment under
Section 1(b) hereof and (y) $125,000.00. If the Employer terminates the
employment of the Employee for cause, then the Employee shall not be
entitled to receive any payment hereunder, other than any accrued
salary through the date of such termination.
(b) Reference in Section 4(a) above to the Employer's
termination of the Employee's employment "for cause" shall mean, and
shall be limited to, the following:
(i) The Employee has been convicted of, or has
pleaded guilty or nolo contendere to, a
felony or any lesser crime or offense having
as its predicate element fraud, dishonesty,
or misappropriation of the property of the
Employer;
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(ii) The Employee has engaged in gross negligence
or willful misconduct or fails to fulfill
any and all fiduciary obligations he may
have in connection with the performance of
his services hereunder or fails to perform a
portion of his duties and responsibilities
hereunder, which failure continues for more
than thirty (30) days after the Employee
receives written notice from the Employer
setting forth in reasonable detail the
nature of such failure;
(iii) The Employee has committed any act which
submits the Employer to criminal liability,
unless such act was expressly directed or
approved by vote or resolution of the Board
of Directors of the Employer;
(iv) The Employee violates, or willfully causes
the Employer to violate, a material
provision of any federal or state banking or
securities law.
5. Termination by Operation of Law. The Employee's employment with the
Employer shall terminate:
(i) if the Employee is removed and/or permanently
prohibited from participating in the conduct of the Employer's
affairs by an order issued under Section 8(e)(4) or (g)(1) of
the Federal Deposit Insurance Act (12 U.S.C. ss. 1818(e)(4) or
(g)(1)), as of the effective date of the order;
(ii) if the Employer is in default (as defined in
Section 3(x)(1) of the Federal Deposit Insurance Act), as of
the date of default; or
(iii) except to the extent determined that
continuation of this Agreement is necessary for the continued
operation of the Employer, 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 Employer under the
authority contained in Section 13(c) of the Federal Deposit
Insurance Act; or (y) at the time the Director or his or her
designee approves a supervisory merger to resolve problems
related to operation of the Employer or when the Employer is
determined by the Director to be in an unsafe or unsound
condition.
6. Suspension of Agreement. Notwithstanding any other provisions of
this Agreement, the Employee's employment hereunder shall be suspended if the
Employee is suspended and/or temporarily prohibited from participating in the
conduct of the Employer's affairs by a notice served under Section 8(e)(3) or
(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. ss. 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 Employer may in its discretion (i)
pay the Employee all or part of the compensation withheld while this Agreement
was suspended pursuant to this Section 6 and (ii) reinstate (in whole or in
part) any of its obligations which were suspended.
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7. Miscellaneous.
7.1 Notices. All notices or other communications hereunder shall be in
writing and shall be deemed given if delivered personally or mailed by prepaid
registered or certified mail (return receipt requested) or transmitted by
telecopy, addressed, in the case of the Employee, to the last address therefor
on file with the Employer or, in the case of the Employer, to the executive
offices of its parent holding company, First Essex Bancorp, Inc. ("Parent"), and
any such notice or communication shall be deemed to have been given as of the
date received by the recipient thereof.
7.2 Parties in Interest. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by either party without the
prior written consent of the other party.
7.3 Complete Agreement. This Agreement contains the entire agreement
and understanding of the parties with respect to its subject matter. There are
no restrictions, agreements, promises, warranties, covenants or undertakings
between the parties other than those expressly set forth herein. This Agreement
supersedes all prior agreements and understandings between the parties, both
written and oral, including without limitation that certain Employment Agreement
dated as of November 21, 1995, by and among Finest, Pelham (the predecessors
through merger to Parent and the Employer) and the Employee and any provisions
contained in the Acquisition Agreement, including without limitation Schedule
5.12 thereto, other than those provisions contained in Section 5.12(a) of the
Acquisition Agreement referred to in Section 2 above, with respect to its
subject matter. Any amendment to this Agreement must be in writing and signed by
each of the parties.
7.4 Counterparts. This Agreement may be executed in counterparts, all
of which shall be considered one and the same agreement and each of which shall
be deemed to be an original and shall become effective when a counterpart has
been signed by each party and delivered to each of the parties.
7.5 Governing Law. This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts, without giving effect to the principles of
conflicts of laws thereof.
7.6 Captions. The section and subsection headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
7.7 Severability. In the event that any one or more provisions of this
Agreement shall for any reason be held invalid, illegal or unenforceable in any
respect, by any court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Agreement and the
parties shall use their best efforts to substitute a valid, legal and
enforceable provision which, insofar as practicable, implements the purposes and
intents of this Agreement.
7.8 Waivers. No failure or delay by either party in enforcing any right
or remedy under this Agreement shall be construed as a waiver of any future or
other exercise of such right or remedy, or of any other right or remedy, by such
party.
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If the foregoing accurately reflects your understanding and agreement
as to the subject matter contained herein, please so indicate by signing this
Agreement where indicated below.
Very truly yours,
FIRST ESSEX BANK, FSB
By:___________________________________
Xxxxxxx X. Xxxxxx, President
Accepted by and agreed to as of the date set forth above:
--------------------------------
Xxxxxx X. Xxxx
