XXXXX X. XXXXX
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of January 1, 1998, 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, 1997 (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 The Prior Agreement is hereby replaced and superseded and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 Chief
Executive Officer and 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,
1998, a salary at an annual rate equal to $ 550,000, 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, 2000. The
Company and the Bank may renew this Agreement by written notice to the Employee
for one additional year on December 31, 1998 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. VACATIONS. The Employee shall be entitled to an annual paid vacation of
at least four weeks per year, or such longer period as the Board of Directors of
the Company or the Bank may approve, in accordance with the vacation policy of
the Company or the Bank, as applicable. The timing of paid vacations shall be
scheduled in a reasonable manner by the Employee.
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
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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 the 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 (which was earned with
respect to the prior 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.
(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: (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.
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(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 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. 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 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
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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, 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 employment (or any aforesaid
position) with any company or entity with which the Employee may then be
employed or otherwise affiliated.
9. 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.
10. NO ASSIGNMENTS; SUCCESSORS. 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. The Company
and/or the Bank shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company or the Bank expressly to assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company and the Bank would have been required to perform if no succession had
taken place. All references herein to the "Company" and the "Bank" shall refer
to any such successor.
11. 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.
12. 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.
13. 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.
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14. 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.
15. 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/ Xxxxx X. Xxxxxxxx By /s/ Xxxx X. Xxxxxx
---------------------------- ----------------------------
Chairman, Personnel Resources
Committee
Attest: XXXXXXX BANK
/s/ Xxxxx X. Xxxxxxxx By /s/ Xxxx X. Xxxxxx
---------------------------- ----------------------------
Chairman, Personnel Resources
Committee
EMPLOYEE
/s/ Xxxxx X. Xxxxx
----------------------------
Xxxxx X. Xxxxx
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SCHEDULE 10.27 TO EXHIBIT 10.27
Set forth below are the names of the executive officers of Xxxxxxx
Financial Corporation and Xxxxxxx Bank who have an Employment Agreement that is
substantially identical in all material respects to the Employment Agreement of
Xx. Xxxxx as well as the material details of those agreements that differ from
the agreement of Xx. Xxxxx:
Xxxx X. Xxxxxxx:
Current position with the Corporation and Xxxxxxx Bank:
Executive Vice President, Treasurer and Chief Financial Officer
Current salary: $235,000
Xxxxxxx X. Xxxxxxxx
Current position with the Corporation and Xxxxxxx Bank:
Executive Vice President, Business Banking
Current salary: $210,000
Xxxxx X. Xxxxxxxx
Current position with the Corporation and Xxxxxxx Bank:
Executive Vice President, Consumer and Small Business Banking
Current Salary: $200,000
Xxxx X. Xxxxxxxxxx
Current position with the Corporation and Xxxxxxx Bank:
Executive Vice President of Mortgage Banking
Current salary: $195,000
