Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of ________________, 1998, by and
between HERITAGE FEDERAL SAVINGS & LOAN ASSOCIATION (the "ASSOCIATION"),
HERITAGE BANCORP, INC. (the "COMPANY"), a Delaware corporation; and J. XXXXXX
XXXXX ("EXECUTIVE").
WHEREAS, EXECUTIVE serves in a position of substantial responsibility;
WHEREAS, the ASSOCIATION wishes to assure itself of the services of
EXECUTIVE for the period provided in this Agreement; and
WHEREAS, EXECUTIVE is willing to serve in the employ of the ASSOCIATION on
a full-time basis for said period.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:
1. POSITION AND RESPONSIBILITIES.
During the period of his employment hereunder, EXECUTIVE agrees to serve as
President and Chief Executive Officer of the ASSOCIATION. During said period,
EXECUTIVE also agrees to serve, if elected, as an officer and director of the
COMPANY or any subsidiary or affiliate of the COMPANY or the ASSOCIATION.
Executive shall render administrative and management duties to the ASSOCIATION
such as are customarily performed by persons situated in a similar executive
capacity.
2. TERMS AND DUTIES.
(a) The term of this Agreement shall be deemed to have commenced as of the
date first above written and shall continue for a period of thirty-six (36) full
calendar months thereafter. Commencing on the first anniversary date, and
continuing at each anniversary date thereafter, the Board of Directors of the
ASSOCIATION (the "Board") may extend the Agreement for an additional year.
Prior to the extension of the Agreement as provided herein, the Board of
Directors of the ASSOCIATION will conduct a formal performance evaluation of
EXECUTIVE for purposes of determining whether to extend the Agreement, and the
results thereof shall be included in the minutes of the Board's meeting.
(b) During the period of his employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods, and reasonable
leaves of absence, EXECUTIVE shall devote substantially all his business time,
attention, skill, and efforts to the faithful performance of his duties
hereunder including activities and services related to the organization,
operation and management of the ASSOCIATION; provided, however, that, with the
approval of the Board, as evidenced by a resolution of such Board, from time to
time, EXECUTIVE may serve, or continue to serve, on the boards of directors of,
and hold any other offices or positions in, companies or organizations, which,
in such Board's judgment, will not
present any conflict of interest with the ASSOCIATION, or materially affect the
performance of EXECUTIVE's duties pursuant to this Agreement.
3. COMPENSATION AND REIMBURSEMENT.
(a) The compensation specified under this Agreement shall constitute the
salary and benefits paid for the duties described in Sections 1 and 2. The
ASSOCIATION shall pay EXECUTIVE as compensation a salary of $________________
per year ("Base Salary"). Such Base Salary shall be payable in accordance with
the customary payroll practices of the ASSOCIATION. During the period of this
Agreement, EXECUTIVE's Base Salary shall be reviewed at least annually; the
first such review will be made no later than one year from the date of this
Agreement. Such review shall be conducted by a Committee designated by the
Board, and the Board may increase EXECUTIVE's Base Salary. In addition to the
Base Salary provided in this Section 3(a), the ASSOCIATION shall provide
EXECUTIVE at no cost to EXECUTIVE with all such other benefits as are provided
uniformly to permanent full-time employees of the ASSOCIATION.
(b) The ASSOCIATION will provide EXECUTIVE with employee benefit plans,
arrangements and perquisites substantially equivalent to those in which
EXECUTIVE was participating or otherwise deriving benefit from immediately prior
to the beginning of the term of this Agreement, and the ASSOCIATION will not,
without EXECUTIVE's prior written consent, make any changes in such plans,
arrangements or perquisites which would adversely affect EXECUTIVE's rights or
benefits thereunder. Without limiting the generality of the foregoing
provisions of this Subsection (b), EXECUTIVE will be entitled to participate in
or receive benefits under any employee benefit plans including, but not limited
to, retirement plans, supplemental retirement plans, pension plans, profit-
sharing plans, health-and-accident plan, medical coverage or any other employee
benefit plan or arrangement made available by the ASSOCIATION in the future to
its senior executives and key management employees, subject to, and on a basis
consistent with, the terms, conditions and overall administration of such plans
and arrangements. EXECUTIVE will be entitled to incentive compensation and
bonuses as provided in any plan, or pursuant to any arrangement of the
ASSOCIATION, in which EXECUTIVE is eligible to participate. Nothing paid to
EXECUTIVE under any such plan or arrangement will be deemed to be in lieu of
other compensation to which EXECUTIVE is entitled under this Agreement, except
as provided under Section 5(e).
(c) In addition to the Base Salary provided for by paragraph (a) of this
Section 3, the ASSOCIATION shall pay or reimburse EXECUTIVE for all reasonable
travel and other obligations under this Agreement and may provide such
additional compensation in such form and such amounts as the Board may from time
to time determine.
4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.
(a) Upon the occurrence of an Event of Termination (as herein defined)
during EXECUTIVE's term of employment under this Agreement, the provisions of
this Section shall
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apply. As used in this Agreement, an "Event of Termination" shall mean and
include any one or more of the following: (i) the termination by the
ASSOCIATION of EXECUTIVE's full-time employment hereunder for any reason other
than a Change in Control, as defined in Section 5(a) hereof; disability, as
defined in Section 6(a) hereof; death; retirement, as defined in Section 7
hereof; or Termination for Cause, as defined in Section 8 hereof; (ii)
EXECUTIVE's resignation from the ASSOCIATION's employ, upon (A) unless consented
to by EXECUTIVE, a material change in EXECUTIVE's function, duties, or
responsibilities, which change would cause EXECUTIVE's position to become one of
lesser responsibility, importance, or scope from the position and attributes
thereof described in Sections 1 and 2, above (any such material change shall be
deemed a continuing breach of this Agreement), (B) a relocation of EXECUTIVE's
principal place of employment by more than 35 miles from its location at the
effective date of this Agreement, or a material reduction in the benefits and
perquisites to EXECUTIVE from those being provided as of the effective date of
this Agreement, (C) the liquidation or dissolution of the ASSOCIATION, or (D)
any breach of this Agreement by the ASSOCIATION. Upon the occurrence of any
event described in clauses (A), (B), (C) or (D), above, EXECUTIVE shall have the
right to elect to terminate his employment under this Agreement by resignation
upon not less than sixty (60) days prior written notice given within a
reasonable period of time not to exceed, except in case of a continuing breach,
four (4) calendar months after the event giving rise to said right to elect.
(b) Upon the occurrence of an Event of Termination, the ASSOCIATION shall
pay EXECUTIVE, or, in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, as severance pay or liquidated
damages, or both, a sum equal to the payments due to EXECUTIVE for the remaining
term of the Agreement, including Base Salary, bonuses, and any other cash or
deferred compensation paid or to be paid (including the value of employer
contributions that would have been made on EXECUTIVE's behalf over the remaining
term of the agreement to any tax-qualified retirement plan sponsored by the
ASSOCIATION as of the Date of Termination), to EXECUTIVE for the term of the
Agreement provided, however, that if the ASSOCIATION is not in compliance with
its minimum capital requirements or if such payments would cause the
ASSOCIATION's capital to be reduced below its minimum capital requirements, such
payments shall be deferred until such time as the ASSOCIATION is in capital
compliance. All payments made pursuant to this Section 4(b) shall be paid in
substantially equal monthly installments over the remaining term of this
Agreement following EXECUTIVE's termination; provided, however, that if the
remaining term of the Agreement is less than one (1) year (determined as of
EXECUTIVE's Date of Termination), such payments and benefits shall be paid to
EXECUTIVE in a lump sum within thirty (30) days of the Date of Termination.
(c) Upon the occurrence of an Event of Termination, the ASSOCIATION will
cause to be continued life, medical, dental and disability coverage
substantially identical to the coverage maintained by the ASSOCIATION for
EXECUTIVE prior to his termination. Such coverage shall cease upon the
expiration of the remaining term of this Agreement.
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5. CHANGE IN CONTROL.
(a) No benefit shall be paid under this Section 5 unless there shall have
occurred a Change in Control of the COMPANY or the ASSOCIATION. For purposes of
this Agreement, a "Change in Control" of the COMPANY or the ASSOCIATION shall be
deemed to occur if and when (a) there occurs a change in control of the
ASSOCIATION or the COMPANY within the meaning of the Home Owners Loan Act of
1933 and 12 C.F.R. Part 574, (b) any person (as such term is used in Sections
13(d) and 14(d)(2) of the Exchange Act) is or becomes the beneficial owner,
directly or indirectly, of securities of the COMPANY or the ASSOCIATION
representing twenty-five percent (25%) or more of the combined voting power of
the COMPANY's or the ASSOCIATION's then outstanding securities, (c) the
membership of the board of directors of the COMPANY or the ASSOCIATION changes
as the result of a contested election, such that individuals who were directors
at the beginning of any twenty-four (24) month period (whether commencing before
or after the date of adoption of this Agreement) do not constitute a majority of
the Board at the end of such period, or (d) shareholders of the COMPANY or the
ASSOCIATION approve a merger, consolidation, sale or disposition of all or
substantially all of the COMPANY's or the ASSOCIATION's assets, or a plan of
partial or complete liquidation.
(b) If any of the events described in Section 5(a) hereof constituting a
Change in Control have occurred or the Board of the ASSOCIATION or the COMPANY
has reasonably determined that a Change in Control has occurred, EXECUTIVE shall
be entitled to the benefits provided in paragraphs (c), (d) and (e) of this
Section 5 upon his subsequent involuntary termination following the effective
date of a Change in Control (or voluntary termination within twelve (12) months
of the effective date of a Change in Control following any demotion, loss of
title, office or significant authority, reduction in his annual compensation or
benefits (other than a reduction affecting the ASSOCIATION's personnel
generally), or relocation of his principal place of employment by more than 35
miles from its location immediately prior to the Change in Control), unless such
termination is because of his death, retirement as provided in Section 7,
termination for Cause, or termination for Disability.
(c) Upon the occurrence of a Change in Control followed by EXECUTIVE's
termination of employment, the ASSOCIATION shall pay EXECUTIVE, or in the event
of his subsequent death, his beneficiary or beneficiaries, or his estate, as the
case may be, as severance pay or liquidated damages, or both, a sum equal to
2.99 times EXECUTIVE's "base amount," within the meaning of (S)280G(b)(3)
of the Internal Revenue Code of 1986 ("Code"), as amended. Such payment shall
be made in a lump sum paid within ten (10) days of EXECUTIVE's Date of
Termination.
(d) Upon the occurrence of a Change in Control followed by EXECUTIVE's
termination of employment, the ASSOCIATION will cause to be continued life,
medical, dental and disability coverage substantially identical to the coverage
maintained by the ASSOCIATION for EXECUTIVE prior to his severance. In
addition, EXECUTIVE shall be entitled to receive the value of employer
contributions that would have been made on EXECUTIVE's behalf over the remaining
term of the agreement to any tax-qualified retirement plan sponsored by the
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ASSOCIATION as of the Date of Termination. Such coverage and payments shall
cease upon the expiration of thirty-six (36) months.
(e) Upon the occurrence of a Change in Control, EXECUTIVE shall be entitled
to receive benefits due him under, or contributed by the COMPANY or the
ASSOCIATION on his behalf, pursuant to any retirement, incentive, profit
sharing, bonus, performance, disability or other employee benefit plan
maintained by the ASSOCIATION or the COMPANY on EXECUTIVE's behalf to the extent
that such benefits are not otherwise paid to EXECUTIVE upon a Change in Control.
(f) Notwithstanding the preceding paragraphs of this Section 5, in the
event that the aggregate payments or benefits to be made or afforded to
EXECUTIVE under this Section, together with any other payments or benefits
received or to be received by EXECUTIVE in connection with a Change in Control,
would be deemed to include an "excess parachute payment" under (S)280G of
the Code, then, at the election of EXECUTIVE, (i) such payments or benefits
shall be payable or provided to EXECUTIVE over the minimum period necessary to
reduce the present value of such payments or benefits to an amount which is one
dollar ($1.00) less than three (3) times EXECUTIVE's "base amount" under (S)
280G(b)(3) of the Code or (ii) the payments or benefits to be provided under
this Section 5 shall be reduced to the extent necessary to avoid treatment as an
excess parachute payment with the allocation of the reduction among such
payments and benefits to be determined by EXECUTIVE.
6. TERMINATION FOR DISABILITY.
(a) If EXECUTIVE shall become disabled as defined in the ASSOCIATION's then
current disability plan (or, if no such plan is then in effect, if EXECUTIVE is
permanently and totally disabled within the meaning of Section 22(e)(3) of the
Code as determined by a physician designated by the Board), the ASSOCIATION may
terminate EXECUTIVE's employment for "Disability."
(b) Upon EXECUTIVE's termination of employment for Disability, the
ASSOCIATION will pay EXECUTIVE, as disability pay, a bi-weekly payment equal to
three-quarters (3/4) of EXECUTIVE's bi-weekly rate of Base Salary on the
effective date of such termination. These disability payments shall commence
on the effective date of EXECUTIVE's termination and will end on the earlier of
(i) the date EXECUTIVE returns to the full-time employment of the ASSOCIATION in
the same capacity as he was employed prior to his termination for Disability and
pursuant to an employment agreement between EXECUTIVE and the ASSOCIATION; (ii)
EXECUTIVE's full-time employment by another employer; (iii) EXECUTIVE attaining
the age of sixty-five (65); or (iv) EXECUTIVE's death; or (v) the expiration of
the term of this Agreement. The disability pay shall be reduced by the amount,
if any, paid to EXECUTIVE under any plan of the ASSOCIATION providing disability
benefits to EXECUTIVE.
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(c) The ASSOCIATION will cause to be continued life, medical, dental and
disability coverage substantially identical to the coverage maintained by the
ASSOCIATION for EXECUTIVE prior to his termination for Disability. This
coverage and payments shall cease upon the earlier of (i) the date EXECUTIVE
returns to the full-time employment of the ASSOCIATION, in the same capacity as
he was employed prior to his termination for Disability and pursuant to an
employment agreement between EXECUTIVE and the ASSOCIATION; (ii) EXECUTIVE's
full-time employment by another employer; (iii) EXECUTIVE's attaining the age of
sixty-five (65); (iv) EXECUTIVE's death; or (v) the expiration of the term of
this Agreement.
(d) Notwithstanding the foregoing, there will be no reduction in the
compensation otherwise payable to EXECUTIVE during any period during which
EXECUTIVE is incapable of performing his duties hereunder by reason of temporary
disability.
7. TERMINATION UPON RETIREMENT; DEATH OF EXECUTIVE; RESIGNATION
Termination by the ASSOCIATION of EXECUTIVE based on "Retirement" shall
mean retirement at or after attaining age sixty-five (65) or in accordance with
any retirement arrangement established with EXECUTIVE's consent with respect to
him. Upon termination of EXECUTIVE upon Retirement, EXECUTIVE shall be entitled
to all benefits under any retirement plan of the ASSOCIATION or the COMPANY and
other plans to which EXECUTIVE is a party. Upon the death of EXECUTIVE during
the term of this Agreement, the ASSOCIATION shall pay to EXECUTIVE's estate the
compensation due to EXECUTIVE through the last day of the calendar month in
which his death occurred. Upon the voluntary resignation of EXECUTIVE during
the term of this Agreement, other than in connection with an Event of
Termination, the ASSOCIATION shall pay to EXECUTIVE the compensation due to
EXECUTIVE through his Date of Termination.
8. TERMINATION FOR CAUSE.
For purposes of this Agreement, "Termination for Cause" shall include
termination because of EXECUTIVE'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.
Notwithstanding the foregoing, EXECUTIVE shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to him a
copy of a resolution duly adopted by the affirmative vote of not less than
three-fourths (3/4) of the members of the Board at a meeting of the Board called
and held for that purpose (after reasonable notice to EXECUTIVE and an
opportunity for him, together with counsel, to be heard before the Board),
finding that in the good faith opinion of the Board, EXECUTIVE was guilty of
conduct justifying termination for Cause and specifying the reasons thereof.
EXECUTIVE shall not have the right to receive compensation or other benefits for
any period after termination for Cause. Any stock options granted to EXECUTIVE
under any stock option plan or any unvested awards granted under any other stock
benefit plan of the ASSOCIATION, the COMPANY, or any subsidiary or affiliate
thereof, shall become null
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and void effective upon EXECUTIVE's receipt of Notice of Termination for Cause
pursuant to Section 10 hereof, and shall not be exercisable by EXECUTIVE at any
time subsequent to such Termination for Cause.
9. REQUIRED PROVISIONS.
(a) The ASSOCIATION may terminate EXECUTIVE's employment at any time, but
any termination by the ASSOCIATION, other than Termination for Cause, shall not
prejudice EXECUTIVE's right to compensation or other benefits under this
Agreement. EXECUTIVE shall not have the right to receive compensation or other
benefits for any period after Termination for Cause as defined in Section 8
herein.
(b) If EXECUTIVE is suspended and/or temporarily prohibited from
participating in the conduct of the ASSOCIATION's affairs by a notice served
under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act ("FDIA")
(12 U.S.C. 1818(e)(3) and (g)(1)), the ASSOCIATION's obligations under the
Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the
ASSOCIATION may, in its discretion, (i) pay EXECUTIVE all or part of the
compensation withheld while its contract obligations were suspended and (ii)
reinstate (in whole or in part) any of its obligations that were suspended.
(c) If EXECUTIVE is removed and/or permanently prohibited from
participating in the conduct of the ASSOCIATION's affairs by an order issued
under Section 8(e)(4) or (g)(1) of the FDIA (12 U.S.C. 1818(e)(4) or (g)(1)),
all obligations of the ASSOCIATION under the Agreement shall terminate as of the
effective date of the order, but vested rights of the contracting parties shall
not be affected.
(d) If the ASSOCIATION is in default (as defined in Section 3(x)(1) of the
FDIA), 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 the Agreement is necessary for the
continued operation of the ASSOCIATION): (i) by the Director of the Office of
Thrift Supervision (the "Director") or his designee at the time the Federal
Deposit Insurance Corporation enters into an agreement to provide assistance to
or on behalf of the ASSOCIATION under the authority contained in Section 13(c)
of the FDIA or (ii) by the Director, or his designee at the time the Director or
such designee approves a supervisory merger to resolve problems related to
operation of the ASSOCIATION or when the ASSOCIATION is determined by the
Director to be in an unsafe or unsound condition. Any rights of the parties
that have already vested, however, shall not be affected by such action.
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(f) Any payments made to EXECUTIVE pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C. (S)
1828(k) and any regulations promulgated thereunder.
10. NOTICE.
(a) Any purported termination by the ASSOCIATION or by EXECUTIVE shall be
communicated by Notice of Termination to the other party hereto. For purposes
of this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of EXECUTIVE's employment under the provision so
indicated.
(b) "Date of Termination" shall mean (A) if EXECUTIVE's employment is
terminated for Disability, thirty (30) days after a Notice of Termination is
given (provided that he shall not have returned to the performance of his duties
on a full-time basis during such thirty (30) day period), and (B) if his
employment is terminated for any other reason, other than Termination for
Cause, the date specified in the Notice of Termination . In the event of
EXECUTIVE's Termination for Cause, the Date of Termination shall be the same as
the date of the Notice of Termination.
(c) If, within thirty (30) days after any Notice of Termination is given,
the party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, except upon the occurrence of a
Change in Control and voluntary termination by EXECUTIVE in which case the Date
of Termination shall be the date specified in the Notice, the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties, by a binding arbitration award, or
by a final judgment, order or decree of a court of competent jurisdiction (the
time for appeal there from having expired and no appeal having been perfected)
and provided further that the Date of Termination shall be extended by a notice
of dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the ASSOCIATION will continue
to pay EXECUTIVE his full compensation in effect when the notice giving rise to
the dispute was given (including, but not limited to, Base Salary) and continue
him as a participant in all compensation, benefit and insurance plans in which
he was participating when the notice of dispute was given, until the dispute is
finally resolved in accordance with this Agreement. Amounts paid under this
Section are in addition to all other amounts due under this Agreement and shall
not be offset against or reduce any other amounts due under this Agreement.
11. NON-COMPETITION.
(a) Upon any termination of EXECUTIVE's employment hereunder pursuant to an
Event of Termination as provided in Section 4 hereof, EXECUTIVE agrees not to
compete with the ASSOCIATION and/or the COMPANY for a period of one (1) year
following such
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termination in any city, town or county in which the ASSOCIATION and/or the
COMPANY has an office or has filed an application for regulatory approval to
establish an office, determined as of the effective date of such termination.
EXECUTIVE agrees that during such period and within said cities, towns and
counties, EXECUTIVE shall not work for or advise, consult or otherwise serve
with, directly or indirectly, any entity whose business materially competes with
the depository, lending or other business activities of the ASSOCIATION and/or
the COMPANY. The parties hereto, recognizing that irreparable injury will
result to the ASSOCIATION and/or the COMPANY, its business and property in the
event of EXECUTIVE's breach of this Subsection 11(a) agree that in the event of
any such breach by EXECUTIVE, the ASSOCIATION and/or the COMPANY will be
entitled, in addition to any other remedies and damages available, to an
injunction to restrain the violation hereof by EXECUTIVE, EXECUTIVE's partners,
agents, servants, employers, employees and all persons acting for or with
EXECUTIVE. EXECUTIVE represents and admits that in the event of the termination
of his employment pursuant to Section 4 hereof, EXECUTIVE's experience and
capabilities are such that EXECUTIVE can obtain employment in a business engaged
in other lines and/or of a different nature than the ASSOCIATION and/or the
COMPANY, and that the enforcement of a remedy by way of injunction will not
prevent EXECUTIVE from earning a livelihood. Nothing herein will be construed
as prohibiting the ASSOCIATION and/or the COMPANY from pursuing any other
remedies available to the ASSOCIATION and/or the COMPANY for such breach or
threatened breach, including the recovery of damages from EXECUTIVE.
(b) EXECUTIVE recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the ASSOCIATION and
affiliates thereof, as it may exist from time to time, is a valuable, special
and unique asset of the business of the ASSOCIATION. EXECUTIVE will not, during
or after the term of his employment, disclose any knowledge of the past,
present, planned or considered business activities of the ASSOCIATION or
affiliates thereof to any person, firm, corporation, or other entity for any
reason or purpose whatsoever. Notwithstanding the foregoing, EXECUTIVE may
disclose any knowledge of banking, financial and/or economic principles,
concepts or ideas which are not solely and exclusively derived from the business
plans and activities of the ASSOCIATION. In the event of a breach or threatened
breach by EXECUTIVE of the provisions of this Section, the ASSOCIATION will be
entitled to an injunction restraining EXECUTIVE from disclosing, in whole or in
part, the knowledge of the past, present, planned or considered business
activities of the ASSOCIATION or affiliates thereof, or from rendering any
services to any person, firm, corporation, other entity to whom such knowledge,
in whole or in part, has been disclosed or is threatened to be disclosed.
Nothing herein will be construed as prohibiting the ASSOCIATION from pursuing
any other remedies available to the ASSOCIATION for such breach or threatened
breach, including the recovery of damages from EXECUTIVE.
12. SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the ASSOCIATION. The COMPANY, however,
guarantees all payments and the provision of all amounts and benefits due
hereunder to EXECUTIVE and, if such payments
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are not timely paid or provided by the ASSOCIATION, such amounts and benefits
shall be paid or provided by the COMPANY.
13. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties hereto
and supersedes any prior employment agreement between the ASSOCIATION or any
predecessor of the ASSOCIATION and EXECUTIVE, except that this Agreement shall
not affect or operate to reduce any benefit or compensation inuring to EXECUTIVE
of a kind elsewhere provided. No provision of this Agreement shall be
interpreted to mean that EXECUTIVE is subject to receiving fewer benefits than
those available to him without reference to this Agreement.
14. NO ATTACHMENT.
(a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.
(b) This Agreement shall be binding upon, and inure to the benefit of,
EXECUTIVE, the ASSOCIATION, the COMPANY and their respective successors and
assigns.
15. MODIFICATION AND WAIVER.
(a) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there by any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.
16. SEVERABILITY.
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
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17. HEADINGS FOR REFERENCE ONLY.
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
18. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of South
Carolina, unless otherwise specified herein; provided, however, that in the
event of a conflict between the terms of this Agreement and any applicable
federal or state law or regulation, the provisions of such law or regulation
shall prevail.
19. ARBITRATION.
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators sitting in a location selected by the employee within fifty
miles from the location of the ASSOCIATION, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that
EXECUTIVE shall be entitled to seek specific performance of his right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
20. PAYMENT OF LEGAL FEES.
All reasonable legal fees paid or incurred by EXECUTIVE pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid
or reimbursed by the ASSOCIATION, if successful pursuant to a legal judgment,
arbitration or settlement.
21. INDEMNIFICATION.
The ASSOCIATION shall provide EXECUTIVE (including his heirs, executors and
administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, or in lieu thereof, shall indemnify
EXECUTIVE (and his heirs, executors and administrators) to the fullest extent
permitted under law against all expenses and liabilities reasonably incurred by
him in connection with or arising out of any action, suit or proceeding in which
he may be involved by reason of his having been a director or officer of the
ASSOCIATION (whether or not he continues to be a directors or officer at the
time of incurring such expenses or liabilities), such expenses and liabilities
to include, but not be limited to, judgment, court costs and attorneys' fees and
the cost of reasonable settlements.
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22. SUCCESSOR TO THE ASSOCIATION OR THE COMPANY.
The ASSOCIATION and the COMPANY shall require any successor or assignee,
whether direct or indirect, by purchase, merger, consolidation or otherwise, to
all or substantially all the business or assets of the ASSOCIATION or the
COMPANY, expressly and unconditionally to assume and agree to perform the
ASSOCIATION's or the COMPANY's obligations under this Agreement, in the same
manner and to the same extent that the ASSOCIATION or the COMPANY would be
required to perform if no such succession or assignment had taken place.
IN WITNESS WHEREOF, the ASSOCIATION and the COMPANY have caused this
Agreement to be executed and their seal to be affixed hereunto by a duly
authorized officer, and EXECUTIVE has signed this Agreement, all on the ____ day
of _____________, 1998.
ATTEST: HERITAGE FEDERAL SAVINGS
AND LOAN ASSOCIATION
BY:
-------------------------------- ---------------------------------
[SEAL]
ATTEST: HERITAGE BANCORP, INC.
BY:
------------------------------- --------------------------------
[SEAL]
WITNESS:
------------------------------- -----------------------------------
J. Xxxxxx Xxxxx
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