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Exhibit 10.10
BOSTONFED BANCORP, INC.
EMPLOYMENT AGREEMENT
This AGREEMENT ("Agreement"), effective as of December 31, 1999, by and
between BostonFed Bancorp, Inc. (the "Holding Company"), a corporation organized
under the laws of Delaware, with its principal administrative offices at 17 New
England Executive Park, Xxxxxxxxxx, XX 00000, and Xxxx X. Xxxxxx ("Executive").
Any reference to the "Institution" in this Agreement shall mean Boston Federal
Savings Bank.
WHEREAS, the Holding Company wishes to continue to assure itself of the
services of Executive for the period provided in this Agreement; and
WHEREAS, Executive is willing to continue to serve in the employ of the
Holding Company and its subsidiaries on a full-time basis for the term of this
Agreement.
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 Executive's employment hereunder, Executive agrees to
serve as Vice President of the Holding Company. Executive shall render
administrative and management services to the Holding Company such as are
customarily performed by persons in a similar executive capacity. During the
term of this Agreement, Executive also agrees to serve as a vice president of
the Institution and as Senior Vice President of Diversified Ventures, Inc.,
d/b/a Forward Financial Company ("Forward Financial") a wholly owned subsidiary
of the Institution.
2. TERMS.
(a) The period of Executive's employment under this Agreement shall be
deemed to have commenced as of the date first written above and shall continue
for a period of twenty-four (24) full calendar months from the effective date of
this Agreement. Commencing on the date of execution of this Agreement, the term
of this Agreement shall be extended for one day each day, so that a constant
twenty-four (24) calendar month term shall remain in effect, until such time as
the Board of Directors of the Holding Company (the "Board") or Executive elects
not to extend the term of the Agreement by giving written notice to the other
party in accordance with Section 8 of this Agreement, in which case the term of
this Agreement shall be fixed and shall end on the second anniversary of the
date of such written notice.
(b) During the period of Executive's employment hereunder, except for
periods of absence occasioned by illness, reasonable vacation periods, and other
reasonable leaves of absence, Executive shall devote substantially all of his
business time, attention, skill, and efforts to the faithful performance of his
duties hereunder, including activities and services related to the organization,
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operation and management of the Holding Company, the Institution and Forward
Financial (both referred to as "Subsidiaries") and participation in industry,
community and civic organizations; provided, however, that, with the approval of
the Board, as evidenced by a resolution of the 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
the Board's judgment, will not present any conflict of interest with the Holding
Company or its Subsidiaries, or materially affect the performance of Executive's
duties pursuant to this Agreement.
(c) Notwithstanding anything in this Agreement to the contrary, either
Executive or the Holding Company may terminate Executive's employment with the
Holding Company at any time during the term of this Agreement, subject to the
terms and conditions of this Agreement.
3. COMPENSATION AND REIMBURSEMENT.
(a) The compensation specified under this Agreement shall constitute
consideration paid by the Holding Company in exchange for the duties described
in Section 1 of this Agreement. The Holding Company shall pay Executive, as
compensation, a salary of not less than $155,000 ("Base Salary"). Base Salary
shall include any amounts of compensation deferred by Executive under any
tax-qualified retirement or welfare benefit plan or any other deferred
compensation arrangement maintained by the Holding Company or its subsidiaries.
Base Salary shall be payable in accordance with the normal payroll practices of
the Holding Company. During the period of this Agreement, Executive's Base
Salary shall be reviewed at least annually; on or about the 15th day of December
each year. Such review shall be conducted by the Board or by a committee of the
Board delegated such responsibility by the Board. The committee or the Board may
increase Executive's Base Salary at any time. Any increase in Base Salary shall
thereafter become the new "Base Salary" for purposes of this Agreement.
(b) Executive shall be entitled to participate in any employee benefit
plans, arrangements and perquisites substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from as an employee of
Forward Financial immediately prior to the beginning of the term of this
Agreement and the Holding Company and its Subsidiaries will not, without
Executive's prior written consent, make any changes in such plans, arrangements
or perquisites (or any plans, arrangements or perquisites with respect to which
Executive begins to participate at any time during the term of this Agreement)
which would adversely affect Executive's rights or benefits thereunder, without
separately providing for an arrangement that ensures Executive receives or will
receive the economic value that Executive would otherwise lose as a result of
such adverse affect, unless such change is general in nature and applies in a
nondiscriminatory manner to all employees covered by the plan, arrangement or
perquisite. Without limiting the generality of the foregoing provisions of this
Subsection (b), Executive shall be entitled to participate in and receive
benefits under any employee benefit plans made available by Forward Financial
now or in the future to full-time employees of Forward Financial and/or senior
executives and key management employees of Forward Financial, subject to and on
a basis consistent with the terms, conditions and overall administration of such
plans and arrangements. Nothing paid to Executive under any such plans or
arrangements will be deemed to be in lieu of other compensation and benefits to
which Executive
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is entitled under this Agreement. Without further action of the Board, Executive
shall not participate in or benefit from employee benefit plans, arrangements or
perquisites of the Holding Company or the Institution.
(c) The Holding Company shall pay or reimburse Executive for all
reasonable expenses incurred by Executive in performing his obligations under
this Agreement.
4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.
(a) Upon the occurrence of an Event of Termination (as defined in this
Agreement) during Executive's term of employment under this Agreement, the
provisions of this Section 4 shall 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 Holding Company of Executive's full-time employment hereunder
for any reason other than termination governed by Section 5(a) of this
Agreement, or Termination for Cause, as defined in Section 7 of this Agreement,
or Retirement or Disability, as defined in paragraph (f) of this Section 4 or;
(ii) Executive's resignation from the Holding Company's employ, upon, any (A)
notice to Executive by the Holding Company of non-renewal of the term of this
Agreement, (B) failure to re-elect or re-appoint Executive as Vice President of
the Holding Company, unless consented to by the Executive, (C) material change
in Executive's function, duties, or responsibilities with the Holding Company or
its Subsidiaries, which change would cause Executive's position to become one of
lesser responsibility, importance, or scope from the position and attributes
thereof described in Section 1 of this Agreement (and any such material change
shall be deemed as continuing breach of this Agreement), unless consented to by
Executive, (D) relocation of Executive's principal place of employment by more
than 25 miles from its location at the effective date of this Agreement, unless
consented to by Executive, (E) material reduction in the benefits, arrangements
or perquisites to Executive which is not general in nature and applicable on a
nondiscriminatory basis to all employees of Forward Financial covered by such
benefits, arrangements, or perquisites or, pursuant to Section 3(b) of this
Agreement, to which Executive does not consent or for which Executive is not or
will not be provided the economic benefit, or (F) breach of this Agreement by
the Holding Company. Upon the occurrence of any event described in clauses (A),
(B), (C), (D), (E), or (F) above, Executive shall have the right to elect to
terminate employment under this Agreement by resignation upon not less than
sixty (60) days prior written notice given within six full calendar months after
the event giving rise to said right to elect.
(b) Upon the occurrence of an Event of Termination, on the Date of
Termination, as defined in Section 8 of this Agreement, the Holding Company
shall be obligated to pay Executive, or, in the event of Executive's subsequent
death, his beneficiary or beneficiaries, or his estate, as the case may be, the
amount of the remaining payments and benefits that Executive would have earned
if he had continued his employment with the Holding Company during the remaining
unexpired term of this Agreement, based on Executive's Base Salary and the
benefits provided to Executive as of the date of the Event of Termination, as
set forth in Sections 3(a) and (b) of this Agreement, as the case may be, and
the amount still due Executive under any paragraph of Section 3 of this
Agreement for service rendered through the Date of Termination. Except as
provided for in paragraphs (c) and
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(d) of Section 4 of this Agreement, the determination of Executive's benefits as
of the date of the Event of Termination shall be made based on (i) the value of
the allocation attributable to employer contributions for the most recent plan
year under any defined contribution type plan; (ii) the percentage of salary of
any incentive or bonus payment for the most recently-completed fiscal year; and
(iii) the employer-provided cost of any other benefit sponsored by Forward
Financial for the most recently-completed fiscal year. At the election of
Executive, which election is to be made within thirty (30) days of the Date of
Termination, such payments shall be made in a lump sum (without discount for
early payment) or paid monthly during the remaining term of the agreement
following Executive's termination. In the event that no election is made,
payment to Executive will be made in a lump sum. Such payments shall not be
reduced in the event Executive obtains other employment following termination of
employment. Notwithstanding anything to the contrary elsewhere in this
Agreement, to the extent the Executive is entitled to continued coverage or
benefit accrual under any retirement or welfare benefit plan during the
remaining unexpired term of this Agreement the amount payable under this Section
4(b) should be adjusted to the extent necessary to avoid any duplication of such
benefits.
(c) Upon the occurrence of an Event of Termination, Executive will be
entitled to receive benefits due him under or contributed by Forward Financial
on his behalf pursuant to any employee benefit plan or arrangement maintained by
Forward Financial to the extent such benefits are not otherwise paid to
Executive under a separate provision of this Agreement.
(d) To the extent that Forward Financial continues to offer any life,
medical, health, disability or dental insurance plan or arrangement in which
Executive participates in on the last day of his employment (each being a
"Welfare Plan"), after an Event of Termination (as defined in this Agreement),
Executive and his dependents shall continue participating in such Welfare Plans,
subject to the same premium contributions on the part of Executive as were
required immediately prior to the Event of Termination until the earlier of (i)
his death (ii) his employment by another employer other than one of which he is
the majority owner or (iii) the end of the remaining term of this Agreement. If
Forward Financial does not offer the Welfare Plans (or if for any reason
Executive's participation in said plans is prohibited) after the Event of
Termination, then the Holding Company shall provide Executive with a payment
equal to the actuarial value of the provision of such benefit for the period
which runs until the earlier of (i) his death; (ii) his employment by another
employer other than one of which he is the majority owner; or (iii) the end of
the remaining term of this Agreement.
(e) In the event that Executive is receiving monthly payments pursuant to
Section 4(b) of this Agreement, on an annual basis, thereafter, between the
dates of January 1 and January 31 of each year, Executive shall elect whether
the balance of the amount payable under the Agreement for that year shall be
paid in a lump sum or on a pro rata basis. Such election shall be irrevocable
for the year for which such election is made.
(f) Termination of Executive based on "Retirement" shall mean termination
by written notice to the Holding Company or its subsidiaries from Executive
specifying an exact retirement date or termination in accordance with any
retirement arrangement established with Executive's written
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consent with respect to him. Termination of Executive based on Disability shall
mean written notice to the Holding Company or its subsidiaries by Executive
specifying an exact date as of which he is unable to perform all of the duties
and responsibilities of his position. Upon termination of Executive upon
Disability, Executive shall be entitled to all benefits under any disability
plan of Forward Financial or any other plans which Executive is a party or a
participant in accordance with the terms of the plan or arrangement. Executive
shall be entitled to all compensation and benefits provided for in Section 3 of
this Agreement through the date of his termination of employment as specified in
the notice provided by him.
5. CHANGE IN CONTROL.
(a) For purposes of this Agreement, a "Change in Control" of the Holding
Company or the Institution or Forward Financial shall mean an event of a nature
that; (i) would be required to be reported in response to Item 1(a) of the
current report on Form 8-K, as in effect on the date hereof, pursuant to Section
13 or 15(d) of the Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"); or (ii)
results in a Change in Control of the Institution or the Holding Company within
the meaning of the Home Owners' Loan Act of 1933, as amended, the Federal
Deposit Insurance Act, and the Rules and Regulations promulgated by the Office
of Thrift Supervision (or its predecessor agency), as in effect on the date
hereof (provided, that in applying the definition of change in control as set
forth under the rules and regulations of the OTS, the Board shall substitute its
judgment for that of the OTS); or (iii) without limitation such a Change in
Control shall be deemed to have occurred at such time as (A) any "person" (as
the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of voting securities of the Institution or the Holding
Company representing 20% or more of the Institution's or the Holding Company's
outstanding voting securities or right to acquire such securities except for any
voting securities of the Institution purchased by the Holding Company and any
voting securities purchased by any employee benefit plan of the Holding Company
or its Subsidiaries; or (B) individuals who constitute the board of directors on
the date hereof (the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming a director
subsequent to the date hereof whose election was approved by a vote of at least
three-quarters of the directors comprising the Incumbent Board (or members who
were nominated by the Incumbent Board), or whose nomination for election by the
Company's stockholders was approved by a Nominating Committee solely composed of
members which are Incumbent Board members (or members who were nominated by the
Incumbent Board), shall be, for purposes of this clause (B), considered as
though he were a member of the Incumbent Board; or (C) a plan of reorganization,
merger, consolidation, or sale of all or substantially all the assets or stock
of the Institution, Forward Financial or the Holding Company or similar
transaction occurs or is effectuated in which the Institution, Forward Financial
or the Holding Company is not the resulting entity; provided, however, that such
an event listed above will be deemed to have occurred or to have been
effectuated upon the receipt of all required federal regulatory approvals not
including the lapse of any statutory waiting periods; or (D) a proxy statement
has been distributed soliciting proxies from stockholders of the Holding
Company, by someone other than the current management of the Holding Company,
seeking stockholder approval of a plan of reorganization, merger or
consolidation of the Holding Company, Forward Financial, or the Institution with
one or more
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corporations as a result of which the outstanding shares of the class of
securities then subject to such plan or transaction are exchanged for or
converted into cash or property or securities not issued by the Institution,
Forward Financial or the Holding Company shall be distributed; or (E) a tender
offer is made for 20% or more of the voting securities of the Institution or
Holding Company then outstanding. Notwithstanding anything herein to the
contrary, a "Change in Control" shall not include a transaction in which Forward
Financial is merged with or liquidated into the Institution or any other
subsidiary of the Holding Company or the Institution.
(b) If any of the events described in Section 5(a) of this Agreement
constituting a Change in Control have occurred, or the Board has determined that
a Change in Control has occurred, Executive shall be entitled to the benefits
provided in paragraphs (c), (d), (e), (f), and (g) of this Section 5 upon his
termination of employment on or after the date the Change in Control occurs due
to (i) Executive's dismissal at any time during the term of this Agreement, (ii)
Executive's resignation for any reason within the thirty (30) day period
following the date that is one-year from the date the Change in Control occurred
or (iii) Executive's resignation following any demotion, loss of title, office
or significant authority or responsibility, reduction in the annual compensation
or benefits or relocation of Executive's principal place of employment by more
than 25 miles from its location immediately prior to the Change in Control,
unless such termination is because of Executive's Termination for Cause;
provided, however, Executive may consent in writing to any such demotion, loss,
reduction or relocation. The effect of any written consent of the Executive
under this Section 5(b) shall be strictly limited to the terms specified in such
written consent. Under no circumstances can a termination of employment during
the term of this Agreement on or after the date of a Change in Control occurs be
considered a termination on account of retirement or disability for purposes of
determining Executive's rights to the payment of benefits provided in paragraphs
(c), (d), (e), (f), and (g) of this Section 5.
(c) Upon Executive's entitlement to payment pursuant to Section 5(b) of
this Agreement, the Holding Company shall pay Executive, or in the event of
Executive's subsequent death, Executive's beneficiary or beneficiaries, or
estate, as the case may be, as severance pay or liquidated damages, or both, a
sum equal to the greater of: (1) the payments that would have been due pursuant
to Section 3 of this Agreement for the remaining term of the Agreement; or (2)
two (2) times the greater of (i) Executive's average annual compensation
(including compensation attributable to the exercise of stock options) for the
five most recently completed taxable years of Executive or (ii) the highest
annual compensation (excluding compensation attributable to the exercise of
stock options) for any of the five most recently completed taxable years of
Executive. Except as provided for in the preceding sentence, for purposes of
this Section 5(c), annual compensation shall include Base Salary and any other
taxable income paid by the Holding Company or its subsidiaries, including but
not limited to amounts related to the granting, vesting or exercise of
restricted stock or stock option awards, commissions, bonuses, severance
payments, retirement benefits and fringe benefits paid or to be paid to
Executive or paid for Executive's benefit during any such year, as well as
retirement contributions or benefits, including to any tax-qualified or
non-tax-qualified plan or arrangement (whether or not taxable) made or accrued
on behalf of Executive for such year. At the election of Executive, which
election is to be made prior to or within thirty (30) days of the Date of
Termination on or following a Change in Control, such payment may be made in a
lump sum (without discount
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for early payment) on or immediately following the Date of Termination (which
may be the date a Change in Control occurs) or paid in equal monthly
installments during the twenty-four (24) months following Executive's
termination. In the event that no election is made, payment to Executive will be
made in a lump sum. Such payments shall not be reduced in the event Executive
obtains other employment following termination of employment.
(d) Upon the occurrence of a Change in Control followed by Executive's
termination of employment, Executive will be entitled to receive benefits due
him under or contributed by Forward Financial on his behalf pursuant to any
employee benefit plan or other arrangement maintained by Forward Financial on
Executive's behalf to the extent such benefits are not otherwise paid to
Executive under a separate provision of this Agreement.
(e) Upon the occurrence of a Change in Control and Executive's termination
of employment pursuant to the provisions of Section 5(b) of this Agreement in
connection therewith, Forward Financial will cause to be continued any welfare
plan benefit (as described in Section 4(d) of this Agreement) substantially
identical to the benefit coverage maintained by Forward Financial for Executive
and any of his dependents covered under such plans prior to the Change in
Control. Such coverage shall cease upon the expiration of twenty-four (24) full
calendar months following the Date of Termination. In the event Executive's or
Executive's dependent's participation in any such plan or program is barred, the
Holding Company shall arrange to provide Executive and his dependents with
benefits coverage substantially similar to those which Executive and his
dependents would otherwise have been entitled to receive under such plans and
programs by operation of this provision or provide their economic equivalent to
Executive and his dependents.
(f) The use or provision of any membership, license, automobile use, or
other perquisites shall be continued during the remaining term of the Agreement
on the same financial terms and obligations as were in place immediately prior
to the Change in Control. To the extent that any item referred to in this
paragraph will at the end of the term of this Agreement no longer be available
to Executive, Executive will have the option to purchase all rights then held by
the Holding Company or its Subsidiaries to such item for a price equal to the
then fair market value of the item.
(g) In the event that Executive is receiving monthly payments pursuant to
Section 5(c) of this Agreement, on an annual basis, thereafter, between the
dates of January 1 and January 31 of each year, Executive shall elect whether
the balance of the amount payable under the Agreement for that year shall be
paid in a lump sum pursuant to such section. Such election shall be irrevocable
for the year for which such election is made.
6. CHANGE OF CONTROL RELATED PROVISIONS.
(a) Notwithstanding the preceding provisions of Section 5 of this
Agreement, for any taxable year in which Executive shall be liable for the
payment of an excise tax under Section 4999 of the Internal Revenue Code (or any
successor provision thereto), with respect to any payment in the nature of the
compensation made by the Holding Company or its subsidiaries to (or for the
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benefit of) Executive pursuant to this Agreement or otherwise, the Holding
Company (or any successor thereto) shall pay to Executive an amount determined
under the following formula:
An amount equal to: (E x P) + X
WHERE:
X = E X P
------------------------------------
1 - [(FI x (1 - SLI)) + SLI + E + M]
and
E = the rate at which the excise tax is assessed under
Section 4999 of the Code;
P = the amount with respect to which such excise tax is
assessed, determined without regard to this Section 6;
FI = the highest marginal rate of federal income,
employment, and other taxes (other than taxes imposed
under Section 4999 of the Code) applicable to
Executive for the taxable year in question with
respect to such payment (including any effective
increase in Executive's tax rate attributable to the
resultant disallowance of any deduction or the
phase-out of any personal exemption or similar
items);
SLI = the sum of the highest marginal rates of income and
payroll tax applicable to Executive under applicable
state and local laws for the taxable year in question
(including any effective increase in Executive's tax
rate attributable to the resultant disallowance of
any deduction or the phase-out of any personal
exemption or similar items);
M = highest marginal rate of Medicare tax; and
With respect to any payment in the nature of compensation that is made to (or
for the benefit of) Executive under the terms of this Section 6 or otherwise and
on which an excise tax under Section 4999 of the Code may or will be assessed,
the payment determined under this Section 6 shall be made to Executive on the
earliest of (i) the date the Holding Company is required to withhold such tax,
(ii) the date the tax is required to be paid by Executive, or (iii) at the time
of termination resulting from the Change in Control. It is the intention of the
parties that the Holding Company provide Executive with a full tax gross-up
under the provisions of this Section 6, so that on a net after-tax basis, the
result to Executive shall be the same as if the excise tax under Section 4999
(or any successor provisions) of the Code had not been imposed. The tax gross-up
may be adjusted, as appropriate, if alternative minimum tax rules are applicable
to Executive.
(b) Notwithstanding the foregoing, if its is (i) initially determined by
the Holding Company's tax advisors that no excise tax under Section 4999 of the
Code is due with respect to any
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payment or benefit described in the first paragraph of Section 6(a) and
thereafter it is determined in a final judicial determination or administrative
settlement that the Section 4999 excise tax is due with respect to such payments
or benefits or subsequently determined in a final judicial determination or a
final administrative settlement to which Executive is a party that the excise
tax under Section 4999 of the Code is due or that the excess parachute payment
as defined in Section 4999 of the Code is more than the amount determined as
"P", above (such revised determination under (i) or (ii) above thereafter being
referred to as the "Determinative Excess Parachute Payment"), then the tax
advisors of the Holding Company (or any successor thereto) shall determine the
amount (the "Adjustment Amount"), the Holding Company (or any successor thereto)
must pay to Executive, in order to put Executive in the same position as
Executive would have been if the amount determined as "P" above had been equal
to the Determinative Excess Parachute Payment. In determining the Adjustment
Amount, the tax advisors shall take into account any and all taxes (including
any penalties and interest) paid or payable by Executive in connection with such
final judicial determination or final administrative settlement As soon as
practicable after the Adjustment Amount has been so determined, the Holding
Company shall pay the Adjustment Amount to Executive.
(c) The Holding Company (or its successor) shall indemnify and hold
Executive harmless from any and all losses, costs and expenses (including
without limitation, reasonable attorney's fees, reasonable accountant's fees,
interest, fines and penalties of any kind) which Executive incurs as a result of
any administrative or judicial review of Executive's liability under Section
4999 of the Code by the Internal Revenue Service or any comparable state agency
through and including a final judicial determination or final administrative
settlement of any dispute arising out of Executive's liability for the Section
4999 excise tax or otherwise relating to the classification for purposes of
Section 280G of the Code of any payment or benefit in the nature of compensation
made or provided to Executive by the Holding Company or any successor thereto.
Executive shall promptly notify the Holding Company in writing whenever
Executive receives notice of the commencement of any judicial or administrative
proceeding, formal or informal, in which the federal tax treatment under Section
4999 of the Code of any amount paid or payable under this Supplemental Agreement
is being reviewed or is in dispute (including a notice of audit or other inquiry
concerning the reporting of Executive's liability under Section 4999). The
Holding Company (or its successor) may assume control at its expense over all
legal and accounting matters pertaining to such federal or state tax treatment
(except to the extent necessary or appropriate for Executive to resolve any such
proceeding with respect to any matter unrelated to amounts paid or payable
pursuant to this contract) and Executive shall cooperate fully with the Holding
Company in any such proceeding. Executive shall not enter into any compromise or
settlement or otherwise prejudice any rights the Holding Company (or its
successor) may have in connection therewith without prior consent to the Holding
Company (or its successor). In the event that the Holding Company (or any
successor thereto) elects not to assume control over such matters, the Holding
Company (or any successor thereto) shall promptly reimburse Executive for all
expenses related thereto as and when incurred upon presentation of appropriate
documentation relating thereto.
(d) The preceding provisions of this Section 6 shall apply only in the
event Executive's
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"parachute payments" (as such term is used for purposes of Section 280G of the
Code) exceed the amount equal to three times Executive's "base amount" (as such
term is used for purposes of Section 280G of the Code) by more than five
percent. If the preceding provisions of this Section 6 shall not apply by
operation of the preceding sentence and if
(i) the aggregate payments or benefits to be made or afforded to
Executive, which are deemed to be parachute payments (the
"Termination Benefits") would be deemed to include an "excess
parachute payment" under Section 280G of the Code; and
(ii) if such Termination Benefits were reduced to an amount (the
"Non-Triggering Amount"), the value of which is one dollar
($1.00) less than an amount equal to three (3) times Executive's
"base amount," as determined in accordance with said Section 280G
of the Code and the Non-Triggering Amount less the product of the
marginal rate of any applicable state and federal income tax (P,
FI, SLI, and M, as defined in paragraph (a) of this Section 6)
and the Non-Triggering Amount would be greater than the aggregate
value of the Termination Benefits (without such reduction) minus
(i) the amount of tax required to be paid by the Executive
thereon by Section 4999 of the Code and further minus (ii) the
product of the Termination Benefits and the marginal rate of any
applicable state and federal income tax (as determined above
including E, as defined in paragraph (a) of this Section 6),
then the Termination Benefits shall be reduced to the Non-Triggering Amount and
the allocation of the reduction required hereby among the Termination Benefits
shall be determined by Executive.
7. TERMINATION FOR CAUSE.
The term "Termination for Cause" shall mean termination because of
Executive's personal dishonesty, incompetence, willful misconduct, any breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, regulation (other than traffic
violations or similar offenses), 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 the standards for professional competence
generally prevailing for executive officers having comparable positions in the
savings institution industry. Notwithstanding the foregoing, Executive shall not
be deemed to have been terminated for Cause unless and until there shall have
been delivered to Executive a Notice of Termination which shall include a copy
of a resolution duly adopted by the affirmative vote of not less than
three-fourths 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 Executive, together with counsel, to be heard before the Board and which
such meeting shall be held not more than 30 days from the date of notice during
which period Executive may be suspended with pay), finding that in the good
faith opinion of the Board, Executive was guilty of conduct justifying
Termination for Cause and specifying the particulars thereof in detail.
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Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause except for compensation and benefits
already vested. Any stock options and related limited rights granted to
Executive under any stock option plan, or any unvested awards granted to
Executive under any restricted stock benefit plan of the Holding Company or its
Subsidiaries, shall become null and void effective upon Executive's receipt of
Notice of Termination for Cause pursuant to Section 8 of this Agreement, and
shall not be exercisable by or delivered to Executive at any time subsequent to
such Termination for Cause except all benefits shall be deemed to have remained
in effect if Executive is reinstated.
8. NOTICE.
(a) Any purported termination by the Holding Company 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) Except as otherwise provided for in this Agreement, "Date of
Termination" shall mean the date specified in the Notice of Termination (which,
in the case of a Termination for Cause, shall not be less than thirty (30) days
from the date such Notice of Termination is given).
(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
reasonable dispute exists concerning the termination, 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 therefrom 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 Holding Company will
continue to pay Executive's Base Salary and continue to cover Executive under
each Welfare Benefit Plan in which Executive participated at the time of such
notice in effect when the notice giving rise to the dispute was given until the
dispute is finally resolved in accordance with this Agreement. Amounts paid
under this Section 8(c) 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.
9. POST-TERMINATION OBLIGATIONS.
All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with this Section 9 for two (2) full years
after the earlier of the expiration of this Agreement or termination of
Executive's employment with the Holding Company. Executive shall, upon
reasonable notice, furnish such information and assistance to the Holding
Company with regard to matters as to which he has personal knowledge and as may
reasonably be required by the Holding
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Company in connection with any litigation in which it or any of its subsidiaries
or affiliates is, or may become, a party. The Holding Company shall reimburse
Executive for all out-of-pocket expenses incurred and at an hourly rate
equivalent to the hourly rate (based on an eight-hour work day) of his Base
Salary in effect at the time of his termination from employment for any time
incurred in connection with services rendered pursuant to this Section 9.
10. NON-COMPETITION.
(a) Upon any termination of Executive's employment hereunder pursuant to
Section 4 of this Agreement, Executive agrees not to compete with the Holding
Company or its Subsidiaries for a period of one (1) year following such
termination in any city, town or county in which the Executive's normal business
office is located and the Holding Company or any of its Subsidiaries has an
office or has filed an application for regulatory approval to establish an
office, determined as of the effective date of such termination, except as
agreed to pursuant to a resolution duly adopted by the Board. 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 Holding Company or its subsidiaries.
The parties hereto, recognizing that irreparable injury will result to the
Holding Company or its subsidiaries, its business and property in the event of
Executive's breach of this Subsection 10(a) agree that in the event of any such
breach by Executive, the Holding Company or its subsidiaries, 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, employees and all persons acting for or under the direction of
Executive. Executive represents and admits that in the event of the termination
of his employment pursuant to Section 4 of this Agreement, 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 Holding
Company or its subsidiaries, 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 Holding Company or its subsidiaries from
pursuing any other remedies available to the Holding Company or its subsidiaries
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 Holding Company and
its Subsidiaries as it may exist from time to time, is a valuable, special and
unique asset of the business of the Holding Company and its subsidiaries.
Executive will not, during or after the term of Executive's employment, disclose
any knowledge of the past, present, planned or considered business activities of
the Holding Company and its subsidiaries thereof to any person, firm,
corporation, or other entity for any reason or purpose whatsoever unless
expressly authorized by the Board of Directors or required by law.
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 Holding
Company. In the event of a breach or threatened breach by the Executive of the
provisions of this Section 10, the Holding Company will be entitled to an
injunction restraining Executive from disclosing, in whole or in part, the
knowledge of the past,
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present, planned or considered business activities of the Holding Company or its
subsidiaries 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 Holding Company from pursuing any other remedies available to the Holding
Company for such breach or threatened breach, including the recovery of damages
from Executive.
11. SOURCE OF PAYMENTS.
(a) All payments provided in this Agreement shall be timely paid in cash,
check or other mutually agreed upon method from the general funds of the Holding
Company subject to Section 11(b) of this Agreement.
(b) Notwithstanding any provision herein to the contrary, to the extent
that payments and benefits, as provided by this Agreement, are paid to or
received by Executive under the Employment Agreement in effect between Executive
and the Institution or otherwise by Forward Financial, such payments and
benefits paid by the Institution or Forward Financial will be subtracted from
any amount due simultaneously to Executive under similar provisions of this
Agreement. Payments pursuant to this Agreement and the Institution Agreement and
payments made by Forward Financial shall be allocated in proportion to the level
of activity and the time expended on such activities by Executive as determined
by the Holding Company, the Institution and Forward Financial on a quarterly
basis; provided, however, that except for the reduction provided by the first
sentence of this Section 11(b), the Holding Company will be obligated to pay
100% of the amounts due Executive hereunder.
12. 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 Holding Company or any
predecessor of the Holding Company and Executive, except that this Agreement
shall not affect or operate to reduce any benefit or compensation inuring to the
Executive of a kind elsewhere provided. This Agreement also specifically
supersedes in full any prior employment agreement between Forward Financial and
Executive. 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.
13. 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.
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(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive and the Holding Company and their respective successors and assigns.
14. 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 be 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.
15. 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.
16. 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.
17. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Delaware,
unless otherwise specified herein.
18. 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 Executive within fifty
(50) miles from the location of the Holding Company, 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
Executive's 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.
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In the event any dispute or controversy arising under or in connection with
Executive's termination is resolved in favor of Executive, whether by judgment,
arbitration or settlement, Executive shall be entitled to the payment of all
back-pay, including salary, bonuses and any other cash compensation, fringe
benefits and any compensation and benefits due Executive under this Agreement.
19. 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 Holding Company, if Executive is successful pursuant to a
legal judgment, arbitration or settlement.
20. INDEMNIFICATION.
The Holding Company shall provide Executive (including Executive's heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at its expense and shall indemnify
Executive (and Executive's heirs, executors and administrators) to the fullest
extent permitted under Delaware law against all expenses and liabilities
reasonably incurred by Executive in connection with or arising out of any
action, suit or proceeding in which Executive may be involved by reason of
Executive having been a director or officer of the Holding Company or its
Subsidiaries (whether or not Executive continues to be a director or officer at
the time of incurring such expenses or liabilities), such expenses and
liabilities to include, but not be limited to, judgments, court costs and
attorneys' fees and the cost of reasonable settlements.
21. SUCCESSOR TO THE HOLDING COMPANY.
The Holding 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 Bank, the Holding Company, or
Forward Financial expressly and unconditionally to assume and agree to perform
the Holding Company's obligations under this Agreement, in the same manner and
to the same extent that the Holding Company would be required to perform if no
such succession or assignment had taken place.
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SIGNATURES
IN WITNESS WHEREOF, BostonFed Bancorp, Inc. has caused this Agreement to be
executed and its seal to be affixed hereunto by their duly authorized officers
and its directors, and Executive has signed this Agreement on March 28, 2000.
ATTEST: BOSTONFED BANCORP, INC.
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxx
------------------------------------- ----------------------------------------
Assistant Secretary For the Entire Board of Directors
[SEAL]
WITNESS: EXECUTIVE
Xxxxx X. XxXxx By: /s/ Xxxx X. Xxxxxx
------------------------------------- ----------------------------------------
Xxxx X. Xxxxxx
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BOSTON FEDERAL SAVINGS BANK
EMPLOYMENT AGREEMENT
This AGREEMENT ("Agreement"), effective as of December 31, 1999, by and
between Boston Federal Savings Bank (the "Bank"), a federally chartered savings
institution, with its principal administrative offices at 17 New England
Executive Park, Xxxxxxxxxx, XX 00000, BostonFed Bancorp, Inc., a corporation
organized under the laws of the state of Delaware, the Holding Company of the
Bank (the "Holding Company") and Xxxx X. Xxxxxx ("Executive").
WHEREAS, the Bank wishes to continue to assure itself of the services of
Executive for the period provided in this Agreement; and
WHEREAS, Executive is willing to continue to serve in the employ of the
Bank and its subsidiaries on a full-time basis for the term of this Agreement.
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 Executive's employment hereunder, Executive agrees to
serve as Vice President of the Bank. Executive shall render administrative and
management services to the Bank such as are customarily performed by persons in
a similar executive capacity. During the term of this Agreement, Executive also
agrees to serve as Senior Vice President of Diversified Ventures, Inc. d/b/a
Forward Financial Company ("Forward Financial") a wholly owned subsidiary of the
Bank.
2. TERMS.
(a) The period of Executive's employment under this Agreement shall be
deemed to have commenced as of the date first written above and shall continue
for a period of twenty-four (24) full calendar months from the effective date of
this Agreement. Commencing on December 31, 2000, and continuing on each
anniversary thereafter, the disinterested members of the board of directors of
the Bank ("Board") may extend the Agreement an additional year such that the
remaining term of the Agreement shall be two (2) years unless the Executive
elects not to extend the term of this Agreement by giving written notice in
accordance with Section 8 of this Agreement. The Board will review the Agreement
and Executive's performance annually for purposes of determining whether to
extend the Agreement and the rationale and results thereof shall be included in
the minutes of the Board's meeting. The Board shall give notice to the Executive
as soon as possible after such review as to whether the Agreement is to be
extended.
(b) During the period of Executive's employment hereunder, except for
periods of absence occasioned by illness, reasonable vacation periods, and other
reasonable leaves of absence, Executive shall devote substantially all of 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 Bank and participation in industry, community
and civic
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organizations; provided, however, that, with the approval of the Board, as
evidenced by a resolution of the 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 the Board's judgment,
will not present any conflict of interest with the Bank, or materially affect
the performance of Executive's duties pursuant to this Agreement.
(c) Notwithstanding anything in this Agreement to the contrary, either
Executive or the Bank may terminate Executive's employment with the Bank at any
time during the term of this Agreement, subject to the terms and conditions of
this Agreement.
3. COMPENSATION AND REIMBURSEMENT.
(a) The compensation specified under this Agreement shall constitute
consideration paid by the Bank in exchange for the duties described in Section 1
of this Agreement. The Bank shall pay Executive, as compensation, a salary of
not less than $155,000 ("Base Salary"). Base Salary shall include any amounts of
compensation deferred by Executive under any tax-qualified retirement or welfare
benefit plan or any other deferred compensation arrangement maintained by the
Bank. Base Salary shall be payable in accordance with the normal payroll
practices of the Bank. During the period of this Agreement, Executive's Base
Salary shall be reviewed at least annually; on or about the 15th day of December
each year. Such review shall be conducted by the Board or by a committee of the
Board delegated such responsibility by the Board. The committee or the Board may
increase Executive's Base Salary at any time. Any increase in Base Salary shall
thereafter become the new "Base Salary" for purposes of this Agreement.
(b) Executive shall be entitled to participate in any employee benefit
plans, arrangements and perquisites substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from as an employee of
Forward Financial immediately prior to the beginning of the term of this
Agreement and Forward Financial will not, without Executive's prior written
consent, make any changes in such plans, arrangements or perquisites (or any
plans, arrangements or perquisites with respect to which Executive begins to
participate at any time during the term of this Agreement) which would adversely
affect Executive's rights or benefits thereunder, without separately providing
for an arrangement that ensures Executive receives or will receive the economic
value that Executive would otherwise lose as a result of such adverse affect,
unless such change is general in nature and applies in a nondiscriminatory
manner to all employees covered by the plan, arrangement or perquisite. Without
limiting the generality of the foregoing provisions of this Subsection (b),
Executive shall be entitled to participate in and receive benefits under any
employee benefit plans made available by Forward Financial now or in the future
to full-time employees of Forward Financial and/or senior executives and key
management employees of Forward Financial, subject to and on a basis consistent
with the terms, conditions and overall administration of such plans and
arrangements. Nothing paid to Executive under any such plans or arrangements
will be deemed to be in lieu of other compensation and benefits to which
Executive is entitled under this Agreement. Without further action of the Board,
Executive shall not be eligible to participate in or benefit from employee
benefit plans, arrangements or perquisites of the Holding Company or the Bank.
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(c) The Bank shall pay or reimburse Executive for all reasonable expenses
incurred by Executive in performing his obligations under this Agreement.
4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.
(a) Upon the occurrence of an Event of Termination (as defined in this
Agreement) during Executive's term of employment under this Agreement, the
provisions of this Section 4 shall 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 Bank or the Holding Company of Executive's full-time
employment hereunder for any reason other than termination governed by Section
5(a) of this Agreement, or Termination for Cause, as defined in Section 7 of
this Agreement, or Retirement or Disability, as defined in paragraph (f) of this
Section 4 or; (ii) Executive's resignation from the Bank's employ, upon, any (A)
notice to Executive by the Bank of non-renewal of the term of this Agreement,
(B) failure to re-elect or re-appoint Executive as Vice President of the Bank,
unless consented to by the Executive, (C) material change in Executive's
function, duties, or responsibilities with the Bank, which change would cause
Executive's position to become one of lesser responsibility, importance, or
scope from the position and attributes thereof described in Section 1 of this
Agreement (and any such material change shall be deemed as continuing breach of
this Agreement), unless consented to by Executive, (D) relocation of Executive's
principal place of employment by more than 25 miles from its location at the
effective date of this Agreement, unless consented to by Executive, (E) material
reduction in the benefits, arrangements or perquisites to Executive which is not
general in nature and applicable on a nondiscriminatory basis to all employees
covered by such benefits, arrangements, or perquisites or, pursuant to Section
3(b) of this Agreement, to which Executive does not consent or for which
Executive is not or will not be provided the economic benefit, or (F) breach of
this Agreement by the Bank. Upon the occurrence of any event described in
clauses (A), (B), (C), (D), (E), or (F) above, Executive shall have the right to
elect to terminate employment under this Agreement by resignation upon not less
than sixty (60) days prior written notice given within six full calendar months
after the event giving rise to said right to elect.
(b) Upon the occurrence of an Event of Termination, on the Date of
Termination, as defined in Section 8 of this Agreement, the Bank shall be
obligated to pay Executive, or, in the event of Executive's subsequent death,
his beneficiary or beneficiaries, or his estate, as the case may be, the amount
of the remaining payments and benefits that Executive would have earned if he
had continued his employment with the Bank during the remaining unexpired term
of this Agreement, based on Executive's Base Salary and the benefits provided to
Executive as of the date of the Event of Termination, as set forth in Sections
3(a) and (b) of this Agreement, as the case may be, and the amount still due
Executive under any paragraph of Section 3 for service rendered through the Date
of Termination. Except as provided for in paragraphs (c) and (d) of Section 4,
the determination of Executive's benefits as of the date of the Event of
Termination shall be made based on (i) the value of the allocation attributable
to employer contributions for the most recent plan year under any defined
contribution type plan sponsored by Forward Financial; (ii) the percentage of
salary of any incentive or bonus payment for the most recently-completed fiscal
year; and (iii) the employer-provided cost of any other benefit sponsored by
Forward Financial for the most recently-completed
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fiscal year. At the election of Executive, which election is to be made within
thirty (30) days of the Date of Termination, such payments shall be made in a
lump sum (without discount for early payment) or paid monthly during the
remaining term of the Agreement following Executive's termination. In the event
that no election is made, payment to Executive will be made in a lump sum. Such
payments shall not be reduced in the event Executive obtains other employment
following termination of employment. Notwithstanding anything to the contrary
elsewhere herein to the extent the Executive is entitled to continued coverage
or benefit accrual under any retirement or welfare benefit plan during the
remaining unexpired term of this Agreement the amount payable under this Section
4(b) should be adjusted to the extent necessary to avoid any duplication of such
benefits.
(c) Upon the occurrence of an Event of Termination, Executive will be
entitled to receive benefits due him under or contributed by Forward Financial
on his behalf pursuant to any employee benefit plan or arrangement maintained by
Forward Financial to the extent such benefits are not otherwise paid to
Executive under a separate provision of this Agreement.
(d) To the extent that Forward Financial continues to offer any life,
medical, health, disability or dental insurance plan or arrangement in which
Executive participates in on the last day of his employment (each being a
"Welfare Plan"), after an Event of Termination (as herein defined), Executive
and his dependents shall continue participating in such Welfare Plans, subject
to the same premium contributions on the part of Executive as were required
immediately prior to the Event of Termination until the earlier of (i) his death
(ii) his employment by another employer other than one of which he is the
majority owner or (iii) the end of the remaining term of this Agreement. If
Forward Financial does not offer the Welfare Plans (or if for any reason
Executive's participation in said plans is prohibited) after the Event of
Termination, then the Bank shall provide Executive with a payment equal to the
actuarial value of the provision of such benefit for the period which runs until
the earlier of (i) his death; (ii) his employment by another employer other than
one of which he is the majority owner; or (iii) the end of the remaining term of
this Agreement.
(e) In the event that Executive is receiving monthly payments pursuant to
Section 4(b) hereof, on an annual basis, thereafter, between the dates of
January 1 and January 31 of each year, Executive shall elect whether the balance
of the amount payable under the Agreement for that year shall be paid in a lump
sum or on a pro rata basis. Such election shall be irrevocable for the year for
which such election is made.
(f) Termination of Executive based on "Retirement" shall mean termination
by written notice to the Bank from Executive specifying an exact retirement date
or termination in accordance with any retirement arrangement established with
Executive's written consent with respect to him. Termination of Executive based
on Disability shall mean written notice to the Bank by Executive specifying an
exact date as of which he is unable to perform all of the duties and
responsibilities of his position. Upon termination of Executive upon Disability,
Executive shall be entitled to all benefits under any disability plan of the
Bank or any other plans which Executive is a party or a participant in
accordance with the terms of the plan or arrangement. Executive shall be
entitled to
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all compensation and benefits provided for in Section 3 of this Agreement
through the date of his termination of employment as specified in the notice
provided by him.
5. CHANGE IN CONTROL.
(a) For purposes of this Agreement, a "Change in Control" of the Holding
Company or the Bank or Forward Financial shall mean an event of a nature that;
(i) would be required to be reported in response to Item 1(a) of the current
report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or
15(d) of the Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"); or (ii)
results in a Change in Control of the Bank or the Holding Company within the
meaning of the Home Owners' Loan Act of 1933, as amended, the Federal Deposit
Insurance Act, and the Rules and Regulations promulgated by the Office of Thrift
Supervision (or its predecessor agency), as in effect on the date hereof
(provided, that in applying the definition of change in control as set forth
under the rules and regulations of the OTS, the Board shall substitute its
judgment for that of the OTS); or (iii) without limitation such a Change in
Control shall be deemed to have occurred at such time as (A) any "person" (as
the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of voting securities of the Bank or the Holding Company
representing 20% or more of the Bank's or the Holding Company's outstanding
voting securities or right to acquire such securities except for any voting
securities of the Bank purchased by the Holding Company and any voting
securities purchased by any employee benefit plan of the Holding Company or its
Subsidiaries; or (B) individuals who constitute the board of directors on the
date hereof (the "Incumbent Board") cease for any reason to constitute at least
a majority thereof, provided that any person becoming a director subsequent to
the date hereof whose election was approved by a vote of at least three-quarters
of the directors comprising the Incumbent Board (or members who were nominated
by the Incumbent Board), or whose nomination for election by the Holding
Company's stockholders was approved by a Nominating Committee solely composed of
members which are Incumbent Board members (or members who were nominated by the
Incumbent Board), shall be, for purposes of this clause (B), considered as
though he were a member of the Incumbent Board; or (C) a plan of reorganization,
merger, consolidation, or sale of all or substantially all the assets or stock
of the Bank, Forward Financial, or the Holding Company or similar transaction
occurs or is effectuated in which the Bank, Forward Financial or the Holding
Company is not the resulting entity; provided, however, that such an event
listed above will be deemed to have occurred or to have been effectuated upon
the receipt of all required federal regulatory approvals not including the lapse
of any statutory waiting periods. Notwithstanding anything herein to the
contrary, a "Change in Control" shall not include a transaction in which Forward
Financial is merged with or liquidated into the Bank or any other subsidiary of
the Holding Company or the Bank.
(b) If any of the events described in Section 5(a) of this Agreement
constituting a Change in Control have occurred, or the Board has determined that
a Change in Control has occurred, Executive shall be entitled to the benefits
provided in paragraphs (c), (d), (e), (f), and (g) of this Section 5 upon his
termination of employment on or after the date the Change in Control occurs due
to (i) Executive's dismissal at any time during the term of this Agreement, (ii)
Executive's resignation for any reason within the thirty (30) day period
following the date that is one-year from
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the date the Change in Control occurred or (iii) Executive's resignation
following any demotion, loss of title, office or significant authority or
responsibility, reduction in the annual compensation or benefits or relocation
of Executive's principal place of employment by more than 25 miles from its
location immediately prior to the Change in Control, unless such termination is
because of Executive's Termination for Cause; provided, however, Executive may
consent in writing to any such demotion, loss, reduction or relocation. The
effect of any written consent of the Executive under this Section 5(b) shall be
strictly limited to the terms specified in such written consent. Under no
circumstances can a termination of employment during the term of this Agreement
on or after the date of a Change in Control occurs be considered a termination
on account of retirement or disability for purposes of determining Executive's
rights to the payment of benefits provided in paragraphs (c), (d), (e), (f), and
(g) of this Section 5.
(c) Upon Executive's entitlement to payment pursuant to Section 5(b) of
this Agreement, the Bank shall pay Executive, or in the event of Executive's
subsequent death, Executive's beneficiary or beneficiaries, or estate, as the
case may be, as severance pay or liquidated damages, or both, a sum equal to two
(2) times the greater of (i) Executive's average annual compensation (including
compensation attributable to the exercise of stock options) for the five most
recently completed taxable years of Executive or (ii) the highest annual
compensation (excluding compensation attributable to the exercise of stock
options) for any of the five most recently completed taxable years of Executive;
provided, however, that any payment under this provision shall not exceed three
(3) times Executive's average annual compensation during the five (5) previous
taxable years. In the event the Bank is not in compliance with its minimum
capital requirements or if such payments would cause the Bank's capital to be
reduced below its minimum regulatory capital requirements, such payments shall
be deferred until such time as the Bank or successor thereto is in capital
compliance. Except as provided for in the preceding sentence, for purposes of
this Section 5(c), annual compensation shall include Base Salary and any other
taxable income paid by the Bank or Forward Financial, including but not limited
to amounts related to the granting, vesting or exercise of restricted stock or
stock option awards, commissions, bonuses, severance payments, retirement
benefits and fringe benefits paid or to be paid to Executive or paid for
Executive's benefit during any such year, as well as retirement contributions or
benefits, including to any tax-qualified or non-tax-qualified plan or
arrangement (whether or not taxable) made or accrued on behalf of Executive for
such year. At the election of Executive, which election is to be made prior to
or within thirty (30) days of the Date of Termination on or following a Change
in Control, such payment may be made in a lump sum (without discount for early
payment) on or immediately following the Date of Termination (which may be the
date a Change in Control occurs) or paid in equal monthly installments during
the twenty-four (24) months following Executive's termination. In the event that
no election is made, payment to Executive will be made in a lump sum. Such
payments shall not be reduced in the event Executive obtains other employment
following termination of employment.
(d) Upon the occurrence of a Change in Control followed by Executive's
termination of employment, Executive will be entitled to receive benefits due
him under or contributed by Forward Financial on his behalf pursuant to any
employee benefit plan or other arrangement maintained by
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Forward Financial on Executive's behalf to the extent such benefits are not
otherwise paid to Executive under a separate provision of this Agreement.
(e) Upon the occurrence of a Change in Control and Executive's termination
of employment pursuant to the provisions of Section 5(b) of this Agreement in
connection therewith, the Bank will cause to be continued any Welfare Plan
Benefit (as described in Section 4(d) of this Agreement) substantially identical
to the benefit coverage maintained by Forward Financial for Executive and any of
his dependents covered under such plans prior to the Change in Control. Such
coverage shall cease upon the expiration of twenty-four (24) full calendar
months following the Date of Termination. In the event Executive's or
Executive's dependent's participation in any such plan or program is barred, the
Bank shall arrange to provide Executive and his dependents with benefits
coverage substantially similar to those which Executive and his dependents would
otherwise have been entitled to receive under such plans and programs by
operation of this provision or provide their economic equivalent to Executive
and his dependents.
(f) The use or provision of any membership, license, automobile use, or
other perquisites shall be continued during the remaining term of the Agreement
on the same financial terms and obligations as were in place immediately prior
to the Change in Control. To the extent that any item referred to in this
paragraph will at the end of the term of this Agreement no longer be available
to Executive, Executive will have the option to purchase all rights then held by
the Bank or Forward Financial to such item for a price equal to the then fair
market value of the item.
(g) In the event that Executive is receiving monthly payments pursuant to
Section 5(c) hereof, on an annual basis, thereafter, between the dates of
January 1 and January 31 of each year, Executive shall elect whether the balance
of the amount payable under the Agreement for that year shall be paid in a lump
sum pursuant to such section. Such election shall be irrevocable for the year
for which such election is made.
6. CHANGE OF CONTROL RELATED PROVISIONS.
Notwithstanding the provisions of Section 5 of this Agreement, in no event
shall the aggregate payments or benefits to be made or afforded to Executive
under said paragraphs or otherwise paid or provided by the Bank or Forward
Financial in connection with a Change in Control (the "Termination Benefits")
constitute an "excess parachute payment" under Section 280G of the Code or any
successor thereto, and in order to avoid such a result, the Termination Benefits
will be reduced, if necessary, to an amount (the "Non-Triggering Amount"), the
value of which is one dollar ($1.00) less than an amount equal to three (3)
times Executive's "base amount", as determined in accordance with said Section
280G. The allocation of any reduction required with respect to the Termination
Benefits shall be determined by Executive.
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7. TERMINATION FOR CAUSE.
The term "Termination for Cause" shall mean termination because of
Executive's personal dishonesty, incompetence, willful misconduct, any breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, regulation (other than traffic
violations or similar offenses), 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 the standards for professional competence
generally prevailing for executive officers having comparable positions in the
savings institution industry. Notwithstanding the foregoing, Executive shall not
be deemed to have been terminated for Cause unless and until there shall have
been delivered to Executive a Notice of Termination which shall include a copy
of a resolution duly adopted by the affirmative vote of not less than
three-fourths 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 Executive, together with counsel, to be heard before the Board and which
such meeting shall be held not more than 30 days from the date of notice during
which period Executive may be suspended with pay), finding that in the good
faith opinion of the Board, Executive was guilty of conduct justifying
Termination for Cause and specifying the particulars thereof in detail.
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause except for compensation and benefits
already vested. Any stock options and related limited rights granted to
Executive under any stock option plan, or any unvested awards granted to
Executive under any restricted stock benefit plan of the Bank or its
Subsidiaries, shall become null and void effective upon Executive's receipt of
Notice of Termination for Cause pursuant to Section 8 hereof, and shall not be
exercisable by or delivered to Executive at any time subsequent to such
Termination for Cause except all benefits shall be deemed to have remained in
effect if Executive is reinstated.
8. NOTICE.
(a) Any purported termination by the Bank 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) Except as otherwise provided for in this Agreement, "Date of
Termination" shall mean the date specified in the Notice of Termination (which,
in the case of a Termination for Cause, shall not be less than thirty (30) days
from the date such Notice of Termination is given).
(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
reasonable dispute exists concerning the termination, 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 therefrom having
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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 Bank will continue to pay Executive's Base Salary and continue to
cover Executive under each Welfare Benefit Plan in which Executive participated
at the time of such notice in effect when the notice giving rise to the dispute
was given until the dispute is finally resolved in accordance with this
Agreement. Amounts paid under this Section 8(c) 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.
9. POST-TERMINATION OBLIGATIONS.
All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with this Section 9 for two (2) full years
after the earlier of the expiration of this Agreement or termination of
Executive's employment with the Bank. Executive shall, upon reasonable notice,
furnish such information and assistance to the Bank with regard to matters as to
which he has personal knowledge and as may reasonably be required by the Bank in
connection with any litigation in which it or any of its subsidiaries or
affiliates is, or may become, a party. The Bank shall reimburse Executive for
all out-of-pocket expenses incurred and at an hourly rate equivalent to the
hourly rate (based on an eight-hour work day) of his Base Salary in effect at
the time of his termination from employment for any time incurred in connection
with services rendered pursuant to this Section 9.
10. NON-COMPETITION.
(a) Upon any termination of Executive's employment hereunder pursuant to
Section 4 of this Agreement, Executive agrees not to compete with the Bank or
Forward Financial for a period of one (1) year following such termination in any
city, town or county in which the Executive's normal business office is located
and the Bank or Forward Financial has an office or has filed an application for
regulatory approval to establish an office, determined as of the effective date
of such termination, except as agreed to pursuant to a resolution duly adopted
by the Board. 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 Bank
and Forward Financial. The parties hereto, recognizing that irreparable injury
will result to the Bank, its business and property in the event of Executive's
breach of this Subsection 10(a) agree that in the event of any such breach by
Executive, the Bank 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, employees and all persons
acting for or under the direction of Executive. Executive represents and admits
that in the event of the termination of his employment pursuant to Section 4 of
this Agreement, 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 Bank, 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 Bank from pursuing any other
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remedies available to the Bank 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 Bank and its
affiliates as it may exist from time to time, is a valuable, special and unique
asset of the business of the Bank. Executive will not, during or after the term
of Executive's employment, disclose any knowledge of the past, present, planned
or considered business activities of the Bank and its affiliates thereof to any
person, firm, corporation, or other entity for any reason or purpose whatsoever
unless expressly authorized by the Board of Directors or required by law.
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 Bank. In the
event of a breach or threatened breach by the Executive of the provisions of
this Section 10, the Bank 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 Bank or its affiliates
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 Bank from
pursuing any other remedies available to the Bank for such breach or threatened
breach, including the recovery of damages from Executive.
11. SOURCE OF PAYMENTS.
(a) All payments provided in this Agreement shall be timely paid in cash,
check or other mutually agreed upon method from the general funds of the Bank
subject to Section 11(b). The Holding Company, however, unconditionally
guarantees payment and provision of all amounts and benefits due hereunder to
Executive and, if such amounts and benefits due from the Bank or Forward
Financial are not timely paid or provided by the Bank or Forward Financial, such
amounts and benefits shall be paid or provided by the Holding Company.
(b) Notwithstanding any provision herein to the contrary, to the extent
that payments and benefits, as provided by this Agreement, are paid to or
received by Executive under the Employment Agreement in effect between Executive
and the Holding Company or otherwise by Forward Financial, such payments and
benefits paid by the Holding Company or Forward Financial will be subtracted
from any amount due simultaneously to Executive under similar provisions of this
Agreement. Payments pursuant to this Agreement and the Holding Company Agreement
and payments made by Forward Financial shall be allocated in proportion to the
level of activity and the time expended on such activities by Executive as
determined by the Holding Company, the Bank and Forward Financial on a quarterly
basis; provided, however, that except for the reduction provided by the first
sentence of this Section 11(b), the Holding Company will be obligated to pay
100% of the amounts due Executive hereunder.
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12. 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 Bank or any
predecessor of the Bank and Executive, except that this Agreement shall not
affect or operate to reduce any benefit or compensation inuring to the Executive
of a kind elsewhere provided. This Agreement also specifically supersedes in
full any prior employment agreement between Forward Financial and Executive. 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.
13. 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 and the Bank and their respective successors and assigns.
14. 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 be 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.
15. REQUIRED PROVISIONS.
(a) The Bank may terminate Executive's employment at any time, but any
termination by the Bank, 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 7 hereinabove.
(b) If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C.
ss.1818(e)(3) or (g)(1); the Bank's obligations under this contract shall be
suspended as of the date of service, unless stayed by appropriate proceedings.
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If the charges in the notice are dismissed, the Bank may in its discretion: (i)
pay Executive all or part of the compensation withheld while their contract
obligations were suspended; and (ii) reinstate (in whole or in part) any of the
obligations which were suspended.
(c) If Executive 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 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C.
ss.1818(e)(4) or (g)(1), all obligations of the Bank under this contract shall
terminate as of the effective date of the order, but vested rights of the
contracting 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, 12 U.S.C. ss.1813(x)(1) all obligations of the Bank under
this contract shall terminate as of the date of default, but this paragraph
shall not affect any vested rights of the contracting parties.
(e) All obligations of the Bank under this contract shall be terminated,
except to the extent determined that continuation of the contract is necessary
for the continued operation of the institution: (i) by the Director of the OTS
(or his designee), the FDIC or the Resolution Trust Corporation, at the time the
FDIC 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, 12 U.S.C. ss.1823(c); or (ii) by the Director of the OTS (or his designee)
at the time the Director (or his designee) approves a supervisory merger to
resolve problems related to the operations of the Bank or when the Bank 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.
(f) Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C.
ss.1828(k) and 12 C.F.R. ss.545.121 and any rules and regulations promulgated
thereunder.
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.
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.
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18. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Delaware,
unless otherwise specified herein.
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 Executive within fifty
(50) miles from the location of the Bank, 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 Executive's 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.
In the event any dispute or controversy arising under or in connection with
Executive's termination is resolved in favor of Executive, whether by judgment,
arbitration or settlement, Executive shall be entitled to the payment of all
back-pay, including salary, bonuses and any other cash compensation, fringe
benefits and any compensation and benefits due Executive under 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 Bank, if Executive is successful pursuant to a legal
judgment, arbitration or settlement.
21. INDEMNIFICATION.
The Bank shall provide Executive (including Executive's heirs, executors
and administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense and shall indemnify Executive (and
Executive's heirs, executors and administrators) to the fullest extent permitted
under Delaware law against all expenses and liabilities reasonably incurred by
Executive in connection with or arising out of any action, suit or proceeding in
which Executive may be involved by reason of Executive having been a director or
officer of the Bank or its Subsidiaries (whether or not Executive continues to
be a director or officer at the time of incurring such expenses or liabilities),
such expenses and liabilities to include, but not be limited to, judgments,
court costs and attorneys' fees and the cost of reasonable settlements.
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22. SUCCESSOR TO THE BANK.
The Bank 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 Bank or Forward Financial,
expressly and unconditionally, to assume and agree to perform the Bank's
obligations under this Agreement, in the same manner and to the same extent that
the Bank would be required to perform if no such succession or assignment had
taken place.
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SIGNATURES
IN WITNESS WHEREOF, Boston Federal Savings Bank and BostonFed Bancorp, Inc.
have caused this Agreement to be executed and their seals to be affixed hereunto
by their duly authorized officers and Executive has signed this Agreement, on
March 28, 2000.
ATTEST: BOSTON FEDERAL SAVINGS BANK
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxx
------------------------------------- -------------------------------------
Assistant Secretary For the Entire Board of Directors
[SEAL]
ATTEST: BOSTONFED BANCORP, INC.
(Guarantor)
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxx
------------------------------------- -------------------------------------
Assistant Secretary For the Entire Board of Directors
[SEAL]
WITNESS: EXECUTIVE
/s/ Xxxxx X. XxXxx /s/ Xxxx X. Xxxxxx
------------------------------------- ----------------------------------------
Xxxx X. Xxxxxx
15
