Exhibit 10.15
EMPLOYMENT AGREEMENT
between
SOVEREIGN BANCORP, INC.
and
XXXXX X. XXXXX
1
THIS AGREEMENT ("Agreement") made as of this 1st day of June, 2001, between
SOVEREIGN BANCORP, INC., a Pennsylvania corporation ("SBI" or "Corporation"),
and XXXXX X. XXXXX, an individual (the "Executive").
WITNESSETH:
WHEREAS, Sovereign Bank, a federal savings bank (the "Bank") is a wholly
owned subsidiary of SBI; and
WHEREAS, SBI and the Executive desire to enter in an agreement regarding,
among other things the employment of the Executive by SBI.
AGREEMENT:
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Employment. SBI hereby employs the Executive, and the Executive hereby
accepts employment with the SBI, on the terms and conditions set forth in this
Agreement.
2. Duties of Employee. The Executive shall perform and discharge well and
faithfully such duties as an executive officer of SBI as may be assigned to the
Executive from time to time by the Board of Directors or the Chief Executive
Officer of SBI. The Executive initially shall be employed as Chief Financial
Officer of SBI, and shall hold such other titles as may be given to him from
time to time by the Board of Directors of SBI. The Executive shall devote his
full time, attention and energies to the business of SBI and shall not, during
the Employment
2
Period (as defined in Section 3 hereof), be employed or involved in any other
business activity, whether or not such activity is pursued for gain, profit or
other pecuniary advantage; provided, however, that this Section 2 shall not be
construed as preventing the Executive from (a) investing the Executive's
personal assets, (b) acting as a member of the Board of Directors of any other
corporation or as a member of the Board of Trustees of any other organization,
or (c) being involved in any other activity with the prior approval of the Chief
Executive Officer of SBI.
3. Period of Employment and Termination During Period. The Executive's
employment under this Agreement shall be for a period (the "Employment Period")
commencing upon the date the conditions to approval of this Agreement fixed by
the federal Office of Thrift Supervision ("OTS") and the Federal Deposit
Insurance Corporation ("FDIC") have been met, and ending on April 30, 2004 (or
such later date as the parties shall mutually agree) pursuant to Section 17
hereof, unless the Executive's employment is sooner terminated in accordance
with Section 5 hereof or one of the following provisions:
(a) The Executive's employment under this Agreement may be terminated
at any time during the Employment Period for "Cause" (as herein defined), by
action of the Chief Executive Officer or Board of Directors of SBI, upon giving
notice of such termination to the Executive at least fifteen (15) days prior to
the date upon which such termination shall take effect. As used in this
Agreement, "Cause" means any of the following events:
(i) The Executive is convicted of, enters a plea of guilty or nolo
contendere to, or enters a pre-disposition diversion program with respect
to a felony, a crime of dishonesty, or a crime involving
3
fraud or moral turpitude, or the actual incarceration of the Executive for a
period of forty-five (45) consecutive days;
(ii) The Executive willfully fails to follow the lawful instructions
of the Chief Executive Officer or Board of Directors of SBI after the
Executive's receipt of written notice of such instructions, other than a
failure resulting from the Executive's incapacity because of physical or
mental illness;
(iii) The Executive repeatedly fails in any material respect to
perform the reasonable duties required of the Executive under Section 2
hereof following written notice of such failure from the Board of Directors
or the Chief Executive Officer of SBI;
(iv) The Executive willfully violates SBI's or the Bank's Code of
Conduct as it may be amended from time to time or any material banking
statute or regulation, or any final cease and desist order applicable to
SBI or the Bank;
(v) The OTS, FDIC or any government regulatory agency having
jurisdiction over SBI or the Bank recommends or orders that SBI terminate
the employment of the Executive or relieve him of his duties;
(vi) The Executive engages in an activity that results in a breach of
fiduciary duty involving receipt of personal profit by the Executive at the
expense of the Bank;
4
(vii) The Executive commits a significant act of personal dishonesty
or willful misconduct, or performs his duties under this Agreement in an
incompetent manner; or
(viii) The Executive materially breaches any material provision of
this Agreement.
If the Executive's employment is terminated under the provisions of this
Section 3(a), then all rights of the Executive under Section 4 hereof shall
cease as of the effective date of such termination.
(b) The Executive's employment under this Agreement may be terminated
at any time during the Employment Period without "Cause" (as defined in Section
3(a) hereof), by action of the Board of Directors of SBI, upon giving notice of
such termination to the Executive at least thirty (30) days prior to the date
upon which such termination shall take effect. If the Executive's employment is
terminated under the provisions of this Section 3(b), then the Executive shall
be entitled to receive the compensation and benefits set forth in Section 6 or
Section 7 hereof, whichever shall be applicable. To the extent the Executive
becomes entitled to and receives the payment and benefits set forth in Section 6
or 7, such payments and benefits shall constitute liquidated damages for any
possible breach of this Agreement by SBI and shall represent the maximum extent
of liability therefore that the Executive can claim against SBI or any of its
subsidiaries, including the Bank. Such payments and benefits are solely the
responsibility of SBI.
(c) If the Executive retires or dies, the Executive's employment under
this Agreement shall be deemed terminated as of the date of the Executive's
retirement or death, and all rights of the Executive under Section 4 hereof
shall
5
cease as of the date of such termination and any benefits payable to the
Executive shall be determined in accordance with the retirement and insurance
programs of SBI, including the eligibility provisions, then in effect.
(d) If the Executive is incapacitated by accident, sickness, or
otherwise so as to render the Executive mentally or physically incapable of
performing the services required of the Executive under Section 2 of this
Agreement for a continuous period of six (6) months, then, upon the expiration
of such period or at any time thereafter, by action of the Board of Directors of
SBI, the Executive's employment under this Agreement may be terminated
immediately upon giving the Executive notice to that effect. If the Executive's
employment is terminated under the provisions of this Section 3(d), then all
rights of the Executive under Section 4 hereof shall cease as of the last
business day of the week in which such termination occurs and any benefits
payable to the Executive shall be determined in accordance with the retirement
and insurance programs of SBI then in effect.
(e) If Executive voluntarily terminates his employment hereunder
without Good Reason as provided in Section 5, then all rights of the Executive
under Section 4 hereof shall cease as of the effective date of such termination.
4. Employment Period Compensation.
(a) Salary. For services performed by the Executive under this
Agreement, SBI shall pay the Executive a salary during the Employment Period, at
the rate of Three Hundred Thousand Dollars ($300,000) per year, payable at the
same times as salaries are payable to other executive employees of SBI. SBI may,
from time to time, increase, but may not decrease, the Executive's salary, and
any and all such increases shall be deemed to constitute amendments to this
6
Section 4(a) to reflect the increased amounts, effective as of the dates
established for such increases by the Chief Executive Officer or by the Board of
Directors of SBI in the resolutions authorizing such increases.
(b) Bonus. SBI shall pay to Executive such bonuses as Executive earns
under the SBI leaders incentive program or programs for which comparable
executives of SBI are eligible. In addition, SBI may, from time to time, pay
such other bonus or bonuses to the Executive as the Board of Directors of SBI,
in its sole discretion, deems appropriate. The payment of any such bonuses shall
not reduce or otherwise affect any other obligation of SBI to the Executive
provided in this Agreement.
(c) Other Benefits. SBI will provide the Executive, during the
Employment Period, with insurance, vacation, retirement, and other fringe
benefits in the aggregate not less favorable than those received by other
comparable executive employees of SBI.
(d) Relocation Reimbursement. The Executive shall receive
reimbursement for reasonable and necessary moving expenses up to a maximum of
$15,000 in connection with relocating his home to the Wyomissing, PA area, which
amount shall be increased by the amount necessary to compensate the Executive
for any income taxes he is required to pay on such reimbursement.
5. Resignation of the Executive for Good Reason.
(a) The Executive may resign for "Good Reason" (as herein defined),
provided the event constituting such occurs at any time during the twelve
(12)-month period following a "Change in Control" (as defined in Section 5(b)
7
hereof), as hereinafter set forth. As used in this Agreement, "Good Reason"
means any of the following:
(i) Any material reduction in title or a substantial reduction in the
Executive's responsibilities or authority, including such responsibilities
and authority as the same may be increased at any time during the term of
this Agreement, or the assignment to the Executive of duties inconsistent
with the Executive's status as Chief Financial Officer of SBI
(ii) Any reassignment of the Executive which requires the Executive to
be based anywhere more than fifty (50) miles from the location of the
Executive's primary office immediately preceding the Change in Control;
(iii) Any reduction in the Executive's annual base salary as in effect
on the date hereof or as the same may be increased from time to time;
(iv) Any failure to provide the Executive with benefits at least as
favorable as those enjoyed by the Executive under any of the retirement,
life insurance, medical, health and accident, disability or other employee
plans of SBI in which the Executive participated at the time of the Change
in Control, or the taking of any action that would materially reduce any of
such benefits in effect at the time of the Change in Control unless such
reduction is part of a reduction applicable proportionately to all
comparable executives of SBI;
8
(v) Any failure to obtain a satisfactory agreement from any successor
to assume and agree to perform this Agreement, as contemplated in Section
16 hereof; or
(vi) Any material breach of this Agreement of any nature whatsoever.
A resignation from employment under this Agreement shall be by a notice in
writing (the "Notice of Termination") delivered to SBI (or its successor) within
ninety (90) days after the occurrence of the event constituting Good Reason, and
the provisions of Section 6 hereof shall thereupon apply.
(b) As used in this Agreement, "Change in Control" means a change of
control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), as enacted and in force on the
date hereof, whether or not SBI is then subject to such reporting requirement;
provided, however, that, without limitation, the first to occur of any of the
following events shall constitute a Change in Control:
(i) any "Person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act except for any of the Corporation's employee benefit
plans, or any entity holding the Corporation's voting securities for, or
pursuant to, the terms of any such plan (or any trust forming a part
thereof) (the "Benefit Plan(s)"), is or becomes the beneficial owner,
directly or indirectly, of the Corporation's securities representing 19.9%
or more of the combined voting power of the Corporation's then outstanding
securities other than pursuant to a transaction described in (iv) below;
9
(ii) there occurs a contested proxy solicitation of the Corporation's
shareholders that results in the contesting party obtaining the ability to
vote securities representing 19.9% or more of the combined voting power of
the Corporation's then outstanding securities;
(iii) a binding written agreement is executed (and, if legally
required, approved by the Corporation's shareholders) providing for a sale,
exchange, transfer or other disposition of substantially all of the assets
of the Corporation or of the Bank to another entity, except to an entity
controlled directly or indirectly by the Corporation;
(iv) the shareholders of the Corporation approve a merger,
consolidation, or other reorganization of the Corporation, unless:
A. under the terms of the agreement approved by the Corporation's
shareholders providing for such merger, consolidation or
reorganization, the shareholders of the Corporation immediately before
such merger, consolidation or reorganization, will own, directly or
indirectly immediately following such merger, consolidation or
reorganization at least 51% of the combined voting power of the
outstanding voting securities of the Corporation resulting from such
merger, consolidation or reorganization (the "Surviving Corporation")
in substantially the same proportion as their ownership of the
10
voting securities immediately before such merger, consolidation or
reorganization;
B. under the terms of the agreement approved by the Corporation's
shareholders providing for such merger, consolidation or
reorganization, the individuals who were members of the Board of
Directors of the Corporation immediately prior to the execution of
such agreement will constitute at least 51% of the members of the
board of directors of the Surviving Corporation after such merger,
consolidation or reorganization; and
C. based on the terms of the agreement approved by the
Corporation's shareholders providing for such merger, consolidation or
reorganization, no Person (other than (1) the Corporation or any
subsidiary of the Corporation, (2) any Benefit Plan (3) the Surviving
Corporation or any subsidiary of the Surviving Corporation, or (4) any
Person who, immediately prior to such merger, consolidation or
reorganization had beneficial ownership of 19.9% or more of the then
outstanding voting securities) will have beneficial ownership of 19.9%
or more of the combined voting power of the Surviving Corporation's
then outstanding voting securities;
(v) a plan of liquidation or dissolution of the Corporation, other
than pursuant to bankruptcy or insolvency laws, is adopted;
11
(vi) during any period of two consecutive years, individuals, who at
the beginning of such period, constituted the Board of Directors of the
Corporation cease for any reason to constitute at least a majority of the
Board of Directors of the Corporation unless the election, or the
nomination for election by the Corporation's shareholders, of each new
director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the period; or
(vii) the occurrence of a Triggering Event within the meaning of the
Rights Agreement dated as of September 19, 1989, as amended by the
Amendment to Rights Agreement dated as of September 27, 1995 between the
Corporation and Chemical Bank, as rights agent.
Notwithstanding clause (i) of the preceding paragraph, a Change in Control
shall not be deemed to have occurred if a Person becomes the beneficial owner,
directly or indirectly, of the Corporation's securities representing 19.9% or
more of the combined voting power of the Corporation's then outstanding
securities solely as a result of an acquisition by the Corporation of its voting
securities which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 19.9% or
more of the combined voting power of the Corporation's then outstanding
securities; provided, however, that if a Person becomes a beneficial owner of
19.9% or more of the combined voting power of the Corporation's then outstanding
securities by reason of share purchases by the Corporation and shall, after such
share purchases by the Corporation, become the beneficial owner, directly or
indirectly, of any additional voting securities of the Corporation (other than
as a result of a stock split, stock
12
dividend or similar transaction), then a Change in Control of the Corporation
shall be deemed to have occurred with respect to such Person under clause (i) of
the preceding paragraph. In no event shall a Change in Control of the
Corporation be deemed to occur under such clause (i) above with respect to
Benefit Plans.
6. Rights in Event of Termination of Employment After Change in Control. In
the event that Executive resigns from employment for Good Reason following a
Change in Control, by delivery of a Notice of Termination to SBI or its
successor, or Executive's employment is terminated by SBI or its successor
without Cause after a Change in Control, Executive shall be entitled, subject to
controlling statute or regulation, to receive the amounts and benefits set forth
in this section.
(a) For a period equal to the greater of two (2) years from the date
of termination of employment or the remaining term of this Agreement, Executive
shall be paid his Current Compensation at Termination.
(i) For purposes of this section, the term "Current Compensation at
Termination" means the sum of (A) the Executive's base salary as of the
date of termination of employment (or prior to any reduction thereof
resulting in Good Reason for resignation), and (B) a dollar amount equal to
the highest of the awards Executive received as bonuses in any of the three
(3) calendar years preceding the year in which the termination of
employment occurs.
(ii) Amounts required to be paid to Executive under Section 6(a) shall
be paid in bi-weekly installments conforming to normal payroll dates,
beginning thirty (30) days following the date of termination of employment.
13
(b) For a period equal to the greater of two (2) years from the date
of termination of employment or the remaining term of this Agreement, Executive
shall receive a continuation of all medical insurance benefits in effect with
respect to Executive as of the date of termination of employment or, if SBI
cannot provide such benefits because Executive is no longer an employee, a
dollar amount equal to the cost after-tax to Executive of obtaining such
benefits (or substantially similar benefits), net of the amount payable by
current employees of SBI for such insurance coverage during such period.
(c) Executive shall not be required to mitigate the amount of any
payment or benefit provided for in this Section 6 by seeking employment or
otherwise; nor shall any amounts or benefits payable or provided hereunder be
reduced in the event he/she does secure employment.
7. Rights in Event of Termination of Employment Without Cause in Absence of
Change in Control. In the event that Executive's employment is terminated by SBI
without Cause and no Change in Control shall have occurred at the date of such
termination, Executive shall be entitled, subject to controlling statute or
regulation, to receive for a period equal to the greater of two (2) years from
the date of termination of employment or the remaining term of this Agreement
his base salary as of the date of termination of employment, in accordance with
the following conditions:
(a) Amounts required to be paid to Executive under this Section 7
shall be paid in bi-weekly installments conforming to normal payroll dates,
beginning thirty (30) days following the date of termination of employment.
(b) For a period equal to the greater of two (2) years from the date
of termination of employment or the remaining term of this Agreement, Executive
14
shall receive a continuation of all medical insurance benefits in effect with
respect to Executive as of the date of termination of employment or, if SBI
cannot provide such benefits because Executive is no longer an employee, a
dollar amount equal to the cost after-tax to Executive of obtaining such
benefits (or substantially similar benefits), net of the amount payable by
current employees of SBI for such insurance coverage during such period.
(c) Executive shall not be required to mitigate the amount of any payment
or benefit provided for in this Section 7 by seeking employment or otherwise;
nor shall any amounts or benefits payable or provided hereunder be reduced in
the event he/she does secure employment.
8. Excise Tax Matters. In the event that the amounts and benefits payable
under this Agreement, when added to other amounts and benefits which may become
payable to the Executive by SBI, are such that he becomes subject to the excise
tax provisions of Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code"), SBI shall pay him such additional amount or amounts as will result
in his retention (after the payment of all federal, state and local excise,
employment and income taxes on such payments and the value of such benefits) of
a net amount equal to the net amount he would have retained had the initially
calculated payments and benefits been subject only to income and employment
taxation. For purposes of the preceding sentence, the Executive shall be deemed
to be subject to the highest marginal federal, relevant state and relevant local
tax rates. All calculations required to be made under this subsection shall be
made by SBI's independent public accountants, subject to the right of
Executive's representative to review the same. All such amounts required to be
paid shall be paid at the time any withholding may be required under applicable
law, and any additional amounts to which the Executive may be entitled shall be
paid or
15
reimbursed no later than fifteen (15) days following confirmation of such amount
by SBI's accountants. In the event any amounts paid hereunder are subsequently
determined to be in error because estimates were required or otherwise, the
parties agree to reimburse each other to correct such error, as appropriate, and
to pay interest thereon at the applicable federal rate (as determined under Code
Section 1274 for the period of time such erroneous amount remained outstanding
and unreimbursed). The parties recognize that the actual implementation of the
provisions of this subsection are complex and agree to deal with each other in
good faith to resolve any questions or disagreements arising hereunder.
9. Covenant Not to Compete; Non-Solicitation of Customers and Employees.
(a) The Executive hereby acknowledges and recognizes the highly
competitive nature of the business of SBI and of the Bank and accordingly agrees
that, during and for the applicable period set forth in Section 9(c) hereof, the
Executive shall not:
(i) be engaged, directly or indirectly, either for his own account or
as agent, consultant, employee, partner, officer, director, proprietor,
investor (except as an investor owning less than 5% of the stock of a
publicly owned company) or otherwise of any person, firm, corporation or
enterprise engaged in any business in which SBI or one of its subsidiaries,
including the Bank, is engaged at the date of termination of employment
(the "Business") in any geographic area in which, at any time during the
Employment Period, SBI or any of its subsidiaries, including the Bank,
conducts the Business (the "Non-Competition Area"); or
16
(ii) provide financial or other assistance to any person, firm,
corporation, or enterprise engaged in the Business in the Non-Competition
Area; or
(iii) engage in any of the foregoing types of business with, or
solicit the sale of or sell any financial service or product relating to
the Business to, any customer or client of SBI or any of its subsidiaries,
including the Bank; or
(iv) solicit or hire any employees of SBI or any of its subsidiaries,
including the Bank, who are engaged in the Business or induce any of such
employees to terminate their employment relationship with SBI or any of its
subsidiaries, including the Bank.
(b) It is expressly understood and agreed that, although the Executive
and the Bank consider the restrictions contained in Section 9(a) hereof
reasonable for the purpose of preserving for SBI and its subsidiaries their good
will and other proprietary rights, if a final judicial determination is made by
a court having jurisdiction that the time or territory or any other restriction
contained in Section 9(a) hereof is an unreasonable or otherwise unenforceable
restriction against the Executive, the provisions of Section 9(a) hereof shall
not be rendered void but shall be deemed amended to apply as to such maximum
time and territory and to such other extent as such court may judicially
determine or indicate to be reasonable.
(c) The provisions of this Section 9 shall be applicable commencing on
the date of this Agreement and ending on the date that is twelve (12) months
following the Executive's termination of employment unless the Executive's
employment is terminated without Cause as provided in Section 3(b) or
17
the Executive resigns for Good Reason as provided in Section 5, in which case
the provisions of this Section 8 shall be applicable on the date of this
Agreement and ending on the date of termination of the Executive's employment.
In the event the Executive's employment terminates as a result of his notice to
SBI of his non-agreement to renewal of this Agreement, the provisions of this
Section 9 shall be fully applicable to him. In the event termination of the
Executive's employment is as a result of SBI's notice to him of its
non-agreement to renewal of this Agreement, the provisions of this Section 9
shall not apply to the Executive beyond the termination date; provided, however,
that for a period of twelve (12) months following the termination date, the
Executive shall be subject to the prohibitions set forth in subsections (a)(iii)
and (iv) of this Section 9.
10. Confidential Information.
(a) The Executive agrees that all customer lists, files and records
now or hereafter used by SBI or any of its subsidiaries, including the Bank, are
the property of SBI and are its trade secrets. Accordingly, the Executive
acknowledges that SBI's trade secrets as they may exist from time to time and
other confidential information concerning the SBI's business, products,
technical information, sales activities, procedures, promotion, pricing
techniques, business plans, customer and dealer lists and credit and financial
data concerning customers are valuable, special and unique assets of SBI, access
to and knowledge of which are essential to the performance of the Executive's
duties under this Agreement. In light of the highly competitive nature of the
industry in which the business of the SBI and its subsidiaries, including the
Bank, is conducted, the Executive further agrees that all knowledge and
information described in the preceding sentence not in the public domain and
heretofore or in the future obtained by the Executive as a result of employment
by SBI shall be considered confidential information. In
18
recognition of this fact, the Executive agrees that the Executive will not,
during or after the Employment Period, disclose any of such confidential
information to any person or other entity for any reason or purpose whatsoever,
except as necessary in the performance of the Executive's duties as an employee
of or consultant to the SBI or any of its subsidiaries, including the Bank, nor
shall the Executive make use of any such confidential information for the
Executive's own purposes or for the benefit of any person or other entity
(except SBI and its subsidiaries, including the Bank) under any circumstances
during or after the Employment Period.
(b) Notwithstanding the provisions of Section 10(a) of this Agreement,
the Company acknowledges and agrees that SBI's trade secrets and confidential
information shall not be deemed to include (1) information which was in the
Executive's possession prior to the Executive's employment by SBI and is not
known by the Executive to be subject to another confidentiality agreement with
or other obligation of secrecy to SBI or any of its subsidiaries, including the
Bank, (2) information which becomes generally available to and known by the
public other than as a result of disclosure by the Executive or (3) information
which becomes generally available to the Executive on a non-confidential basis
from a source other than SBI or any of its subsidiaries, including the Bank,
provided such source is not known by the Executive to be bound by a
confidentiality agreement with or other obligation of secrecy to SBI or any of
its subsidiaries, including the Bank. In addition, nothing contained herein
shall be deemed to preclude the Executive from responding to requests for
information or inquiries from the OTS or the FDIC.
11. Arbitration. SBI and the Executive recognize that in the event a
dispute should arise between them concerning the interpretation or
implementation of this Agreement or concerning the termination of their
employment relationship
19
or otherwise, lengthy and expensive litigation will not afford a practical
resolution of the issues within a reasonable period of time. Consequently, each
party agrees that all claims, disputes, disagreements and questions of
interpretation concerning this Agreement, or arising under any statute,
ordinance or regulation, or arising under common law are to be submitted for
resolution to the American Arbitration Association (the "Association") in
Philadelphia, Pennsylvania, in accordance with the employment dispute rules and
procedures of the Association. SBI, or the Executive, may initiate an
arbitration proceeding at any time by giving notice to the others in accordance
with the rules of the Association. A single arbitrator shall be selected,
pursuant to the Association's procedures, to conduct the proceeding. The
arbitrator shall not be bound by the rules of evidence and procedure of the
courts of the Commonwealth of Pennsylvania but shall be bound by the substantive
law applicable to the claims asserted. The decision of the arbitrator, absent
fraud, duress, incompetence or gross and obvious error of fact or law, shall be
final and binding upon the parties and shall be enforceable in courts of proper
jurisdiction. Following written notice of a request for arbitration, SBI, and
the Executive, shall be entitled to an injunction restraining all further
proceedings in any pending or subsequently filed litigation concerning this
Agreement, except as otherwise provided herein.
12. Notices. Any notice required or permitted to be given under this
Agreement shall be deemed properly given if in writing and if mailed by
registered or certified mail, postage prepaid with return receipt requested, to
the residence of the Executive, in the case of notices to the Executive, and to
the principal office of SBI, in the case of notices to SBI.
13. Waiver. No provision of this Agreement may be modified, waived, or
discharged unless such waiver, modification, or discharge is agreed to in
writing
20
and signed by the Executive and the Chief Executive Officer of SBI or such other
executive specifically designated by the Board of Directors of SBI. No waiver by
any party hereto at any time of any breach by any other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
14. Assignment. This Agreement shall not be assignable by either party
hereto, except by SBI to any successor in interest to the business of SBI.
15. Entire Agreement. This Agreement contains the entire agreement of the
parties relating to the subject matter of this Agreement and supersedes any
prior agreement of the parties.
16. Successors, Binding Agreement.
(a) SBI will require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all of
the business and/or assets of SBI to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that SBI would be required
to perform it if no such succession had taken place. Failure by SBI to obtain
such assumption and agreement prior to the effectiveness of any such succession
shall constitute a breach of this Agreement and the provisions of Section 6
hereof shall apply. As used in this Agreement, "SBI" shall mean SBI as
hereinbefore defined and any successor to the respective business and/or assets
of SBI as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
21
(b) This Agreement shall inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors, administrators,
heirs, distributees, devisees, and legatees. If the Executive should die while
any amount is payable to the Executive under this Agreement if the Executive had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Executive's devisee,
legatee, or other designee, or, if there is no such designee, to the Executive's
estate.
17. Termination.
(a) Unless the Executive's employment is terminated pursuant to the
provisions of Section 3 or Section 5 hereof, the term of this Agreement shall:
(i) Initially be a term commencing upon the date the conditions to
approval of this Agreement fixed by the OTS and FDIC have been met, and
ending on April 30, 2004; and
(ii) Thereafter for such term as the parties mutually agree.
(b) Any termination of the Executive's employment under this Agreement
or of this Agreement shall not affect the provisions of Sections 6, 7, 8, 9,10
or 11 hereof which shall survive any such termination and remain in full force
and effect in accordance with their respective terms.
(c) To the extent the Executive receives from the Bank any of the
compensation set forth in Section 4 hereof prior to this Agreement becoming
effective pursuant to this Section 17, the Executive shall not be entitled to
receive such compensation from SBI hereunder.
22
18. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
19. Applicable Law. This Agreement shall be governed by and construed in
accordance with the domestic laws (but not the law of conflict of laws) of the
Commonwealth of Pennsylvania.
20. Headings. The headings of the Sections of this Agreement are for
convenience only and shall not control or affect the meaning or construction or
limit the scope or intent of any of the provisions of this Agreement.
21. Effective Date; Termination of Prior Agreement. This Agreement shall
become effective on the date set forth in Section 3. Upon the execution and
delivery of this Agreement by the parties hereto, any prior agreement, whether
oral or written, relating to the subject matter hereof, shall be automatically
terminated and be of no further force or effect.
22. Representation. SBI represents to the Executive that this Agreement has
been fully authorized by all necessary corporate action.
23
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
SOVEREIGN BANCORP, INC.
By /s/ Xxx X. Xxxxx (SEAL)
----------------------------------
President
Attest: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------
Secretary
("SBI")
/s/ Xxxxx X. Xxxxx (SEAL)
-------------------------------------
Xxxxx X. Xxxxx
("Executive")
