1
Exhibit 10.10
EMPLOYMENT AGREEMENT
This Agreement made as of this February 24, 2000, by and among X.X. Xxxxx (the
"Employee") and Xxxxxxxx Savings Bank (the "Bank") shall be effective as of
February 24, 2000 (the "Effective Date").
WHEREAS, the Board of Directors of the Bank recognizes the Employee's potential
contribution to the growth and success of the Bank and desires to assure the
Bank of the Employee's employment in an executive capacity and to compensate him
therefor; and
WHEREAS, the Employee is desirous of being employed by the Bank and of
committing himself to serve the Bank on the terms herein provided;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, the parties hereto
agree as follows:
1. POSITION, RESPONSIBILITIES AND TERM OF EMPLOYMENT
1.01 POSITION. The Employee shall serve as Executive Vice President of the
Bank and in such additional management position(s) as the Chief
Executive Officer of the Bank shall designate. In this capacity the
Employee shall, subject to the By-Laws of the Bank and the direction of
the Board, serve the Bank by performing such duties and carrying out
such responsibilities as are normally related, in accordance with the
standards of the banking industry relating to the Employee's position
and to the Employee's level of experience and training.
1.02 BEST EFFORTS COVENANT. The Employee will, to the best of his ability,
devote his full professional and business time and best efforts to the
performance of his duties for, and in the business and affairs of the
Bank and any subsidiaries and affiliates of the Bank.
1.03 EXCLUSIVITY COVENANT. While employed by the Bank, except with the
written consent of the Board, the Employee will not undertake or engage
in any other employment occupation or business enterprise other than a
business enterprise in which the Employee does not actively
participate. Further, while employed by the Bank, the Employee agrees
not to acquire, assume or participate in, directly or indirectly, any
position, investment or interest adverse or antagonistic to the Bank,
its business or prospects, financial or otherwise, or take any action
towards any of the foregoing, except for any investment representing
less than 1% of the voting shares of any publicly-held corporation.
2
Page 2 of 9
1.04 INITIAL TERM AND EXTENSION. Subject to the provision of this section
and Section 3.03, the term of this Employment Agreement shall be for
two (2) years commencing with the "Effective Date" hereof (02/24/2000)
provided, however, that the term shall be extended automatically for
periods of one (1) year commencing on the second anniversary of the
Effective Date and on each subsequent anniversary of the Effective Date
thereafter, unless either party gives written notice to the other,
prior to the date of such anniversary, of such party's election not to
extend the term of this Agreement. (This means that after 02/24/2000
the Employment Agreement will have a 2-year life at each renewal.)
2.0 COMPENSATION.
2.01 ANNUAL BASE SALARY.
(a) The Bank shall pay to the Employee for the services to be
rendered hereunder a "Base Salary", annually, equal to the
salary the Employee was receiving effective 07/01/99.
(b) Annually, there shall be a review for merit by the President
and the Employee's Base Salary for such year may be set at an
amount greater than the salary the Employee was receiving
effective 07/01/99 if the President deems such an increase to
be appropriate to reflect the value of the services of the
Employee.
(c) If the President increases the Employee's Base Salary at any
time during the term of this Agreement, the Employee's
increased annual Base Salary shall become the floor below
which the Employee's annual Base Salary shall not fall at any
future time during the term of this Agreement.
(d) If the Agreement is extended for an additional year(s)
following the second anniversary of the Effective Date
pursuant to Section 1.04, the Employee's Base Salary for such
year(s) shall be at least the salary the Employee was
receiving in accordance with the provisions of subpart (c) of
section 2.01.
(e) The Employee's Base Salary shall be payable in periodic
installments in accordance with the Bank's usual practice for
its employees.
2.02 INCENTIVE COMPENSATION. In addition to a Base Salary, the Employee
shall be entitled to receive payments under any formal or informal
bonus program(s), if any, in such amounts as is determined by the
President to be appropriate for the Employee.
3
Page 3 of 9
2.03 PARTICIPATION IN BENEFIT PLANS.
(a) The Employee shall be entitled to participate in, and receive
benefits under, all employee benefit plans and arrangements
maintained by the Bank in effect on the Effective Date for as
long as such plans and arrangements may remain in effect
(including, but not limited to, participation in any other
pension or 401K plan adopted by the Bank and all group life,
health, dental, disability and any or all other insurance and
benefit plans), or any substitute or additional plans,
policies or arrangements made available in the future to the
similarly situated employees of the Bank, subject to and on a
basis consistent with the terms, conditions and overall
administration of such plans, policies and arrangements. At
the date the Employee begins employment with the Bank and to
the extent permitted by the documents governing the plans, he
shall participate in (at the cost and expense of the Bank) the
group life, health plans and other health and welfare plans
maintained by the Bank, notwithstanding any waiting period
otherwise provided for in such plans.
(b) The Bank shall pay all reasonable costs (less any amounts paid
by medical insurance plans) associated with an annual physical
examination for the Employee.
(c) Nothing paid to the Employee under any plan, policy or
arrangement presently in effect, or made available in the
future, shall be deemed in lieu of other Compensation to the
Employee hereunder as described in this Section 2.
2.04 VACATION DAYS. The Employee shall be entitled to the number of paid
vacation days and paid holidays in each year as is determined by the
Bank from time-to-time for employees of similar title and/or length of
service, provided that the aggregate annual number of such vacation
days and paid holidays shall at no time fall below the number of days
per year to which he was entitled on the Effective Date.
2.05 EXPENSES. During the term of his employment hereunder, the Employee
shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by him in accordance with the policies and procedures
established by the Bank for the Employee, in performing services
hereunder.
3.0 TERMINATION.
3.01 TERMINATION BY THE BANK FOR OTHER THAN CAUSE.
(a) If during the term of this Agreement the Bank terminates the
employment of the Employee and such termination is not for
"cause" (as defined in Section 3.02), then:
4
Page 4 of 9
(1) The Bank shall pay to the Employee an amount equal to
the Employee's monthly Base Salary (as defined in
Section 2.01 and at the monthly salary rate in effect
on the date of such termination) multiplied by the
greater of (i) 12 months; or (ii) the number of
months remaining in the term of this Agreement. This
amount shall be paid to the Employee in one (1) lump
sum as soon as practicable, but in no event later
than 60 days after the date of such termination.
(2) The Bank shall also pay the Employee, throughout the
remainder of this Agreement (as defined in Section
1.04) following the date that the Employee's
employment terminated, such Compensation as is
provided to the Employee pursuant to Section 2.02 (to
the extent that incentive compensation relates to a
period during which the Employee was employed by the
Bank), Section 2.03 (except where continuation of
benefits cannot be provided as contemplated by this
Section 3.01 by reason of a prohibition in the terms
of the benefit plan) and Section 2.05. For the
purposes of determining the amount of benefits to
which the Employee shall continue to be entitled to
pursuant to Section 2.03, the Employee shall be
deemed, throughout the period of his entitlement
pursuant to this Section 3.01, to have continued to
have performed services for the Bank at a rate of
total compensation equal to the rate in effect on the
date of his termination of employment.
(b) If the Bank fails to re-appoint (or re-elect) the Employee to
the position or positions listed in Section 1.01, fails to
comply with the provisions of Section 2 or engages in any
other material breach of the terms of this Agreement, a
termination of the Employee's employment shall be considered
to be a termination of the Employee's employment by the Bank
for reasons other than "cause" (as defined in Section 3.02
below) pursuant to this Section 3.01.
3.02 TERMINATION BY THE BANK FOR CAUSE.
(a) The Bank shall have the right to terminate the employment of
the Employee for cause only after (i) giving written notice to
the Employee setting forth in reasonable detail the nature of
such cause, and (ii) giving the Employee a reasonable and fair
opportunity to respond to such written notice. Effective as of
the date that the employment of the Employee terminates by
reason of cause, this Agreement shall terminate and no further
payments of the Compensation described in Section 2 (except
for such remaining payments of Base Salary under Section 2.01
relating to periods during which the Employee was employed by
the Bank, benefits under Section 2.03 which are required by
applicable law to be continued and reimbursement of proper
expenses under Section 2.05) shall be made.
5
Page 5 of 9
(b) For the purposes of this Section "cause" shall mean willful or
gross neglect of duties for which the Employee is employed
(other than on account of a medically determinable disability
which renders the Employee incapable of performing such
services); committing fraud, misappropriation or embezzlement
in the performance of duties as an employee of the Bank;
conviction of a felony involving a crime of moral turpitude;
materially failing to follow the proper instructions of the
Board; or willfully engaging in conduct materially injurious
to the Bank and in violation of the covenants contained in
Sections 1.03 or 5.04, or any conduct or circumstance
warranting removal of the executive by state or federal
regulatory authorities under applicable provisions of
Massachusetts or federal law.
3.03 TERMINATION FOLLOWING CHANGE OF CONTROL. If there is a "change of
control" (as defined in subsection (a) below) while this Agreement is
in effect, the provisions of this Section 3.03 shall apply and shall
continue to apply for a 2-year period following the "change of control"
(as defined in subsection (a) below); the provisions of this Section
3.03 shall continue to apply regardless of whether the Agreement is
terminated. If during the 2-year period following a change of control
the Employee's employment is terminated by the Employee following the
occurrence of any of the events listed in subsection (b) below, the
Employee shall receive such compensation as is provided to the Employee
pursuant to subsection (c) below. Similarly, if the Employee's
employment is terminated without cause (as defined in Section 3.02
above) by the Bank during the 2-year period following the change of
control, the Employee shall receive such compensation as is provided to
the Employee pursuant to subsection (c) below.
(a) For the purposes of this Section 3.03, "change of control"
shall mean the occurrence of one or more of the following
three events:
(1) After the Effective Date, if any "person" (as such
term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended), other
than the Bank, becomes a beneficial owner (as such
term is defined in Rule 13d-3 as promulgated under
the Securities Exchange Act of 1934, as amended)
directly or indirectly of securities representing 15%
or more of the total number of votes that may be cast
for the election of Directors of the Bank and 2/3 of
the appropriate Board have not consented to such
event prior to its occurrence or within 60 days
thereafter, provided that if the consent occurs after
the event, it shall only be valid for the purposes of
this paragraph (1) if a majority of the consenting
Board is comprised of Directors of the Bank, as
appropriate, who were Directors of the Bank, as
appropriate, immediately prior to the event;
(2) Within two (2) years after a merger, consolidation or
sale of assets (other than in the ordinary course of
business of the Bank, as appropriate), involving the
Bank, or a contested election of a Director of the
Bank, as appropriate, or any combination of the
foregoing, the individuals who were Directors of the
Bank immediately prior thereto shall cease to
constitute a majority of the respective Boards;
6
Page 6 of 9
(3) Within two (2) years after a tender offer or exchange
offer for voting securities of the Bank (other than
by the Bank, as appropriate), the individuals who
were Directors of the Bank, as appropriate,
immediately prior thereto shall cease to constitute a
majority of the Board.
(b) The "events" referred to in this Section 3.03 shall be as
follows:
(1) A reduction of the Employee's annual Compensation (as
described in Section 2 above) other than a reduction
which is based on the financial performance of the
Bank and is similar to the reduction made to the
compensation provided to each other Employee of the
Bank, provided that such reduction does not exceed
25%;
(2) In the judgment of the Employee (such judgment being
exercised in good faith), a significant change in the
Employee's responsibilities and/or duties which
constitutes, when compared to the Employee's
responsibilities and/or duties before the "change of
control" (as defined in subsection (a) above), a
demotion;
(3) A loss of title or office;
(4) An increase in Compensation for the Employee
following a "change of control" that, when compared
to the increases in Compensation received in the
prior three (3) years, is a lower dollar amount or
percentage of increase, except that such reduction in
increases in Compensation shall not be considered an
"event" for purposes of this subsection (b) if such
reduction in increases is based on the financial
performance of the Bank and is similar to the
reduction in increases in compensation provided to
other Employees of the Bank; or
(5) A requirement that the Employee relocate to a
location that is more than 25 miles from the main
office of the Bank in effect immediately prior to the
"change in control".
(c) If the Employee becomes entitled to receive compensation
pursuant to this Section 3.03, he shall receive a lump-sum
payment from the Bank within 60 days of the termination of his
employment. Such lump-sum payment shall equal three (3) times
of the Employee's "base amount" (as defined in Section
280G(b)(3) of the Internal Revenue Code of 1986, as amended
[the "Code"]), provided that the Board shall have full power,
without the prior consent of the Employee, to reduce the
amount of the lump-sum payment payable pursuant to this
Section, but only to the extent necessary to ensure that such
lump-sum payment is not subject to tax pursuant to Section
4999 of the Code.
7
Page 7 of 9
3.04 OTHER. If the Employee's termination of employment is covered by both
Section 3.01 and Section 3.03 the Employee shall receive the greater
of:
(a) The compensation described in Section 3.01 net of the amount
of tax imposed on such compensation under Section 4999 of the
Code; or
(b) The compensation described in section 3.03 above.
3.05 TERMINATION BY DEATH OR DISABILITY. If the Employee dies or becomes
disabled, this Agreement shall terminate and the Employee shall then be
entitled to such compensation described in Section 2 that relates to
the period that he performed services for the Bank plus all applicable
benefits to which the Employee is entitled under employee benefit plans
maintained by the Bank, incentive compensation or bonus plans, other
benefit plans or programs maintained by the Bank and all such other
benefits from employment policies and practices of the Bank.
For purposes of this section, the Employee shall be regarded as
"disabled" if he or she is (in the good faith judgement of the Board of
Directors of the Bank) substantially unable, as a result of physical or
mental capacity or any combination thereof, to perform his or her
duties hereunder for a (i) a period of three consecutive months; or
(ii) for a total of 90 days in any one-year period.
4. ASSIGNMENT. This Agreement and the rights and obligations of the
parties hereto shall bind and inure to the benefit of each of the
parties hereto and shall also bind and inure to the benefit of any
successor or successors of the Bank by reorganization, merger or
consolidation and any assignee of all or substantially all of business
and properties of the Bank, but, except as to any such successor or
assignee of the Bank, neither this Agreement nor any rights or benefits
hereunder may be assigned by the Bank or the Employee.
5. MISCELLANEOUS.
5.01 GOVERNING LAW. This Agreement shall be construed in accordance with and
governed for all purposes by the laws of the Commonwealth of
Massachusetts.
5.02 INTERPRETATION. In case any one or more of the provisions contained in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or provision
unenforceability shall not affect any other provisions of this
Agreement, but this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
5.03 NOTICES. Any notice required or permitted to be given hereunder shall
be effective when received and shall be sufficient if in writing and if
personally delivered or sent by pre-paid cable, telex or registered
mail, return receipt requested, to the party to receive such notice.
8
Page 8 of 9
5.04 CONFIDENTIAL INFORMATION. The Employee will not disclose to any other
person or entity (except as required by applicable law or in connection
with the performance of his responsibilities hereunder), or use for his
own benefit, any confidential information of the Bank obtained by him
incident to his employment with the Bank. The term "confidential
information" includes, without limitation, financial information,
business plans, prospects and opportunities which have been discussed
or considered by the Board or management of the Bank, but does not
include any information which has been public other than on account of
the Employee's failure to comply with the provisions of this Section.
5.05 AMENDMENT AND WAIVER. This Agreement may not be amended, supplemented
or waived except by a writing signed by the party against which such
amendment or waiver is to be enforced. The waiver by any party of a
breach of any provision of this Agreement shall not operate to, or be
construed as a waiver of, any other breach of that provision nor as a
waiver of any breach of another provision.
5.06 BINDING EFFECT. Subject to the provisions of Section 4 hereof, this
Agreement shall be binding on the successors and assigns of the parties
hereto.
5.07 SURVIVAL OF RIGHTS AND OBLIGATIONS. All rights and obligations of the
Employee or the Bank arising during the term of this Agreement shall
continue to have full force and effect after the termination of this
Agreement.
5.08 COUNTERPARTS. This Agreement may be executed in two (2) counterparts,
each of which is an original, but which shall together constitute one
and the same instrument.
5.09. LEGAL EXPENSES. In the event that after a "change of control" the
Employee's employment is terminated for any reason, including "cause",
the Bank shall pay such amounts as shall become due all of the legal
expenses incurred by the Employee to contest such termination, except
that the Employee shall reimburse the Bank for all such expenses paid,
and the Bank shall not be further liable for any further expenses,
should it be finally determined by a court of competent jurisdiction
that the termination was for "cause" or, if the reason for termination
was "cause", the Employee fails to pursue his remedies to such a final
determination.
6. ARBITRATION.
------------
6.01 ARBITRATION OF DISPUTES. Any controversy or claim arising out of or
relating to this Agreement or the breach thereof shall be settled by
arbitration in accordance with the laws of the Commonwealth of
Massachusetts by three (3) arbitrators, one of whom shall be appointed
by the Bank, one by the Employee and the third by the first two
arbitrators. If the first two arbitrators cannot agree on the
appointment of a third arbitrator, then the third arbitrator shall by
appointed by the American Arbitration Association in the City of
Boston. Such arbitration shall be conducted in the City of Boston in
accordance with the rules of the American Arbitration Association,
except with respect to the selection of arbitrators which shall be as
provided in this Section 6.01. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
9
Page 9 of 9
In any arbitration proceeding brought pursuant to this Section 6.01, or
in any court proceeding to enforce or review an award of the
arbitrators, each of the parties shall pay his or its own legal costs,
expenses and attorney's fees, provided, that if the issue or one of the
issues if there be more than one, between the parties is whether the
termination or dismissal of the Employee was for cause, and the
ultimate conclusion, whether made by the arbitrators, or by a court (in
a proceeding to enforce or review the arbitration award) is that the
termination or dismissal was NOT for cause, then the Bank shall pay (or
the Employee shall be entitled to recover from the Bank, as the case
may be) the Employee's reasonable legal costs, expenses and attorney's
fees incurred in the litigation,. The provisions of this Section 6.01
shall apply regardless of whether the termination or dismissal of the
Employee for cause was made after or as a result of a "change of
control".
EXECUTION
Upon execution below by all parties, this Agreement will enter into full force
and effect on the Effective Date as an instrument under seal.
XXXXXXXX SAVINGS BANK
By: /s/ Xxxx X. Xxxxxx Witness: /s/ illegible
---------------------------- -----------------------------
Xxxx X. Xxxxxx
President
EMPLOYEE
/s/ X.X. Xxxxx Witness: /s/ Xxxxx X. Xxxxx
---------------------------- -----------------------------
X.X. Xxxxx
Executive Vice President
