EXHIBIT 10.3
EXECUTIVE EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is between Bank Rhode
Island, a financial institution organized under the laws of the State of
Rhode Island with its executive offices located at Xxx Xxxxx Xxxx Xxxxx,
Xxxxxxxxxx, Xxxxx Xxxxxx 00000 (the "Bank"), Bancorp Rhode Island, Inc., a
corporation organized under the laws of the State of Rhode Island (the
"Company"), and Xxxxxx X. XxXxxxx of 0 Xxxxx Xxxx, Xxxxxxxxxx, Xxxxx Xxxxxx
00000 (the "Executive").
IT IS MUTUALLY AGREED by the parties as follows:
1. Employment; Duties
1.1 Responsibilities and Authority. (a) The Bank hereby
employs Executive to serve as Executive Vice President and Chief
Lending Officer of the Bank, and Executive hereby accepts such
employment. Executive shall have the duties, responsibilities,
authorities and powers normally incident to such office. At all
times, however, Executive's activities and authority with respect to
such offices will be subject to supervision, control and direction by
the Board of Directors of the Bank (the "Board"), by the Executive
Committee of the Board, and by the President and Chief Executive
Officer of the Bank (the "Chief Executive Officer") and Executive
agrees to carry out such duties and responsibilities as any of them
may from time to time reasonably assign to him. Executive shall
report from time to time or routinely, upon request, to the Chief
Executive Officer or her designee as to the current status of any of
Executive's assigned duties and responsibilities.
(b) The Company hereby employs Executive to serve as
Vice President of the Company and such other offices and
positions as the Company may determine, and Executive hereby
accepts such employment. Executive shall have the duties,
responsibilities, authorities and powers normally incident to
such offices. At all times, however, Executive's activities
and authority with respect to such offices will be subject to
supervision, control and direction by the Board of Directors of
the Company (the "Company Board") or by the Executive Committee
of the Company Board, and Executive hereby agrees to carry out
such duties and responsibilities as either of them may from
time to time reasonably assign to Executive. Executive shall
report from time to time or routinely, upon request, to the
Company Board as to the current status of any of Executive's
assigned duties and responsibilities.
1.2 Compensation. The Bank shall pay Executive a base salary
at the rate of (i) One Hundred Thirty-Four Thousand Three Hundred
Dollars ($134,300) per year, commencing on the date hereof and
continuing through December 31, 2000, and (ii) One Hundred Forty-Two
Thousand Three Hundred Dollars ($142,300) per year, commencing on
January 1, 2001 and thereafter, payable on a bi-weekly basis, or at
such higher rate as shall be determined from time to time by the
Board. In addition, Executive shall be entitled to receive payments
under any incentive compensation or bonus program (as in effect from
time to time), which the Bank may establish for its employees and/or
senior executives, in such amounts as are provided by such programs.
1.3 Employee Benefits. As a full-time employee of the Bank,
Executive shall be eligible to participate in any and all employee
benefit plans generally available to full-time employees of the Bank,
including non-contributory plans and, at Executive's option,
contributory plans.
1.4 Certain Specified Employee Benefits.
(a) Grant of Stock Options. Executive shall receive
stock options to purchase shares of the Company's common stock
in such number, at an exercise price and on such other terms as
may be approved by the Compensation Committee of the Company
Board, in its sole discretion. Any such options will become
exercisable on a schedule no less favorable than the following:
20% on the grant date and an additional 20% on each of the
first through fourth anniversaries of the grant date, with such
vesting to accelerate on a Change in Control (as defined in
Section 3.2).
(b) Car Allowance. Executive shall be entitled to
receive a monthly car allowance in the amount of $600 per
month.
1.5 Vacation. Executive shall be entitled to four weeks of
vacation during each year of employment, such vacation to be taken in
accordance with the Bank's customary vacation policies and at such
times and intervals as are mutually agreed upon by Executive and the
Bank. Executive shall be entitled to holiday time and sick leave in
accordance with the then existing policies of the Bank, as in effect
from time to time.
1.6 Reimbursement of Expenses. (a) Executive shall be
reimbursed by the Bank for reasonable business expenses incurred by
him incident to his employment upon presentation of appropriate
vouchers, receipts, and other supporting documents required by the
Bank.
(b) Executive shall be reimbursed by the Company for
reasonable business expenses incurred by him incident to his
employment by the Company upon presentation of appropriate
vouchers, receipts, and other supporting documents required by
the Company.
1.7 Duty to Perform Services. So long as Executive is
employed by the Company and the Bank, Executive agrees to devote his
full business and productive time, skill, and energy diligently,
loyally, effectively, and to the best of his ability to the rendering
of service to the Company and the Bank, and will exert his best
efforts in the rendering of such services. This provision will not
prohibit Executive from:
(a) making passive investments or serving as a
fiduciary with respect to direct family investments;
(b) serving on the board of directors of any company,
provided that Executive shall not render any material services
with respect to the operations or affairs of any such company
and provided further that serving on such board of directors
does not otherwise violate the terms of this Agreement,
including, but not limited to, the provisions of Section 4.2
herein; or
(c) engaging in religious, charitable or other
community or non-profit activities which do not impair
Executive's ability to fulfill his duties and responsibilities
to the Company and Bank.
Executive agrees that in the rendering of all services to the Company
and the Bank and in all aspects of his employment, in connection with
his duties as Executive Vice President and Chief Lending Officer, he
will comply with all directives, policies, standards, and regulations
from time to time established by the Company or the Bank or by
applicable law.
1.8 Death or Disability.
(a) Death. In the event of Executive's death during
the term of his employment under this Agreement, the Bank shall
immediately pay to Executive's designated beneficiary any
salary accrued but unpaid as of the date of death. Upon
payment of the aforementioned sums, the Bank's obligations to
make further salary payments shall terminate. This provision
shall not be construed to negate any rights Executive may have
to death benefits under any employee benefit or welfare plan of
the Company or Bank in which he may from time to time be a
participant or under any other written agreement with the
Company or Bank which specifically provides for such benefits.
(b) Disability. In the event of Executive's
"disability" (as defined below) during the term of his
employment under this Agreement, the Bank shall continue to pay
Executive his base salary (reduced by any benefits Executive is
entitled to receive under any state or federal disability
insurance program, such as Rhode Island temporary disability
insurance or federal social security) for a period of six
months from the date of "disability". For purposes of this
Agreement, "disability" shall mean a good faith determination
by the Board that Executive is unable for any reason, either
physical or mental, to perform the duties required of him
hereunder.
1.9 Term of Employment. The term of Executive's employment
under this Agreement shall commence on the date hereof and shall
continue, unless sooner terminated pursuant to the provisions of this
Agreement, for a period of two years (the "Term"), which Term shall
automatically renew on each successive one year anniversary hereafter
commencing with the first anniversary hereof unless any party shall
have given written notice to the other parties of such party's
election not to extend the Term within ninety (90) calendar days
prior to any anniversary date.
1.10 Termination. This Agreement and the rights of the
parties hereunder will terminate (subject to the provisions of
Section 1.11 below) upon the occurrence of one of the following:
(a) Upon the Executive's death or disability as
provided in Section 1.8 above;
(b) For Cause as provided in Section 3.5, immediately
upon the giving of notice by the Company or the Bank or at such
later time as such notice may specify or as may be required by
Section 3.5;
(c) At the election of the Executive for Good Reason
(as hereinafter defined) as provided in Section 2.2; or
(d) Upon expiration of the Term, following notice by
any party not to renew the Term as provided in Section 1.9.
1.11 Termination and Survival. The provisions of Section 1.8,
Sections 2 and 3 and Sections 4.1, 4.2, 4.4, 4.6, 4.8, 4.9 and 4.10
hereof shall remain in full force and effect and shall continue to be
enforceable in accordance with their terms beyond termination of
employment and beyond expiration of this Agreement, except as
otherwise agreed in writing by Executive and the Company and the
Bank.
2. Severance.
2.1 Severance Benefit. In the event of a termination of
Executive's employment by the Company or the Bank without Cause (as
such term is defined in Section 3.5) at any time, or in the event of
termination of Executive's employment by him for Good Reason (as
defined in Section 2.2), the Bank will (a) continue to pay Executive
his base salary (the "Severance Benefit") then in effect for an
eighteen (18) month period commencing on the date of termination (the
"Severance Period"), and (b) provide Executive with the medical and
life insurance coverage generally available to full-time employees
during the Severance Period or as required by law, whichever is
longer. The Bank shall also provide Executive with outplacement
assistance at no charge. Notwithstanding anything herein to the
contrary, the Bank shall have no obligation to pay the Severance
Benefit to Executive in the event his employment is terminated with
Cause by the Company or the Bank or voluntarily by him without Good
Reason. Any Severance Benefit paid under this Section 2.1 shall be
credited against any amounts due Executive under Section 3 as a
result of a Change in Control. In the event that during the first
twelve (12) months of the Severance Period Executive accepts a
position as a senior lending officer with a commercial lending
institution located in the greater Providence area, effective as of
the effective date of such employment, the Executive shall not be
entitled to any further Severance Benefit.
2.2 "Good Reason" Defined. For purposes of this Agreement
"Good Reason" shall mean the Company or the Bank giving written
notice of its election not to renew this Agreement on any anniversary
date as permitted under Section 1.9 and its failure to offer and
enter into a new employment agreement with Executive on terms which
are substantially similar to those of his employment existing
immediately prior to such notice of non-renewal (other than a
reduction of fringe benefits required by law or applicable to all
employees generally) provided, however, that Good Reason shall not be
deemed to have occurred unless prior to Executive's termination of
employment for Good Reason, he shall give not less than 30 days
written notice to the Company and the Bank of his intent to terminate
for Good Reason stating the basis of the Good Reason sufficient to
permit the Company and the Bank to alleviate the basis of such Good
Reason prior to termination, and the Company and the Bank have not
done so within such 30 day period, and further provided, that
Executive's continuing to work following notice of non-renewal by the
Company or the Bank and in the absence of entering into a new
employment agreement shall be without prejudice to his right to
claim termination for Good Reason, absent written agreement between
Executive and the Bank or the Company to the contrary.
3. Change in Control.
3.1 Purpose. In order to allow Executive to consider the
prospect of a Change in Control (as defined in Section 3.2) in an
objective manner and in consideration of the services rendered and to
be rendered by him to the Company and the Bank, the Bank is willing
to provide, subject to the terms of this Agreement, certain severance
benefits to protect Executive from the consequences of a Terminating
Event (as defined in Section 3.4) occurring subsequent to a Change in
Control.
3.2 Change in Control. A "Change in Control" will be deemed
to have occurred if: (i) a Takeover Transaction is effectuated; or
(ii) the Company commences substantive negotiations with a third
party with respect to a Takeover Transaction if within twelve (12)
months of the commencement of such negotiations, enters into a
definitive agreement with respect to a Takeover Transaction with any
party with which negotiations were originally commenced; or (iii) any
election of directors of the Company occurs (whether by the directors
then in office or by the shareholders at a meeting or by written
consent) where a majority of the directors in office following such
election are individuals who were not nominated by a vote of two-
thirds of the members of the board of directors immediately preceding
such election; or (iv) the Company or the Bank effectuates a complete
liquidation.
3.3 Takeover Transaction. A "Takeover Transaction" shall
mean:
(a) The acquisition of voting securities of the Company
by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")), other than by the
Company or its subsidiaries or any employee benefit plan (or
related trust) of the Company or its subsidiaries, which
theretofore did not beneficially own (within the meaning of
Rule 13d-3 promulgated under the Exchange Act), securities
representing 30% or more of the voting power of all outstanding
shares of voting securities of the Company, if such acquisition
results in such individual, entity or group owning securities
representing more than 30% of the voting power of all
outstanding voting securities of the Company; provided, that
any acquisition by a corporation with respect to which,
following such acquisition, more than 50% of the then
outstanding shares of voting securities of such corporation, is
then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners of the voting securities of the Company
outstanding immediately prior to such acquisition in
substantially the same proportion as their ownership,
immediately prior to such acquisition, of the outstanding
voting securities of the Company, shall not constitute a Change
in Control; or
(b) The issuance of additional shares of common stock
of the Company or the Bank, as applicable, in a single
transaction or a series of related transactions if the
individuals and entities who were the beneficial owners of the
outstanding voting securities of the Company or the Bank, as
applicable, immediately prior to such issuance do not,
following such issuance, beneficially own, directly or
indirectly, securities representing more than 50% of the voting
power of all then outstanding voting securities of the Company
or the Bank, as applicable; or
(c) Consummation by the Company or the Bank of (i) a
reorganization, merger or consolidation, in each case, with
respect to which all or substantially all of the individuals
and entities who were the beneficial owners of the voting
securities of the Company immediately prior to such
reorganization, merger or consolidation do not, following such
reorganization, merger or consolidation, beneficially own,
directly or indirectly, securities representing more than 50%
of the voting power of the outstanding voting securities of the
corporation resulting from such a reorganization, merger or
consolidation, or (ii) the sale, exchange or other disposition
(in one transaction or a series of related transactions) of all
or substantially all of the assets of the Company (on a
consolidated basis) or the Bank to a party which is not
controlled by or under common control with such entity, or
(iii) the sale by the Company on one transaction or in a series
of related transactions of voting securities of the Bank such
that following such transaction or transactions the Company no
longer beneficially owns, directly or indirectly, securities
representing more than 50% of the voting power of the then
outstanding voting securities of the Bank.
For purposes of this Section 3.3, "voting power" means ordinary
voting power for the election of directors.
3.4 Terminating Event. A "Terminating Event" means either:
(a) Termination by the Company or the Bank of
Executive's employment for any reason other than (i)
Executive's death or disability or (ii) for "Cause" (as such
term is defined in Section 3.5 hereof), or
(b) Executive's resignation as an employee of the
Company or the Bank, other than for reasons of disability,
following (i) a significant reduction in the nature or scope of
Executive's duties, responsibilities, authority and powers from
the duties, responsibilities, authority and powers exercised by
him immediately prior to the Change in Control or (ii) a
greater than 10% reduction in Executive's annual base salary or
fringe benefits as in effect on the date of the Change in
Control; or (iii) any requirement by the Company or the Bank or
of any Person (as defined in Section 4.2 hereof) in control of
the Company or the Bank that the location at which Executive
performs the principal duties of the Bank or the Company be
outside a radius of 50 miles from the location at which he
performed such duties immediately prior to the Change in
Control; or (iv) the failure of any successor of the Company or
the Bank to agree in writing upon terms and conditions of
employment with Executive pursuant to which he shall serve in a
position no less senior than Chief Lending Officer responsible
for lending operations and whereby he shall report directly to
the chief executive officer of such successor entity and which
are reasonably satisfactory to Executive within ninety (90)
days following a Change in Control.
3.5 Termination for "Cause" Defined. For purposes of this
Agreement, termination for Cause shall include termination by reason
of any of the following:
(a) Continuing any arrangement, holding any position or
engaging in any activities that conflict with the interest of,
or that interfere with Executive's duties owed to, the Company
or Bank, after ten (10) days prior written notice by the
Company or the Bank, as applicable, to him of the same;
(b) Conviction of embezzlement or other crimes against
the Company or the Bank, deliberate misappropriation of the
Company's or Bank's funds or dishonesty;
(c) Material violation of written policies of the
Company or the Bank, irresponsible acts in the performance of
Executive's duties or material breach of any of his obligations
under the terms of this Agreement;
(d) Material non-performance of Executive's duties or
material acts (or omissions) of mismanagement; and
(e) Refusal to perform assigned duties when such
refusal is not justified or excused either by the terms of this
Agreement or by actions taken by the Company or the Bank in
violation of this Agreement.
3.6 Payment in Connection With Terminating Event. If a
Terminating Event occurs within one (1) year after a Change in
Control (which one year period shall be calculated from the effective
date of the Takeover Transaction if the Terminating Event occurs
after a Takeover Transaction), the Bank will pay to Executive an
amount (the "Severance Payment") equal to two times the sum of (a)
Executive's annual base salary in effect at the time of the Change in
Control, and (b) an amount equal to the largest annual cash bonus
paid to Executive with respect to the two full fiscal years
immediately preceding the Change in Control, which Severance Payment
shall be payable in one lump sum within 30 days of the date of
termination of Executive's employment, or if such Change in Control
is governed by clause (ii) of Section 3.2 and the Terminating Event
occurs prior to entering into a definitive agreement, upon the
entering into of a definitive agreement by the Company. In addition,
the Bank shall continue to pay for all medical and life insurance
coverage provided on the date of the Terminating Event for the
twenty-four month period commencing on the effective date of the
Terminating Event. No Severance Payment will be made to Executive
under Section 3 if his employment with the Bank terminates for any
reason prior to a Change in Control (except as may be provided
below), or if his employment with the Company terminates after a
Change in Control but such termination or resignation is not a
Terminating Event. In addition, except as provided in Section 2, no
Severance Payment will be made to Executive under Section 3.6 of this
Agreement with respect to a Terminating Event which occurs more than
one year after a Change in Control (which one year period shall be
calculated from the effective date of the Takeover Transaction if the
Terminating Event occurs after a Takeover Transaction).
3.7 Applicability of Change in Control Provisions. The
provisions of Section 3 shall terminate upon the earliest of (i) the
termination by the Company or the Bank of Executive's employment for
any reason prior to a Change in Control, (ii) the termination of
Executive's employment by the Company or the Bank after a Change in
Control because of death or disability or for Cause, (iii)
Executive's resignation or termination of employment with the Company
or the Bank for any reason other than Good Reason prior to a Change
in Control, and (iv) Executive's resignation or termination of
employment after a Change in Control on or after the first
anniversary of the Takeover Transaction or events specified in
Sections 3.2(iii) or (iv).
3.8 Excise Tax Equalization Payment. In the event that
Executive becomes entitled to a Severance Payment or any other
payment or benefit under this Agreement, or under any other agreement
with or plan of the Company (in the aggregate, the "Total Payments"),
if any of the Total Payments will be subject to the tax (the "Excise
Tax") imposed by Section 4999 of the Code (or any similar tax that
may hereafter be imposed), then the Bank shall pay to Executive in
cash an additional amount (the "Gross-Up Payment") such that the net
amount retained by him after deduction of any Excise Tax upon the
Total Payments and any Federal, state and local income tax and Excise
Tax upon the Gross-Up Payment provided for by this Section 3.8
(including FICA and FUTA), shall be equal to the Total Payments.
Such payment shall be made by the Bank to Executive as soon as
practical following the effective date of the Terminating Event, but
in no event beyond thirty (30) days from such date.
3.9 Tax Computation. For purposes of determining whether any
of the Total Payments will be subject to the Excise Tax and the
amounts of such Excise Tax:
(a) Any other payments or benefits received or to be
received by Executive in connection with a Change in Control or
Executive's termination of employment (whether pursuant to the
terms of this Agreement or any other plan, arrangement, or
agreement with the Company or the Bank, or with any person
(which shall have the meaning set forth in Section 3(a)(9) of
the Exchange Act, including a "group" as defined in Section
13(d) therein) whose actions result in a Change in Control or
any person affiliated with the Company or such persons) shall
be treated as "parachute payments" within the meaning of
Section 280G(b)(1) of the Code, and all "excess parachute
payments" within the meaning of Section 280G(b)(1) shall be
treated as subject to the Excise Tax, unless in the opinion of
tax counsel as supported by the Company's independent auditors
and acceptable to Executive, such other payments or benefits
(in whole or in part) do not constitute parachute payments, or
unless such excess parachute payments (in whole or in part)
represent reasonable compensation for services actually
rendered within the meaning of Section 280G(b)(4) of the Code
in excess of the base amount within the meaning of Section 280G
(b)(3) of the Code, or are otherwise not subject to the Excise
Tax;
(b) The amount of the Total Payments which shall be
treated as subject to the Excise Tax shall be equal to the
lesser of: (i) the total amount of the Total Payments; (or
(ii) the amount of excess parachute payments within the meaning
of Section 280G(b)(1) (after applying clause (a) above); and
(c) The value of any noncash benefits or any deferred
payment or benefit shall be determined by the Company's
independent auditors in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code.
For purposes of determining the amount of the Gross-Up Payment,
Executive shall be deemed to pay Federal income taxes at the highest
marginal rate of Federal income taxation in the calendar year in which the
Gross-Up Payment is to be made, and state and local income taxes at the
highest marginal rate of taxation in the state and locality of his
residence on the effective date of the Terminating Event, net of the
maximum reduction in Federal income taxes which could be obtained from
deduction of such state and local taxes.
3.10 Subsequent Recalculation. In the event the Internal
Revenue Service adjusts the computation of the Bank under Section 3.9
herein so that Executive did not receive the greatest net benefit,
the Bank shall reimburse him for the full amount necessary to make
him whole, plus a market rate of interest, as determined by the
Compensation Committee of the Board.
3.11 Dispute Resolution. If any dispute between the Bank
and Executive as to any of the amounts to be determined under
Sections 3.8 or 3.9, or the method of calculating such amounts,
cannot be resolved by Executive and the Bank, either the Bank or
Executive after giving three (3) days written notice to the other,
may refer the dispute to a partner in the Boston, Massachusetts
office of a firm of independent certified public accountants selected
jointly by Executive and the Bank. The determination of such partner
as to the amount to be determined under Section 3.8 and 3.9 and the
method of calculating such amounts shall be final and binding on both
Executive and the Bank and the Company. The Bank shall bear the
costs of any such determination. The Company shall have the same
rights and obligations as the Bank under this Section 3.11 in the
event of a dispute between the Company and Executive.
4. Miscellaneous.
4.1 Confidential Information. Unless Executive first secures
the Company's consent, he shall not disclose or use, at any time
either during or subsequent to his employment by the Company or the
Bank, except as required by his duties to the Company or Bank, any
secret or confidential information of the Company or Bank of which
Executive becomes informed during his employment, whether or not
developed by him. The term "confidential information" includes,
without limitation, financial information, business plans, prospects,
and opportunities (such as lending relationships, financial product
developments, or possible acquisitions or dispositions of business or
facilities) which have been discussed or considered by the Company's
or Bank's management, but does not include any information which has
become part of the public domain by means other than Executive's non-
observance of his obligations hereunder.
4.2 Non-Competition. During Executive's employment by the
Company and the Bank hereunder, and during a period of one (1) year
following the date of termination of his employment with the Company
or the Bank for any reason, Executive will not, directly or
indirectly, whether as partner, consultant, agent, employee, co-
venturer, greater than 2% owner, or otherwise, or through any Person
(as hereafter defined),
(a) attempt to recruit any employee of the Company or
Bank, assist in such hiring by any other Person, or encourage
any such employee to terminate his or her relationship with the
Company or Bank, or
(b) encourage any customer of the Company or Bank to
conduct with any other Person any business or activity which
such customer conducts or could conduct with the Company or
Bank.
For purposes of this Section 4.2, the term "Person" shall mean an
individual, a corporation, an association, a partnership, an estate, a
trust and any other entity or organization.
4.3 No Conflicting Obligations. The Company and the Bank,
in entering into this Agreement, understand, and Executive hereby
represents, that he is not under any obligation to any former
employer or any person, firm or corporation that would prevent, limit
or impair, in any way, the performance by Executive of his duties as
an employee of the Company or the Bank.
4.4 Ethical Behavior. Upon termination by the Company or the
Bank of Executive's employment for any reason, Executive shall act at
all times in an ethical manner with regard to the Bank and the
Company, and during the one-year period following the date of such
termination, shall take no action which directly or indirectly could
reasonably be expected to have the effect of terminating or otherwise
adversely affecting the relationship of the Company or the Bank with
any employee of, or others with business or advantageous
relationships with, the Company or any of its affiliates, including
the Bank.
4.5 Withholding. All payments made by the Company or the
Bank under this Agreement will be net of any tax or other amounts
required to be withheld by the Company or the Bank under applicable
law.
4.6 Legal Fees. Upon submission of appropriate statements or
documentation, the Company and the Bank jointly and severally agree
to reimburse Executive for reasonable legal fees actually incurred by
him in connection with the enforcement of the terms of this Agreement
following a Change in Control, provided, however, that neither the
Company nor the Bank shall not be obligated to reimburse Executive
for any legal fees or expenses incurred by him in connection with the
Company's or the Bank's enforcement of the terms of this Agreement or
in connection with any arbitration or litigation in which the Company
or the Bank is the prevailing party.
4.7 Binding Effect. This Agreement is binding upon and will
inure to the benefit of the parties hereto and their respective
heirs, administrators, executors, successors and assigns. The
Company and the Bank 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 the Company or the
Bank, as the case may be, to assume expressly and perform this
Agreement. Failure of the Company or the Bank, as applicable, to
obtain such assumption and agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall
entitle Executive to compensation from the Bank in the same amount
and on the same terms as he would be entitled to hereunder following
a Terminating Event, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective
shall be deemed the date on which Executive becomes entitled to such
compensation from the Bank. As used in this Agreement, "Bank" shall
mean the Bank, as hereinbefore defined and any successor to its
business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
4.8 Arbitration of Disputes. Any dispute, controversy or
claim arising out of or relating to this Agreement or the breach or
performance hereof will be settled by arbitration in accordance with
the laws of the State of Rhode Island by an arbitrator mutually
agreed upon by Executive and the Company and/or the Bank. If an
arbitrator cannot be agreed upon, Executive shall choose an
arbitrator and the Company and/or the Bank shall choose an
arbitrator, and these two together shall select a third arbitrator.
If the first two arbitrators cannot agree on the appointment of a
third arbitrator, then the third arbitrator will be appointed by the
American Arbitration Association in Providence, Rhode Island. Such
arbitration will be conducted in the City of Providence in accordance
with the Commercial Arbitration Rules of the American Arbitration
Association, except with respect to the selection of arbitrators
which shall be as provided in this Section 4.8. Judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.
4.9 Indemnification. The Company and the Bank each hereby
covenants and agrees to indemnify Executive and hold him harmless
fully, completely, and absolutely against and in respect to any and
all actions, suits, proceedings, claims, demands, judgments, costs,
expenses (including attorney's fees), losses, and damages resulting
from his good faith performance of his duties and obligations under
the terms of this Agreement.
4.10 Guaranty. The Company hereby guarantees the due and
punctual performance in full by the Bank of its covenants, agreements
and obligations contained herein.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
/s/18th day of /s/December, 2000.
BANCORP RHODE ISLAND, INC.
By: /s/Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
BANK RHODE ISLAND
By: /s/Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
President and Chief Executive
Officer
EXECUTIVE
/s/Xxxxxx X. XxXxxxx
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Xxxxxx X. XxXxxxx
