AGREEMENT
Exhibit 10.50
THIS AGREEMENT (“Agreement”) made as of this 11th day of February, 2008, between SOVEREIGN
BANK, a federal savings bank (the “Bank”), and Xxxxxxx X. Xxxxxxxx, an individual (the “Officer”).
WITNESSETH:
WHEREAS, the Bank is a wholly-owned subsidiary of Sovereign Bancorp, Inc., a Pennsylvania
business corporation and savings and loan holding company (“Sovereign”); and
WHEREAS, the Bank and the Officer desire to enter into an agreement regarding, among other
things, the employment of the Officer by the Bank in the Bank’s Commercial Banking Division as
Managing Director, Commercial Banking, reporting initially to Xxxxxx X. Xxxxxxxxxx, President and
Chief Executive Officer of Sovereign and the Bank.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows:
1. Employment. The Bank hereby employs the Officer, and the Officer hereby accepts
employment with the Bank, on the terms and conditions set forth in this Agreement, effective as of
the date first set forth above. Prior to the occurrence of the announcement of a transaction
involving an actual or potential Change in Control, the Bank agrees that the Officer shall not be
required to relocate his office more than fifty (50) miles from 00 Xxxxx Xxxxxx, Xxxxxx, XX.
2. Duties of Employee. The Officer shall perform and discharge such duties as may be
reasonably assigned to the Officer from time to time by the President and Chief Executive Officer
of the Bank. The Officer’s duties shall be consistent with his title and shall not be unreasonably
or materially changed, considering his role in the Company; provided, however, that nothing herein
shall preclude his promotion. The Officer shall devote his full business time to the business of
the Bank and shall not, during the Employment Period (as defined in Section 3), be employed or
involved in any other business activity. However, this Section 2 shall not be construed as
preventing the Officer from (a) investing the Officer’s personal assets or (b) being involved in
any other activity with the prior approval of the President and Chief Executive Officer of the
Bank. The Officer shall have the title of Managing Director, Commercial Banking.
3. Term of Employment. The Officer’s employment under this Agreement shall be for a
period (the “Employment Period”) commencing on the date of this Agreement and ending on the date
that is two (2) years subsequent thereto, provided that on the first and each subsequent annual
anniversary date of this Agreement, and unless a party has given the other party written notice at
least sixty (60) days prior to such anniversary date that such party does not agree to renew this
Agreement, the term of this Agreement and the Employment Period shall be deemed renewed for a term
ending two (2) years subsequent to such anniversary date, unless sooner terminated in accordance
with one of the following provisions:
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(a) The Officer’s employment under this Agreement may be terminated at any time during
the Employment Period for “Cause,” by action of the President and Chief Executive Officer of
the Bank. As used in this Agreement, “Cause” means any of the following events:
(i) the Officer is convicted of or enters a plea of guilty or nolo
contendere to a felony or a crime involving fraud or moral turpitude;
(ii) the Officer repeatedly fails to follow the lawful instructions of the
President and Chief Executive Officer of the Bank;
(iii) the Officer violates the Bank’s Code of Conduct;
(iv) a government regulatory agency recommends that the Bank relieve the Officer of
his duties;
(v) the Officer willfully violates any material statute or regulation (other than
traffic violations or similar offenses), or any final cease and desist order applicable
to Sovereign or the Bank;
(vi) the Officer engages in an activity that results in a breach of fiduciary duty
involving receipt of personal profit by the Officer at the expense of the Bank;
(vii) the Officer commits an act of willful misconduct, intentionally fails to
perform stated lawful duties, or performs his duties under this Agreement in an
incompetent manner;
(viii) the Officer materially breaches any material provision of this Agreement; or
(ix) concurrent with or following the public announcement of a transaction
involving an actual or potential Change in Control (as defined in Section 5A(c)), the
Officer’s refusal to accept a Reasonable Job Offer (as defined in Section 3(f)).
If the Officer’s employment is terminated under the provisions of this Section 3(a), then all
rights of the Officer under Section 4 shall cease as of the effective date of such
termination.
(b) The Officer’s employment under this Agreement may be terminated at any time during
the Employment Period without Cause, by action of the Chief Executive Officer of the Bank,
upon giving written notice of such termination to the Officer at least thirty (30) days prior
to the date upon which such termination shall take effect. If the Officer’s employment is
terminated under the provisions of this Section 3(b), then the Officer shall be entitled to
receive the compensation and benefits set forth in Section 5. For purposes of this Section
3(b), (i) a material adverse change in the Officer’s duties or responsibilities following a
Change in Control of Sovereign, or (ii) a violation by the Bank of the last sentence of
Section 1 hereof shall be deemed to be a termination of the
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Officer’s employment without Cause. Upon the occurrence of any of the events listed in this
Section 3(b), the Officer shall be permitted, within ninety (90) days of the occurrence of
such event, to resign from employment by a notice in writing delivered to the Bank, whereupon
he will become entitled to receive the compensation and benefits set forth in Section 5,
provided, however, that the Bank shall be given thirty (30) days from the day it receives the
notice of termination to remedy any such event. Notwithstanding the foregoing, any amounts
payable upon a termination under this Section 3(b) shall be paid only if the Officer actually
terminates employment within two (2) years following the initial existence of the events
listed in this Section.
(c) If the Officer retires or dies, the Officer’s employment under this Agreement shall
be deemed terminated as of the date of the Officer’s retirement or death, and all rights of
the Officer under Section 4 shall cease and any other amounts or benefits payable to the
Officer shall be determined in accordance with the retirement and insurance programs of the
Bank then in effect. For purposes of this Agreement, the term “retirement” shall mean
voluntary termination on or after age sixty-five (65).
(d) If the Officer is incapacitated by accident, sickness, or otherwise so as to render
the Officer mentally or physically incapable of performing the services required under this
Agreement, notwithstanding reasonable accommodation, for a continuous period of six (6)
months, then, upon the expiration of such period or at any time thereafter, by action of the
Chief Executive Officer of the Bank, the Officer’s employment under this Agreement may be
terminated immediately. If the Officer’s employment is terminated under the provisions of this
Section 3(d), then all rights of the Officer under Section 4 shall cease as of the last
business day of the week in which such termination occurs and any other amounts or benefits
payable to the Officer shall be determined in accordance with the retirement and insurance
programs of the Bank then in affect.
(e) The Officer’s employment under this Agreement may be terminated by the Officer at any
time during the Employment Period for any or no reason, by giving written notice of such
termination to the Chief Executive Officer of the Bank at least thirty (30) days prior to the
date upon which such termination is to take effect. If the Officer terminates his employment
under the provisions of this Section 3(e), then all rights of the Officer under Section 4
hereof shall cease as of the effective date of such termination.
(f) For purposes of this Agreement, the term “Reasonable Job Offer” means a good faith
offer of employment made or directly facilitated by Sovereign, the Bank, an affiliate of
either, an entity proposing to acquire the business of Sovereign or the Bank, or an affiliate
of such entity, which offer (i) would not give the Officer the right to terminate employment
for Good Reason under Section 5A(a), and (ii) does not require an employment background and
skill set materially different than required for his then position.
4. Employment Period Compensation. The Officer shall be entitled to all benefits
offered by the Bank to executives holding comparable positions to those of the Officer, including,
but not limited to, the following:
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(a) Salary. The Bank shall pay the Officer a salary, during the Employment
Period, at the rate of $350,000 per year, payable bi-weekly (or in such manner as other Bank
officers are paid). The Bank may, from time to time, increase but not decrease the Officer’s
salary, and any and all such increases shall be deemed to constitute amendments to this
Section 4(a) to reflect the increased amounts, effective as of the dates established for such
increases. The Bank shall undertake a performance review of the salary payable pursuant to
this Section 4(a) not less frequently than annually.
(b) Bonus. The Bank shall set bonus targets as a percent of salary for the
Officer based on the assigned job salary grade, and pay the Officer bonuses during the
Employment Period in such amounts and at such times as may be approved by the Board of
Directors of the Bank in its discretion based on both individual and company performance
against specified objectives. Notwithstanding the foregoing, all bonus payments, if any, shall
be made no later than March 15 of the year next following the year to which such bonus
relates.
(c) Other Benefits. The Officer shall be entitled to participate in the Bank’s
tax-qualified employee benefit plans and the Bank shall provide the Officer, during the
Employment Period, with insurance, vacation, pension, and other fringe benefits in the
aggregate not less favorable than those received by other comparable officers of the Bank.
5. Rights in Event of Certain Termination of Employment Before Change in Control
Announcement.
(a) In the event that the Officer’s employment is terminated by the Bank without Cause
during the Employment Period, before the occurrence of the announcement of a transaction
involving an actual or potential Change in Control, the Officer shall be entitled to receive
the amounts and benefits set forth in this Section 5:
(i) annual salary otherwise accrued or payable through the date of termination of
employment; and
(ii) the greater of (A) continued payments of base salary then in effect through
the end of the Employment Period or a period of twenty four (24) months, whichever is
longer, or (B) a lump sum severance payment equal to the severance payment due under
Sovereign’s or the Bank’s Severance Pay Plan applicable to the Officer at the time of
termination; provided, in either case, that the Officer executes Sovereign’s standard
form of release and waiver.
(b) All payments required by Section 5(a) shall be paid in a lump sum cash payment not
later than the thirtieth (30th) day following the date of termination of employment.
(c) The Officer shall not be required to mitigate the amount of any payment provided for
in this section by seeking employment or otherwise nor shall the amount of any payment
provided for in this section be reduced or offset by the Officer’s subsequent employment.
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(d) The Officer agrees that the amounts set forth in this Section 5 constitute the
Officer’s sole and exclusive remedy, contractual or otherwise, in the event of a termination
by the Bank of the Officer’s employment without Cause before the announcement of a transaction
involving an actual or potential Change in Control.
5A. Rights in Event of Certain Terminations of Employment on or After the Occurrence of a
Change in Control Announcement.
(a) Events Giving Right to Terminate for Good Reason. If a public
announcement of a transaction involving an actual or potential Change in Control
occurs, and concurrently therewith or during a period of twenty-four (24) months
thereafter, an event constituting Good Reason also occurs with respect to the
Officer, he may terminate his employment in accordance with the provisions of
Section 5A(b) and, thereupon, will become entitled to the payments and benefits
described in Sections 5A(e) and 5A(f). As used in this Agreement, the term “Good
Reason” means any of the following events:
(i) the involuntary termination of the Officer’s employment, other than an
involuntary termination permitted in Sections 3(a) and (d);
(ii) a material reduction in the Officer’s base and/or annual target
incentive compensation below a level that was in effect immediately prior to
the public announcement;
(iii) the failure to provide the Officer with a total compensation package
(salary, welfare and pension benefits, stock options and a bonus plan
evaluated on the basis of bonus potential) reasonably comparable to the
compensation package provided to the Officer immediately prior to the public
announcement;
(iv) the reassignment for longer than sixty (60) days of the Officer to a
principal office which is more than thirty (30) miles from his or her primary
residence as of the date of the public announcement or an additional ten (10)
miles from the Officer’s primary residence in the event the Officer’s one-way
driving commute prior to the public announcement was in excess of thirty (30)
miles; and
(v) any material breach of this Agreement by the Officer’s employer at any
relevant time, coupled with the failure to cure the same within thirty (30)
days after receipt of written notice of such breach from the Officer; and
(vi) any reduction in title or any material reduction in Officer’s
responsibilities or authority as they exist immediately prior to the public
announcement.
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(b) Notice of Termination. Upon the occurrence of an event of Good
Reason subject to Section 5A(a), the Officer may, within ninety (90) days of the
occurrence of any such event, resign from employment by a notice in writing
(“Notice of Termination”) delivered to Sovereign, whereupon he will become entitled
to the payments and benefits described in Sections 5A(e) and 5A(f), provided,
however, that Sovereign shall be given thirty (30) days from the date it receives
the Notice of Termination to remedy such event. Notwithstanding the foregoing, any
amounts payable upon a termination for Good Reason shall be paid only if the
Officer actually terminates employment within two (2) years following the initial
existence of the event constituting Good Reason. In the case of a termination
described in Section 5A(a)(i), the Officer shall confirm his involuntary
termination, in writing, within ninety (90) days of the date of such termination,
and such confirmation will be deemed a Notice of Termination.
(c) Change in Control Defined. As used in this Agreement, the term
“Change in Control” means any of the following:
(i) any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934 (the “Exchange Act”)), other than Sovereign,
a subsidiary of Sovereign, or an employee benefit plan of Sovereign or a
subsidiary of Sovereign (including a related trust), becomes the beneficial
owner (as determined pursuant to Rule 13d-3 under the Exchange Act), directly
or indirectly of securities of Sovereign representing more than 19.9% of (A)
the combined voting power of Sovereign’s then outstanding stock and
securities or (B) the aggregate number of shares of Sovereign’s then
outstanding common stock;
(ii) the occurrence of a sale of all or substantially all of the assets of
Sovereign or the Bank to an entity which is not a direct or indirect
subsidiary of Sovereign;
(iii) the occurrence of a reorganization, merger, consolidation or similar
transaction involving Sovereign, unless (A) the shareholders of Sovereign
immediately prior to the consummation of any such transaction initially
thereafter own securities representing a majority of the voting power of the
surviving or resulting corporation, and (B) the directors of Sovereign
immediately prior to the consummation of such transaction initially
thereafter represent a majority of the directors of the surviving or
resulting corporation;
(iv) a plan of liquidation or dissolution, other than pursuant to bankruptcy
or insolvency, is adopted for Sovereign or the Bank;
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(v) during any period of two (2) consecutive years, individuals who, at the
beginning of such period, constituted the Board of Directors of Sovereign
cease to constitute the majority of such Board (unless the election of each
new director was expressly or by implication approved by a majority of the
Board members who were still in office and who were directors at the
beginning of such period); and
(vi) the occurrence of any other event which is irrevocably designated as a
“change in control” for purposes of this Agreement by resolution adopted by a
majority of the then non-employee directors of Sovereign.
Notwithstanding the foregoing, a Change in Control will not be deemed to have occurred if
a person becomes the beneficial owner, directly or indirectly, of stock and securities
representing more than 19.9% of the combined voting power of Sovereign’s then outstanding
stock and securities or the aggregate number of shares of Sovereign’s then outstanding common
stock solely as a result of an acquisition by Sovereign of its stock or securities which, by
reducing the number of securities or stock outstanding, increases the proportionate number of
securities or stock beneficially owned by such person; provided, however, that if a person
becomes the beneficial owner of more than 19.9% of the combined voting power of stock and
securities or the aggregate number of shares of common stock by reason of such acquisition and
thereafter becomes the beneficial owner, directly or indirectly of any additional voting stock
securities or common stock (other than by reason of a stock split, stock dividend or similar
transaction), then a Change in Control will thereupon be deemed to have occurred.
(d) Termination of Proposed Change in Control Transaction. If,
following a public announcement described in Subsection (a), a proposed transaction
is terminated without completion, this Agreement shall thereafter be construed as
though no such announcement had ever been made; provided, however, that the rights
associated with any termination of employment or the giving of a Notice of
Termination during the interim period shall be determined without regard to this
subsection.
(e) Rights Under This Section. In the event the Officer validly and
timely delivers a Notice of Termination to Sovereign, he will be entitled to
receive the following payments and benefits:
(i) Basic Payments. The Officer will be paid an amount equal to two
(2) times the sum of (A) the highest annualized base salary paid to him
during the year of termination or the immediately preceding two (2) calendar
years, and (B) the greater of (i) the target bonus in the year of termination
or (ii) the highest bonus paid to him with respect to one of the three (3)
calendar years immediately preceding the year of termination. Such amount
will
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be paid to the Officer in a lump sum cash payment not later than the
thirtieth (30th) day following the date of termination of employment. For
purposes of this Paragraph (i), to the extent necessary, base salary and
bonuses with any predecessor of Sovereign or an affiliate thereof shall be
taken into account.
(ii) Health and Medical Benefits. For a period of two (2) years from
the day of termination of employment, the Officer shall be provided, at no
charge, with a continuation of health and medical benefits substantially
similar to the most favorable of such benefits provided to him at his
employer’s cost during the two year period immediately preceding such
termination. To the extent such benefits cannot be provided under a plan
because the Officer is no longer an employee of the employer, a lump sum
payment in cash equal to the present value (determined based upon 120% of the
then prevailing monthly short-term applicable federal rate), after tax cost
(estimated in good faith by the Bank) of obtaining such benefits, or
substantially similar benefits, shall be made to the Officer within fifteen
(15) days of his termination of employment.
(f) Legal Expenses. The Officer shall be paid all reasonable legal
fees and expenses when incurred by the Officer in seeking to obtain or enforce any
right or benefit provided by this Section 5A, provided he acts in good faith with
respect to issues raised.
(g) No Mitigation or Offset. The provisions of Section 5(c) shall
apply to payments made and benefits provided under Section 5A.
(h) Exclusive Remedy. The Officer agrees that the payments made and
benefits provided under Section 5A shall constitute the Officer’s sole and
exclusive remedy, contractual or otherwise, in the event of a termination for Good
Reason under this section.
(i) Notwithstanding anything herein to the contrary, Section 3 of this
Agreement shall be construed as though the Employment Period were a three-year
renewable agreement, instead of a two-year renewable agreement, solely with respect
to the rights and benefits potentially provided under this Section 5A.
6. No Disclosure of Confidential Information. The Officer agrees that all customer
lists, dealer lists, files and records now or hereafter used by the Bank are the property of the
Bank and are its trade secrets. Accordingly, the Officer acknowledges that the Bank’s trade secrets
as they may exist from time to time and other confidential information concerning the Bank’s
business, products, promotion, pricing techniques, business plans, customer lists and credit and
financial data concerning customers are valuable, special and unique assets of the Bank, access to
and knowledge of which are essential to the performance of the Officer’s duties under this
Agreement. The Officer further agrees that all knowledge and information described
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in the preceding sentence not in the public domain and heretofore or in the future obtained by the
Officer as a result of employment by the Bank shall be considered confidential information and
shall not be disclosed without the Bank’s consent. The provisions of the preceding sentence shall
apply during the Officer’s employment and following the termination thereof for any reason. The
provisions of this section may be enforced in the same manner as described in Section 19. Nothing
contained herein shall be deemed to preclude the Officer from responding to requests for
information or inquiries from the Office of Thrift Supervision or the Federal Deposit Insurance
Corporation.
6A. Covenant Not to Compete, Non-Solicitation of Customers and Employees — In General.
(a) If the Officer voluntarily leaves employment hereunder during the term of this
Agreement, but before the announcement of a transaction involving an actual or potential
Change in Control, or in the event of his termination under circumstances not qualifying for
payments and benefits under Section 5A, he agrees that, for a period of twelve (12) months
following the date of the termination of his employment, he shall not work directly or
indirectly for or on behalf of another bank that offers products or services similar or
equivalent to those offered by the Bank within fifty (50) miles of any county in which
Sovereign or its affiliates, including the Bank, are conducting such business at the date of
termination of his employment. Nor during such period shall the Officer solicit customers or
employees of Sovereign or any of its affiliates, including the Bank, to cease doing business,
in whole or in part, or cease employment with Sovereign or any of its affiliates, including
the Bank. To the extent the restrictions in this Section 6A are legally held to be
unreasonable, they shall not be void, but shall be modified to the extent necessary to make
such restrictions reasonable. The provisions of this section may be enforced in the same
manner as described in Section 19.
(b) Notwithstanding the foregoing, in the event the Officer (1) is provided written
notice of the Excise Tax Reduction pursuant to Section 10(a) and quantification of the
reasonable additional payment offered in exchange for this non-competition restriction,
pursuant to Section 10(b); and (2) provides written notice to Sovereign or the Bank of the
Officer’s intention to be bound by the terms of this non-competition restriction, as provided
in Section 10(b), in exchange for receipt of the reasonable additional payment described in
Section 10(b) and the written notice, the Officer hereby agrees and covenants that for a
period of twelve (12) months from the Officer’s effective date of termination of employment,
he or she shall not work directly or indirectly for or on behalf of another bank that offers
products or services similar or equivalent to those offered by the Bank in the geographic area
in which Sovereign or its affiliates, including the Bank, are conducting such business as of
the date of termination of Officer’s employment. The Officer hereby acknowledges and agrees
that the covenants and restrictions in Sections 6A and 19 of this Agreement are necessary to
protect the legitimate business interests of Sovereign, including, without limitation,
customer information and goodwill, and considers the restrictions to be reasonable for such
purpose. The Officer acknowledges that any breach by the Officer of the obligations set forth
in Sections 6A and/or 19 would substantially and materially impair and irreparably harm
Sovereign’s business and good will; that such impairment and harm would be
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difficult to measure; and, therefore, total compensation in solely monetary terms would be
inadequate. Consequently, in the event of any breach or any threatened breach by the Officer
of any of the provisions of Sections 6A and/or 19, the Officer’s right to payments and
benefits under Section 10(b) shall immediately terminate and Sovereign shall be entitled to
recover any payments or benefits made following the commencement of the prohibited conduct,
but before discovery of the same. The Officer agrees that Sovereign, in addition to monetary
damages or such other remedies which may be available, shall be entitled to specific
performance and other equitable relief, including temporary or permanent restraining orders
and/or other injunctive relief without the necessity of proving actual damages and/or posting
a bond, as well as any equitable accounting of all earnings, profits or other benefits arising
from any violation hereof, and to the payment by the Officer of all costs and expenses
incurred by Sovereign in enforcing the provisions thereof against the Officer, including
attorneys’ fees incurred by Sovereign. The existence of any claims or cause of action by the
Officer against Sovereign, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by Sovereign of such obligations.
7. Notwithstanding anything contained herein to the contrary, if the Officer is suspended
and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice
served under Section 8(c)(3) or (g)(l) of the Federal Deposit Insurance Act (the “FDIC”), the
Bank’s obligations hereunder shall be suspended as of the date of service unless stayed by
appropriate judicial proceedings; provided, however, that, if the charges are dismissed, the Bank
shall, as soon as administratively practicable, (i) pay the Officer all of the compensation
withheld during such suspension and (ii) reinstate all of its obligations hereunder which were
suspended.
8. Notwithstanding anything contained herein to the contrary, if the Officer is removed or
permanently prohibited from participating in the Bank’s affairs by an order issued under Section
8(a)(4) or (g)(l) of the FDIA, all obligations of the Bank hereunder shall terminate as of the
effective date of such order; provided, however, that any rights of the Officer that have already
vested shall not be affected by such action.
9. (a) If the Bank is in default (as defined in Section 3(x)(1) of the FDIA), all obligations
under this Agreement shall terminate as of the date of default, but this Section 9(a) shall
not affect any vested rights of the Officer.
(b) All obligations under this Agreement shall terminate, except to the extent determined
that continuation of the Agreement is necessary for the continued operation of the Bank (i) by
the Director (the “Director”) of the Office of Thrift Supervision, or his or her designee, at
the time the FDIC enters into an agreement to provide assistance to or on behalf of the Bank
under the authority contained in Section 13(c) of the FDIA or (ii) by the Director, or his or
her designee, at the time the Director, or his or her designee, approves a supervisory merger
to resolve problems related to operation of the Bank or when the Bank is determined by the
Director to be in an unsafe or unsound condition; provided, however, that any rights of the
Officer that have already vested shall not be affected by such action.
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10. (a) All payments made to the Officer pursuant to this Employment Agreement or otherwise,
are subject to and conditioned upon their compliance with 12 U.S.C. § 1828(k) and any
regulations promulgated thereunder. In addition, in the event that any payments and benefits
pursuant to this Agreement would, when taken together with payments and benefits provided to
him under any other plans, contracts or arrangements with Sovereign, the Bank or an affiliate
of either, result in the imposition of an excise tax under Section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”), the amounts and benefits payable hereunder
shall be reduced to such extent as may be necessary to avoid such imposition (the “Excise Tax
Reduction”). The Officer shall have the right, within 30 days of receipt of written notice
from Sovereign or the Bank, to specify which amounts and benefits shall be reduced to satisfy
the requirements of this subsection. All calculations required to be made under this
subsection will be made by Sovereign’s or the Bank’s independent public accountants, subject
to the right of Officer’s representative to review the same. 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.
(b) In the event the Officer is provided written notice of the Excise Tax Reduction as
described in Section 10(a), the Officer may elect to be bound by the non-competition
restriction contained in Section 6A, in exchange for a reasonable additional payment in an
amount to be determined by Sovereign or the Bank and communicated to the Officer in the
written notice of the Excise Tax Reduction. Under no circumstances will the reasonable
additional payment exceed the total amount of the Excise Tax Reduction required in Section
10(a). The written notice from Sovereign or the Bank shall further contain a form for
execution by the Officer and return to Sovereign or the Bank in the event the Officer elects
the reasonable additional payment and accepts the non-competition restriction.
11. 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 Officer, in the case of notices to
the Officer, and to the principal office of the Bank, in the case of notices to the Bank.
12. Waiver. No provisions of this Agreement may be modified, waived, or discharged
unless such waiver, modification, or discharge is agreed to in writing and signed by the Officer
and an executive officer of the Bank specifically designated by the Board of Directors of the Bank.
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.
13. Assignment. This Agreement shall not be assignable by either party hereto, except
by the Bank to any successor in interest to the business of the Bank, provided that the Bank (if it
remains a separate entity) shall remain fully liable under this Agreement for all obligations,
payments and otherwise.
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14. Entire Agreement; Other Arrangements Superseded. 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.
15. 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.
16. Applicable Law. This Agreement shall be governed by and construed in accordance
with the domestic laws of the Commonwealth of Massachusetts without regard to its conflicts of laws
principles, unless and to the extent preempted by the laws of the United States of America.
17. 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.
18. Other Rights. Except as otherwise provided herein, nothing herein shall be
construed as limiting, restricting or eliminating any rights the Officer may have under any plan,
contract or arrangement to which he is a party or in which he is a vested participant; provided,
however, that no severance benefits shall be paid to him under any severance benefit plan of
Sovereign or the Bank unless they become payable under Section 5(a)(ii).
19. Nonsolicitation of Employees and Customers — Section 5A Applicable. In the event
the Officer becomes entitled to benefits under Section 5A, rather than Section 5, he shall refrain
from directly or indirectly soliciting, for employment or business relationship purposes, employees
and customers of Sovereign, the Bank or any affiliate of either as of the date of his termination
of employment. In the event of a breach of this section, the Officer’s right to payments and
benefits under Section 5A shall immediately terminate. The Bank shall be entitled to recover any
payments or benefits made following commencement of the prohibited conduct, but before discovery of
the same, and may commence an action in any court of competent jurisdiction for such additional
legal and equitable relief as it may deem necessary or appropriate to recover damages incurred by
reason of such conduct and to precluded continued violation of this section.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
| SOVEREIGN BANK | ||||||||||||||
| By | /s/ Xxxxxx X. XxXxxxxxx | |||||||||||||
(SEAL)
|
Attest: | |||||||||||||
| /s/ Xxxxxxx X. Xxxxxxxx | (SEAL) | |||||||||||||
| Xxxxxxx X. Xxxxxxxx | ||||||||||||||
Agreed to the 20th day of February, 2008.
| SOVEREIGN BANCORP, INC. |
||||
| By | /s/ Xxxxxx X. XxXxxxxxx | |||
13
