AGREEMENT entered into as of the _____ day of December 1996 by and
between Enterprise Bank and Trust Company, a Massachusetts corporation
(hereinafter referred to as the "Corporation") and Xxxxxx X. Xxxxxx of Lowell,
Massachusetts, (hereinafter referred to as "Xxxxxx").
W I T N E S S E T H
WHEREAS, Xxxxxx is a highly regarded expert in the field of bank
management;
WHEREAS, the Corporation acknowledges that Xxxxxx'x abilities and services
are unique and essential to the future prospects of the Corporation;
WHEREAS, in light of the foregoing, the Corporation desires to employ
Xxxxxx as its Chief Executive Officer and Xxxxxx desires to accept such
employment
NOW, THEREFORE, the parties hereto, each in consideration of the
premises and of the joinder of the other herein, hereby agree as follows:
1. The Corporation hereby employs Xxxxxx and Xxxxxx hereby agrees to be
employed by the Corporation upon the terms and conditions hereinafter set forth.
2. This agreement shall commence on January l, 1997 and shall be
extended from year to year according to the provisions hereinafter set forth.
The minimum term and any extended term(s) of this agreement shall at all times
be three (3) years unless otherwise specifically set forth. This agreement shall
be reviewed annually by the Board of Directors of the Corporation or its
designated committee.
3. Xxxxxx agrees to serve during the term or terms of this agreement as
the Chief Executive Officer of the Corporation for so long as he may be elected
by the Board of Directors of the Corporation and he agrees to devote his full
time and best efforts to the performance of his designated duties to the
furtherance of the business of the Corporation.
4. All services which Xxxxxx shall perform for the Corporation and its
subsidiaries while this Agreement is in effect shall be deemed to be services
covered by this Agreement and by the compensation herein provided for, and
Xxxxxx shall not be entitled to any additional compensation thereof for such
additional duties.
5. During the term or any extensions of the term of this agreement,
nothing herein shall preclude Xxxxxx from remaining involved in any business,
including any limited or general partnership, in which he currently
participates, or any future like venture in which he may participate, as a
passive investor. Any future business involvement such as a general partnership
for real estate purposes or other like active investment must be first approved
by the Board of Directors. The Board shall act within a reasonable time
regarding a request for approval of an investment when such request is made of
it by Xxxxxx.
6. While Xxxxxx shall be employed hereunder, he shall be paid a minimum
base salary at the rate of One Hundred Fifty-Six Thousand Two Hundred Fifty
Dollars($156,250) per annum, to be paid in equal weekly installments, which
shall be subject to periodic upward adjustments as determined by the Board of
Directors of the Corporation. (hereafter referred to as "Base Salary").
7. (a) In addition to his base salary, Xxxxxx shall be entitled (i) to
participate in the Corporation's Benefit Plans, Stock Option Plans, 401k Plans,
Employee Stock Ownership Plan, Bonus Plans, and any other incentive plans of the
Corporation for the benefit of its officers or employees from time to time in
effect (subject to the terms of such plans and subject to the applicable votes
of the Board of Directors in effect from time to time), and (ii) to receive all
such other fringe benefits and perquisites as the Corporation shall from time to
time make available to its officers. For the purposes of this agreement any
payments made to or payable to Xxxxxx
-2-
under paragraph 6 and paragraph 7 of this agreement shall at all times be
hereafter defined as his "Annual Earnings."
7. (b) In addition to his base salary, Xxxxxx shall be further entitled
to receive the benefits as set out and defined in a SPLIT DOLLAR AGREEMENT
entered into between the Corporation and Xxxxxx and dated October 15, 1996, as
the same shall from time to time be amended. The payments under the Split Dollar
Agreement shall continue to be made during the time periods set out in
paragraphs 8, 9, and 10 of this Employment Agreement.
7 (c) In addition, in the event of the death of Xxxxxx while this
agreement is in effect, the Corporation agrees that Xxxxx Xxxxxx the wife of
Xxxxxx and his children (the "beneficiaries") shall remain covered by the health
plan of the Corporation and the premium payment shall be made by the
Corporation. The obligation of the Corporation shall terminate for the children
upon their emancipation; and for the wife when she shall remarry or die,
whichever shall first occur. A child who is a full time student and who has not
attained age 25 years shall not be deemed emancipated.
8. (a) During the term or any extended term of this Agreement, if
Xxxxxx is unable to perform the services required of him hereunder because of
sickness or other disability (hereafter called the "Disability Period"), the
Corporation may elect to be relieved of the obligation to pay Xxxxxx his annual
earnings and, upon notice to Xxxxxx, to pay Xxxxxx during the period of his
disability at the rate equal to seventy-five (75%) percent of the highest annual
earnings paid him during the term of this Agreement which occurred prior to his
disability less any amounts payable to him under any group disability plan.
(b) The existence of a disability shall not entitle the Corporation to
terminate this agreement for cause as that term is defined in paragraph 16 of
this agreement, nor to terminate his status as an employee of the Corporation.
If Xxxxxx is replaced as Chief Executive Officer
-3-
of the Corporation during the disability period according to paragraph 10(a) of
this agreement, then the obligations of the parties under paragraph 8(a) of this
Agreement shall control and not those under said paragraph 10(a).
(c) For purposes of this Agreement, Xxxxxx shall be deemed to be
disabled if he shall qualify to receive disability benefits under the group long
term disability policy then in force and effect at the Corporation and if there
is no such policy in force and effect, Xxxxxx shall be deemed to be disabled if
he shall, in the judgment of the Board of Directors, be unable to perform his
duties hereunder, and he shall be deemed to have recovered from any such
disability when he is no longer eligible to receive disability benefits under
the aforementioned long term disability policy; and if there is no such policy
in force and effect, Xxxxxx shall be deemed t~ have recovered from any such
disability if he shall, in the judgment of the Board of Directors, be able to
perform such duties. Any such determination(s) by the Board of Directors shall
be binding upon Xxxxxx. To assist the Board in making such a decision Xxxxxx
agrees that he will submit to a physical examination, at any reasonable time or
times, by any qualified physician designated by the Board.
9. If, during the term or any extended term of this Agreement, there is
a "Business Combination" as defined in the Articles of Organization as from time
to time amended, then, beginning on the effective date of the business
combination, Xxxxxx shall have the option, exercisable by him at any time during
the term or any extended term of this Agreement, upon 60 days advance written
notice to the Corporation, to terminate this Agreement, in which event the
Corporation shall pay Xxxxxx within 60 days following the receipt by it of the
said notice of termination a lump sum of money equal to 2.99 times Xxxxxx'x
previous highest annual earnings. In addition, Xxxxxx shall be entitled to
receive any additional benefits referred to in paragraph 7 of this agreement
which are not included in annual earnings but which are due him
-4-
under the terms and conditions of the provisions of any Corporate plan or plans.
Xxxxxx, if he exercises the option to terminate as set forth in this paragraph
9, notwithstanding the obligation to compensate him under this paragraph, shall
be relieved of any restrictions with respect to competition as set forth in
paragraph 12 and paragraph 13 of this agreement.
10. (a) If, during the term or any extended term of this Agreement and
prior to any change in ownership, Xxxxxx shall cease to be elected by the Board
of Directors to serve the Corporation as the Chief Executive Officer, other than
for disability under the provisions of paragraph 8, then, beginning on the date
on which Xxxxxx ceased to be so elected, Xxxxxx shall have the options,
exercisable by him at any time during the remainder of the term or any extended
term of this Agreement, upon 60 days advance written notice to the Corporation
to (I) remain as a full-time employee of the Corporation under the terms of this
Agreement; or (ii) terminate this Agreement; or (iii) serve the Corporation as a
consultant for the remainder of the term, or any extended term in lieu of
serving in another capacity.
(b) In the event Xxxxxx elects to terminate this Agreement in
accordance with paragraph 10 (a)(ii), Xxxxxx shall receive salary payments from
the Corporation for two (2) years from the date the Corporation is notified of
his election to terminate. The salary payments shall equal the highest annual
earnings paid to Xxxxxx during any year of the term or extended term of this
Agreement. These salary payments shall be made in equal weekly installments. In
addition, Xxxxxx shall be entitled to receive all other benefits referred to in
paragraph 7 of this Agreement. Xxxxxx agrees that during the period he is
receiving payments under this paragraph 10(b), and in consideration of the
compensation to be paid to him hereunder, that he will not compete, directly or
indirectly, with the business of the Corporation (including any parent or
subsidiary entity thereof) or of that of its successors or assigns. The phrase
"compete, directly or indirectly, with the business of the Corporation or of
that of its successors or assigns", as used
-5-
herein, shall be deemed to include (without thereby limiting the generality of
the same) engaging or having any interest directly or indirectly as an employee
through the rendering of services or otherwise either alone or in association
with others in the operation of any financial institution with a branch office
in Lowell or any town contiguous to Lowell, which shall include Billerica,
Chelmsford, Dracut, Tewksbury, and Tyngsboro and engaging or having any interest
directly or indirectly as an employee through the rendering of services or
otherwise either alone or in association with others in the operation of any
financial institution in any City or Town in which Enterprise Bank and Trust
Company has a branch. Xxxxxx further agrees, during the payment period of this
paragraph 10(b), not to own an interest exceeding one percent (1%), directly or
indirectly as an owner, partner through stock ownership, investment of capital,
lending of money or property, in any financial institution with a branch in
Lowell or any town contiguous to Lowell, which shall include Billerica,
Chelmsford, Dracut, Tewksbury, and Tyngsboro or in any City or Town in which
Enterprise Bank and Trust Company has a branch. The restrictions as to non
competition in this paragraph 10(b) shall be in lieu of any restrictions set
forth in paragraph 12 and paragraph 13.
(c) In the event Xxxxxx so elects to serve as a consultant, he shall
render such services of an advisory or consultative nature as the Corporation
may require of him from time to time and to assist the Corporation in its
relations with its employees and its customers in order that the Corporation may
have the benefit of his experience and knowledge of its business, his reputation
and contacts in the industry, and his general business experience. During such
time (hereinafter referred to as the "Consultation Period"), Xxxxxx shall devote
approximately half his time to the business and affairs of the Corporation, and
shall receive as compensation therefor a salary at the rate which shall be equal
to fifty (50%) of the highest annual earnings paid to him during the period in
which he served the Corporation in the capacity of Chief
-6-
Executive Officer. During the Consultation Period, Xxxxxx shall be deemed to be
an employee of the Corporation and, as such, Xxxxxx shall participate in the
plans and receive the fringe benefits and perquisites referred to in Paragraph 7
above subject to the provisions of said paragraph. Upon the termination of the
consultation period, Xxxxxx shall be restricted in his activities according to
paragraph 12, and paragraph 13. During each year of the non-compete period
following the termination of the consultation period, Xxxxxx shall receive
salary payments equal to fifty (50%) percent of the highest annual earnings paid
to him during any year of the term or extended term of this Agreement,
notwithstanding the salary payment provisions set forth in paragraph 12.
If the provisions of this paragraph become operable there shall be no
obligation on the part of Xxxxxx to serve or to continue to serve as a member of
the Board of Directors of the Corporation.
11. Xxxxxx agrees that he will not, without the express prior written
consent of the Corporation, whether during the term or any extended term of this
Agreement or thereafter, divulge, communicate or utilize for the benefit of any
other party or person any marketing research, account information or any other
information pertaining to the business or affairs of the Corporation or of any
of its clients, customers, consultants or collaborators, except to such extent
as may be necessary in the ordinary course of performing his duties as to the
Corporation or to comply with legal process. The foregoing notwithstanding,
there is nothing in this Agreement which prohibits Xxxxxx from communicating
directly with all Federal and/or State regulatory authorities concerning the
activities of the Corporation.
12. Xxxxxx agrees not to compete with the Corporation during a two year
non-compete period as defined in this paragraph 12 and in paragraph 13. During
each year of the two-year non-compete period, as further detailed below, Xxxxxx
shall receive salary payments at least
-7-
equal to seventy percent of the highest annual earnings paid to him during any
year of the term of this Agreement or any year of any extended term of this
agreement. If Xxxxxx is employed during the two-year non-compete period, by
another employer outside of the non-compete area, or by an employer approved by
the Corporation within the non-compete area, Xxxxxx shall receive salary
payments from the Corporation equal to one-hundred percent of the highest annual
earnings ~aid to him during the term of this Agreement less any enumeration paid
by his new employer. For a period of two (2) years from the date this agreement
is terminated,(The "Non Compete Period") and subject to the provisions of this
agreement which specifically set forth a contrary intent, Xxxxxx further agrees,
in consideration of the compensation to be paid to him hereunder that, during
any non compete period he will not compete, directly or indirectly, with the
business of the Corporation or of that of its successors or assigns. The phrase
"compete, directly or indirectly, with the business of the Corporation or of
that of its successors or assigns", as used herein, shall be deemed to include
(without thereby limiting the generality of the same) engaging or having any
interest, directly or indirectly, as an employee, through the rendering of
services, or otherwise, either alone or in association with others, in the
operation of any financial institution engaging or having any interest directly
or indirectly as an employee through the rendering of services or otherwise
either alone or in association with others in the operation of any financial
institution with a branch office in Lowell or any town contiguous to Lowell,
which shall include Billerica, Chelmsford, Dracut, Tewksbury, and Tyngsboro and
engaging or having any interest directly or indirectly as an employee through
the rendering of services or otherwise either alone or in association with
others in the operation of any financial institution in any City or Town in
which Enterprise Bank and Trust Company has a branch.
13. During the term or any extended term of this Agreement and during
the non compete period defined in paragraph 12, Xxxxxx agrees not to own an
interest exceeding one percent
-8-
(1%), directly or indirectly as an owner, partner through stock ownership,
investment of capital, lending of money or property, in any financial
institution with a branch office in Lowell or any town contiguous to Lowell,
which shall include Billerica, Chelmsford, Dracut, Tewksbury, and Tyngsboro or
in any City or Town in which Enterprise Bank and Trust Company has a branch.
14. The parties hereto agree that the services of Xxxxxx are of a
personal, special, unique and extraordinary nature and cannot be replaced by the
Corporation and that the violation by Xxxxxx of any of his covenants hereunder
will cause the Corporation irreparable harm which could not reasonably or
adequately be compensated in damages in an action at law, and that the covenants
of Xxxxxx hereunder shall therefore be enforceable both at law and in equity, by
injunction and otherwise. The remedies of the Corporation hereunder, and at law
and in equity, shall be cumulative and not alternative, and shall not be
exhausted by any one or more uses thereof.
15. Upon the expiration of this agreement or other termination in
accordance with the provisions of this Agreement, all obligations of the
Corporation to Xxxxxx hereunder shall forthwith terminate, except for any
obligation to pay any sum or sums of money to Xxxxxx which may have accrued and
are due and payable under this contract and except for any obligation to pay any
sum or sums of money to Xxxxxx which may have accrued and are due and payable
under any corporate benefit plan or plans but the obligations of Xxxxxx shall
not be so terminated except and unless set forth specifically in this agreement.
16. Termination for Cause. Xxxxxx'x employment hereunder may be
terminated for cause without further liability on the part of the Corporation by
written notice to Xxxxxx setting forth in reasonable detail the nature of such
cause. The following shall constitute "cause" for such termination: (i) a
willful breach of this contract; or (ii) dishonesty or fraud committed by Xxxxxx
with respect to the Corporation or any subsidiary or affiliate thereof; or (iii)
conviction
-9-
of a felony by Xxxxxx; or (iv) an order from a regulatory body directing the
corporation to terminate Xxxxxx for cause. For the purpose of this Section, any
action taken by the Corporation shall first require a two-thirds vote of all the
members of the Board of Directors. In the event Xxxxxx shall be terminated for
cause under this paragraph of the agreement, the Corporation shall be relieved
of its obligations to make any payments to Xxxxxx under paragraph 12 of this
agreement and Xxxxxx shall be relieved of any obligations not to compete under
said paragraph 12 and paragraph 13.
17. Any notice hereunder shall be effective when mailed by registered
or certified mail, postage and other charges prepaid, in the case of Xxxxxx,
addressed to him at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, and in the
case of the Corporation, addressed to it c/o Vice Chairman at 000 Xxxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 or at such other address as either of the
parties shall have last designated by notice given in like manner to the other
of them.
18. No provision of this Agreement shall be modified or amended except
by an instrument in writing duly executed by the parties hereto, and no custom,
act, payment, favor or indulgence shall grant any additional right to Xxxxxx or
be deemed a waiver by the Corporation of any of Xxxxxx'x obligations hereunder
or release Xxxxxx therefrom or impose any additional obligations upon the
Corporation, nor shall any assent, express or implied, by the Corporation to,
waiver by the Corporation of, any breach by Xxxxxx of any term or provision
hereof be deemed to be an assent or waiver by the Corporation to or of any
succeeding breach of the same or any other term or provision. Every term and
provision of this Agreement shall be deemed to be of the essence hereof and
every breach thereof material. This Agreement is personal to and shall not be
assignable by Xxxxxx, but its economic benefits shall inure to the benefit of
Xxxxxx, or his respective heirs, successors and legal representatives.
-10-
19. If any term or provision of this Agreement or the application
thereof to any person or circumstance shall to any extent be invalid or
unenforceable, the remainder of this Agreement or the application of such term
or provision to persons or circumstances other than those to which it is invalid
or unenforceable shall not be affected thereby, and each term and provision of
this Agreement shall be valid and be enforced to the fullest extent permitted by
law; provided, however, that if the provisions of Paragraph 10 shall be held to
be unenforceable and if Xxxxxx shall not voluntarily abide by said provisions in
all respects, then this Agreement shall ipso facto terminate.
20. This agreement shall terminate as of the earlier of:
a. Thirty-six (36) months after notice is given by the
corporation to Xxxxxx that it no longer desires to extend
this agreement;
b. the death of Xxxxxx;
c. the termination of Xxxxxx by the corporation for cause under
paragraph 16 of this agreement;
d. sixty (60) days after notice is given by Xxxxxx to the
Corporation after the existence of a "Business Combination"
under paragraph 9 of this agreement;
e. sixty (60) days after notice is given by Xxxxxx to the
Corporation in the event of the failure of the Corporation
to elect Xxxxxx as the Chief Executive Officer of the
Corporation under paragraph 10(b) of this agreement.
21. This Agreement shall be construed and enforced in all respects in
accordance with the laws of the Commonwealth of Massachusetts.
-11-
22. The phrase Corporation shall include Enterprise Bank and Trust
Company and any parent or subsidiary thereof and any successors and assigns.
WITNESS the execution hereof as an instrument under seal as of the day
and year first above written.
Enterprise Bank and Trust Company
By:_________________________________
Its:_________________________________
------------------------------------
Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxx
Witness to all
-12-
