EXHIBIT 10(A)
EMPLOYMENT AGREEMENT XXXXXXX X. XXXXX, XX.
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of this 13th day of September, 1995 between
Harbor Federal Savings Bank whose principal place of business is located at
000 X. Xxxxxx Xxxxxx, Xxxx Xxxxxx, Xxxxxxx 00000, Harbor Financial, M.H.C.
(together, "Employer"), and Xxxxxxx X. Xxxxx Xx., whose residence is 00000
Xxxxxxxxxx Xxxx, Xxxx Xx. Xxxxx, Xxxxxxx ("Employee").
1. Term of Employment.
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1.1. Initial Term. The Employer hereby employees the Employee and the
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Employee hereby accepts employment with the Employer for an initial term of two
(2) years and four (4) months beginning on September 13, 1995 and terminating on
January 6, 1988 (the "Initial Term").
1.2. Renewal. This Employment Agreement and the employment term may be
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extended for additional periods not to exceed one (1) year upon successive
Anniversary Date of each year beginning on January 6, 1996, provided that the
Board of Directors of Employer specifically reviews the Employment Agreement and
the arrangements herein and adopts a resolution not later than thirty (30) days
prior to the Anniversary Date affirmatively approving the extension of the
Employment Agreement for such additional term not to exceed one (1) year as the
Board shall determine. Without such approvals the Employment Agreement shall
expire three (3) years from the date of the last approval or, if the Board does
not make such an approval, at the end of the Initial Term. Any such renewal
term shall be upon such terms, conditions and for such compensation as the
parties shall mutually agree in writing.
1.3. "Employment Term " Defined. As used herein, the phrase "Employment
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Term" refers to the entire period of employment of the Employee hereunder,
whether for the Initial Term provided above, or extended for terms as provided
at Section 1.2 above.
2. Duties of Employee.
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2.1. General Duties. Employee has, for a number of years, served as
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President and Chief Executive Officer of Employer, and shall continue to serve
in that position, with the duties and responsibilities customary to that office.
During the Employment Term, Employee's title and specific reporting
responsibilities may be changed by action of Employer's Board of Directors in
the light of changing circumstances of Employer, including specifically a
transaction described in Section 4.9 hereof, providing that Employee shall at
all times during the term hereof have a substantial executive position in
keeping with the dignity and prestige of his present position. He shall do and
perform all services, acts or things necessary or advisable to manage and
conduct the business of the Employer, subject always to the policies set by the
Board of Directors, in accordance with any and all governing rules and
regulations of regulatory agencies.
2.2. Devotion of Entire Time to Employer's Business. The Employee shall
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devote his entire productive time, ability and attention during normal business
hours to the business of the Employer during the Employment Term. The employee
shall not directly or indirectly render any services of a business, commercial,
or professional nature to any other person or organization for compensation
without the prior written consent of the Board of directors of the employer;
providing, however, that the foregoing shall not preclude reasonable
participation as a member in community, civic or similar organizations, or the
pursuit of personal investments which do not interfere with normal business
activities for Employer.
2.3. No Other Agreements. The Employee shall have no employment contract
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or other written or oral Agreement concerning employment as President and Chief
Executive Officer of Employer with any entity or person other than Employer.
2.4. Uniqueness of Employee's Services. The Employee hereby represents
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that the services to be performed by him under the terms of this Agreement are
of a special, unique, unusual, extraordinary and intellectual character which
gives them a peculiar value, the loss of which cannot be reasonably or
adequately compensated in damages in an action at law. The Employee therefore
expressly agrees that the Employer, in addition to any other rights or remedies
which the Employer may possess, shall be entitled to injunctive and other
equitable relief to present a breach of this Agreement by the Employee.
2.5. Location and Travel. Employee's principal office shall continue to be
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located in St Lucie County, Florida throughout the Employment Term. Such office
may be relocated elsewhere in St Lucie County, but any relocation of the
Employer's principal office outside St Lucie County without the Employee's
consent shall be treated as a termination not for cause under Section 4.1 and
shall entitle the Employee to all applicable benefits under Section 4.
3. Compensation of Employee
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3.1. Salary. As compensation for his services hereunder, the Employee
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shall, during the first year of his employment hereunder, receive a base annual
salary equal to that in effect on the commencement of the Initial Term payable
in accordance with the general payroll practice of Employer and any bonus
compensation as determined by the Board of Directors or the Compensation
Committee. During each succeeding calendar year or portion thereof, his salary
shall be adjusted to equal the greater of (a) the past year base salary, or (b)
an amount which includes an annual increase as determined by the Board of
Directors or the Compensation Committee of the Board of Directors.
3.2. Employee Benefit Programs. Employee shall be entitled to continue
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participation in all employee benefit, bonus, pension, restricted stock,
supplemental retirement plan, profit sharing plans and similar programs in which
he is now participating, including programs of insurance, civic and social
clubs, professional organizations and to participate throughout the Employment
Term in these, and in all programs subsequently adopted by Employer for senior
management personnel.
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4. Termination of Employment.
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4.1. By Employer. Employer's Board of Directors may terminate Employee's
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employment at any time by giving written notice of such termination to Employee
in the manner provided below for the giving of notices, such termination to be
effective on a date specified therein which is not less than sixty (60) days
from the date of such notice; provided, however, any termination other than for
cause shall not prejudice the Employee's right to compensation and other
benefits under this Agreement during the balance of the Employment Term (as
provided at Section 1.3, and without regard to such termination). Such
compensation shall be paid at the same time as current wages are payable, or, at
the election of Employee, in a lump sum paid at the effective date of
termination, but without any discount for such prepayment. Employee's
participation in all benefit programs shall continue throughout the Employment
Term (as provided at Section 1.3, and without regard to such termination) as if
Employee were still an employee. The amounts payable to Employee under this
Section 4.1 shall not be reduced by any amounts earned by Employee from other
employment or otherwise, and the Employee shall be under no duty to seek other
employment, or otherwise to mitigate the amounts payable hereunder. Employee
shall have the right (but not the obligation) at any time following receipt of
notice of termination under this Section 4.1 until the effective date thereof to
resign as an officer and/or as a Director of Employer while continuing to serve
as an employee at the same compensation, but with such reduction in duties as
may be appropriate in order that Employee shall no longer be an officer of
Employer within the meaning of Section 16(b) of the Securities Exchange Act of
1934.
4.2. Termination for Cause. Employee shall have no right to receive
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compensation or other benefits for any period after termination for cause. For
purposes of this Agreement, "cause" shall mean termination for personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties, willful violation
of any law, rule or regulation (other than traffic violations or similar
offenses) or final cease-and-desist order, material breach of any provision of
this Agreement, fraud, dishonesty, or felonious activities which result in a
conviction in any court of competent jurisdiction.
4.3. Temporary Suspension. If Employee is suspended from office and/or
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temporarily prohibited from participating in the conduct of Employer's affairs
by a notice served under Section 8(e)(4) or (g)(1) of the Federal Deposit
Insurance Act ("FDI Act"), Employer's obligations under this Agreement shall be
suspended as of the date of service, unless stayed by appropriate proceedings.
If the charges in the notice are dismissed, Employer may in its discretion: (a)
pay Employee all or part of the compensation withheld while its contract
obligations were suspended and (b) reinstate (in whole or in part) any of its
obligations which were suspended.
4.4. Permanent Removal From Office. If Employee is removed from office
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and/or permanently prohibited from participating in the conduct of Employer's
affairs by an order issued under Section 8(e)(4) or (g)(1) of the FDI Act,
obligations of Employer under this
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Agreement shall terminate as of the effective date of the Order, but vested
rights of the contracting parties shall not be affected.
4.5. Default of Employer. If Employer is in default (as defined in Section
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3(x)(1) of the FDI Act, all obligations under this Agreement shall terminate as
of the date of default, but vested rights of the parties under this Agreement
shall not be affected.
4.6. Termination by Regulatory Agency. All obligations under this
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Agreement shall be terminated, except to the extent it is determined that the
continuation of this Agreement is necessary for the continued operation of the
Employer: (i) by the Director of the Office of Thrift Supervision, or his or her
designee, at the time the Federal Deposit Insurance Corporation or the
Resolution Trust Corporation enters into an agreement to provide assistance to
or on behalf of the Employer under the authority contained in section 13(c) of
the Federal Deposit Insurance Act; or (ii) by the Director of the Office of
Thrift Supervision, 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 Employer or when the Employer is determined by the Director to
be in an unsafe or unsound condition.
4.7. Effect of Certain Terminations. Upon a termination of the Employment
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Term pursuant to any of Sections 4.2 through 4.6 above, the Employer shall have
no further liability or obligation to the Employee under this Agreement except
to pay the Employee or his estate (i) all compensation accrued pursuant to
Section 3.1 through the Date of Termination and unpaid, and (ii) all sums
payable and owed to the Employee as specified in Section 3.2 hereof.
4.8. Termination by the Employee.
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(a) The Employment Term and the obligations of the Employer and the
Employee under this Agreement shall terminate:
(i) upon the death of the Employee;
(ii) upon the date on which the Employee retires;
(iii) if the Employee is incapacitated by accident, sickness, or
otherwise so as to render the Employee, for a period of 180
consecutive days, mentally or physically incapable of
performing the services required of the Employee under this
Agreement (a "Disability") and, if requested by the Employer,
the basis for such Disability is certified by a licensed
physician, and if within thirty days after written notice of
potential termination is given, the Employee shall not have
returned to the performance of the Employee's duties hereunder
on a full-time basis.
(b) Upon a termination of the Employment Term pursuant to (a)(i), (ii) or
(iii), above, the Employer shall have no further liability or obligation to the
Employee under this Agreement
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except to pay the Employee or his estate (i) all compensation accrued pursuant
to Section 3.1 through the Date of Termination and unpaid, and (ii) all sums
payable and owed to the Employee as specified in Section 3.2 for expenses and
benefits, in each case earned before termination of the Employment Term.
(c) The Employee may also terminate his employment with the Employer at
any time, by giving sixty (60) days written notice of such termination to the
Employer in the manner provided for the giving of notices in Section 7.1. The
Employee shall have no right to receive compensation, Severance Payments or
other benefits for any period after the Date of Termination, unless such
termination is as a result of one of the terminations described in Section 4.10,
or such notice is a notice of nonrenewal. Such termination shall not prejudice
any remedy which either party may have at law, in equity, or under this
Agreement.
4.9. Effective of Employer's Merger, Transfer of Assets or Dissolution.
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This Agreement shall not, except as provided in 4.6 above, be terminated by any:
(a) merger or consolidation where the Employer is not the consolidated or
surviving association, (b) transfer of all or substantially all of the assets of
Employer, (c) voluntary or involuntary dissolution of Employer or (d) change in
control as defined under the Change in Bank Control Act of 1978. The surviving
or resulting association, the transferee of Employer's assets or the control
person shall be bound by and have the benefit of the provisions of this
Agreement, and Employer shall take all actions necessary to insure that such
association, transferee or control person is bound by the provisions of this
Agreement; it being understood, however, that Employee's job title, duties and
reporting responsibilities may be realigned to reflect the fact that the
combination has resulted in a larger organization with several personnel groups
who must be integrated into a unified operational work force. In the event of a
termination of the operations of Employer (other than a formal dissolution in
connection with a reorganization, merger or other form of acquisitive
reorganization), Employee shall not be entitled to any relief other than to
receive the full amount of salary and benefits otherwise payable over the
balance of the Employment Term, without discount for the fact that such payments
are accelerated in time. Employee, in the event of such merger or consolidation
or transfer of assets, dissolution or change in control, shall not be required
to report to a location, as his place of work, more than 50 miles from his
current residence.
4.10. Additional Provisions Respecting Fringe Benefits on Termination. In
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the event of any termination pursuant to Section 4.1, Section 4.9 or this
Section 4.10 hereof then, in addition to all other rights of Employee hereunder,
the following special provisions shall apply as to matters here specified:
4.10.1 Any contrary provision of the Employer's employee stock
option plan not withstanding, all stock options held by Employee shall become
immediately exercisable, in full, notwithstanding any provisions herein for
deferred "vesting" based on the completion of a specified period of employment,
and such options shall remain exercisable for a period of twelve (12) months
after the effective date of the termination of Employee's employment as
specified in such notice.
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4.10.2 (a) If within one year following an occurrence of any of
the events described in Sections 4.9(a), (b), (c) or (d) above, the Employee's
employment hereunder is terminated 1) by the Board for any reason other than:
(i) for cause; or (ii) as a result of the Employee's retirement or disability,
or 2) by the Employee, after the occurrence of any of the following:
(A) without the express written consent of the
Employee, a material diminution in his position, duties,
responsibilities or status with the Employer from those in existence
on the date of this Agreement, a material reduction in his
compensation as defined in Section 3.1, benefits as defined in
Section 3.2, a material reduction in his reporting responsibilities,
titles or offices from those in effect on the date of this Agreement,
or the removal from or failure to be re-elected to his current
position, except in each case in connection with the termination of
his employment pursuant to section 4.2 or due to the Employee's
death, disability or retirement; or
(B) the failure by any successor to the Employer to
assume this Agreement;
(collectively known as an "Involuntary Termination"), then upon the Date of
Involuntary Termination the Employee shall be entitled to receive the
Employee's full basic salary pursuant to Section 3.1 and such other sums
payable for expenses and benefits as specified in Section 3.2 through the
Date of Involuntary Termination at the rate in effect at the time Notice of
Termination is given, and, in lieu of any other payments due under this
Agreement, the "Severance Payment" set forth in subparagraph (b) below.
(b) In the event of an Involuntary Termination, in lieu of
any further salary payments to the Employee for periods subsequent to the
date of the Involuntary Termination, the Employer shall pay to the
Employee, or in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, subject to the limitation
set forth in subparagraph (c), Severance Payments in an amount equal to
three times the sum of:
(i) the Employee's base salary from the Employer
during the 12-month period immediately preceding
the Date of Involuntary Termination, plus
(ii) the amount of the bonuses received by the
Employee from the Employer during the 12-month
period immediately preceding the Date of
Involuntary Termination, plus
(iii) the cost to the Employer of all benefits to
which the Employee is entitled under Section 3.2
above during the 12-month period immediately
preceding the Date of
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Involuntary Termination, including, without
limitation (but without duplication), any
insurance, pension, savings, contingent stock,
stock option or other employee benefit plans,
excluding any amounts forfeited thereunder by
reason of termination prior to vesting, plus
(iv) upon the election of the Employee at his sole
discretion, an amount equivalent to the excess,
if any, of the aggregate fair market value
(measured as of the close of trading on the date
of Involuntary Termination) of all shares of any
class or series of the Employer's capital stock
issuable upon exercise of then outstanding
exercisable employee stock options granted to
the Employee over the aggregate exercise price
of such options; and such options shall
thereupon be cancelled and of no further force
or effect;
No Severance Payments shall be due or payable to the Employee under this
Agreement in the event the Employee resigns or terminates his employment with
the Employer or the Employer terminates the Employee's employment, except as
specifically provided above.
(c) Amounts otherwise payable by the Employer to the
Employee pursuant to Section 4.10.2(b) above shall not, in the aggregate, exceed
the amount which is $100 less than three times the Employee's "base amount," as
that term is defined in Section 280G(b)(3) of the Internal Revenue Code of 1986
(the "Code") or any successory provision, as such Section or provision may be
amended and applicable to contracts entered into on the date of this Agreement.
(d) The full Severance Payment shall be made by the
Employer to the Employee in a lump sum on the tenth business day (the "Payment
Date") following the Date of Involuntary Termination; provided that the Employee
may elect in writing, on the date this Agreement is executed, to have any such
Severance Payment paid in installments.
(e) Any purported termination by the Employer or by the
Employee shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 7.1 hereof. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Employee's employment under the provision so
indicated.
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5. Remedies in the Event of Controversies or Breach.
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5.1. Damages for Breach of Contract. In the event of a breach of this
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Agreement by either Employer or the Employee, resulting in damages to the other
party, that party may recover from the party breaching the agreement any and all
damages that may be sustained.
5.2. Additional Recovery. The parties recognize that in the event of any
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dispute as to Employee's entitlement to continuing compensation hereunder,
Employer's economic position is greatly stronger than that of Employee, and the
Employee could be seriously damaged were Employer to stop the payment of
compensation due to Employee in the case of a termination under Section 4.1, 4.9
or 4.10 by claiming that such termination was made pursuant to Sections 4.2
through 4.6. Accordingly, the parties have agreed that in the case of any
termination which Employer contends is subject to Section 4.2 through 4.6, but
Employee claims is subject to Section 4.1, if Employer continues to make
compensation payment to Employee during resolution of such dispute that Employer
shall be entitled to return of such payments, with interest at the discount rate
payable by Employer on borrowings from its Federal Home Loan Bank, if it is
ultimately determined that termination was subject to Sections 4.2 through 4.6;
and if Employer shall cease such payments and it be determined that such
termination was subject to Section 4.1, 4.9 or 4.10 hereof, that Employee shall
be entitled to recovery of the amount due to Employee for payments not made,
together with interest at the prime rate as announced from time to time by The
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Wall Street Journal, and legal fees as provided at Section 5.3, and in addition,
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the term during which payments are to be made to Employee under Section 4.1, 4.9
or 4.10 shall be extended for a number of months equal to the number of months
for which payments were not made. This provision is made by the parties hereto
for the purpose of compensating Employee for the loss he will suffer in the case
of an unfounded discontinuation of compensation payments, and to encourage
fairness and equal dealing between the parties in the event of a dispute.
5.3. Attorney's Fees and Costs. If any action at law or in equity is
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necessary to enforce or interpret the terms of this Agreement, the Employee
shall be entitled to reasonable attorney's fees, costs and necessary
disbursements if he receives a legal judgment or settlement in his favor.
6. Golden Parachute.
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6.1. Payments. Any payments to the Employee pursuant to the Agreement or
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otherwise are subject to and conditioned upon their compliance with 12 U.S.C,
(S) 1828(k) and any regulations promulgated thereunder to the extent such may be
applicable.
7. General Provisions.
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7.1. Notices. Any notices to be given hereunder by either party to the
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other may be effected by personal delivery in writing or by mail, registered or
certified postage prepaid with return receipt requested. Mailed notices shall be
addressed to the parties at the addresses
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appearing in the introductory paragraph of this Agreement, but each party may
change his address by written notice in accordance with this paragraph. Notices
delivered personally shall be deemed communicated as of actual receipt; mailed
notices shall be deemed communicated as of the second day following deposit in
the United States mail.
7.2. Entire Agreement. This Agreement supersedes any and all other
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agreements, either oral or in writing, other than certain stock option
agreements, between the parties hereto with respect to the employment in any
manner whatsoever. Each party to this Agreement acknowledges that no
representations, inducements, promises, or agreements, orally or otherwise, have
been made by any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other Agreement shall be valid or binding. Any
modification of this Agreement will be effective only if it is in writing signed
by the party to be charged.
7.3. Partial Invalidity. If any provision in this Agreement is held by a
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court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.
7.4. Assignment. This Agreement and the rights and obligations of the
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parties hereto shall bind and inure to the benefit of any successor or
successors of the Employer and any assignee of all or substantially all of its
business and properties, but except as to such successor or assignee of the
Employer, neither this Agreement nor any rights or benefits hereunder may be
assigned by the Employer, except by operation of law. This Agreement and all
rights of the Employee hereunder shall inure to the benefit of and be
enforceable by the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributors, devisees and legatees.
7.5. Law Governing Agreement. This Agreement shall be governed by and
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construed in accordance with the laws of the State of Florida and Section 563.39
Chapter V, Title 12 of the Code of Federal Regulations.
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Executed at Fort Piece, Florida as of the day and year first above written.
HARBOR FEDERAL SAVINGS BANK
DATE September 13, 1995 EMPLOYER:
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ATTEST:/s/ Xxxxxxxxx Xxxxxx BY: /s/ Xxxxxx X. Xxxx
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Secretary Xxxxxx X. Xxxx
Chairman of the Board of Directors
EMPLOYEE:
ATTEST:/s/ Xxxxxxxxx Xxxxxx /s/ Xxxxxxx X. Xxxxx, Xx.
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Secretary Xxxxxxx X. Xxxxx, Xx.
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