Exhibit 10.10
EXECUTIVE SUPPLEMENTAL COMPENSATION AGREEMENT
BETWEEN
FIRST IPSWICH BANCORP
AND
XXXXXX X. XXXX
This agreement is made and entered into this 31st day of March, 2004 by
and between First Ipswich Bancorp, a Massachusetts corporation (hereinafter
referred to as the "Company") and Xxxxxx X. Xxxx of Ipswich, Massachusetts
(hereinafter referred to as the "Executive") .
W I T N E S S E T H:
WHEREAS, the Executive has been in the employ of the Company and its
wholly-owned subsidiary, The First National Bank of Ipswich (the "Bank"), and is
now serving as the president and chief executive officer of the Bank and this
Company; and
WHEREAS, because of the Executive's experience, knowledge of the affairs
of the Bank and this Company and his reputation and contacts in the industry,
the Company deems the Executive's continued employment with the Company
important for its future growth; and
WHEREAS, it is the desire of the Company and in its best interest and that
of the Bank that the Executive's services be retained; and
WHEREAS, in order to induce the Executive to continue in the employ of the
Bank and in recognition of his past service, the Company wishes to enter into an
Executive Supplemental Income Agreement to provide him or his beneficiaries
certain benefits.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and the Executive hereby agree as follows:
1. Retirement; Payments. Upon termination of Executive's employment due to
Retirement, as provided herein, the Company will pay to the Executive the Net
Retirement Benefit described below. Payment shall be made in monthly
installments beginning the first day of the calendar month following termination
of employment. "Retirement" shall mean the termination of Executive's employment
at any time after the date hereof for any reason (other than the Company's
termination of the Executive for Cause as defined herein), including termination
because of a permanent disability, early retirement or after a Change in Control
(as defined herein).
2. Net Retirement Benefit. The "Net Retirement Benefit" shall be
determined by calculating the Vested Retirement Amount and subtracting therefrom
the amount of Offsets actually paid to the Executive (or which he would have
received upon making appropriate elections) (all such terms as hereinafter
defined).
3. Vested Retirement Amount. The Vested Retirement Amount shall be
calculated by multiplying the Retirement Amount by the applicable following
percentage:
a. Retirement before Age 60 before Change in Control under Section 7
hereof: The Executive will vest in an amount equal to five percent (5%) of the
Retirement Amount for each six months of service with the Company beginning with
the date the Executive attained the age of fifty years.
b. Retirement before Age 60 following Change in Control under
Section 7 hereof: The Executive will be 100% vested.
c. Retirement After Age 60: 100%.
The "Retirement Amount" shall be calculated by multiplying the Benefit
Computation Amount by a percentage determined as follows: two percent (2%)
multiplied by the number of full years of service with the Company up to thirty
(30). The "Benefit Computation Amount" shall be the average of the Executive's
compensation during the three (3) consecutive calendar years in which his
compensation, including any bonus, is the highest, as determined by reference to
the W-2 forms issued by the Company.
4. Offsets. The "Offsets" are the Social Security Offset and the 401k
Offset, (as hereinafter defined):
a. The "Social Security Offset" shall be 50% of the single life
annual retirement benefit which the Executive is entitled to receive at age 62,
or at the time of Retirement, if later. In the event the amount the Executive is
entitled to receive as a single life retirement benefit from the Social Security
Administration changes from the amount included in the initial or any succeeding
calculation of the Social Security Offset, the Social Security Offset shall be
recalculated using the new amount.
b. The "401k Offset" shall be equal to the annual benefit payable
from a single life annuity on the Executive's life from a company holding at
least an AA rating from Xxxxx'x, Standard & Poor's or an equivalent rating
service on an assumed investment equal to the total of all employer
contributions to the 401k plan for the benefit of the Executive, including
matching contributions, (plus assumed earnings thereon at 6% per annum).
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5. Optional Forms of Payment. In lieu of the lifetime payments of Net
Retirement Benefit provided for herein, the Executive may with the consent of
the Company elect an optional form of payment, which shall be the actuarial
equivalent of the lifetime payments provided for hereunder. If possible, such
election shall be made at least three and not more than twelve months prior to
the date payments are to begin, and shall specify the optional form of payment
elected, which shall be a form of payment available to the Executive under the
Company's qualified defined contribution (401k) plan. In the event the Executive
elects a lump sum payment, the Company may elect to make payment of the
actuarial equivalent of the Net Retirement Benefit in substantially equal
monthly payments over a period of up to five years, together with interest on
the unpaid balance at a variable rate equal to the rate of interest on 90-day
U.S. Treasury Bills, payable monthly in arrears. The interest rate shall be
adjusted on the first day of each calendar month to be the rate of interest on
90-day U.S. Treasury Bills determined at the last auction of the preceding
calendar month.
6. Forfeiture. Anything to the contrary in this Agreement notwithstanding,
benefits under this Agreement shall be forfeited and all rights of the Executive
and his beneficiaries shall become null and void if the Executive's employment
is terminated for Cause. For this purpose, "Cause" shall have the meaning set
forth in the Employment Agreement of Executive and the Company of even date,
whether or not such agreement continues in effect.
7. Change in Control or Potential Change in Control. In the Event
Executive's employment is terminated for any reason other than involuntarily for
"Cause" or voluntarily for "Good Reason" within 36 months of a "Change in
Control" or 12 months of a "Potential Change in Control" (as those terms are
defined in a Severance Agreement between Executive and the Company of even date,
whether or not such agreement is in effect at the date of application), the Net
Retirement Benefit hereunder shall be calculated assuming that the Executive
shall have the greater of 16 years of Service or his actual number of years of
service and Executive shall be 100% per cent vested in such Net Retirement
Benefit.
8. Alienability. Neither the Executive, nor, if applicable, his widow or
other beneficiary under this Agreement, shall have any power or right to
transfer, assign, anticipate, hypothecate, mortgage, commute, modify, or
otherwise encumber any of the benefits payable hereunder or any rights to
benefits hereunder, nor shall any of said benefits or rights be subject to any
debts, judgments, alimony or separate maintenance owed by the Executive or, if
applicable, any beneficiary, or be transferable by operation of law in the event
of bankruptcy, or otherwise.
9. Participation in Other Plans. Nothing contained in this Agreement shall
be construed to alter, abridge, or in any manner affect the rights and
privileges of the
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Executive to participate in and be covered by any pension, profit-sharing, group
insurance, bonus or any other employee plan or plans which the Company or any
subsidiary or affiliate may have or hereafter have.
10. Reorganization. The Company shall not merge or consolidate into or
with another Company, or reorganize, or sell substantially all of its assets to
another Company, firm or person unless and until such succeeding or continuing
Company, firm or person agrees to assume and discharge the obligations of the
Company under this Agreement. Upon the occurrence of such event, the term
"Company" as used in this Agreement shall be deemed to refer to such successor
or survivor.
11. Benefits and Burdens. This Agreement shall be binding upon and inure
to the benefit of the Executive and his personal representatives and heirs, and
to the Company and any successor organization which shall succeed to
substantially all of its assets and business without regard to the form of such
succession.
12. Company. As used in this Agreement, Company shall mean First Ipswich
Bancorp and any affiliated entity, successor organization, parent, subsidiary or
holding company, including a successor after reorganization as provided in
Section 10.
13. Notices. Any notice or communication required of either party with
respect to this Agreement shall be made in writing and may either be delivered
personally or sent by first class mail, as the case may be:
To the Company at:
First Ipswich Bancorp
00 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Chairman
To the Executive at:
Xx. Xxxxxx X. Xxxx
7 Xxxxxxx Commons, Xxx. 0
Xxxxx Xxxxxxxx
Xxxxxxx, XX 00000
Each party shall have the right by written notice to change the place to
which any notice may be addressed.
14. Arbitration; Costs of Collection. Any dispute or controversy arising
under or in connection with this Agreement shall, after exhaustion of
administrative
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remedies, including the claims procedure in Section 15 hereof, be settled
exclusively by arbitration in Boston, Massachusetts in accordance with the rules
of the American Arbitration Association then in effect. Notwithstanding the
pendency of any such dispute or controversy, the Company will continue to pay
the Net Retirement Benefit until the dispute is finally resolved. Judgment may
be entered on the arbitrator's award in any court having jurisdiction; provided,
however, that Executive shall be entitled to seek specific performance of
Executive's right to be paid during the pendency of any dispute or controversy
arising under or in connection with this Agreement. In the event the dispute
relates to the amount of the payment, the Company shall continue to pay the
undisputed amount.
The Company shall pay to the Executive all reasonable legal fees and
expenses incurred by him in seeking to obtain or enforce any right or benefit
provided by this Agreement, provided that the final resolution of such matter
principally is in Executive's favor.
15. Claims Procedure.
a. The Company will be the "named fiduciary" and "plan
administrator" of the arrangement contemplated herein. The claims procedure set
forth herein may be changed by Company from time to time by written notice to
the Executive, provided no such change shall limit the protections herein
provided to the claimant except as such limitations are imposed by applicable
law, regulation, or case law. The Company may establish reasonable
administrative procedures for applying the Claims Procedures.
b. The Executive or any beneficiary of his may file a request for
benefits with the Company in writing delivered to the Company at its address
provided in Section 13 hereof. If a claim request is wholly or partially denied,
the Company will furnish to the claimant a notice of its decision within ninety
(90) days in writing, and in a manner to be understood by the claimant, which
notice will contain the following information:
i. the specific reason or reasons for the denial;
ii. specific reference to pertinent provisions of this
Agreement upon which the denial is based;
iii. a description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation as to why such material or information is
necessary; and
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iv. an explanation of the applicable claim-review procedure
describing the steps to be taken by a claimant who
wishes to submit his claim for review.
c. A claimant or his authorized representative may, with respect to
any denied claim:
i. request a review upon written application filed within
sixty (60) days after receipt by the claimant of written
notice of the denial of his claim;
ii. review pertinent documents; and
iii. submit issues and comments in writing.
d. Any request or submission will be in writing and will be directed
to the Company. The Company will have the sole responsibility for the review of
any denied claim and will take all appropriate steps in light of its findings.
The Company will render a decision upon review of a denied claim within sixty
(60) days after receipt of a request for review. If special circumstances
warrant additional time, the decision will be rendered as soon as possible, but
not later than one hundred twenty (120) days after receipt of request for
review. Written notice of any such extension will be furnished to the claimant
prior to the commencement of the extension. The decision on review will be in
writing and will include specific reasons for the decision written in a manner
to be understood by the claimant, as well as the specific references of the
pertinent provisions on which the decision is based. If the decision on review
is not furnished to the claimant within the time limits described above, the
claim will be deemed denied on review.
16. Entire Agreement; Amendments. This Agreement constitutes the entire
understanding of the parties with respect to its subject matter, supersedes any
prior communication or understanding with respect thereto, and no amendment to
or modification or waiver of any provision hereof shall be valid unless made in
writing and signed by the parties.
17. Jurisdiction. The terms and conditions of this Agreement are subject
to the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
under seal by its duly authorized officer, and the Executive has hereunto set
his hand and seal at Ipswich, Massachusetts on this 31st day of March, 2004.
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WITNESS: FIRST IPSWICH BANCORP
/s/ Xxxxx Xxxxxxxx By: /s/ Xxxx St. Xxxx Xxxxxxx
----------------------------- ----------------------------------------
Title: Chairman
WITNESS:
/s/ Xxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxx
----------------------------- --------------------------------------------
Xxxxxx X. Xxxx, Executive
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