FHE Draft
May 3, 1998
[Other Officers]
EMPLOYMENT AGREEMENT
AGREEMENT made as of the ___ day of ______, 1998, by and among COMPASS BANK
FOR SAVINGS, a Massachusetts chartered savings bank, with its executive offices
in New Bedford, Massachusetts (the "Bank"), [SEACOAST FINANCIAL SERVICES
CORPORATION], a Massachusetts corporation (the "Holding Company") and the parent
company for the Bank (the Bank and the Holding Company shall be hereinafter
collectively referred to as the "Employers"), and _______ of ____________,
Massachusetts (the "Executive").
WITNESSETH
WHEREAS, the Bank desires to continue to provide for the Executive's
employment by the Bank;
NOW THEREFORE, in consideration of the mutual covenants contained herein,
the Bank and the Executive agree as follows:
1. Employment. The Executive shall serve the Bank as a Senior Executive
Officer. In such positions, the Executive shall have such duties,
responsibilities and authorities as may be determined and designated from time
to time by the Board of Directors. The Executive shall serve under the direction
and supervision of and report to the Chief Executive Officer. The Executive
shall not be required to perform any duties and responsibilities which would
result in a noncompliance with or violation of any applicable law or regulation.
In addition to serving as a Senior Executive Officer of the Bank, you also agree
to serve during the Term of Employment as a Senior Executive Officer of the
Holding Company if requested to do so. Unless otherwise determined by the Board
of Directors of the Holding Company, you shall not be entitled to compensation
in addition to the compensation set forth in Section 3 of this Agreement as a
result of your serving as an officer of the Holding Company.
2. Effective Date and Term. The commencement date (the "Commencement Date")
of this Agreement shall be the date first above written. The initial term of the
Executive's employment hereunder shall be for two years from the Commencement
Date. The parties intend that, at any point in time during the Executive's
employment hereunder, the then- remaining term of his employment under this
Agreement shall be two years. Accordingly, the term of employment shall be
automatically extended by one day for each day that the Executive remains
employed by the Bank, unless the Executive elects not to continue to extend the
term of this Agreement by giving written notice in accordance with Section 7.2
of this Agreement, or the Board elects not to continue to extend the term of
this Agreement (in which event the provisions of Section 7.1 shall apply). The
last day of such term as so extended from time to time, is herein sometimes
referred to as the "Expiration Date" and the time period from the Commencement
Date through the Expiration Date shall be the "Term of Employment". At least
once in each calendar year the Board will review the Agreement and Executive's
performance annually for purposes of determining whether to continue to extend
the Agreement and the rationale and results thereof shall be included in the
minutes of the Board's meeting. The Board shall give notice to the Executive
reasonably promptly after such review if it has determined not to continue to
extend this Agreement.
3. Compensation and Benefits. The compensation and benefits payable to the
Executive under this Agreement shall be as follows:
3.1 Salary. For all services rendered by the Executive to the Bank and its
affiliates, the Executive shall be entitled to receive a base salary at the rate
of $__________ per year, subject to increase from time to time in accordance
with the usual practices of the Bank with respect to review of compensation of
its senior executives. In addition, if the Board increases the Executive's
annual base salary at any time before the Expiration Date, such increased
annual base salary shall become a floor below which such annual base salary
shall not fall at any future time during the Term of Employment without the
Executive's written consent, provided, however, that such increased salary may
be reduced (but not below the level originally in effect on the Commencement
Date) on a basis consistent with and concurrently with across-the-board salary
reductions based on the Employers' financial performance similarly affecting all
senior management personnel of the Bank and its affiliates. The Executive's
salary shall be payable in periodic installments in accordance with the Bank's
usual practice for its senior executives.
3.2 Regular Benefits. The Executive shall also be entitled to participate
in any and all employee benefit plans, medical insurance plans, disability
income plans, retirement plans, bonus incentive plans, and other benefit plans
from time to time in effect for senior executives of the Bank. Such
participation shall be subject to (i) the terms of the applicable plan
documents, (ii) generally applicable policies of the Bank and (iii) the
discretion of the Board of Directors of the Bank or any administrative or other
committee provided for in or contemplated by such plan.
3.3 Other Benefits.
(a) [To be specified; as presently in effect for particular Officer].
3.4 Business Expenses. The Bank shall reimburse the Executive for all
reasonable travel and other business expenses incurred by him in the performance
of his duties and responsibilities, subject to such reasonable requirements with
respect to substantiation and documentation as may be specified by the Bank.
3.5 Vacation. The Executive shall be entitled to not less than [four (4)]
[five (5)] weeks of vacation per year, to be taken at such times and intervals
as shall be determined by the Executive with the approval of the Bank, which
approval shall not be unreasonably withheld.
3.6 General. Nothing paid to the Executive under any plan, policy or
arrangement currently in effect or made available in the future shall be deemed
to be in lieu of other
compensation to the Executive as described in this Agreement.
4. Extent of Service. During the Term of Employment, the Executive shall,
subject to the direction and supervision of the Board of Directors of the Bank,
devote his full time, best efforts and business judgment, skill and knowledge to
the advancement of the Employers' interests and to the discharge of his duties
and responsibilities hereunder. He shall not engage in any other business
activity, except as may be approved by the Board of Directors; provided,
however, that nothing herein shall be construed as preventing the Executive
from:
(a) investing his assets in such form or manner as shall not require
any material services on his part in the operations or affairs of the companies
or the other entities in which such investments are made; or
(b) serving on the board of directors of any company not in competition
with either Employer, provided that the Executive shall not render any material
services with respect to the operations or affairs of any such company; or
(c) engaging in religious, charitable or other community or non-profit
activities which do not impair his ability to fulfill his duties and
responsibilities under this Agreement.
5. Termination Upon Death. In the event of the Executive's death during the
Term of Employment, the Executive's employment shall terminate on the date of
his death. The Bank shall pay to the Executive's beneficiary designated in
writing to the Bank prior to his death (or to his estate, if he fails to make
such designation), (i) any base salary or other compensation earned (together
with a pro rata portion of the bonus payable with respect to the year in which
death occurred) but not paid to Executive prior to the date of death, plus (ii)
the base salary that Executive would have earned for a period of six months
following his death, plus (iii) any death benefits that Executive is entitled to
under the Bank's policies in effect on Executive's date of death. The foregoing
bonus payments shall be payable at the time of payment of similar bonus payments
made to other executives of the Bank and shall be computed on the assumption
that all the Executive's individual goals (if any) under any applicable bonus
plans were achieved. In addition, the Bank shall continue in effect the medical
benefits of the Executive and Executive's dependents, or any of the same, at the
level in effect on, and at the same out-of-pocket cost to the Executive as of,
the date of death for a six month period commencing on the date of death (or, if
such continuation is not permitted by applicable law or if the Board so
determines in its sole discretion, the Bank shall provide the economic
equivalent in lieu thereof).
6. Termination by the Bank for Cause.
6.1 Termination by Bank. The Executive's employment hereunder may be
terminated by the Bank without further liability on the part of the Bank,
effective immediately, by a two-thirds vote of all of the members of the Board
of Directors of the Bank for Cause (as such term is defined in Section 6.2) by
written notice to the Executive setting forth in reasonable detail the nature of
such Cause.
6.2 Cause. Termination for "Cause" shall mean
(a) deliberate dishonesty with respect to the Bank or any subsidiary or
affiliate thereof;
(b) committing fraud, misappropriation or embezzlement in the
performance of duties as an employee of the Bank or any subsidiary or affiliate
thereof; or
(c) conviction of a crime involving moral turpitude.
6.3 Termination of Obligations. In the event of termination pursuant to
Section 6, all obligations of the Bank under this Agreement shall terminate as
of the date indicated, but vested rights of the parties hereunder shall not be
affected.
7. Termination by the Executive
7.1 Termination by the Executive for Good Reason. The Executive shall be
entitled to terminate his employment hereunder for Good Reason (as defined in
Section 7.4) effective immediately by giving written notice to the Board of
Directors. Upon any such termination, the Executive shall be entitled to receive
the benefits set forth in Section 9.
7.2 Other Voluntary Termination by the Executive. During the Term of
Employment, the Executive may effect, upon sixty (60) days prior written notice
to the Bank, a Voluntary Termination of his employment hereunder and thereupon
the Term of Employment (if not already expired) shall end. A "Voluntary
Termination" shall mean a termination of employment by the Executive on his own
initiative other than (a) a termination due to death or becoming Disabled (as
defined in Section 11), (b) a termination for Good Reason, (c) a termination due
to Retirement (as defined in Section 7.3), or (d) a termination as a result of
the normal expiration of the full Term of Employment. If, during the Term of
Employment, the Executive's employment is so terminated due to Voluntary
Termination, the Term of Employment shall thereupon end and the Employers shall
pay to the Executive the payments and benefits which the Executive would be
entitled to in the event of a termination of his employment by the Employers for
Cause.
7.3 Termination Due to Retirement. "Retirement" means the termination of
the Executive's employment with the Bank for any reason by the Executive at any
time after the Executive attains "Retirement Age" (as hereinafter defined).
"Retirement Age" shall mean the earliest to occur of (x) age 65, (y) (if
applicable) any lesser age at which the Executive is entitled to retire from the
Employers and receive retirement benefits under the Employers' qualified pension
plan, and (z) an age of 62 or greater at which the Employers permit the
Executive to retire. The Executive may terminate the Executive's employment
hereunder due to Retirement upon thirty (30) days prior written notice to the
Bank. If, during the Term of Employment, the Executive's employment is so
terminated due to Retirement, the Term of Employment shall thereupon end and the
Executive shall be entitled to (i) continuation of the Executive's medical
benefits at the level in effect on, and at the same out-of-pocket cost to the
Executive as of, the
date of termination for the one-year period following the termination of the
Executive's employment due to Retirement (or, if such continuation is not
permitted by applicable law or if the Board so determines in its sole
discretion, the Bank shall provide the economic equivalent in lieu thereof), and
(ii) any other compensation and benefits as may be provided in accordance with
the terms and provisions of any applicable plans and programs, if any, of the
Bank.
7.4 Good Reason. For purposes of this Agreement, the term "Good Reason"
shall mean any of the following:
(a) the failure of the Board of Directors of the Bank to elect the
Executive as a Senior Executive Officer, or to continue the Executive as a
Senior Executive Officer;
(b) a material breach by the Bank of the provisions of Section 3.1,
which breach shall have continued for thirty (30) days after written notice from
the Executive to the Bank specifying the nature of such failure or breach; and
(c) a determination by the Board not to continue to extend the term of
this Agreement as provided in Section 2.
In addition,"Good Reason" shall include the following events but only if they
shall occur within two years following a "Change in Control" (which term shall
have the meaning defined in the Change in Control Agreement between the
Executive and the Bank):
(d) the failure by the Bank to continue to provide the Executive with
benefits substantially similar to those available to the Executive under any of
the life insurance, medical, health and accident, or disability plans or any
other material benefit plans in which the Executive was participating at the
time of the Change in Control, or the taking of any action by the Bank which
would directly or indirectly materially reduce any of such benefits, or the
failure by the Bank to provide the Executive with the number of paid vacation
days to which the Executive is entitled on the basis of years of service with
the Bank in accordance with the Bank's normal vacation policy in effect at the
time of the Change in Control;
(e) A reasonable determination by the Executive that, as a result of a
Change in Control, he is unable to exercise the responsibilities, authorities,
powers, functions or duties exercised by the Executive immediately prior to such
Change in Control;
(f) A reasonable determination by the Executive that, as a result of a
Change in Control, his working conditions have significantly worsened; or
(g) the failure of the Bank to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement.
8. Termination by the Bank Without Cause. The Executive's employment with
the Bank may be terminated without Cause by a two-thirds vote of all of the
members of the Board of Directors of the Bank on written notice to the
Executive, provided, however, that the Bank shall
have the obligation upon any such termination to make the payments to the
Executive provided for under Section 9 of this Agreement.
9. Certain Termination Benefits. In the event of termination pursuant to
Section 7.1 or 8, the Executive shall be entitled to each of the following
benefits:
9.1 Earnings to Date of Termination. An amount equal to the sum of (a) base
salary or other compensation earned through the date of termination, plus (b)
the Executive's pro rata share (based on the portion of the fiscal year during
which the Executive was employed) of the highest annual bonus paid during the
three fiscal years preceding the termination of employment, plus (c) all accrued
vacation and deferred compensation.
9.2 Lump Sum Payment of Remaining Salary Obligation. A lump sum severance
benefit equal to two times the sum of (a) the Executive's annual base salary and
(b) the highest annual bonus paid to the Executive during the three fiscal years
preceding the termination of employment.
9.3 Benefit Continuation. For the period subsequent to the date of
termination until the Expiration Date, the Executive shall continue to receive
the disability and medical benefits described in Section 3.2 existing on the
date of termination at the level in effect on, and at the same out-of-pocket
cost to the Executive as of, the date of termination.
9.4 Pension Adjustment. An amount equal to the excess of (a) the actuarial
value of the benefits which the Executive would have accrued under the
Employers' qualified defined benefit pension plan and non-qualified supplemental
retirement plan if the Executive's employment had continued for a period of two
years following his date of termination, over (b) the actuarial equivalent of
the Executive's actual benefit under the defined benefit pension plan and the
non-qualified supplemental retirement plan.
10. Adjustment for Unavailability of Benefits. If, in spite of the
provisions of Section 9, benefits or service credits under any benefit plan
provided by a third party shall not be payable or provided under any such plan
to the Executive, or to the Executive's dependents, beneficiaries or estate,
because the Executive is no longer deemed to be an employee of the Bank, the
Bank shall pay or provide for payment of such benefits and service credits for
such benefits to the Executive, or to the Executive's dependents, beneficiaries
or estate.
11. Disability. If, due to physical or mental illness, the Executive shall
be disabled so as to be unable to perform substantially all of his duties and
responsibilities hereunder, the Bank, acting through its Board of Directors, may
designate another executive to act in his place during the period of his
disability. Notwithstanding any such designation, the Executive shall continue
to receive his full salary and benefits under Section 3 of this Agreement until
the earlier of (x) the Expiration Date or (y) the date on which he becomes
eligible for disability income under the Employer's disability income plan (at
which time the Executive shall be considered to be "Disabled"). While receiving
disability payments under such plan, the Executive shall receive a salary from
the Bank which when combined with the Executive's disability income payments
will
equal 60% of the Executive's prior salary from the Bank, and shall continue to
participate in the Employers' benefit plans and to receive other benefits as
specified in Section 3.2 until the Expiration Date, with all such benefits to be
at the level in effect on, and at the same out-of-pocket cost to the Executive
as of, the date of disability. In the absence of a disability income plan at the
time of such disability, the Bank shall pay the Executive benefits equal to
those the Executive would have received if the Bank's current disability plan
were in effect at such time. Upon the Executive being able to return to
full-time employment after being Disabled but before the expiration of the Term
of Employment, the Executive shall be offered an equivalent available position
and otherwise be subject to the provisions of this Agreement. Nothing contained
in this Section 11 shall preclude the Bank from terminating the Executive's
employment without Cause, subject to its payment of benefits as provided in
Section 9.
12. Confidential Information. The Executive will not disclose to any other
Person (except as required by applicable law or in connection with the
performance of his duties and responsibilities hereunder), or use for his own
benefit or gain, any confidential information of either Employer obtained by him
incident to his employment with the Bank. The term "confidential information"
includes, without limitation, financial information, business plans, prospects
and opportunities (such as lending relationships, financial product
developments, or possible acquisitions or dispositions of business or
facilities) which have been discussed or considered by the management of either
Employer but does not include any information which has become part of the
public domain by means other than the Executive's nonobservance of his
obligations hereunder.
13. No Mitigation; No Offset. In the event of any termination of employment
under this Agreement, the Executive shall be under no obligation to seek other
employment or to mitigate damages, and there shall be no offset against any
amounts due to him under this Agreement for any reason, including, without
limitation, on account of any remuneration attributable to any subsequent
employment that the Executive may obtain. Any amounts due under this Agreement
are in the nature of severance payments or liquidated damages, or both, and are
not in the nature of a penalty.
14. Miscellaneous.
14.1 Conflicting Agreements. The Executive hereby represents and warrants
that the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which he
is a party or is bound, and that he is not now subject to any covenants against
competition or similar covenants which would affect the performance of his
obligations hereunder.
14.2 Definition of "Person". For purposes of this Agreement, the term
"Person" shall mean an individual, a corporation, an association, a partnership,
an estate, a trust and any other entity or organization.
14.3 Withholding. All payments made by the Bank under this Agreement shall
be net of any tax or other amounts required to be withheld by the Bank under
applicable law.
14.4 Arbitration of Disputes. Any controversy or claim arising out of or
relating to this Agreement or the breach thereof shall be settled by arbitration
in accordance with the laws of the Commonwealth of Massachusetts by three
arbitrators, one of whom shall be appointed by the Bank, one by the Executive
and the third by the first two arbitrators. If the first two arbitrators cannot
agree on the appointment of a third arbitrator, then the third arbitrator shall
be appointed by the American Arbitration Association in the City of Boston. Such
arbitration shall be conducted in the City of Boston in accordance with the
rules of the American Arbitration Association, except with respect to the
selection of arbitrators which shall be as provided in this Section 14.4.
Judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. In the event that it shall be necessary or
desirable for the Executive to retain legal counsel or incur other costs and
expenses in connection with the enforcement of any or all of the Executive's
rights under this Agreement, the Bank shall pay (or the Executive shall be
entitled to recover from the Bank, as the case may be) the Executive's
reasonable attorneys' fees and other reasonable costs and expenses in connection
with the enforcement of said rights (including the enforcement of any
arbitration award in court) regardless of the final outcome, unless and to the
extent the arbitrators shall determine that under the circumstances recovery by
the Executive of all or a part of any such fees and costs and expenses would be
unjust.
14.5 Interpretation. The recitals hereto constitute an integral part of
this Agreement. References to Sections include subsections, which are part of
the related Section (e.g., a section numbered "Section 5.5" would be part of
"Section 5" and references to "Section 5" would also refer to material contained
in the subsection described as "Section 5.5").
14.6 Assignment; Successors and Assigns, etc. Neither the Bank nor the
Executive may make any assignment of this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent of the other
party and without such consent any attempted transfer or assignment shall be
null and of no effect; provided, however, that the Bank may assign its rights
and obligations under this Agreement without the consent of the Executive in the
event either Employer shall hereafter effect a reorganization, consolidate with
or merge into any other Person, or transfer all or substantially all of its
properties or assets to any other Person. This Agreement shall inure to the
benefit of and be binding upon the Bank and the Executive, and their respective
successors, executors, administrators, heirs and permitted assigns. In the event
of the Executive's death prior to the completion by the Bank of all payments due
him under this Agreement, the Bank shall continue such payments to the
Executive's beneficiary designated in writing to the Bank prior to his death (or
to his estate, if he fails to make such designation).
14.7 Enforceability. If any portion or provision of this Agreement shall to
any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
14.8 Waiver. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of any party to
require the performance of
any term or obligation of this Agreement, or the waiver by any party of any
breach of this Agreement, shall not prevent any subsequent enforcement of such
term or obligation or be deemed a waiver of any subsequent breach.
14.9 Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by registered or certified mail, postage prepaid, to the
Executive at such address as the Executive has filed in writing with the Bank
or, in the case of the Bank, at its main office, attention of the Board of
Directors.
14.10 Amendment. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by duly authorized
representatives of the Holding Company.
14.11 Governing Law. This is a Massachusetts contract and shall be
construed under and be governed in all respects by the laws of The Commonwealth
of Massachusetts.
* * * * *
IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument
by the Holding Company, by its duly authorized officer, and by the Executive, as
of the date first above written.
ATTEST: COMPASS BANK FOR
SAVINGS
--------------------------------
By:-----------------------------
Title:--------------------------
[Seal]
WITNESS EXECUTIVE
------------------------------
The undersigned hereby unconditionally
guarantees the obligations of the Holding
Company under the foregoing Agreement.
[SEACOAST FINANCIAL SERVICES CORPORATION]
By:---------------------------
Title:------------------------
