BYRD
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of July 31, 1996, among COASTAL SAVINGS BANK
(the "Bank"), FIRST COASTAL CORPORATION (the "Company") and DENNIS D. BYRD
(the "Employee").
WHEREAS, the respective Boards of Directors of the Company and the
Bank have approved and authorized the entry into this Agreement with the
Employee;
WHEREAS, the Employee is currently serving as Treasurer of both the
Company and the Bank;
WHEREAS, the parties have entered into an Employment Protection
Amendment dated as of December 21, 1994, as amended (the "Prior Agreement");
WHEREAS, the parties desire to enter into this Agreement to set
forth the terms and conditions for the employment relationships of the
Employee with the Company and the Bank and to replace and supersede the Prior
Agreement.
NOW, THEREFORE, it is AGREED as follows:
1. EMPLOYMENT. The Prior Agreement is hereby replaced and
superseded and the Prior Agreement shall be of no further force or effect
after the date of this Agreement. The Employee is employed as Treasurer of
both the Company and the Bank from the date hereof through the term of this
Agreement. As an executive of the Company and of the Bank, the Employee shall
render executive, policy, and other management services to the Company and
the Bank of the type customarily performed by persons serving in similar
executive officer capacities. The Employee shall also perform such duties as
the Chief Executive Officer and the Boards of Directors of the Company and of
the Bank may from time to time reasonably direct. During the term of this
Agreement, there shall be no material increase or decrease in the duties and
responsibilities of the Employee otherwise than as provided herein, unless
the parties otherwise agree in writing.
2. SALARY. The Bank agrees to pay the Employee during the term
of this Agreement a base salary as follows: from the date hereof through
December 31, 1996, a salary at an annual rate equal to $88,400, which may be
increased in January of each year during the term of this Agreement as
determined by the Boards of Directors of the Company and the Bank. In
determining salary increases, the Board of Directors may compensate the
Employee for increases in the cost of living and may also provide for
performance or merit increases. The salary of the Employee shall not be
decreased at any time during the term of this Agreement from the amount then
in effect, unless the Employee otherwise agrees in writing. The salary under
this Section 2 shall be payable by the Bank to the Employee not less
frequently than monthly. The Company shall reimburse the Bank for a portion
of the salary paid to the Employee hereunder, which portion shall represent
an appropriate allocation for the services rendered to the Company
hereunder. The Employee shall not be entitled to receive fees for serving as
a director of the Company or of the Bank or for serving as a member of any
committee of the Board of Directors of the Company or of the Bank.
3. DISCRETIONARY BONUSES. In addition to his salary under
Section 2 hereof, the Employee shall be eligible to receive such
discretionary bonuses as may be authorized, declared, and paid by the Board
of Directors of the Company or of the Bank. No other compensation provided
for in this Agreement shall be deemed a substitute for such bonuses when and
as declared by the Board of Directors of the Company or the Bank.
4. PARTICIPATION IN RETIREMENT AND EMPLOYEE BENEFIT PLANS; FRINGE
BENEFITS. The Employee shall be eligible to participate in any plan of the
Company or of the Bank relating to stock options, stock purchases, pension,
thrift, profit sharing, employee stock ownership, group life insurance,
medical coverage, disability insurance, education, or other retirement or
employee benefits that the Bank or the Company has adopted or may adopt for
the benefit of its executive employees and shall also be eligible to
participate in any other fringe benefits which are now or may be or become
applicable to the Company's or the Bank's executive employees. In addition,
the Employee shall be reimbursed for reasonable business expenses, subject to
substantiation and other requirements as provided in the Bank's written
policies concerning reimbursement of business expenses. Participation in
these plans and fringe benefits shall not reduce the salary payable to the
Employee under Section 2 hereof.
5. TERM. The initial term of employment under this Agreement
shall be for a period commencing on the date hereof and ending on December
31, 1997. This Agreement shall be automatically renewed for an additional
consecutive 12-month period as of December 31, 1996 and every anniversary of
December 31 thereafter, unless contrary written notice to each of the other
parties has been given either by the Employee or by the Company and the Bank
at least two months prior to any such renewal date. Such initial term and
all such renewed terms are collectively referred to herein as the term of
this Agreement.
6. STANDARDS. The Employee shall perform the Employee's duties
and responsibilities under this Agreement in accordance with such reasonable
standards as may be established from time to time by the Boards of Directors
of the Company and the Bank. The reasonableness of such standards shall be
measured against standards for executive performance generally prevailing in
the savings institutions industry.
7. VOLUNTARY ABSENCES; VACATIONS. The Employee shall be
entitled, without loss of pay, to be absent voluntarily for reasonable
periods of time from the performance of the duties and responsibilities under
this Agreement. All such voluntary absences shall count as paid vacation
time, unless the Boards of Directors of the Company and the Bank otherwise
approves. The Employee shall be entitled to an annual paid vacation of four
weeks per year or such longer period as the Boards of Directors of the
Company and the Bank may approve. The timing of paid vacations shall be
scheduled in a reasonable manner by the Employee. The Employee shall not be
entitled (i) to receive
- 2 -
any additional compensation from the Bank on account of failure to take a
paid vacation or (ii) to accumulate [more than two weeks of] unused paid
vacation time from one fiscal year to the next.
8. TERMINATION OF EMPLOYMENT.
(a) (i) The Boards of Directors of the Company and the
Bank may terminate the Employee's employment at any time, but any termination
by such Board of Directors other than termination for cause shall not
prejudice the Employee's right to compensation or other benefits under this
Agreement. The Employee shall have no right to receive compensation or other
benefits for any period after termination for cause. The term "termination
for cause" shall mean termination because of the Employee's 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, or material
breach of any provision of this Agreement. In determining incompetence, the
acts or omissions shall be measured against standards generally prevailing in
the savings institutions industry; PROVIDED, that it shall be the Company's
and the Bank's burden to prove the alleged acts and omissions and the
prevailing nature of the standards the Company and the Bank shall have
alleged are violated by such acts and/or omissions.
(ii) The parties acknowledge and agree that damages
which will result to Employee for termination by the Company and the Bank
without cause, or termination by the Employee with "Good Reason" (as defined
below), shall be extremely difficult or impossible to establish or prove, and
agree that, unless the termination is for cause or voluntarily without Good
Reason, the Bank shall be obligated, concurrently with such termination, to
make a lump sum cash payment to the Employee as liquidated damages of an
amount equal to the amount that would be payable over a period equal to the
remaining term of this Agreement under Section 5 hereof (but not in excess of
24 months), if the Employee's compensation for such period were at an annual
rate equal to the Employee's base salary under Section 2 hereof, determined
as of the time of termination, and bonuses paid during the fiscal year
preceding the fiscal year in which such termination occurs. To establish
that a voluntary termination was with Good Reason, the Employee shall state
in his notice of resignation the reasons why he believes that Good Reason
exists for his resignation. For purposes of this Agreement, "Good Reason"
shall include a material reduction in the position, authority, duties or
responsibilities of the Employee or a failure by the Company and the Bank to
renew the term of this Agreement (including a notice of nonrenewal pursuant
to Section 5 hereof). Unless the Company and the Bank, within 30 days of the
date of such notice of resignation, shall reject the Employee's statement
that Good Reason exists, the Employee shall be conclusively deemed to have
voluntarily resigned with Good Reason. If the Company and the Bank reject
the Employee's statement that Good Reason exists, the dispute shall be
resolved by arbitration in accordance with the Commercial Arbitration Rules
of the American Arbitration Association, and the Bank shall have the burden
of proving that such rejection of the Employee's statement was proper. The
Employee agrees that, except for such other payments and benefits to which
the Employee may be
- 3 -
entitled as expressly provided by the terms of this Agreement, such
liquidated damages shall be in lieu of all other claims which Employee may
make by reason of such termination. Payment to the Employee hereunder shall
be made on or before the Employee's last day of employment with the Company
and the Bank. The liquidated damages amount shall not be reduced by any
compensation which the Employee may receive for other employment with another
employer after termination of his employment with the Company and the Bank.
(iii) In addition to the liquidated damages above
described that are payable to the Employee for termination without cause or
termination with Good Reason, the following shall apply in the event of any
termination by the Company and the Bank without cause or termination by the
Employee with Good Reason: (1) the Employee shall continue to participate
in, and accrue benefits under, all retirement, pension, profit-sharing,
employee stock ownership, and other deferred compensation plans of the
Company and the Bank for the remaining term of this Agreement (but not in
excess of 24 months) as if the termination of employment of the Employee had
not occurred (with the Employee being deemed to receive annually for the
purposes of such plans the Employee's then current salary (at the time of his
termination) under Section 2 of the Agreement), except to the extent that
such continued participation and accrual is expressly prohibited by law, or
to the extent such plan constitutes a "qualified plan" under Section 401 of
the Internal Revenue Code of 1986, as amended (the "Code"); (2) the Employee
shall be entitled to continue to receive all other employee benefits referred
to in Section 3 hereof for the remaining term of this Agreement (but not in
excess of 24 months) as if the termination of employment had not occurred;
and (3) all insurance or other provisions for indemnification, defense or
hold-harmless of officers or directors of the Company or the Bank which are
in effect on the date the notice of termination is sent to the Employee shall
continue for the benefit of the Employee with respect to all of his acts and
omissions while an officer or director as fully and completely as if such
termination had not occurred, and until the final expiration or running of
all periods of limitation against action which may be applicable to such acts
or omissions.
(b) The Employee shall have no right to terminate employment
under this Agreement prior to the end of the term of this Agreement, unless
such termination is approved by the Boards of Directors of the Company and
the Bank or is for Good Reason. In the event that the Employee violates this
provision, the Company and the Bank shall be entitled, in addition to its
other legal remedies, to enjoin the employment of the Employee with any
significant competitor of the Bank for a period of six months or the
remaining term of this Agreement, whichever is less. The term "significant
competitor" shall mean any commercial bank, savings bank, savings and loan
association, or mortgage banking company, or a holding company affiliate of
any of the foregoing, which at the date of its employment of the Employee has
an office out of which the Employee would be primarily based within 35 miles
of the Bank's home office.
(c) In the event the employment of the Employee is terminated
by the Company and the Bank without cause or by the Employee with Good Reason
and the Bank fails to make timely payment of the amounts then owed to the
Employee under this Agreement, the Employee shall be entitled to
reimbursement for all reasonable costs,
- 4 -
including attorneys' fees, incurred by the Employee in taking action to
collect such amounts or otherwise to enforce this Agreement, plus interest on
such amounts at the rate of one percent above the prime rate (defined as the
base rate on corporate loans at large U.S. money center commercial banks as
published by THE WALL STREET JOURNAL), compounded monthly, for the period
from the date the payment is due to be paid to the Employee until payment is
made. Such reimbursement and interest shall be in addition to all rights
which the Employee is otherwise entitled to under this Agreement.
(d) The Employee agrees to maintain the confidentiality of,
and not to use for the benefit of anyone other than the Company and the Bank,
any information that the Employee possesses concerning the Company or the
Bank, or any customer or borrower of the Bank, including any business plans
and strategies, financial information, marketing plans and information,
customer information, business or personnel data and practices and
information respecting existing and proposed acquisitions and investments,
except such information that is generally publicly available (other than
because of the wrongful disclosure of such information by the Employee) or
that is in the Employee's possession free of any restrictions on its use or
disclosure and from a source other than the Company or the Bank. The
Employee agrees, for a period of one year after the date of termination of
his employment with the Company and the Bank, that he will not (i) offer
employment (or a consulting, agency, independent contractor or other similar
paid position) to any employee of the Company, the Bank or any of their
respective subsidiaries, or (ii) induce, encourage or solicit any such
employee to accept employment (or any such other position) with any company
or entity with which the Employee may then be employed or otherwise
affiliated.
(e) Notwithstanding any other provision of this Agreement,
the Company and the Bank may terminate or suspend this Agreement and the
employment of the Employee hereunder as if such termination were for cause
under Section 8(a)(i) hereof to the extent required by the laws of the State
of Maine related to banking, by applicable federal law relating to deposit
insurance or bank holding companies or by regulations or orders issued by the
Banking Commissioner of the State of Maine or the Federal Deposit Insurance
Corporation and no payment shall be required to be made to the Employee under
this Agreement to the extent such payment is prohibited by applicable law,
regulation or order issued by a banking agency or a court of competent
jurisdiction; PROVIDED, that it shall be the burden of the Company and the
Bank to prove that any such action was so required. Without limiting the
generality of the foregoing, no payment shall be required to be made
hereunder to the Employee that would constitute a "golden parachute payment"
within the meaning of 12 CFR Section 359.1(f)(1) for which no applicable
exception exists at the time of such payment pursuant to 12 CFR Section
359.1(f)(2) or, in each case, the corresponding provisions of any subsequent
regulations. To the extent that the Company or the Bank (or both of them)
shall need the consent or approval of the Commissioner, the FDIC or other
applicable regulator to make payments to or for the benefit of the Employee
under this Agreement the Company and the Bank shall use their reasonable best
efforts to apply for and obtain any such consent or approval and, upon
receiving such consent or approval, to take such other actions as are
reasonably necessary and appropriate to enable them to make such payments.
- 5 -
(f) Notwithstanding any other provisions of this Agreement or
of any other agreement, contract, or understanding heretofore or hereafter
entered into by the Employee with the Company or the Bank, except an
agreement, contract, or understanding hereafter entered into that expressly
modifies or excludes application of this Section 8(f) (the "Other
Agreements"), and notwithstanding any formal or informal plan or other
arrangement heretofore or hereafter adopted by the Company or the Bank for
the direct or indirect provision of compensation to the Employee (including
groups or classes of participants or beneficiaries of which the Employee is a
member), whether or not such compensation is deferred, is in cash, or is in
the form of a benefit to or for the Employee (a "Benefit Plan"), the Employee
shall not have any right to receive any payment or other benefit under this
Agreement, any Other Agreement, or any Benefit Plan if such payment or
benefit, taking into account all other payments or benefits to or for the
Employee under this Agreement, all Other Agreements, and all Benefit Plans,
would cause any payment to the Employee under this Agreement to be considered
a "parachute payment" within the meaning of Section 280G(b)(2) of the
Internal Revenue Code of 1986, as amended (the "Code") (a "Parachute
Payment"). In the event that the receipt of any such payment or benefit
under this Agreement, any Other Agreement, or any Benefit Plan would cause
the Employee to be considered to have received a Parachute Payment under this
Agreement, then the Employee shall have the right, in the Employee's sole
discretion, to designate those payments or benefits under this Agreement, any
Other Agreements, and/or any Benefit Plans, which should be reduced or
eliminated so as to avoid having the payment to the Employee under this
Agreement be deemed to be a Parachute Payment.
9. DISABILITY. If the Employee shall become disabled or
incapacitated to the extent that the Employee is unable to perform the
Employee's duties and responsibilities hereunder, the Employee shall be
entitled to receive disability benefits of the type provided for other
executive employees of the Company and the Bank and the obligations of the
Company and the Bank hereunder shall be limited to providing such benefits
for the period of such disability.
10. NO ASSIGNMENTS. This Agreement is personal to each of the
parties hereto. No party may assign or delegate any rights or obligations
hereunder without first obtaining the written consent of the other party
hereto. However, in the event of the death of the Employee all rights to
receive payments hereunder shall become rights of the Employee's estate.
11. OTHER CONTRACTS. The Employee shall not, during the term of
this Agreement, have any other paid employment other than with a subsidiary
of the Company, except with the prior approval of the Boards of Directors of
the Company and the Bank.
12. AMENDMENTS OR ADDITIONS. No amendments or additions to this
Agreement shall be binding unless in writing and signed by all parties hereto.
- 6 -
13. SECTION HEADINGS. The section headings used in this Agreement
are included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.
14. SEVERABILITY. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability of the other provisions
hereof.
15. GOVERNING LAW. This Agreement shall be governed by the laws
of the United States to the extent applicable and otherwise by the laws of
the State of Maine, excluding the choice of law rules thereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, or caused this Agreement to be duly executed on their behalf, as
of the day and year first above written.
Attest: FIRST COASTAL CORPORATION
/s/ Patricia J. Briand By /s/ Gregory T. Caswell
- ---------------------------- ---------------------------------------
(Secretary President and Chief Executive Officer
Attest: COASTAL SAVINGS BANK
/s/ Patricia J. Briand By /s/ Gregory T. Caswell
- ---------------------------- ---------------------------------------
(Secretary) President and Chief Executive Officer
EMPLOYEE
/s/ Dennis D. Byrd
------------------------------------------
Dennis D. Byrd
- 7 -