CASWELL
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of July 31, 1996, among COASTAL SAVINGS BANK (the
"Bank"), FIRST COASTAL CORPORATION (the "Company") and GREGORY T. CASWELL (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 President and Chief
Executive Officer 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superseded and the Prior Agreement shall be of no further force or effect after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 President and Chief
Executive Officer 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 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 $124,800, 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
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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 Boards 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
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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,
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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 (the "Commissioner") or the Federal Deposit Insurance
Corporation (the "FDIC") 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.
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(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.
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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/ Normand E. Simard
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(Secretary) Its Chairman
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Attest: COASTAL SAVINGS BANK
/s/ Patricia J. Briand By /s/ Normand E. Simard
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(Secretary) Its Chairman
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EMPLOYEE
/s/ Gregory T. Caswell
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Gregory T. Caswell
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