Exhibit 10.1
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 2nd day of January, 1991 by and between THE
HIBERNIA SAVINGS BANK, a Massachusetts savings bank with its main office in
Quincy, Massachusetts (the "Bank") and MARK A. OSBORNE of Norwell,
Massachusetts (the "Executive").
W I T N E S S E T H
WHEREAS, the Executive and the Bank are parties to an Employment
Agreement dated September 4, 1986; and
WHEREAS, certain further action has been taken by the Bank with respect
to the Executive's employment with the Bank and the parties wish hereby to
enter into a new Employment Agreement to memorialize the current
understandings between the parties;
NOW THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Bank and the Executive agree as follows:
1. EMPLOYMENT. The Bank agrees to employ the Executive and the Executive
agrees to continue in the employ of the Bank on the terms and conditions
hereinafter set forth.
2. CAPACITY. The Executive shall serve the Bank as its President,
Chairman of the Board of Directors and Chief Executive Officer subject to his
election by the Board of Directors. In this capacity, the Executive shall,
subject to the By-Laws of the Bank and to the direction of the Board of
Directors, have responsibility for the general supervision and management of
the Bank's business.
3. EFFECTIVE DATE AND TERM. The commencement date (the "Commencement
Date") of this Agreement shall be January 2, 1991. Subject to the provisions
of Section 6, the term of the Executive's employment hereunder shall be for
five (5) years from the Commencement Date; provided, however, that the term
shall be extended automatically for periods of one year commencing on the day
prior to the first anniversary of the Commencement Date and on the day prior
to each subsequent anniversary thereafter, unless, on the date of any such
anniversary, either party gives written notice to the other of such party's
election not to extend the term of this Agreement. The last day of such term,
as so extended from time to time, is herein sometimes referred to as the
"Expiration Date".
4. COMPENSATION AND BENEFITS. The regular compensation and benefits
payable to the Executive under this Agreement shall be as follows:
(a) SALARY. For all services rendered by the Executive under this
Agreement, the Bank shall pay the Executive a base salary at the rate
of $185,000.00 per year, subject to increase from time to time in
accordance with the usual practice of the Bank with respect to review of
compensation of its senior executives. At such time as the initial base
salary is increased, if ever, such increased salary shall become the
base salary under this
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Agreement. The Executive's salary shall be payable in periodic
installments in accordance with the Bank's usual practice for its
senior executives.
(b) REGULAR BENEFITS. The Executive shall also be entitled to
participate in any and all employee benefit plans, medical insurance
plans, life 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 Bank policies and (iii) the discretion of the Board of
Directors or any administrative or other committee provided for in or
contemplated by such plan. In addition, the Executive shall be entitled
to receive benefits which are the same or substantially similar to
those which are currently being provided to the chief executive officers
of savings banks within the Commonwealth of Massachusetts.
(c) BUSINESS EXPENSES. The Bank shall reimburse the Executive for all
reasonable travel, entertainment 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 including without
limitation expenses incurred in travelling to and
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from and attending conventions and seminars in connection with the
Bank's business. On those occasions when Executive is accompanied by
his spouse, Bank shall pay all reasonable expenses incurred by
Executive on his spouse's behalf.
(d) AUTOMOBILE. The Bank will provide the Executive with the full
use of an automobile of a type and style consistent with his status as
President, Chief Executive Officer and Chairman of the Board, such
automobile to be selected by the Executive. All costs of operating,
insuring, maintaining or repairing said automobile (including without
limitation the costs of gasoline and oil) shall be paid by the Bank. The
Executive recognizes that such costs paid by the Bank represent taxable
income to him. The Bank agrees to pay to the Executive, on an annual
basis, an amount approximating the additional tax cost to the Executive
incurred as a result of the inclusion of such costs in the Executive's
taxable income to him. Such amount, to be determined solely by the Bank,
in its reasonable judgment, shall be based upon average marginal rates
in effect for persons receiving like compensation, and the actual tax
paid by the Executive shall not determine the amount so paid.
(e) VACATION. The Executive shall be entitled to not less than four
weeks of vacation per year, to be taken at
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such times and intervals as shall be determined by the Executive with the
approval of the Bank, which approval shall not be unreasonably withheld.
During such vacation time, the Executive's compensation shall be paid in
full.
(f) LIFE INSURANCE PLAN. The Executive and the Bank acknowledge that,
in addition to the Executive being a named insured under the Bank's group
life insurance plan, the Executive is covered by a term life insurance
contract in the face amount of $750,000. The Executive shall be the owner
of the policy and, in the event of the death of the Executive while in the
employ of the Bank, the proceeds shall be paid to the beneficiary
specified by the Executive, or if no beneficiary shall have been so
specified, to the estate of the Executive. The Bank shall be solely
responsible for the payment of premiums on such term life insurance
policy for so long as this Agreement is in effect. If, for any reason,
the policy is cancelled, Bank shall procure and pay for a substitute
insurance policy providing similar coverage.
The Executive recognizes that insurance premiums paid by the Bank on
all policies providing insurance in excess of limitations imposed by the
Internal Revenue Code are considered "excess insurance" and represent
taxable income to him. The Bank agrees to pay to the Executive, on an
annual basis, an amount approximating the additional tax
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cost to the Executive incurred as a result of the inclusion of all such
premiums for such excess insurance in the Executive's taxable income. Such
amount, to be determined solely by the Bank, in its reasonable judgment,
shall be based upon average marginal rates in effect for persons receiving
like compensation, and the actual tax paid by the Executive shall not
determine the amount so paid.
At the expiration of the Bank's obligations to Executive under this
Agreement including the payment of all termination benefits, Bank's
obligations to pay the premiums on such term policy shall cease; provided
however, that Bank will insure that such policy or policies provide the
Executive with the option for Executive to assume the premium cost of
continuing such insurance coverage.
(g) PHYSICAL EXAMINATION. The Executive agrees that he will submit to
an annual physical examination by a physician licensed to practice medicine
in the Commonwealth of Massachusetts chosen by the Executive. The Bank
will pay all expenses of such examination but shall not be entitled to a
report of the examination.
(h) TAX RETURN PREPARATION AND TAX PLANNING SERVICES. The Bank will
contract with the Bank's accountants in order to have such accountants
provide all services to Executive as are necessary to prepare the
Executive's state and federal tax returns and to provide such financial
and tax
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planning services as may be reasonably required by the Executive. All
costs of such services shall be paid by the Bank.
The Executive recognizes that such payments paid by the Bank on all
such financial planning and tax services represent taxable income to him.
The Bank agrees to pay to the Executive, on an annual basis, an amount
approximating the additional tax cost to the Executive incurred as a
result of the inclusion of ALL such financial planning and tax services
in the Executive's taxable income. Such amount, to be determined solely
by the Bank, in its reasonable judgment, shall be based upon average
marginal rates in effect for persons receiving like compensation, and
the actual tax paid by the Executive shall not determine the amount so
paid.
(i) SALARY CONTINUATION PLAN. The Bank agrees that, in the event of
the death of the Executive prior to the termination of this Agreement,
in addition to any other life insurance benefits which are provided for
under this Agreement, the Bank will pay the Executive's named beneficiary
the sum of One Hundred Thousand Dollars ($100,000.00) per year for each
of the four years following the Executive's death. Such amount shall be
deemed a "salary continuation benefit" and shall be paid in equal monthly
installments over the four year period. The Bank may purchase and maintain
a life insurance policy on the
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Executive in an amount sufficient to fund such benefit and, in such event
the Bank shall be the owner and beneficiary of such policy and solely
responsible for the payment of premiums on such policy, but such benefit
shall be due and payable whether or not such insurance is purchased and
whether or not the Bank receives payment on any such policy.
(j) OTHER BENEFITS. In addition to paying for all membership and
subscription fees for professional organizations and periodicals, Bank
shall pay for the cost of initiation fee and annual membership dues or
fees on behalf of the Executive at a private golf course of the
Executive's choosing in the Greater Boston Area.
5. EXTENT OF SERVICE. During his employment hereunder, the Executive
shall, subject to the direction and supervision of the Board of Directors,
devote his full business time, best efforts and business judgment, skill and
knowledge to the advancement of the Bank's 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 the following:
(a) investing his assets in a manner not prohibited by Section 9(a)
hereof, and in such form or manner as shall not require any material
services on his part in the operations or affairs of the companies or
other entities in which such investments are made;
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(b) serving on the board of directors of any company, subject to the
prohibitions set forth in Section 9(a) and provided that he shall not be
required to 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.
6. TERMINATION AND TERMINATION BENEFITS. The Executive's employment may
be terminated under the following circumstances:
(a) TERMINATION BY THE BANK FOR CAUSE. The Executive's employment
hereunder may be terminated 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 for cause by written notice to the Executive
setting forth in reasonable detail the nature of such cause. Only the
following shall constitute "cause" for such termination:
(i) Deliberate dishonesty of the Executive with respect to
the Bank or any subsidiary of affiliate thereof;
(ii) Conviction of the Executive of a crime involving moral
turpitude;
(iii) Gross and willful failure to perform a substantial portion
of his duties and responsibilities hereunder, which failure continues
for more than thirty days
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after written notice given to the Executive pursuant to a two-thirds
vote of all of the members of the Board of Directors, such vote to set
forth in reasonable detail the nature of such failure.
(b) TERMINATION BY THE EXECUTIVE. The Executive's employment hereunder
may be terminated effective immediately by the Executive by written notice
to the Board of Directors in the event of the following:
(i) Failure of the Board of Directors to elect the Executive to
any of the offices of President, Chairman of the Board, and Chief
Executive Officer of the Bank, or to continue the Executive in such
offices; or
(ii) Failure by the Bank to comply with any of the provisions of
Section 4(a) through (j) inclusive or any material breach by the Bank of
any other provision of this Agreement; or
(iii) If, in the reasonable judgment of the Executive (such
judgment being exercised in good faith), a significant change in the
nature or scope of Executive's responsibilities, power, functions or
duties has occurred which, when compared to the Executive's
responsibilities, powers, functions or duties exercised by the Executive
as of the date of execution of this Agreement, constitutes a demotion
and/or dismissal or if a reasonable determination is made by the
Executive that he is unable to exercise the
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responsibilities, powers, functions or duties exercised by him as of
the date of execution of this Agreement.
(c) TERMINATION BY THE BANK WITHOUT CAUSE. The Executive's employment
with the Bank may be terminated without cause by a three-fourths vote of
all members of the Board of Directors on written notice to the Executive.
(d) TERMINATION AT AGE SIXTY-FIVE. The Executive reaches age
sixty-five, except that retirement or termination benefits provided by
this Agreement shall not be prejudiced by this Section.
(e) CERTAIN TERMINATION BENEFITS. In the event of termination of
this Agreement for any reason other than a termination under Section
6(a) above, the Executive shall be entitled to the following
benefits:
(i) For the period subsequent to the date of termination until
the Expiration Date, the Bank shall continue to pay the Executive the
base salary at the rate in effect on the date of termination,
including such increases as are provided in Section 4(a).
(ii) For the period subsequent to the date of termination until
the Expiration Date, the Executive shall continue to receive all
benefits described in Section 4(b), (d) and (f) above existing on the
date of termination (except for any cash bonus plans which shall be
pro-rated through the date of termination). For purposes of
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application of such benefits, the Executive shall be treated as if he
had remained in the employ of the Bank, with an annual salary at the
rate in effect on the date of termination, with increases as provided
in Section 4(a), and service credits will continue to accrue during such
period as if the Executive had remained in the employ of the Bank.
(iii) If, in spite of the provisions of Section 6(e)(ii) above,
benefits or service credits under any benefit plan 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 itself 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.
(iv) If, as of the date of termination, the Executive is eligible
to retire under any retirement plan of the Bank in effect at such time,
the Executive will be entitled to receive any and all benefits that would
accrue to retiring employees under such plan for such period of time
after termination as the Executive is receiving termination benefits
under this Agreement.
(f) Not withstanding any other provision of this Agreement, the
Executive shall be under no obligation whatsoever to seek or accept
any employment after termination
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of employment with the Bank and the Executive's entitlement to all
benefits provided herein shall not be prejudiced in any way by his
failure to seek employment after termination of employment with the
Bank.
7. TERMINATION BENEFITS BUY-OUT.
(a) In the event of Executive's termination hereunder under
circumstances entitling the Executive to termination benefits under
Section 6(e), at the Executive's sole option, the Executive, at any
time before all termination benefits have been paid, may demand and,
upon such demand, the Bank shall pay the Executive the then current
value of the termination benefits owed to the Executive, such payment
to be made within thirty (30) days of demand.
(b) In the event of the Executive's death after the lawful termination
of this Agreement, but prior to the payment of all termination benefits
owed to Executive hereunder, in addition to any other life insurance
benefits provided in this Agreement, the Bank will pay the Executive's
named beneficiary the sum of One Hundred Thousand Dollars
($1,000,000.00) per year for each of the four years following the
Executive's death. Such amount shall be deemed a "salary continuation
benefit" and shall be paid in equal monthly installments over the four
year period. The Bank may purchase and maintain a life insurance policy
on the Executive in an amount sufficient to fund such benefit and,
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in such event the Bank shall be the owner and beneficiary of such
policy and solely responsible for the payment of premiums on such
policy, but such benefit shall be due and payable whether or not such
insurance is purchased and whether or not the Bank receives payment on
any such policy.
8. DISABILITY. If, due to illness or physical or mental disability, the
Executive shall be unable to perform substantially all of his duties and
responsibilities hereunder, the Board of Directors may designate another
executive to act in his place during the period of such disability.
Notwithstanding any such designation, the Executive shall continue to receive
his full salary and benefits under Section 4 of this Agreement until he
becomes eligible for disability income under the Bank's disability income
plan. While receiving disability income payments under such plan, the
Executive shall not receive any salary under Section 4(a), but shall continue
to participate in the Bank's benefit plans and to receive other benefits as
specified in Section 4 until the Expiration Date; provided, however, that in
the event that the disability income payments under under the Bank's
disability income plan are less than the Executive's salary at the time of
such disability, the Bank shall pay the Executive an amount equal to the
difference between such salary and disability payments. In the absence of a
disability income plan at the time of such disability, the Bank shall pay the
Executive benefits equal to the Executive's full salary. If
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any question shall arise as to whether during any period the Executive was
disabled so as to be unable to perform substantially all of his duties and
responsibilities hereunder due to physical or mental illness, the Executive
may, and at the request of the Bank will, submit to the Bank a certification,
in reasonable detail, by a physician selected by the Executive or his
guardian to whom the Bank has no reasonable objection as to whether the
Executive was so disabled, and such certification shall for the purposes of
this Agreement be conclusive of the issue. If such question shall arise and
the Executive shall fail to submit such certification, the Bank's
determination of such issue shall be binding on the Executive.
9. NONCOMPETITION AND CONFIDENTIAL INFORMATION
(a) NONCOMPETITION. During
(i) a period of one year following the date of termination of
the Executive's employment with the Bank by the Executive as a result of
his election not to extend pursuant to Section 3 or by the Bank for
cause pursuant to Section 6(a) hereof, and
(ii) the period during which the Bank continues to provide
benefits to the Executive pursuant to Section 6(e)(i)-(iii) hereof,
the Executive will not, directly or indirectly, whether as owner, partner,
shareholder, consultant, agent, employee, co-venturer or otherwise, or through
any person (as defined in Section 11),
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compete in the Bank's market area (defined as the towns in which the Bank's
main office and branch offices are located and all towns contiguous thereto)
with the banking or any other business conducted by the Bank during the
period of his employment hereunder, nor will he attempt to hire any employee
of the Bank, assist in such hiring by any other person, encourage any such
employee to terminate his or her relationship with the Bank or solicit or
encourage any customer of the Bank to terminate its relationship with the
Bank or to conduct with any other person any business or activity which such
customer conducts or could conduct with the Bank.
(b) 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 the Bank
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 businesses or facilities) which have
been discussed or considered by the Bank's management but does not
include any information which has become part of the public domain by
means other than the Executive's non-observance of his obligations
hereunder.
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(c) RELIEF INTERPRETATION. The Executive agrees that the Bank shall
be entitled to injunctive relief for any breach by him of the covenants
contained in Sections 9(a) or 9(b). In the event that any provision of
this Section 9 shall be determined by any court of competent
jurisdiction to be unenforceable by reason of its being extended over
too great a period of time, too large a geographic area or too great a
range of activities, it shall be interpreted to extend only over the
maximum period of time, geographic area or range of activities as to
which it may be enforceable. For purposes of this Section 9, the term
"Bank" shall mean the Bank and any of its subsidiaries and affiliates.
10. CONFLICTION 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.
11. DEFINITION OF "PERSON", "DIRECTOR" AND "BOARD OF DIRECTORS". 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; and the terms "Director" and "Board of Directors"
shall mean a Director and the Board of Directors, respectively, of the Bank.
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12. 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.
13. ENFORCEMENT EXPENSES. In the event that the Executive retains legal
counsel and/or incurs 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 attorney's fees and other
reasonable costs and expenses in connection with the enforcement of said
rights regardless of whether the Executive prevails on the merits of his
claims, so long as such claims are made in good faith.
14. 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. This Agreement shall inure to the benefit of and be binding upon
the Bank and the Executive, their respective successors, executors,
administrators, heirs and permitted assigns.
15. SPECIAL TERMINATION AGREEMENT. Executive and Bank are parties to a
written Special Termination Agreement dated September 4, 1986 as amended by
Amendment dated as of January 2, 1991. Nothing contained in this Agreement
shall limit the provisions thereof and such Special Termination Agreement is
to remain in full force and effect in accordance with its provisions as from
time to time amended.
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16. INDEMNITY. Bank shall indemnify, defend, and hold the Executive
harmless for all acts or decisions made by him in good faith while performing
services for the Bank. In addition to and not in lieu of such indemnity,
Bank shall include Executive as an insured under any insurance policy now in
force or hereafter obtained during the term of this Agreement covering the
officers and directors of the Bank. Bank shall pay all expenses including
without limitation reasonable attorneys' fees actually and necessarily
incurred by the Executive in connection with the defense of such acts and
decisions, suits or proceedings, including costs of settlement and/or appeal.
17. 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.
18. WAIVER. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of either party
to require the performance of any term or obligation of this Agreement, or
the waiver by either 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.
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19. 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 the last address the Executive has filed in writing with
the Bank, or, in the case of the Bank, at its main office attention of the
Clerk.
20. AMENDMENT. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by a duly authorized
representative of the Bank.
21. GOVERNING LAW. This is a Massachusetts contract and shall be
construed under and 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 Bank, by its duly authorized officer and by the Executive,
as of the date first above written:
ATTEST: THE HIBERNIA SAVINGS BANK
/s/ Thomas Johnson By: /s/ [Unreadable]
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, Clerk
Title: Director
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[Seal]
WITNESS:
/s/ [Unreadable] /s/ Mark A. Osborne
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MARK A. OSBORNE
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