FORM OF
REVERE FEDERAL SAVINGS
EXECUTIVE EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
______________, 1998, by and between REVERE FEDERAL SAVINGS, a savings
association organized and operating under the federal laws of the United States
and having an office at 310 Broadway, Revere, Massachusetts 02151 ("Bank") and
JAMES J. MCCARTHY, an individual residing at 12 Magnolia Terrace, Stoneham,
Massachusetts 02180 ("Executive").
W I T N E S S E T H :
WHEREAS, the Executive currently serves the Bank in the capacity of
President and Chief Executive Officer and is a member of its Board of Directors
("Board"); and
WHEREAS, effective as of the Effective Date of this Agreement (as defined
in section 28 hereof) and pursuant to the Plan of Reorganization dated January
10, 1998 (the "Plan of Reorganization"), the Bank has reorganized from a
federally chartered mutual savings bank to a federally chartered stock savings
bank and has become a wholly-owned subsidiary of RFS Bancorp, Inc. ("RFS
Bancorp"), a mid-tier stock holding company, which is majority owned by Revere
Bancorp, M.H.C., a mutual holding company; and
WHEREAS, the Bank desires to assure for itself the continued availability
of the Executive's services and the ability of the Executive to perform such
services with a minimum of personal distraction in the event of a pending or
threatened Change of Control (as hereinafter defined); and
WHEREAS, the Executive is willing to continue to serve the Bank on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions hereinafter set forth, the Bank and the Executive hereby agree as
follows:
SECTION 1. EMPLOYMENT.
The Bank agrees to continue to employ the Executive, and the Executive
hereby agrees to such continued employment, during the period and upon the terms
and conditions set forth in this Agreement.
SECTION 2. EMPLOYMENT PERIOD; REMAINING UNEXPIRED EMPLOYMENT PERIOD.
(a) The terms and conditions of this Agreement shall be and remain in
effect during the period of employment established under this section 2
("Employment Period"). The Employment Period shall be for an initial term of
three years beginning on the Effective Date of this Agreement. Prior to the
first anniversary of the Effective Date of this Agreement and prior to each
anniversary date thereafter (each, an "Anniversary Date"), the Board shall
review the terms of this Agreement and the Executive's performance of services
hereunder and may, in the absence of objection from the Executive, approve an
extension of the Employment Period. In such event, the Employment Period shall
be extended to the third anniversary of the relevant Anniversary Date. In no
event, however, shall any such extension take effect at a time when the
Executive could elect to resign pursuant to section 9(a)(i) or 11 and claim
severance benefits under section 9(b).
(b) For all purposes of this Agreement, the term "Remaining Unexpired
Employment Period" as of any date shall mean the period beginning on such date
and ending on the Anniversary Date on which the Employment Period (as extended
pursuant to section 2(a) of this Agreement) is then scheduled to expire.
(c) Nothing in this Agreement shall be deemed to prohibit the Bank from
terminating the Executive's employment at any time during the Employment Period
with or without notice for any reason; provided, however, that the relative
rights and obligations of the Bank and the Executive in the event of any such
termination shall be determined under this Agreement.
SECTION 3. DUTIES.
Executive shall serve as President and Chief Executive Officer of the Bank,
having such power, authority and responsibility and performing such duties as
are prescribed by or under the By-Laws of the Bank and as are customarily
associated with such positions. Executive shall devote his full business time
and attention (other than during weekends, holidays, approved vacation periods,
and periods of illness or approved leaves of absence) to the business and
affairs of the Bank and shall use his best efforts to advance the interests of
the Bank.
SECTION 4. CASH COMPENSATION.
In consideration for the services to be rendered by the Executive
hereunder, the Bank shall pay to him a salary at an initial annual rate
of_______________________________ ($_______), payable in approximately equal
installments in accordance with the Bank's customary payroll practices for
senior officers. The Board shall review the Executive's annual rate of salary at
such times during the Employment Period as it deems appropriate, but not less
frequently than once every twelve months, and may, in its discretion, approve an
increase in the Executive's annual rate of salary. In addition to salary, the
Executive may receive other cash compensation from the Bank for services
hereunder, including but not limited to, an annual cash bonus, at such
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times, in such amounts and on such terms and conditions as the Board may
determine from time to time.
SECTION 5. EMPLOYEE BENEFIT PLANS AND PROGRAMS.
During the Employment Period, the Executive shall be treated as an employee
of the Bank and shall be entitled to participate in and receive benefits under
any and all qualified or non-qualified retirement, pension, savings,
profit-sharing or stock bonus plans, any and all group life, health (including
hospitalization, medical and major medical), dental, accident and long-term
disability insurance plans, and any other employee benefit and compensation
plans (including, but not limited to, any incentive compensation plans or
programs, stock option and appreciation rights plans and restricted stock plans)
as may from time to time be maintained by, or cover employees of, the Bank or
RFS Bancorp, in accordance with the terms and conditions of such employee ben
efit plans and programs and compensation plans and programs and consistent with
the Bank's customary practices. Nothing paid to the Executive under any such
plan or arrangement will be deemed to be in lieu of other compensation to which
the Executive is entitled under this Agreement.
SECTION 6. INDEMNIFICATION AND INSURANCE.
(a) During the Employment Period and for a period of six (6) years
thereafter, the Bank shall cause the Executive to be covered by and named as an
insured under any policy or contract of insurance obtained by it to insure its
directors and officers against personal liability for acts or omissions in
connection with service as an officer or director of the Bank or service in
other capacities at the request of the Bank. The coverage provided to Executive
pursuant to this section 6 shall be of the same scope and on the same terms and
conditions as the coverage (if any) provided to other officers or directors of
the Bank.
(b) For as long as the Bank is subject to regulation by the Office of
Thrift Supervision ("OTS"), the Bank shall indemnify the Executive in accordance
with 12 Code of Federal Regulations ("C.F.R") ss.545.121. From and after the
earliest date on which the Bank is not subject to regulation by the OTS, to the
maximum extent permitted under applicable law, during the Employment Period and
for a period of six (6) years thereafter, the Bank shall indemnify Executive
against and hold him harmless from any costs, liabilities, losses and exposures
to the fullest extent and on the most favorable terms and conditions that
similar indemnification is offered to any director or officer of the Bank or any
subsidiary or affiliate thereof. This section 6(b) shall not be applicable where
section 18 is applicable.
SECTION 7. OUTSIDE ACTIVITIES.
Executive may serve as a member of the boards of directors of such
business, community and charitable organizations as he may disclose to and as
may be approved by the Board (which approval shall not be unreasonably
withheld); provided, however, that such service shall not materially interfere
with the performance of his duties under this Agreement. The Executive may also
engage in personal business and investment activities which do not materially
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interfere, and are not inconsistent with, the performance of his duties and
responsibilities hereunder; and, provided, further, however, that such
activities are not prohibited under 12 C.F.R. ss.ss.571.7 or 571.9 or any code
of conduct or investment or securities trading policy established by the Bank
and generally applicable to all similarly situated executives (including,
without limitation, any applicable conflict of interest policy adopted by the
Board as contemplated by 12 C.F.R. ss.571.7). Executive may also serve as an
officer or director of the RFS Bancorp or Revere Bancorp, M.H.C. upon such terms
and conditions as the Bank and the RFS Bancorp or Revere Bancorp, M.H.C. may
mutually agree upon, and such service shall not be deemed to materially
interfere with the Executive's performance of his duties hereunder or otherwise
result in a material breach of this Agreement. The Executive shall not receive
compensation from the Bank for service as an officer or director of either RFS
Bancorp or Revere Bancorp, M.H.C.
SECTION 8. WORKING FACILITIES AND EXPENSES.
Executive's principal place of employment shall be at the Bank's executive
offices at the address first above written, or at such other location within
Suffolk County at which the Bank shall maintain its principal executive offices,
or at such other location as the Bank and the Executive may mutually agree upon.
The Bank shall provide the Executive at his principal place of employment with a
private office, secretarial services, and other support services and facilities
suitable to his position with the Bank and necessary or appropriate in
connection with the per formance of his assigned duties under this Agreement.
The Bank shall reimburse Executive for his ordinary and necessary business
expenses, including, without limitation, all expenses associated with his
business use of an automobile, fees for memberships in such clubs and or
ganizations as the Executive and the Bank shall mutually agree are necessary and
appropriate for business purposes, and his travel and entertainment expenses
incurred in connection with the performance of his duties under this Agreement,
in each case upon presentation to the Bank of an itemized account of such
expenses in such form as the Bank may reasonably require.
SECTION 9. TERMINATION OF EMPLOYMENT WITH SEVERANCE BENEFITS.
(a) Executive shall be entitled to the severance benefits described in
section 9(b) herein in the event that his employment with the Bank terminates
during the Employment Period under any of the following circumstances:
(i) Executive's voluntary resignation from employment with the Bank
within ninety (90) days following:
(A) the failure of the Board to appoint or re-appoint or elect or
re-elect Executive to the position stated in section 3 of this
Agreement (or a more senior office of the Bank);
(B) in the event that the Executive is a member of the Board, the
failure of the stockholders of the Bank to elect or re-elect Executive
to the Board or the failure of the Board (or the nominating committee
thereof) to nominate the Executive for such election or re-election;
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(C) the expiration of a thirty (30) day period following the date
on which the Executive gives written notice to the Bank of its
material failure, whether by amendment of the Bank's Charter or
By-Laws, action of the Board or the Bank's stockholders or otherwise,
to vest in Executive the functions, duties, or responsibilities
prescribed in section 3 of this Agreement, unless, during such thirty
(30) day period, such failure is cured in a manner determined by
Executive, in his discretion, to be satisfactory; or
(D) the expiration of a thirty (30) day period following the date
on which Executive gives written notice to the Bank of its material
breach of any term, condition or covenant contained in this Agreement
(including, without limitation any reduction of Executive's rate of
base salary in effect from time to time and any change in the terms
and conditions of any compensation or benefit program in which
Executive participates which, either individually or together with
other changes, has a material adverse effect on the aggregate value of
his total compensation package), unless, during such thirty (30) day
period, such failure is cured in a manner determined by Executive, in
his discretion, to be satisfactory; or
(ii) subject to the provisions of section 10, the termination of
Executive's employment with the Bank for any other reason not described in
section 9(a) other than a termination of the Executive's employment for
"cause;"
then, the Bank shall provide the benefits and pay to Executive the amounts
described in section 9(b).
(b) Upon the termination of Executive's employment with the Bank under
circumstances described in section 9(a) of this Agreement, the Bank shall pay
and provide to Executive (or, in the event of his death, to his estate):
(i) the portion, if any, of the compensation (including, without
limitation, all items which constitute wages under applicable law and the
payment of which is not otherwise provided for under this section 9(b))
earned by the Executive through the date of the termination of his
employment with the Bank which remains unpaid as of such date, such payment
to be made at the time and in the manner prescribed by law applicable to
the payment of wages but in no event later than thirty (30) days after the
Executive's termination of employment;
(ii) the benefits, if any, to which he is entitled as a former
employee under the employee benefit plans and programs and compensation
plans and programs maintained for the benefit of the Bank's officers and
employees;
(iii) continued group life, health (including hospitalization, medical
and major medical), dental, accident and long-term disability insurance
benefits, in addition to that
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provided pursuant to section 9(b)(ii), and after taking into account the
coverage provided by any subsequent employer, if and to the extent
necessary to provide for Executive, for the Remaining Unexpired Employment
Period, coverage equivalent to the coverage to which he would have been
entitled under such plans (as in effect on the date of his termination of
employment, or, if his termination of employment occurs after a Change of
Control, on the date of such Change of Control, whichever benefits are
greater), if he had continued working for the Company during the Remaining
Unexpired Employment Period at the highest annual rate of compensation
achieved during that portion of the Employment Period which is prior to
Executive's termination of employment with the Bank;
(iv) within thirty (30) days following his termination of employment
with the Bank, a lump sum payment, in an amount equal to the present value
of the salary that Executive would have earned if he had continued working
for the Bank during the Remaining Unexpired Employment Period at the
highest annual rate of salary achieved during that portion of the
Employment Period which is prior to Executive's termination of employment
with the Bank, where such present value is to be determined using a dis
count rate equal to the applicable short-term federal rate prescribed under
section 1274(d) of the Internal Revenue Code of 1986 ("Code"), compounded
using the compounding period corresponding to the Bank's regular payroll
periods for its officers, such lump sum to be paid in lieu of all other
payments of salary provided for under this Agreement in re spect of the
period following any such termination;
(v) within thirty (30) days following his termination of employment
with the Bank, a lump sum payment in an amount equal to the excess, if any,
of:
(A) the present value of the aggregate benefits to which he would
be entitled under any and all qualified and non-qualified defined
benefit pension plans maintained by, or covering employees of, the
Bank, if he were 100% vested thereunder and had continued working for
the Bank during the Remaining Unexpired Employment Period, such
benefits to be determined as of the date of termination of employment
by adding to the service actually recognized under such plans an
additional period equal to the Remaining Unexpired Employment Period
and by adding to the compensation actually recognized under such
plans, all amounts payable under sections 9(b)(i) and 9(b)(vii) to the
extent that such amounts would have been recognized under such plans
had the Executive remained in service during the Remaining Unexpired
Employment Period; over
(B) the present value of the benefits to which he is actually
entitled un der such defined benefit pension plans as of the date of
his termination;
where such present values are to be determined using the mortality tables
prescr ibed under section 415(b)(2)(E)(v) of the Code and a discount rate,
compounded monthly equal to the annualized rate of interest prescribed by
the Pension Benefit Guaranty Corporation for the valuation of immediate
annuities payable under
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terminating single-employer defined benefit plans for the month in which
Executive's termination of employment occurs ("Applicable PBGC Rate");
(vi) within thirty (30) days following his termination of employment
with the Bank, a lump sum payment in an amount equal to the present value
of the additional employer contributions (or if greater in the case of a
leveraged employee stock ownership plan or similar arrangement, the
additional assets allocable to him through debt service, based on the fair
market value of such assets at termination of employment) to which he would
have been entitled under any and all qualified and non-qualified defined
contribution plans maintained by, or covering employees of, the Bank, as if
he were 100% vested thereunder and had continued working for the Bank
during the Remaining Unexpired Em ployment Period at the highest annual
rate of compensation achieved during that portion of the Employment Period
which is prior to the Executive's termination of employment with the Bank,
and making the maximum amount of employee contributions, if any, re quired
under such plan or plans, such present value to be determined on the basis
of a discount rate, compounded using the compounding period that
corresponds to the frequency with which employer contributions are made to
the relevant plan, equal to the Applicable PBGC Rate; and
(vii) within thirty (30) days following his termination of employment
with the Company, the payments that would have been made to Executive under
any cash bonus or long-term or short-term cash incentive compensation plan
maintained by, or covering employees of, the Bank if he had continued
working for the Bank during the Remaining Unexpired Employment Period and
had earned the maximum bonus or incentive award in each calendar year that
ends during the Remaining Unexpired Employment Period, such payments to be
equal to the product of:
(A) the maximum percentage rate at which an award was ever
available to Executive under such incentive compensation plan;
multiplied by
(B) the salary that would have been paid to Executive during each
such calendar year at the highest annual rate of salary achieved
during that portion of the Employment Period which is prior to
Executive's termination of employment with the Bank,
such payments to be made (without discounting for early payment) within
thirty (30) days following the Executive's termination of employment;
The Bank and the Executive each hereby stipulate that the damages which may
be incurred by Executive following any such termination of employment are not
capable of accurate measurement as of the date first above written and that the
payments and benefits contemplated by this section 9(b) constitute reasonable
damages under the circumstances and shall be payable without any requirement of
proof of actual damage and without regard to Executive's efforts, if any, to
mitigate damages. The Bank and the Executive further agree that the Bank may
condition the payments and benefits (if any) due under sections 9(b)(iii), (iv),
(v), (vi) and (vii) on the
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receipt of Executive's resignation from any and all positions which he holds as
an officer, director or committee member with respect to the Bank, RFS Bancorp,
Revere Bancorp, M.H.C., or any subsidiary or affiliate of any of them.
SECTION 10. TERMINATION WITHOUT ADDITIONAL BANK LIABILITY.
In the event that the Executive's employment with the Bank shall terminate
during the Employment Period on account of:
(a) the discharge of the Executive for "cause," which, for purposes of
this Agreement shall mean 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
any material breach of this Agreement, in each case as measured against
standards generally prevailing at the relevant time in the savings and community
banking industry; provided, however, that the Executive shall not be deemed to
have been discharged for cause unless and until the following procedures shall
have been followed:
(i) the Board shall adopt a resolution duly approved by affirmative
vote of a majority of the entire Board at a meeting called and held for
such purpose calling for the Executive's termination for cause and setting
forth the purported grounds for such termination ("Proposed Termination
Resolution");
(ii) as soon as practicable, and in any event within five (5) days,
after adoption of such resolution, the Board shall furnish to the Executive
a written notice of termination which shall be accompanied by a certified
copy of the Proposed Termination Resolution ("Notice of Proposed
Termination");
(iii) the Executive shall be afforded a reasonable opportunity to make
oral and written presentations to the members of the Board, on his own
behalf, or through a repre sentative, who may be his legal counsel, to
refute the grounds set forth in the Proposed Termination Resolution at one
or more meetings of the Board to be held no sooner than fifteen (15) days
and no later than thirty (30) days after the Executive's receipt of the
Proposed Termination Notice ("Termination Hearings"); and
(iv) within ten (10) days following the end of the Termination
Hearings, the Board shall adopt a resolution duly approved by affirmative
vote of a majority of the entire Board at a meeting called and held for
such purpose (A) finding that in the good faith opinion of the Board the
grounds for termination set forth in the Proposed Termination Resolution
exist and (B) terminating the Executive's employment ("Termination
Resolution"); and
(v) as promptly as practicable, and in any event within one (1)
business day after adoption of the Termination Resolution, the Board shall
furnish to the Executive written notice of termination, which notice shall
include a copy of the Termination
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Resolution and specify an effective date of termination that is not later
than the date on which such notice is given;
(b) Executive's voluntary resignation from employment with the Company
for reasons other than those specified in section 9(a)(i);
(c) Executive's death; or
(d) a determination that Executive is eligible for long-term
disability benefits under the Bank's long-term disability insurance program or,
if there is no such program, under the federal Social Security Act;
then, the Bank shall have no further obligations under this Agreement, other
than the payment to Executive (or, in the event of his death, to his estate) of
the portion, if any, of the salary earned by the Executive through the date of
his termination of employment with the Bank which remains unpaid as of such date
and the provision of such other benefits, if any, to which he is entitled as a
former employee under the employee benefit plans and programs and compensation
plans and programs maintained by, or covering employees of, the Bank.
SECTION 11. TERMINATION UPON OR FOLLOWING A CHANGE OF CONTROL.
(a) A Change of Control of the Bank ("Change of Control") shall be
deemed to have occurred upon the happening of any of the following events:
(i) approval by the stockholders of the Bank of a transaction that
would result in the reorganization, merger or consolidation of the Bank,
respectively, with one or more other persons, other than a transaction
following which:
(A) at least 51% of the equity ownership interests of the entity
resulting from such transaction are beneficially owned (within the
meaning of Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended "Exchange Act") in substantially the same relative
proportions by persons who, immediately prior to such transaction,
beneficially owned (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) at least 51% of the outstanding equity ownership
interests in the Bank; and
(B) at least 51% of the securities entitled to vote generally in
the election of directors of the entity resulting from such
transaction are beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act) in substantially the same relative
proportions by persons who, immediately prior to such transaction,
beneficially owned (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) at least 51% of the securities entitled to vote
generally in the election of directors of the Bank;
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(ii) the acquisition of all or substantially all of the assets of the
Bank or beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 25% or more of the outstanding securities of the
Bank entitled to vote generally in the election of directors by any person
or by any persons acting in concert, or approval by the stockholders of the
Bank of any transaction which would result in such an acquisition;
(iii) a complete liquidation or dissolution of the Bank, or approval
by the stockholders of the Bank of a plan for such liquidation or
dissolution; or
(iv) the occurrence of any event if, immediately following such event,
at least 50% of the members of the Board of the Bank do not belong to any
of the following groups:
(A) individuals who were members of the Board of the Bank on the
date of this Agreement; or
(B) individuals who first became members of the Board of the Bank
after the date of this Agreement either:
(I) upon election to serve as a member of the Board of the
Bank by affirmative vote of three-quarters of the members of such
Board, or of a nominating committee thereof, in office at the
time of such first election; or
(II) upon election by the stockholders of the Bank to serve
as a member of the Board of the Bank, but only if nominated for
election by affirmative vote of three-quarters of the members of
the Board, or of a nominating committee thereof, in office at the
time of such first nomination;
provided, however, that such individual's election or nomination did
not result from an actual or threatened election contest (within the
meaning of Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or
consents (within the meaning of Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) other than by or on behalf of the
Board of the Bank;
In no event, however, shall a Change of Control be deemed to have occurred as a
result of any acquisition of securities or assets of the Company, the Bank, or
any affiliate or subsidiary of either of them, by the Company, the Bank, or any
affiliate or subsidiary of either of them, or by any employee benefit plan
maintained by any of them. For purposes of this section 11(a), the term "person"
shall have the meaning assigned to it under sections 13(d)(3) or 14(d)(2) of the
Exchange Act.
(b) In the event of a Change of Control, Executive shall be entitled
to the payments and benefits contemplated by section 9(b) in the event of his
termination employment
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with the Bank under any of the circumstances described in section 9(a) of this
Agreement or under any of the following circumstances:
(i) resignation, voluntary or otherwise, by the Executive at any time
during the Employment Period and within ninety (90) days following his
demotion, loss of title, office or significant authority or responsibility,
or following any reduction in any element of his package of compensation
and benefits;
(ii) resignation, voluntary or otherwise, by the Executive at any time
during the Employment Period and within ninety (90) days following any
relocation of his principal place of employment or any change in working
conditions at such principal place of employment which is embarrassing,
derogatory or otherwise materially adverse to the Executive;
(iii) resignation, voluntary or otherwise, by the Executive at any
time during the Employment Period following the failure of any successor to
the Bank in the Change of Control to include the Executive in any
compensation or benefit program maintained by it or covering any of its
executive officers, unless the Executive is already covered by a
substantially similar plan of the Bank which is at least as favorable to
him; or
(iv) resignation, voluntary or otherwise, for any reason whatsoever
following the expiration of a transition period of thirty days beginning on
the effective date of the Change of Control (or such longer period, not to
exceed ninety (90) days beginning on the effective date of the Change of
Control, as the Bank or its successor may reasonably request) to facilitate
a transfer of management responsibilities.
SECTION 12. COVENANT NOT TO COMPETE.
In the event of his termination of employment with the Bank prior to the
expiration of the Employment Period, for a period of one (1) year following the
date of his termination of employment with the Bank (or, if less, for the
Remaining Unexpired Employment Period), the Executive shall not, without the
written consent of the Bank, become an officer, employee, consultant, director
or trustee of any competitor (as herein defined) if in this capacity he would be
working for the competitor within a town contiguous to where the headquarters of
the Bank are located on the date of the Executive's termination of employment.
For this purpose, a "competitor" is any savings association, savings and loan
association, savings and loan holding company, bank or bank holding company, or
any direct or indirect subsidiary or affiliate of any such entity. This section
12 shall not apply if the Executive's employment is terminated without cause or
due to death or voluntary resignation as described in section 9(a). If the
Executive's employment shall be terminated on account of disability as provided
in section 10(d) of this Agreement, this section 12 shall not apply if (a) the
Executive first offers, by written notice, to accept a similar position with, or
perform similar services for, the Bank on substantially the same terms and
conditions proposed by the competitor and (b) the Bank declines to accept such
offer within ten (10) days after such notice is given.
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SECTION 13. CONFIDENTIALITY.
Unless he obtains the prior written consent of the Bank, the Executive
shall keep confidential and shall refrain from using for the benefit of himself,
or any person or entity other than the Bank or any entity which is a subsidiary
of the Bank or of which the Bank is a subsidiary, any material document or
information obtained from the Bank, or from its parent or subsidiaries, in the
course of his employment with any of them concerning their properties,
operations or business (unless such document or information is readily
ascertainable from public or published information or trade sources or has
otherwise been made available to the public through no fault of his own) until
the same ceases to be material (or becomes so ascertainable or available);
provided, however, that nothing in this section 13 shall prevent Executive, with
or without the Bank's consent, from participating in or disclosing documents or
information in connection with any judicial or administrative investigation,
inquiry or proceeding to the extent that such participation or disclosure is
required under applicable law.
SECTION 14. SOLICITATION.
Executive hereby covenants and agrees that, for a period of one (1) year
following his termination of employment with the Bank, he shall not, without the
written consent of the Bank, either directly or indirectly:
(a) solicit, offer employment to, or take any other action intended, or
that a reasonable person acting in like circumstances would expect, to have the
effect of causing any officer or employee of the Bank or any affiliate, as of
the date of this Agreement, of either of them, to terminate his or her
employment and accept employment or become affiliated with, or provide services
for compensation in any capacity whatsoever to, any savings association,
cooperative bank, credit union, savings and loan association, savings and loan
holding company, bank, bank holding company, or other institution engaged in the
business of accepting deposits and making loans, having its principal place of
business in a town contiguous to where the headquarters of the Bank are located,
as of the date of this Agreement;
(b) provide any information, advice or recommendation with respect to any
such officer or employee of any savings association, cooperative bank, credit
union, savings and loan association, savings and loan holding company, bank,
bank holding company, or other institution engaged in the business of accepting
deposits and making loans, having its principal place of business in a town
contiguous to where the headquarters of the Bank are located, as of the date of
this Agreement, that is intended, or that a reasonable person acting in like
circumstances would expect, to have the effect of causing any officer or
employee of the Bank or any affiliate, as of the date of this Agreement, of
either of them, to terminate his employment and accept employment or become
affiliated with, or provide services for compensation in any capacity whatsoever
to, any savings association, cooperative bank, credit union, savings and loan
association, savings and loan holding company, bank, bank holding company, or
other institution engaged in the business of accepting deposits and making
loans, having its principal place of business in a town contiguous to where the
headquarters of the Bank are located, as of the date of this Agreement; or
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(c) solicit, provide any information, advice or recommendation or take any
other action intended, or that a reasonable person acting in like circumstances
would expect, to have the effect of causing any customer of the Bank to
terminate an existing business or commercial relationship with the Bank.
SECTION 15. NO EFFECT ON EMPLOYEE BENEFIT PLANS OR PROGRAMS.
The termination of Executive's employment during the term of this Agreement
or thereafter, whether by the Bank or by Executive, shall have no effect on the
rights and obligations of the parties hereto under the Bank's qualified or
non-qualified retirement, pension, savings, thrift, profit-sharing or stock
bonus plans, group life, health (including hospitalization, medical and major
medical), dental, accident and long-term disability insurance plans or such
other employee benefit plans or programs, or compensation plans or programs, as
may be maintained by, or cover employees of, the Bank from time to time.
SECTION 16. SUCCESSORS AND ASSIGNS.
This Agreement will inure to the benefit of and be binding upon Executive,
his legal representatives and testate or intestate distributees, and the Bank
and its successors and assigns, including any successor by merger or
consolidation or a statutory receiver or any other person or firm or corporation
to which all or substantially all of the assets and business of the Bank may be
sold or otherwise transferred. Failure of the Bank to obtain from any successor
its express written assumption of the Bank's obligations hereunder at least
sixty (60) days in advance of the scheduled effective date of any such
succession shall be deemed a material breach of this Agreement unless cured
within ten (10) days after notice hereof by the Executive to the Bank.
SECTION 17. NOTICES.
Any communication required or permitted to be given under this Agreement,
including any notice, direction, designation, consent, instruction, objection or
waiver, shall be in writing and shall be deemed to have been given at such time
as it is delivered personally, or five (5) days after mailing if mailed, postage
prepaid, by registered or certified mail, return receipt requested, addressed to
such party at the address listed below or at such other address as one such
party may by written notice specify to the other party:
If to Executive:
Mr. James J. McCarthy
12 Magnolia Terrace
Stoneham, Massachusetts 02180
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If to the Bank:
Revere Federal Savings
310 Broadway
Revere, Massachusetts 02151
Attention: Board of Directors -- Non-Employee Directors
with a copy to:
Thacher Proffitt & Wood
1500 K Street, N.W., Suite 200
Washington, D.C. 20005
Attention: Richard A. Schaberg, Esq.
SECTION 18. INDEMNIFICATION FOR ATTORNEYS' FEES.
The Bank shall indemnify, hold harmless and defend Executive against
reasonable costs, including legal fees, incurred by him in connection with or
arising out of any action, suit or proceeding in which he may be involved, as a
result of his efforts, in good faith, to defend or enforce the terms of this
Agreement; provided, however, that Executive shall have substantially prevailed
on the merits pursuant to a judgment, decree or order of a court of competent
jurisdiction or of an arbitrator in an arbitration proceeding. The determination
whether the Executive shall have substantially prevailed on the merits and is
therefore entitled to such indemnification, shall be made by the court or
arbitrator, as applicable. In the event of a settlement pursuant to a settlement
agreement, any indemnification payment under this section 18 shall be made only
after a determination by the members of the Board (other than the Executive and
any other member of the Board to which the Executive is related by blood or
marriage) that the Executive has acted in good faith and that such
indemnification payment is in the best interests of the Bank.
SECTION 19. SEVERABILITY.
A determination that any provision of this Agreement is invalid or
unenforceable shall not affect the validity or enforceability of any other
provision hereof.
SECTION 20. WAIVER.
Failure to insist upon strict compliance with any of the terms, covenants
or conditions hereof shall not be deemed a waiver of such term, covenant, or
condition. A waiver of any provision of this Agreement must be made in writing,
designated as a waiver, and signed by the party against whom its enforcement is
sought. Any waiver or relinquishment of any right
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or power hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.
SECTION 21. COUNTERPARTS.
This Agreement may be executed in two (2) or more counterparts, each of
which shall be deemed an original, and all of which shall constitute one and the
same Agreement.
SECTION 22. GOVERNING LAW.
This Agreement shall be governed by and construed and enforced in
accordance with the federal laws of the United States and, to the extent that
federal law is inapplicable, in accordance with the laws of the Commonwealth of
Massachusetts applicable to contracts entered into and to be performed entirely
within the Commonwealth of Massachusetts.
SECTION 23. HEADINGS AND CONSTRUCTION.
The headings of sections in this Agreement are for convenience of reference
only and are not intended to qualify the meaning of any section. Any reference
to a section number shall refer to a section of this Agreement, unless otherwise
stated.
SECTION 24. ENTIRE AGREEMENT; MODIFICATIONS.
This instrument contains the entire agreement of the parties relating to
the subject matter hereof, and supersedes in its entirety any and all prior
agreements, understandings or rep resentations relating to the subject matter
hereof. No modifications of this Agreement shall be valid unless made in writing
and signed by the parties hereto.
SECTION 25. REQUIRED REGULATORY PROVISIONS.
The following provisions are included for the purposes of complying with
various laws, rules and regulations applicable to the Bank:
(a) Notwithstanding anything herein contained to the contrary, in no event
shall the aggregate amount of compensation payable to the Executive under
section 9(b) hereof (exclusive of amounts described in section 9(b)(i) or (ii))
exceed the three times the Executive's average annual compensation (within the
meaning of OTS Regulatory Bulletin 27a or any successor thereto) for the last
five consecutive calendar years to end prior to his termination of employment
with the Bank (or for his entire period of employment with the Bank if less than
five calendar years). The compensation payable to the Executive hereunder shall
be further reduced (but not below zero) if such reduction would avoid the
assessment of excise taxes on excess parachute payments (within the meaning of
section 280G of the Code).
(b) Notwithstanding anything herein contained to the contrary, any payments
to the Executive by the Bank, whether pursuant to this Agreement or otherwise,
are subject to and
-Page 15 of 18-
conditioned upon their compliance with section 18(k) of the Federal Deposit
Insurance Act ("FDI Act"), 12 U.S.C. ss.1828(k), and any regulations promulgated
thereunder.
(c) Notwithstanding anything herein contained to the contrary, if the
Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the affairs of the Bank pursuant to a notice
served under section 8(e)(3) or 8(g)(1) of the FDI Act, 12 U.S.C. ss.1818(e)(3)
or 1818(g)(1), the Bank's obligations under this Agreement shall be suspended as
of the date of service of such notice, unless stayed by appropriate proceedings.
If the charges in such notice are dismissed, the Bank, in its discretion, may
(i) pay to the Executive all or part of the compensation withheld while the
Bank's obligations hereunder were suspended and (ii) reinstate, in whole or in
part, any of the obligations which were suspended.
(d) Notwithstanding anything herein contained to the contrary, if the
Executive is removed and/or permanently prohibited from participating in the
conduct of the Bank's affairs by an order issued under section 8(e)(4) or
8(g)(1) of the FDI Act, 12 U.S.C. ss.1818(e)(4) or (g)(1), all prospective
obligations of the Bank under this Agreement shall terminate as of the effective
date of the order, but vested rights and obligations of the Bank and the
Executive shall not be affected.
(e) Notwithstanding anything herein contained to the contrary, if the Bank
is in default (within the meaning of section 3(x)(1) of the FDI Act, 12 U.S.C.
ss.1813(x)(1), all prospective obligations of the Bank under this Agreement
shall terminate as of the date of default, but vested rights and obligations of
the Bank and the Executive shall not be affected.
(f) Notwithstanding anything herein contained to the contrary, all
prospective obligations of the Bank hereunder shall be terminated, except to the
extent that a continuation of this Agreement is necessary for the continued
operation of the Bank: (i) by the Director of the OTS or his designee or the
Federal Deposit Insurance Corporation ("FDIC"), at the time the FDIC enters into
an agreement to provide assistance to or on behalf of the Bank under the
authority contained in section 13(c) of the FDI Act, 12 U.S.C. ss.1823(c); (ii)
by the Director of the OTS or his designee at the time such Director or designee
approves a supervisory merger to resolve problems related to the operation of
the Bank or when the Bank is determined by such Director to be in an unsafe or
unsound condition. The vested rights and obligations of the parties shall not be
affected.
If and to the extent that any of the foregoing provisions shall cease to be
required or by applicable law, rule or regulation, the same shall become
inoperative as though eliminated by formal amendment of this Agreement.
SECTION 26. EFFECTIVE DATE.
This Agreement shall become effective (the "Effective Date") upon the later
of the following two dates: (a) the effective date of the Bank's conversion from
a federally chartered mutual savings bank to a stock form savings bank pursuant
to the Plan of Reorganization or (b)
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the date the OTS advises the Bank in writing that it either approves or has no
objection to the terms and conditions of this Agreement. The Bank and the
Executive each hereby acknowledge and agree that the terms of this Agreement
shall have no force or effect prior to such Effective Date.
IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed and
Executive has hereunto set his hand, all as of the day and year first above
written.
----------------------------
JAMES J. MCCARTHY
ATTEST: REVERE FEDERAL SAVINGS
By
----------------------------------
Secretary By
--------------------------
Name:
Title:
[Seal]
-Page 17 of 18-
COMMONWEALTH OF MASSACHUSETTS )
: SS.:
COUNTY OF SUFFOLK )
On this ________ day of ____________________, 1998, before me personally
came JAMES J. MCCARTHY, to me known, and known to me to be the individual
described in the foregoing instrument, who, being by me duly sworn, did depose
and say that he resides at the address set forth in said instrument, and that he
signed his name to the foregoing instrument.
---------------------------
Notary Public
COMMONWEALTH OF MASSACHUSETTS )
: SS.:
COUNTY OF SUFFOLK )
On this ________ day of ____________________, 1998, before me personally
came _____________________________, to me known, who, being by me duly sworn,
did depose and say that he resides at
_____________________________________________________, that he is a member of
the Board of Directors of REVERE FEDERAL SAVINGS, the savings bank described in
and which executed the foregoing instrument; that he knows the seal of said
bank; that the seal affixed to said instrument is such seal; that it was so
affixed by order of the Board of Directors of said bank; and that he signed his
name thereto by like order.
---------------------------
Notary Public
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