EXHIBIT 10.3(b)
FIRST ESSEX BANCORP, INC.
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POST OFFICE BOX 2010
ANDOVER, MASSACHUSETTS 01810
As of January 1, 2000
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RE: AMENDMENT TO EXECUTIVE SALARY CONTINUATION AGREEMENT
Dear ▇▇▇,
We are writing to confirm the changes we have agreed to make to that
certain Executive Salary Continuation Agreement (the "Agreement") between you
and First Essex Savings Bank, (the "Bank") and First Essex Bancorp, Inc. (the
"Holding Company") (hereinafter the Bank and the Holding Company are the
"Corporation"), dated as of January 1, 1991 and amended and restated as of
January 1992. We propose to confirm our mutual understanding of the following
amendments to the Agreement, each of which shall be effective as of
January 1, 2000.
1. ACCELERATE VESTING FOR CERTAIN EARLY TERMINATIONS. The parties intend
that under certain circumstances the Executive should become fully vested in the
benefits provided in Section 2 of the Agreement before the date otherwise
established for full vesting. Therefore, the parties agree that Article Two of
the Agreement is hereby amended as follows:
(a) SECTION 2.03. Revise the first sentence of Section 2.03 by adding
"(the "Accrued Percentage")" after "multiplied by a fraction".
(b) SECTIONS 2.06 AND 2.07. New Sections 2.06 and 2.07 shall be added
to Article Two as follows:
"2.06. ACCELERATION OF ACCRUAL. Notwithstanding the provisions
of Section 2.03, in the event that the Executive terminates
his employment for Good Reason (as defined in the Employment
Agreement dated as of [ ] between the Executive and the
Corporation (the "Employment Agreement")), or is terminated by
the Corporation for any reason other than for Cause (as
defined below), the Accrued Benefit shall be the amount to
which the Executive would be entitled under Section 2.01
commencing at the Normal Retirement Date, calculated with an
Accrued Percentage equal to 100%.
2.07. CAUSE.
(a) As used in this Agreement, the term "Cause" shall
mean (1) committing fraud, misappropriation or embezzlement in
the performance of duties as an employee of the Corporation;
(2) conviction of a felony involving a crime of moral
turpitude; or (3) willfully engaging in violations of material
banking regulations.
(b) For purposes of the definition of Cause contained
in this Section 2.07, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is
done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive's action or
omission was in the best interests of the Corporation. Any
act, or failure to act, based upon authority given pursuant to
a resolution duly adopted by the Board or upon the
instructions of the Chief Executive Officer (if Executive is
not the Chief Executive Officer) or a senior officer of the
Corporation or based upon the advice of counsel for the
Corporation shall be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the
best interests of the Corporation. Notwithstanding the
foregoing, the Executive shall not be deemed to have been
discharged for "Cause" unless and until there shall have been
delivered to him a copy of a certification by the Clerk of the
Corporation that two-thirds of the entire Board of Directors
of the Corporation found in good faith that the Executive was
guilty of conduct which is deemed to be Cause as defined in
this Section 2.07 and specifying the particulars thereof,
after reasonable notice to the Executive setting forth in
reasonable detail the nature of such Cause and an opportunity
for him together with his counsel, to be heard before the
Board in accordance with the Board Termination Procedure as
described in the Employment Agreement."
2. DISABILITY BENEFITS. The parties intend that the Agreement provide for
certain benefits in the event the Executive becomes disabled after he reaches
the age of fifty-five, but before the Normal Retirement Date. Therefore, Article
Four of the Agreement is hereby amended as follows:
(a) SECTION 4.01. Section 4.01 shall be replaced in its entirety by
the following:
"4.01. DISABILITY PRIOR TO RETIREMENT. In the event the
Compensation Committee shall determine, on the basis of such
medical evidence as it may reasonably require, that prior to
the Normal Retirement Date the Executive has become mentally
or physically disabled such that he is prevented from
performing all the material aspects of his duties, the
Corporation will pay to the Executive from the date of such
determination, in monthly payments, an annual amount equal to
sixty percent (60%) of his salary at the time he became
disabled until the earlier of (a) his death, (b) his
sixty-second birthday, or (c) such time as he is no longer so
disabled. Said disability benefits under this Section 4.01
shall be reduced by the amount of payments made to or on
behalf of the Executive as a result of any disability
insurance policies paid for by the Corporation and the amount
of salary or money paid to the Executive during such
disability for any subsequent employment or self-employment of
the Executive. The Executive shall be considered to be no
longer disabled at such time as he returns to work in a
position with responsibilities comparable to those inherent in
the position in which he was employed at the date of
disability."
(b) SECTION 4.02. Replace the words "determined as of the date of the
disability" in the second sentence of Section 4.02 with "calculated with an
Accrued Percentage of 100%"; and
(c) SECTION 4.03. At the end of Section 4.03 insert the following: ",
and (for purposes of calculating the Accrued Benefit) as if the Executive had
remained employed by the Corporation throughout the period of his disability."
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3. CERTAIN TERMINATION PROVISIONS. Article Five of the Agreement is hereby
amended as follows:
(a) SECTION 5.01. Replace the words "for cause in accordance with any
employment agreement between the Executive and the Corporation," in Section
5.01; with "for Cause (as defined herein)";
(b) SECTION 5.03. Add the following to the end of Section 5.03:
"If the Executive requests Early Commencement of Benefits and
the Compensation Committee refuses, the Executive may request
the Compensation Committee to reconsider its decision. If the
Compensation Committee does not agree within thirty (30) days
of the Executive's request for reconsideration, the Executive
shall have the right to receive upon written application to
the Corporation the Actuarial Equivalent of such Accrued
Benefit, less a penalty of seven percent (7%). If the
Executive begins to receive his Accrued Benefit prior to
attaining his Normal Retirement Age, the Benefit shall be the
Actuarial Equivalent of the benefit that would have been
payable if the benefit had been paid at the Executive's Normal
Retirement Age."
4. NON-COMPETITION. Article Six of the Agreement is hereby amended as
follows:
(a) SECTION 6.01. In the first sentence of Section 6.01, insert "the
Executive's employment is terminated for any reason prior to a Change in Control
(as defined in the Employment Agreement) and" immediately following the words
"In the event that".
(b) SECTION 6.01. Add the following sentence to the end of Section
6.01:
"For purposes of this Section 6.01, the Executive shall not be
deemed to be competing with the Corporation if he is employed
outside of the Corporation's market area for a bank or a
corporation which has its headquarters outside of the
Corporation's market area, even if such bank or corporation
has a branch or office in the Corporation's market area."
5. RABBI TRUST. The parties intend that the benefits provided by the
Agreement be protected by the establishment of a so-called "Rabbi Trust."
Article Ten of the Agreement is hereby amended to add Section 10.2 as follows:
"10.2. RABBI TRUST. Upon a Change in Control, the Corporation
shall, as soon as possible, but in no event later than 30 days
following the Change in Control, make an irrevocable
contribution to a trust (the "Trust") in an amount that is
sufficient, as determined by an actuary appointed by the
trustee of the Trust (the "Trustee"), to pay the Executive or
his Beneficiary the full benefits to which he would be
entitled pursuant to the terms of this Agreement as of the
date on which the Change in Control occurred assuming that (a)
the Accrued Benefit was calculated with an Accrued Percentage
of 100%, and (b) the Board had agreed to pay such benefits to
the Executive or his Beneficiary, on an Actuarial Equivalent
basis, as of the date of the Change in Control. Within the
same time period following a Change in Control, the
Corporation shall make a further irrevocable contribution to
the Trust in an amount sufficient to pay for the Trustee's
fees and for actuarial, accounting, legal and other
professional or administrative services necessary to implement
the terms of this Agreement following a Change in Control.
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Such amount shall be determined by the Trustee's estimate of
its fees (as provided in the Trust agreement) and by estimates
obtained by the Trustee from the independent actuaries,
accountants, lawyers and other appropriate professional and
administrative personnel who provided such services to the
Trust or the Corporation immediately before the Change in
Control."
6. NO OTHER AMENDMENTS. Except as set forth above, all other terms and
conditions of the Agreement shall remain in full force and effect as set forth
therein.
By countersigning below, you confirm your agreement to the foregoing.
Upon our receipt of such countersignature, this letter agreement shall become a
binding agreement between us, under seal, to be governed in all respects by the
laws of The Commonwealth of Massachusetts without giving effect to the
principles of conflicts of laws of such state.
Very truly yours,
FIRST ESSEX BANCORP, INC.
By: ________________________
Name:______________________
Title:_______________________
Agreed and Accepted:
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