Document:

Exhibit
10.28

 

AMENDED AND RESTATED EMPLOYMENT
AGREEMENT

 

This Amended and Restated
Employment Agreement (this “Agreement”), dated as of January 1, 2004 (the
“Effective Date”), is made by and among Enterprise Bancorp, Inc., a
Massachusetts corporation (the “Company”), and its wholly owned subsidiary,
Enterprise Bank and Trust Company, a Massachusetts trust company with its main
office in Lowell, Massachusetts (the “Bank”) (the Bank and the Company being
collectively referred to herein as the “Employers”), and George L. Duncan, an
individual residing at 710 Andover Street, Lowell, Massachusetts (the
“Executive”).  This Agreement shall be
effective as of the date hereof (the “Effective Date”).

 

WHEREAS, the Employers
desire to continue to employ the Executive as Chairman and Chief Executive
Officer of the Company and the Bank, respectively, and to enter into an amended
and restated employment agreement embodying the terms of such relationship;

 

AND WHEREAS, the
Executive is willing to continue to be employed as Chairman and Chief Executive
Officer of the Company and the Bank on the terms set forth herein;

 

NOW, THEREFORE, in
consideration of the premises and mutual covenants herein contained, and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the Employers and the Executive hereby agree as follows:

 

1.                                       Definitions.

 

1.1                                 “Affiliate”
means any Person effectively controlling, effectively controlled by or
effectively under common control with the Employers.

 

1.2                                 “Board”
means the board of directors of the Company or the Bank, as the case may be.

 

1.3                                 “Cause”
means, when used with respect to the termination of the employment of the
Executive by the Employers, termination due to (a) the Executive’s willful and
continued failure to substantially perform his employment duties (other than
any such failure resulting from the Executive’s incapacity due to physical or
mental illness) or (b) the Executive’s willfully engaging in conduct which is
demonstrably and materially injurious to the Company or the Bank, monetarily or
otherwise.  For purposes of this
definition, no act, or failure to act, on the part of the Executive shall be
deemed “willful” unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that his action or omission was in the
best interests of the Company or the Bank.

 

1.4                                 “Change
in Control” has the same meaning as defined in the Company’s 2003 Stock
Incentive Plan, as may be amended and in effect from time to time.

 

1.5                                 “Code”
means the Internal Revenue Code of 1986, as amended, and as in effect from time
to time, and/or any successor code thereto.

 

 

1.6                                 “Date
of Termination” means the date specified in the Notice of Termination (as such
term is defined in Section 6.8 of this Agreement) or such date that the
Executive’s employment terminates if such termination does not require or
otherwise depend upon a prior written notice by the Employers or the Executive,
as the case may be, under the terms of this Agreement; provided, however, that
if, within thirty (30) calendar days after any Notice of Termination is given,
the party receiving such Notice of Termination notifies the other party in
writing that a dispute exists concerning the termination of employment that is
the subject of such Notice of Termination, then the Date of Termination shall
be the date on which such dispute is finally resolved, either by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, order or decree of a court of competent jurisdiction, including all
appeals, unless the time for appeal therefrom has expired and no appeal has
been perfected; provided, further, however, that the Date of Termination shall
(a) in no case be later than the date on which the Term of Employment (as such
term is defined in Section 3 of this Agreement) expires, and (b) be
extended by a notice of dispute as provided above only if such notice is given
in good faith and the party giving such notice pursues the resolution of such dispute
with reasonable diligence.

 

1.7                                 “Good
Reason” means, and shall be deemed to exist if, (a) without the written consent
of the Executive, (i) the Employers fail to appoint or reappoint the Executive
as Chairman and Chief Executive Officer of the Company and the Bank, (ii) there
occurs any material change by the Employers to the Executive’s function, duties
or responsibilities as set forth in Section 4.1 of this Agreement, which
change would cause the Executive’s position with the Employers to become one of
lesser responsibility, importance or scope from the position and attributes
thereof as set forth in Section 4.1 of this Agreement, (iii) there occurs
any material breach of this Agreement by the Employers or (iv) the Employers
fail to obtain a satisfactory agreement from any successor(s) to assume and
agree to perform the Employers obligations under this Agreement, or (b) a
Change in Control occurs, whether or not the Executive has consented , in
writing or otherwise, to such Change in Control.

 

1.8                                 “Highest
Annual Compensation” means, as determined as of any Date of Termination, the
sum of (a) the highest per annum rate of base salary paid by the Employers to
the Executive at any time during the Term of Employment prior to such Date of
Termination, (b) the highest amount of commission or other compensation (which
is not otherwise included in the base salary and bonus amounts referred in
clauses (a) and (c) hereof) paid by the Employers to the Executive with respect
to any fiscal year of the Employers during the Term of Employment prior to
such  Date of Termination, and (c) the
highest annual incentive compensation or other bonus amount paid by the
Employers to the Executive (or which would have been paid but for an election
by the Executive to defer payment to a later period) with respect to any fiscal
year of the Employers during the Term of Employment prior to such Date of
Termination.

 

1.9                                 “Parent”
means any Person which has a direct or indirect legal or beneficial ownership
interest in the Employers, but only if any such Person owns or controls,
directly or indirectly, securities possessing at least 50 percent of the total
combined voting power of all classes of securities of the Employers.

 

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1.10                           “Person”
means any natural person or any bank, trust company, credit union, corporation,
firm, unincorporated organization, association, partnership, limited liability
company, trust, estate, joint venture or other business organization or entity.

 

1.11                           “Subsidiary”
means any Person (other than the Company or the Bank) in which the Employers or
any Parent has a direct or indirect legal or beneficial ownership interest, but
only if the Company or the Parent, as the case may be, owns or controls,
directly or indirectly, securities possessing at least 50 percent of the total
combined voting power of all classes of securities in any such Person.

 

1.12                           “Retirement”
means the termination of the Executive’s employment with the Employers upon the
initiative of the Executive at any time after the Executive attains the age of
65 years old, other than (a) a termination due to death, (b) a termination for
Good Reason or (c) a termination upon the expiration of the Term of Employment.

 

2.                                       Employment.  Subject to the terms and provisions set
forth in this Agreement, the Employers, during the Term of Employment, agree to
employ the Executive as Chairman and Chief Executive Officer of the Employers
and the Executive hereby accepts such employment. The parties acknowledge and agree
that the Executive’s employment by the Employers under this Agreement may not
be terminated for any reason other than as set forth in Section 6 below
prior to the expiration of the Term of Employment.

 

3.                                       Term
of Employment.  The term of
employment under this Agreement shall commence as of the Effective Date and,
subject to extension as provided in this Section 3 or earlier termination
as provided under Section 6 of this Agreement, shall continue through
December 31, 2006 (the “Term of Employment”).  As of the first day of each month of January during which
this Agreement remains in effect (each such day a “Renewal Date”), a one-year
extension of the then current Term of Employment shall automatically be
effected (for example, on January 1, 2005, the Term of Employment shall be
extended from a term ending on December 31, 2006 to a term ending on
December 31, 2007).  Either the
Employers or the Executive may give written notice to the other on or prior to
any given Renewal Date of the intent of the party giving such notice to
terminate this Agreement at the expiration of the three-year period commencing
on such Renewal Date.  Upon the delivery
by either party of any such notice, the Term of Employment shall no longer be
subject to the automatic one-year extension provided for herein, but rather
shall expire upon the conclusion of such final three-year period.

 

4.                                       Positions,
Responsibilities and Duties.

 

4.1                                 Positions
and Duties.  During the Term of
Employment, the Executive shall be employed and shall serve as Chairman and
Chief Executive Officer of each of the Employers.  In such positions, the Executive shall have the duties,
responsibilities and authorities as determined and designated from time to time
by the Board and as otherwise provided in the bylaws of the Employers,
including, without limitation, complete management authority with respect to,
and total responsibility for, the overall operations and day-to-day business
and affairs of the Employers.  The Executive
shall serve under the direction and supervision of, and report only to, the
Board.  Notwithstanding the above, the
Executive shall not be required to perform

 

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any duties and
responsibilities which would result in the Employers’ or the Executive’s
noncompliance with, or any other violation of, any applicable law, regulation,
regulatory policy or other regulatory requirement.

 

4.2                                 Attention
to Duties and Responsibilities. 
During the Term of Employment, the Executive shall, except for periods of
absence occasioned by illness, vacation in accordance with Section 5.6 of
this Agreement, and any other reasonable leaves of absence in accordance with
any applicable policies, programs, procedures or practices of the Employers,
devote substantially all of his business time to the business and affairs of
the Employers and the Executive shall use his best efforts, business skills,
ability and fidelity to perform faithfully and efficiently the duties and
responsibilities contemplated by this Agreement; provided, however,
that the Executive shall be allowed, to the extent such activities do not
present a conflict of interest or significantly interfere with the performance
by the Executive of his duties and responsibilities hereunder, (a) to manage
the Executive’s personal financial affairs, including his personal investment
portfolio, and (b)(i) to serve on boards of directors or trustees or committees
of civic or charitable organizations or trade associations, and (ii) after
obtaining the consent of the Board, as evidenced by a formally adopted vote or
resolution of the Board and under the terms and conditions specified in any
such vote or resolution, to serve on the board of directors or trustees or
other governing body of any company or other organization or  association or to serve as a general partner
or other type of active manager in any partnership or other type of business
venture; provided, further, however, that all offices or
positions which the Executive currently holds or has held prior to the date of
this Agreement and any other that may be set forth in a schedule attached
to this Agreement are hereby acknowledged by the Employers and designated as
currently consented to positions.

 

5.                                       Compensation
and Other Benefits.

 

5.1                                 Base
Salary.  During the Term of
Employment, the Executive shall receive a base salary of Two Hundred Three
Thousand Nine Hundred and 00/100 Dollars ($203,900.00) per annum (such per
annum amount being referred to herein as the Executive’s “Base Salary”),
payable in accordance with the Employers’ normal payroll practices.  The Executive’s Base Salary shall be
reviewed annually by the Board for increase (but not any decrease) in the
Board’s sole discretion.  The
Executive’s Base Salary as may be so increased from time to time during the
Term of Employment shall then constitute the Executive’s “Base Salary” for
purposes of this Agreement.

 

5.2                                 Annual
Bonus.  During the Term of
Employment, the Executive shall be entitled to participate in an equitable
manner with other executive officers of the Employers in such discretionary
bonus payment or awards as may be authorized, declared and paid by the Board to
the Employers’ executive employees.  No
other compensation or additional benefits provided for in this Agreement shall
be deemed to be a substitute for the Executive’s right to receive such bonuses
if, when and as declared and paid by the Board.

 

5.3                                 Incentive,
Retirement, and Savings Plans. 
During the Term of Employment, the Executive shall participate in all
incentive, pension, retirement, supplemental retirement, savings, stock option
and other stock grant and equity compensation plans, as well as

 

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all other employee
benefit plans and programs, which may be maintained from time to time by the
Employers for the benefit of senior executives and/or other employees of the
Employers.

 

5.4                                 Welfare
Benefit Plans.  During the Term of
Employment, the Executive and his spouse and other eligible dependents shall
participate in, and be covered by, all of the health and other welfare benefit
plans and programs that may be maintained from time to time by the Employers
for the benefit of senior executives and/or other employees of the Employers.

 

5.5                                 Expense
Reimbursement.  During the Term of
Employment, the Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses, including reasonable business travel expenses,
incurred by the Executive in performing his duties and responsibilities under
this Agreement in accordance with the policies, programs, procedures and
practices of the Employers as in effect at the time the expense was incurred,
as the same may be changed from time to time.

 

5.6                                 Vacation
and Fringe Benefits; Automobile. 
During the Term of Employment, the Executive shall be eligible to
benefit from such fringe benefits and perquisites, in accordance with the
policies, programs,  procedures and
practices of the Employers, as may be in effect and provided from time to time
to senior executives and/or other employees of the Employers, and shall be
entitled to the use of an automobile, of a type commensurate with the
Executive’s office and standing, at the Employers’ expense.

 

6.                                       Termination.

 

6.1                                 Termination
Due to Death.  In the event of the
Executive’s death during the Term of Employment, the Term of Employment shall
thereupon end and his estate or other legal representative, as the case may be,
shall, subject to Section 6.11 of this Agreement, only be entitled to:

 

(a)                                  Base
Salary continuation at the rate in effect (as provided in Section 5.1 of
this Agreement) on the Date of Termination for a period of six months
commencing on such Date of Termination or, if the Board so determines in its
sole discretion and in lieu of such six-month salary continuation, a lump sum payment
equal in amount to such six-month Base Salary continuation; provided, however,
that if the Executive’s death during the Term of Employment occurs after, or
within one year prior to, a Change in Control, then the Executive’s estate or
other legal representative shall receive, in lieu of the payments required
under this Section 6.1(a) and subject to Section 6.9 below, the full
lump sum payment required under Section 6.4(a) below in the event of a
termination of the Executive’s employment after, or within one year prior to, a
Change in Control (and, in the case of the Executive’s death within one year
prior to a Change in Control, any amounts paid under this Section 6.1(a)
prior to the Change in Control shall be taken into account in determining the
total amount payable to the Executive’s estate or other legal representative as
a result of the Change in Control);

 

(b)                                 any
Base Salary accrued but not yet paid as of the Date of Termination;

 

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(c)                                  any
bonus actually awarded or commissions actually earned, but not yet paid, as of
the Date of Termination;

 

(d)                                 reimbursement
for all expenses (under Section 5.5) incurred as of the Date of
Termination, but not yet paid as of the Date of Termination;

 

(e)                                  payment
of the per diem value of any unused vacation days that have accrued during the
Term of Employment prior to the Date of Termination and the unused, unaccrued
portion of any vacation days available through the end (but not beyond) of the
calendar year in which the Date of Termination occurs;

 

(f)                                    any
other compensation and benefits as may be provided in accordance with the terms
and provisions of any applicable plans, programs, procedures and practices of
the Employers;

 

(g)                                 continuation
of all health and other welfare benefits provided under Section 5.4 of
this Agreement for the benefit of the Executive’s spouse and other eligible
dependents at the level in effect on the Date of Termination and at no cost to
the Executive’s spouse and such other eligible dependents for a period
commencing on the Date of Termination and ending, with respect to the
Executive’s spouse, on the earlier of her death or remarriage and, with respect
to any other eligible dependent of the Executive, on such date as such
dependent reaches the age of legal emancipation in accordance with the laws of
the Commonwealth of Massachusetts (or, if such continuation of health or other
welfare benefits is not permitted by applicable law, the Employers shall
provide the economic equivalent in lieu thereof); and

 

(h)                                 any
rights to indemnification in accordance with Section 10 of this Agreement.

 

6.2                                 Suspension
for Disability.

 

(a)                                  If,
during the Term of Employment, the Executive shall either qualify to receive
disability benefits under any group long-term disability plan then maintained
by the Employers or, if no such plan is maintained by the Employers, have been
absent from his duties with the Employers on a full-time basis due to physical
or mental illness for six (6) consecutive months, and in either case shall not
have returned to the full-time performance of his duties within thirty (30)
days after written notice of potential suspension has been given to the
Executive by the Employers, then the Executive’s employment shall be deemed to
be suspended on the basis of disability (a “Suspension for Disability”).

 

(b)                                 If
a Suspension for Disability occurs during the Term of Employment, the Employers
shall pay the Executive an amount equal, on a per annum basis, to seventy-five
percent (75%) of the Executive’s Highest Annual Compensation as determined on
the effective date of the Suspension for Disability (assuming, for purposes of
such determination, that the effective date of the Suspension for Disability is
the Date of Termination as referred to in the definition of Highest Annual
Compensation), such

 

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amount to be paid out in
equal periodic installments in accordance with the Employers’ ordinary payroll
practices during the period that such payments are required to be made under
this Section 6.2(b).  These
payments shall commence on the first ordinary payroll payment date of the
Employers after the effective date of the Executive’s Suspension for Disability
and will end on the earliest to occur of the following:  (i) the date on which the Executive returns
to full-time employment with the Employers; (ii) the Executive’s death; or
(iii) the termination by either party, or the expiration, of the Term of
Employment in accordance with the terms of this Agreement.  After a Suspension for Disability occurs,
the Employers shall be free to fill the Executive’s positions.  Upon the Executive being able to return to
full-time employment before any termination or the expiration of the Term of
Employment, the Executive shall, at his option, (i) assume the Chairman and
Chief Executive Officer positions of the Employers or, if another individual is
then holding any of such positions and the Executive is not reappointed to all
such positions, assume such other position(s) as may be available with the
Employers at the same Base Salary as was in effect at the time the Suspension
for Disability had commenced and otherwise continue in the employ of the
Employers in accordance with the terms of this Agreement or (ii) if another
individual is then holding any of such positions and the Executive is not
reappointed to all such positions, exercise his right to terminate this
Agreement for Good Reason under Section 6.4 of this Agreement.  The disability payments to be paid to the
Executive during a Suspension for Disability under this Section 6.2(b)
shall be in addition to any payments or other benefits payable to the Executive
under any qualified or nonqualified retirement plans or programs maintained by
the Employers but shall be reduced by any payments received by the Executive
during such Suspension for Disability under any group long-term disability plan
maintained by the Employers. 
Notwithstanding any other provision contained in this Agreement to the
contrary, the occurrence of a Suspension of Disability shall not in any way
prevent or otherwise limit the parties’ exercising any of their respective
rights to terminate the Term of Employment at any time in accordance with the
terms of this Agreement.

 

(c)                                  The
Employers shall cause to be continued during any Suspension for Disability all
life, health and other welfare coverages and benefits as were maintained by the
Employers for the benefit of the Executive and his spouse and other eligible
dependents prior to the occurrence of such Suspension for Disability, such
continuation to continue, subject to Section 6.2(d) of this Agreement,
until the expiration of the Term of Employment.

 

(d)                                 Notwithstanding
any other provision to the contrary in this Section 6.2, there shall be no
reduction in the compensation (except as otherwise provided in
Section 6.2(b) above), accrued benefits or pension granted or accruing to
the Executive during the period of any Suspension for Disability and there
shall be no abrogation or limitation of any of the other provisions of this
Agreement that grant rights to the Executive or the Executive’s spouse or other
eligible dependents or the Executive’s estate following the Executive’s death,
Retirement or other applicable termination of employment during the Term of
Employment as a result of any Suspension for 
Disability.

 

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6.3                                 Termination
by the Board for Cause.

 

(a)                                  The
Board may terminate the Executive’s employment hereunder for Cause, as provided
in Section 6.3(b) below.  If the
Board terminates the Executive’s employment under this Section 6.3 for
Cause, the Term of Employment shall thereupon end as set forth below and the
Executive shall, subject to Section 6.11 of this Agreement, only be
entitled to:

 

(i)                                     any
Base Salary accrued but not yet paid as of the Date of Termination;

 

(ii)                                  any
bonus actually awarded or commissions actually earned, but not yet paid, as of
the Date of Termination;

 

(iii)                               reimbursement
for all expenses (under Section 5.5) incurred as of the Date of
Termination, but not yet paid as of the Date of Termination; and

 

(iv)                              payment
of the per diem value of any unused vacation days that    have accrued during the Term of Employment
prior to the Date of Termination and the unused, unaccrued portion of any
vacation days available through the end (but not beyond) of the calendar year
in which the Date of Termination occurs.

 

(b)                                 In
determining Cause, the alleged acts or omissions of the Executive must be
confirmed beyond a reasonable doubt by not less than two-thirds of the Board
(meaning, for purposes of this Section 6.3(b), the Board excluding the
Executive and any other directors of the Employers who are alleged to have been
involved or otherwise to have an interest in any of such alleged acts or
omissions of the Executive) at a meeting duly called and held for the purpose
of the Board’s making such determination (the “Determination Meeting”). In the
event of such a confirmation by  the
Board, the Employers shall notify the Executive that the Employers intend to
terminate the Executive’s employment for Cause under this Section 6.3 (the
“Confirmation Notice”).  The
Confirmation Notice shall specify the act(s), or omission(s), upon the basis of
which the Board has confirmed the existence of Cause and must be delivered to
the Executive within ten (10) days after the date on which the Determination
Meeting has been held.  If the Executive
notifies the Employers in writing (the “Opportunity Notice”) within ten (10)
days after the Executive has received the Confirmation Notice, the Executive
(together with counsel) shall be provided one opportunity to meet with the
Board (or a sufficient quorum thereof) to discuss such act(s) or
omission(s).  Such opportunity to meet
with the Board shall be fixed and shall occur on a date selected by the Board
(such date being not less than ten (10) nor more than thirty (30) days after
the Employers receive the Opportunity Notice from the Executive).  Such meeting (the “Final Meeting”) shall
take place at the principal offices of the Employers or such other location as
agreed to by the Executive and the Employers. 
During the period commencing on the date on which notice of the
Determination Meeting is duly given to the Board and ending either on the date
of the Determination Meeting, if no determination of Cause is made at the
Determination Meeting, or on the Date of Termination, and not withstanding
anything to the contrary in this Agreement, the Executive shall be suspended
from employment with the Employers (with continuing payment of Base Salary and
continuation of benefits in

 

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accordance with
Section 5 of this Agreement, to the extent such payments and benefits are
not prohibited by applicable law, regulation, regulatory policy or other
regulatory requirement), and the Board may, during such suspension period,
reasonably limit the Executive’s access to the principal offices and any other
premises of the Employers and/or the Executive’s access to any of the
Employers’ assets or personnel.  If the
Board properly sets the date of the Final Meeting and if the Board (or a
sufficient quorum thereof) attends the Final Meeting and in good faith does not
rescind its confirmation of Cause at the Final Meeting or if the Executive fails
to attend the Final Meeting for any reason, the Executive’s employment by the
Employers shall, immediately upon the closing of the Final Meeting and the
delivery to the Executive of the Notice of Termination, be terminated for Cause
under this Section 6.3.  If the
Executive does not respond in writing to the Confirmation Notice in the manner
and within the time period specified in this Section 6.3, the Executive’s
employment with the Employers shall, on the eleventh day after the receipt by
the Executive of the Confirmation Notice, be terminated for Cause under this
Section 6.3.  In the event of any
dispute hereunder, the Executive shall be entitled, to the extent not
prohibited by applicable law, regulation, regulatory policy or other regulatory
requirement, until the earliest to occur of (i) the Date of Termination, (ii)
the expiration of the then current Term of Employment or (iii) the resolution
of such dispute, to be paid his Base Salary in accordance with the Employers’
ordinary payroll practices and continue to receive all other benefits to be
provided to the Executive pursuant to Section 5 hereof, and there shall be
no reduction whatsoever of any amounts subsequently paid to the Executive upon
resolution of such dispute as a result of, or in respect to, such interim
payments or coverage.  The procedure set
forth in this Section 6.3 to determine the existence of Cause shall at all
times be subject to the requirements of applicable law, regulation, regulatory
policy or other regulatory requirements.

 

6.4                                 Termination
by Employers Without Cause or by Executive for Good Reason.  The Employers may terminate the Executive’s
employment for any reason and without Cause, or for no reason at all, at any
time during the Term of Employment upon sixty (60) days prior written notice to
the Executive.  The Executive may
terminate his employment for Good Reason at any time during the Term of
Employment upon sixty (60) days prior written notice to the Employers.  If the Employers terminate the Executive’s
employment hereunder without Cause or the Executive terminates his employment
hereunder for Good Reason, then the Term of Employment shall thereupon end and
the Executive shall, subject to Section 6.11 of this Agreement, only be
entitled to:

 

(a)                                  an
aggregate amount equal to three times the Executive’s Highest Annual
Compensation, such amount to be paid out in equal periodic installments in
accordance with the Employers’ ordinary payroll practices over the three-year
period commencing on the first payroll payment date after the Date of
Termination; provided, however, that if such termination by either the
Employers or the Executive occurs at any time during the Term of Employment
after, or within one year prior to, a Change in Control, then the Executive
shall, subject to Section 6.9 below, be entitled to a cash lump sum
payment equal to three (3) times the Executive’s Highest Annual Compensation,
which lump sum shall be paid within thirty (30) days following the later of the
Date of Termination or the

 

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date of the Change in
Control (and, in the case of any such termination within one year prior to a
Change in Control, any amounts paid under this Section 6.4(a) prior to the
Change in Control shall be taken into account in determining the total amount
payable to the Executive as a result of the Change in Control);

 

(b)                                 any
Base Salary accrued but not yet paid as of the Date of Termination;

 

(c)                                  any
bonus actually awarded or commissions actually earned, but not yet paid, as of
the Date of Termination;

 

(d)                                 reimbursement
for all expenses (under Section 5.5) incurred as of the Date of
Termination, but not yet paid as of the Date of Termination;

 

(e)                                  payment
of the per diem value of any unused vacation days that have accrued during the
Term of Employment prior to the Date of Termination and the unused, unaccrued
portion of any vacation days available through the end (but not beyond) of the
calendar year in which the Date of Termination occurs;

 

(f)                                    any
other compensation and benefits as may be provided in accordance with the terms
and provisions of any applicable plans, programs, procedures or practices of
the Employers;

 

(g)                                 continuation
of the welfare benefits of the Executive and his spouse and other eligible
dependents at the level in effect (as provided for by Section 5.4 of this
Agreement) on, and at the same out-of-pocket cost to the Executive as of, the
Date of Termination for the three-year period commencing on the Date of
Termination (or, if such continuation is not permitted by applicable law or if
the Board so determines in its sole discretion, the Employers shall provide the
economic equivalent in lieu thereof);

 

(h)                                 reimbursement
for the reasonable fees of a professional out-placement service selected by the
Executive within ninety (90) days after the Date of Termination; and

 

(i)                                     any
rights to indemnification in accordance with Section 10 of this Agreement.

 

In the event of any
dispute hereunder, the Executive shall be entitled until the earliest to occur
of (i) the Date of Termination, (ii) the expiration of the then current Term of
Employment, or (iii) the resolution of such dispute, to be paid his Base Salary
in accordance with the Employers’ ordinary payroll practices and continue to
receive all other benefits to be provided to the Executive pursuant to
Section 5 hereof, and there shall be no reduction whatsoever of any
amounts subsequently paid to the Executive upon resolution of such dispute as a
result of, or in respect to, such interim payments or coverage.

 

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6.5                                 Voluntary
Termination.

 

(a)                                  During
the Term of Employment, the Executive may effect, upon sixty (60) days prior
written notice to the Employers, a Voluntary Termination of his employment
hereunder and thereupon the Term of Employment shall end.  A “Voluntary Termination” shall mean a
termination of employment by the Executive on his own initiative other than (i)
a termination due to death, (ii) a termination for Good Reason, (iii) a
termination due to Retirement, or (iv) a termination upon expiration of the
Term of Employment.

 

(b)                                 Upon
a Voluntary Termination, the Executive shall, subject to Section 6.11 of
this Agreement, only be entitled to:

 

(i)                                     Base
Salary accrued but not yet paid as of the Date of Termination;

 

(ii)                                  any
bonus actually awarded or commissions actually earned, but not yet paid, as of
the Date of Termination;

 

(iii)                               reimbursement
for all expenses (under Section 5.5) incurred as of the Date of
Termination, but not yet paid as of the Date of Termination;

 

(iv)                              payment
of the per diem value of any unused vacation days that have accrued during the
Term of Employment prior to the Date of Termination and the unused, unaccrued
portion of any vacation days available through the end (but not beyond) of the
calendar year in which the Date of Termination occurs;

 

(v)                                 any
other compensation and benefits as may be provided in accordance with the terms
and provisions of any applicable plans, programs, procedures or practices of
the Employers; and

 

(vi)                              any
rights to indemnification in accordance with Section 10 of this Agreement;

 

provided, however, that
if a Voluntary Termination occurs within one year prior to a Change in Control,
then the Executive shall receive, in addition to all of the payments and
benefits required under this Section 6.5(b) and subject to
Section 6.9 below, the full lump sum payment required under
Section 6.4(a) above in the event of a termination of the Executive’s
employment after, or within one year prior to, a Change in Control, which lump
sum shall be paid within thirty (30) days following the date of the Change in
Control.

 

6.6                                 Termination
Due to Retirement.  The Executive
may terminate his employment hereunder on the basis of his Retirement upon
sixty (60) days prior written notice to the Employers.  If, during the Term of Employment, the
Executive’s employment is so terminated due to Retirement, the Term of
Employment shall thereupon end and the Executive shall, subject to Section 6.11
of this Agreement, only be entitled to:

 

(a)                                  Base
Salary accrued but not yet paid as of the Date of Termination;

 

11

 

(b)                                 any
bonus actually awarded or commissions actually earned, but not yet paid, as of
the Date of Termination;

 

(c)                                  reimbursement
for all expenses (under Section 5.5) incurred as of the Date of
Termination, but not yet paid as of the Date of Termination;

 

(d)                                 payment
of the per diem value of any unused vacation days that have accrued during the
Term of Employment prior to the Date of Termination and the unused, unaccrued
portion of any vacation days available through the end (but not beyond) of the
calendar year in which the Date of Termination occurs;

 

(e)                                  any
other compensation and benefits as may be provided in accordance with the terms
and provisions of any applicable plans, programs, procedures or practices of
the Employers;

 

(f)                                    continuation
of the welfare benefits of the Executive, his spouse and other eligible
dependants, if any, at the level in effect (as described in Section 5.4 of
this Agreement) on, and at the same out-of-pocket cost to the Executive as of,
the Date of Termination for the one-year period commencing on the Date of
Termination (or, if such continuation of benefits is not permitted by
applicable law or if the Board so determines in its sole discretion, the
Employers shall provide the economic equivalent in lieu thereof); and

 

(g)                                 any
rights to indemnification in accordance with Section 10 of this Agreement;

 

provided, however, that
if a termination due to Retirement occurs within one year prior to a Change in
Control, then the Executive shall receive, in addition to all of the payments
and benefits required under this Section 6.6 and subject to
Section 6.9 below, the full lump sum payment required under Section 6.4(a)
above in the event of a termination of the Executive’s employment after, or
within one year prior to, a Change in Control, which lump sum shall be paid
within thirty (30) days following the date of the Change in Control.

 

6.7                                 No
Obligation to Mitigate; Offset Under Certain Circumstances.  In the event of any termination of the
Executive’s employment under this Section 6, the Executive shall be under
no obligation to seek other employment or to mitigate damages.  If any termination of the Executive’s
employment occurs after a Change in Control, then there shall be no offset
against any amounts due the Executive under this Agreement for any reason,
including, without limitation, on account of any remuneration attributable to
any subsequent employment that the Executive may obtain.  If any termination of the Executive’s
employment occurs prior to a Change in Control, then the amounts that may be
payable by the Employers to the Executive during any applicable period
following the Date of Termination and prior to the date of any Change in
Control under Sections 6.4(a) or 7.3 of this Agreement may be adjusted, so that
any payment paid to the Executive by the Employers during any such period shall
equal the difference between the total amount that the Employers would
otherwise be required to pay to

 

12

 

the Executive for such
period pursuant to Sections 6.4(a) or 7.3, as applicable, and the total amount
of any payments received by the Executive from any third party(ies) during such
period.

 

6.8                                 Notice
of Termination.  Any termination of
the Executive’s employment under this Section 6 requiring advance written
notice shall be communicated by a notice of termination to the other party
hereto given in accordance with Section 11.3 of this Agreement (the
“Notice of Termination”).  The Notice of
Termination, in the case of a termination by the Employers for Cause, or a
termination by the Executive for Good Reason, shall indicate the specific
termination provision in this Agreement relied upon and set forth in reasonable
detail the dates, facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated.

 

6.9                                 Code
Section 280G Reduction. 
Anything in this Agreement or in any other agreement, contract,
understanding, plan or program entered into or maintained by the Employers to
the contrary notwithstanding, in the event it shall be determined that any
payment or distribution by the Employers to or for the benefit of the
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (collectively, the “Payments”), would
be subject to the excise tax imposed by Section 4999 of the Code, and/or
any successor provision or section thereto (such excise tax, together with
any interest or penalties incurred by the Executive with respect to such excise
tax, collectively, the “Excise Tax”), and if the Payments less the Excise Tax
would be less than the amount of the Payments that would otherwise be payable
to the Executive without imposition of the Excise Tax, then, to the extent
necessary to eliminate the imposition of the Excise Tax (and taking into
account any reduction in the Payments provided by reason of Section 280G
of the Code in any such other agreement, contract, understanding, plan or
program), the cash and non-cash payments and benefits payable to the Executive
shall be reduced (with the executive being provided with the amount of each
payment and benefit as calculated by the Employers and given ten (10) business
days in which to prioritize the order of reduction of each such payment or
benefit); but only if, by reason of any such reduction, the Payments with any
such reduction shall exceed the Payments less the Excise Tax without any such
reduction.  For purposes of this
Section 6.9, (i) no portion of the Payments, the receipt or enjoyment of
which the Executive shall have effectively waived in writing prior to the Date
of Termination, shall be taken into account, (ii) no portion of the Payments
shall be taken into account that, in the opinion of tax counsel selected in
good faith by the Employers, does not constitute a “parachute payment” within
the meaning of Section 280G(b)(2) of the Code, including without
limitation by reason of Section 280G(b)(4)(A) of the Code, (iii) any
payments and/or benefits under this Agreement or otherwise for services to be
rendered on or after the effective date of a Change in Control shall be reduced
only to the extent necessary so that such payments and/or benefits in their
entirety constitute reasonable compensation for services actually rendered
within the meaning of Section 280G(b)(4)(B) of the Code or are otherwise
not subject to disallowance as deductions, in the opinion of the tax counsel
referred to in the immediately preceding clause (ii) of this sentence, and (iv)
the value of any non-cash payment or benefit or any deferred payment or benefit
included in the Payments shall be determined by the Employers’ independent auditors
in accordance with the principles of Sections 280G(d)(3) and 280G(d)(4) of the
Code and the applicable regulations or proposed regulations under the
Code.  Except as otherwise provided in
this Section 6.9, the foregoing calculations and determinations shall be
made in good faith by the Employers and shall be conclusive and binding

 

13

 

upon the parties.  The Employers shall pay all costs and
expenses incurred in connection with any such calculations or determinations.

 

6.10                           Payment.  Except as otherwise provided in this
Agreement, any payments to which the Executive shall be entitled to under this
Section 6, including, without limitation, any economic equivalent of any
benefit, shall be made, to the extent practicable, within five (5) business
days following the Date of Termination.

 

6.11                           Bank
Regulatory Limitations.  Any
payments made to the Executive pursuant to this Agreement, or otherwise, are
subject to and conditioned upon their compliance with 12 U.S.C. § 1828(k)
and any applicable regulations promulgated thereunder.  In addition, to the extent required by
applicable law, regulation, regulatory policy 
or other regulatory requirement, the aggregate amount and/or value of
the compensation paid as a result of any termination of the Executive’s
employment with the Employers, regardless of the reason for any such
termination of employment, shall not exceed the limit prescribed by such
applicable law, regulation, regulatory policy or other regulatory requirement.

 

6.12                           Option
to Serve as Consultant.

 

(a)                                  In
lieu of the Employers terminating the Term of Employment without Cause or the
Executive terminating the Term of Employment for any reason, the parties may
agree that the Executive shall serve as a consultant to the Employers for the
balance of the Term of Employment (as such may be extended pursuant to
Section 3 of this Agreement) in accordance with the terms set forth in
this Section 6.12.  If the Employers
and the Executive so agree that the Executive shall serve as a consultant to
the Employers hereunder, the Executive shall render such services of an
advisory or consultative nature as the Employers may reasonably require of him
from time to time and he shall assist the Employers in their relations with
their employees and customers, such that the Employers shall have the benefit
of the Executive’s experience and knowledge of the Employers’ business and
operations, his reputation and contacts in the industry generally as well as in
the Employers’ market area and his general business experience.

 

(b)                                 During
the period of the Executive’s providing the consulting services contemplated by
Section 6.12(a) above (the “Consulting Period”), the Executive shall
devote approximately one-half of his time during normal business hours to the
business and affairs of the Employers, and shall receive as compensation
therefor an amount equal, on a per annum basis, to fifty percent (50%) of the
Executive’s Highest Annual Compensation as determined as of the date upon which
the Consulting Period commences (assuming, for purposes of such determination,
that the date upon which the Consulting Period commences is the Date of
Termination as referred to in the definition of Highest Annual Compensation),
such amount to be paid out in equal periodic installments in accordance with
the Employers’ ordinary payroll practices during the Consulting Period.

 

(c)                                  During
the Consulting Period, the Executive shall be deemed to be an employee of the
Employers and, on this basis, the Executive shall be entitled to a

 

14

 

continuation of all of
the compensation, payments and other benefits provided to him, his spouse and
other eligible dependents pursuant to Sections 5.3 through 5.6 of this Agreement
in accordance with the terms thereof. 
During the Consulting Period, there shall be no affirmative obligation
on the part of the Executive to serve or to continue to serve as a member of
the Board, and any such membership shall be in accordance with the mutual
agreement of the Executive and the Employers.

 

(d)                                 The
Consulting Period may be terminated at any time by either the Employers or the
Executive for any reason, or for no reason at all, upon sixty (60) days prior
written notice to the other party.  If
the Consulting Period is terminated by either the Employers or the Executive
prior to the occurrence of a Change in Control, then, so long as the Consulting
Period has not been terminated by the Employers for Cause and subject to any
applicable provisions of Section 6.12(e) below, such termination shall be
deemed to have occurred, effective as of the date on which the Consulting
Period terminates, on the grounds that would have applied at the time of the
parties’ first entering into the consulting arrangement provided for in this
Section 6.12, if the Employers or the Executive, as the case may be, had
exercised the right of termination then available to such party, and the
Executive shall be entitled to receive all of the payments and benefits set
forth in the applicable provisions of Section 6 of this Agreement on
account of such termination, except that any reference to Base Salary in any
such applicable provision shall mean the amount of annual compensation required
to be paid to the Executive under Section 6.12(b) above; provided,
however, notwithstanding the grounds for termination that may have applied at
the time of the parties’ first entering into the consulting arrangement
provided for in this Section 6.12, if the Employers terminate the Consulting
Period without Cause or the Executive terminates the Consulting Period for Good
Reason (to the extent that the principle of Good Reason may apply to the
Executive’s termination of the Consulting Period pursuant to clauses (a)(iii)
and (a)(iv) of the definition of Good Reason contained above), then the
Executive shall be entitled to receive all of the payments and benefits set
forth in Section 6.4 of this Agreement (including without limitation
Section 6.4(a) above) on account of such termination, except that the
reference to Base Salary in Section 6.4(b) above shall mean the amount of
annual compensation required to be paid to the Executive under
Section 6.12(b) above.  If the
Consulting Period is terminated by either the Employers or the Executive for any
reason, or for no reason at all, following the occurrence of a Change in
Control, then, subject to any applicable provisions of Section 6.12(e)
below, the Executive shall be deemed to have exercised his right to terminate
this Agreement for Good Reason, where such Good Reason is the occurrence of
such Change in Control, effective as of the date on which the Consulting Period
terminates, and the Executive shall be entitled to all of the payments and
benefits set forth in Section 6.4 of this Agreement (including without
limitation Section 6.4(a) above) on account of such termination, except
that the reference to Base Salary in Section 6.4(b) above shall mean the
amount of annual compensation required to be paid to the Executive under
Section 6.12(b) above.  For
purposes of calculating the amount payable to the Executive under
Section 6.4(a) of this Agreement if the Consulting Period is terminated
hereunder, to the extent that any such payment is required, the Executive’s
Highest Annual Compensation shall be determined as of the date on which

 

15

 

the Employers and the
Executive first entered into the consulting arrangement provided for under this
Section 6.12.

 

(e)                                  If
the Consulting Period is terminated as a result of the Executive’s death, then
the Executive’s estate or other legal representative, as the case may be, shall
be entitled to receive the payments and benefits set forth in Section 6.1
of this Agreement, including the payments provided for in Section 6.1(a)
above if the Executive’s death occurs after, or within one year prior to, a
Change in Control, except that the references to Base Salary in Sections 6.1(a)
above, in the case of the Executive’s death prior to a Change in Control, and
6.1(b) above shall mean the amount of annual compensation required to be paid
to the Executive under Section 6.12(b) above.  If the Executive becomes disabled during the Consulting Period,
as such disability is contemplated under Section 6.2(a) of this Agreement,
then all of the terms of Section 6.2 above shall apply, except that the
amount that may be paid to the Executive during any Suspension for Disability
shall equal seventy-five percent (75%) of the amount of the compensation
required to be paid to the Executive under Section 6.12(b) above, the
reference to Base Salary in Section 6.2(b) above shall mean the amount of
annual compensation required to be paid to the Executive under
Section 6.12(b) above, and any and all references in Section 6.2 to the
Executive’s employment, offices, titles, positions or other functions with the
Employers shall mean the consulting arrangement entered into between the
Employers and the Executive pursuant to this Section 6.12.  If the Consulting Period is terminated by
the Employers for Cause, then the Executive shall be entitled to all of the
payments set forth in Section 6.3 of this Agreement, except that the
reference to Base Salary in Section 6.3(a)(i) above shall mean the amount
of annual compensation required to be paid to the Executive under
Section 6.12(b) above.

 

7.                                       Confidential
Information; Noncompetition.

 

7.1                                 Confidentiality.  The Executive shall not, during or after the
period during which he is employed by the Employers, disclose any Confidential
Information (as such term is defined herein) to any Person for any reason or
purpose whatsoever.  The term
“Confidential Information” shall mean all confidential information of or
relating to the Employers and any of their Affiliates, including without
limitation financial information and data, business plans and information
regarding prospects and opportunities (such as, by way of example only, client
and customer lists and acquisition, disposition, expansion, product development
and other strategic plans), but does not include any information that is or
becomes public knowledge by means other than the Executive’s breach or
nonobservance of his obligations described in this Section 7.1.  Notwithstanding the foregoing, the Executive
may disclose such Confidential Information as he may be legally required to do
so on the advice of counsel in connection with any legal or regulatory
proceeding; provided, however, that the Executive shall provide the Employers
with prior written notice of any such required or potentially required
disclosure and shall cooperate with the Employers and use his best efforts
under such circumstances to obtain appropriate confidential treatment of any
such Confidential Information that may be so required to be disclosed in
connection with any such legal or regulatory proceeding.  The Executive’s obligation to refrain from
disclosing any Confidential Information under this Section 7.1 shall

 

16

 

continue in effect in
accordance with its terms following any termination of this Agreement pursuant
to Section 6 above.

 

7.2                                 Noncompetition.  If the Executive’s employment with the
Employers (including without limitation any employment during a Consulting
Period) is terminated by the Employers or the Executive for any reason, other
than due to death, or for no reason at all or otherwise terminates as a result
of the expiration of the Term of Employment, in any such case prior to a Change
in Control, then during the two-year period following the Date of Termination
or, if a Change in Control occurs at any time during such two-year period, such
shorter period from the Date of Termination up to the date of such Change in
Control, and subject to Section 7.3 hereof, the Executive shall not:  (a) directly or indirectly, whether as
owner, partner, shareholder (other than the holder of 1% or less of the common
stock of any company the common stock of which is listed on a national stock
exchange or quoted on the Nasdaq Stock Market), consultant, agent, employee or
otherwise, engage in competition with the Employers or any of their Affiliates
within a ten (10) mile radius of any city or town in which the Bank or any
Affiliate has a branch or other office; or (b) hire or attempt to hire, or
assist in hiring, any employees of the Employers or any of their Affiliates, or
solicit, encourage or induce any such employee to terminate his or her
relationship with the Employers or any such Affiliate; or (c) solicit,
encourage or induce any customer or client of the Employers or any of their
Affiliates to terminate his or its relationship with the Employers or any such
Affiliate or to do business with anyone other than the Employers and their
Affiliates.

 

7.3                                 Payments.  During the two years or such shorter period
during which the restrictions of Section 7.2 above apply, the Executive
shall be paid, subject to Section 6.7 above, a per annum amount equal to
seventy percent (70%) of the per annum amount required under
Section 6.4(a) of this Agreement in the event of a termination of the
Executive’s employment prior to a Change in Control; provided, however, that,
if the termination of the Executive’s employment that precedes such period of
restriction required under Section 7.2 above has occurred pursuant to
Section 6.4 above, then the Executive shall be paid during such period the
full per annum amount required under Section 6.4(a).  If the period of the restrictions required
under Section 7.2 above follows any termination of a Consulting Period,
then the payments required under this Section 7.3 shall be reduced to a
per annum amount equal to fifty percent (50%) of the per annum amount specified
in Section 6.4(a) of this Agreement, subject to Section 6.7 above and
subject further to any requirement that the full per annum amount under
Section 6.4(a) be paid during such period pursuant to Sections 6.12(d) or
6.12(e) above.  The amount payable under
this Section 7.3 is only payable during the period of restriction that is
the subject of Section 7.2 of this Agreement.  Inasmuch as such period of restriction shall not apply under any
circumstances after a Change in Control, no amount shall be paid to the
Executive under this Section 7.3 under any circumstances after a Change in
Control (although amounts may otherwise be paid to the Executive, his estate or
other legal representative after a Change in Control under other applicable
provisions of this Agreement).  The
amounts to be paid to the Executive under this Section 7.3 shall be paid
out in equal periodic installments in accordance with the Employers’ ordinary
payroll practices over the two-year or such shorter  period commencing on the first payroll date after the Date of
Termination.

 

17

 

7.4                                 Injunctive
Relief.  The Executive acknowledges
and agrees that the Employers will have no adequate remedy at law, and would be
irreparably harmed, if the Executive breaches or threatens to breach any of the
provisions of this Section 7.  The
Executive agrees that the Employers shall be entitled to equitable and/or
injunctive relief to prevent any breach or threatened breach of this
Section 7, and to specific performance of each of the terms of this
Section 7 in addition to any other legal or equitable remedies that the
Employers may have.  The Executive
further agrees that he shall not, in any equity proceeding relating to the
enforcement of the terms of this Section 7, raise the defense that the
Employers have an adequate remedy at law.

 

7.5                                 Special
Severability.  The terms and
provisions of this Section 7 are intended to be separate and divisible
provisions and if, for any reason, any one or more of them is held to be
invalid or unenforceable, neither the validity nor the enforceability of any
other provision of this Agreement shall thereby be affected.

 

8.                                       Arbitration
of Disputes.  Any controversy or
claim arising out of or relating to this Agreement or the breach hereof, other
than an action brought by the Employers for injunctive or other equitable
relief in the enforcement of the Employers’ rights under Section 7 above,
in which case such action may be brought in any court of competent
jurisdiction, shall be settled by arbitration in accordance with the laws of
the Commonwealth of Massachusetts by three arbitrators, one of whom shall be
appointed by the Employers, one by the Executive and the third by the first two
arbitrators.  If the first two
arbitrators cannot agree on the appointment of a third arbitrator, then the
third arbitrator shall be appointed by the American Arbitration Association in
the City of Boston, Massachusetts.  Such
arbitration shall be conducted in the City of Boston, Massachusetts in
accordance with the rules of the American Arbitration Association, except with
respect to the selection of arbitrators which shall be as provided in this
Section 8.  Judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof.  In the event that it shall be
necessary or desirable for the Executive to retain legal counsel and/or incur
other costs and expenses in connection with the enforcement of any or all of
Executive’s  rights under this
Agreement, the Employers shall pay (or the Executive shall be entitled to
recover from the Employers, as the case may be) the Executive’s reasonable attorneys’
fees and other reasonable costs and expenses in connection with the enforcement
of said rights (including the enforcement of any arbitration award in court)
regardless of the final outcome, unless and to the extent that the arbitrators
shall determine that the Executive has not acted in good faith or that under
the circumstances recovery by the Executive of all or part of any such fees and
costs and expenses would be inequitable or otherwise unjust.

 

9.                                       Successors.

 

9.1                                 The
Executive.  This Agreement is
personal to the Executive and, without the prior written consent of the
Employers, shall not be assignable by the Executive, except that the
Executive’s rights to receive any compensation or benefits under this Agreement
may be transferred or disposed of pursuant to testamentary disposition, intestate
succession or pursuant to a qualified domestic relations order.  This Agreement shall inure to the benefit of
and be enforceable by the Executive’s heirs, beneficiaries and/or legal
representatives.  In the event of the
Executive’s death prior to the completion by the Employers of all payments due
to the

 

18

 

Executive under this
Agreement, the Employers shall continue to make such payments to the
Executive’s beneficiary(ies) as designated in writing by the Executive to the
Employers prior to his death (or to his estate, if he fails to make such
designation).

 

9.2                                 The
Employers.  This Agreement shall
inure to the benefit of and be binding upon the Employers and their successors
and assigns.  Each of the Company and
the Bank shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of its
businesses and/or assets to assume expressly and agree to perform this
Agreement in the same manner and to the same extent as if no such succession
had taken place.  Failure of either the
Company or the Bank to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation in the same amount and on the same
terms as he would be entitled to hereunder if he terminated this Agreement for
Good Reason following a Change in Control, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed to be the Date of Termination.  As used in this Agreement, “Company,” “Bank”
and “Employers” shall mean the Company, the Bank and the Employers as hereinbefore
defined and any successor to the business and/or assets of either the Company
or the Bank as aforesaid which successor assumes and agrees to perform this
Agreement by operation of law or otherwise.

 

10.                                 Indemnification.  The Executive (and his heirs, executors and
administrators) shall be indemnified and held harmless by the Employers to the
fullest extent permitted by applicable law, regulation, regulatory policy or
other regulatory requirement, against all expenses, liabilities and losses
(including, without limitation, all reasonable attorneys’ fees and all
judgments, fines, excise taxes or penalties and amounts paid or to be paid in
settlement) incurred or suffered by the Executive as a consequence of the
Executive being or having been made a party to, or being or having been involved
in, any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that
the Executive is or was a trustee, director or officer of the Employers or is
or was serving at the request of the Employers as a trustee, director or
officer of another corporation or other entity (including, but not limited to,
a Subsidiary or an Affiliate of the Employers), and such indemnification shall
continue after the Executive shall cease to be an officer, director or
trustee.  The right to indemnification
conferred hereby shall be a contract right and shall also include, to the
extent permitted by applicable law, regulation, regulatory policy or other regulatory
requirement, the right to be paid by the Employers the expenses incurred in
defending any such proceeding in advance of the final disposition upon receipt
by the Employers of an undertaking by or on behalf of the Executive to repay
such amount or a portion thereof, if it shall ultimately be determined that the
Executive is not entitled to be indemnified by the Employers pursuant hereto or
as otherwise authorized by law, regulation, regulatory policy or other
regulatory requirement, but such repayment by the Executive shall only be in an
amount ultimately determined to exceed the amount to which the Executive was
entitled to be indemnified.  The
Employers’ acceptance of any such undertaking by or on behalf of the Executive
may not be conditioned upon any evidence or demonstration by or on behalf of
the Executive of any financial capacity to make any such repayment at the time
such undertaking is delivered.

 

19

 

11.                                 Miscellaneous.

 

11.1                           Applicable
Law.  This Agreement shall, to the
extent not superseded by federal law, be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, without regard
to principles of conflict of laws.

 

11.2                           Amendments/Waiver.  This Agreement may not be amended, waived,
or modified otherwise than by a written agreement executed by the parties to
this Agreement or their respective successors and legal representatives.  No waiver by any party to this Agreement of
any breach of any term, provision or condition of this Agreement by the other party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same time, or any prior or subsequent time.

 

11.3                           Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed given when received by
hand-delivery to the other party, by facsimile transmission, by overnight
courier, or by registered or certified mail, return receipt requested, postage
prepaid, addressed, if to the Executive, to the Executive at his last address
on file with the Employers and, if to the Employers, to the Employers at their
then current executive offices or to such other address as either party shall
have furnished to the other in writing in accordance herewith.  Notices and communications shall be
effective when actually received by the addressee (which receipt shall be
deemed to have occurred at any time that the addressee refuses or otherwise
attempts to avoid delivery of any such notice or communication).

 

11.4                           Withholdings.  The Employers may withhold from any amounts
payable under this Agreement such taxes as shall be required to be withheld
pursuant to any applicable law or regulation.

 

11.5                           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.

 

11.6                           Captions.  The captions of this Agreement are for
convenience of reference only, are not part of the terms of this Agreement and
shall have no force or effect in the application or interpretation thereof.

 

11.7                           Entire
Agreement.  This Agreement contains
the entire agreement between the parties to this Agreement concerning the
subject matter hereof and supersedes all prior agreements, understandings, discussions,
negotiations and undertakings, whether written or oral, between the parties
with respect thereto, including without limitation that certain Employment
Agreement dated as of June 1 , 2001 by and between the Employers and the
Executive.

 

11.8                           Survivorship.  The respective rights and obligations of the
parties to this Agreement, including, without limitation, any of their
respective rights and obligations under Section 10 of this Agreement,
shall survive any termination of this Agreement or any termination

 

20

 

of the Executive’s
employment hereunder for any reason to the extent necessary to accomplish the
intended preservation of such rights and obligations.

 

IN WITNESS WHEREOF, the
Executive has hereunto set his hand and each of the Employers has caused this
Agreement to be executed in its name and on its behalf by a duly authorized
officer, in each case as an instrument under seal and as of the date set forth
above.

 

 

	
  ATTEST:

  	
  ENTERPRISE BANCORP, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Arnold S. Lerner

  	
   

  	
  By:

  	
  /s/ John P. Clancy, Jr.

  	
   

  
	
  Arnold S. Lerner

  	
   

  	
   

  	
  John
  P. Clancy Jr.

  	
   

  
	
  Vice Chairman

  	
   

  	
   

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  ENTERPRISE BANK AND
  TRUST COMPANY

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Arnold S. Lerner

  	
   

  	
  By:

  	
  /s/ Richard W. Main

  	
   

  
	
  Arnold S. Lerner

  	
   

  	
   

  	
  Richard
  W. Main

  	
   

  
	
  Vice Chairman

  	
   

  	
   

  	
  President
  and Chief Operating Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Robert R. Gilman

  	
   

  	
  /s/ George L. Duncan

  	
   

  
	
   

  	
   

  	
  George L. Duncan

  	
   

  
							

 

21Exhibit
10.29

 

AMENDED AND RESTATED EMPLOYMENT
AGREEMENT

 

 

This Amended and Restated
Employment Agreement (this “Agreement”), dated as of January 1, 2004 (the
“Effective Date”), is made by and among Enterprise Bancorp, Inc., a
Massachusetts corporation (the “Company”), and its wholly owned subsidiary,
Enterprise Bank and Trust Company, a Massachusetts trust company with its main
office in Lowell, Massachusetts (the “Bank”) (the Bank and the Company being
collectively referred to herein as the “Employers”), and Richard W. Main, an
individual residing at 1 Overlook Drive, Chelmsford, Massachusetts (the
“Executive”).  This Agreement shall be
effective as of the date hereof (the “Effective Date”).

 

WHEREAS, the Employers
desire to continue to employ the Executive as President and Chief Operating
Officer of the Bank and to enter into an amended and restated employment
agreement embodying the terms of such relationship;

 

AND WHEREAS, the
Executive is willing to continue to be employed as President and Chief Operating
Officer of the Bank on the terms set forth herein;

 

NOW, THEREFORE, in
consideration of the premises and mutual covenants herein contained, and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the Employers and the Executive hereby agree as follows:

 

1.                                       Definitions.

 

1.1                                 “Affiliate”
means any Person effectively controlling, effectively controlled by or
effectively under common control with the Employers.

 

1.2                                 “Board”
means the board of directors of the Company or the Bank, as the case may be.

 

1.3                                 “Cause”
means, when used with respect to the termination of the employment of the
Executive by the Employers, termination due to (a) the Executive’s willful and
continued failure to substantially perform his employment duties (other than
any such failure resulting from the Executive’s incapacity due to physical or
mental illness) or (b) the Executive’s willfully engaging in conduct which is
demonstrably and materially injurious to the Company or the Bank, monetarily or
otherwise.  For purposes of this
definition, no act, or failure to act, on the part of the Executive shall be
deemed “willful” unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that his action or omission was in the
best interests of the Company or the Bank.

 

1.4                                 “Change
in Control” has the same meaning as defined in the Company’s 2003 Stock
Incentive Plan, as may be amended and in effect from time to time.

 

1.5                                 “Code”
means the Internal Revenue Code of 1986, as amended, and as in effect from time
to time, and/or any successor code thereto.

 

 

1.6                                 “Date
of Termination” means the date specified in the Notice of Termination (as such
term is defined in Section 6.8 of this Agreement) or such date that the
Executive’s employment terminates if such termination does not require or
otherwise depend upon a prior written notice by the Employers or the Executive,
as the case may be, under the terms of this Agreement; provided, however, that
if, within thirty (30) calendar days after any Notice of Termination is given,
the party receiving such Notice of Termination notifies the other party in
writing that a dispute exists concerning the termination of employment that is
the subject of such Notice of Termination, then the Date of Termination shall
be the date on which such dispute is finally resolved, either by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, order or decree of a court of competent jurisdiction, including all
appeals, unless the time for appeal therefrom has expired and no appeal has
been perfected; provided, further, however, that the Date of Termination shall
(a) in no case be later than the date on which the Term of Employment (as such
term is defined in Section 3 of this Agreement) expires, and (b) be
extended by a notice of dispute as provided above only if such notice is given
in good faith and the party giving such notice pursues the resolution of such
dispute with reasonable diligence.

 

1.7                                 “Good
Reason” means, and shall be deemed to exist if, (a) without the written consent
of the Executive, (i) the Employers fail to appoint or reappoint the Executive
as President and Chief Operating Officer of the Bank, (ii) there occurs any
material change by the Employers to the Executive’s function, duties or
responsibilities as set forth in Section 4.1 of this Agreement, which
change would cause the Executive’s position with the Employers to become one of
lesser responsibility, importance or scope from the position and attributes
thereof as set forth in Section 4.1 of this Agreement, (iii) there occurs
any material breach of this Agreement by the Employers or (iv) the Employers
fail to obtain a satisfactory agreement from any successor(s) to assume and
agree to perform the Employers obligations under this Agreement, or (b) a
Change in Control occurs, whether or not the Executive has consented , in
writing or otherwise, to such Change in Control.

 

1.8                                 “Highest
Annual Compensation” means, as determined as of any Date of Termination, the
sum of (a) the highest per annum rate of base salary paid by the Employers to
the Executive at any time during the Term of Employment prior to such Date of
Termination, (b) the highest amount of commission or other compensation (which
is not otherwise included in the base salary and bonus amounts referred in
clauses (a) and (c) hereof) paid by the Employers to the Executive with respect
to any fiscal year of the Employers during the Term of Employment prior to such  Date of Termination, and (c) the highest
annual incentive compensation or other bonus amount paid by the Employers to
the Executive (or which would have been paid but for an election by the
Executive to defer payment to a later period) with respect to any fiscal year of
the Employers during the Term of Employment prior to such Date of Termination.

 

1.9                                 “Parent”
means any Person which has a direct or indirect legal or beneficial ownership
interest in the Employers, but only if any such Person owns or controls,
directly or indirectly, securities possessing at least 50 percent of the total
combined voting power of all classes of securities of the Employers.

 

2

 

1.10                           “Person”
means any natural person or any bank, trust company, credit union, corporation,
firm, unincorporated organization, association, partnership, limited liability
company, trust, estate, joint venture or other business organization or entity.

 

1.11                           “Subsidiary”
means any Person (other than the Company or the Bank) in which the Employers or
any Parent has a direct or indirect legal or beneficial ownership interest, but
only if the Company or the Parent, as the case may be, owns or controls,
directly or indirectly, securities possessing at least 50 percent of the total
combined voting power of all classes of securities in any such Person.

 

1.12                           “Retirement”
means the termination of the Executive’s employment with the Employers upon the
initiative of the Executive at any time after the Executive attains the age of
65 years old, other than (a) a termination due to death, (b) a termination for
Good Reason or (c) a termination upon the expiration of the Term of Employment.

 

2.                                       Employment.  Subject to the terms and provisions set
forth in this Agreement, the Employers, during the Term of Employment, agree to
employ the Executive as President and Chief Operating Officer of the Bank and
the Executive hereby accepts such employment. The parties acknowledge and agree
that the Executive’s employment by the Employers under this Agreement may not
be terminated for any reason other than as set forth in Section 6 below
prior to the expiration of the Term of Employment.

 

3.                                       Term
of Employment.  The term of
employment under this Agreement shall commence as of the Effective Date and,
subject to extension as provided in this Section 3 or earlier termination
as provided under Section 6 of this Agreement, shall continue through
December 31, 2005 (the “Term of Employment”).  As of the first day of each month of January during which
this Agreement remains in effect (each such day a “Renewal Date”), a one-year
extension of the then current Term of Employment shall automatically be
effected (for example, on January 1, 2005, the Term of Employment shall be
extended from a term ending on December 31, 2005 to a term ending on
December 31, 2006).  Either the
Employers or the Executive may give written notice to the other on or prior to
any given Renewal Date of the intent of the party giving such notice to
terminate this Agreement at the expiration of the two-year period commencing on
such Renewal Date.  Upon the delivery by
either party of any such notice, the Term of Employment shall no longer be
subject to the automatic one-year extension provided for herein, but rather
shall expire upon the conclusion of such final two-year period.

 

4.                                       Positions,
Responsibilities and Duties.

 

4.1                                 Positions
and Duties.  During the Term of
Employment, the Executive shall be employed and shall serve as President and
Chief Operating Officer of the Bank.  In
such positions, the Executive shall have the duties, responsibilities and
authorities as determined and designated from time to time by the Chairman and
Chief Executive Officer of the Employers or the Board and as otherwise provided
in the bylaws of the Employers.  The
Executive shall serve under the direction of, and report only to, the Chairman
and Chief Executive Officer of the Employers. 
Notwithstanding the above, the Executive shall not be required to
perform any duties and responsibilities which would result in the Employers’ or
the Executive’s

 

3

 

noncompliance with, or
any other violation of, any applicable law, regulation, regulatory policy or
other regulatory requirement.

 

4.2                                 Attention
to Duties and Responsibilities. 
During the Term of Employment, the Executive shall, except for periods
of absence occasioned by illness, vacation in accordance with Section 5.6
of this Agreement, and any other reasonable leaves of absence in accordance
with any applicable policies, programs, procedures or practices of the
Employers, devote substantially all of his business time to the business and
affairs of the Employers and the Executive shall use his best efforts, business
skills, ability and fidelity to perform faithfully and efficiently the duties
and responsibilities contemplated by this Agreement; provided, however,
that the Executive shall be allowed, to the extent such activities do not
present a conflict of interest or significantly interfere with the performance
by the Executive of his duties and responsibilities hereunder, (a) to manage
the Executive’s personal financial affairs, including his personal investment
portfolio, and (b)(i) to serve on boards of directors or trustees or committees
of civic or charitable organizations or trade associations, and (ii) after
obtaining the consent of the Board, as evidenced by a formally adopted vote or
resolution of the Board and under the terms and conditions specified in any
such vote or resolution, to serve on the board of directors or trustees or
other governing body of any company or other organization or  association or to serve as a general partner
or other type of active manager in any partnership or other type of business
venture; provided, further, however, that all offices or
positions which the Executive currently holds or has held prior to the date of
this Agreement and any other that may be set forth in a schedule attached
to this Agreement are hereby acknowledged by the Employers and designated as
currently consented to positions.

 

5.                                       Compensation
and Other Benefits.

 

5.1                                 Base
Salary.  During the Term of
Employment, the Executive shall receive a base salary of One Hundred Sixty-One
Thousand Six Hundred and 00/100 Dollars ($161,600.00) per annum (such per annum
amount being referred to herein as the Executive’s “Base Salary”), payable in
accordance with the Employers’ normal payroll practices.  The Executive’s Base Salary shall be
reviewed annually by the Board for increase (but not any decrease) in the
Board’s sole discretion.  The
Executive’s Base Salary as may be so increased from time to time during the
Term of Employment shall then constitute the Executive’s “Base Salary” for
purposes of this Agreement.

 

5.2                                 Annual
Bonus.  During the Term of
Employment, the Executive shall be entitled to participate in an equitable
manner with other executive officers of the Employers in such discretionary
bonus payment or awards as may be authorized, declared and paid by the Board to
the Employers’ executive employees.  No
other compensation or additional benefits provided for in this Agreement shall
be deemed to be a substitute for the Executive’s right to receive such bonuses
if, when and as declared and paid by the Board.

 

5.3                                 Incentive,
Retirement, and Savings Plans. 
During the Term of Employment, the Executive shall participate in all
incentive, pension, retirement, supplemental retirement, savings, stock option
and other stock grant and equity compensation plans, as well as

 

4

 

all other employee
benefit plans and programs, which may be maintained from time to time by the
Employers for the benefit of senior executives and/or other employees of the
Employers.

 

5.4                                 Welfare
Benefit Plans.  During the Term of
Employment, the Executive and his spouse and other eligible dependents shall
participate in, and be covered by, all of the health and other welfare benefit
plans and programs that may be maintained from time to time by the Employers
for the benefit of senior executives and/or other employees of the Employers.

 

5.5                                 Expense
Reimbursement.  During the Term of
Employment, the Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses, including reasonable business travel expenses,
incurred by the Executive in performing his duties and responsibilities under
this Agreement in accordance with the policies, programs, procedures and
practices of the Employers as in effect at the time the expense was incurred,
as the same may be changed from time to time.

 

5.6                                 Vacation
and Fringe Benefits; Automobile. 
During the Term of Employment, the Executive shall be eligible to
benefit from such fringe benefits and perquisites, in accordance with the
policies, programs,  procedures and
practices of the Employers, as may be in effect and provided from time to time
to senior executives and/or other employees of the Employers, and shall be
entitled to the use of an automobile, of a type commensurate with the
Executive’s office and standing, at the Employers’ expense.

 

6.                                       Termination.

 

6.1                                 Termination
Due to Death.  In the event of the
Executive’s death during the Term of Employment, the Term of Employment shall
thereupon end and his estate or other legal representative, as the case may be,
shall, subject to Section 6.11 of this Agreement, only be entitled to:

 

(a)                                  Base
Salary continuation at the rate in effect (as provided in Section 5.1 of
this Agreement) on the Date of Termination for a period of six months
commencing on such Date of Termination or, if the Board so determines in its
sole discretion and in lieu of such six-month salary continuation, a lump sum
payment equal in amount to such six-month Base Salary continuation; provided,
however, that if the Executive’s death during the Term of Employment occurs
after, or within one year prior to, a Change in Control, then the Executive’s
estate or other legal representative shall receive, in lieu of the payments
required under this Section 6.1(a) and subject to Section 6.9 below,
the full lump sum payment required under Section 6.4(a) below in the event
of a termination of the Executive’s employment after, or within one year prior
to, a Change in Control (and, in the case of the Executive’s death within one
year prior to a Change in Control, any amounts paid under this Section 6.1(a)
prior to the Change in Control shall be taken into account in determining the
total amount payable to the Executive’s estate or other legal representative as
a result of the Change in Control);

 

(b)                                 any
Base Salary accrued but not yet paid as of the Date of Termination;

 

5

 

(c)                                  any
bonus actually awarded or commissions actually earned, but not yet paid, as of
the Date of Termination;

 

(d)                                 reimbursement
for all expenses (under Section 5.5) incurred as of the Date of
Termination, but not yet paid as of the Date of Termination;

 

(e)                                  payment
of the per diem value of any unused vacation days that have accrued during the
Term of Employment prior to the Date of Termination and the unused, unaccrued
portion of any vacation days available through the end (but not beyond) of the
calendar year in which the Date of Termination occurs;

 

(f)                                    any
other compensation and benefits as may be provided in accordance with the terms
and provisions of any applicable plans, programs, procedures and practices of
the Employers;

 

(g)                                 continuation
of all health and other welfare benefits provided under Section 5.4 of
this Agreement for the benefit of the Executive’s spouse and other eligible
dependents at the level in effect on the Date of Termination and at no cost to
the Executive’s spouse and such other eligible dependents for a period
commencing on the Date of Termination and ending, with respect to the
Executive’s spouse, on the earlier of her death or remarriage and, with respect
to any other eligible dependent of the Executive, on such date as such
dependent reaches the age of legal emancipation in accordance with the laws of
the Commonwealth of Massachusetts (or, if such continuation of health or other
welfare benefits is not permitted by applicable law, the Employers shall
provide the economic equivalent in lieu thereof); and

 

(h)                                 any
rights to indemnification in accordance with Section 10 of this Agreement.

 

6.2                                 Suspension
for Disability.

 

(a)                                  If,
during the Term of Employment, the Executive shall either qualify to receive
disability benefits under any group long-term disability plan then maintained
by the Employers or, if no such plan is maintained by the Employers, have been
absent from his duties with the Employers on a full-time basis due to physical
or mental illness for six (6) consecutive months, and in either case shall not
have returned to the full-time performance of his duties within thirty (30)
days after written notice of potential suspension has been given to the Executive
by the Employers, then the Executive’s employment shall be deemed to be
suspended on the basis of disability (a “Suspension for Disability”).

 

(b)                                 If
a Suspension for Disability occurs during the Term of Employment, the Employers
shall pay the Executive an amount equal, on a per annum basis, to seventy-five
percent (75%) of the Executive’s Highest Annual Compensation as determined on
the effective date of the Suspension for Disability (assuming, for purposes of
such determination, that the effective date of the Suspension for Disability is
the Date of Termination as referred to in the definition of Highest Annual
Compensation), such

 

6

 

amount to be paid out in
equal periodic installments in accordance with the Employers’ ordinary payroll
practices during the period that such payments are required to be made under
this Section 6.2(b).  These
payments shall commence on the first ordinary payroll payment date of the
Employers after the effective date of the Executive’s Suspension for Disability
and will end on the earliest to occur of the following:  (i) the date on which the Executive returns
to full-time employment with the Employers; (ii) the Executive’s death; or
(iii) the termination by either party, or the expiration, of the Term of
Employment in accordance with the terms of this Agreement.  After a Suspension for Disability occurs,
the Employers shall be free to fill the Executive’s positions.  Upon the Executive being able to return to
full-time employment before any termination or the expiration of the Term of
Employment, the Executive shall, at his option, (i) assume the President and
Chief Operating Officer positions of the Bank or, if another individual is then
holding either of such positions and the Executive is not reappointed to both
such positions, assume such other position(s) as may be available with the
Employers at the same Base Salary as was in effect at the time the Suspension
for Disability had commenced and otherwise continue in the employ of the
Employers in accordance with the terms of this Agreement or (ii) if another
individual is then holding either of such positions and the Executive is not
reappointed to both such positions, exercise his right to terminate this
Agreement for Good Reason under Section 6.4 of this Agreement.  The disability payments to be paid to the
Executive during a Suspension for Disability under this Section 6.2(b)
shall be in addition to any payments or other benefits payable to the Executive
under any qualified or nonqualified retirement plans or programs maintained by
the Employers but shall be reduced by any payments received by the Executive
during such Suspension for Disability under any group long-term disability plan
maintained by the Employers.  Notwithstanding
any other provision contained in this Agreement to the contrary, the occurrence
of a Suspension of Disability shall not in any way prevent or otherwise limit
the parties’ exercising any of their respective rights to terminate the Term of
Employment at any time in accordance with the terms of this Agreement.

 

(c)                                  The
Employers shall cause to be continued during any Suspension for Disability all
life, health and other welfare coverages and benefits as were maintained by the
Employers for the benefit of the Executive and his spouse and other eligible
dependents prior to the occurrence of such Suspension for Disability, such
continuation to continue, subject to Section 6.2(d) of this Agreement,
until the expiration of the Term of Employment.

 

(d)                                 Notwithstanding
any other provision to the contrary in this Section 6.2, there shall be no
reduction in the compensation (except as otherwise provided in
Section 6.2(b) above), accrued benefits or pension granted or accruing to
the Executive during the period of any Suspension for Disability and there
shall be no abrogation or limitation of any of the other provisions of this
Agreement that grant rights to the Executive or the Executive’s spouse or other
eligible dependents or the Executive’s estate following the Executive’s death,
Retirement or other applicable termination of employment during the Term of
Employment as a result of any Suspension for 
Disability.

 

7

 

6.3                                 Termination
by the Board for Cause.

 

(a)                                  The
Board may terminate the Executive’s employment hereunder for Cause, as provided
in Section 6.3(b) below.  If the
Board terminates the Executive’s employment under this Section 6.3 for
Cause, the Term of Employment shall thereupon end as set forth below and the
Executive shall, subject to Section 6.11 of this Agreement, only be
entitled to:

 

(i)                                     any
Base Salary accrued but not yet paid as of the Date of Termination;

 

(ii)                                  any
bonus actually awarded or commissions actually earned, but not yet paid, as of
the Date of Termination;

 

(iii)                               reimbursement
for all expenses (under Section 5.5) incurred as of the Date of
Termination, but not yet paid as of the Date of Termination; and

 

(iv)                              payment
of the per diem value of any unused vacation days that    have accrued during the Term of Employment
prior to the Date of Termination and the unused, unaccrued portion of any
vacation days available through the end (but not beyond) of the calendar year
in which the Date of Termination occurs.

 

(b)                                 In
determining Cause, the alleged acts or omissions of the Executive must be
confirmed beyond a reasonable doubt by not less than two-thirds of the Board
(meaning, for purposes of this Section 6.3(b), the Board excluding the
Executive and any other directors of the Employers who are alleged to have been
involved or otherwise to have an interest in any of such alleged acts or
omissions of the Executive) at a meeting duly called and held for the purpose
of the Board’s making such determination (the “Determination Meeting”). In the
event of such a confirmation by  the
Board, the Employers shall notify the Executive that the Employers intend to
terminate the Executive’s employment for Cause under this Section 6.3 (the
“Confirmation Notice”).  The
Confirmation Notice shall specify the act(s), or omission(s), upon the basis of
which the Board has confirmed the existence of Cause and must be delivered to
the Executive within ten (10) days after the date on which the Determination
Meeting has been held.  If the Executive
notifies the Employers in writing (the “Opportunity Notice”) within ten (10)
days after the Executive has received the Confirmation Notice, the Executive
(together with counsel) shall be provided one opportunity to meet with the
Board (or a sufficient quorum thereof) to discuss such act(s) or
omission(s).  Such opportunity to meet
with the Board shall be fixed and shall occur on a date selected by the Board
(such date being not less than ten (10) nor more than thirty (30) days after
the Employers receive the Opportunity Notice from the Executive).  Such meeting (the “Final Meeting”) shall
take place at the principal offices of the Employers or such other location as
agreed to by the Executive and the Employers. 
During the period commencing on the date on which notice of the Determination
Meeting is duly given to the Board and ending either on the date of the
Determination Meeting, if no determination of Cause is made at the
Determination Meeting, or on the Date of Termination, and not withstanding
anything to the contrary in this Agreement, the Executive shall be suspended
from employment with the Employers (with continuing payment of Base Salary and
continuation of benefits in

 

8

 

accordance with
Section 5 of this Agreement, to the extent such payments and benefits are
not prohibited by applicable law, regulation, regulatory policy or other
regulatory requirement), and the Board may, during such suspension period,
reasonably limit the Executive’s access to the principal offices and any other
premises of the Employers and/or the Executive’s access to any of the
Employers’ assets or personnel.  If the
Board properly sets the date of the Final Meeting and if the Board (or a
sufficient quorum thereof) attends the Final Meeting and in good faith does not
rescind its confirmation of Cause at the Final Meeting or if the Executive
fails to attend the Final Meeting for any reason, the Executive’s employment by
the Employers shall, immediately upon the closing of the Final Meeting and the
delivery to the Executive of the Notice of Termination, be terminated for Cause
under this Section 6.3.  If the
Executive does not respond in writing to the Confirmation Notice in the manner
and within the time period specified in this Section 6.3, the Executive’s
employment with the Employers shall, on the eleventh day after the receipt by
the Executive of the Confirmation Notice, be terminated for Cause under this
Section 6.3.  In the event of any
dispute hereunder, the Executive shall be entitled, to the extent not
prohibited by applicable law, regulation, regulatory policy or other regulatory
requirement, until the earliest to occur of (i) the Date of Termination, (ii)
the expiration of the then current Term of Employment or (iii) the resolution
of such dispute, to be paid his Base Salary in accordance with the Employers’
ordinary payroll practices and continue to receive all other benefits to be
provided to the Executive pursuant to Section 5 hereof, and there shall be
no reduction whatsoever of any amounts subsequently paid to the Executive upon
resolution of such dispute as a result of, or in respect to, such interim
payments or coverage.  The procedure set
forth in this Section 6.3 to determine the existence of Cause shall at all
times be subject to the requirements of applicable law, regulation, regulatory
policy or other regulatory requirements.

 

6.4                                 Termination
by Employers Without Cause or by Executive for Good Reason.  The Employers may terminate the Executive’s
employment for any reason and without Cause, or for no reason at all, at any
time during the Term of Employment upon sixty (60) days prior written notice to
the Executive.  The Executive may
terminate his employment for Good Reason at any time during the Term of
Employment upon sixty (60) days prior written notice to the Employers.  If the Employers terminate the Executive’s
employment hereunder without Cause or the Executive terminates his employment
hereunder for Good Reason, then the Term of Employment shall thereupon end and
the Executive shall, subject to Section 6.11 of this Agreement, only be
entitled to:

 

(a)                                  an
aggregate amount equal to two times the Executive’s Highest Annual
Compensation, such amount to be paid out in equal periodic installments in
accordance with the Employers’ ordinary payroll practices over the two-year
period commencing on the first payroll payment date after the Date of
Termination; provided, however, that if such termination by either the
Employers or the Executive occurs at any time during the Term of Employment after,
or within one year prior to, a Change in Control, then the Executive shall,
subject to Section 6.9 below, be entitled to a cash lump sum payment equal
to two (2) times the Executive’s Highest Annual Compensation, which lump sum
shall be paid within thirty (30) days following the later of the Date of
Termination or the

 

9

 

date of the Change in
Control (and, in the case of any such termination within one year prior to a
Change in Control, any amounts paid under this Section 6.4(a) prior to the
Change in Control shall be taken into account in determining the total amount
payable to the Executive as a result of the Change in Control);

 

(b)                                 any
Base Salary accrued but not yet paid as of the Date of Termination;

 

(c)                                  any
bonus actually awarded or commissions actually earned, but not yet paid, as of
the Date of Termination;

 

(d)                                 reimbursement
for all expenses (under Section 5.5) incurred as of the Date of
Termination, but not yet paid as of the Date of Termination;

 

(e)                                  payment
of the per diem value of any unused vacation days that have accrued during the
Term of Employment prior to the Date of Termination and the unused, unaccrued
portion of any vacation days available through the end (but not beyond) of the
calendar year in which the Date of Termination occurs;

 

(f)                                    any
other compensation and benefits as may be provided in accordance with the terms
and provisions of any applicable plans, programs, procedures or practices of
the Employers;

 

(g)                                 continuation
of the welfare benefits of the Executive and his spouse and other eligible
dependents at the level in effect (as provided for by Section 5.4 of this
Agreement) on, and at the same out-of-pocket cost to the Executive as of, the
Date of Termination for the two-year period commencing on the Date of
Termination (or, if such continuation is not permitted by applicable law or if
the Board so determines in its sole discretion, the Employers shall provide the
economic equivalent in lieu thereof);

 

(h)                                 reimbursement
for the reasonable fees of a professional out-placement service selected by the
Executive within ninety (90) days after the Date of Termination; and

 

(i)                                     any
rights to indemnification in accordance with Section 10 of this Agreement.

 

In the event of any dispute
hereunder, the Executive shall be entitled until the earliest to occur of (i)
the Date of Termination, (ii) the expiration of the then current Term of
Employment, or (iii) the resolution of such dispute, to be paid his Base Salary
in accordance with the Employers’ ordinary payroll practices and continue to
receive all other benefits to be provided to the Executive pursuant to
Section 5 hereof, and there shall be no reduction whatsoever of any
amounts subsequently paid to the Executive upon resolution of such dispute as a
result of, or in respect to, such interim payments or coverage.

 

10

 

6.5                                 Voluntary
Termination.

 

(a)                                  During
the Term of Employment, the Executive may effect, upon sixty (60) days prior
written notice to the Employers, a Voluntary Termination of his employment
hereunder and thereupon the Term of Employment shall end.  A “Voluntary Termination” shall mean a
termination of employment by the Executive on his own initiative other than (i)
a termination due to death, (ii) a termination for Good Reason, (iii) a
termination due to Retirement, or (iv) a termination upon expiration of the
Term of Employment.

 

(b)                                 Upon
a Voluntary Termination, the Executive shall, subject to Section 6.11 of
this Agreement, only be entitled to:

 

(i)                                     Base
Salary accrued but not yet paid as of the Date of Termination;

 

(ii)                                  any
bonus actually awarded or commissions actually earned, but not yet paid, as of
the Date of Termination;

 

(iii)                               reimbursement
for all expenses (under Section 5.5) incurred as of the Date of
Termination, but not yet paid as of the Date of Termination;

 

(iv)                              payment
of the per diem value of any unused vacation days that have accrued during the
Term of Employment prior to the Date of Termination and the unused, unaccrued
portion of any vacation days available through the end (but not beyond) of the
calendar year in which the Date of Termination occurs;

 

(v)                                 any
other compensation and benefits as may be provided in accordance with the terms
and provisions of any applicable plans, programs, procedures or practices of
the Employers; and

 

(vi)                              any
rights to indemnification in accordance with Section 10 of this Agreement;

 

provided, however, that
if a Voluntary Termination occurs within one year prior to a Change in Control,
then the Executive shall receive, in addition to all of the payments and
benefits required under this Section 6.5(b) and subject to
Section 6.9 below, the full lump sum payment required under
Section 6.4(a) above in the event of a termination of the Executive’s
employment after, or within one year prior to, a Change in Control, which lump
sum shall be paid within thirty (30) days following the date of the Change in
Control.

 

6.6                                 Termination
Due to Retirement.  The Executive
may terminate his employment hereunder on the basis of his Retirement upon
sixty (60) days prior written notice to the Employers.  If, during the Term of Employment, the
Executive’s employment is so terminated due to Retirement, the Term of
Employment shall thereupon end and the Executive shall, subject to
Section 6.11 of this Agreement, only be entitled to:

 

(a)                                  Base
Salary accrued but not yet paid as of the Date of Termination;

 

11

 

(b)                                 any
bonus actually awarded or commissions actually earned, but not yet paid, as of
the Date of Termination;

 

(c)                                  reimbursement
for all expenses (under Section 5.5) incurred as of the Date of
Termination, but not yet paid as of the Date of Termination;

 

(d)                                 payment
of the per diem value of any unused vacation days that have accrued during the
Term of Employment prior to the Date of Termination and the unused, unaccrued
portion of any vacation days available through the end (but not beyond) of the
calendar year in which the Date of Termination occurs;

 

(e)                                  any
other compensation and benefits as may be provided in accordance with the terms
and provisions of any applicable plans, programs, procedures or practices of
the Employers;

 

(f)                                    continuation
of the welfare benefits of the Executive, his spouse and other eligible
dependants, if any, at the level in effect (as described in Section 5.4 of
this Agreement) on, and at the same out-of-pocket cost to the Executive as of,
the Date of Termination for the one-year period commencing on the Date of Termination
(or, if such continuation of benefits is not permitted by applicable law or if
the Board so determines in its sole discretion, the Employers shall provide the
economic equivalent in lieu thereof); and

 

(g)                                 any
rights to indemnification in accordance with Section 10 of this Agreement;

 

provided, however, that
if a termination due to Retirement occurs within one year prior to a Change in
Control, then the Executive shall receive, in addition to all of the payments
and benefits required under this Section 6.6 and subject to
Section 6.9 below, the full lump sum payment required under
Section 6.4(a) above in the event of a termination of the Executive’s
employment after, or within one year prior to, a Change in Control, which lump
sum shall be paid within thirty (30) days following the date of the Change in
Control.

 

6.7                                 No
Obligation to Mitigate; Offset Under Certain Circumstances.  In the event of any termination of the
Executive’s employment under this Section 6, the Executive shall be under
no obligation to seek other employment or to mitigate damages.  If any termination of the Executive’s
employment occurs after a Change in Control, then there shall be no offset
against any amounts due the Executive under this Agreement for any reason,
including, without limitation, on account of any remuneration attributable to
any subsequent employment that the Executive may obtain.  If any termination of the Executive’s
employment occurs prior to a Change in Control, then the amounts that may be
payable by the Employers to the Executive during any applicable period
following the Date of Termination and prior to the date of any Change in
Control under Sections 6.4(a) or 7.3 of this Agreement may be adjusted, so that
any payment paid to the Executive by the Employers during any such period shall
equal the difference between the total amount that the Employers would
otherwise be required to pay to

 

12

 

the Executive for such
period pursuant to Sections 6.4(a) or 7.3, as applicable, and the total amount
of any payments received by the Executive from any third party(ies) during such
period.

 

6.8                                 Notice
of Termination.  Any termination of
the Executive’s employment under this Section 6 requiring advance written
notice shall be communicated by a notice of termination to the other party
hereto given in accordance with Section 11.3 of this Agreement (the
“Notice of Termination”).  The Notice of
Termination, in the case of a termination by the Employers for Cause, or a
termination by the Executive for Good Reason, shall indicate the specific
termination provision in this Agreement relied upon and set forth in reasonable
detail the dates, facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated.

 

6.9                                 Code
Section 280G Reduction. 
Anything in this Agreement or in any other agreement, contract,
understanding, plan or program entered into or maintained by the Employers to
the contrary notwithstanding, in the event it shall be determined that any
payment or distribution by the Employers to or for the benefit of the
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (collectively, the “Payments”), would
be subject to the excise tax imposed by Section 4999 of the Code, and/or
any successor provision or section thereto (such excise tax, together with
any interest or penalties incurred by the Executive with respect to such excise
tax, collectively, the “Excise Tax”), and if the Payments less the Excise Tax
would be less than the amount of the Payments that would otherwise be payable
to the Executive without imposition of the Excise Tax, then, to the extent
necessary to eliminate the imposition of the Excise Tax (and taking into
account any reduction in the Payments provided by reason of Section 280G
of the Code in any such other agreement, contract, understanding, plan or
program), the cash and non-cash payments and benefits payable to the Executive
shall be reduced (with the executive being provided with the amount of each
payment and benefit as calculated by the Employers and given ten (10) business
days in which to prioritize the order of reduction of each such payment or
benefit); but only if, by reason of any such reduction, the Payments with any
such reduction shall exceed the Payments less the Excise Tax without any such
reduction.  For purposes of this
Section 6.9, (i) no portion of the Payments, the receipt or enjoyment of
which the Executive shall have effectively waived in writing prior to the Date
of Termination, shall be taken into account, (ii) no portion of the Payments
shall be taken into account that, in the opinion of tax counsel selected in
good faith by the Employers, does not constitute a “parachute payment” within
the meaning of Section 280G(b)(2) of the Code, including without
limitation by reason of Section 280G(b)(4)(A) of the Code, (iii) any
payments and/or benefits under this Agreement or otherwise for services to be
rendered on or after the effective date of a Change in Control shall be reduced
only to the extent necessary so that such payments and/or benefits in their
entirety constitute reasonable compensation for services actually rendered
within the meaning of Section 280G(b)(4)(B) of the Code or are otherwise
not subject to disallowance as deductions, in the opinion of the tax counsel
referred to in the immediately preceding clause (ii) of this sentence, and (iv)
the value of any non-cash payment or benefit or any deferred payment or benefit
included in the Payments shall be determined by the Employers’ independent
auditors in accordance with the principles of Sections 280G(d)(3) and
280G(d)(4) of the Code and the applicable regulations or proposed regulations
under the Code.  Except as otherwise
provided in this Section 6.9, the foregoing calculations and
determinations shall be made in good faith by the Employers and shall be
conclusive and binding

 

13

 

upon the parties.  The Employers shall pay all costs and
expenses incurred in connection with any such calculations or determinations.

 

6.10                           Payment.  Except as otherwise provided in this
Agreement, any payments to which the Executive shall be entitled to under this
Section 6, including, without limitation, any economic equivalent of any
benefit, shall be made, to the extent practicable, within five (5) business
days following the Date of Termination.

 

6.11                           Bank
Regulatory Limitations.  Any
payments made to the Executive pursuant to this Agreement, or otherwise, are
subject to and conditioned upon their compliance with 12 U.S.C. § 1828(k)
and any applicable regulations promulgated thereunder.  In addition, to the extent required by
applicable law, regulation, regulatory policy 
or other regulatory requirement, the aggregate amount and/or value of
the compensation paid as a result of any termination of the Executive’s
employment with the Employers, regardless of the reason for any such
termination of employment, shall not exceed the limit prescribed by such
applicable law, regulation, regulatory policy or other regulatory requirement.

 

6.12                           Option
to Serve as Consultant.

 

(a)                                  In
lieu of the Employers terminating the Term of Employment without Cause or the
Executive terminating the Term of Employment for any reason, the parties may
agree that the Executive shall serve as a consultant to the Employers for the
balance of the Term of Employment (as such may be extended pursuant to
Section 3 of this Agreement) in accordance with the terms set forth in
this Section 6.12.  If the
Employers and the Executive so agree that the Executive shall serve as a
consultant to the Employers hereunder, the Executive shall render such services
of an advisory or consultative nature as the Employers may reasonably require
of him from time to time and he shall assist the Employers in their relations
with their employees and customers, such that the Employers shall have the
benefit of the Executive’s experience and knowledge of the Employers’ business
and operations, his reputation and contacts in the industry generally as well
as in the Employers’ market area and his general business experience.

 

(b)                                 During
the period of the Executive’s providing the consulting services contemplated by
Section 6.12(a) above (the “Consulting Period”), the Executive shall
devote approximately one-half of his time during normal business hours to the
business and affairs of the Employers, and shall receive as compensation
therefor an amount equal, on a per annum basis, to fifty percent (50%) of the
Executive’s Highest Annual Compensation as determined as of the date upon which
the Consulting Period commences (assuming, for purposes of such determination,
that the date upon which the Consulting Period commences is the Date of
Termination as referred to in the definition of Highest Annual Compensation),
such amount to be paid out in equal periodic installments in accordance with
the Employers’ ordinary payroll practices during the Consulting Period.

 

(c)                                  During
the Consulting Period, the Executive shall be deemed to be an employee of the
Employers and, on this basis, the Executive shall be entitled to a

 

14

 

continuation of all of
the compensation, payments and other benefits provided to him, his spouse and
other eligible dependents pursuant to Sections 5.3 through 5.6 of this
Agreement in accordance with the terms thereof.  During the Consulting Period, there shall be no affirmative
obligation on the part of the Executive to serve or to continue to serve as a
member of the Board, and any such membership shall be in accordance with the
mutual agreement of the Executive and the Employers.

 

(d)                                 The
Consulting Period may be terminated at any time by either the Employers or the
Executive for any reason, or for no reason at all, upon sixty (60) days prior
written notice to the other party.  If
the Consulting Period is terminated by either the Employers or the Executive
prior to the occurrence of a Change in Control, then, so long as the Consulting
Period has not been terminated by the Employers for Cause and subject to any
applicable provisions of Section 6.12(e) below, such termination shall be
deemed to have occurred, effective as of the date on which the Consulting
Period terminates, on the grounds that would have applied at the time of the
parties’ first entering into the consulting arrangement provided for in this
Section 6.12, if the Employers or the Executive, as the case may be, had
exercised the right of termination then available to such party, and the
Executive shall be entitled to receive all of the payments and benefits set
forth in the applicable provisions of Section 6 of this Agreement on
account of such termination, except that any reference to Base Salary in any
such applicable provision shall mean the amount of annual compensation required
to be paid to the Executive under Section 6.12(b) above; provided,
however, notwithstanding the grounds for termination that may have applied at
the time of the parties’ first entering into the consulting arrangement
provided for in this Section 6.12, if the Employers terminate the
Consulting Period without Cause or the Executive terminates the Consulting
Period for Good Reason (to the extent that the principle of Good Reason may
apply to the Executive’s termination of the Consulting Period pursuant to
clauses (a)(iii) and (a)(iv) of the definition of Good Reason contained above),
then the Executive shall be entitled to receive all of the payments and
benefits set forth in Section 6.4 of this Agreement (including without
limitation Section 6.4(a) above) on account of such termination, except
that the reference to Base Salary in Section 6.4(b) above shall mean the
amount of annual compensation required to be paid to the Executive under
Section 6.12(b) above.  If the
Consulting Period is terminated by either the Employers or the Executive for
any reason, or for no reason at all, following the occurrence of a Change in
Control, then, subject to any applicable provisions of Section 6.12(e)
below, the Executive shall be deemed to have exercised his right to terminate
this Agreement for Good Reason, where such Good Reason is the occurrence of
such Change in Control, effective as of the date on which the Consulting Period
terminates, and the Executive shall be entitled to all of the payments and
benefits set forth in Section 6.4 of this Agreement (including without
limitation Section 6.4(a) above) on account of such termination, except
that the reference to Base Salary in Section 6.4(b) above shall mean the
amount of annual compensation required to be paid to the Executive under
Section 6.12(b) above.  For
purposes of calculating the amount payable to the Executive under
Section 6.4(a) of this Agreement if the Consulting Period is terminated
hereunder, to the extent that any such payment is required, the Executive’s
Highest Annual Compensation shall be determined as of the date on which

 

15

 

the Employers and the
Executive first entered into the consulting arrangement provided for under this
Section 6.12.

 

(e)                                  If
the Consulting Period is terminated as a result of the Executive’s death, then
the Executive’s estate or other legal representative, as the case may be, shall
be entitled to receive the payments and benefits set forth in Section 6.1
of this Agreement, including the payments provided for in Section 6.1(a)
above if the Executive’s death occurs after, or within one year prior to, a
Change in Control, except that the references to Base Salary in Sections 6.1(a)
above, in the case of the Executive’s death prior to a Change in Control, and
6.1(b) above shall mean the amount of annual compensation required to be paid
to the Executive under Section 6.12(b) above.  If the Executive becomes disabled during the Consulting Period,
as such disability is contemplated under Section 6.2(a) of this Agreement,
then all of the terms of Section 6.2 above shall apply, except that the
amount that may be paid to the Executive during any Suspension for Disability
shall equal seventy-five percent (75%) of the amount of the compensation
required to be paid to the Executive under Section 6.12(b) above, the
reference to Base Salary in Section 6.2(b) above shall mean the amount of
annual compensation required to be paid to the Executive under Section 6.12(b)
above, and any and all references in Section 6.2 to the Executive’s
employment, offices, titles, positions or other functions with the Employers
shall mean the consulting arrangement entered into between the Employers and
the Executive pursuant to this Section 6.12.  If the Consulting Period is terminated by the Employers for
Cause, then the Executive shall be entitled to all of the payments set forth in
Section 6.3 of this Agreement, except that the reference to Base Salary in
Section 6.3(a)(i) above shall mean the amount of annual compensation
required to be paid to the Executive under Section 6.12(b) above.

 

7.                                       Confidential
Information; Noncompetition.

 

7.1                                 Confidentiality.  The Executive shall not, during or after the
period during which he is employed by the Employers, disclose any Confidential
Information (as such term is defined herein) to any Person for any reason or
purpose whatsoever.  The term
“Confidential Information” shall mean all confidential information of or
relating to the Employers and any of their Affiliates, including without
limitation financial information and data, business plans and information
regarding prospects and opportunities (such as, by way of example only, client
and customer lists and acquisition, disposition, expansion, product development
and other strategic plans), but does not include any information that is or
becomes public knowledge by means other than the Executive’s breach or
nonobservance of his obligations described in this Section 7.1.  Notwithstanding the foregoing, the Executive
may disclose such Confidential Information as he may be legally required to do
so on the advice of counsel in connection with any legal or regulatory
proceeding; provided, however, that the Executive shall provide the Employers
with prior written notice of any such required or potentially required
disclosure and shall cooperate with the Employers and use his best efforts
under such circumstances to obtain appropriate confidential treatment of any
such Confidential Information that may be so required to be disclosed in
connection with any such legal or regulatory proceeding.  The Executive’s obligation to refrain from
disclosing any Confidential Information under this Section 7.1 shall

 

16

 

continue in effect in
accordance with its terms following any termination of this Agreement pursuant
to Section 6 above.

 

7.2                                 Noncompetition.  If the Executive’s employment with the
Employers (including without limitation any employment during a Consulting
Period) is terminated by the Employers or the Executive for any reason, other
than due to death, or for no reason at all or otherwise terminates as a result
of the expiration of the Term of Employment, in any such case prior to a Change
in Control, then during the two-year period following the Date of Termination
or, if a Change in Control occurs at any time during such two-year period, such
shorter period from the Date of Termination up to the date of such Change in
Control, and subject to Section 7.3 hereof, the Executive shall not:  (a) directly or indirectly, whether as
owner, partner, shareholder (other than the holder of 1% or less of the common
stock of any company the common stock of which is listed on a national stock
exchange or quoted on the Nasdaq Stock Market), consultant, agent, employee or
otherwise, engage in competition with the Employers or any of their Affiliates
within a ten (10) mile radius of any city or town in which the Bank or any
Affiliate has a branch or other office; or (b) hire or attempt to hire, or
assist in hiring, any employees of the Employers or any of their Affiliates, or
solicit, encourage or induce any such employee to terminate his or her
relationship with the Employers or any such Affiliate; or (c) solicit, encourage
or induce any customer or client of the Employers or any of their Affiliates to
terminate his or its relationship with the Employers or any such Affiliate or
to do business with anyone other than the Employers and their Affiliates.

 

7.3                                 Payments.  During the two years or such shorter period
during which the restrictions of Section 7.2 above apply, the Executive
shall be paid, subject to Section 6.7 above, a per annum amount equal to
seventy percent (70%) of the per annum amount required under Section 6.4(a)
of this Agreement in the event of a termination of the Executive’s employment
prior to a Change in Control; provided, however, that, if the termination of
the Executive’s employment that precedes such period of restriction required
under Section 7.2 above has occurred pursuant to Section 6.4 above,
then the Executive shall be paid during such period the full per annum amount
required under Section 6.4(a).  If
the period of the restrictions required under Section 7.2 above follows
any termination of a Consulting Period, then the payments required under this
Section 7.3 shall be reduced to a per annum amount equal to fifty percent
(50%) of the per annum amount specified in Section 6.4(a) of this
Agreement, subject to Section 6.7 above and subject further to any
requirement that the full per annum amount under Section 6.4(a) be paid
during such period pursuant to Sections 6.12(d) or 6.12(e) above.  The amount payable under this
Section 7.3 is only payable during the period of restriction that is the
subject of Section 7.2 of this Agreement. 
Inasmuch as such period of restriction shall not apply under any
circumstances after a Change in Control, no amount shall be paid to the
Executive under this Section 7.3 under any circumstances after a Change in
Control (although amounts may otherwise be paid to the Executive, his estate or
other legal representative after a Change in Control under other applicable
provisions of this Agreement).  The
amounts to be paid to the Executive under this Section 7.3 shall be paid
out in equal periodic installments in accordance with the Employers’ ordinary
payroll practices over the two-year or such shorter  period commencing on the first payroll date after the Date of
Termination.

 

17

 

7.4                                 Injunctive
Relief.  The Executive acknowledges
and agrees that the Employers will have no adequate remedy at law, and would be
irreparably harmed, if the Executive breaches or threatens to breach any of the
provisions of this Section 7.  The
Executive agrees that the Employers shall be entitled to equitable and/or
injunctive relief to prevent any breach or threatened breach of this
Section 7, and to specific performance of each of the terms of this
Section 7 in addition to any other legal or equitable remedies that the
Employers may have.  The Executive
further agrees that he shall not, in any equity proceeding relating to the
enforcement of the terms of this Section 7, raise the defense that the
Employers have an adequate remedy at law.

 

7.5                                 Special
Severability.  The terms and
provisions of this Section 7 are intended to be separate and divisible
provisions and if, for any reason, any one or more of them is held to be
invalid or unenforceable, neither the validity nor the enforceability of any other
provision of this Agreement shall thereby be affected.

 

8.                                       Arbitration
of Disputes.  Any controversy or
claim arising out of or relating to this Agreement or the breach hereof, other
than an action brought by the Employers for injunctive or other equitable
relief in the enforcement of the Employers’ rights under Section 7 above,
in which case such action may be brought in any court of competent
jurisdiction, shall be settled by arbitration in accordance with the laws of
the Commonwealth of Massachusetts by three arbitrators, one of whom shall be
appointed by the Employers, one by the Executive and the third by the first two
arbitrators.  If the first two
arbitrators cannot agree on the appointment of a third arbitrator, then the
third arbitrator shall be appointed by the American Arbitration Association in
the City of Boston, Massachusetts.  Such
arbitration shall be conducted in the City of Boston, Massachusetts in
accordance with the rules of the American Arbitration Association, except with
respect to the selection of arbitrators which shall be as provided in this
Section 8.  Judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof.  In the event that it shall be
necessary or desirable for the Executive to retain legal counsel and/or incur
other costs and expenses in connection with the enforcement of any or all of
Executive’s  rights under this
Agreement, the Employers shall pay (or the Executive shall be entitled to
recover from the Employers, as the case may be) the Executive’s reasonable
attorneys’ fees and other reasonable costs and expenses in connection with the
enforcement of said rights (including the enforcement of any arbitration award
in court) regardless of the final outcome, unless and to the extent that the
arbitrators shall determine that the Executive has not acted in good faith or
that under the circumstances recovery by the Executive of all or part of any
such fees and costs and expenses would be inequitable or otherwise unjust.

 

9.                                       Successors.

 

9.1                                 The
Executive.  This Agreement is
personal to the Executive and, without the prior written consent of the
Employers, shall not be assignable by the Executive, except that the
Executive’s rights to receive any compensation or benefits under this Agreement
may be transferred or disposed of pursuant to testamentary disposition,
intestate succession or pursuant to a qualified domestic relations order.  This Agreement shall inure to the benefit of
and be enforceable by the Executive’s heirs, beneficiaries and/or legal
representatives.  In the event of the
Executive’s death prior to the completion by the Employers of all payments due
to the

 

18

 

Executive under this
Agreement, the Employers shall continue to make such payments to the
Executive’s beneficiary(ies) as designated in writing by the Executive to the
Employers prior to his death (or to his estate, if he fails to make such
designation).

 

9.2                                 The
Employers.  This Agreement shall
inure to the benefit of and be binding upon the Employers and their successors
and assigns.  Each of the Company and
the Bank shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of its businesses
and/or assets to assume expressly and agree to perform this Agreement in the
same manner and to the same extent as if no such succession had taken
place.  Failure of either the Company or
the Bank to obtain such assumption and agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle the
Executive to compensation in the same amount and on the same terms as he would
be entitled to hereunder if he terminated this Agreement for Good Reason
following a Change in Control, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed to be the Date of Termination. 
As used in this Agreement, “Company,” “Bank” and “Employers” shall mean
the Company, the Bank and the Employers as hereinbefore defined and any
successor to the business and/or assets of either the Company or the Bank as
aforesaid which successor assumes and agrees to perform this Agreement by
operation of law or otherwise.

 

10.                                 Indemnification.  The Executive (and his heirs, executors and
administrators) shall be indemnified and held harmless by the Employers to the
fullest extent permitted by applicable law, regulation, regulatory policy or
other regulatory requirement, against all expenses, liabilities and losses
(including, without limitation, all reasonable attorneys’ fees and all
judgments, fines, excise taxes or penalties and amounts paid or to be paid in
settlement) incurred or suffered by the Executive as a consequence of the
Executive being or having been made a party to, or being or having been
involved in, any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that the Executive is or was a trustee, director or officer of the Employers or
is or was serving at the request of the Employers as a trustee, director or
officer of another corporation or other entity (including, but not limited to,
a Subsidiary or an Affiliate of the Employers), and such indemnification shall
continue after the Executive shall cease to be an officer, director or
trustee.  The right to indemnification
conferred hereby shall be a contract right and shall also include, to the
extent permitted by applicable law, regulation, regulatory policy or other
regulatory requirement, the right to be paid by the Employers the expenses
incurred in defending any such proceeding in advance of the final disposition
upon receipt by the Employers of an undertaking by or on behalf of the
Executive to repay such amount or a portion thereof, if it shall ultimately be
determined that the Executive is not entitled to be indemnified by the
Employers pursuant hereto or as otherwise authorized by law, regulation,
regulatory policy or other regulatory requirement, but such repayment by the
Executive shall only be in an amount ultimately determined to exceed the amount
to which the Executive was entitled to be indemnified.  The Employers’ acceptance of any such
undertaking by or on behalf of the Executive may not be conditioned upon any
evidence or demonstration by or on behalf of the Executive of any financial
capacity to make any such repayment at the time such undertaking is delivered.

 

19

 

11.                                 Miscellaneous.

 

11.1                           Applicable
Law.  This Agreement shall, to the
extent not superseded by federal law, be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, without regard
to principles of conflict of laws.

 

11.2                           Amendments/Waiver.  This Agreement may not be amended, waived,
or modified otherwise than by a written agreement executed by the parties to
this Agreement or their respective successors and legal representatives.  No waiver by any party to this Agreement of
any breach of any term, provision or condition of this Agreement by the other
party shall be deemed a waiver of a similar or dissimilar condition or
provision at the same time, or any prior or subsequent time.

 

11.3                           Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed given when received by
hand-delivery to the other party, by facsimile transmission, by overnight
courier, or by registered or certified mail, return receipt requested, postage
prepaid, addressed, if to the Executive, to the Executive at his last address
on file with the Employers and, if to the Employers, to the Employers at their
then current executive offices or to such other address as either party shall
have furnished to the other in writing in accordance herewith.  Notices and communications shall be
effective when actually received by the addressee (which receipt shall be
deemed to have occurred at any time that the addressee refuses or otherwise attempts
to avoid delivery of any such notice or communication).

 

11.4                           Withholdings.  The Employers may withhold from any amounts
payable under this Agreement such taxes as shall be required to be withheld
pursuant to any applicable law or regulation.

 

11.5                           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.

 

11.6                           Captions.  The captions of this Agreement are for
convenience of reference only, are not part of the terms of this Agreement and
shall have no force or effect in the application or interpretation thereof.

 

11.7                           Entire
Agreement.  This Agreement contains
the entire agreement between the parties to this Agreement concerning the
subject matter hereof and supersedes all prior agreements, understandings,
discussions, negotiations and undertakings, whether written or oral, between
the parties with respect thereto, including without limitation that certain
Employment Agreement dated as of June 1 , 2001 by and between the
Employers and the Executive.

 

11.8                           Survivorship.  The respective rights and obligations of the
parties to this Agreement, including, without limitation, any of their
respective rights and obligations under Section 10 of this Agreement,
shall survive any termination of this Agreement or any termination

 

20

 

of the Executive’s
employment hereunder for any reason to the extent necessary to accomplish the
intended preservation of such rights and obligations.

 

IN WITNESS WHEREOF, the
Executive has hereunto set his hand and each of the Employers has caused this
Agreement to be executed in its name and on its behalf by a duly authorized
officer, in each case as an instrument under seal and as of the date set forth
above.

 

 

	
  ATTEST:

  	
  ENTERPRISE BANCORP,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Arnold S. Lerner

  	
   

  	
  By:

  	
  /s/ John P. Clancy, Jr.

  	
   

  
	
  Arnold S. Lerner

  	
   

  	
   

  	
  John
  P. Clancy Jr.

  	
   

  
	
  Vice Chairman

  	
   

  	
   

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  ENTERPRISE BANK AND TRUST
  COMPANY

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Arnold S. Lerner

  	
   

  	
  By:

  	
  /s/ George L. Duncan

  	
   

  
	
  Arnold S. Lerner

  	
   

  	
   

  	
  George
  L. Duncan

  	
   

  
	
  Vice Chairman

  	
   

  	
   

  	
  Chairman
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  EXECUTIVE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Robert R. Gilman

  	
   

  	
  /s/ Richard W. Main

  	
   

  
	
   

  	
   

  	
  Richard
  W. Main

  	
   

  	
   

  
						

 

21

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