Cto Employment Agreement

Exhibit 10.1


Proposed Form of Employment Agreement for Executive Officers


EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of this ___ day of __________, 1999 by and between EverTrust Financial Group, Inc. (the "Company"), and its wholly owned subsidiary, Everett Mutual Bank (the "Bank"), and____________ (the "Employee").


WHEREAS, the Employee is currently serving as the _________________________ of the Company and of the Bank;


WHEREAS, the Employee has made and will continue to make a major contribution to the success of the Company and the Bank in the position of __________________________;


WHEREAS, the board of directors of the Company and the board of directors of the Bank (collectively, the "Board of Directors") recognize that the possibility of a change in control of the Bank or the Company may exist and that such possibility, and the uncertainty and questions which may arise among management, may result in the departure or distraction of key management to the detriment of the Company, the Bank and their respective stockholders;


WHEREAS, the Board of Directors believes that it is in the best interests of the Company and the Bank for the Company and the Bank to enter into this Agreement with the Employee in order to assure continuity of management of the Company and its subsidiaries; and


WHEREAS, the Board of Directors has approved and authorized the execution of this Agreement with the Employee;


NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements of the parties herein, it is AGREED as follows:


1. Definitions.


(a) The term "Change in Control" means (1) an offeror other than the
Company purchases shares of stock of the Company or the Bank pursuant to a
tender or exchange offer for such shares (2) an event of a nature that
results in the acquisition of control of the Company or the Bank within the
meaning of the Bank Holding Company Act of 1956, as amended, under 12
U.S.C. Section 1841 (or any successor statute or regulation) or requires
the filing of a notice with the Federal Deposit Insurance Corporation under
12 U.S.C. Section 1817(j) (or any successor statute or regulation); (2) an
event that would be required to be reported in response to Item 1 of the
current report on Form 8-K, as in effect on the Effective Date, pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act"); (3) any person (as the term is used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the beneficial owner (as defined in Rule
13d-3 under the Exchange Act) directly or indirectly of securities of the
Company or the Bank representing 25% or more of the combined voting power
of the Company's or the Bank's outstanding securities; (4) individuals who
are members of the board of directors of the Company immediately following
the Effective Date or who are members of the board of directors of the Bank
immediately


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following the Effective Date (in each case, the "Incumbent Board") cease
for any reason to constitute at least a majority thereof, provided that any
person becoming a director subsequently whose election was approved by a
vote of at least three-quarters of the directors comprising the Incumbent
Board, or whose nomination for election by the Company's or the Bank's
stockholders was approved by the nominating committee serving under an
Incumbent Board, shall be considered a member of the Incumbent Board; or
(5) consummation of a plan of reorganization, merger, consolidation, sale
of all or substantially all of the assets of the Company or a similar
transaction in which the Company is not the resulting entity, or a
transaction at the completion of which the former stockholders of the
acquired corporation become the holders of more than 40% of the outstanding
common stock of the Company and the Company is the resulting entity of such
transaction; provided that the term "Change in Control" shall not include
an acquisition of securities by an employee benefit plan of the Bank or the
Company.


(b) The term "Consolidated Subsidiaries" means any subsidiary or
subsidiaries of the Company (or its successors) that are part of the
affiliated group (as defined in Section 1504 of the Internal Revenue Code
of 1986, as amended (the "Code"), without regard to subsection (b) thereof)
that includes the Bank, including but not limited to the Company.


(c) The term "Date of Termination" means the date upon which the
Employee's employment with the Company or the Bank or both ceases, as
specified in a notice of termination pursuant to Section 8 of this
Agreement.


(d) The term "Effective Date" means the date of this Agreement.


(e) The term "Involuntary Termination" means the termination of the
employment of Employee (i) by either the Company or the Bank or both
without his express written consent; or (ii) by the Employee by reason of a
material diminution of or interference with his duties, responsibilities or
benefits, including (without limitation) any of the following actions
unless consented to in writing by the Employee: (1) a requirement that the
Employee be based at any place other than Everett Washington, or within a
radius of 35 miles from the location of the Company's administrative
offices as of the date of this Agreement, except for reasonable travel on
Company or Bank business; (2) a material demotion of the Employee; (3) a
material reduction in the number or seniority of personnel reporting to the
Employee or a material reduction in the frequency with which, or in the
nature of the matters with respect to which such personnel are to report to
the Employee, other than as part of a Bank- or Company-wide reduction in
staff; (4) a reduction in the Employee's salary or a material adverse
change in the Employee's perquisites, benefits, contingent benefits or
vacation, other than as part of an overall program applied uniformly and
with equitable effect to all members of the senior management of the Bank
or the Company; (5) a material permanent increase in the required hours of
work or the workload of the Employee; or (6) the failure of the board of
directors of the Company (or a board of directors of a successor of the
Company) to elect him as ____________________ ______________ of the Company
(or a successor of the Company) or any action by the board of directors of
the Company (or a board of directors of a successor of the Company)
removing him from such office, or the failure of the board of directors of
the Bank (or any successor of the Bank) to elect him as ___________________
of the Bank (or any successor of the Bank) or any action by such board (or
a board of a successor of the Bank) removing him from such office. The term
"Involuntary Termination" does not include Termination for Cause,
termination of employment due


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to death or permanent disability pursuant to Section 7(f) of this
Agreement, retirement or suspension or temporary or permanent prohibition
from participation in the conduct of the Bank's affairs under Section 8 of
the Federal Deposit Insurance Act.


(f) The terms "Termination for Cause" and "Terminated For Cause" mean
termination of the employment of the Employee with either the Company or
the Bank, as the case may be, because of the Employee's personal
dishonesty, incompetence, willful misconduct, breach of a fiduciary duty
involving personal profit, intentional failure to perform stated duties,
willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease-and- desist order, or
(except as provided below) material breach of any provision of this
Agreement. No act or failure to act by the Employee shall be considered
willful unless the Employee acted or failed to act with an absence of good
faith and without a reasonable belief that his action or failure to act was
in the best interest of the Company or the Bank. The Employee shall not be
deemed to have been Terminated for Cause unless and until there shall have
been delivered to the Employee a copy of a resolution, duly adopted by the
affirmative vote of not less than a majority of the entire membership of
the Board of Directors at a meeting of the Board duly called and held for
such purpose (after reasonable notice to the Employee and an opportunity
for the Employee, together with the Employee's counsel, to be heard before
the Board), stating that in the good faith opinion of the Board of
Directors the Employee has engaged in conduct described in the preceding
sentence and specifying the particulars thereof in detail.


2. Term. The term of this Agreement shall be a period of three years commencing on the Effective Date, subject to earlier termination as provided herein. Beginning on the first anniversary of the Effective Date, and on each anniversary thereafter, the term of this Agreement shall be extended for a period of one year in addition to the then-remaining term, provided that (i) neither the Employee nor the Company has given notice to the other in writing at least 90 days prior to such anniversary that the term of this Agreement shall not be extended further; and (ii) prior to such anniversary, the Board of Directors explicitly reviews and approves the extension. Reference herein to the term of this Agreement shall refer to both such initial term and such extended terms.


3. Employment. The Employee shall be employed as the ______________________ Officer of the Company and as the ______________________________ of the Bank. As such, the Employee shall render ______________________________ services as are customarily performed by persons situated in similar executive capacities, and shall have such other pow ...