TD BANKNORTH INC. AMENDED AND RESTATED PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD AGREEMENT – CASH SETTLEMENT AMENDED AND RESTATED 2003 EQUITY INCENTIVE PLAN
Exhibit 10.5
AMENDED AND RESTATED
PERFORMANCE-BASED
RESTRICTED STOCK UNIT AWARD AGREEMENT – CASH SETTLEMENT
RESTRICTED STOCK UNIT AWARD AGREEMENT – CASH SETTLEMENT
AMENDED AND RESTATED 2003 EQUITY INCENTIVE PLAN
THIS Amended and Restated Performance-Based Restricted Stock Unit Award Agreement, dated
January 23, 2007 (the “Agreement”), amends the award agreement (the “Initial Agreement”) previously
made as of May ___, 2005 (hereinafter referred to as the “Date of Grant”) by and between TD
Banknorth Inc. (the “Company”) and (the “Participant”). Defined terms, unless
otherwise defined herein, shall have the same meaning as set forth in the Plan (as hereinafter
defined).
(a) The “Performance Result” to be used for calculating the Performance Factor is the Total
Shareholder Return achieved by The Toronto-Dominion Bank over the one-year period from the end of
the fiscal year of The Toronto-Dominion Bank immediately preceding the date of this Agreement to
the end of the fiscal year of The Toronto-Dominion Bank immediately preceding December 31, 2007
(the “Maturity Date”).
(b) The “Performance Target” to be used for calculating the Performance Factor is the average
Total Shareholder Return achieved by a comparative group of major banks over the one-year period
from the end of the fiscal year of The Toronto-Dominion Bank immediately preceding the date of this
Agreement to the end of the fiscal year of The Toronto-Dominion Bank immediately preceding the
Maturity Date. The comparative group of major banks for purposes of this Agreement will be the
group selected by The Toronto-Dominion Bank under the TDBFG Performance Share Unit Plan for awards
with similar performance periods, as determined by the Committee.
(c) “Total Shareholder Return” is the change in market value of the common shares of The
Toronto-Dominion Bank (the “Parent Common Shares”) (or the common shares of the other major banks
used in the peer group, as the case may be) calculated as at the end of the fiscal year immediately
preceding the Maturity Date, expressed as a percentage of the market value calculated as at the end
of the fiscal year immediately preceding the date of this Agreement (based on the closing price on
the last trading day in October 2006) and compounded annually, assuming quarterly reinvestment of
dividends. As an example, a percentage of ten percent shall be shown as 10.0%, and the percentages
shall be rounded to one decimal place.
(a) The Performance Factor is a multiple expressed as a percentage that is determined by
comparing the Performance Result to the Performance Target, pursuant to the following formula, and
rounded to one decimal place:
Performance Factor = ((Performance Result – Performance Target) x 1) + 100
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(a) The number of Actual Units will be multiplied by a Service Percentage as defined below to
determine the number of Final Units to be paid out.
(b) For Participants who remain continuously employed with the Company for the entire period
from January 1, 2007 through and including December 31, 2007 (the “Service Period”), the Service
Percentage shall equal 100%. For Participants whose employment is terminated during the Service
Period due to death or Disability, the Service Percentage shall equal 100%. For Participants whose
employment is terminated during the Service Period due to Retirement (as defined below), the
Service Percentage shall equal the following quotient: (a) the number of calendar weeks from
January 1, 2007 through and including the date of Retirement, divided by (b) 52 weeks, rounded to
the nearest one-tenth of a percent. For Participants who are on an unpaid leave of absence at any
time on or after January 1, 2007 through and including December 31, 2007, the Service Percentage
shall equal the following quotient: (x) the number of calendar weeks the Participant was actively
working for the Company during the period January 1, 2007 through and including December 31, 2007,
divided by (y) 52 weeks, rounded to the nearest one-tenth of a percent.
(c) In the event a Change of Control occurs during the Service Period, the Service Percentage
for each Participant who is employed by the Company immediately prior to the Change of Control
shall be calculated as if the Participant had remained employed with the Company through and
including December 31, 2007. The consummation of the transactions contemplated by the Merger
Agreement will not constitute a Change in Control as defined in the Plan.
(d) For purposes of this Agreement, “Retirement” means voluntary termination of employment
with the Company or any Affiliate after the Participant has (A) attained age 65 with at least five
years of service to the Company and (B) either (1) has become eligible for a fully vested benefit
under the Company’s Retirement Plan, or (2) if at the time of retirement, the Participant was
employed by an Affiliate that is not an “Employer” as defined in the Retirement Plan, would have
become so eligible if his or her Affiliate employer were an “Employer” as defined in the Retirement
Plan, provided that no Retirement may occur prior to the one-year anniversary of the Date of Grant.
(e) If the Participant’s employment by the Company shall be terminated during the Service
Period and prior to a Change in Control for any reason other than death, Disability or Retirement,
including without limitation a termination of employment for “cause” (as determined pursuant to
Section 13(b) of the Plan) or a voluntary termination of employment by the Participant, then this
Agreement and the Target Units covered hereby shall expire immediately upon such termination and
all of the Target Units shall be forfeited. The Participant shall thereafter have no
rights under this Agreement or under the Agreement and no rights to receive the cash payment
specified in Section 5 below. The Company shall have the power in all cases to determine whether
the Participant has been terminated for cause and the date upon which such termination for cause
occurs. Any such determination shall be final, conclusive and binding upon the Participant.
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(f) As of the Effective Time of the Merger, as such terms are defined in the Merger Agreement,
the number of Target Units will be adjusted as provided below, and each adjusted Target Unit will
represent one Parent Common Share instead of one share of Company Common Stock. The number of
notional Parent Common Shares subject to this Agreement as adjusted will be equal to the product of
(x) the number of notional shares of Company Common Stock underlying the Target Units immediately
prior to such adjustment multiplied by (y) the “Exchange Ratio”, as defined in the Merger
Agreement.
(a) Except as set forth in Sections 5(b) and 5(c) below, as soon as administratively feasible
following the Maturity Date but in no event later than March 15, 2008, the Company shall pay a lump
sum cash amount to the Participant equal to (i) the average of the closing sales prices of one
share of Common Stock on each of the 20 consecutive trading days on which such prices are so quoted
immediately preceding the Maturity Date (the “Maturity Date Share Price”), multiplied by (ii) the
number of Final Units, minus applicable withholding. If a Participant’s employment is terminated
due to death, Disability or Retirement, the cash payment to the Participant for his or her Final
Units shall be made as soon as administratively feasible following the Maturity Date but in no
event later than March 15, 2008.
(b) Except as provided in Section 5(c) below, if a Change of Control occurs during the Service
Period, then the Company shall, within 60 days following the Change of Control, pay a lump sum cash
amount to the Participant equal to (i) the closing sales price of one share of Common Stock on the
last trading day immediately preceding the date of the Change of Control, multiplied by (ii) the
number of Final Units, minus applicable withholding.
(c) If the Effective Time of the Merger occurs prior to the Maturity Date or prior to a Change
in Control, then (i) all references in this Section 5 to “Common Stock” shall be deemed to be a
reference to “Parent Common Shares,” (ii) the Maturity Date Share Price will be calculated by using
the average of the high and low prices quoted on The Toronto Stock Exchange for one Parent Common
Share (based on board lot prices) on each of the 20 consecutive trading days on which such prices
are so quoted immediately preceding the Maturity Date, with such prices converted into United
States dollars using the spot exchange rate reported in The Wall Street Journal, for each
applicable day, on the business day immediately following such day, and (iii) the price used for
purposes of Section 5(b)(i) above shall be the average of the high and low prices quoted on The
Toronto Stock Exchange for one Parent Common Share (based on board lot prices) on the last trading
day immediately preceding the date of the Change in Control, with such prices converted into United
States dollars as set forth in the preceding clause.
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12. Notices. Any written notice provided for in this Agreement or the Plan shall be
in writing and shall be deemed sufficiently given if it is hand delivered, sent by fax or overnight
courier, or sent by postage paid first class mail. Notices sent by mail shall be deemed received
three business days after mailing but in no event later than the date of actual receipt. Notices
shall be directed, if to the Participant, at the Participant’s address indicated by the Company’s
records, or if to the Company, at the following address: TD Banknorth Inc., X.X. Xxx 0000, Xxx
Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx 00000-0000 Attention: General Counsel.
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15. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
[NOTE: Section 17 below is only for inclusion in grant agreements for the officers who have an
employment or retention agreement.]
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ATTEST: | TD BANKNORTH INC. | |||||||||
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Name:
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Name: | |||||||||
Title:
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Title: | |||||||||
PARTICIPANT | ||||||||||
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