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EXHIBIT 10.17
FORM
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (this "Agreement") dated as of
November 21, 1996 is made by and between PNC Bank Corp., a Pennsylvania
corporation (the "Company"), and ___________ (the "Executive").
WHEREAS the Board of Directors of the Company (the "Board") has determined
that it is in the best interest of the Company and its shareholders to enter
into agreements with the Company's senior executives regarding change in
control severance benefits and the Executive is a Company senior executive;
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained and intending to be legally bound hereby, the Company and the
Executive hereby agree as follows:
1. Defined Terms. The definitions of capitalized terms used in this
Agreement are provided in the last Section and elsewhere in this Agreement.
2. Term of Agreement. This Agreement shall commence on the date hereof and
shall remain in effect until the Executive attains age sixty-five (65);
provided, however, that (a) the Company may terminate this Agreement, at any
time other than during a Coverage Period, if the Company gives the Executive at
least one (1) year advance written notice of termination (which notice shall
have no effect if the proposed date of termination falls within a Coverage
Period) and the Company terminates this Agreement simultaneously with all
similar agreements with other Company executives and (b) unless the Committee
determines otherwise, this Agreement shall terminate if at any time after the
date hereof, other than during a Coverage Period, the Executive is classified
below SEG 6. Notwithstanding the foregoing, any outstanding obligations of the
Company and the Executive hereunder arising from a termination of the
Executive's employment shall survive the termination of this Agreement until
such obligations have been fulfilled.
3. Company's Covenants Summarized. In order to induce the Executive to
remain in the employ of the Company and in consideration of the Executive's
covenants set forth in Section 4 hereof, the Company agrees, under the terms
and conditions set forth herein, that, in the event the Executive's employment
with the Company is terminated during a Coverage Period, the Company shall
provide the Executive the benefits and pay the Executive the amounts specified
in Section 5 hereof.
4. The Executive's Covenants.
4.1 No-Raid. The Executive agrees that, in the event the Executive's
employment with the Company is terminated for any reason whatsoever, and as a
result of such termination the Executive is entitled to receive the Severance
Benefits, the Executive shall not, for a period of one (1) year after the Date
of Termination, employ or offer to employ, solicit, actively interfere with the
Company's or any Company affiliate's relationship with, or attempt to divert or
entice away, any officer of the Company or any Company affiliate.
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4.2 Nondisclosure. During the Executive's employment with the Company and
thereafter, the Executive shall not disclose or use in any way any confidential
business or technical information or trade secret acquired in the course of
such employment, other than (i) information that is generally known in the
Company's industry or acquired from public sources, (ii) as required in the
course of such employment, (iii) as required by any court, supervisory
authority, administrative agency or applicable law, or (iv) with the prior
written consent of the Company.
5. Benefits and Rights upon Termination of Employment.
5.1. General Termination Rights and Benefits. If the Executive's
employment by the Company is terminated for any reason (whether by the Company
or the Executive) during a Coverage Period, the Company shall pay to the
Executive the payments described in Subsections (a) and (b) below.
(a) Pre-Termination Benefits. The Company shall pay the Executive's
base salary to the Executive through the Date of Termination in accordance with
the Company's normal payment practices at the highest rate in effect during the
sixty (60) day period preceding the date the Notice of Termination is given,
together with all other compensation and benefits payable to the Executive
through the Date of Termination under the terms of any compensation or benefit
plan, program or arrangement maintained by the Company during such period.
(b) Post-Termination Benefits. The Company shall pay the Executive's
normal post-termination compensation and benefits to the Executive as such
payments become due. Such post-termination compensation and benefits shall be
determined under, and paid in accordance with, the Company's retirement,
insurance, pension, welfare and other compensation or benefit plans, programs
and arrangements.
5.2. Severance Benefits. In addition to the payments provided for by
Section 5.1 hereof, but subject to Section 7.16 hereof, the Company shall pay
to the Executive the payments described in Subsections (a) through (e) below
(the "Severance Benefits") upon termination of the Executive's employment with
the Company during a Coverage Period, unless such termination is (i) by the
Company for Cause, (ii) by reason of the Executive's death or Disability or
after the Executive attains age sixty-five (65) or (iii) by the Executive
without Good Reason.
(a) Lump-Sum Severance Payment. In lieu of any further salary payments
to the Executive for periods subsequent to the Date of Termination, the Company
shall pay to the Executive a lump sum severance payment, in cash, equal to the
Classification Factor (or, if less, the Retirement Factor) times the sum of (i)
the Executive's Annual Base Salary and (ii) the Executive's Annual Bonus;
provided, however, that a portion of such lump-sum severance payment equal to
6% of the product of (x) the Classification Factor (or, if less, the Retirement
Factor) and (y) the Executive's Annual Base Salary shall be credited, together
with a matching contribution from the Company equal to 100% of such amount, to
the Executive's account under the Supplemental Savings Plan. Such amount that
is credited to the Executive's account under the Supplemental Savings Plan
shall be administered in the same manner as other amounts credited to the
Executive under such plan and shall be distributed to the Executive at the time
and in the manner that the Executive's account under such plan is distributed.
(b) Bonus.
(i) Termination Year Bonus. The Company shall pay to the Executive
a lump sum cash payment at a minimum equal to the product of (x) the
Executive's highest annual base salary in effect during the one (1) year period
preceding the Executive's Date of Termination and (y) the Executive's highest
Target Percentage in effect during the fiscal year preceding the Termination
Year.
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(ii) Preceding Fiscal Year Bonus. To the extent that as of the Date
of Termination the Company has not yet determined and paid to the Executive any
incentive award to which the Executive is entitled under any Company incentive
plan with respect to the fiscal year preceding the Termination Year, the
Company shall also pay to the Executive a lump sum cash payment at a minimum
equal to the product of (x) the Executive's highest annual base salary in
effect during such fiscal year and (y) the Executive's highest Target
Percentage in effect during such fiscal year.
(iii) General. Any payment made to the Executive under this Section
5.2(b) shall be deemed to be a payment made in fulfillment of the Company's
then existing or future cash bonus obligations, if any, to the Executive under
any Company cash bonus incentive compensation plan with respect to such fiscal
years.
(iv) Deferral Option. If the Executive so elects by notifying the
Company in writing at least one year prior to the Date of Termination, (x) all
or a portion, as specified by the Executive in such election notice, of the
payment provided for by the foregoing provisions of this Section 5.2(b), and
(y) a portion of the lump-sum severance payment provided for by Section 5.2(a)
hereof, as specified by the Executive in the election notice, up to the product
of the Classification Factor (or, if less, the Retirement Factor) and the
Executive's Annual Bonus, shall not be paid to the Executive, but instead shall
be credited to an account established for the Executive under the Deferred
Compensation Plan. Such credited amount shall be administered in the same
manner as amounts otherwise deferred under the Deferred Compensation Plan and
shall be distributed to the Executive at the time and in the manner specified
in the Executive's election notice.
(c) Continued Welfare Benefits. Commencing on the Date of Termination
and continuing thereafter for the number of months equal to the product of
twelve (12) and the Classification Factor (or, if less, the Retirement Factor)
(such period is referred to herein as the "Benefits Period"), the Company shall
provide the Executive with life insurance (including group term and
supplemental executive life insurance), health insurance and long-term
disability insurance benefits ("Welfare Benefits") substantially similar in all
respects to those which the Executive was receiving immediately prior to the
Notice of Termination. The receipt of such Welfare Benefits shall be
conditioned upon the Executive continuing to pay the premiums for such Welfare
Benefits that the Executive paid immediately prior to the Notice of
Termination. Benefits otherwise receivable by an Executive pursuant to this
Section 5.2(c) (and the corresponding premium payments made by the Executive
therefor) shall be reduced to the extent substantially similar benefits are
actually received by or made available to the Executive by any other employer
during the Benefits Period at a cost to the Executive that is commensurate with
the cost incurred by the Executive immediately prior to the Notice of
Termination; provided, however, that if the Executive becomes employed by a new
employer that maintains a medical plan that either (i) does not cover the
Executive or a family member or dependent with respect to a preexisting
condition that was covered under the applicable Company medical plan, or (ii)
does not cover the Executive or a family member or dependent for a designated
waiting period, the Executive's coverage under the applicable Company medical
plan shall continue (but shall be limited in the event of noncoverage due to a
preexisting condition, to such preexisting condition) until the earlier of (x)
the end of the applicable period of noncoverage under the new employer's plan
and (y) the end of the Benefits Period. The Executive agrees to report to the
Company any coverage and benefits actually received by or made available to the
Executive from such other employer(s). During the Benefits Period, the
Executive shall be entitled to elect to change the Executive's level of
coverage and/or choice of coverage options (such as Executive only or family
medical coverage) with respect to the Welfare Benefits to be provided by the
Company to the Executive to the same extent that actively employed senior
executives of the Company are permitted to make such changes; provided,
however, that in the event of any such changes the premiums paid by the
Executive for such Welfare Benefits shall reflect any cost increase or decrease
that would actually be paid or received by an actively employed senior
executive of the Company who made the same changes. For purposes of this
Section 5.2(c), any measurement of Welfare Benefits, premium payments, or costs
that is based on the Welfare Benefits, premium payments or costs that the
Executive was receiving, paying or incurring immediately prior to the Notice of
Termination shall be determined without giving effect to any change thereto
during the
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Coverage Period which constituted Good Reason pursuant to Section 8.21(e). To
the extent that the Company is unable to provide the Executive with any of the
Welfare Benefits required by this Section 5.2(c) under the Company's benefit
plans, the Company shall either purchase such Welfare Benefits for the
Executive or pay to the Executive a cash payment equal to the value thereof.
(d) Other Benefits. The Company shall pay to the Executive a lump sum
cash payment equal to the product of (i) the Classification Factor (or, if
less, the Retirement Factor) and (ii) the average annual amount of club
membership fees (excluding any one-time initiation fees) and automobile
expenses paid by the Company to or on behalf of the Executive during the three
fiscal years (or such shorter period during which the Executive has been
employed by the Company or receiving these perquisites) immediately preceding
the Termination Year. Any club membership bond or certificate held by the
Company on behalf of the Executive shall be transferred to the Executive as
appropriate to enable the Executive to retain such club membership. In
addition, during the Benefits Period, the Company shall continue to pay for and
provide the Executive with access to personal financial consulting services
that are substantially similar to that which the Company provided the Executive
with during the fiscal year immediately preceding the Termination Year.
(e) Pension Benefits.
(i) Pension Plan Benefits. The pension benefits accrued by the
Executive under the Pension Plan shall be paid to the Executive in accordance
with the terms of such plan.
(ii) Certain Previously Accrued Pension Benefits. If the Executive
so elects by notifying the Company in writing at least one year prior to the
Date of Termination, in lieu of the pension benefits to which the Executive
would be entitled under the Excess Plan and the SERP, the Company shall pay to
the Executive a lump sum amount, in cash, equal to the actuarial equivalent
present value of the pension benefits that the Executive accrued under such
plans as of the Date of Termination, calculated in accordance with Section
5.2(e)(iv) hereof. If the Executive does not elect to receive the lump sum
payment provided for by this Section 5.2(e)(ii), the pension benefits accrued
by the Executive under the Excess Plan and the SERP shall be paid to the
Executive in accordance with the terms of such plans.
(iii) Certain Benefits Period Pension Accruals. In addition to
amounts payable to the Executive pursuant to Section 5.2(e)(ii) hereof and/or
the Pension Plan, the Excess Plan and the SERP (the "Company Pension Plans"),
the Company shall pay to the Executive a lump sum amount, in cash, equal to the
actuarial equivalent present value of the additional pension benefits that the
Executive would have accrued under the Company Pension Plans assuming the
Executive remained employed (after the Date of Termination) for the Benefits
Period, was compensated during such period at the Executive's Annual Base
Salary and Annual Bonus, and was fully vested under the Company Pension Plans.
Such actuarial equivalent present value amount shall be calculated in
accordance with Section 5.2(e)(iv) hereof.
(iv) Calculation of Lump Sum Amounts. The actuarial equivalent
present value lump sum amounts provided for by Sections 5.2(e)(ii) and
5.2(e)(iii) shall be determined: (1) based on the pension benefits that would
be payable to the Executive as a straight life annuity commencing as of the
later of (A) the Executive's attainment of age fifty-five (55) and (B) the Date
of Termination (in the case of the lump sum amount provided for by Section
5.2(e)(ii) hereof) or the last day of the Benefits Period (in the case of the
lump sum amount provided for by Section 5.2(e)(iii) hereof); (2) using the same
methods and assumptions utilized under the Pension Plan in determining lump sum
payments immediately prior to the Date of Termination; and (3) without giving
effect to any amendments to the Company Pension Plans during the Coverage
Period that adversely affect in any manner the amount of pension benefits
payable to the Executive under the Company Pension Plans.
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5.3. Gross-Up Payment; Certain Limitations on Payments and Benefits.
(a) In the event that (i) the Executive becomes entitled to the
Severance Benefits or any other benefits or payments in connection with a
Change in Control or the termination of the Executive's employment, whether
pursuant to the terms of this Agreement or otherwise (collectively, the "Total
Benefits"), and (ii) any of the Total Benefits will be subject to the Excise
Tax, the Company shall pay to the Executive an additional amount (the "Gross-Up
Payment") such that the net amount retained by the Executive from the Gross-Up
Payment, after deduction of any federal, state and local income taxes, Excise
Tax, and FICA and Medicare withholding taxes upon the Gross-Up Payment, shall
be equal to the Excise Tax on the Total Benefits. For purposes of determining
the amount of such Excise Tax, the amount of the Total Benefits that shall be
treated as subject to the Excise Tax shall be equal to (i) the Total Benefits,
minus (ii) the amount of such Total Benefits that, in the opinion of tax
counsel selected by the Company and reasonably acceptable to the Executive
("Tax Counsel"), are not excess parachute payments (within the meaning of
Section 280G(b)(1) of the Code).
(b) For purposes of this Section 5.3, the Executive shall be deemed to
pay federal income taxes at the highest marginal rate of federal income
taxation in the calendar year in which the Excise Tax is (or would be) payable
and state and local income taxes at the highest marginal rate of taxation in
the state and locality of the Executive's residence on the Date of Termination,
net of the reduction in federal income taxes which could be obtained from
deduction of such state and local taxes (calculated by assuming that any
reduction under Section 68 of the Code in the amount of itemized deductions
allowable to the Executive applies first to reduce the amount of such state and
local income taxes that would otherwise be deductible by the Executive). Except
as otherwise provided herein, all determinations required to be made under this
Section 5.3 shall be made by Tax Counsel, which determinations shall be
conclusive and binding on the Executive and the Company absent manifest error.
(c) In the event that the Excise Tax on the Total Benefits is
subsequently determined to be less than the amount taken into account hereunder
at the time of termination of the Executive's employment, the Executive shall
repay to the Company, at the time that the amount of such reduction in Excise
Tax is finally determined, the portion of the Gross-Up Payment attributable to
such reduction (plus that portion of the Gross-Up Payment attributable to the
Excise Tax, federal, state and local income taxes and FICA and Medicare
withholding taxes imposed on the Gross-Up Payment being repaid by the Executive
to the extent that such repayment results in a reduction in any such taxes
and/or a federal, state or local income tax deduction) plus interest on the
amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the
Code. In the event that the Excise Tax on the Total Benefits is determined to
exceed the amount taken into account hereunder at the time of the termination
of the Executive's employment (including by reason of any payment the existence
or amount of which cannot be determined at the time of the Gross-Up Payment),
the Company shall make an additional Gross-Up Payment (which shall be
calculated by Tax Counsel in the same manner and using the same assumptions as
set forth in Sections 5.3(a) and 5.3(b) hereof) to the Executive in respect of
such excess (plus any interest, penalties or additions payable by the Executive
with respect to such excess to the Internal Revenue Service or any other
federal, state, local or foreign taxing authority) at the time that the amount
of such excess is finally determined.
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5.4. Timing of Payments. The payments provided for in Sections 5.1 through
5.3 (other than Section 5.1(b), Section 5.2(c) and the last sentence of Section
5.2(d) and other than payments (and related gross-up payments) that are
deferred in accordance with Section 5.2) shall be made on the Date of
Termination, provided, however, that if the amounts of such payments cannot be
finally determined on or before such day, the Company shall pay to the
Executive on such day an estimate, as determined in good faith by the Company,
of the minimum amount of such payments. The Company shall pay the remainder of
such payments (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code from the Date of Termination to the payment of such
remainder) as soon as the amount thereof can be determined, but in no event
later than the thirtieth (30th) day after the Date of Termination. In the event
that the amount of the estimated payments exceeds the amount subsequently
determined to have been due, such excess shall constitute a loan by the Company
to the Executive, payable on the fifth (5th) business day after written demand
by the Company to the Executive (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code from the Date of Termination to the repayment
of such excess).
5.5. Reimbursement of Legal Costs. The Company shall pay to the Executive
all reasonable legal fees and expenses incurred by the Executive as a result of
a bona fide dispute regarding the application of any provision of this
Agreement including all such fees and expenses, if any, incurred (i) in
disputing any Notice of Termination under Section 6.2 hereof, (ii) in seeking
to obtain or enforce any right or benefit provided by this Agreement or (iii)
in connection with any tax audit or proceeding to the extent attributable to
the application of Section 4999 of the Code to any payment or benefit provided
hereunder. Such payments shall be made within five (5) business days after
delivery of the Executive's respective written requests for payment accompanied
with such evidence of fees and expenses incurred as the Company reasonably may
require.
6. Termination Procedures.
6.1 Notice of Termination. During a Coverage Period or pursuant to Section
7.2 or Section 7.3 hereof, any termination of the Executive's employment (other
than by reason of death) must be preceded by a written Notice of Termination
from one party hereto to the other party hereto in accordance with Section 7.6
hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice that shall (i) specify the Executive's date of termination (the "Date of
Termination") which shall not be more than sixty (60) days from the date such
Notice of Termination is given, (ii) indicate the notifying party's opinion
regarding the specific provisions of this Agreement that will apply upon such
termination and (iii) set forth in reasonable detail the facts and
circumstances claimed to provide a basis for the application of the provisions
indicated. Termination of the Executive's employment shall occur on the
specified Date of Termination even if there is a dispute between the parties
pursuant to Section 6.2 hereof relating to the provisions of this Agreement
applicable to such termination.
6.2 Dispute Concerning Applicable Termination Provisions. If within thirty
(30) days of receiving the Notice of Termination the party receiving such
notice notifies the other party that a dispute exists concerning the provisions
of this Agreement that apply to such termination, the dispute shall be resolved
either (i) by mutual written agreement of the parties or (ii) by a final
judgment, order or decree of a court of competent jurisdiction (which is not
appealable or with respect to which the time for appeal therefrom has expired
and no appeal has been perfected). The parties shall pursue the resolution of
such dispute with reasonable diligence. Within five (5) business days of such a
resolution, any party owing any payments pursuant to the provisions of this
Agreement shall make all such payments together with interest accrued thereon
at the rate provided in Section 1274(b)(2)(B) of the Code.
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7. Miscellaneous.
7.1 No Mitigation. The Executive is not required to seek other employment
or to attempt in any way to reduce any amounts payable to the Executive by the
Company pursuant to this Agreement. The amount of any payment or benefit
provided for under this Agreement (other than to the extent provided in Section
5.2(c) and Section 7.16) shall not be reduced by any compensation earned by the
Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by the Executive to
the Company, or otherwise.
7.2 Successors. In addition to any obligations imposed by law upon any
successor to the Company, the Company shall be obligated to require any
successor (whether direct or indirect and whether by purchase, merger,
consolidation, operation of law, or otherwise) to all or substantially all of
the business, property and/or assets of the Company to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken
place; in the event of such a succession, references to the "Company" herein
shall thereafter be deemed to include such successor. Failure of the Company to
obtain such assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement. Such breach shall entitle the
Executive to terminate the Executive's employment at any time within six months
of such succession and thereafter to receive compensation and benefits from the
Company in the same amount and on the same terms as the Executive would be
entitled to hereunder if the Executive were to terminate the Executive's
employment for Good Reason during a Coverage Period. Failure of the Executive
to exercise any right to terminate the Executive's employment pursuant to this
Section 7.2 shall not affect any other right of the Executive under this
Agreement.
7.3 Terminations in Anticipation of Change in Control. The Executive's
employment shall be deemed to have been terminated by the Company without Cause
during a Coverage Period if the Executive's employment is terminated by the
Company without Cause not during a Coverage Period and such termination of
employment (a) was at the request of a third party that has taken steps
reasonably calculated to effect a Change in Control, or (b) otherwise arose in
anticipation of a Change in Control. The Executive's employment shall be deemed
to have been terminated by the Executive for Good Reason during a Coverage
Period if the Executive terminates his or her employment with Good Reason not
during a Coverage Period and the circumstance or event that constitutes Good
Reason (a) occurs at the request of a third party that has taken steps
reasonably calculated to effect a Change in Control or (b) otherwise arose in
anticipation of a Change in Control. In the event of a termination of
employment described in this Section 7.3, the Executive shall be entitled to
all payments and other benefits to which the Executive would have been entitled
had such termination occurred during a Coverage Period, provided that the
Executive shall only be entitled to salary and other compensation and benefits
pursuant to Section 5.1(a) hereof until the Executive's actual date of
termination. Notwithstanding the preceding sentences of this Section 7.3 or
any other provision of this Agreement, the Executive shall not be entitled to
receive, and the Company shall have no obligation to pay or provide to the
Executive, any Severance Benefits as a result of a termination of the
Executive's employment described in this Section 7.3, unless and until a
Coverage Period commences within three (3) months of such termination.
Notwithstanding the provisions of Section 7.15 hereof, for purposes of this
Section 7.3 only, the burden of proving that the requirements of clauses (a)
and (b) of the first and second sentences of this Section 7.3 have been met
shall be on the Executive and the standard of proof to be met by the Executive
shall be clear and convincing evidence. For purposes of this Section 7.3 only,
the definition of "Change in Control" shall exclude the provision in Section
8.7(a).
7.4 Incompetency. Any benefit payable to or for the benefit of the
Executive, if legally incompetent, or incapable of giving a receipt therefor,
shall be deemed paid when paid to the Executive's guardian or to the party
providing or reasonably appearing to provide for the care of such person, and
such payment shall fully discharge the Company.
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7.5 Death. This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amount would still be payable to the Executive
hereunder if the Executive had continued to live (other than amounts which, by
their terms, terminate upon the death of the Executive), such amount, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the executors, personal representatives or administrators of the
Executive's estate.
7.6 Notices. In any case where any notice or other communication is
required or permitted to be given hereunder, such notice or communication shall
be in writing and shall be deemed to have been duly given and delivered, (a) if
delivered in person, on the date of such delivery or (b) if sent by a
recognized overnight courier service or registered U.S. mail (with postage
prepaid and return receipt requested), on the date of receipt of such mail, and
shall be sent or delivered to the following address (or such other address as a
party may designate from time to time in a written notice to the other party
hereto):
To the Company:
PNC Bank Corp.
One PNC Plaza
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx,
Senior Vice President and Director of
Human Resources
With a copy (which shall not be deemed notice) to:
Xxxxx X. Xxxxxx
Senior Vice President and General Counsel
PNC Bank Corp.
One PNC Plaza
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
To the Executive:
_________________________________
_________________________________
_________________________________
7.7 Modification; Waiver. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach of, or failure to comply with, any condition or provision of this
Agreement that is to be satisfied or performed by the other party hereto shall
be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time.
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7.8 Entire Agreement. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement.
7.9 Governing Law and Venue. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania applicable to agreements made and entirely to be
performed within such jurisdiction. The party bringing any action under this
Agreement shall only be entitled to choose the federal or state courts in the
Commonwealth of Pennsylvania as the venue for such action, and each party
consents to the jurisdiction of the court chosen in such manner for such
action.
7.10 Changes to Statutes, Employee Benefit Plans and Employee
Classification Systems. All references to sections of, or regulations
promulgated under, the Exchange Act, the Code or other statutes shall be deemed
also to refer to such sections or regulations as amended from time to time and
to any successor provisions to such sections or regulations. All references to
employee benefit plans and employee classification systems of the Company shall
be deemed also to refer to such plans and classification systems as amended
from time to time and to any successor plans or classification systems thereto.
7.11 Withholding. Any payments provided for hereunder shall be paid net of
any applicable withholding required under federal, state or local law and any
additional withholding to which the Executive has agreed.
7.12 Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
7.13 No Right to Continued Employment. Nothing in this Agreement shall be
deemed to give the Executive the right to be retained in the employ of the
Company, or to interfere with the right of the Company to discharge the
Executive at any time, subject in all cases to the terms of this Agreement.
7.14 No Assignment of Benefits. Except as otherwise provided herein or by
law, no right or interest of the Executive under this Agreement shall be
assignable or transferable, in whole or in part, either directly or by
operation of law or otherwise, including without limitation by execution, levy,
garnishment, attachment or pledge; no attempted assignment or transfer thereof
shall be effective.
7.15 Burden and Standard of Proof. Except as otherwise expressly provided
in Section 7.3 hereof, in any proceeding (regardless of who initiates such
proceeding) in which the payment of Severance Benefits or other benefits under
this Agreement is at issue, the burden of proof as to whether any termination
of the Executive's employment has been for Cause or without Good Reason for
purposes of this Agreement shall be upon the Company or its successor, and the
standard of proof to be met with respect thereto shall be clear and convincing
evidence.
7.16 Reduction of Agreement Benefits by Other Required Benefits.
Notwithstanding any other provision of this Agreement to the contrary, if in
connection with the termination of the Executive's employment for any reason
the Company is obligated by law or by contract (including any employment or
severance agreement other than this Agreement) or by Company plan or policy to
(i) pay the Executive with respect to any notice period prior to termination,
(ii) pay the Executive severance pay (including any payments based upon unpaid
or contingent awards pursuant to any incentive compensation plan or based upon
added years of service credit or any other credit or addition under any pension
or savings plan), a termination indemnity, notice pay, or the like, or (iii)
provide the Executive with life, disability, accident or health insurance or
other welfare benefits after the Executive's termination (or a cash payment in
lieu thereof), then any Severance Benefits hereunder shall be reduced by the
amount of any payments and similar benefits described in clauses (i), (ii) and
(iii), as applicable.
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7.17 Headings. The headings and captions herein are provided for reference
and convenience only, shall not be considered part of this Agreement, and shall
not be employed in the construction of this Agreement.
8. Definitions.
8.1 "Annual Base Salary" means the greater of (a) the Executive's highest
annual base salary in effect during the one (1) year period preceding the
commencement of the applicable Coverage Period and (b) the Executive's highest
annual base salary in effect during the one (1) year period preceding the
Executive's Date of Termination.
8.2 "Annual Bonus" means the product of (a) the greater of (i) the
Executive's average Bonus Percent for the three fiscal years (or such shorter
period during which the Executive has been employed by the Company) immediately
preceding the fiscal year during which the applicable Coverage Period commences
and (ii) the Executive's average Bonus Percent for the three fiscal years (or
such shorter period during which the Executive has been employed by the
Company) immediately preceding the Termination Year, and (b) the Annual Base
Salary.
8.3 "Benefits Period" has the meaning assigned to such term in Section
5.2(c) hereof.
8.4 "Board" means the Board of Directors of the Company.
8.5 "Bonus Percent" means the bonus amount paid or payable to the
Executive with respect to a particular fiscal year divided by the aggregate
base salary paid or payable to the Executive for such fiscal year; provided,
however, that with respect to the fiscal year preceding the Termination Year
the Bonus Percent shall not be less than the Executive's highest Target
Percentage that was in effect during such fiscal year.
8.6 "Cause" means:
(a) the willful and continued failure of the Executive to
substantially perform the Executive's duties with the Company (other than any
such failure resulting from incapacity due to physical or mental illness),
after a written demand for substantial performance is delivered to the
Executive by the Board or the Chief Executive Officer of the Company which
specifically identifies the manner in which the Board or Chief Executive
Officer believes that the Executive has not substantially performed the
Executive's duties; or
(b) the willful engaging by the Executive in illegal conduct or gross
misconduct that is materially and demonstrably injurious to the Company.
For purposes of the preceding clauses (a) and (b), no act or failure to
act, on the part of the Executive, shall be considered "willful" unless it is
done, or omitted to be done, by the Executive in bad faith and without
reasonable belief that the Executive's action or omission was in the best
interests of the Company. Any act, or failure to act, based upon the
instructions or prior approval of the Board, the Chief Executive Officer or the
Executive's superior or based upon the advice of counsel for the Company, shall
be conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. The cessation of
employment of the Executive shall not be deemed to be for Cause unless and
until there shall have been delivered to the Executive, as part of the Notice
of Termination, a copy of a resolution duly adopted by the affirmative vote of
not less than a majority of the entire membership of the Board, at a Board
meeting called and held for the purpose of considering such termination,
finding that, in the good faith opinion of the Board, the Executive is guilty
of the conduct described in clause (a) or (b) above and specifying the
particulars thereof in detail. Such resolution shall be adopted only after
reasonable notice of such Board meeting is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before
the Board.
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8.7 A "Change in Control" means a change of control of the Company of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or in response to any similar item on any
similar schedule or form) promulgated under the Exchange Act, whether or not
the Company is then subject to such reporting requirement; provided, however,
that without limitation, a Change in Control shall be deemed to have occurred
if:
(a) any Person, excluding employee benefit plans of the Company, is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the combined voting power of the
Company's then outstanding securities, provided, however, that such an
acquisition of beneficial ownership representing between twenty percent (20%)
and forty percent (40%), inclusive, of such voting power shall not be
considered a Change in Control if the Board approves such acquisition either
prior to or immediately after its occurrence;
(b) the Company consummates a merger, consolidation, share exchange,
division or other reorganization or transaction of the Company (a "Fundamental
Transaction") with any other corporation, other than a Fundamental Transaction
that results in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) at least sixty
percent (60%) of the combined voting power immediately after such Fundamental
Transaction of (i) the Company's outstanding securities, (ii) the surviving
entity's outstanding securities, or (iii) in the case of a division, the
outstanding securities of each entity resulting from the division;
(c) the shareholders of the Company approve a plan of complete
liquidation or winding-up of the Company or an agreement for the sale or
disposition (in one transaction or a series of transactions) of all or
substantially all of the Company's assets;
(d) as a result of a proxy contest, individuals who prior to the
conclusion thereof constituted the Board (including for this purpose any new
director whose election or nomination for election by the Company's
shareholders in connection with such proxy contest was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who were directors
prior to such proxy contest) cease to constitute at least a majority of the
Board (excluding any Board seat that is vacant or otherwise unoccupied);
(e) during any period of twenty-four consecutive months, individuals
who at the beginning of such period constituted the Board (including for this
purpose any new director whose election or nomination for election by the
Company's shareholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority of the Board
(excluding any Board seat that is vacant or otherwise unoccupied); or
(f) the Board determines that a Change in Control has occurred.
Notwithstanding anything to the contrary herein, a divestiture or spin-off of a
Subsidiary or division of the Company shall not by itself constitute a "Change
in Control."
8.8 "CIC Failure" means the following:
(a) with respect to a CIC Triggering Event described in Section
8.9(a), the Company's shareholders vote against the transaction approved by the
Board or the agreement to consummate the transaction is terminated; or
(b) with respect to a CIC Triggering Event described in Section
8.9(b), the proxy contest fails to replace or remove a majority of the members
of the Board.
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8.9 "CIC Triggering Event" means the occurrence of either of the
following:
(a) the Board or the Company's shareholders approve a transaction
described in Subsection (b) of the definition of Change in Control contained in
Section 8.7 hereof; or
(b) the commencement of a proxy contest in which any Person seeks to
replace or remove a majority of the members of the Board.
8.10 "Classification Factor" shall mean 'three (3)' if the Executive is
classified by the Company at SEG 14 or above and 'two (2)' if the Executive is
classified by the Company at SEG 13 or below. For each Coverage Period, the
Classification Factor shall be determined as of the day prior to the
commencement of such Coverage Period. Notwithstanding the foregoing, in the
event that the Executive was previously classified at SEG 14 or above and has
subsequently been reclassified below SEG 14, the Committee may, within sixty
(60) days of such reclassification, determine that the "Classification Factor"
shall remain 'three (3)' for the Executive.
8.11 "Code" means the Internal Revenue Code of 1986.
8.12 "Committee" means the Personnel and Compensation Committee of the
Board.
8.13 "Company" means PNC Bank Corp., a Pennsylvania corporation.
References herein to employment with the Company shall include employment with
a Subsidiary. In addition, if the Executive becomes employed by a Subsidiary,
references to payments, benefits, privileges or other rights to be accorded by
the "Company" shall be deemed to include such payments, benefits, privileges or
other rights to be provided by such Subsidiary.
8.14 "Coverage Period" means a period commencing on the earlier to occur
of (i) the date of a CIC Triggering Event and (ii) the date of a Change in
Control, and ending on the date that is the Classification Factor years after
the date of the Change in Control, provided, however, that in the event that a
Coverage Period commences on the date of a CIC Triggering Event such Coverage
Period shall terminate upon the earlier to occur of (x) the date of a CIC
Failure and (y) the date that is the Classification Factor years after the date
of the Change in Control triggered by the CIC Triggering Event. After the
termination of any Coverage Period, this Agreement shall continue in effect and
another Coverage Period shall commence upon the earlier to occur of clauses (i)
and (ii) in the preceding sentence.
8.15 "Date of Termination" has the meaning assigned to such term in
Section 6.1 hereof.
8.16 "Deferred Compensation Plan" means the PNC Bank Corp. and Affiliates
Deferred Compensation Plan, provided, however, that no amendment or termination
of the Plan, during a Coverage Period or after the Date of Termination, that
adversely affects the administration or payment of the Executive's benefits
shall be given effect for purposes of this Agreement without the written
consent of the Executive.
8.17 "Disability" means the Executive's absence from the full-time
performance of the Executive's duties with the Company as a result of the
Executive's incapacity due to physical or mental illness, which is determined
to be total and permanent under the Company's long-term disability plan(s) that
cover the Executive.
8.18 "Excess Plan" means the PNC Bank Corp. Supplemental Pension Plan.
8.19 "Exchange Act" means the Securities Exchange Act of 1934.
8.20 "Excise Tax" means any excise tax imposed under Section 4999 of the
Code.
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8.21 "Good Reason" means:
(a) the assignment to the Executive of any duties inconsistent in any
respect with the Executive's position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities immediately
prior to either the CIC Triggering Event or the Change in Control, or any other
action by the Company which results in a diminution in any respect in such
position, authority, duties or responsibilities, excluding for this purpose an
isolated, insubstantial and inadvertent action not taken in bad faith that is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;
(b) a reduction by the Company in the Executive's annual base salary
as in effect on the date hereof, as the same may be increased from time to
time;
(c) the Company's requiring the Executive to be based at any office or
location that is more than fifty (50) miles from the Executive's office or
location immediately prior to either the CIC Triggering Event or the Change in
Control;
(d) the failure by the Company (i) to continue in effect any bonus,
stock option, or other cash or equity-based incentive plan in which the
Executive participates immediately prior to either the CIC Triggering Event or
the Change in Control that is material to the Executive's total compensation,
unless a substantially equivalent arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such plan, or
(ii) to continue the Executive's participation in such plan (or in such
substitute or alternative plan) on a basis at least as favorable, both in terms
of the amount of benefits provided and the level of the Executive's
participation relative to other participants, as existed immediately prior to
the CIC Triggering Event or the Change in Control; or
(e) the failure by the Company to continue to provide the Executive
with benefits substantially similar to those received by the Executive under
any of the Company's pension (including, but not limited to, tax-qualified
plans), life insurance, health, accident, disability or other welfare plans in
which the Executive was participating, at costs substantially similar to those
paid by the Executive, immediately prior to the CIC Triggering Event or the
Change in Control.
8.22 "Notice of Termination" has the meaning assigned to such term in
Section 6.1 hereof.
8.23 "Pension Plan" means the PNC Bank Corp. Pension Plan.
8.24 "Person" has the meaning given in Section 3(a)(9) of the Exchange Act
and also includes any syndicate or group deemed to be a "person" under Section
13(d)(3) of the Exchange Act.
8.25 "Retirement Factor" means the number of years, including fractions,
from the Date of Termination until the Executive will reach age sixty-five
(65).
8.26 "SERP" means the PNC Bank Corp. Supplemental Executive Retirement
Income and Disability Plan.
8.27 "Severance Benefits" has the meaning assigned to such term in Section
5.2 hereof.
8.28 "Subsidiary" means any corporation controlled by the Company,
directly or indirectly.
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8.29 "Supplemental Savings Plan" means the PNC Bank Corp.
Supplemental Incentive Savings Plan, provided, however, that no amendment
or termination of such plan, during a Coverage Period or after the Date of
Termination, that adversely affects the administration or payment of the
Executive's benefits thereunder shall be given effect for purposes of this
Agreement without the written consent of the Executive.
8.30 "Target Percentage" means the percentage of the Executive's
annual base salary on which the Executive's target cash incentive award
pursuant to the 1994 Plan, the 1996 Plan or any other Company incentive
compensation plan then in effect is based for a particular fiscal year.
Such percentage is established annually by the Committee in administering
the applicable plan.
8.31 "Termination Year" means the Company's fiscal year during which
the Executive's Date of Termination occurs.
8.32 "1994 Plan" means the PNC Bank Corp. 1994 Annual Incentive Award
Plan.
8.33 "1996 Plan" means the PNC Bank Corp. 1996 Executive Incentive
Award Plan.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its officer, thereunto duly authorized, and the Executive has executed this
Agreement, all as of the day and year first above written.
PNC BANK CORP.
By:_____________________
Name:
Title:
By:_____________________
[Name of Executive]
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