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Exhibit 10(g)
EXECUTIVE AGREEMENT
This is an Agreement by and between Huntington Bancshares Incorporated,
a Maryland corporation, with its principal office at the Huntington Center, 00
Xxxxx Xxxx Xxxxxx, Xxxxxxxx, XX 00000 ("Huntington"), and
___________________________ ("Executive"), effective as of ____________, 199__.
Recitals
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A. Executive is an executive officer of Huntington or one or more of
its affiliated companies with significant policy-making and operational
responsibilities in the conduct of its business. For purposes of describing the
employment of Executive, the term "Huntington" shall include the employment of
Executive by Huntington and such affiliated entities as shall be determined by
the Compensation and Stock Option Committee of the Board of Directors of
Huntington Bancshares Incorporated.
X. Xxxxxxxxxx recognizes that Executive is a valuable resource for
Huntington and desires to be assured of the continued dedication and services of
Executive.
X. Xxxxxxxxxx acknowledges that upon a threatened change in control
Executive may have concerns about the continuation of his employment status and
responsibilities and may be approached by others with employment opportunities,
and Huntington desires to provide Executive some assurance as to the
continuation of his employment status and responsibilities in the event of a
change in control.
X. Xxxxxxxxxx desires to assure that if it should receive an offer
involving a possible change of control and Executive would be involved in
deliberations or negotiations in connection therewith, Executive would be in a
secure position to consider such offer and negotiate on behalf of Huntington and
its shareholders as objectively as possible, and to this end Huntington desires
to protect Executive from any direct or implied threat to his financial
well-being under such circumstances.
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E. Executive is willing to continue to serve as such but desires
assurance that in the event of a change in control he will not be exposed to
unreasonable financial hardship or loss of status.
Agreement
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The parties do hereby agree as follows:
1. DEFINITIONS. As used herein:
"Change in Control" - A change in control shall be deemed to have
occurred if and when, after the date hereof any of the following events have
occurred:
(i) Huntington, or in one or more transactions 50% or more of its
assets or earning power, is acquired by or combined with another Person and less
than a majority of the outstanding voting shares of the Person surviving such
transaction (or the ultimate parent of the surviving Person) after such
acquisition or combination is owned, immediately prior to such acquisition or
combination, by the owners of the voting shares of Huntington outstanding
immediately prior to such acquisition or combination;
(ii) there is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report), each as promulgated pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), disclosing
that any person (including any "person" as defined in Section 13(d) (3) or
Section 14(d) (2) of the Exchange Act) has become the beneficial owner (as the
term "beneficial owner" is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of securities representing 10% or
more of the combined voting power of the then outstanding securities entitled to
vote generally in the election of directors ("Voting Stock") of Huntington;
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(iii) Huntington files a report or proxy statement with the Securities
and Exchange Commission pursuant to the Exchange Act disclosing in response to
Form 8-K or Schedule 14A (or any successor schedule, form or report or item
therein) that a change in control of Huntington has occurred or will occur in
the future pursuant to any then-existing contract or transaction; or
(iv) if, during any period of two consecutive years, individuals who at
the beginning of any such period constitute the Board of Directors of Huntington
("Board") cease for any reason to constitute at least a majority thereof;
provided, however, that for purposes of this clause (iv) each Director who is
first appointed, or first nominated for election by Huntington's stockholders,
by a vote of at least two-thirds of the Directors of Huntington (or a committee
thereof) then still in office who were Directors of Huntington at the beginning
of any such period will be deemed to have been a Director of Huntington at the
beginning of such period; or
(v) The occurrence of any other event or circumstance which is not
covered by (i) through (iv) above which the Board determines affects control of
Huntington and, in order to implement the purposes of this Agreement as set
forth above, adopts a resolution that such event or circumstance constitutes a
Change in Control for the purposes of this Agreement.
Notwithstanding the foregoing provisions of paragraphs 1 (ii) or (iii),
unless otherwise determined in a specific case by majority vote of the Board, a
"Change in Control" shall not be deemed to have occurred for purposes of
paragraphs (ii) or (iii) solely because (1) Huntington, (2) an entity in which
Huntington directly or indirectly beneficially owns 50% or more of the entity's
outstanding voting stock (a "Subsidiary"), or (3) any employee stock ownership
plan or any other employee benefit plan of Huntington or any Subsidiary either
files or becomes obligated to file a report or a proxy statement under or in
response to Schedule 13D, Schedule
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14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or report or
item therein) under the Exchange Act disclosing beneficial ownership by it of
shares of voting stock of Huntington, whether in excess of 10% or otherwise, or
because Huntington reports that a change in control of Huntington has occurred
or will occur in the future by reason of such beneficial ownership. In defining
"Control," all voting securities of Huntington shall be considered to be a
single class.
"Minimum Annual Base Salary" means the Executive's current base annual
salary, plus such increases to the base annual compensation as the Board or
Compensation and Stock Option Committee of Huntington may authorize in their
discretion from time to time, but in no event less than the annual base salary
in effect at the time of making this agreement.
2. TERMINATION FOLLOWING CHANGE IN CONTROL. Executive shall be entitled
to the benefits described below if a Change in Control shall have occurred and
within three years of such Change in Control either (i) Executive terminates his
employment upon making a determination (which determination will be conclusive
and binding upon the parties hereto provided it has been made in good faith)
that Executive's employment status or employment responsibilities have been
materially and adversely affected thereby, or (ii) his employment is terminated
by Huntington:
Executive shall be entitled to receive an amount equal to three times
his Minimum Annual Base Salary in effect for the year in which his termination
of employment occurs.
(a) Executive shall also be entitled to receive three times the
average bonus or incentive compensation paid to him in respect of the
three fiscal years preceding his termination of employment.
Notwithstanding any provision for compensation
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under this paragraph 2(a), if Executive will attain his Normal
Retirement Date as defined in Section 1.31(c) of the Huntington
Bancshares Retirement Plan ("Normal Retirement Date") within three
years of his termination of employment, then Executive shall be
entitled to an amount equal to his Minimum Annual Base Salary for each
year, or any portion thereof, remaining between his termination of
employment and his Normal Retirement Date. At Executive's option the
amount payable under this paragraph 2(a) shall be paid to him in one
lump sum within thirty days after termination of employment or in
twenty-four equal consecutive monthly payments commencing on the first
day of the month following termination of employment.
(b) Huntington shall maintain for Executive's benefit until the
earlier of (i) thirty-six months after termination of employment, or
(ii) Executive's commencement of full-time employment with a new
employer (the "Continuation Period"), all costs and expenses
associated with providing a corporate automobile, all professional
memberships, dues in all clubs in which Executive maintains
membership, all life insurance, medical, health and accident,
disability plans or programs and such other substantially similar
benefits which Executive shall have been entitled to prior to
termination, provided Executive's continued participation is permitted
under the general terms of such plans and programs after the
termination of employment. In the event Executive's participation in
any such plan or program is not permitted, Huntington will provide at
no cost to Executive
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directly the benefits to which Executive would be entitled under such
plans and programs.
(c) Executive also shall be paid the aggregate of the increases in the
single sum actuarial equivalents of Executive's vested accrued
benefits under Huntington's retirement plan or any successor plan
(hereinafter referred to as the "Pension Plan") and each nonqualified
defined benefit pension plan sponsored by Huntington, including the
supplemental executive retirement plan that would result if Executive
were credited with three additional years of service and benefit
service and three additional years of age under such plans.
(d) Without limiting the rights of Executive at law or in equity, if
Huntington fails to make any payment or provide any benefit required
to be made or provided hereunder on a timely basis, Huntington will
pay interest on the amount or value thereof at an annualized rate of
interest equal to the greater of (i) 12% or (ii) the prime commercial
rate in effect of The Huntington National Bank or its successor from
time to time. Such interest will be payable as it accrues on demand.
Any change in such prime rate will be effective on and as of the date
of such change.
3. CONSIDERATION FOR PAYMENTS. Huntington hereby acknowledges that it
will be difficult and may be impossible (a) for Executive to find reasonably
comparable employment, and (b) to measure the amount of damages which Executive
may suffer as a result of termination of employment hereunder. In addition,
Huntington acknowledges that its severance pay plans applicable in general to
its salaried employees do not provide for mitigation, offset or reduction of any
severance payment received thereunder. Accordingly, the payment of the severance
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compensation by Huntington to Executive in accordance with the terms of this
Agreement is hereby acknowledged by Huntington to be reasonable and will be
liquidated damages, and Executive will not be required to mitigate the amount of
any payment provided for in this Agreement by seeking other employment or
otherwise, nor will any profits, income, earnings or other benefits from any
source whatsoever create any mitigation, offset, reduction or any other
obligation on the part of Executive hereunder or otherwise, except as provided
in Section 2(e). Huntington shall not be entitled to set off or counterclaim
against amounts payable hereunder any claim, debt or obligation of Executive.
4. TAX CONSIDERATIONS.
(a) BASIC RULE. Anything in this Agreement to the contrary
notwithstanding, in the event that a firm of Certified Public
Accountants chosen by Huntington (the "Auditors") determine that
any payment or distribution by Huntington 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 (a "Payment"), would be nondeductible by Huntington for
federal income tax purposes because of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), then the
aggregate present value of the amounts payable or distributable
to or for the benefit of the Executive pursuant to this Agreement
or any employment agreement (the "Agreement Payments") shall be
reduced (but not below zero) to the Reduced Amount. For purposes
of this Section 4, the "Reduced Amount" shall be an amount
expressed in present value which maximizes the aggregate
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present value of Agreement Payments without causing any Payment
to be nondeductible by Huntington because of Section 280G of the
Code.
(b) REDUCTION OF PAYMENTS. If the Auditors determine that any
Payment would be nondeductible by Huntington because of Section
280G of the Code, Huntington shall promptly give the Executive
notice to that effect and a copy of the detailed calculation
thereof and of the Reduced Amount, and the Executive may then
elect, in his sole discretion, which and how much of the
Agreement Payments shall be eliminated or reduced (as long as
after such election the aggregate present value of the Agreement
Payments equals the Reduced Amount) and shall advise Huntington
in writing of his election within ten days of his receipt of
notice. If no such election is made by the Executive within such
ten-day period, then Huntington may elect which and how much of
the Agreement Payments shall be eliminated or reduced (as long as
after such election the aggregate present value of the Agreement
Payments equals the Reduced Amount) and shall notify the
Executive promptly of such election. For purposes of this Section
4, present value shall be determined in accordance with Section
280G(d)(4) of the Code. All determinations made by the Auditors
under this Section 4 shall be binding upon Huntington and the
Executive and shall be made within 60 days of the Executive's
termination of employment. As promptly as practicable following
such determination and the elections hereunder, Huntington shall
pay to or distribute to or for the benefit of the Executive such
amounts as are then due to him under this Agreement and shall
promptly pay to or distribute for
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the benefit of the Executive in the future such amounts as become
due to him under this Agreement.
(c) OVERPAYMENTS AND UNDERPAYMENTS. As a result of the
uncertainty in the application of Section 280G of the Code at the
time of the initial determination by the Auditors hereunder, it
is possible that Agreement Payments will have been made by
Huntington which should not have been made (an "Overpayment") or
that additional Agreement Payments which will not have been made
by Huntington could have been made (an "Underpayment"),
consistent in each case with the calculation of the Reduced
Amount hereunder. In the event that the auditors, based upon the
assertion of a deficiency by the Internal Revenue Service against
the Company or the Employee which the Auditors believe has a high
probability of success, determine that an Overpayment has been
made, such Overpayment shall be treated for all purposes as a
loan to the Executive which he shall repay to Huntington,
together with interest at the applicable federal rate provided
for in Section 7872(f)(2) of the Code; provided, however, that no
amount shall be payable by the Executive to Huntington if and to
the extent that such payment would not reduce the amount which is
subject to taxation under Section 4999 of the Code. In the event
that the Auditors, based upon controlling precedent, determine
that an Underpayment has occurred, such Underpayment shall
promptly be paid by Huntington to or for the benefit of the
Executive, together with interest at the applicable federal rate
provided for in Section 7872(f)(2)(A) of the Code.
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5. ARRANGEMENTS NOT EXCLUSIVE. The specific benefit arrangements
referred to in this Agreement are not intended to exclude Executive from
participation in or from other benefits available to executive personnel
generally or to preclude Executive's right to other compensation or benefits as
may be authorized by the Board of Huntington at any time. The provisions of this
Agreement and any payments provided for hereunder shall not reduce any amounts
otherwise payable, or in any way diminish Executive's existing rights, or rights
which would accrue solely as the result of the passage of time under any benefit
plan, incentive plan, stock option plan, employment agreement or other contract,
plan or arrangement except as may be specified in such contract, plan or
arrangement.
6. HUNTINGTON'S RIGHT TO TERMINATE EMPLOYMENT. This Agreement sets
forth the severance benefits payable to Executive in the event his employment
with Huntington is terminated under certain conditions subsequent to a Change in
Control (as defined in Section 1 hereof). This Agreement is not an employment
contract nor is it intended to confer upon the Executive any right to continued
employment. Notwithstanding the foregoing, any termination of employment of
Executive or the removal of the Executive from the current office or position of
Executive at Huntington following the commencement of any discussion with a
third person that ultimately results in a Change in Control shall be deemed to
be a termination or removal of Executive after a Change in Control for purposes
of this Agreement.
7. ENFORCEMENT COSTS; INTEREST. Huntington is aware that, upon the
occurrence of a Change in Control, the Board or a stockholder of Huntington may
then cause or attempt to cause Huntington to refuse to comply with its
obligations under this Agreement, or may cause or attempt to cause Huntington to
institute, or may institute, litigation seeking to have this
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Agreement declared unenforceable, or may take, or attempt to take, other action
to deny Executive the benefits intended under this Agreement. In these
circumstances, the purpose of this Agreement could be frustrated. It is the
intent of Huntington that Executive not be required to incur the expenses
associated with the enforcement of his rights under this Agreement by litigation
or other legal action nor be bound to negotiate any settlement of his rights
hereunder under threat of incurring such expenses because the cost and expense
thereof would substantially detract from the benefits intended to be extended to
Executive hereunder. Accordingly, if following a Change in Control it should
appear to Executive that Huntington has failed to comply with any of its
obligations under this Agreement or in the event that Huntington or any other
person takes any action to declare this Agreement void or unenforceable, or
institute any litigation or other legal action designed to deny, diminish or to
recover from Executive, the benefits intended to be provided to Executive
hereunder, Huntington irrevocably authorizes Executive from time to time to
retain counsel of his choice at the expense of Huntington as provided in this
Section 7 to represent Executive in connection with the initiation or defense of
any litigation or other legal action, whether by or against Huntington or any
director, officer, stockholder or other person affiliated with Huntington.
Notwithstanding any existing or prior attorney-client relationship between
Huntington and such counsel, Huntington irrevocably consents to Executive
entering into an attorney-client relationship with such counsel, and in that
connection Huntington and Executive agree that a confidential relationship shall
exist between Executive and such counsel. The reasonable fees and expenses of
counsel selected from time to time by Executive as hereinabove provided shall be
paid or reimbursed to Executive by Huntington on a regular, periodic basis upon
presentation by Executive of a statement or
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statements prepared by such counsel in accordance with its customary practices.
In any action involving this Agreement, Executive shall be entitled to
prejudgment interest on any amounts found to be due him from the date such
amounts would have been payable to Executive pursuant to this Agreement at an
annual rate of interest equal to the greater of (a) 12%, or (b) the prime
commercial rate in effect at The Huntington National Bank or its successor from
time to time during the prejudgment period.
8. TERMINATION. This Agreement shall terminate if the employment of
Executive with Huntington shall terminate prior to a Change in Control.
9. SUCCESSORS AND ASSIGNS. In the event that Huntington shall merge or
consolidate with any other corporation or all or substantially all Huntington's
business or assets shall be transferred in any manner to any other Person, such
Person shall thereupon succeed to, and be subject to, all rights, interests,
duties and obligations of, and shall thereafter be deemed for all purposes
hereof to be, Huntington hereunder. This Agreement shall be binding upon and
inure to the benefit of any such successor and the personal and legal
representatives of Executive. If Executive should die while any amounts are
still payable to him hereunder, all such amounts shall be paid in accordance
with the terms of this Agreement to Executive's beneficiary indicated on the
Beneficiary Designation, attached hereto as Exhibit A.
10. SEVERABILITY. In the event that any section, paragraph, clause or
other provision of this Agreement shall be determined to be invalid or
unenforceable in any jurisdiction for any reason, such section, paragraph,
clause or other provision shall be enforceable in any other jurisdiction in
which valid and enforceable and, in any event, the remaining sections,
paragraphs,
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clauses and other provisions of this Agreement shall be unaffected and shall
remain in full force and effect to the fullest extent permitted by law.
11. INDEMNIFICATION. For a period of five years after any termination
of Executive's employment, Huntington shall provide Executive (including his
heirs, executors and administrators) with coverage under a standard directors'
and officers' liability insurance policy at its expense, and shall indemnify,
hold harmless and defend Executive (and his heirs, executors and administrators)
to the fullest extent permitted under Maryland law against all expenses and
liabilities reasonably incurred by him in connection with or arising out of any
action, suit or proceeding in which he may be involved by reason of his having
been a director or officer of Huntington or any subsidiary (whether or not he
continues to be a director or officer at the time of incurring such expenses or
liabilities), such expenses and liabilities to include, but not be limited to,
judgments, court costs and attorneys' fees and the cost of reasonable
settlements.
12. TERMINATION OF PRIOR AGREEMENTS. The Executive hereby agrees to a
mutual termination, effective as of the effective date of this Agreement, of any
prior existing change in control agreement providing benefits to the Executive
upon a termination of employment following a Change in Control of the Company,
to which he and Huntington are parties, and as to such prior agreement, if any,
the Executive releases all claims, rights and entitlement.
IN WITNESS WHEREOF, this Agreement has been executed on ____________,
199__.
HUNTINGTON BANCSHARES INCORPORATED
By
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Exhibit A
Beneficiary Designation
In the event of my death, I hereby direct that any amounts due me under
the agreement to which this Beneficiary Designation is attached shall be
distributed to the person designated below. If no beneficiary shall be living to
receive such assets they shall be paid to the administrator or executor of my
estate.
Date
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Beneficiary
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Relationship to Executive
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