EXHIBIT 10(k)
EMPLOYMENT AGREEMENT
by and between
FLEET FINANCIAL GROUP, INC.
and
XXXXXX X. XXXXXXXXX
TABLE OF CONTENTS
SECTION PAGE
------- ----
1. Employment.......................................................1
2. Term.............................................................1
3. Position and Duties..............................................1
4. Place of Performance.............................................2
5. Compensation and Related Matters.................................2
(a) Base Salary................................................2
(b) Bonuses....................................................2
(c) Expenses...................................................3
(d) Other Benefits.............................................3
(e) Vacation...................................................3
(f) Services Furnished.........................................3
6. Offices..........................................................3
7. Termination......................................................3
(a) Death......................................................3
(b) Disability.................................................4
(c) Cause......................................................4
(d) Good Reason................................................4
8. Termination Procedure............................................4
(a) Notice of Termination......................................4
(b) Date of Termination........................................5
(c) Compensation During Dispute................................5
9. Compensation upon Termination or During Disability...............5
(a) Disability; Death..........................................5
(b) By Corporation without Cause or by the Executive...........6
(c) By Corporation for Cause...................................7
(d) Compensation Plans.........................................7
(e) Mitigation.................................................7
10. Confidential Information; Nonsolicitation Requirement............7
(a) Confidential Information...................................7
(b) Nonsolicitation Requirement................................8
11. Indemnification; Legal Fees......................................8
12. Successors; Binding Agreement....................................8
(a) Corporation's Successors...................................8
(b) The Executive's Successors.................................9
13. Notice...........................................................9
14. Additional Payment...............................................9
15. Amendment or Modification; Waiver...............................11
16. Funding.........................................................11
17. Arbitration.....................................................11
18. Governing Law...................................................11
19. Miscellaneous...................................................11
20. Severability....................................................11
21. Counterparts....................................................11
22. Entire Agreement................................................12
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INDEX OF DEFINED TERMS
----------------------
Term Where Defined
---- -------------
Annual Bonus.....................................................Sec. 5(b)
Base Salary......................................................Sec. 5(a)
Board.........................................................Introduction
Cause............................................................Sec. 7(c)
Code...............................................................Sec. 11
Contract Payments...............................................Sec. 14(a)
Corporation...................................................Introduction
Date of Termination..............................................Sec. 8(b)
Disability.......................................................Sec. 7(b)
Disability Period................................................Sec. 9(a)
Effective Date......................................................Sec. 2
Effective Time................................................Introduction
Excise Tax......................................................Sec. 14(a)
Executive.....................................................Introduction
Good Reason......................................................Sec. 7(d)
Gross-Up Payment................................................Sec. 14(a)
Long-Term Bonus..................................................Sec. 5(b)
Merger Agreement..............................................Introduction
Notice of Termination............................................Sec. 8(a)
Shawmut.......................................................Introduction
Prior Agreement...............................................Introduction
Renewal Date........................................................Sec. 2
Severance Agreement................................................Sec. 21
Term................................................................Sec. 2
Total Payments..................................................Sec. 14(b)
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EMPLOYMENT AGREEMENT
AGREEMENT, dated as of February 20, 1995, by and between Xxxxxx X.
Xxxxxxxxx (the "Executive") and Fleet Financial Group, Inc., a Rhode Island
corporation (the "Corporation").
The Executive was formerly employed by Shawmut National Corporation, a
Delaware corporation ("Shawmut"), as President and Chief Operating Officer
pursuant to an employment agreement (the "Prior Agreement") effective as of
February 24, 1994. Pursuant to the Agreement and Plan of Merger, dated as of
February 20, 1995 (the "Merger Agreement") by and between the Company and
Shawmut, Shawmut will merge with and into the Company as of the "Effective Time"
(as defined in the Merger Agreement).
The Board of Directors of the Corporation (the "Board") recognizes that
the Executive can contribute significantly to the growth and success of the
Corporation. The Board desires to provide for the employment of the Executive
and to encourage the attention and dedication to the Corporation of the
Executive as a member of the Corporation's management, in the best interest of
the Corporation and its shareholders. The Executive is willing to commit himself
to serve the Corporation, on the terms and conditions herein provided.
In order to effect the foregoing, the Corporation and the Executive wish
to enter into an employment agreement on the terms and conditions set forth
below. This Agreement shall become effective only at the Effective Time. If the
Effective Time does not occur, this Agreement shall be of no force or effect.
Accordingly, in consideration of the premises and the respective covenants and
agreements of the parties herein contained, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Employment. The Corporation hereby agrees to employ the Executive,
and the Executive hereby accepts such employment, on the terms and conditions
hereinafter set forth.
2. Term. The period of employment of the Executive by the Corporation
hereunder (the "Term") shall commence on the date (the "Effective Date") on
which the Effective Time occurs and shall end on the second anniversary thereof
unless further extended as provided in this Section 2 or sooner terminated as
provided in Section 7. Notwithstanding the foregoing, on the first anniversary
of the Effective Date and on each anniversary of the Effective Date thereafter
(a "Renewal Date"), the term of the Executive's employment shall be
automatically extended for one (l) additional year unless, at least sixty (60)
days prior to such Renewal Date, the Corporation shall have delivered to the
Executive or the Executive shall have delivered to the Corporation written
notice that the term of the Executive's employment hereunder will not be
extended.
3. Position and Duties. During the Term, the Executive shall serve as Vice
Chairman of the Corporation. The Executive shall be responsible for the consumer
banking and investment management operations of the Corporation and shall have
such additional responsibilities and authority as may from time to time be
assigned to the Executive by the Chairman or Chief Executive Officer of the
Corporation, provided that such responsibilities and authority are consistent
with the Executive's position with the Corporation. The Executive agrees to
devote substantially all of his working time and efforts to the performance of
his duties for the Corporation; provided, however, that the Executive may (i)
serve on the boards of directors of other organizations to the extent such
service is permitted by applicable law and would not subject the Corporation to
any liability with respect to its business activities under such law, and (ii)
may devote a reasonable amount of time to charitable and community services.
4. Place of Performance. In connection with the Executive's employment by
the Corporation, the Executive shall be based at the headquarters of the
Corporation in Boston, Massachusetts and in Hartford, Connecticut except for
required travel on the Corporation's business to an extent substantially
consistent with the Executive's business travel obligations with Shawmut prior
to the Effective Date.
5. Compensation and Related Matters.
(a) Base Salary. During the Term, the Corporation shall pay the
Executive a base salary (the "Base Salary") at a rate no less than the
rate in effect from time to time for other Vice Chairmen of the
Corporation. Notwithstanding the foregoing, the Corporation shall pay the
Executive as additional Base Salary with respect to 1995 (whether or not
the Effective Time occurs during 1995) an amount equal to the excess of
the highest base salary earned by any executive officer of the Corporation
(other than the Chairman or Chief Executive Officer of the Corporation)
during 1995 over the base salary earned by the Executive during 1995 with
Shawmut. Base Salary shall be paid in approximately equal installments in
accordance with the Corporation's customary payroll practices. Base Salary
may be increased from time to time in accordance with the normal business
practices of the Corporation and, if so increased, shall not thereafter
during the Term be decreased. The salary payments (including any increased
salary payments) hereunder shall not in any way limit or reduce any other
obligation of the Corporation hereunder, and no other compensation,
benefit or payment hereunder shall in any way limit or reduce the
obligation of the Corporation to pay the Executive's salary hereunder.
(b) Bonuses. During the Term, the Executive shall be eligible to
receive an annual bonus (the "Annual Bonus"). For each year during the
Term, the Executive shall be eligible to receive such Annual Bonus, and
other awards (the "Long-Term Bonus") as may be provided pursuant to the
terms of the incentive plans of the Corporation applicable to other Vice
Chairmen of the Corporation as such plans may from time to time be
revised. Notwithstanding the foregoing, the Corporation shall pay the
Executive an Annual Bonus with respect to 1995 (whether or not the
Effective time occurs during 1995) in an amount equal to the excess of the
highest Annual Bonus earned by any executive officer of the Corporation
(other than the Chairman or Chief Executive Officer of the Corporation)
during 1995 over the annual bonus earned by the Executive during 1995 with
Shawmut. The Annual Bonus and the Long-Term Bonus shall be paid in
accordance with the terms of such plans.
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(c) Expenses. The Corporation shall promptly reimburse the Executive
for all reasonable business expenses incurred during the Term by the
Executive in performing services hereunder, including all expenses of
travel and living expenses while away from home on business or at the
request of and in the service of the Corporation, provided that such
expenses are incurred and accounted for in accordance with the policies
and procedures established by the Corporation.
(d) Other Benefits. The Executive shall be entitled to participate
in all of the employee benefit plans and arrangements made available by
the Corporation to its similarly situated executive officers, subject to
and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements and subject to offset for
benefits earned under Shawmut employee benefit plans, where applicable.
Nothing paid to the Executive under any plan or arrangement presently in
effect or made available in the future shall be deemed to be in lieu of
the salary payable to the Executive pursuant to subsection (a) of this
Section 5. The Corporation understands and agrees that the benefit payable
to the Executive pursuant to Shawmut's Executive Supplemental Retirement
Plan shall be determined by giving effect to Schedule A hereto.
(e) Vacation. The Executive shall be entitled to (i) the number of
vacation days in each calendar year, (ii) compensation in respect of
earned but unused vacation days, and (iii) all paid holidays, in each case
as the same may be provided by the Corporation to its similarly situated
executive officers.
(f) Services Furnished. During the Term, the Corporation shall
furnish the Executive with office space, stenographic assistance and such
other facilities and services as shall be suitable to the Executive's
position and adequate for the performance of his duties as set forth in
Section 3.
6. Offices. Subject to Sections 3 and 4, the Executive agrees to serve
without additional compensation, if elected or appointed thereto, as a director
of the Corporation or any of its subsidiaries and as a member of any committees
of the board of directors of any such corporations, and in one or more executive
positions of any of the Corporation's subsidiaries, provided that the Executive
is indemnified for serving in any and all such capacities on a basis no less
favorable than is currently or may be provided to any other director of the
Corporation, any of its subsidiaries, or in connection with any such executive
position, as the case may be.
7. Termination. The Executive's employment hereunder may be terminated
without any breach of this Agreement only under the circumstances set forth in
subsections (a), (b), (c) and (d) of this Section 7. In the event of a
termination pursuant to subsection (a), (b) or (c) of this Section 7, the Term
shall end on the Executive's Date of Termination (as defined in Section 8(b)).
(a) Death. The Executive's employment hereunder shall
terminate upon his death.
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(b) Disability. If, as a result of the Executive's incapacity due to
physical or mental illness, the Executive shall have been absent from the
full-time performance of his duties hereunder for the entire period of six
consecutive months, and within thirty (30) days after written Notice of
Termination (as defined in Section 8) is given shall not have returned to
the performance of his duties hereunder on a full-time basis, the
Corporation may terminate the Executive's employment hereunder for
"Disability."
(c) Cause. The Corporation may terminate the Executive's employment
hereunder for Cause. For purposes of this Agreement, the Corporation shall
have "Cause" to terminate the Executive's employment hereunder upon the
occurrence of any of the following events:
(i) the conviction of the Executive for the
commission of a felony involving dishonesty with respect to
the Corporation; or
(ii) the willful misconduct by the Executive (including,
but not limited to, breach by the Executive of the provisions of
Section 10) that is demonstrably and materially injurious to the
Corporation or its subsidiaries, whether monetarily or otherwise.
Cause shall not exist unless and until the Corporation has delivered to
the Executive a copy of a resolution duly adopted by the affirmative vote
of not less than two-thirds (2/3) of the entire membership of the Board at
a meeting of the Board called and held for such purpose (after reasonable
notice to the Executive and an opportunity for the Executive, together
with his counsel, to be heard before the Board), finding that in the good
faith opinion of the Board, the Executive was guilty of the conduct set
forth in this Section 7(c) and specifying the particulars thereof in
detail. For purposes of this Section 7(c), no act or failure to act on the
Executive's part shall be considered "willful" unless done or failed to be
done by the Executive in bad faith and without reasonable belief that the
Executive's action or omission was in the best interest of the
Corporation.
(d) Good Reason. The Executive may terminate his employment during
the Term hereunder for "Good Reason." The Executive shall be deemed to
have terminated his employment for Good Reason if his employment
terminates for any reason other than death, Disability or by the
Corporation for Cause.
8. Termination Procedure.
(a) Notice of Termination. Any termination of the Executive's
employment by the Corporation or by the Executive (other than termination
pursuant to Section 7(a) hereof) shall be communicated by written Notice
of Termination to the other party hereto in accordance with Section 13.
For purposes of this Agreement, a "Notice of Termination" shall mean a
notice that shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts
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and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated.
(b) Date of Termination. "Date of Termination" shall mean (i) if the
Executive's employment is terminated pursuant to Section 7(a) above, (ii)
if the Executive's employment is terminated pursuant to Section 7(b)
above, thirty (30) days after Notice of Termination (provided that the
Executive shall not have returned to the performance of his duties on a
full-time basis during such thirty (30) day period), (iii) if the
Executive's employment is terminated pursuant to Section 7(c) above, the
date specified in the Notice of Termination, and (iv) if the Executive's
employment is terminated pursuant to Section 7(d) above, the date on which
a Notice of Termination is given or any later date (within 30 days) set
forth in such Notice of Termination; provided, however, that, if within
thirty (30) days after any Notice of Termination is given the party
receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, the Date of Termination shall
be the date on which the dispute is finally determined, either by mutual
written agreement of the parties, by a binding and final arbitration award
or by a final judgment, order or decree of a court of competent
jurisdiction (the time for appeal therefrom having expired and no appeal
having been perfected).
(c) Compensation During Dispute. If a purported termination occurs
during the Term, and such termination is disputed in accordance with
subsection (b) of this Section 8, the Corporation shall continue to pay
the Executive the full compensation in effect when the notice giving rise
to the dispute was given (including, but not limited to, salary) and
continue the Executive as a participant in all compensation, benefit and
insurance plans in which Executive was participating when the notice
giving rise to the dispute was given, until the Date of Termination,
determined in accordance with subsection (b) of this Section 8. Amounts
paid under this Section 8(c) are in addition to all other amounts due
under this Agreement and shall not be offset against or reduce any other
amounts due under this Agreement.
9. Compensation upon Termination or During Disability.
(a) Disability; Death. During any period that the Executive fails to
perform his duties hereunder as a result of incapacity due to physical or
mental illness ("Disability Period"), the Executive shall continue to
receive his full Base Salary at the rate in effect at the beginning of
such period until his employment is terminated pursuant to Section 7 (b),
provided that payments so made to the Executive during the disability
period shall be reduced by the sum of the amounts, if any, payable to the
Executive with respect to such period under the disability benefit plans
of the Corporation then in effect or under the Social Security disability
insurance program, which amounts were not previously applied to reduce any
such payment. Subsequent to the termination of the Executive's employment
pursuant to Section 7(b), or in the event the Executive's employment is
5
terminated by reason of his death, the Corporation shall pay to the
Executive, his legal representative or his successors (as described in
Section 12(b)) his full salary through the Date of Termination at the rate
in effect at the time Notice of Termination is given. The Corporation
shall have no further obligations to the Executive under this Agreement,
except as set forth in this subsection (a) of Section 9, and the
Executive's benefits shall be determined under the Corporation's
retirement, insurance and other compensation programs then in effect in
accordance with the terms of such programs.
(b) By the Corporation without Cause or by the Executive.
If during the Term the Executive's employment is terminated by
the Corporation other than for Cause or Disability or by the
Executive, then --
(i) the Corporation shall pay the Executive his full
salary through the Date of Termination at the rate in effect at the
time Notice of Termination is given;
(ii) in lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination, the
Corporation shall pay as liquidated damages to the Executive an
aggregate amount equal to the product of (A) the sum of (1) the
Executive's annual salary rate in effect as of the Date of
Termination (or, if greater, as in effect immediately prior to the
Effective Time), (2) the highest Annual Bonus awarded to and earned
by the Executive pursuant to either Section 5(b) of this Agreement
or Section 5(b) of the Prior Agreement in respect of any fiscal year
during the three fiscal years completed prior to the Date of
Termination (or, if greater, any fiscal year during the three fiscal
years completed prior to the Effective Time) and (3) the highest
Long-Term Bonus awarded to and earned by the Executive pursuant to
either Section 5(b) of this Agreement or Section 5(b) of the Prior
Agreement in respect of any performance cycle ending during the
three fiscal years completed prior to the Date of Termination or, if
no performance cycle has ended during such three fiscal years, then
the highest Long-Term Bonus awarded to the Executive with respect to
a performance cycle in effect but not yet ended on the Date of
Termination, and (B) three (3), such amount to be paid in a cash
lump sum within five (5) days following the Date of Termination,
unless the Executive elects, prior to the beginning of the calendar
year in which occurs the Date of Termination, to have such amount
paid in substantially equal monthly installments during the period
commencing with the month immediately following the month in which
the Date of Termination occurs and ending with the month
corresponding to the end of the Term hereunder; and
(iii) the Corporation shall (A) continue coverage for
the Executive under the Corporation's life insurance, medical,
health, disability and similar welfare benefit plans (or, if
continued coverage is barred under such plans, the Corporation shall
provide to the Executive substantially similar benefits) for the
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remainder of the Term, and (B) provide the benefits or additional
benefits to which the Executive would have been entitled pursuant to
Shawmut's Executive Supplemental Retirement Plan, Executive Group
Life Insurance Plan and Split-Dollar Life Insurance Plan (each as in
effect immediately prior to the Effective Date), in each case had
his employment continued at the rate of compensation specified
herein, or if higher, his compensation for calendar year 1994, in
each case for three (3) years, notwithstanding the Executive's
election, if any, to commence receiving benefits under such plan,
agreement or arrangement prior to the end of the Term. Benefits
otherwise receivable by the Executive pursuant to clause (A) of this
Section 9(b) (iv) shall be reduced to the extent comparable benefits
are actually received by the Executive from a subsequent employer
during the period during which the Corporation is required to
provide such benefits, and the Executive shall report any such
benefits actually received to the Corporation. In addition to the
foregoing, the Corporation shall provide to the Executive Retiree
medical benefits no less favorable than those to which he would have
been entitled under the Shawmut retiree medical plan immediately
prior to the Effective Date.
(c) By Corporation for Cause. If the Executive's employment shall be
terminated by the Corporation for Cause, then the Corporation shall pay
the Executive his Base Salary (at the rate in effect at the time Notice of
Termination is given) through the Date of Termination, and the Corporation
shall have no additional obligations to the Executive under this Agreement
except as set forth in subsection (d) of this Section 9.
(d) Compensation Plans. Following any termination of the Executive's
employment, the Corporation shall pay the Executive all unpaid amounts, if
any, to which the Executive is entitled as of the Date of Termination
under any compensation plan or program of the Corporation, including, but
not limited to, any deferred compensation plan or program at the time such
payments are due.
(e) Mitigation. Except as is specifically provided in subsection (b)
(iv) of this Section 9, the Executive shall not be required to mitigate
the amount of any payment provided herein by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided
hereunder 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
Corporation, or otherwise.
10. Confidential Information; Nonsolicitation Requirement.
(a) Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Corporation all trade secrets,
confidential information, and knowledge or data relating to the
Corporation and its businesses, which shall have been obtained by the
Executive during the Executive's employment by the Corporation and which
7
shall not have been or now or hereafter have become public knowledge
(other than by acts by the Executive or representatives of the Executive
in violation of this Agreement). The Executive shall not, without the
prior written consent of the Corporation or as may otherwise be required
by law or legal process, communicate or divulge any such trade secrets,
information, knowledge or data to anyone other than the Corporation and
those designated by the Corporation. Any termination of the Executive's
employment or of this Agreement shall have no effect on the continuing
operation of this Section 10(a).
(b) Nonsolicitation Requirement. During any period that the
Executive is performing services hereunder or the Executive is entitled to
payment pursuant to Section 9, and for a period of one (1) year following
a termination of the Executive's employment by the Corporation for Cause,
the Executive shall not induce any employee of the Corporation or its
subsidiaries to terminate employment with the Corporation or its
subsidiaries in order to obtain employment with any person, firm or
corporation affiliated with the Executive.
11. Indemnification; Legal Fees. The Corporation shall indemnify the
Executive to the full extent permitted by law and the by-laws of the Corporation
for all expenses, costs, liabilities and legal fees that the Executive may incur
in the discharge of his duties hereunder, including any legal fees and expenses
incurred by the Executive in contesting or disputing any termination of the
Executive's employment or in seeking to obtain or enforce any right or benefit
provided by this Agreement (or in connection with any tax audit or proceeding to
the extent attributable to the application of section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code"), to any payment or benefit
provided hereunder) other than for any such expenses, costs, liabilities or
legal fees incurred as a result of the Executive's bad faith or gross
negligence. Such payments shall be made within five (5) days after the
Executive's request for payment accompanied with such evidence of fees and
expenses incurred as the Corporation reasonably may require. Any termination of
the Executive's employment or of this Agreement shall have no effect on the
continuing operation of this Section 11.
12. Successors; Binding Agreement.
(a) Corporation's Successors. The Corporation will require any
successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or assets of
the Corporation to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Corporation would be
required to perform it if no such succession had taken place. Failure of
the Corporation to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement
and shall entitle the Executive to compensation from the Corporation in
the same amount and on the same terms as he would be entitled to hereunder
if he terminated his employment for Good Reason, except that for purposes
of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination. As used in this
8
Agreement, "Corporation" shall mean the Corporation as herein before
defined and any successor to its business and/or assets as aforesaid which
executes and delivers the agreement provided for in this Section 12 or
which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law.
(b) The Executive's Successors. This Agreement and all rights of the
Executive hereunder 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 should die while any amounts would still be payable to him
hereunder if he had continued to live, all such amounts unless otherwise
provided herein shall be paid in accordance with the terms of this
Agreement to the Executive's devisee, legatee, or other designee or, if
there be no such designee, to the Executive's estate.
13. Notice. For the purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
Xxxxxx X. Xxxxxxxxx
Xxx Xxxxxxxx Xxxx Xxxx
Xxxx Xxxxxxxx, Xxxxxxxxxxx 00000
If to the Corporation:
Fleet Financial Group, Inc.
00 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: General Counsel
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
14. Additional Payment.
(a) If any of the payments provided for in this Agreement (the
"Contract Payments") or other portion of the Total Payments (as defined
below) will be subject to the tax (the "Excise Tax") imposed by section
4999 of the Code, the Corporation shall pay to the Executive, no later
than the fifth day following the Date of Termination, an additional amount
(the "Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Contract Payments and
such other Total Payments and any federal and state and local income tax
9
and Excise Tax upon the payment provided for by this subsection, shall be
equal to the Contract Payments and such other Total Payments.
(b) For purposes of determining whether any of the Total Payments
will be subject to the Excise Tax and the amount of such Excise Tax, (i)
any payments or benefits received or to be received by the Executive in
connection with an event described in section 280G(b) (2) (A) (i) of the
Code (hereinafter, a "change in control"), or the Executive's termination
of employment pursuant to the terms of any plan, arrangement or agreement
(other than this Agreement) with the Corporation, its successors, any
person whose actions result in a change in control or any person
affiliated with the Corporation or such person (together with the Contract
Payments, the "Total Payments"), shall be treated as "parachute payments"
within the meaning of section 280G(b) (2) of the Code except to the extent
that, in the opinion of tax counsel selected by the Corporation's
independent auditors and acceptable to the Executive, the Total Payments
do not constitute parachute payments, (b) all "excess parachute payments"
within the meaning of section 280G(b) (1) shall be treated as subject to
the Excise Tax except to the extent that, in the opinion of such tax
counsel, such excess parachute payments represent reasonable compensation
for services actually rendered within the meaning of section 280G(b) (4)
(B) of the Code in excess of the base amount within the meaning of section
280G(b) (3) of the Code, or are otherwise not subject to the Excise Tax,
and (c) the value of any noncash benefits or any deferred payment or
benefit shall be determined by the Corporation's independent auditors in
accordance with the principles of sections 280G(d) (3) and (4) of the
Code. For purposes of determining the amount of the Gross-Up Payment, 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
Gross-Up Payment is to be made 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 maximum
reduction in federal income taxes which could be obtained from deduction
of such state and local taxes.
(c) In the event that the Excise Tax 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 Corporation 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 the portion of the Gross-Up Payment
attributable to the Excise Tax and federal and state and local income tax
imposed on the Gross-Up Payment being repaid by the Executive if such
repayment results in a reduction in Excise Tax and/or a federal and state
and 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 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
Corporation shall make an additional gross-up payment in respect of such
10
excess (plus any interest payable with respect to such excess) at the time
that the amount of such excess is finally determined.
15. Amendment or Modification: Waiver. No provisions of this Agreement may
be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing signed by the Executive and such officer of the
Corporation as may be specifically designated by the Board or its compensation
committee. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. 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 set forth expressly in this Agreement.
16. Funding. This Agreement shall constitute a Plan for purposes of
Section 1.01 of the so-called rabbi trust entered into by Shawmut prior to the
Effective Date and assumed by the Corporation pursuant to the Merger Agreement;
provided, however, that nothing contained herein shall require the Corporation
to make additional contributions to such trust.
17. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration, conducted
before a panel of three arbitrators in Boston, Massachusetts in accordance with
the rules of the American Arbitration Association then in effect or of such
similar organization as the parties hereto may mutually agree. Judgment may be
entered on the arbitrator's award in any court having jurisdiction. The expense
of such arbitration shall be borne by the Corporation.
18. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Rhode Island without regard to its conflicts of law principles.
19. Miscellaneous. All references to sections of any statute shall be
deemed also to refer to any successor provisions to such sections. The
obligations of the Corporation under Section 9 shall survive the expiration of
the term of this Agreement. The compensation and benefits payable to the
Executive under this Agreement shall be in lieu of any other severance benefits
to which the Executive may otherwise be entitled upon his termination of
employment under any severance plan, program, policy or arrangement of the
Corporation (other than the Severance Agreement, as defined in Section 22).
20. Severability. The invalidity or unenforceability of any provision
or provisions 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 throughout the Term.
21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
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22. Entire Agreement. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and, as of
the Effective Date, supersedes all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto; and, as
of the Effective Date, the Prior Agreement and any prior agreement of the
parties hereto in respect of the subject matter contained herein are hereby
terminated and canceled; provided, however, that this Agreement shall not
supersede or in any way affect the validity of any other agreement setting forth
the rights of the Executive following a change in control of the Corporation
(the "Severance Agreement").
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
FLEET FINANCIAL GROUP, INC.
By:________________________________
Name:
Title:
___________________________________
Xxxxxx X. Xxxxxxxxx
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Schedule A
II. Resolution With Respect to Messrs. Xxxxxx and Xxxxxxxxx
-------------------------------------------------------
Pursuant to the provisions of the Hartford National Corporation Executive
Supplemental Retirement Plan (the "Plan"), the Committee hereby grants to
Messrs. Xxxx X. Xxxxxx and Xxxxxx X. Xxxxxxxxx (i) an additional five
years of service to be added to their respective Years of Service as
defined in the Plan; and (ii) the option to have the payment of Retirement
Benefits under the Plan commence at any time after the Participant shall
have attained age 50.
No action is required to ensure that the 3% per year reduction in benefits
applicable to commencement of payments before age 62 applies to payments
commencing as early as age 50. As written, the Plan would require a 36%
reduction in benefits for one whose payments commence at age 50.
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