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EXHIBIT 10(e)
EMPLOYMENT AGREEMENT
This AGREEMENT is made and entered into the 30th day of June
1995, by and between Peoples Heritage Financial Group, Inc. (the "Company"), and
Xxxx X. Xxxxxxx (the "Executive"), and shall become effective as provided in
Section 1, below.
WITNESSETH
WHEREAS, the Executive has served the Company as Senior Executive Vice
President and Chief Operating Officer; and
WHEREAS, the Executive desires to alter his employment status so as to
reduce his annual time commitment to the Company while remaining an active
employee;
WHEREAS, the Company wishes to continue the Executive's employment on
that basis; and
WHEREAS, in connection therewith, the Company and the Executive (the
"Parties") desire to amend the Severance Agreement between the Company and the
Executive dated January 1, 1995 (the "Severance Agreement") pursuant to Section
14 thereof:
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the Parties
agree as follows:
1. Term of Employment.
This Agreement shall become fully effective on February 1,
1996 (the "Effective Date"), if the Executive is then in the employ of the
Company. Once this Agreement becomes effective, the Executive's employment
hereunder shall run from the Effective Date until January 31, 2001 (the
"Termination Date"), subject to earlier termination as provided in Section 7
below (the "Employment Term").
2. Position, Duties, Responsibilities.
During the Employment Term, the Executive shall serve as
Special Assistant to the President with such duties and responsibilities as may
be assigned from time to time by the President and Chief Executive Officer of
the Company, to whom the Executive shall report. The Executive shall be employed
for a period of 1,000 hours during any calendar year. The exact schedule for the
performance of the Executive's services shall be established in good faith by
the Chief Executive Officer, it being understood that the Executive shall reside
out of state during approximately three months of the year and that during such
period he shall be subject to limited reasonable travel demands.
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3. Salary.
During the Employment Term, the Executive shall be paid salary
("Salary") at an annual rate of Ninety Thousand Dollars ($90,000), payable in
accordance with the Company's standard payroll practices. The Executive's salary
shall be reviewed annually for increase in the sole judgment of the Chief
Executive Officer, provided that in all events the Executive's salary shall be
increased by a percentage not less than the average percentage increase in
salary applicable to Executive Vice Presidents of the Company.
4. Annual Bonus.
The Executive shall have an annual target bonus opportunity
stated as a percentage of his salary for the bonus year (the "Annual Bonus").
The percentage shall be the same as the percentage of "mid-point" salaries set
as the target bonus opportunity applicable to Executive Vice Presidents for that
year. Actual bonus shall be determined as per the Company's Short Term Incentive
Compensation Plan.
5. Stock Options.
The Executive shall be granted stock options at such times and
pursuant to such terms as are applicable to Executive Vice Presidents of the
Company generally. The number of shares subject to any such option ("Option
Shares"), shall be equal to one half the average number of Option Shares
applicable to simultaneous grants to such Executive Vice Presidents.
6. Other Benefits.
The Company shall provide the Executive (i) continued
crediting of "employment" under the Executive's Supplemental Retirement
Agreement (the "Supplemental Pension), and (ii) such benefits and perquisites as
are provided under the Company's Plans applicable to part-time employees (the
"Plans"). The Executive shall be reimbursed for all reasonably incurred business
expenses properly accounted for.
7. Termination of Employment.
7.1 Disability or Death.
(a) Subject to Section 7.4 below, if the Executive's
employment is terminated due to the Executive's Disability, as defined in
Subsection (b) below, or the death of the Executive, then the Executive, his
guardian or his estate, as applicable, shall be entitled to:
(i) Salary and benefits earned to the date of
termination of employment;
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(ii) any unpaid Annual Bonus earned for the
performance year prior to the performance year in
which the Executive's employment terminates; and
(iii) other benefits as are provided under the Plans
of the Company as then in effect.
(b) For purposes of this Agreement, "Disability" shall mean
the inability of the Executive to perform all the material and substantial
duties called for in this Agreement as a result of sickness or injury which
commenced while the Executive was employed by the Company. Disability shall be
determined by a physician selected by the Company.
(c) The amounts described in clauses (i) and (ii) of
subsection 7.1 (a) above shall each be paid as soon as practicable once the
amount thereof can be determined.
7.2 Termination by the Company without Cause.
(a) Subject to Section 7.4 below, the Company may terminate
the Executive's employment at any time without Cause (as hereinafter defined),
in which case the Executive shall be entitled to:
(i) Salary and benefits earned to the date of
termination of employment;
(ii) continued Salary through the earlier of (A) the
end of the twelfth full calendar month after the date
of such termination of employment, or (B) January 31,
2001 (the "Continuation Period");
(iii) continued crediting of employment under the
Supplemental Pension for the Continuation Period;
(iv) coverage for the Continuation Period under the
Plans, to the extent practicable under the provisions
of the Plans, applicable insurance policies and law,
at the same cost, if any, to the Executive as was
applicable during the Employment Term (it being
understood that the Executive may be entitled under
Federal law to continue certain coverages at his own
cost after the end of the Continuation Period);
(v) any unpaid Annual Bonus earned for the
performance year prior to the performance year in
which his employment terminates;
(vi) Pro-rata Annual Bonus, determined as provided in
subsection (b) below, for the performance year in
which the Executive's employment terminates.
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(b) Pro-rata Annual Bonus shall mean the Annual Bonus as
otherwise determined for the applicable year, multiplied by a fraction, the
numerator of which is the number of full weeks of employment worked by the
Executive in the applicable year and the denominator of which is 52.
(c) The amounts described in clauses (i), (iii) and (iv) of
subsection 7.2 (a) above shall each be paid as soon as practicable once the
amount thereof can be determined. The amounts described in clause (ii) above
shall be paid pursuant to standard payroll practices for Executive Vice
Presidents as in effect from time to time.
7.3 Voluntary Termination or Termination by the Company
for Cause.
(a) Subject to Section 7.4 below, if the Executive terminates
employment voluntarily, or the Company terminates the Executive's employment for
Cause, as defined in Subsection (b) below, the Executive shall be entitled only
to:
(i) Salary and benefits earned to the date of
termination of employment; and
(ii) any unpaid Annual Bonus earned for the
performance year prior to the performance year in
which his employment terminates.
(b) Cause shall mean:
(i) the Executive's conviction of, or plea of nolo
contendere to a felony;
(ii) the Executive's willful and repeated neglect of
duties which continues after written notice; or
(iii) the Executive's willful or gross misconduct in
the performance of duties.
(c) The amounts described in clauses (i) and (ii) of (a)
above, shall each be paid as soon as practicable once the amount thereof can be
determined.
7.4 Severance Agreement.
(a) On the Effective Date, the Severance Agreement shall,
without further action by the Parties, be amended and restated as set forth in
Attachment A.
(b) Notwithstanding any other provision of this Agreement, if
the Executive's employment with the Company is terminated under circumstances
entitling him to compensation or benefits under the restated Severance
Agreement, then all rights and
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obligations of either party under this Agreement shall terminate and the
Executive's rights in respect of such termination shall be determined under the
restated Severance Agreement.
8. Confidential Information.
(a) The Executive by reason of his employment with the Company
may acquire Confidential Information (as hereinafter defined), concerning the
operation of the Company or its subsidiaries (collectively, "the Group"), the
use or disclosure of which would cause the company substantial loss and damages
which could not be readily calculated and for which no remedy at law would be
adequate. Accordingly, the Executive agrees that he will not (directly or
indirectly) at any time, whether during or after the Employment Term, (i)
knowingly use for an improper personal benefit any Confidential Information that
he may learn or has learned by reason of his employment with the Company or (ii)
disclose any such Confidential Information to any person except (A) in the
performance of his obligations to the Group hereunder, (B) as required by
applicable law, (C) in connection with the enforcement of his rights under this
Employment Agreement or (D) with the prior consent of the Board. As used herein,
"Confidential Information" includes information with respect to the Group's
confidential reports, financial information, business plans, prospects or
opportunities; provided, however, that such term shall not include any
information that (x) is or becomes generally known or available other than as a
result of a disclosure by the Executive or (y) is or becomes known or available
to the Executive on a nonconfidential basis from a source (other than the Group)
which, to the Executive's knowledge, is not prohibited from disclosing such
information to the Executive by a legal, contractual, fiduciary or other
obligation to the Group.
(b) The Executive confirms that all Confidential Information
is the exclusive property of the Group. All business records, papers and
documents kept or made by the Executive relating to the business of the Group
shall be and remain the property of the Group during the Employment Term and all
times thereafter. Upon the termination of his employment with the Company or
upon the request of the Group at any time, the Executive shall promptly deliver
to the Group, and shall retain no copies of, any written materials, records and
documents made by the Executive or coming into his possession concerning the
business or affairs of the Group other than personal notes or correspondence of
the Executive not containing Confidential Information.
9. Non-Competition.
(a) During the Employment Term, and, if the Executive's
employment is terminated voluntarily by the Executive as described in Section
7.3 above, for a period of one year thereafter (the "Restricted Period"), the
Executive shall not, unless he receives the prior written consent of the Board,
own any interest in, manage, operate, join, control, or participate in or be
connected with, as an officer, employee, partner, stockholder, consultant or
otherwise, any person engaged in the business of banking or acting as a trust
company, or any person who otherwise competes with any member of the Group, in
any
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state in which any member of the Group maintains or maintained an office during
the period of the Executive's employment. Nothing herein shall prohibit the
Executive from acquiring or holding any issue of stock or securities of any
person that has any securities registered under Section 12 of the Securities
Exchange Act of 1934, as amended, listed on a national securities exchange or
quoted on the automated quotation system of the National Association of
Securities Dealers, Inc. so long as (i) the Executive is not deemed to be an
"affiliate" of such person as such term is used in paragraphs (c) and (d) of
Rule 145 under the Securities Act of 1933, as amended, and (ii) the Executive,
members of his immediate family or persons under his control do not own or hold
more than 5% of any voting securities of any such person.
(b) The Executive has carefully read and considered the
provisions of this Section 9 and, having done so, agrees that the restrictions
set forth in this Section 9 (including the Restricted Period, scope of activity
to be restrained and the geographical scope) are fair and reasonable and are
reasonably required for the protection of the interest of the Group, its
officers, directors, employees, creditors and shareholders. The Executive
understands that the restrictions contained in this Section 9 may limit his
ability to engage in a business similar to the Group's business, but
acknowledges that he will receive sufficient remuneration and other benefits
from the Company hereunder to justify such restrictions.
(c) During the Restricted Period, the Executive shall not,
whether for his own account or for the account of any other person (excluding
the Group), intentionally (i) solicit, endeavor to entice or induce any employee
of the Group to terminate his employment with any member of the Group or accept
employment with anyone else or (ii) interfere in a similar manner with the
business of the Group.
(d) In the event that any provision of this Section 9 relating
to the Restricted Period and/or the areas of restriction shall be declared by a
court of competent jurisdiction to exceed the maximum time period or areas of
restriction such court deems reasonable and enforceable, the Restricted Period
and/or areas of restriction deemed reasonable and enforceable by the court shall
become and thereafter be the maximum time period and/or areas of restriction.
10. Breach of Section 8 or Section 9.
The Executive acknowledges that a breach of any of the
covenants contained in Section 8 and Section 9 hereof may result in material,
irreparable injury to the Company for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injuries precisely and
that, in the event of such a breach, all obligations of the Company to the
Executive, including its obligations under this Agreement, shall cease, and the
Company shall be entitled to obtain a temporary restraining order and/or a
preliminary or permanent injunction restraining the Executive from engaging in
activities prohibited by Section 8 or Section 9 hereof or such other relief as
may be required to
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enforce any of the covenants contained in Section 8 or Section 9 hereof.
11. Withholding.
Anything to the contrary notwithstanding, all payments
required to be made by the Company hereunder to the Executive, his spouse, his
estate or beneficiaries, shall be subject to withholding of such amounts
relating to taxes as the Company may reasonably determine it should withhold
pursuant to any applicable law or regulation. In lieu of withholding such
amounts in whole or in part, the Company may, in its sole discretion, accept
other provisions for payment of taxes as required by law, provided it is
satisfied that all requirements of law affecting its responsibilities to
withhold such taxes have been satisfied.
12. Assignability; Binding Nature.
(a) If the Company sells, assigns, or transfers all or
substantially all of its business and assets to any Person (as defined under
Section 3(a)(9) of the Securities Exchange Act of 1934, as amended), excluding
affiliates of the Company, or if the Company merges into or consolidates or
otherwise combines with any Person which is a continuing or successor entity,
then the Company shall assign all of its rights, title and interest in this
Agreement as of the date of such event to the Person which is either the
acquiring or successor Company, and such Person shall assume in writing and
perform from and after the date of such written assignment all of the terms,
conditions and provisions imposed by this Agreement upon the Company. Failure of
the Company to obtain such written assignment shall be a breach of this
Agreement. In case of such assignment by the Company and of written assumption
and agreement by such Person, all further rights as well as all other
obligations of the Company under this Agreement thenceforth shall cease and
terminate and thereafter the expression "the Company" wherever used herein shall
be deemed to mean such Person or Persons.
(b) This Agreement and all rights of the Executive shall inure
to the benefit of and be enforceable by the Executive's personal or legal
representatives, estates, executors, administrators, heirs and beneficiaries.
All amounts payable to the Executive hereunder shall be paid, in the event of
the Executive's death, to the Executive's estate, heirs and representatives.
This Agreement shall inure to the benefit of, be binding upon and be enforceable
by, any successor, surviving or resulting Company or other entity to which all
or substantially all of the Company's business and assets shall be transferred.
This Agreement shall not be terminated by the voluntary or involuntary
dissolution of the Company.
13. Entire Agreement.
This Agreement, together with the Severance Agreement,
contains the entire agreement between the Parties concerning the subject matter
hereof and supersedes all prior
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agreements, understandings, discussions, negotiations, and undertakings, whether
written or oral, between the Parties with respect thereto.
14. Amendments and Waivers.
This Agreement may not be modified or amended except by a
writing signed by both Parties. A Party may waive compliance by the other Party
with any term or provision of this Agreement, or any part thereof, provided that
the term or provision, or part thereof, is for the benefit of the waiving Party.
Any waiver will be limited to the facts or circumstances giving rise to the
noncompliance and will not be deemed either a general waiver or modification
with respect to the term or provision, or part thereof, being waived, or as to
any other term or provision of this Agreement, nor will it be deemed a waiver of
compliance with respect to any other facts or circumstances then or thereafter
occurring.
15. Notice.
Any notice given hereunder shall be in writing and shall be
deemed given when delivered personally or by courier, or five days after being
mailed, certified or registered mail, duly addressed to the Party concerned at
the address indicated below or at such other address as such Party may
subsequently provide, in accordance with the notice and delivery provisions of
this Section 15:
To the Company: Peoples Heritage Financial Group, Inc.
Xxx Xxxxxxxx Xxxxxx
XX Xxx 0000
Xxxxxxxx, XX 00000-0000
ATTN.: Clerk
With a copy to: Xxxxxxx X. Xxxxxxxxx
Moon, Moss, XxXxxx & Xxxxxxxxx, P.A.
00 Xxxx Xxxxxx, XX Xxx 0000
Xxxxxxxx, XX 00000-0000
To the Executive: Xxxx X. Xxxxxxx
000 Xxxx Xxxxx Xxxxxx
Xxx Xxxxxxx Xxxxx, XX 00000
16. Severability.
In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, the remaining
provisions or portions of this Agreement will be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.
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17. Survivorship.
The respective rights and obligations of the Parties hereunder
shall survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
18. References.
In the event of the Executive's death or a judicial
determination of his incompetence, reference in this Agreement to the Executive
shall be deemed, where appropriate, to refer to his legal representative or,
where appropriate, to his beneficiary or beneficiaries.
19. Governing Law.
This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Maine without reference
to the principles of conflicts of law.
20. Headings.
The headings of paragraphs contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement on the date first written above.
PEOPLES HERITAGE FINANCIAL
GROUP, INC.
By: /s/ Xxxxxxx X. Xxxx
-------------------------------
Chairman, President and Chief
Executive Officer
Attest: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Secretary
/s/ Xxxx X. Xxxxxxx
----------------------------------------
Executive
Address: 000 X. Xxxxx Xxxxxx
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Xxx Xxxxxxx Xxxxx, Xxxxx 00000
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ATTACHMENT A
XXXX X. XXXXXXX SEVERANCE AGREEMENT
This AGREEMENT, made and entered into by and among PEOPLES HERITAGE
FINANCIAL GROUP, INC. (the "Company") and XXXX X. XXXXXXX (the "Executive");
W I T N E S S E T H:
WHEREAS, the Executive is employed by the Company in a key executive
capacity and possesses intimate knowledge of the business and affairs of the
Company; and
WHEREAS, the Company desires to ensure, insofar as possible, that it
will continue to have the benefit of the Executive's services and to protect its
confidential information and goodwill; and
WHEREAS, the Company recognizes that circumstances may arise in which a
change in the control of the Company occurs, thereby causing uncertainty of
employment without regard to the Executive's competence or past contributions;
and
WHEREAS, the Company and the Executive wish to provide reasonable
security to the Executive against changes in the Executive's relationship with
the Company in the event of such change in control;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
1. Definitions.
(a) Accrued Benefit means:
(i) all salary earned or accrued through the
date the Executive's employment is terminated;
(ii) reimbursement for any and all monies advanced in
connection with the Executive's employment for reasonable and necessary expenses
incurred by the Executive through the date the Executive's employment is
terminated;
(iii) any and all other compensation previously
earned and deferred at the election of the Executive or pursuant to any deferred
compensation plans then in effect together with any interest or desired earnings
thereon;
(iv) annual bonus, if any, accrued for a Year prior
to the Year in which employment terminates, but not yet paid to the Executive,
under any bonus or incentive compensation plan or plans in which the Executive
is a participant;
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(v) a pro rata portion of the maximum bonus payable
to the Executive for the Year in which employment terminates under any bonus or
incentive compensation plan or plans in which the Executive is a participant,
determined as if the Executive had remained in employment for the full Year and
prorated based upon weeks, including partial weeks, of employment during that
Year;
(vi) all other payments and benefits to which the
Executive may be entitled under the terms of any applicable compensation
arrangement or benefit plan or program of the Company.
(b) Act means the Securities Exchange Act of 1934, as
amended.
(c) Affiliate of any specified persons means any other person
that, directly or indirectly, through one or more intermediaries, controls, or
is controlled by, or is under direct or indirect common control with such
specified person. For the purposes of this definition, "control" means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a person, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
(d) Annual Compensation means the sum of:
(i) the Executive's annual salary at the rate in
effect on the date of a termination of employment as described in Section 3 or
in Section 7(d) (or, in the event of a termination for Good Reason under Section
1(k)(i)(A) below, the annual salary as in effect immediately before the actions
giving rise to Good Reason); plus
(ii) the greatest of the bonuses either paid or
accrued in either the Year of the Change in Control or the immediately preceding
Year (except that, only one half of any bonus accrued prior to 1996 shall be
taken into account).
(e) Base Amount means an amount equal to the Executive's
Annualized Includable Compensation for the Base Period as defined in Section
280G(d)(1) and (2) of the Code (as hereinafter defined).
(f) Cause means (i) the executive's conviction of, or plea of
nolo contendere to, a felony; or (ii) willful and intentional misconduct,
willful neglect, or gross negligence, in the performance of the Executive's
duties, which has caused a demonstrable and serious injury to the Company,
monetary or otherwise.
The Executive shall be given written notice that the
Company intends to terminate his employment for Cause. Such written notice shall
specify the particular acts, or failures to act, on the basis of which the
decision to so terminate employment was made.
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In the case of a termination for Cause as described
in Clause (ii), above, the Executive shall be given the opportunity within 30
days of the receipt of such notice to meet with the Board to defend such acts,
or failures to act, prior to termination. The Company may suspend the
Executive's title and authority pending such meeting, and such suspension shall
not constitute "Good Reason," as defined in subsection (k) below.
(g) Change in Control of the Company shall mean a Change in
Control of a nature that would be required to be reported in response to Item
5(f) of Schedule 14A of Regulation 14A promulgated under the Act or any
successor thereto, provided that without limiting the foregoing, a Change in
Control of the Company also shall be deemed to have occurred if:
(i) any "person" (as defined under Section 3(a)(9) of
the Act) or "group" of persons (as provided under Rule 13d-3 of the Act) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 or otherwise under the
Act), directly or indirectly (including as provided in Rule 13d-3(d)(1) of the
Act), of capital stock of the Company the holders of which are entitled to vote
for the election of directors ("voting stock") representing that percentage of
the Company's then outstanding voting stock (giving effect to the deemed
ownership of securities by such person or group, as provided in Rule 13d-
3(d)(1) of the Act, but not giving effect to any such deemed ownership of
securities by another person or group) equal to or greater than thirty-five
percent (35%) of all such voting stock;
(ii) individuals who constitute the Board on the date
hereof (the "Incumbent Board") cease for any reason to constitute at least a
majority thereof. Any person becoming a director subsequent to such date whose
election, or nomination for election, is, at any time, approved by a vote of at
least a majority of the directors comprising the Incumbent Board shall be
considered as though he were a member of the Incumbent Board;
(iii) The Company combines with another person or
entity, whether through a merger, asset sale, reorganization or otherwise, and
(A) any person or group of persons holds at any time after such combination,
voting stock equal to or greater than thirty-five percent (35%) determined by
reference to the voting securities of the surviving entity, or (B) the Company's
directors, as of the date immediately before such combination, constitute less
than a majority of the Board of Directors of the combined entity.
(h) Code means the Internal Revenue Code of 1986, including
any amendments thereto.
(i) Effective Date means February 1, 1996.
(j) Employment Period means a period commencing on the date of
a Change in Control of the Company and ending on the earlier
of (i) the last
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day of the twenty-fourth month following the month in which
the Change in Control occurs, or (ii) the Termination Date
under the Employment Agreement effective January 1, 1996
between the Company and the Executive (the "Employment
Agreement").
(k) Good Reason means:
(i) any breach of this Agreement by the Company,
including without limitation (A) any reduction during the employment period in
the amount of the Executive's base salary or aggregate benefits as in effect
from time to time, (B) failure to provide the Executive with the same fringe
benefits that were provided to the Executive immediately prior to a Change in
Control of the Company, or with a package of fringe benefits (including paid
vacations) that, though one or more of such benefits may vary from those in
effect immediately prior to such a Change in Control, is substantially
comparable in all material respects to such fringe benefits taken as a whole, or
(C) any other breach by the Company of its obligations contained in Section 6
below. Notwithstanding the above, the changes in the terms and conditions of the
Executive's employment occurring as of the Effective Date pursuant to the
Employment Agreement shall not constitute Good Reason, and the terms and
conditions applicable to the Executive's employment under the Employment
Agreement as of the Effective Date, shall constitute the basis for determining
whether an event constituting Good Reason shall have occurred thereafter.
(ii) without the Executive's express written consent,
the assignment to the Executive of any duties which are materially inconsistent
with the Executive's positions, duties, responsibilities and status immediately
prior to the Change in Control of the Company, a material change in the
Executive's reporting responsibilities, titles or offices as an employee and as
in effect immediately prior to the Change in Control, or a significant
reduction, in the Executive's title, duties or responsibilities, or in the level
of his support services;
(iii) the relocation of the Executive's principal
place of employment, without the Executive's written consent, to a location
outside the same metropolitan area in which the Executive was employed at the
time of such Change in Control, or the imposition of any requirement that the
Executive spend more than ninety business days per year at a location other than
such principal place of employment; or
(iv) any purported termination of the Executive's
employment for Cause, Disability or Retirement which is not effected pursuant to
a Notice of Termination satisfying the requirements of paragraph (l) below.
Upon the occurrence of any of the events described in (i),
(ii), (iii), or (iv) above, the Executive shall give the Company written notice
that such event constitutes Good Reason, and the Company shall thereafter have
thirty (30) days in which to cure. If the Company has not cured in that time,
the event shall constitute Good Reason.
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(l) Notice of Termination. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the specific
termination provision relied upon in this Agreement and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated.
(m) Person or Group means a "person" or "group," as defined in
Section 1(g)(i) hereof.
(n) Year means a calendar year unless otherwise specifically
provided.
2. Term of Agreement. This Agreement shall begin on the Effective Date
and shall continue until December 31, 2000, provided that, if a Change in
Control of the Company occurs during such term, the term shall in all events
continue through the last day of the Employment Period. This Agreement is also
subject to earlier termination as provided in Section 3 below. All rights and
obligations hereunder shall survive to the extent necessary to the intended
enforcement thereof.
3. Termination of Employment Prior to a Change in Control.
(a) The Company and the Executive shall each retain the right
to terminate the employment of the Executive at any time prior to a Change in
Control of the Company, subject to the Employment Agreement. In the event the
Executive's employment is terminated prior to a Change in Control of the
Company, this Agreement shall, except as provided in Subsection (b) below, be
terminated and of no further force and effect, and any and all rights and
obligations of the parties hereunder shall be determined solely under the
Employment Agreement.
(b) If the Executive's employment is terminated by the Company
prior to the occurrence of a Change in Control of the Company, and if it can be
shown that the Executive's termination (i) was at the direction or request of a
third party that had taken steps reasonably calculated to effect the Change in
Control of the Company thereafter, or (ii) otherwise occurred in connection
with, or in anticipation of, the Change in Control of the Company, the Executive
shall have the rights described in Section 7(d) below, as if a Change in Control
of the Company had occurred on the date immediately preceding such termination.
4. Employment Following a Change in Control. If a Change in Control of
the Company occurs when the Executive is employed by the Company, the Company
will continue thereafter to employ the Executive, and the Executive will remain
in the employ of the Company, during the Employment Period, in accordance with
the terms and provisions of this Agreement and the Employment Agreement.
5. Duties. During the Employment Period, the Executive shall serve in
such capacities and positions as may be assigned by the Company consistent with
the
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Employment Agreement, and the Executive shall devote his best efforts, attention
and skill to the business and affairs of the Company, as such business and
affairs now exist and as they may hereafter be conducted.
6. Compensation. During the Employment Period, the Executive shall be
compensated by the Company as follows:
(a) the Executive shall receive, at such intervals and in
accordance with such standard policies as in effect on the date of the Change in
Control of the Company, an annual salary not less than the Executive's annual
salary as in effect under the Employment Agreement;
(b) the Executive shall, subject to the Employment Agreement,
be included in all plans providing incentive compensation to executives,
including but not limited to bonus, deferred compensation, annual or other
incentive compensation, supplemental pension, stock ownership, stock option,
stock appreciation, stock bonus and similar or comparable plans as any such
plans are extended by the Company from time to time to senior corporate
officers, key employees and other employees of comparable status;
(c) the Executive shall be reimbursed, at such intervals and
in accordance with such standard policies as may be in effect on the date of the
Change in Control of the Company, for any and all monies advanced in connection
with the Executive's employment for reasonable and necessary expenses incurred
by the Executive on behalf of the Company, including travel expenses;
(d) the Executive shall be included, to the extent eligible
thereunder, and subject to the Employment Agreement, in any and all plans
providing but not limited to, group life insurance, hospitalization, disability,
medical, dental, pension, profit sharing and stock bonus plans, and shall be
provided any and all other benefits and perquisites made available to other
employees of comparable status and position at the expense of the Company on a
comparable basis;
(e) During the Employment Period the Executive's salary shall
be subject to adjustment as per the Employment Agreement.
7. Termination of Employment. Any termination by the Company or the
Executive of the Executive's employment during the Employment Period shall be
communicated by written Notice of Termination to the Executive if such notice is
delivered by the Company and to the Company if such notice is delivered by the
Executive. The Notice of Termination shall comply with the requirements of
Section 17 below.
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(a) Termination for Disability. If, during the Employment
Period, the Executive's employment is terminated on account of the Executive's
Disability, as defined below, this Agreement shall terminate and the Executive's
rights shall be determined under the Employment Agreement. For purposes of this
Agreement, "Disability" shall have the meaning set forth in the Employment
Agreement.
(b) Termination on the Executive's Death. If, during the
Employment Period, the Executive's employment is terminated on account of the
Executive's death, this Agreement shall terminate and the Executive's rights
shall be determined under the Employment Agreement.
(c) Voluntary Termination or Termination for Cause. If, during
the Employment Period, (i) the Executive terminates employment with the Company
other than for Good Reason, or (ii) the Executive's employment is terminated for
Cause, the Executive shall receive from the Company his Accrued Benefits.
(d) Termination by the Company Without Cause or by the
Executive for Good Reason. If, during the Employment Period, the Executive's
employment with the Company is terminated by the Company other than for Cause,
or by the Executive for Good Reason, then:
(i) the Executive shall be entitled to receive from
the Company his Accrued Benefit, except that, for this purpose, Accrued Benefit
shall not include any entitlement to severance under any Company severance
policy generally applicable to the Company's salaried employees;
(ii) the Executive shall receive from the Company, no
less than ten (10) days following termination of his employment, a lump-sum
payment equal to his Annual Compensation multiplied by the lesser of (A) 2, or
(B) a fraction, the numeration of which is the number of months remaining
through December 31, 2000 (the "Employment Agreement Term") and the denominator
of which is 12;
(iii) all rights under any equity or long-term
incentive plan shall be fully vested to the extent such rights would have become
vested had the Executive remained in employment through the Employment Agreement
Term;
(iv) rights, if any, to supplemental pension shall be
fully vested; and
(v) the Executive shall continue to be covered at the
expense of the Company by the same or equivalent hospital, medical, dental,
accident, disability and life insurance coverage as in effect for the Executive
immediately prior to termination of his employment, until the earliest of (A)
twenty-four months following termination of employment, (B) the date the
Executive has commenced new employment and has thereby become eligible for
comparable benefits, and (C) the end of the Employment Agreement
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Term.
8. Certain Supplemental Payments by the Company.
(a) In the event the Executive's employment is terminated
pursuant to Section 7(d) above, and if in connection therewith it is determined
that (A) part or all of the compensation and benefits to be paid to the
Executive constitute "parachute payments" under Section 280G of the Code, and
(B) the payment thereof will cause the Executive to incur excise tax under
Section 4999 of the Code, the Company, on or before the date for payment of such
excise tax, shall pay the Executive, in lump sum, an amount (the "Gross-Up
Amount") such that, after payment of all federal, state and local income tax and
any additional excise tax under Section 4999 of the Code in respect of the
Gross-Up Amount payment, the Executive will be fully reimbursed for the amount
of such excise tax.
(b) The determination of the Parachute Amount, the Base Amount
and the Gross-Up Amount, as well as any other calculations necessary to
implement this Section 8 shall be made by a nationally recognized accounting or
benefits consulting firm selected by the Executive and reasonably satisfactory
to the Company and which has not performed services, other than minor indirect
or incidental services, for either the Company or the Executive for three years
prior to the date the Consultant is retained for this purpose. The Consultant's
fee shall be paid by the Company.
(c) As promptly as practicable following such determination
and the elections hereunder, the Company shall pay to or distribute to or for
the benefit of the Executive such amounts as are then due to the Executive under
this Agreement and shall promptly pay to or distribute to or for the benefit of
the Executive in the future such amounts as become due to the Executive under
this Agreement.
(d) As a result of the uncertainty in the application of
Section 280G of the Code at the time of an initial determination hereunder, it
is possible that payments will not have been made by the Company which should
have been made under clause (a) of this Section 8 ("Underpayment"). In the event
that there is a final determination by the Internal Revenue Service, or a final
determination by a court of competent jurisdiction, that an Underpayment has
been made and the Executive thereafter is required to make any payment of an
excise tax, income tax, any interest or penalty, the accounting or benefits
consulting firm selected under clause (b) above shall determine the amount of
the Underpayment that has occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the Executive.
9. Further Obligations of the Executive. During and following the
Executive's employment by the Company, the Executive shall hold in confidence
and not directly or indirectly disclose or use or copy or make lists of any
confidential information or proprietary data of the Company, except to the
extent authorized in writing by the Board of Directors of the Company or
required by any court or administrative agency, other than to an employee of the
Company or a person to whom disclosure is reasonably necessary or
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appropriate in connection with the performance by the Executive of duties as an
executive of the Company. Confidential information shall not include any
information known generally to the public or any information of a type not
otherwise considered confidential by persons engaged in the same business or a
business similar to that of the Company. All records, files, documents and
materials or copies thereof, relating to the Company's business which the
Executive shall prepare, or use, or come into contact with, shall be and remain
the sole property of the Company and shall be promptly returned to the Company
upon termination of employment with the Company.
10. Expenses and Interest. If, after a Change in Control of the
Company, a good faith dispute arises with respect to the enforcement of the
Executive's rights under this Agreement, or if any legal or arbitration
proceeding shall be brought in good faith to enforce or interpret any provision
contained herein, or to recover damages for breach hereof, the Executive shall
recover from the Company any reasonable attorney's fees and necessary costs and
disbursements incurred as a result of such dispute, and prejudgment interest on
any money judgment or arbitration award obtained by the Executive calculated at
the rate of interest announced by Peoples Heritage Bank, or the successor
thereto, from time to time as its prime rate from the date that payments to him
should have been made under this Agreement.
11. Payment Obligations Absolute. The Company's obligation during and
after the Employment Period to pay the Executive the compensation and to make
the arrangements provided herein shall be absolute and unconditional and shall
not be affected by any circumstances, including, without limitation, any setoff,
counterclaim, recoupment, defense or other right which the Company may have
against him or anyone else. All amounts payable by the Company hereunder shall
be paid without notice or demand. Each and every payment made hereunder by the
Company shall be final and the Company will not seek to recover all or any part
of such payment from the Executive or from whomsoever may be entitled thereto,
for any reason whatever except as provided in Section 8(d) above.
12. Successors.
(a) If the Company sells, assigns, or transfers all or
substantially all of its business and assets to any Person, excluding Affiliates
of the Company, or if the Company merges into or consolidates or otherwise
combines with any Person which is a continuing or successor entity, then the
Company shall assign all of its rights, title and interest in this Agreement as
of the date of such event to the Person which is either the acquiring or
successor Company, and such Person shall assume in writing and perform from and
after the date of such written assignment all of the terms, conditions and
provisions imposed by this Agreement upon the Company. Failure of the Company to
obtain such written assignment shall be a breach of this Agreement. In case of
such assignment by the Company and of written assumption and agreement by such
Person, all further rights as well as all other obligations of the Company under
this Agreement thenceforth shall cease and terminate and thereafter the
expression "the Company" wherever used herein shall be
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deemed to mean such Person or Persons.
(ii) This Agreement and all rights of the Executive
shall inure to the benefit of and be enforceable by the Executive's personal or
legal representatives, estates, executors, administrators, heirs and
beneficiaries. All amounts payable to the Executive hereunder shall be paid, in
the event of the Executive's death, to the Executive's estate, heirs and
representatives. This Agreement shall inure to the benefit of, be binding upon
and be enforceable by, any successor, surviving or resulting Company or other
entity to which all or substantially all of the Company's business and assets
shall be transferred. This Agreement shall not be terminated by the voluntary or
involuntary dissolution of the Company.
13. Enforcement. The provisions of this Agreement shall be regarded as
divisible, and if any such provisions or any part hereof are declared invalid or
unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remainder of such provisions or parts hereof and the
applicability thereof shall not be affected thereby.
14. Amendment. This Agreement may not be amended or modified at any
time except by a written instrument executed by the Company and the Executive.
15. Withholding. The Company shall be entitled to withhold from amounts
to be paid to the Executive hereunder any federal, state or local withholding or
other taxes, or charge which it is from time to time required to withhold. The
Company shall be entitled to rely on an opinion of counsel if any question as to
the amount or requirement of any such withholding shall arise.
16. Governing law: Arbitration. This Agreement and the rights and
obligations hereunder shall be governed by and construed in accordance with the
laws of the State of Maine. Any dispute arising out of this Agreement shall be
determined by arbitration in the State of Maine under the rules of the American
Arbitration Association then in effect and judgment upon any award pursuant to
such arbitration may be enforced in any court having jurisdiction thereof.
17. Notice. Notices given pursuant to this Agreement shall be in
writing and shall be deemed given when received and, if mailed, shall be mailed
by United States registered or certified mail, return receipt requested,
addressee only postage prepaid, to the Company at:
Peoples Heritage Financial Group, Inc.
X.X. Xxx 0000
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Clerk
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or if to the Executive, at the address set forth below the Executive's signature
line of this Agreement, or to such other address as the party to be notified
shall have given to the other.
18. No Waiver. No waiver by any party at any time of any breach by
another party of, or compliance with, any condition or provision of this
Agreement to be performed by another party shall be deemed a waiver of similar
or dissimilar provisions or conditions at any time.
19. Headings. The headings herein contained are for reference only and
shall not affect the meaning or interpretation of any provision of this
Agreement.
20. Effectiveness. This Agreement shall become effective on the
Effective Date, but only if the Executive is then in the employ of the Company.
Once this Agreement becomes effective, it shall supersede the Severance
Agreement between the Executive and the Company dated January 1, 1995 in its
entirety.
IN WITNESS WHEREOF, the parties have executed this Agreement as an
Attachment A to the Employment Agreement.
PEOPLES HERITAGE FINANCIAL
GROUP, INC.
By: /s/ Xxxxxxx X. Xxxx
-------------------------------
Chairman, President and Chief
Executive Officer
Date: June 30, 1995
-------------------------------
Attest: /s/ Xxxxx X. Xxxxxxxx
Secretary
/s/ Xxxx X. Xxxxxxx
----------------------------------------
Executive
Date: June 30, 1995
Address: 000 X. Xxxxx Xxxxxx
Xxx Xxxxxxx Xxxxx, Xxxxx 00000
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