EXHIBIT 10
EMPLOYMENT AGREEMENT
AGREEMENT by and between Peoples Heritage Financial Group, Inc. (the
"Company") and F. Xxxxxxx Xxxxxxxx, Jr. (the "Executive") dated as of the
_______ day of _________ 199__.
The Company has determined that it is in the best interests of its
shareholders to ensure that the Company will have the continued dedication of
the Executive following the merger of SIS Bancorp, Inc. ("SIS"), a Massachusetts
corporation, with and into a wholly-owned subsidiary of the Company (the
"Merger") pursuant to the Agreement and Plan of Merger, dated as of July 20,
1998, as amended (the "Merger Agreement"), and to provide the Company after the
Merger with continuity of management. Therefore, in order to accomplish these
objectives, the Executive and the Company desire to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Effective Date. The "Effective Date" shall mean the effective
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date of the Merger.
2. Employment Period. The Company hereby agrees to employ the
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Executive, and the Executive hereby agrees to enter into the employ of the
Company subject to the terms and conditions of this Agreement, for the period
commencing on the Effective Date and ending on December 31, 2001 (the
"Employment Period").
3. Terms of Employment.
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(a) Position and Duties. (i) During the Employment Period, the
Executive shall serve as an Executive Vice President of the Company and Vice
Chairman of its Senior Management Committee, reporting directly to the Chief
Executive Officer of the Company, with appropriate authority, duties and
responsibilities, as determined from time to time by the Board of Directors of
the Company and/or the Chief Executive Officer of the Company.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote substantially all of his attention and time during normal business
hours to the business and affairs of the Company and its affiliated companies
and, to the extent necessary to discharge the responsibilities assigned to the
Executive hereunder, to use the Executive's reasonable best efforts to perform
faithfully and efficiently such responsibilities. During the Employment Period
it shall not be a violation of this Agreement for the Executive to (A) serve on
corporate, civic or charitable boards or committees, (B) deliver lectures,
fulfill speaking engagements or teach at educational institutions and (C) manage
personal investments, so long as such activities do not significantly interfere
with the performance of the Executive's responsibilities as an employee of the
Company in accordance with this Agreement. It is expressly understood and
agreed that to the extent that any such activities have been conducted by the
Executive prior to the Effective Date, the continued conduct of such activities
(or the conduct of activities similar in nature and scope thereto) subsequent to
the Effective Date shall not thereafter be deemed to interfere with the
performance of the Executive's responsibilities to the Company. As used in this
Agreement, the term "affiliated companies" shall include any company controlled
by, controlling or under common control with the Company.
(b) Compensation and Other Benefits. (i) Base Salary. During the
Employment Period, the Executive shall receive an annual base salary ("Annual
Base Salary") of no less than $418,000. Any increase in Annual Base Salary
shall not serve to limit or reduce any other obligation to the Executive under
this Agreement. Annual Base Salary shall not be reduced after any such increase
and the term Annual Base Salary as utilized in this Agreement shall refer to
Annual Base Salary as so increased.
(ii) Annual Bonus. During the Employment Period, the Executive
shall be eligible to receive an annual cash bonus ("Annual Bonus") on a basis no
less favorable than peer executives of the Company.
(iii) Other Employee Benefit Plans. During the Employment
Period, except as otherwise expressly provided herein, the Executive shall be
entitled to participate in all employee benefit, welfare, incentive, pension,
retirement, supplemental retirement, savings, stock option and stock grant plans
and all other plans, practices, policies and programs (collectively, "Employee
Benefit Plans") applicable to peer executives of the Company (which for purposes
of this Agreement shall mean executives with the same job level at the Company)
on a basis no less favorable than that provided to peer executives of the
Company. For purposes of all Employee Benefit Plans, service rendered by the
Executive to SIS shall be deemed service with the Company.
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4. Termination of Employment.
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(a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance with
Section 12(b) of this Agreement of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the Company shall
terminate effective on the 30th day after receipt of such notice by the
Executive (the "Disability Effective Date"), provided that, within the 30 days
after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the Executive's duties
with the Company on a full-time basis for 90 consecutive business days as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
reasonably acceptable to the Executive or the Executive's legal representative.
(b) Cause. The Company may terminate the Executive's employment
during the Employment Period for Cause. For purposes of this Agreement, "Cause"
shall mean:
(i) the continued failure of the Executive to perform
substantially the Executive's duties with the Company or one of its affiliates
(other than any such failure resulting from incapacity due to physical or mental
illness), after a written demand for substantial performance is delivered to the
Executive by the Board of Directors or the Chief Executive Officer of the
Company which specifically identifies the manner in which the Board of Directors
or Chief Executive Officer believes that the Executive has not substantially
performed the Executive's duties; or
(ii) the willful engaging by the Executive in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the Company;
or
(iii) conviction of a felony or a guilty or nolo contendere plea
by the Executive with respect thereto.
For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board of Directors or upon the instructions of the Chief
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Executive Officer or a senior officer of the Company or based upon the advice of
counsel for the Company shall be conclusively presumed to be done, or omitted to
be done, by the Executive in good faith and in the best interests of the
Company. The cessation of employment of the Executive for conduct described in
subparagraph (i) or (ii) above shall not be deemed to be for Cause unless and
until there shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of a majority of the entire membership of
the Board of Directors at a meeting of the Board of Directors called and held
for such purpose (after not less than 30 days' advance notice is provided to the
Executive and the Executive is given an opportunity, together with counsel
chosen by the Executive, to be heard before the Board of Directors), finding
that, in the good faith opinion of the Board, the Executive is guilty of the
conduct described in subparagraph (i) or (ii) above, and specifying the
particulars thereof in detail. The Company may suspend the Executive's
authority (with full salary and benefits continuation during such period of
suspension) after the provision of a notice of intention to terminate the
Executive's employment for conduct described in subparagraph (i) or (ii) above
and prior to the time the Executive is given an opportunity to meet with the
Board of Directors, and any such suspension shall not constitute "Good Reason"
as defined in Section 4(c) below.
(c) Good Reason. The Executive's employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean in the absence of a written consent of the Executive:
(i) the assignment to the Executive of any duties inconsistent
in any respect with the Executive's position, authority, duties or
responsibilities as an Executive Vice President of the Company and Vice Chairman
of its Senior Management Committee, or any other action (including any change in
the Executive's status, offices, titles and reporting requirements) by the
Company which, in the Executive's reasonable judgment, results in a diminution
in such position, authority, duties or responsibilities, excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in bad faith
and which is remedied by the Company within 25 days after receipt of notice
thereof given by the Executive;
(ii) any failure by the Company to comply with any of the
provisions of Section 3(b) of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and which is
remedied by the Company within 25 days after receipt of notice thereof given by
the Executive;
(iii) any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or
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(iv) any failure by the Company to comply with and satisfy Section
11(c) of this Agreement.
(d) Notice of Termination. Any termination by the Company for Cause,
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b) of
this Agreement. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than 30
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein within 30 days of such notice, as the case may
be, (ii) if the Executive's employment is terminated by the Company other than
for Cause or Disability, the Date of Termination shall be the date on which the
Company notifies the Executive of such termination and (iii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
5. Obligations of the Company upon Termination.
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(a) Good Reason; Other Than for Cause, Death or Disability. If,
during the Employment Period, the Company shall terminate the Executive's
employment other than for Cause, Death or Disability or the Executive shall
terminate employment for Good Reason:
(i) the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:
A. the sum of (1) the Executive's Annual Base Salary through the
Date of Termination to the extent not theretofore paid and (2) the
product of
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(x) the highest annual bonus paid to the Executive by the Company or
SIS for any of the three years prior to the Date of Termination (the
"Recent Annual Bonus") and (y) a fraction, the numerator of which is
the number of days in the fiscal year in which the Date of Termination
occurs through the Date of Termination, and the denominator of which
is 365, in each case to the extent not theretofore paid (the sum of
the amounts described in clauses (1) and (2) shall be hereinafter
referred to as the "Accrued Obligations"); and
B. the amount equal to the product of (1) the number of months
and portions thereof from the Date of Termination until December 31, 2001,
divided by twelve and (2) the sum of (x) the Executive's Annual Base Salary
and (y) the Recent Annual Bonus (such amount shall be hereinafter referred
to as the "Additional Severance Obligations");
(ii) for the remainder of the Employment Period, the Company
shall continue to provide medical and dental benefits to the Executive, his
spouse and dependents at the level in effect on, and at the same out-of-pocket
costs to the Executive as of, the Date of Termination or, if more favorable, on
the same basis as such benefits are provided to peer executives of the Company
(collectively "Medical Benefits"); and
(iii) to the extent not theretofore paid or provided, the
Company shall timely pay or provide to the Executive any other amounts or
benefits required to be paid or provided or which the Executive is eligible to
receive under any plan, program, policy or practice or contract or agreement of
the Company and its affiliated companies through the Date of Termination (such
other amounts and benefits shall be hereinafter referred to as the "Other
Benefits").
(b) Death. If the Executive's employment is terminated by reason of
the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for payment of the Accrued Obligations and the
Additional Severance Obligations and the timely payment or provision of Other
Benefits. The Accrued Obligations and the Additional Severance Obligations
shall be paid to the Executive's estate or beneficiary, as applicable, in a lump
sum in cash within 30 days of the Date of Termination. With respect to the
provision of Other Benefits, the term Other Benefits as utilized in this Section
5(b) shall include death benefits as in effect on the date of the Executive's
death with respect to the peer executives of the Company and their beneficiaries
and the continued provision of Medical Benefits to the Executive's spouse and
dependents for the remainder of the Employment Period.
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(c) Disability. If the Executive's employment is terminated by reason
of the Executive's Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than for (i)
payment of the Accrued Obligations, (ii) the timely payment or provision of
Other Benefits and (iii) payments to the Executive over the remainder of the
Employment Period, in accordance with the Company's regular payroll practices,
at an annual rate which is equal to the sum of the Executive's Annual Base
Salary and Recent Annual Bonus, provided that such payments shall be reduced by
the amounts actually received by the Executive during the Employment Period
pursuant to the Company's disability plan, it being the intention of the parties
that duplicative disability payments not be paid to the Executive during the
Employment Period pursuant to this Agreement. The Accrued Obligations shall be
paid to the Executive in a lump sum in cash within 30 days of the Date of
Termination. With respect to the provision of Other Benefits, the term Other
Benefits as utilized in this Section 5(c) shall include, and the Executive shall
be entitled after the Disability Effective Date to receive, disability and other
benefits as in effect at any time thereafter generally with respect to peer
executives of the Company and the continued provision of Medical Benefits to the
Executive and his spouse and dependents for the remainder of the Employment
Period.
(d) Cause; Other than for Good Reason. If the Executive's employment
shall be terminated for Cause or the Executive terminates his employment without
Good Reason during the Employment Period, this Agreement shall terminate without
further obligations to the Executive other than the obligation to pay to the
Executive (i) his Annual Base Salary through the Date of Termination and (ii)
Other Benefits, in each case to the extent theretofore unpaid.
6. Non-exclusivity of Rights. Except as specifically provided,
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nothing in this Agreement shall prevent or limit the Executive's continuing or
future participation in any plan, program, policy or practice provided by the
Company or any of its affiliated companies and for which the Executive may
qualify, nor, subject to Section 12(f), shall anything herein limit or otherwise
affect such rights as the Executive may have under any contract or agreement
with the Company or any of its affiliated companies. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any plan,
policy, practice or program of or any contract or agreement with the Company or
any of its affiliated companies at or subsequent to the Date of Termination
shall be payable in accordance with such plan, policy, practice, program,
contract or agreement except as explicitly modified by this Agreement.
7. Full Settlement. The Company's obligation to make the payments
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provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action
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which the Company may have against the Executive or others. In no event shall
the Executive be obligated to seek other employment or take any other action by
way of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and such amounts shall not be reduced whether or
not the Executive obtains other employment.
8. Resolution of Disputes. With the exception of proceedings for
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equitable relief brought pursuant to Section 10 of this Agreement, any dispute
or controversy arising under or in connection with this Agreement may, at either
the Company's or the Executive's option, be settled exclusively by arbitration
in Portland, Maine in accordance with the rules of the American Arbitration
Association then in effect and at the Company's expense. Judgment may be
entered on the arbitrator's award in any court having jurisdiction; provided,
however, that the Executive shall be entitled to seek specific performance in
court of his right to be paid until the Date of Termination during the pendency
of any dispute or controversy arising under or in connection with this
Agreement. If a claim for any payments or benefits under this Agreement or any
other provision of this Agreement is disputed by the Company and the Executive,
the Executive shall, to the extent and at such time or times as is not
prohibited by applicable law, regulation, regulatory bulletin and/or any other
regulatory requirements, as the same exists or may be hereafter promulgated or
amended, if the Executive is successful in his claim, be reimbursed for all
reasonable attorney's fees and expenses incurred by the Executive in pursuing
such claim.
9. Certain Additional Payments by the Company.
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(a) Anything in this Agreement to the contrary notwithstanding
and except as set forth below, in the event it shall be determined that any
payment or distribution by the Company 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, but determined without regard to any additional
payments required under this Section 9) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Executive shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any income
taxes (and any interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
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(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by KPMG Peat
Marwick LLP or such other certified public accounting firm as may be designated
by the Company and reasonably acceptable to the Executive (the "Accounting
Firm"), which shall provide detailed supporting calculations both to the Company
and the Executive within 15 business days of the receipt of notice from the
Executive that there has been a Payment, or such earlier time as is requested by
the Company. All fees and expenses of the Accounting Firm shall be borne solely
by the Company. Any Gross-Up Payment, as determined pursuant to this Section 9,
shall be paid by the Company to the Executive within five days of the later of
(i) the due date for the payment of any Excise Tax and (ii) the receipt of the
Accounting Firm's determination. Any determination by the Accounting Firm shall
be binding upon the Company and the Executive. As a result of the uncertainty
in the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made (an
"Underpayment"), consistent with the calculations required to be made hereunder.
In the event that the Company exhausts its remedies pursuant to Section 9(c) and
the Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm 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.
(c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten business days after the Executive is
informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim;
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time, including,
without
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limitation, accepting legal representation with respect to such claim by an
attorney reasonably selected by the Company;
(iii) cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) permit the Company to participate in any proceedings relating
to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions
of this Section 9(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and xxx for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis, and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to
such advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company's control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 9(c), the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 9(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Section
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9(c), a determination is made that the Executive shall not be entitled to any
refund with respect to such claim and the Company does not notify the Executive
in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
10. Confidential Information.
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(a) The Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge or data
relating to the Company or any of its affiliated companies, and their respective
businesses, which shall have been obtained by the Executive during the
Executive's employment by the Company or any of its affiliated companies and
which shall not be or become public knowledge (other than by acts of the
Executive or representatives of the Executive in violation of this Agreement).
After termination of the Executive's employment with the Company, the Executive
shall not, without the prior written consent of the Company or as may otherwise
be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 10 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
(b) In the event of a breach or threatened breach of this Section
10, the Executive agrees that the Company shall be entitled to injunctive relief
in a court of appropriate jurisdiction to remedy any such breach or threatened
breach, and the Executive acknowledges that damages would be an inadequate and
insufficient remedy in this regard.
(c) Any termination of the Executive's employment or of this
Agreement shall have no effect on the continuing operation of this Section 10.
11. Successors.
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(a) This Agreement is personal to the Executive and without the
prior written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
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(c) The Company 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 Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
12. Miscellaneous.
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(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Maine, without reference to principles
of conflict of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This Agreement may not be
amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
F. Xxxxxxx Xxxxxxxx, Jr.
00 Xxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
If to the Company:
Peoples Heritage Financial Group, Inc.
X.X. Xxx 0000
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000-0000
Attention: President
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
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(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 4(c)(i)-(iv) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision of, or right under,
this Agreement.
(f) Except as provided in paragraph (g) of this Section 12, from
and after the Effective Date this Agreement shall supersede any other
employment, severance or change of control agreement between the Executive and
the Company or any of its affiliated companies with respect to the subject
matter hereof, including without limitation the Employment Agreement (as defined
in such paragraph (g)), provided nothing contained herein shall be deemed to
limit the Company's agreement to honor the indemnification provisions of the
Employment Agreement to the extent set forth in Section 5.8(a) of the Merger
Agreement.
(g) The Company acknowledges that it has agreed in the Merger
Agreement to honor, and to cause its appropriate subsidiaries to honor, the
obligations of Springfield Institution for Savings ("SIS Bank") under the
Amended and Restated Employment Agreement, dated as of June 30, 1997, by and
between SIS Bank and the Executive (the "Employment Agreement").
Notwithstanding any provision of this Agreement or the Employment Agreement to
the contrary, in the event the Executive's employment with the Company is
terminated for any reason other than cause (as defined in the Employment
Agreement) or death within one year of the Effective Date, the Executive shall
(i) be entitled to receive the payments and benefits set forth in Sections 6.4
and 6.9 of the Employment Agreement and not this Agreement, which shall be
terminated, it being agreed that in no event shall the Executive be entitled to
receive benefits under both this Agreement and the Employment Agreement, and
(ii) comply with the requirements of Section 9 of the Employment Agreement.
After such one-year period, and provided that the Executive has not become
entitled to receive benefits under the Employment Agreement, the Employment
Agreement shall terminate and be of no further force and effect without any
action on the part of the Company and the Executive, and the Executive
thereafter shall be
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entitled to receive such benefits as he may be entitled to receive in accordance
with the terms of this Agreement. In the event the Company enters into an
employment or severance agreement with any other executive officer at the same
job range level at the Company on terms more favorable than those set forth in
this Agreement (other than in connection with an acquisition by the Company),
the Executive shall be entitled to enter into a new contract or an amendment to
this Agreement on such more favorable terms. The parties agree that this
Agreement shall constitute a written modification to the Employment Agreement
which satisfies the requirements of Section 12.2 thereof.
(h) Any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with 12 U.S.C. Section 1828(k) and any regulations promulgated thereunder. In
addition, to the extent required by applicable law, regulation, regulatory
bulletin and/or any other regulatory requirement, the aggregate amount and/or
value of the compensation paid as a result of any termination of the Executive's
employment with the Company, regardless of the reason for any such termination
of employment, shall not exceed the limit prescribed by applicable law, rule or
regulation.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization from its Board of Directors, the Company
has caused this Agreement to be executed in its name on its behalf, all as of
the day and year first above written.
_____________________________________
F. Xxxxxxx Xxxxxxxx, Jr.
PEOPLES HERITAGE FINANCIAL GROUP, INC.
By: ______________________________
Name: Xxxxxxx X. Xxxx
Title: Chairman, President and Chief Executive
Officer
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