CHANGE-IN-CONTROL AGREEMENT
Agreement effective as of the 24th day of March, 1997, by and between
BANKNORTH GROUP, INC., a bank holding company, 000 Xxxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxx (hereinafter "BNG"), and XXXX X. XXXX, the Executive
Vice President, Chief Information Officer of BNG, of Solon, Ohio
(hereinafter "Executive").
WHEREAS, Executive is now Executive Vice President, Chief Information
Officer of BNG (hereinafter the "Position"); and
WHEREAS, BNG wishes to secure the future services of Executive in the
Position; and
WHEREAS, in order to induce Executive to remain in the Position, BNG
wishes to assure Executive of the benefits of certain compensation in the
event of a Change-in-Control of BNG; and
WHEREAS, Executive is willing to enter into this Agreement for such
periods and upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements
hereinafter set forth and to induce Executive to remain in the employ of
BNG, the parties agree as follows:
1. Term of Agreement.
1.1 This Agreement shall remain in effect indefinitely;
provided, however, that either Executive or BNG may terminate this
Agreement on a future date certain by delivering written notice to
the other party not less than one (1) month prior to the future
termination date.
2. Change-in-Control.
2.1 A "Change-in-Control" shall be deemed to have occurred, for
all purposes of this Agreement, if any "Person", as defined in Section
2.2, has acquired control of BNG. A Person has control if:
(a) the Person directly or indirectly or acting through
one or more other Persons owns, controls, or has power to vote
25 percent or more of any class of voting securities of BNG;
(b) the Person controls in any manner the election of a
majority of the directors of BNG; or
(c) the Board of Directors of BNG determines that the
Person directly or indirectly exercises a controlling influence
over the management or policies of BNG.
2.2 A "Person" shall include a natural person, corporation, or
other entity. When two (2) or more Persons act as a partnership,
limited partnership, syndicate, or other group for the purpose of
acquiring, holding or disposing of BNG common stock, such partnership,
syndicate or group shall be considered a Person. Beneficial ownership
shall be determined under the then current provisions of Securities
Exchange Act Rule 13d-3; Reg. Section 240.13d-3.
2.3 If during the Term of this Agreement a Change-in-Control
occurs, BNG shall be contractually bound to employ the Executive for a
period of two years from the effective date of such Change-in-Control
(the "Contract Term"). During the Contract Term the Executive's
employment with BNG shall end without further liability of BNG only if
the Executive's employment terminates as provided in Section 2.4. If
(i) BNG terminates Executive's employment for any reason other than
for Cause (defined herein), or (ii) Executive terminates his
employment for Good Reason as provided in Section 4.1 (either being an
"involuntary termination"), Executive shall be entitled to receive
such compensation benefits as are provided in Section 3.1 for the
Contract Term, unless such period terminates earlier under Section
2.4. For all purposes of this Agreement, "Cause" shall mean
Executive's material failure to apply, in good faith, on a full time
basis (allowing for usual vacations and sick leave) all of his skill
and experience to the performance of the duties and responsibilities
of the Position, or the serious willful misconduct of Executive
including, but not limited to, the commission by Executive of a felony
or the perpetration by Executive of a common-law fraud upon BNG or any
affiliate thereof.
2.4 Notwithstanding the provisions of Section 2.3, the Contract
Term shall terminate upon the occurrence of one or more of the
following events:
(a) Executive's attainment of the age of 65, unless
otherwise agreed;
(b) Executive's attainment of the age of 62, if he shall
have given the Board of Directors of BNG six (6) months' written
notice of his desire to take early retirement;
(c) the death of Executive;
(d) the commission of any act which would justify a
termination for Cause hereunder; or
(e) the Executive's "permanent disability" defined as
Executive's inability by reason of physical or mental illness to
fulfill his obligations hereunder for the reasonably foreseeable
future, as determined by the Board of Directors of BNG after
considering all relevant medical evidence.
2.5 Executive has no duty to mitigate damages in the event of
an involuntary termination. BNG's obligations to Executive under
Article 3 are subject to Executive's compliance with the provisions of
Article 6.
3. Compensation.
3.1 BNG shall, for the Contract Term, make the following
payments and provide the following benefits to Executive if he is
then employed by BNG or if his employment with BNG has ended through
an involuntary termination:
(a) Executive's base salary immediately prior to the
Change-in- Control shall be continued for the Contract Term
subject to increase as set forth below. Salary compensation so
determined shall be paid in accordance with BNG's normal payroll
practices. Executive's base salary will be increased annually
at a rate no less than the prior year's increase in the Consumer
Price Index For All Urban Consumers, All Items, as published by
the U.S. Department of Labor, Bureau of Labor Statistics.
(b) Executive during the Contract Term shall continue to
participate in any employee welfare or retirement plan or
program of BNG available generally to employees of BNG to the
extent that such continued participation is possible under the
general terms and provisions of such plans and programs. Such
plans may include plans for hospital services, medical services,
major medical, dental, disability, survivor benefits, employees'
pension plan and profit sharing plan. In the event Executive is
unable to continue participation in any such plan or program,
Executive annually shall be entitled to receive for the Contract
Term an amount equal to the average annual contributions,
payments, credits, or allocations made by BNG to him, to his
account, or on his behalf over the three (3) year period (or
such shorter period if the plan or program has not been in
effect for Executive for 3 years) preceding termination of
employment, provided that with respect to hospital, medical,
dental, major medical, survivor, disability and other similar
insurance benefit plans provided by BNG in which continued
participation is not possible, Executive shall in addition be
entitled to receive from BNG an amount reasonably necessary to
permit Executive to obtain comparable substitute benefits or
coverage. Partial years shall be prorated.
(c) Executive's benefits provided pursuant to BNG's Long-
Term Incentive Plan (Stock Option Program) shall not be affected
by the provisions of this Agreement, and no supplemental
payments shall be made by BNG with respect to the Long-Term
Incentive Plan; Executive's rights under the Long-Term Incentive
Plan shall be determined exclusively under such plan and
separate agreements, if any, between Executive and BNG entered
into pursuant to such plan.
(d) During the remainder of the Contract Term, BNG
annually shall pay Executive an amount equal to the average cash
bonuses paid to Executive under the Short-Term Incentive
Compensation Plan for the three (3) consecutive calendar year
periods (or the period of Executive's participation in such plan
if less than three (3) years) ending on the last day of the
calendar year preceding the year in which Executive's employment
is terminated. Such amount shall be paid annually in the same
manner and at the same time as such benefits are paid to Plan
participants generally. Partial years shall be prorated.
(e) Notwithstanding the foregoing, BNG shall not pay to
Executive and Executive shall not be entitled to receive any
payment or benefit that would be treated as an "excess parachute
payment" as such phrase is defined under Section 280G of the
Internal Revenue Code of 1986 or any future amendment thereto or
any corresponding provision of any future United States revenue
statute. In the event any such excess parachute payment is made
to Executive for any reason, Executive agrees to reimburse BNG
in the amount of such payment upon demand.
4. Termination for Good Reason.
4.1 If Executive, by written notice to the Board of Directors
of BNG, terminates his employment at any time during the Contract Term
for "Good Reason" (defined herein), the Executive shall be entitled to
receive all of the payments and benefits specified in Section 3.1.
For all purposes of this Agreement the phrase "Good Reason" shall mean
a material reduction in position responsibility and authority vested
in Executive, a compensation or benefit reduction contrary to the
terms of this Agreement, a required relocation outside of the state in
which Executive's principal office is now situated, or a significant
change in Executive's reporting relationships.
5. Benefits.
5.1 Executive is now a participant, and in the future may
become a participant, in certain arrangements for the benefit of
Executive and/or executive officers, including, but not limited to,
the following:
(a) Long-Term Incentive (Stock Option) Plan; and
(b) Short-Term Incentive Compensation Plan.
This Agreement shall in no way affect Executive's participation in
such plans or arrangements, except as otherwise expressly provided
herein.
6. Noncompetition Provisions.
6.1 During the Contract Term, Executive shall not become an
officer, employee, agent, partner, or director of any business
enterprise in substantial direct competition (as defined below) with
BNG or with any subsidiary of BNG, as the business of BNG, or any
subsidiary of BNG may be constituted at the time of termination of
Executive's employment.
6.2 For the purposes of Section 6.1, a business enterprise with
which Executive becomes associated as an officer, employee, agent,
partner or director, shall be considered in "substantial direct
competition" if, during a period when such competition is prohibited,
such business enterprise is a financial institution, a bank, or a bank
holding company, or is a subsidiary of a bank holding company which is
engaged in any business within the scope of the business then engaged
in by BNG or any subsidiary of BNG, which business enterprise has an
office or a branch located in any county where BNG or any subsidiary
of BNG has a branch or an office or located in any county contiguous
to any such county.
6.3 Except as provided in Section 6.4, in the event of a breach
by Executive of the noncompetition provisions of Section 6.1, BNG
shall be entitled to terminate the payment of all compensation,
payments and benefits to Executive and shall be entitled to such other
relief, including injunctive relief, as may be permitted in law or
equity.
6.4 In the event of a breach by Executive of the noncompetition
provisions of Section 6.1, after an involuntary termination, the
termination of payment of such compensation to Executive shall be the
sole remedy of BNG.
7. Notices.
All notices under this Agreement shall be in writing and shall
be deemed effective when delivered in person to Executive or to the
Secretary of BNG, or forty-eight (48) hours after deposit thereof in
the U.S. mails, postage prepaid, addressed, in the case of the
Executive, to his last known address as carried on the personnel
records of BNG, and in the case of BNG, to its corporate headquarters,
attention of the Secretary, or to such other address as the party to
be notified may specify by notice to the other party.
8. Prior Agreements.
This Agreement supersedes and replaces all prior agreements
relating to the subject matter hereof.
9. Attorneys' Fees.
If it becomes necessary for Executive or BNG to commence or
become a party to litigation for the purpose of enforcing any rights
arising under this Agreement, the prevailing party shall be entitled
to reimbursement from the losing party for all legal fees, costs and
expenses incurred in connection with any such litigation.
10. Successors and Assigns.
The rights and obligations of BNG under this Agreement shall
inure to the benefit of and shall be binding upon the successors and
assigns of BNG. The rights and obligations of Executive under this
Agreement shall inure to the benefit of and shall be binding upon
Executive's heirs and successors. Executive may not assign his rights
and obligations under this Agreement.
11. Severability.
If any of the terms or conditions of this Agreement shall be
declared void or unenforceable by any court or administrative body of
competent jurisdiction, such term or condition shall be deemed
severable from the remainder of this Agreement, and the other terms
and conditions of this Agreement shall continue to be valid and
enforceable.
12. Construction.
This Agreement shall be construed under the laws of the State of
Vermont. Article headings are for convenience only and shall not be
considered a part of the terms and provisions of the Agreement. This
Agreement may be modified only by a writing signed by the parties.
IN WITNESS WHEREOF, Banknorth Group, Inc. has caused this Agreement to
be executed by a duly authorized officer and Executive has hereunto set his
hand and seal as of the day and year first above written.
EXECUTIVE BANKNORTH GROUP, INC.
/s/ Xxxx X. Xxxx By: /s/ Xxxxxxx X. New
Xxxx X. Xxxx Its duly authorized agent
