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Exhibit 10(c)
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FORM OF TIER II EXECUTIVE AGREEMENT
EXECUTIVE AGREEMENT
THIS IS AN AGREEMENT between HUNTINGTON BANCSHARES INCORPORATED, a
Maryland corporation (the "Corporation"), with its principal office located at
the Huntington Center, 00 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxx 00000, and
________________________ (the "Executive"), effective as of April 1, 1998.
RECITALS:
The Corporation considers the establishment and maintenance of a sound
and vital management to be part of its overall corporate strategy and to be
essential to protecting and enhancing the interests of the Corporation and its
shareholders. As part of this corporate strategy, the Corporation wishes to act
to retain its well-qualified executive officers notwithstanding any actual or
threatened change in control of the Corporation.
The Executive is a key executive officer of the Corporation and the
Executive's services, experience and knowledge of the affairs of the
Corporation, and reputation and contacts in the industry are extremely valuable
to the Corporation. The Executive's continued dedication, availability, advice,
and counsel to the Corporation are deemed important to the Corporation, its
Board of Directors (the "Board"), and its shareholders. It is, therefore, in the
best interests of the Corporation to secure the continued services of the
Executive notwithstanding any actual or threatened change in control of the
Corporation. Accordingly, the Board has approved this Agreement with the
Executive and authorized its execution and delivery on behalf of the
Corporation.
AGREEMENT:
1. TERM OF AGREEMENT. This Agreement will begin on the date entered
above and will continue in effect through December 31, 1999. On December 31,
1999, and on the second anniversary date of each term thereafter (a "Renewal
Date"), the term of this Agreement will be extended automatically for an
additional two-year period unless, not later than 30 days prior to such Renewal
Date, the Corporation gives written notice to the Executive that it has elected
not to extend this Agreement. Notwithstanding the above, if a "Change of
Control" (as defined herein) of the Corporation occurs during the term of this
Agreement, the term of this Agreement will be extended for 36 months beyond the
end of the month in which any such Change of Control occurs.
2. DEFINITIONS. The following defined terms shall have the meanings set
forth below, for purposes of this Agreement:
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(a) ANNUAL AWARD. "Annual Award" means the cash payment paid
or payable to the Executive with respect to a fiscal year under the
Corporation's Incentive Compensation Plan.
(b) BASE ANNUAL SALARY. "Base Annual Salary" means the greater
of (1) the highest annual rate of base salary in effect for the
Executive during the 12 month period immediately prior to a Change of
Control or, (2) the annual rate of base salary in effect at the time
Notice of Termination is given (or on the date employment is terminated
if no Notice of Termination is required).
(c) CAUSE. "Cause" means any of the following:
(1) The Executive shall have committed a felony or an
intentional act of gross misconduct, moral turpitude, fraud,
embezzlement, or theft in connection with the Executive's
duties or in the course of the Executive's employment with the
Corporation or any Subsidiary, and the Board shall have
determined that such act is materially harmful to the
Corporation;
(2) The Corporation or any Subsidiary shall have been
ordered or directed by any federal or state regulatory agency
with jurisdiction to terminate or suspend the Executive's
employment and such order or directive has not been vacated or
reversed upon appeal; or
(3) After being notified in writing by the Board to
cease any particular Competitive Activity (as defined herein),
the Executive shall have continued such Competitive Activity
and the Board shall have determined that such act is
materially harmful to the Corporation.
For purposes of this Agreement, no act or failure to
act on the part of the Executive shall be deemed "intentional" if it
was due primarily to an error in judgment or negligence, but shall be
deemed "intentional" only if done or omitted to be done by the
Executive not in good faith and without reasonable belief that the
Executive's action or omission was in the best interest of the
Corporation. Notwithstanding the foregoing, the Executive shall not be
deemed to have been terminated for "Cause" under this Agreement unless
and until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than
three-quarters of the Board at a meeting called and held for such
purposes, after reasonable notice to the Executive and an opportunity
for the Executive, together with the Executive's counsel (if the
Executive chooses to have counsel present at such meeting), to be heard
before the Board, finding that, in the good faith opinion of the Board,
the Executive had committed an act constituting "Cause" as defined in
this Agreement and specifying the particulars of the act constituting
"Cause" in detail. Nothing in this Agreement will limit the right of
the Executive or the Executive's beneficiaries to contest the validity
or propriety of any such determination.
(d) CHANGE OF CONTROL. "Change of Control" means the
occurrence of any of the following:
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(1) Any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation
representing 25% or more of the combined voting power of the
Corporation's then outstanding securities; or
(2) A majority of the Board of Directors of the
Corporation at any time is comprised of other than Continuing
Directors (for purposes of this section, the term "Continuing
Director" means a director who was either (A) first elected or
appointed as a Director prior to the date of this Agreement;
or (B) subsequently elected or appointed as a director if such
director was nominated or appointed by at least a majority of
the then Continuing Directors); or
(3) Any event or transaction if the Corporation would
be required to report it in response to Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Exchange Act; or
(4) Any of the following occurs:
(A) a merger or consolidation of the
Corporation, other than a merger or consolidation in
which the voting securities of the Corporation
immediately prior to the merger or consolidation
continue to represent (either by remaining
outstanding or being converted into securities of the
surviving entity) 51% or more of the combined voting
power of the Corporation or surviving entity
immediately after the merger or consolidation with
another entity;
(B) a sale, exchange, lease, mortgage,
pledge, transfer, or other disposition (in a single
transaction or a series of related transactions) of
all or substantially all of the assets of the
Corporation which shall include, without limitation,
the sale of assets or earning power aggregating more
than 50% of the assets or earning power of the
Corporation on a consolidated basis;
(C) a liquidation or dissolution of the
Corporation;
(D) a reorganization, reverse stock split,
or recapitalization of the Corporation which would
result in any of the foregoing; or
(E) a transaction or series of related
transactions having, directly or indirectly, the same
effect as any of the foregoing.
(e) CHANGE YEAR. "Change Year" means the fiscal year in which
a Change of Control occurs.
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(f) COMPETITIVE ACTIVITY. "Competitive Activity" means that
Executive's participation, without the written consent of an officer of
the Corporation, in the management of any business enterprise if such
enterprise engages in substantial and direct competition with the
Corporation and such enterprise's revenues derived from any product or
service competitive with any product or service of the Corporation
amounted to 10% or more of such enterprise's revenues for its most
recently completed fiscal year and if the Corporation's revenues for
such product or service amounted to 10% of the Corporation's revenues
for its most recently completed fiscal year. "Competitive Activity"
will not include (i) the mere ownership of securities in any such
enterprise and the exercise of rights appurtenant thereto and (ii)
participation in the management of any such enterprise other than in
connection with the competitive operations of such enterprise.
(g) DISABILITY. "Disability" means that, as a result of the
Executive's incapacity due to physical or mental illness, the Executive
shall be eligible for the receipt of benefits under the Corporation's
long term disability plan.
(h) EMPLOYEE BENEFITS. "Employee Benefits" means the
perquisites, benefits, and service credit for benefits as provided
under any and all employee retirement income and welfare benefit
policies, plans, programs, or arrangements in which the Executive is
entitled to participate, including without limitation any stock option,
stock purchase, stock appreciation, savings, pension, supplemental
executive retirement, or other retirement income or welfare benefit,
deferred compensation, incentive compensation, group or other life,
health, medical/hospital, or other insurance (whether funded by actual
insurance or self-insured by the Corporation), disability, salary
continuation, expense reimbursement, and other employee benefit
policies, plans, programs, or arrangements that may now exist or any
equivalent successor policies, plans, programs, or arrangements that
may be adopted hereafter, providing perquisites and benefits at least
as great in a monetary equivalent as are payable thereunder prior to a
Change in Control.
(i) EMPLOYMENT AGREEMENT. "Employment Agreement" means an
executed employment agreement between the Corporation and the
Executive.
(j) GOOD REASON. "Good Reason" means the occurrence of any one
or more of the following:
(1) The assignment to the Executive after a Change in
Control of the Corporation of duties which are materially and
adversely different from or inconsistent with the duties,
responsibilities, and status of the Executive's position at
any time during the 12 month period prior to such Change of
Control, or which result in a significant change in the
Executive's authority and responsibility as a senior executive
of the Corporation;
(2) A reduction by the Corporation in the Executive's
Base Annual Salary as of the day immediately prior to a Change
of Control of the Corporation, or the failure to grant salary
increases and bonus payments on a basis comparable to those
granted to other executives of the Corporation, or a reduction
of the Executive's most
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recent highest incentive bonus potential prior to such Change
of Control under the Corporation's Incentive Compensation
Plan, Long-Term Incentive Plan, or any successor plans;
(3) A demand by the Corporation that the Executive
relocate to a location in excess of 35 miles from the location
where the Executive is currently based, or in the event of any
such relocation with the Executive's express written consent,
the failure of the Corporation or a Subsidiary to pay (or
reimburse the Executive for) all reasonable moving expenses
incurred by the Executive relating to a change of principal
residence in connection with such relocation and to indemnify
the Executive against any loss in the sale of the Executive's
principal residence in connection with any such change of
residence, all to the effect that the Executive shall incur no
loss on an after tax basis;
(4) The failure of the Corporation to obtain a
satisfactory agreement from any successor to the Corporation
to assume and agree to perform this Agreement, as contemplated
in Section 14 of this Agreement;
(5) The failure of the Corporation to provide the
Executive with substantially the same Employee Benefits that
were provided to him immediately prior to the Change in
Control, or with a package of Employee Benefits that, though
one or more of such benefits may vary from those in effect
immediately prior to such Change in Control, is substantially
comparable in all material respects to such Employee Benefits
taken as a whole; or
(6) Any reduction in the Executive's compensation or
benefits or adverse change in the Executive's location or
duties, if such reduction or adverse change occurs at any time
after the commencement of any discussion with a third party
relating to a possible Change of Control of the Corporation
involving such third party, if such reduction or adverse
change is in contemplation of such possible Change of Control
and such Change of Control is actually consummated within 12
months after the date of such reduction or adverse change.
The existence of Good Reason shall not be affected by
the Executive's incapacity due to physical or mental illness. The
Executive's continued employment shall not constitute a waiver of the
Executive's rights with respect to any circumstance constituting Good
Reason under this Agreement. The Executive's determination of Good
Reason shall be conclusive and binding upon the parties to this
Agreement provided such determination has been made in good faith.
Notwithstanding anything to the contrary in this Agreement, in the
event that the Executive is serving as Chief Executive Officer of the
Corporation immediately prior to the Change of Control, the occurrence
of the Change of Control shall be conclusively deemed to constitute
Good Reason.
(k) HIGHEST INCENTIVE COMPENSATION. "Highest Incentive
Compensation" means the greater of the Executive's Potential Annual
Award for the Executive's Incentive Group for (a) the Change Year or
(b) the fiscal year immediately preceding the Change Year.
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For purposes of (b) above, if the Executive first became a participant
in the Corporation's Incentive Compensation Plan for the Change Year,
the Executive shall be deemed to have been a participant in the
Corporation's Incentive Compensation Plan, and in the same Incentive
Group, for the fiscal year immediately preceding the Change Year.
(l) HIGHEST LONG-TERM INCENTIVE COMPENSATION. "Highest
Long-Term Incentive Compensation" means the greater of the Executive's
Potential Long-Term Award for the Executive's Incentive Group pursuant
to the Corporation's Long-Term Incentive Compensation Plan for (1) the
multi-year cycle in which the Change Year occurs or (2) the multi-year
cycle immediately prior to the multi-year cycle in which the Change
Year occurs; provided, however, that if the Change of Control occurs on
a date that falls within two multi-year cycles, the Highest Long-Term
Incentive Compensation shall mean the greater of the Executive's
Potential Long-Term Award for either of such multi-year cycles. If the
Executive first became a participant in the Corporation's Long-Term
Incentive Compensation Plan during the Change Year or the year
immediately preceding the Change Year, the Executive shall be deemed to
have been a participant in the Corporation's Long-Term Incentive
Compensation Plan and in the same Incentive Group for (1) the
multi-year cycle in which the Change Year occurs and the multi-year
cycle immediately prior to the multi-year cycle in which the Change
Year occurs or, (2) if the Change of Control occurs on a date that
falls within two multi-year cycles, for both such multi-year cycles.
(m) INCENTIVE COMPENSATION PLAN. "Incentive Compensation Plan"
means the Corporation's Incentive Compensation Plan in effect as of the
effective date of this Agreement, as well as any successor plan.
(n) INCENTIVE GROUP. "Incentive Group" means the group or
category into which an Executive is placed pursuant to the
Corporation's Incentive Compensation Plan or Long-Term Incentive
Compensation Plan, as the case may be.
(o) LONG-TERM AWARD. "Long-Term Award" means the total amount
paid or payable at the end of a performance cycle under the
Corporation's Long-Term Incentive Compensation Plan.
(p) LONG-TERM INCENTIVE COMPENSATION PLAN. "Long-Term
Incentive Compensation Plan" means the Corporation's Long-Term
Incentive Compensation Plan in effect as of the effective date of this
Agreement, as well as any successor plan.
(q) NOTICE OF TERMINATION. "Notice of Termination" means a
written notice indicating the specific termination provision in this
Agreement relied upon and setting forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the
employment under the provision so indicated.
(r) POTENTIAL ANNUAL AWARD. "Potential Annual Award" means the
maximum possible Annual Award the Executive could receive according to
his or her Incentive Group pursuant to the Corporation's Incentive
Compensation Plan assuming that (1) the Corporation met the maximum
ROAE for the Corporation's Incentive Compensation Plan for a particular
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fiscal year (whether or not such maximum ROAE was or could be met); (2)
there are no adjustments for business unit or individual performance,
and (3) the Executive's Base Annual Salary is used to determine the
Potential Annual Award.
(s) POTENTIAL LONG-TERM AWARD. "Potential Long-Term Award"
means the maximum possible Long-Term Award payable to the Executive
pursuant to Executive's Incentive Group assuming that (1) the
Corporation met the maximum ROAE for the Corporation's Long-Term
Incentive Compensation Plan for a particular cycle (whether or not such
maximum ROAE was or could be met); and (2) the Executive's Base Annual
Salary is used to determine the Potential Long-Term Award.
(t) RETIREMENT. "Retirement" means having reached normal
retirement age as defined in the Corporation's noncontributory pension
plan or taking early retirement in accordance with the terms of the
Corporation's noncontributory pension plan.
(u) ROAE "ROAE" means return on average equity as referenced
in the Corporation's Incentive Compensation Plan and the Corporation's
Long-Term Incentive Compensation Plan, as the case may be.
(v) SEVERANCE BENEFITS. "Severance Benefits" means the
benefits described in Section 4 of this Agreement, as adjusted by the
applicable provisions of Section 5 of this Agreement.
(w) SUBSIDIARY. "Subsidiary" means any corporation, bank, or
other entity a majority of the voting control of which is directly or
indirectly owned or controlled at the time by the Corporation.
3. ELIGIBILITY FOR SEVERANCE BENEFITS. The Corporation or its successor
shall pay or provide to the Executive the Severance Benefits if the Executive's
employment is terminated voluntarily or involuntarily during the term of this
Agreement, either:
(a) by the Corporation (1) at any time within 36 months after
a Change of Control of the Corporation, or (2) at any time prior to a
Change of Control but after the commencement of any discussions with a
third party relating to a possible Change of Control of the Corporation
involving such third party, if such termination is in contemplation of
such possible Change of Control and such Change of Control is actually
consummated within 12 months after the date of such termination, in
either case unless the termination is on account of the Executive's
death or Disability or for Cause, provided that, in the case of a
termination on account of the Executive's Disability or for Cause, the
Corporation shall give Notice of Termination to the Executive with
respect thereto; or
(b) by the Executive for Good Reason (1) at any time within 36
months after a Change of Control of the Corporation or (2) at any time
after the commencement of any discussions with a third party relating
to a possible Change of Control of the Corporation involving such third
party, if such Change of Control is actually consummated within 12
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months after the date of such termination, and, in any such case,
provided that the Executive shall give Notice of Termination to the
Corporation with respect thereto.
4. SEVERANCE BENEFITS. The Executive, if eligible under Section 3,
shall receive the following Severance Benefits, adjusted by the applicable
provisions of Section 5 (in addition to accrued compensation, bonuses, and
vested benefits and stock options):
(a) BASE ANNUAL SALARY. In addition to any accrued
compensation payable as of the Executive's termination of employment
(either by reason of an Employment Agreement or otherwise), a lump sum
cash amount equal to the Executive's Base Annual Salary, multiplied by
2.5.
(b) ANNUAL INCENTIVE COMPENSATION. In addition to any
compensation payable pursuant to Article 5 of the Corporation's
Incentive Compensation Plan, a lump sum cash amount equal to the
Executive's Highest Incentive Compensation, multiplied by 2.5. In order
to be entitled to a payment pursuant to this Section 4(b), the
Executive must have been a participant in the Corporation's Incentive
Compensation Plan at some time during the 12 month period immediately
preceding the Change of Control.
(c) LONG-TERM INCENTIVE COMPENSATION. In addition to any
accrued compensation payable pursuant to Article 9 of the Corporation's
Long-Term Incentive Compensation Plan, a lump sum cash amount equal to
the Highest Long-Term Incentive Compensation, multiplied by 1.5. In
order to be entitled to a payment pursuant to this Section 4(c), the
Executive must have been a participant in the Corporation's Long-Term
Incentive Compensation Plan at some time during the 12 month period
immediately preceding the Change of Control.
(d) INSURANCE BENEFITS. For a three year period after the date
the employment is terminated, the Corporation will arrange to provide
to the Executive at the Corporation's expense, with:
(1) HEALTH CARE. Health care coverage comparable to
that in effect for the Executive immediately prior to the
termination (or, if more favorable to the Executive, that
furnished generally to salaried employees of the Corporation),
including, but not limited to, hospital, surgical, medical,
dental, prescription, and dependent coverage. Upon the
expiration of the health care benefits required to be provided
pursuant to this subsection 4(d), the Executive shall be
entitled to the continuation of such benefits under the
provisions of the Consolidated Omnibus Budget Reconciliation
Act. Health care benefits otherwise receivable by the
Executive pursuant to this subsection 4(d) shall be reduced to
the extent comparable benefits are actually received by the
Executive from a subsequent employer during the three-year
period following the date the employment is terminated and any
such benefits actually received by the Executive shall be
reported by the Executive to the Corporation.
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(2) LIFE INSURANCE. Life and accidental death and
dismemberment insurance coverage (including any supplemental
coverage, purchase opportunity, and double indemnity for
accidental death that was available to the Executive) equal
(including policy terms) to that in effect at the time Notice
of Termination is given (or on the date the employment is
terminated if no Notice of Termination is required) or, if
more favorable to the Executive, equal to that in effect at
the date the Change of Control occurs.
(3) DISABILITY INSURANCE. Disability insurance
coverage (including policy terms) equal to that in effect at
the time Notice of Termination is given (or on the date
employment is terminated if no Notice of Termination is
required) or, if more favorable to the Executive, equal to
that in effect immediately prior to the Change of Control;
provided, however, that no income replacement benefits will be
payable under such disability policy with regard to the three
year period following a termination of employment provided
that the payments payable under subsections 4(b) and (c) above
have been made.
In the event the Executive's participation in any such plan or
program is not permitted, the Corporation will directly provide, at no
after-tax cost to the Executive, the benefits to which the Executive
would be entitled under such plans and programs.
(e) RETIREMENT BENEFITS. The Executive will be entitled to
receive retirement benefits as provided herein, so that the total
retirement benefits the Executive receives from the Corporation will
approximate the total retirement benefits the Executive would have
received under all (qualified and nonqualified) retirement plans (which
shall not include severance plans) of the Corporation in which the
Executive participates were the Executive fully vested under such
retirement plans and had the Executive continued in the employ of the
Corporation for 36 months following the date of the Executive's
termination or until the Executive's Retirement, if earlier (provided
that such additional period shall be inclusive of and shall not be in
addition to any period of service credited under any severance plan of
the Corporation). The benefits specified in this subsection will
include all ancillary benefits, such as early retirement and survivor
rights and benefits available at retirement. The amount payable to the
Executive or the Executive's beneficiaries under this subsection shall
equal the excess of (1) the retirement benefits that would be paid to
the Executive or the Executive's beneficiaries, under all retirement
plans of the Corporation in which the Executive participates if (A) the
Executive were fully vested under such plans, (B) the 36-month period
(or the period until the Executive's Retirement, if less) following the
date of the Executive's termination were added to the Executive's
credited service under such plans, (C) the terms of such plans were
those most favorable to the Executive in effect at any time during the
period commencing prior to the Change of Control and ending on the date
of Notice of Termination (or on the date employment is terminated if no
Notice of Termination is required), and (D) the Executive's highest
average annual compensation as defined under such retirement plans and
was calculated as if the Executive had been employed by the Corporation
for a 36-month period (or the period until the Executive's Retirement,
if earlier) following the date of the Executive's termination and had
the Executive's compensation during such period been equal to the
Executive's compensation used to calculate the
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Executive's benefit under subsections 4(a), 4(b), and 4(c); over (2)
the retirement benefits that are payable to the Executive or the
Executive's beneficiaries under all retirement plans of the Corporation
in which the Executive participates. These retirement benefits
specified in this subsection are to be provided on an unfunded basis,
are not intended to meet the qualification requirements of Section 401
of the Internal Revenue Code, and shall be payable solely from the
general assets of the Corporation. These retirement benefits shall be
payable at the time and in the manner provided in the applicable
retirement plans to which they relate.
(f) OUTPLACEMENT. The Corporation shall pay all fees for
outplacement services for the Executive up to a maximum equal to 15% of
the Executive's Annual Base Salary used to calculate the Executive's
benefit under subsection 4(a), plus provide a travel expense account of
up to $5,000 to reimburse job search travel.
(g) STOCK OPTIONS. Stock Options held by the Executive become
exercisable upon a Change of Control according to the terms of the
Corporation's Stock Option Plans as interpreted by the Corporation's
Compensation and Stock Option Committee as such Committee existed
immediately prior to the Change of Control.
In computing and determining Severance Benefits under subsections 4(a),
(b), (c), (d), (e), (f), and (g) above, a decrease in the Executive's salary,
incentive bonus potential, or insurance benefits shall be disregarded if such
decrease occurs within six months before a Change of Control, is in
contemplation of such Change of Control, and is taken to avoid the effect of
this Agreement should such action be taken after such Change of Control. In such
event, the salary, incentive bonus potential, and/or insurance benefits used to
determine Severance Benefits shall be that in effect immediately before the
decrease that is disregarded pursuant to this Section 4.
The Severance Benefits provided in subsections 4(a), (b), and (c) above
shall be paid not later than 45 business days following the date the Executive's
employment terminates.
5. TAX GROSS-UP. If any Severance Benefit or other benefit paid or
provided under Section 4, or the acceleration of stock option vesting, or the
payment or distribution of any Employee Benefit or similar benefit is subject to
excise tax pursuant to Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code") (or any similar federal or state excise tax), the
Corporation shall pay to the Executive such additional compensation as is
necessary (after taking into account all federal, state, and local income taxes
payable by the Executive as a result of the receipt of such additional
compensation) to place the Executive in the same after-tax position he would
have been in had no such excise tax (or any interest or penalties thereon) been
paid or incurred with respect to any of such amounts (the "Tax Gross-Up"). The
Corporation shall pay such additional compensation at the time when the
Corporation withholds such excise tax from any payments to the Executive. The
calculation of the Tax Gross-Up shall be approved by the Corporation's
independent certified public accounting firm engaged by the Corporation
immediately prior to the Change in Control and the calculation shall be provided
to the Executive in writing. The Executive shall then be given 15 days, or such
longer period as the Executive reasonably requests, to accept or reject the
calculation of the Tax Gross-Up. If the Executive rejects the Tax Gross-Up
calculation and the parties are thereafter unable to agree within an additional
45 days, the arbitration provisions of Section 10 shall
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control. The Corporation shall reimburse the Executive for all reasonable legal
and accounting fees incurred with respect to the calculation of the Tax Gross-Up
and any disputes related thereto.
For purposes of determining the amount of the Tax Gross-Up,
the Executive shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation in the calendar year in which the Tax
Gross-Up is to be made and state and local income taxes at the highest marginal
rates of taxation in the state and locality of the Executive's residence on the
date of termination.
If the excise tax is subsequently determined to be less than
the amount taken into account hereunder at the time of termination of
employment, the Executive shall repay to the Corporation at the time the
reduction in excise tax is finally determined, the portion of the Tax Gross-Up
attributable to such reduction. Notwithstanding the Executive's acceptance or
rejection of the Tax Gross-Up calculation, if the excise tax is determined to
exceed the amount taken into account hereunder at the time of termination of
employment, the Corporation shall make an additional Tax Gross-Up payment to the
Executive in respect of such excess at the time the amount of such excess is
finally determined.
Notwithstanding anything to the contrary in this Section 5, if
any Severance Benefit or other benefit paid or provided under Section 4, or the
acceleration of stock option vesting, or the payment or distribution of any
Employee Benefits or similar benefits would be subject to excise tax pursuant to
Section 4999 of the Code (or any similar federal or state excise tax), but would
not be so subject if the total of such payments would be reduced by 10% or less,
then such payment shall be reduced by the minimum amount necessary so as not to
cause Corporation to have paid an Excess Severance Payment as defined in Section
280G(b)(l) of the Code and so the Executive will not be subject to Excise Tax
pursuant to Section 4999 of the Code. The calculation of any potential reduction
pursuant to this paragraph or any disputes related thereto shall be resolved as
described above with respect to the calclulation of the Tax Gross-Up. In the
event that the amount of any Severance Payments that would be payable to or for
the benefit of Executive under this Agreement must be modified or reduced to
comply with this provision, Executive shall direct which Severance Payments are
to be modified or reduced; provided, however, that no increase in the amount of
any payment or change in the timing of the payment shall be made without the
consent of Corporation. In no event shall the total payments be reduced by more
than 10% in order to avoid treatment as an Excess Severance Payment.
6. WITHHOLDING OF TAXES. The Corporation may withhold from any amounts
payable under this Agreement all federal, state, city, or other taxes as
required by law.
7. ACKNOWLEDGEMENT. The Corporation hereby acknowledges that it will be
difficult and may be impossible for the Executive to find reasonably comparable
employment, or to measure the amount of damages which the Executive may suffer
as a result of termination of employment hereunder. Accordingly, the payment of
the Severance Benefits by the Corporation to the Executive in accordance with
the terms of this Agreement is hereby acknowledged by the Corporation to be
reasonable and will be liquidated damages, and the Executive will not be
required to mitigate the amount of any payment provided for in this Agreement by
seeking other employment or otherwise, nor will any profits, income, earnings,
or other benefits from any source whatsoever create any
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mitigation, offset, reduction, or any other obligation on the part of the
Executive hereunder or otherwise, except for a reduction in health insurance
coverage as provided in subsection 4(d)(1). The Corporation shall not be
entitled to set off or counterclaim against amounts payable hereunder with
respect to any claim, debt, or obligation of the Executive.
8. ENFORCEMENT COSTS; INTEREST. The Corporation is aware that, upon the
occurrence of a Change in Control, the Board or a stockholder of the Corporation
may then cause or attempt to cause the Corporation to refuse to comply with its
obligations under this Agreement, or may cause or attempt to cause the
Corporation to institute, or may institute, litigation, arbitration, or other
legal action seeking to have this Agreement declared unenforceable, or may take,
or attempt to take, other action to deny the Executive the benefits intended
under this Agreement. In these circumstances, the purpose of this Agreement
could be frustrated. It is the intent of the Corporation that the Executive not
be required to incur the expenses associated with the enforcement of the
Executive's rights under this Agreement by litigation, arbitration, or other
legal action nor be bound to negotiate any settlement of the Executive's rights
hereunder under threat of incurring such expenses because the cost and expense
thereof would substantially detract from the benefits intended to be extended to
the Executive under this Agreement. Accordingly, if following a Change in
Control it should appear to the Executive that the Corporation has failed to
comply with any of its obligations under this Agreement, including the proper
calculation of the Tax Gross-Up, or in the event that the Corporation or any
other person takes any action to declare this Agreement void or unenforceable,
or institute any litigation or other legal action designed to deny, diminish, or
to recover from the Executive, the benefits intended to be provided to the
Executive hereunder, the Corporation irrevocably authorizes the Executive from
time to time to retain counsel (legal and accounting) of the Executive's choice
at the expense of the Corporation as provided in this Section 8 to represent the
Executive in connection with the calculation of the Tax Gross-Up, or the
initiation or defense of any litigation or other legal action, whether by or
against the Corporation or any director, officer, stockholder, or other person
affiliated with the Corporation. Notwithstanding any existing or prior
attorney-client relationship between the Corporation and such counsel, the
Corporation irrevocably consents to the Executive entering into an
attorney-client relationship with such counsel, and in that connection the
Corporation and the Executive agree that a confidential relationship shall exist
between the Executive and such counsel. The reasonable fees and expenses of
counsel selected from time to time by the Executive as provided in this Section
shall be paid or reimbursed to the Executive by the Corporation on a regular,
periodic basis upon presentation by the Executive of a statement or statements
prepared by such counsel in accordance with its customary practices. In any
action involving this Agreement, the Executive shall be entitled to prejudgment
interest on any amounts found to be due him from the date such amounts would
have been payable to the Executive pursuant to this Agreement at an annual rate
of interest equal to the prime commercial rate in effect at The Huntington
National Bank or its successor from time to time during the prejudgment period
plus 4 percent.
9. INDEMNIFICATION. From and after the earliest to occur of a Change of
Control or termination of employment, the Corporation shall (a) for a period of
five years after such occurrence, provide the Executive (including the
Executive's heirs, executors, and administrators) with coverage under a standard
directors' and officers' liability insurance policy at the Corporation's
expense, and (b) indemnify and hold harmless the Executive, to the fullest
extent permitted or authorized by the law of the State of Maryland as it may
from time to time be amended, if the Executive is (whether
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before or after the Change of Control) made or threatened to be made a party to
any threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, by reason of the fact that
the Executive is or was a director, officer, or employee of the Corporation or
any Subsidiary, or is or was serving at the request of the Corporation or any
Subsidiary as a director, trustee, officer, or employee of a bank, corporation,
partnership, joint venture, trust, or other enterprise. The indemnification
provided by this Section 9 shall not be deemed exclusive of any other rights to
which the Executive may be entitled under the charter or bylaws of the
Corporation or of any Subsidiary, or any agreement, vote of shareholders or
disinterested directors, or otherwise, both as to action in the Executive's
official capacity and as to action in another capacity while holding such
office, and shall continue as to the Executive after the Executive has ceased to
be a director, trustee, officer, or employee and shall inure to the benefit of
the heirs, executors, and administrators of the Executive.
10. ARBITRATION. The initial method for resolving any dispute arising
out of this Agreement shall be nonbinding arbitration in accordance with this
Section. Except as provided otherwise in this Section, arbitration pursuant to
this Section shall be governed by the Commercial Arbitration Rules of the
American Arbitration Association. A party wishing to obtain arbitration of an
issue shall deliver written notice to the other party, including a description
of the issue to be arbitrated. Within 15 days after either party demands
arbitration, the Corporation and the Executive shall each appoint an arbitrator.
Within 15 additional days, these two arbitrators shall appoint the third
arbitrator by mutual agreement; if they fail to agree within this 15 day period,
then the third arbitrator shall be selected promptly pursuant to the rules of
the American Arbitration Association for Commercial Arbitration. The arbitration
panel shall hold a hearing in Columbus, Ohio, within 90 days after the
appointment of the third arbitrator. The fees and expenses of the arbitrator,
and any American Arbitration Association fees, shall be paid by the Corporation.
Both the Corporation and the Executive may be represented by counsel (legal and
accounting) and may present testimony and other evidence at the hearing. Within
90 days after commencement of the hearing, the arbitration panel will issue a
written decision; the majority vote of two of the three arbitrators shall
control. The majority decision of the arbitrators shall not be binding on the
parties, and the parties may pursue other available legal remedies if the
parties are not satisfied with the majority decision of the arbitrator. The
Executive shall be entitled to seek specific performances of the Executive's
rights under this Agreement during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
11. EMPLOYMENT RIGHTS. This Agreement sets forth the Severance Benefits
payable to the Executive in the event the Executive's employment with the
Corporation is terminated under certain conditions specified in Section 3. This
Agreement is not an employment contract nor shall it confer upon the Executive
any right to continue in the employ of the Corporation or its Subsidiaries and
shall not in any way affect the right of the Corporation or its Subsidiaries to
dismiss or otherwise terminate the Executive's employment at any time with or
without cause.
12. ARRANGEMENTS NOT EXCLUSIVE. The specific benefit arrangements
referred to in this Agreement are not intended to exclude the Executive from
participation in or from other benefits available to executive personnel
generally or to preclude the Executive's right to other compensation or benefits
as may be authorized by the Board at any time. The provisions of this Agreement
and any payments provided for hereunder shall not reduce any amounts otherwise
payable, or in any way diminish the Executive's existing rights, or rights which
would accrue solely as the result of the
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passage of time under any compensation plan, benefit plan, incentive plan, stock
option plan, employment agreement, or other contract, plan, or arrangement
except as may be specified in such contract, plan, or arrangement.
Notwithstanding anything to the contrary in this Section 12, the Severance
Benefits provided in Section 4 are in lieu of any benefits to which the
Executive would be entitled following the termination of his or her employment
pursuant to any Employment Agreement or pursuant to the Corporation's Transition
Pay or any successor to such plan.
13. TERMINATION. Except for termination of employment described in
Section 3(b), this Agreement shall terminate if the employment of the Executive
with the Corporation shall terminate prior to a Change in Control.
14. SUCCESSORS; BINDING AGREEMENTS. This Agreement shall inure to the
benefit of and be enforceable by the Executive's personal and legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, and legatees. The Executive's rights and benefits under this Agreement
may not be assigned, except that if the Executive dies while any amount would
still be payable to the Executive hereunder if the Executive had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement, to the beneficiaries designated by
the Executive to receive benefits under this Agreement in a writing on file with
the Corporation at the time of the Executive's death or, if there is no such
beneficiary, to the Executive's estate. The Corporation will require any
successor (whether direct or indirect, by purchase, merger, consolidation, or
otherwise) to all or substantially all of the business and/or assets of the
Corporation (or of any division or Subsidiary thereof employing the Executive)
to expressly assume and agree to perform this Agreement in the same manner and
to the same extent that the Corporation would be required to perform it if no
such succession had taken place. Failure of the Corporation to obtain such
assumption and agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle the Executive to compensation
from the Corporation in the same amount and on the same terms to which the
Executive would be entitled hereunder if the Executive terminated employment for
Good Reason following a Change of Control.
15. NO VESTED INTEREST. Neither the Executive nor the Executive's
beneficiaries shall have any right, title, or interest in any benefit under this
Agreement prior to the occurrence of the right to the payment of such benefit.
16. NOTICE. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the such addresses as each party may designate from time to time to the other
party in writing in the manner provided herein. Unless designated otherwise
notices to the Corporation should be sent to the Corporation at:
Huntington Bancshares Incorporated
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxx Xxxxxxxxx/Corporate Compensation
Until designated otherwise, notices shall be sent to the employee at the address
indicated on the Beneficiary Designation and Notice form attached hereto as
Exhibit A. If the parties by mutual
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agreement supply each other with telecopier numbers for the purposes of
providing notice by facsimile, such notice shall also be proper notice under
this Agreement. Notice sent by certified or registered mail shall be effective
two days after deposit by delivery to the U.S. Post Office.
17. SAVINGS CLAUSE. If any payments otherwise payable to the Executive
under this Agreement are prohibited or limited by any statute or regulation in
effect at the time the payments would otherwise be payable, including, without
limitation, any regulation issued by the Federal Deposit Insurance Company (the
"FDIC") that limits executive change of control payments that can be made by an
FDIC insured institution or its holding company if the institution is
financially troubled (any such limiting statute or regulation a "Limiting
Rule"):
(a) Corporation will use its best efforts to obtain the
consent of the appropriate governmental agency (whether the FDIC or any
other agency) to the payment by Corporation to the Executive of the
maximum amount that is permitted (up to the amounts that would be due
to the Executive absent the Limiting Rule); and
(b) the Executive will be entitled to elect to have apply, and
therefore to receive benefits directly under, either (i) this Agreement
(as limited by the Limiting Rule) or (ii) any generally applicable
Corporation severance, separation pay, and/or salary continuation plan
that may be in effect at the time of the Executive's termination.
Following any such election, the Executive will be entitled to receive benefits
under this agreement or plan elected only if and to the extent the agreement or
plan is applicable and subject to its specific terms.
18. AMENDMENT; WAIVER. This Agreement may not be amended or modified
and no provision may be waived unless such amendment, modification, or waiver is
agreed to in writing and signed by the Executive and the Corporation.
19. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
20. PRIOR EXECUTIVE AGREEMENTS. This Agreement supersedes any and all
prior Executive Agreements between the Corporation (or any predecessor of the
Corporation) and the Executive and no payments or benefits of any kind shall be
made under, on account of, or by reference to the prior Executive Agreements.
21. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
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22. GOVERNING LAW. Except as otherwise provided, this Agreement shall
be governed by the laws of the State of Ohio, without giving effect to any
conflict of law provisions.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the day and
year written above.
CORPORATION:
------------
HUNTINGTON BANCSHARES INCORPORATED
By: /s/ Xxxxx Xxxxx
--------------------------------
Chief Executive Officer
EXECUTIVE:
----------
________________________________________
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Exhibit 10(c)
-------------
19. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
20. PRIOR EXECUTIVE AGREEMENTS. This Agreement supersedes any and all
prior Executive Agreements between the Corporation (or any predecessor of the
Corporation) and the Executive and no payments or benefits of any kind shall be
made under, on account of, or by reference to the prior Executive Agreements.
21. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
22. GOVERNING LAW. Except as otherwise provided, this Agreement shall
be governed by the laws of the State of Ohio, without giving effect to any
conflict of law provisions.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
day and year written above.
CORPORATION:
------------
HUNTINGTON BANCSHARES INCORPORATED
By:______________________________________
Secretary and General Counsel
EXECUTIVE:
----------
_________________________________________
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Exhibit 10(c)
-------------
EXHIBIT A
BENEFICIARY DESIGNATION AND NOTICE FORM
BENEFICIARY DESIGNATION
In the event of my death, I direct that any amounts due me under the
Agreement to which this Beneficiary Designation is attached shall be distributed
to the person designated below. If no beneficiary shall be living to receive
such assets they shall be paid to the administrator or executor of my estate.
NOTICE
Until notified otherwise, pursuant to Section 16 of the Agreement,
notices should be sent to me at the following address
_____________________________
Street Address
_____________________________
City, State and Zip Code
___________________________ __________________________________
Date
Executive
__________________________________
Beneficiary
__________________________________
Relationship to Executive
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