EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of July, 31, 1998, by and between BANKNORTH
GROUP, INC., a Delaware corporation (the "Company") and XXXXXX X. XXXXXX
(the "Executive").
WITNESSETH:
WHEREAS, the Company has entered into an Affiliation Agreement and
Plan of Reorganization and a related Agreement and Plan of Merger (together,
the "Merger Agreement"), with Evergreen Bancorp, Inc. ("Evergreen"), dated
as of July 31, 1998, providing for the merger of Evergreen with and into the
Company (the "Merger"); and
WHEREAS, the Executive currently serves as Chairman of the Board and
Chief Executive Officer of Evergreen;
WHEREAS, the Company believes that the Executive's experience as the
Chairman of the Board and Chief Executive Officer of Evergreen and his
knowledge of and reputation in the markets currently served by Evergreen
would be of great value to the Company after the Merger; and
WHEREAS, the parties hereto desire to provide for the Executive's
employment by the Company upon and following consummation of the Merger;
NOW THEREFORE, in consideration of the mutual covenants contained
herein, the Company and the Executive agree as follows:
1. Employment. The Company agrees to employ the Executive and the
Executive agrees to be employed by the Company on the terms and conditions
hereinafter set forth.
2. Duties. During the term of the Executive's employment
hereunder, the Executive shall serve, subject to the supervision and
direction of the President and the Board of Directors of the Company, as the
Vice Chairman and shall focus on strategic planning, merger and acquisition
opportunities and identification and solicitation of new business.
3. Commencement Date and Term. The commencement date (the
"Commencement Date") of this Agreement shall be the date upon which the
Merger becomes effective. Subject to the provisions of Section 5, the term
of the Executive's employment hereunder shall be for three (3) years from
the Commencement Date. The last day of such term is herein sometimes
referred to as the "Expiration Date."
4. Compensation and Benefits. The compensation and benefits
payable by the Company to the Executive under this Agreement shall be as
follows:
(a) Salary. For all services rendered by the Executive under
this Agreement, the Company shall pay the Executive a base salary at
the rate of $225,000 per year (the "Base Compensation"). The
Executive's salary shall be payable in periodic installments in
accordance with the Company's usual practices for its senior
executives.
(b) Regular Benefits; Bonuses. The Executive shall also be
entitled to participate in the Company's Management Incentive
Compensation Plan and Equity Compensation Plan, as each may be from
time to time in effect, upon the same terms and conditions as other
senior executives of the Company. Such participation shall be subject
to (i) the terms of the applicable plan documents and applicable
federal and state laws, (ii) generally applicable policies of the
Company, and (iii) the discretion of the Board of Directors of the
Company or any administrative or other committee as provided for in or
contemplated by such plan. The parties hereto agree that for the
purpose of calculating bonus compensation under the Banknorth Group,
Inc. Management Incentive Compensation Plan, the Executive shall have
the same Grade Level and Target Award (expressed as a percentage of
base salary) as the Chief Financial Officer of the Company.
(c) Business Expenses. The Company shall reimburse the
Executive for all reasonable travel and other business expenses
incurred by him in the performance of his duties and responsibilities,
subject to such reasonable requirements with respect to substantiation
and documentation as may be specified by the Company.
(d) Vacation. The Executive shall be entitled to four (4)
weeks of vacation per year, to be taken at such times and intervals as
shall be determined by the Executive with the approval of the Company,
which approval shall not be unreasonably withheld. Such vacation
shall be pro-rated for any employment period less than a full year.
(e) Executive's Home. To facilitate the relocation of the
Executive, at such time as may be mutually agreed to by the Company
and the Executive, the Company shall, within thirty (30) days after
the Commencement Date, purchase the Executive's home for its then
market value as determined by an independent, professional appraiser.
The Company shall pay all real estate transfer recordation fees
incurred in connection with such purchase.
5. Termination by the Company.
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(a) Death or Disability. In the event of the Executive's death or
disability (as defined below), this Agreement shall terminate immediately
and the Company shall be obligated only to pay compensation or other
benefits actually earned or accrued through such date, without prejudice to
any other rights or benefits that the Executive is entitled to as a
consequence thereof. "Disability" means the Executive's probable and
expected inability as a result of physical or mental incapacity to
substantially perform his duties for the Company on a full-time basis for a
period of six (6) months. The determination of whether the Executive
suffers a Disability shall be made by a physician reasonably acceptable to
both the Executive (or his personal representative) and the Company.
(b) Termination for Cause. The Company may terminate this Agreement
and the Executive's employment hereunder immediately for (i) any intentional
acts or conduct by the Executive involving moral turpitude; (ii) any gross
negligence by the Executive in complying with the terms of this Agreement or
in performing his duties for the Company; (iii) any intentional act of
dishonesty in the performance of his duties for the Company; (iv) deliberate
and intentional refusal by the Executive during the term of this Agreement,
other than by reason of incapacity due to illness or accident, to obey
lawful directives from the Board of Directors, or if the Executive shall
have breached any obligation under this Agreement and such breach of this
Agreement shall result in a demonstrable, material injury to the Company,
and the Executive shall have failed to remedy such alleged breach within ten
(10) days from his receipt of written notice from the Secretary of the
Company demanding that he remedy such alleged breach. In the event of a
termination pursuant to this Subsection 5(b), the Executive will not be
entitled to any further benefits or compensation under this Agreement.
(c) Termination by Notice. The Company shall have the additional
right to terminate this Agreement and the Executive's employment without
cause by giving the Executive written notice of termination. Such
termination will be effective immediately upon receipt of notice by the
Executive or on such other date as is stated in the notice. In the event of
a termination pursuant to this Subsection 5(c), the Executive will be
entitled only to continuation of his Base Compensation and the payment of
the bonus compensation as provided in Section 4(b) (including the Grade
Level and Target Award as specified therein), calculated based upon the
Executive's Base Compensation on the date of termination, for the remainder
of the original term of this Agreement.
6. Termination by the Executive.
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(a) Termination With Good Reason. The Executive may terminate his
employment if he determines, in good faith, that there has been a
significant reduction in the authorities, powers, functions, duties or
responsibilities assigned to him pursuant to Section 2, or because of any
other material breach by the Company of the terms hereof. In the event of
any such alleged breach, the Executive shall specify by written notice,
within a reasonable time not to exceed, except in the case of a continuing
breach, thirty (30) days after the event giving rise to the notice, to the
Company of the breach relied on for such termination. The Company shall
have thirty (30) days from the receipt of such notice to cure such alleged
breach. If the Executive remains unsatisfied that the action taken by the
Company cures the alleged breach, the matter shall be determined by binding
arbitration through an arbitrator approved by the American Arbitration
Association or other arbitrator mutually acceptable to the parties. If the
arbitrator determines that there was a breach and that it was not adequately
cured within the time permitted, then the Executive's employment hereunder
shall be deemed terminated upon written notice to that effect given to the
Company by the Executive, and the Executive shall thereupon be entitled to
the benefits and remedies specified in Subsection 5(c) of this Agreement.
(b) Termination Without Good Reason. In addition, the Executive may
terminate his employment without good reason at any time by giving thirty
(30) days notice in writing. Upon the effective date of such notice the
Company will not owe the Executive any compensation or benefits except as
required by law, except for compensation or benefits actually earned or
accrued through the date of termination.
7. Effect of Termination. Notwithstanding any other provision of
this Agreement, the Executive agrees that upon termination of this
Agreement, he shall continue to be bound by the terms of Sections 8, 9 and
10 hereof.
8. Covenant Not to Compete. (a) Covenant. For a period of two
(2) years following the expiration or termination of this Agreement for any
reason, the Executive shall not serve as an officer or director of a
depository financial institution (including any holding company thereof)
that is not an affiliate of the Company and that is located or has an office
or offices in any of the towns in the states of Vermont, New Hampshire,
Massachusetts, or New York in which the Company or any of its subsidiaries
maintains banking offices.
(b) Injunctive Relief. The Executive acknowledges that through his
employment with the Company he has and will have access to valuable
confidential information of the Company as well as the opportunity to build
good will among the Company's customer base and those of its subsidiary
banks. The Executive acknowledges that the covenant not to compete is a
reasonable means of protecting and preserving the Company's investment in
the Executive, its confidential information and customer good will. The
Executive agrees that any breach of this covenant may result in irreparable
damage and injury to the Company, and that the Company will be entitled to
injunctive relief in any court of competent jurisdiction without the
necessity of posting any bond.
(c) Enforceability of Covenant. The Executive and the Company agree
that the Executive's obligations under the covenant not to compete contained
herein is separate and distinct from other provisions of this Agreement, and
the failure or alleged failure of the Company to perform its obligations
under any other provisions of this Agreement (other than its payment
obligations hereunder) shall not constitute a defense to the enforceability
of this covenant not to compete.
9. Covenant Not to Solicit.
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(a) Special Value of the Executive's Services. The parties
acknowledge: (i) that the Company is engaged in the business of banking
throughout Vermont, New Hampshire, Massachusetts, and in the northern and
eastern parts of upstate New York, (ii) that the Executive's services under
this Agreement require special expertise and talent in the area of
management in the aforementioned business; (iii) that such expertise has
been built up over the years; (iv) that the Executive has been well
compensated and will continue to be well compensated under this Agreement
for the expertise and knowledge which he possesses; and (v) that due to the
Executive's special experience and talent, the loss of the Executive's
services to the Company under this Agreement cannot be reasonably or
adequately compensated by damages in an action at law.
(b) Non-Solicitation of Customers. For a period of two (2) years
following the expiration or termination of this Agreement for any reason,
the Executive shall not attempt to solicit or accept, directly or by
assisting others, any business from the customers or prospective customers
of the Company (or any of its subsidiaries) whom the Executive has served or
solicited on behalf of the Company during the course of his employment
hereunder.
(c) Injunctive Relief. The Executive acknowledges that the covenant
not to solicit contained herein is a reasonable means of protecting and
preserving the Company's investment in the Executive. The Executive agrees
that any breach of this covenant may result in irreparable damage and injury
to the Company, and that the Company will be entitled to injunctive relief
in any court of competent jurisdiction without the necessity of posting any
bond.
(d) Enforceability of Covenant. The Executive and the Company agree
that the Executive's obligations under the covenant not to solicit contained
herein is separate and distinct from other provisions of this Agreement, and
the failure or alleged failure of the Company to perform its obligations
under any other provisions of this Agreement (other than its payment
obligations hereunder) shall not constitute a defense to the enforceability
of this covenant not to solicit.
10. Nondisclosure of Confidential Information.
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(a) Confidential Information Defined. As used in this Agreement, the
term "Confidential Information" shall mean all information that is not
generally disclosed or known to persons not employed by the Company, and
shall include, without limitation, any customer lists or customer account
information of the Company and any non-public matters concerning the
financial affairs and management of the Company.
(b) Nondisclosure of Confidential Information. Throughout the term
of this Agreement and any renewal periods hereunder, and for a period of two
(2) years following the expiration or termination of this Agreement, the
Executive shall not, either directly or indirectly, transmit or disclose any
Confidential Information to any person, concern or entity.
(c) Injunctive Relief. Executive acknowledges that the
nondisclosure covenant contained herein is a reasonable means of protecting
and preserving the Company's interest in the confidentiality of the
Confidential Information. The Executive agrees that any breach of such
covenant may result in irreparable damage and injury to the Company and that
the Company will be entitled to injunctive relief in any court of competent
jurisdiction without the necessity of posting any bond.
(d) Enforceability of Covenant. The Executive and the Company agree
that the Executive's obligations under the nondisclosure covenant contained
herein is separate and distinct from other provisions of this Agreement, and
the failure or alleged failure of the Company to perform its obligations
under any provisions of this Agreement (other than its payment obligations
hereunder) shall not constitute a defense to the enforceability of the
nondisclosure covenant.
11. Withholding. All payments made by the Company under this
Agreement shall be net of any tax or other amounts required to be withheld
by the Company under applicable law.
12. Supplemental Executive Retirement Plan Benefit; Certain Other
Benefits. Notwithstanding anything to the contrary in the Evergreen
Bancorp, Inc. Supplemental Executive Retirement Plan (the "SERP") or the
Employment Agreement by and between Evergreen and the Executive, dated
December 19, 1996 (the "Evergreen Employment Agreement"), the Executive
shall be entitled to commence receiving actuarially adjusted (in accordance
with the terms of the SERP) Early Retirement benefit payments under the SERP
as of April 1, 1999. The Company and the Executive agree that (a) the
Executive waives his right to (i) continued health and life insurance
coverage under Section 13(c)(ii)(C) of the Evergreen Employment Agreement,
(ii) additional compensation and employment credit for purposes of the SERP
and other retirement plans under Sections 13(c)(ii)(D) and 13(c)(ii)(E) of
the Evergreen Employment Agreement and (iii) the vesting of his accrued
benefit under the SERP upon the occurrence of a "Change in Control" (within
the meaning of the SERP and the Evergreen Employment Agreement), and (b)
that the benefits waived pursuant to the preceding clause (a) will not be
treated as "Severance Payments" for purposes of calculating the limitation
imposed by Section 13(c)(ii)(G) of the Evergreen Employment Agreement.
After the Commencement Date, the Executive shall accrue no additional
benefits under the SERP; provided, however, that the Executive's accrued
benefit (determined based on the Executive's service and compensation
through the Commencement Date) under the SERP shall become fully vested as
of the earlier of (i) the Executive's Disability (within the meaning of the
SERP), or (ii) March 7, 1999, provided that the Executive does not
voluntarily terminate his employment with the Company other than for Good
Reason prior to such date. In the event of the Executive's death on or
after the Commencement Date and before March 7, 1999, the Executive shall be
treated for purposes of Section 6.3 of the SERP as an "Active Participant"
on the date of his death. Notwithstanding Section 3 hereof, the second
sentence of this Section 12 shall be effective as of the date hereof.
13. Assignment; Successors and Assigns, etc. Neither the Company
nor the Executive may make any assignment of this Agreement or any interest
herein, by operation of law or otherwise, without the prior written consent
of the other party; provided, however, that the Company may assign its
rights under this Agreement without the consent of the Executive in the
event the Company shall hereafter effect a reorganization, consolidate with
or merge into any other person, or transfer all or substantially all of its
properties or assets to any other Person. This Agreement shall inure to the
benefit of and be binding upon the Company and the Executive, their
respective successors, executors, administrators, heirs and permitted
assigns. In the event of the Executive's death prior to the completion by
the Company of all payments due him under this Agreement, the Company shall
continue such payments to the Executive's beneficiary designated in writing
to the Company prior to his death (or to his estate, if he fails to make
such designation).
14. Enforceability. If any portion or provision of this Agreement
shall to any extent be declared illegal or unenforceable by a court of
competent jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other than those
as to which it is so declared illegal or unenforceable, shall not be
affected thereby, and each portion and provision of this Agreement shall be
valid and enforceable to the fullest extent permitted by law.
15. Waiver. No waiver of any provision hereof shall be effective
unless made in writing and signed by the waiving party. The failure of any
party to require the performance of any term or obligation of this
Agreement, or the waiver by any party of any breach of this Agreement, shall
not prevent any subsequent enforcement of such term or obligation or be
deemed a waiver of any subsequent breach.
16. Notices. Any notices, requests, demands, and other
communications provided for by this Agreement shall be sufficient if in
writing and delivered in person or sent by registered or certified mail,
postage prepaid, to the Executive at the last address the Executive has
filed in writing with the Company or, in the case of the Company, at its
main office, attention of the Secretary.
17. Amendment. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by a duly authorized
representative of the Company.
18. Governing Law. This is a Vermont contract and shall be
construed under and be governed in all respects by the laws of the State of
Vermont without regard to choice or conflict of law principles.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Executive and by the Company, by its duly authorized
officer, as of the date first above written.
/s/ Xxxxxx X. Xxxxxx
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XXXXXX X. XXXXXX
BANKNORTH GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Its: President & Chief Executive Officer
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ACKNOWLEDGMENT OF ARBITRATION
Each party understands that Section 6(a) of this agreement sets forth
an agreement to arbitrate. After signing this document, each party
understands that they will not be able to bring a lawsuit concerning any
dispute that may arise which is covered by such Section, unless it involves
a question of constitutional or civil rights. Instead, each party agrees to
submit any such dispute to an arbitrator as set forth in such Section.
BANKNORTH GROUP, INC.
/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxx
Its: President & Chief Executive Officer
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