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Severance Agreement

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This AGREEMENT, made and entered into as of the __________________, by and among PEOPLES HERITAGE FINANCIAL GROUP, INC. (the "Company") and _______________________ (the "Executive");


W I T N E S S E T H:


WHEREAS, the Executive is employed by the Company in a key executive capacity and possesses intimate knowledge of the business and affairs of the Company; and


WHEREAS, the Company desires to ensure, insofar as possible, that it will continue to have the benefit of the Executive's services and to protect its confidential information and goodwill; and


WHEREAS, the Company recognizes that circumstances may arise in which a change in the control of the Company occurs, thereby causing uncertainty of employment without regard to the Executive's competence or past contributions; and
WHEREAS, the Company and the Executive wish to provide reasonable security to the Executive against changes in the Executive's relationship with the Company in the event of such change in control;


NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows: 3
1. Definitions


(a) Accrued Benefit means:


(i) All salary earned or accrued through the
date the Executive's employment is
terminated;


(ii) reimbursement for any and all monies
advanced in connection with the Executive's
employment for reasonable and necessary
expenses incurred by the Executive through
the date the Executive's employment is
terminated;


(iii) any and all other compensation previously
earned and deferred at the election of the
Executive or pursuant to any deferred
compensation plans then in effect together
with any interest or desired earnings
thereon;


(iv) annual bonus, if any, accrued for a Year
prior to the Year in which employment
terminates, but not yet paid to the
Executive, under any bonus or incentive
compensation plan or plans in which the
Executive is a participant;


(v) a pro rata portion of the maximum bonus
payable to the Executive for the Year in
which employment terminates under any bonus
or incentive compensation plan or plans in
which the Executive is a participant,
determined as if the Executive had remained
in employment for the full Year and prorated
based upon weeks, including partial weeks,
of employment during that Year;


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(vi) all other payments and benefits to which the
Executive may be entitled under the terms of
any applicable compensation arrangement or
benefit plan or program of the Company.


(b) Act means the Securities Exchange Act of 1934, as amended.


(c) Affiliate of any specified persons means any other person
that, directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under direct or indirect common
control with such specified person. For the purposes of this
definition, "control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies
of a person, whether through the ownership of voting securities, by
contract or otherwise, and the terms "controlling" and "controlled"
have meanings correlative to the foregoing.


(d) Annual Compensation. Annual compensation shall mean the
sum of:


(i) the Executive's annual salary at the rate in
effect on the date of a termination of
employment as described in Section 3 or in
Section 7(d) (or, in the event of a
termination for Good Reason under Section
1(k)(i)(A) below, the annual salary as in
effect immediately before the actions giving
rise to Good Reason); plus


(ii) the greatest of the bonuses either paid or
accrued in either the Year of the Change in
Control or the immediately preceding Year.


(e) Base Amount means an amount equal to the Executive's
Annualized Includable Compensation for the Base Period as defined in
Section 280G(d)(1) and (2) of the Code (as hereinafter defined).


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(f) Cause means (i) the executive's conviction of, or plea of
nolo contendere to, a felony; or (ii) willful and intentional
misconduct, willful neglect, or gross negligence, in the performance of
the Executive's duties, which has caused a demonstrable and serious
injury to the Company, monetary or otherwise.


The Executive shall be given written notice that the
Company intends to terminate his employment for Cause. Such written
notice shall specify the particular acts, or failures to act, on the
basis of which the decision to so terminate employment was made.


In the case of a termination for Cause as described
in Clause (ii), above, the Executive shall be given the opportunity
within 30 days of the receipt of such notice to meet with the Board to
defend such acts, or failures to act, prior to termination. The Company
may suspend the Executive's title and authority pending such meeting,
and such suspension shall not constitute "Good Reason," as defined in
subsection (k) below.


(g) Change in Control of the Company shall mean a Change in
Control of a nature that would be required to be reported in response
to Item 5(f) of Schedule 14A of Regulation 14A promulgated under the
Act or any successor thereto, provided that without limiting the
foregoing, a Change in Control of the Company also shall be deemed to
have occurred if:


(i) any "person" (as defined under Section
3(a)(9) of the Act) or "group" of persons
(as provided under Rule 13d-3 of the Act) is
or becomes the "beneficial owner" (as
defined in Rule 13d-3 or otherwise under the
Act), directly or indirectly (including as


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provided in Rule 13d-3(d)(1) of the Act), of
capital stock of the Company the holders of
which are entitled to vote for the election
of directors ("voting stock") representing
that percentage of the Company's then
outstanding voting stock (giving effect to
the deemed ownership of securities by such
person or group, as provided in Rule
13d-3(d)(1) of the Act, but not giving
effect to any such deemed ownership of
securities by another person or group) equal
to or greater than thirty-five percent (35%)
of all such voting stock;


(ii) individuals who constitute the Board on the
date hereof (the "Incumbent Board") cease
for any reason to constitute at least a
majority thereof. Any person becoming a
director subsequent to such date whose
election, or nomination for election, is, at
any time, approved by a vote of at least a
majority of the directors comprising the
Incumbent Board shall be considered as
though he were a member of the Incumbent
Board;


(iii) The Company combines with another person or
entity, whether through a merger, asset
sale, reorganization or otherwise, and (A)
any person or group of persons holds at any
time after such combination, voting stock
equal to or greater than thirty-five percent
(35%) determined by reference to the voting
securities of the surviving entity, or (B)
the Company's directors, as of the date


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immediately before such combination,
constitute less than a majority of the Board
of Directors of the combined entity.


(h) Code means the Internal Revenue Code of 1986, including
any amendments thereto.


(i) Effective Date means the date this Agreement is executed
by the parties.


(j) Employment Period means a period commencing on the date of
a Change in Control of the Company and ending on the earlier of (i) the
last day of the twenty-fourth month following the month in which the
Change in Control occurs, or (ii) the Executive's Normal Retirement
Date.


(k) Good Reason means:


(i) any breach of this Agreement by the Company,
including without limitation (A) any
reduction during the employment period in
the amount of the Executive's base salary or
aggregate benefits as in effect from time to
time, (B) failure to provide the Executive
with the same fringe benefits that were
provided to the Executive immediately prior
to a Change in Control of the Company, or
with a package of fringe benefits (including
paid vacations) that, though one or more of
such benefits may vary from those in effect
immediately prior to such a Change in
Control, is substantially comparable in all
material respects to such fringe benefits
taken as a whole, or (C) any other breach by
the Company of its obligations contained in
Section 6 below;


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(ii) without the Executive's express written
consent, the assignment to the Executive of
any duties which are materially inconsistent
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