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EXHIBIT 99.3
CHANGE OF CONTROL AGREEMENT
AGREEMENT made as of this 26th day of October, 1997, between CFX
CORPORATION, a New Hampshire corporation (hereinafter "Company"), and Xxxxx X.
Xxxxxxxxx (hereinafter "Executive").
WHEREAS the Company wishes to assure the continued availability of
the Executive's services and to create an environment which will promote the
Executive's giving impartial and objective advice in any circumstances
resulting from the possibility of Change of Control of the Company (as herein
defined), and
WHEREAS the Company and the Executive wish to provide the Executive
with financial protection in the event significant changes in the Executive's
employment status occur following a Change of Control of the Company (as herein
defined);
NOW THEREFORE, the Company and the Executive, in consideration of
the terms and conditions set forth herein and other valuable consideration,
receipt of which is hereby acknowledged, mutually covenant and agree as
follows:
1. Term.
The term of this Agreement shall commence on the date hereof and
terminate on the date three years from the date hereof unless the Executive's
employment is sooner terminated as provided in Section 11 hereof (the "Term").
On each October 26th thereafter, the Term shall automatically be extended for
an additional calendar year unless either party gives written notice to the
other, by no later than the preceding September 30th, that he or it does not
concur in such extension.
2. Payments Upon Change of Control and Termination Event.
The Company shall make payments to the Executive as provided for in
paragraph 4 hereof upon the occurrence of both a Change of Control of the
Company and a Termination Event, as such terms are defined in paragraph 3
hereof.
3. Definitions.
(a) "Base Amount" shall mean an amount equal to the Executive's
annual base salary of $130,000 plus the gross amount of the incentive payment
paid to the Executive under the Company's 1997 Incentive Compensation Plan.
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(b) A "Change of Control" shall be deemed to have occurred if any
of the following have occurred:
(i) any individual, corporation (other than the Company),
partnership, trust, association, pool, syndicate, or any other entity or any
group of persons acting in concert becomes the beneficial owner, as that
concept is defined in Rule 13d-3 promulgated by the Securities Exchange
Commission under the Securities Exchange Act of 1934, as the result of any one
or more securities transactions (including gifts and stock repurchases but
excluding transactions described in subdivision (ii) following) of securities
of the Company possessing fifty-one percent (51%) or more of the voting power
for the election of directors of the Company;
(ii) there shall be consummated any consolidation, merger
or stock-for-stock exchange involving securities of the Company in which the
holders of voting securities of the Company immediately prior to such
consummation own, as a group, immediately after such consummation, voting
securities of the Company (or if the Company does not survive such transaction,
voting securities of the corporation surviving such transaction) having less
than fifty percent (50%) of the total voting power in an election of directors
of the Company (or such other surviving corporation), excluding securities
received by any members of such group which represent disproportionate
percentage increases in their shareholdings vis-a-vis the other members of such
group;
(iii) "approved directors" shall constitute less than a
majority of the entire Board of Directors of the Company, with "approved
directors" defined to mean the members of the Board of Directors of the Company
as of the date of this Agreement and any subsequently elected members of the
Board of Directors of the Company who shall be nominated or approved by a
majority of the approved directors on the Board of Directors of the Company
prior to such election; or
(iv) there shall be consummated any sale, lease, exchange
or other transfer (in one transaction or a series of related transactions,
excluding any transaction described in subdivision (ii) above), of all, or
substantially all, of the assets of the Company or its subsidiaries to a party
which is not controlled by or under common control with the Company.
(c) A "Termination Event" shall be deemed to have occurred if,
within the twelve month period following a Change of Control, the Executive
experiences the loss of his position by reason of discharge or demotion, for
other than termination for good cause, or the Executive's voluntary termination
following the substantial withholding, substantial adverse alteration or
substantial reduction of responsibility, authority, or compensation (including
any compensation or benefit plan in which the Executive participates or
substitute plans adopted prior to the Change of Control) to which the Executive
was charged or empowered with or entitled to immediately prior to a Change of
Control of the Company or to which he would normally be charged or empowered
with or entitled to from time to time by reason of his office, for other than
good cause.
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(d) Termination for Good Cause.
"Termination for good cause" means termination:
(i) based on the willful and continued failure by the
Executive to perform his duties for the Company or a subsidiary (other than
such failure resulting from the Executive's incapacity due to physical or
mental illness), after a written demand for performance is delivered to the
Executive by the Board of Directors of the Company which specifically
identifies the manner in which the Board believes the Executive has not
performed his duties; an act or acts of dishonesty taken by the Executive; or
an act or acts intended to result in his personal enrichment at the expense of
the Company or a subsidiary; or an act or acts of willful misconduct which are
materially injurious to the Company. Termination shall be by written notice to
the Executive identifying the cause; or
(ii) If the Executive shall have been absent from the full-
time performance of his duties with the Company for six consecutive months as
the result of the Executive's incapacity due to physical or mental illness, and
the Executive shall not have returned to full-time performance of his duties
within thirty days after written notice of proposed termination, the Executive's
employment may be terminated by the Company on or after the expiration of such
thirty day period for disability. Termination shall be by written notice to the
Executive. Termination of the Executive's employment based on retirement shall
mean termination in accordance with the Company's generally applicable
retirement policy or with any retirement arrangement established with the
Executive's consent.
4. Cash Payments.
Upon the occurrence of both a Change of Control of the Company and
a Termination Event, the Company shall, immediately upon the occurrence of the
Termination Event, make a lump sum payment to the Executive in an amount that
equals one (1.0) times the Base Amount.
5. Death of Executive.
If the Executive dies before receiving all payments payable to him
under this Agreement, the Company shall pay to the Executive's spouse, or if
the Executive leaves no spouse, to the estate of the Executive, one (l) lump
sum payment in an amount equal to the amount determined pursuant to paragraph 4
hereof.
6. Reimbursement of Expenses.
In the event a Change of Control of the Company and a Termination
Event occur and any action, suit or proceeding is brought by the Company or the
Executive for the enforcement, performance or construction of this Agreement,
the Company agrees to reimburse the Executive for all costs and expenses
reasonably incurred by him in such action, suit or proceeding, including
reasonable attorneys' and accountants' fees and expenses, unless the Executive
shall have been substantially unsuccessful, on the merits or otherwise, in such
action, suit or proceeding.
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7. No Duty to Seek Other Employment.
Amounts payable to the Executive under this Agreement shall not be
reduced by the amount of any compensation received by the Executive from any
other employer or source, and the Executive shall not be under any obligation
to seek other employment or gainful pursuit as a result of this Agreement.
8. Health and Life Insurance Benefits
The Company agrees to maintain, for a period of eighteen (18)
months following the date of the occurrence of the Termination Event, the
Executive's eligibility for and participation in any health and life insurance
plans, in which the Executive was eligible to participate prior to the
Termination Event and upon the same basis and cost as prior to the Termination
Event.
9. Reduction of Payments.
In the event any of the payments made under this Agreement would be
considered an "excess parachute payment" as defined in Section 280G of the
Internal Revenue Code of 1986, as amended, then there shall be a reduction in
the amount otherwise payable under this Agreement such that all payments are
deductible by the Company.
10. Payment of Compensation to Termination Date.
In addition to any other payments payable to the Executive
hereunder, the Company shall pay the Executive full compensation and all other
amounts and benefits to which the Executive is entitled through the termination
of his employment.
11. No Right to Continued Employment.
This Agreement shall not confer upon the Executive any right with
respect to continuance of employment by the Company or any subsidiary, nor
shall it interfere in any way with the right of his employer to terminate his
employment at any time. No payments hereunder shall be required except upon the
occurrence of both a Change of Control of the Company and a Termination Event
as set forth in Section 3 herein. Thus, except as specifically provided in
Section 2 herein, no payments hereunder shall be made on account of termination
of the Executive's employment (i) upon the Executive's death, disability or
retirement, (ii) by the Company with or without cause or (iii) upon the
Executive's voluntary termination.
12. Waiver of Breach.
Waiver by any party of a breach of any provision of this Agreement
shall not operate as or be construed as a waiver by such party of any
subsequent breach hereof.
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13. Invalidity.
The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision, which shall remain in full force and effect.
14. Entire Agreement; Written Modification; Termination.
This Agreement contains the entire agreement between the parties
concerning the matters covered hereby. No modification, amendment or waiver of
any provision hereof shall be effective unless in writing specifically
referring hereto and signed by the party against whom such provision as
modified or amended or such waiver is sought to be enforced. This Agreement
shall terminate as of the time the Company makes the final payment which it may
be obligated to pay hereunder or provides the final benefit which it may be
obligated to provide hereunder.
15. Counterparts.
This Agreement may be made and executed in counterparts, each of
which may be considered an original for all purposes.
16. Governing Law.
This Agreement is governed by and is to be construed and enforced
in accordance with the laws of the State of New Hampshire.
17. Authorization.
The Company represents and warrants that the execution of this
Agreement has been duly authorized by resolution of the Board of Directors of
the Company.
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IN WITNESS WHEREOF, the undersigned parties have executed or caused
to be executed this Agreement as of the day and year first above written.
CFX CORPORATION
By: /s/
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Xxxxx X. Xxxxxx
President and Chief Executive Officer
"EXECUTIVE"
/s/
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Xxxxx X. Xxxxxxxxx
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