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Exhibit 10.1
EMPLOYMENT AGREEMENT
AGREEMENT by and between Peoples Heritage Financial Group, Inc. (the
"Company") and F. Xxxxxxx Xxxxxxxx, Jr. (the "Executive") dated as of the 1st
day of January 1999.
The Company has determined that it is in the best interests of its
shareholders to ensure that the Company will have the continued dedication of
the Executive following the merger of SIS Bancorp, Inc. ("SIS"), a Massachusetts
corporation, with and into a wholly-owned subsidiary of the Company (the
"Merger") pursuant to the Agreement and Plan of Merger, dated as of July 20,
1998, as amended (the "Merger Agreement"), and to provide the Company after the
Merger with continuity of management. Therefore, in order to accomplish these
objectives, the Executive and the Company desire to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. EFFECTIVE DATE. The "Effective Date" shall mean the
effective date of the Merger.
2. EMPLOYMENT PERIOD. The Company hereby agrees to
employ the Executive, and the Executive hereby agrees to enter into the employ
of the Company subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on December 31, 2001 (the
"Employment Period").
3. TERMS OF EMPLOYMENT.
(a) Position and Duties. (i) During the
Employment Period, the Executive shall serve as an Executive Vice President of
the Company and Vice Chairman of its Senior Management Committee, reporting
directly to the Chief Executive Officer of the Company, with appropriate
authority, duties and responsibilities, as determined from time to time by the
Board of Directors of the Company and/or the Chief Executive Officer of the
Company.
(ii) During the Employment Period,
and excluding any periods of vacation and sick leave to which the Executive is
entitled, the Executive agrees to devote substantially all of his attention and
time during normal business hours to the business and affairs of the Company and
its affiliated companies and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the extent that
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such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Company. As used in this Agreement, the term "affiliated
companies" shall include any company controlled by, controlling or under common
control with the Company.
(b) Compensation and Other Benefits. (i) Base Salary.
During the Employment Period, the Executive shall receive an annual base salary
("Annual Base Salary") of no less than $418,000. Any increase in Annual Base
Salary shall not serve to limit or reduce any other obligation to the Executive
under this Agreement. Annual Base Salary shall not be reduced after any such
increase and the term Annual Base Salary as utilized in this Agreement shall
refer to Annual Base Salary as so increased.
(ii) Annual Bonus. During the Employment Period,
the Executive shall be eligible to receive an annual cash bonus ("Annual Bonus")
on a basis no less favorable than peer executives of the Company.
(iii) Other Employee Benefit Plans. During the
Employment Period, except as otherwise expressly provided herein, the Executive
shall be entitled to participate in all employee benefit, welfare, incentive,
pension, retirement, supplemental retirement, savings, stock option and stock
grant plans and all other plans, practices, policies and programs (collectively,
"Employee Benefit Plans") applicable to peer executives of the Company (which
for purposes of this Agreement shall mean executives with the same job level at
the Company) on a basis no less favorable than that provided to peer executives
of the Company, provided that, unless otherwise agreed to by the parties, the
Executive shall not be entitled to enter into a change-in-control severance
agreement of the type which exists between the Company and its executive
officers as of the date hereof as long as this Agreement is in effect. For
purposes of all Employee Benefit Plans, service rendered by the Executive to SIS
shall be deemed service with the Company.
4. TERMINATION OF EMPLOYMENT.
(a) Death or Disability. The Executive's employment shall
terminate automatically upon the Executive's death during the Employment Period.
If the Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance with
Section 12(b) of this Agreement of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the Company shall
terminate effective on the 30th day after receipt of such notice by the
Executive (the "Disability Effective Date"), provided that, within the 30 days
after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the Executive's duties
with the Company on a full-time basis for 90 consecutive business days as a
result of incapacity due to mental or physical illness which is determined to be
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total and permanent by a physician selected by the Company or its insurers and
reasonably acceptable to the Executive or the Executive's legal representative.
(b) Cause. The Company may terminate the Executive's
employment during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean:
(i) the continued failure of the Executive to
perform substantially the Executive's duties with the Company or one of its
affiliates (other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial performance
is delivered to the Executive by the Board of Directors or the Chief Executive
Officer of the Company which specifically identifies the manner in which the
Board of Directors or Chief Executive Officer believes that the Executive has
not substantially performed the Executive's duties; or
(ii) the willful engaging by the Executive in
illegal conduct or gross misconduct which is materially and demonstrably
injurious to the Company; or
(iii) conviction of a felony or a guilty or nolo
contendere plea by the Executive with respect thereto.
For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board of Directors or upon the instructions of the Chief
Executive Officer or a senior officer of the Company or based upon the advice of
counsel for the Company shall be conclusively presumed to be done, or omitted to
be done, by the Executive in good faith and in the best interests of the
Company. The cessation of employment of the Executive for conduct described in
subparagraph (i) or (ii) above shall not be deemed to be for Cause unless and
until there shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of a majority of the entire membership of
the Board of Directors at a meeting of the Board of Directors called and held
for such purpose (after not less than 30 days' advance notice is provided to the
Executive and the Executive is given an opportunity, together with counsel
chosen by the Executive, to be heard before the Board of Directors), finding
that, in the good faith opinion of the Board, the Executive is guilty of the
conduct described in subparagraph (i) or (ii) above, and specifying the
particulars thereof in detail. The Company may suspend the Executive's authority
(with full salary and benefits continuation during such period of suspension)
after the provision of a notice of intention to terminate the Executive's
employment for conduct described in subparagraph (i) or (ii) above and prior to
the time the Executive is given an opportunity to meet with the Board of
Directors, and any such suspension shall not constitute "Good Reason" as defined
in Section 4(c) below.
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(c) Good Reason. The Executive's employment may be
terminated by the Executive for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean in the absence of a written consent of the Executive:
(i) the assignment to the Executive of any
duties inconsistent in any respect with the Executive's position, authority,
duties or responsibilities as an Executive Vice President of the Company and
Vice Chairman of its Senior Management Committee, or any other action (including
any change in the Executive's status, offices, titles and reporting
requirements) by the Company which, in the Executive's reasonable judgment,
results in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the Company within 25 days after
receipt of notice thereof given by the Executive;
(ii) any failure by the Company to comply with
any of the provisions of Section 3(b) of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and which is
remedied by the Company within 25 days after receipt of notice thereof given by
the Executive;
(iii) any purported termination by the Company of
the Executive's employment otherwise than as expressly permitted by this
Agreement; or
(iv) any failure by the Company to comply with
and satisfy Section 11(c) of this Agreement.
(d) Notice of Termination. Any termination by the Company
for Cause, or by the Executive for Good Reason, shall be communicated by Notice
of Termination to the other party hereto given in accordance with Section 12(b)
of this Agreement. For purposes of this Agreement, a "Notice of Termination"
means a written notice which (i) indicates the specific termination provision in
this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated and
(iii) if the Date of Termination (as defined below) is other than the date of
receipt of such notice, specifies the termination date (which date shall be not
more than 30 days after the giving of such notice). The failure by the Executive
or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company, respectively, hereunder or
preclude the Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i)
if the Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein within 30 days of such notice, as the case may
be, (ii) if the Executive's employment is terminated by the Company other than
for Cause or Disability, the Date of Termination shall be the date on which the
Company
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notifies the Executive of such termination and (iii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
5. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(a) Good Reason; Other Than for Cause, Death or
Disability. If, during the Employment Period, the Company shall terminate the
Executive's employment other than for Cause, Death or Disability or the
Executive shall terminate employment for Good Reason:
(i) the Company shall pay to the Executive in a
lump sum in cash within 30 days after the Date of Termination the aggregate of
the following amounts:
A. the sum of (1) the Executive's Annual Base
Salary through the Date of Termination to the extent not
theretofore paid and (2) the product of (x) the highest annual
bonus paid to the Executive by the Company or SIS for any of
the three years prior to the Date of Termination (the "Recent
Annual Bonus") and (y) a fraction, the numerator of which is
the number of days in the fiscal year in which the Date of
Termination occurs through the Date of Termination, and the
denominator of which is 365, in each case to the extent not
theretofore paid (the sum of the amounts described in clauses
(1) and (2) shall be hereinafter referred to as the "Accrued
Obligations"); and
B. the amount equal to the product of (1) the
number of months and portions thereof from the Date of
Termination until December 31, 2001, divided by twelve and (2)
the sum of (x) the Executive's Annual Base Salary and (y) the
Recent Annual Bonus (such amount shall be hereinafter referred
to as the "Additional Severance Obligations");
(ii) for the remainder of the Employment
Period, the Company shall continue to provide medical and dental benefits to the
Executive, his spouse and dependents at the level in effect on, and at the same
out-of-pocket costs to the Executive as of, the Date of Termination or, if more
favorable, on the same basis as such benefits are provided to peer executives of
the Company (collectively "Medical Benefits"); and
(iii) to the extent not theretofore paid
or provided, the Company shall timely pay or provide to the Executive any other
amounts or benefits required to be paid or provided or which the Executive is
eligible to receive under any plan, program, policy or practice or contract or
agreement of the Company and its affiliated companies through the Date of
Termination (such other amounts and benefits shall be hereinafter referred to as
the "Other Benefits").
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(b) Death. If the Executive's employment is terminated by
reason of the Executive's death during the Employment Period, this Agreement
shall terminate without further obligations to the Executive's legal
representatives under this Agreement, other than for payment of the Accrued
Obligations and the Additional Severance Obligations and the timely payment or
provision of Other Benefits. The Accrued Obligations and the Additional
Severance Obligations shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination.
With respect to the provision of Other Benefits, the term Other Benefits as
utilized in this Section 5(b) shall include death benefits as in effect on the
date of the Executive's death with respect to the peer executives of the Company
and their beneficiaries and the continued provision of Medical Benefits to the
Executive's spouse and dependents for the remainder of the Employment Period.
(c) Disability. If the Executive's employment is
terminated by reason of the Executive's Disability during the Employment Period,
this Agreement shall terminate without further obligations to the Executive,
other than for (i) payment of the Accrued Obligations, (ii) the timely payment
or provision of Other Benefits and (iii) payments to the Executive over the
remainder of the Employment Period, in accordance with the Company's regular
payroll practices, at an annual rate which is equal to the sum of the
Executive's Annual Base Salary and Recent Annual Bonus, provided that such
payments shall be reduced by the amounts actually received by the Executive
during the Employment Period pursuant to the Company's disability plan, it being
the intention of the parties that duplicative disability payments not be paid to
the Executive during the Employment Period pursuant to this Agreement. The
Accrued Obligations shall be paid to the Executive in a lump sum in cash within
30 days of the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 5(c) shall
include, and the Executive shall be entitled after the Disability Effective Date
to receive, disability and other benefits as in effect at any time thereafter
generally with respect to peer executives of the Company and the continued
provision of Medical Benefits to the Executive and his spouse and dependents for
the remainder of the Employment Period.
(d) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause or the Executive terminates his
employment without Good Reason during the Employment Period, this Agreement
shall terminate without further obligations to the Executive other than the
obligation to pay to the Executive (i) his Annual Base Salary through the Date
of Termination and (ii) Other Benefits, in each case to the extent theretofore
unpaid.
6. NON-EXCLUSIVITY OF RIGHTS. Except as specifically
provided, nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any plan, program, policy or practice
provided by the Company or any of its affiliated companies and for which the
Executive may qualify, nor, subject to Section 12(f), shall anything herein
limit or otherwise affect such rights as the Executive may have under any
contract or agreement with the Company or any of its affiliated companies.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan, policy, practice or program of or any contract or
agreement with the Company or any of its affiliated companies at or subsequent
to the
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Date of Termination shall be payable in accordance with such plan, policy,
practice, program, contract or agreement except as explicitly modified by this
Agreement.
7. FULL SETTLEMENT. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not the Executive obtains other employment.
8. RESOLUTION OF DISPUTES. With the exception of
proceedings for equitable relief brought pursuant to Section 10 of this
Agreement, any dispute or controversy arising under or in connection with this
Agreement may, at either the Company's or the Executive's option, be settled
exclusively by arbitration in Portland, Maine in accordance with the rules of
the American Arbitration Association then in effect and at the Company's
expense. Judgment may be entered on the arbitrator's award in any court having
jurisdiction; provided, however, that the Executive shall be entitled to seek
specific performance in court of his right to be paid until the Date of
Termination during the pendency of any dispute or controversy arising under or
in connection with this Agreement. If a claim for any payments or benefits under
this Agreement or any other provision of this Agreement is disputed by the
Company and the Executive, the Executive shall, to the extent and at such time
or times as is not prohibited by applicable law, regulation, regulatory bulletin
and/or any other regulatory requirements, as the same exists or may be hereafter
promulgated or amended, if the Executive is successful in his claim, be
reimbursed for all reasonable attorney's fees and expenses incurred by the
Executive in pursuing such claim.
9. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Anything in this Agreement to the contrary
notwithstanding and except as set forth below, in the event it shall be
determined that any payment or distribution by the Company to or for the benefit
of the Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, but determined without
regard to any additional payments required under this Section 9) (a "Payment")
would be subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties are incurred by the Executive with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments.
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(b) Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by KPMG Peat Marwick LLP or such other certified public accounting firm as may
be designated by the Company and reasonably acceptable to the Executive (the
"Accounting Firm"), which shall provide detailed supporting calculations both to
the Company and the Executive within 15 business days of the receipt of notice
from the Executive that there has been a Payment, or such earlier time as is
requested by the Company. All fees and expenses of the Accounting Firm shall be
borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Section 9, shall be paid by the Company to the Executive within five days
of the later of (i) the due date for the payment of any Excise Tax and (ii) the
receipt of the Accounting Firm's determination. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made (an "Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of
any claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than ten business days after the Executive
is informed in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim;
(ii) take such action in connection with
contesting such claim as the Company shall reasonably request in writing from
time to time, including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the Company;
(iii) cooperate with the Company in good faith in
order effectively to contest such claim; and
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(iv) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 9(c), the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and xxx for a refund or contest the claim
in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and xxx for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis, and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to
such advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company's control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 9(c), the Executive becomes entitled
to receive any refund with respect to such claim, the Executive shall (subject
to the Company's complying with the requirements of Section 9(c)) promptly pay
to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 9(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.
10. CONFIDENTIAL INFORMATION.
(a) The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the
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Executive during the Executive's employment by the Company or any of its
affiliated companies and which shall not be or become public knowledge (other
than by acts of the Executive or representatives of the Executive in violation
of this Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it. In no event shall an asserted violation of the
provisions of this Section 10 constitute a basis for deferring or withholding
any amounts otherwise payable to the Executive under this Agreement.
(b) In the event of a breach or threatened
breach of this Section 10, the Executive agrees that the Company shall be
entitled to injunctive relief in a court of appropriate jurisdiction to remedy
any such breach or threatened breach, and the Executive acknowledges that
damages would be an inadequate and insufficient remedy in this regard.
(c) Any termination of the Executive's
employment or of this Agreement shall have no effect on the continuing operation
of this Section 10.
11. SUCCESSORS.
(a) This Agreement is personal to the Executive
and without the prior written consent of the Company shall not be assignable by
the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of
and be binding upon the Company and its successors and assigns.
(c) The Company 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 Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
12. MISCELLANEOUS.
(a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Maine, without reference
to principles of conflict of laws. The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect. This Agreement may
not be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
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(b) All notices and other communications
hereunder shall be in writing and shall be given by hand delivery to the other
party or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive:
F. Xxxxxxx Xxxxxxxx, Jr.
00 Xxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
If to the Company:
Peoples Heritage Financial Group, Inc.
X.X. Xxx 0000
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000-0000
Attention: President
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(d) The Company may withhold from any amounts
payable under this Agreement such Federal, state, local or foreign taxes as
shall be required to be withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to
insist upon strict compliance with any provision of this Agreement or the
failure to assert any right the Executive or the Company may have hereunder,
including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 4(c)(i)-(iv) of this Agreement,
shall not be deemed to be a waiver of such provision or right or any other
provision of, or right under, this Agreement.
(f) Except as provided in paragraph (g) of this
Section 12, from and after the Effective Date this Agreement shall supersede any
other employment, severance or change of control agreement between the Executive
and the Company or any of its affiliated companies with respect to the subject
matter hereof, including without limitation the Employment Agreement (as defined
in such paragraph (g)), provided nothing contained herein shall be deemed to
limit the Company's agreement to honor the indemnification provisions of the
Employment Agreement to the extent set forth in Section 5.8(a) of the Merger
Agreement.
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(g) The Company acknowledges that it has agreed
in the Merger Agreement to honor, and to cause its appropriate subsidiaries to
honor, the obligations of Springfield Institution for Savings ("SIS Bank") under
the Amended and Restated Employment Agreement, dated as of June 30, 1997, by and
between SIS Bank and the Executive (the "Employment Agreement"). Notwithstanding
any provision of this Agreement or the Employment Agreement to the contrary, in
the event the Executive's employment with the Company is terminated for any
reason other than cause (as defined in the Employment Agreement) or death within
one year of the Effective Date, the Executive shall (i) be entitled to receive
the payments and benefits set forth in Sections 6.4 and 6.9 of the Employment
Agreement and not this Agreement, which shall be terminated, it being agreed
that in no event shall the Executive be entitled to receive benefits under both
this Agreement and the Employment Agreement, and (ii) comply with the
requirements of Section 9 of the Employment Agreement. After such one-year
period, and provided that the Executive has not become entitled to receive
benefits under the Employment Agreement, the Employment Agreement shall
terminate and be of no further force and effect without any action on the part
of the Company and the Executive, and the Executive thereafter shall be entitled
to receive such benefits as he may be entitled to receive in accordance with the
terms of this Agreement. In the event that after the date hereof the Company
enters into an employment or severance agreement with any other executive
officer at the same job range level at the Company on terms more favorable than
those set forth in this Agreement (other than in connection with an acquisition
by the Company), the Executive shall be entitled to enter into a new contract or
an amendment to this Agreement on such more favorable terms, provided that,
unless otherwise agreed to by the parties, the Executive shall not be entitled
to enter into a change-in-control severance agreement of the type which exists
between the Company and its executive officers as of the date hereof as long as
this Agreement is in effect. The parties agree that this Agreement shall
constitute a written modification to the Employment Agreement which satisfies
the requirements of Section 12.2 thereof.
(h) Any payments made to the Executive pursuant
to this Agreement, or otherwise, are subject to and conditioned upon their
compliance with 12 U.S.C. Section 1828(k) and any regulations promulgated
thereunder. In addition, to the extent required by applicable law, regulation,
regulatory bulletin and/or any other regulatory requirement, the aggregate
amount and/or value of the compensation paid as a result of any termination of
the Executive's employment with the Company, regardless of the reason for any
such termination of employment, shall not exceed the limit prescribed by
applicable law, rule or regulation.
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IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization from its Board of Directors,
the Company has caused this Agreement to be executed in its name on its behalf,
all as of the day and year first above written.
/s/ F. Xxxxxxx Xxxxxxxx, Jr.
--------------------------------------------
F. Xxxxxxx Xxxxxxxx, Jr.
PEOPLES HERITAGE FINANCIAL GROUP, INC.
By: /s/ Xxxxxxx X. Xxxx
----------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Chairman, President and Chief
Executive Officer
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