Exhibit 10(d)
SUPPLEMENTAL BENEFIT AGREEMENT
THIS AGREEMENT, made and entered into effective as of the 1st day of
January, 1999, between Bangor Hydro-Electric Company (hereinafter referred to
as the "Company"), a Corporation organized and existing under the laws of
the State of Maine, and _____________ (hereinafter referred to as the
"Executive").
WHEREAS, the Executive has been employed by the Company since
_____________ in the capacity of __________________________________ and since
______ in other executive capacities; and
WHEREAS, the Executive has performed the Executive's duties in a capable
and efficient manner, resulting in substantial contributions to the growth
and progress of the Company; and
WHEREAS, the Company desires to continue to retain the services of the
Executive, and realizes that if the Executive were to leave the Company it
could suffer a substantial financial loss; and
WHEREAS, the Executive is more likely to continue in the employ of the
Company if the Company will agree to pay to the Executive or the Executive's
designees certain benefits in accordance with the provisions and conditions
hereinafter set forth;
NOW, THEREFORE, for value received and in consideration of the mutual
covenants contained herein, the parties covenant and agree as follows:
ARTICLE 1
BENEFITS ON DEATH OR RETIREMENT
A. If the termination of the Executive's employment with the Company
first occurs on or after the Executive's 55th birthday, the Executive shall
be entitled to receive from the Company an annual retirement benefit in an
amount determined in accordance with this Paragraph A.
1. The Executive shall be entitled to an annual benefit payable for
the remainder of his life with a survivor annuity payable to his spouse
(if any) equal to fifty percent (50%) of the Executive's annual benefit.
Subject to the offset described in subparagraph 2, below, the annual
benefit payable during the Executive's life shall be equal to the
following percentage of his Average Total Compensation, based on the
Executive's age as of the date he terminates employment with the
Company:
Age at termination of employment Percentage of Average Total Compensation
55 50%
56 53%
57 57%
58 60%
59 64%
60 68%
61 72%
62 or older 75%
2. The annual benefit payable to the Executive during his life,
determined in accordance with subparagraph 1, above, shall be reduced by
the amount of the benefit payable to the Executive from the Company's
qualified defined benefit pension plan. The amount of this reduction
shall be determined as if the Executive were commencing his qualified
plan benefit in the form of a single life annuity at the same time he is
commencing his supplemental benefit under this Agreement.
3. For purposes of this Agreement, "Average Total Compensation"
shall mean the average of the total annual compensation actually paid by
the Company to the Executive during the three (3) consecutive calendar
years in which the Executive's total compensation from the Company was
the highest. For this purpose, "total compensation" shall mean the
Executive's base salary plus any bonuses earned for the year in question
pursuant to Company short-term or long-term bonus incentive programs.
B. If the Executive is not married at the time his benefit is
scheduled to commence under this Agreement, his benefit shall be paid in the
form of a single life annuity. The annual benefit shall be the actuarial
equivalent of the amount determined in accordance with Paragraph A.
C. If the Executive is married at the time his benefit is scheduled to
commence under this Agreement, his benefit shall be paid in the form of a
joint and survivor annuity that is determined in accordance with Paragraph A.
Such joint and survivor annuity shall provide for an annual benefit payable
during the life of the Executive, with an annual benefit payable to his
surviving spouse after the Executive's death equal to 50% of the annual
benefit payable to the Executive. Notwithstanding the foregoing, the
Executive shall be permitted to elect to receive his benefit in the form of a
100% joint and survivor annuity or a single life annuity (with no survivor
benefit) that is the actuarial equivalent of the amount determined in
accordance with Paragraph A.
D. The annual benefit payable to the Executive or his surviving spouse
under this Agreement shall be paid in twelve (12) equal monthly installments
beginning on the first day of the first month following the date of
termination of the Executive's employment, and on the first day of each month
thereafter.
E. The determination of any actuarial equivalent forms of benefit
payment under this Agreement shall be made using the actuarial assumptions
used for such purposes under the Company's qualified defined benefit pension
plan at the time of such determination.
F. If the termination of the Executive's employment with the Company
first occurs before he has reached his 55th birthday, the Executive shall not
be entitled to receive any benefits under this Agreement. Notwithstanding
the foregoing, if a Change in Control of the Company has occurred prior to
the Executive's termination of employment, the Executive shall have a fully
vested and nonforfeitable right to receive the benefit under this Agreement
commencing on or after his attainment of age 55, at the time and in the
manner otherwise specified in this Agreement. Solely for purposes of
calculating the amount of the Executive's annual benefit under subparagraph 1
of Paragraph A, if the Executive is less than 55 years of age at the time of
his termination of employment following a Change in Control of the Company,
the Executive shall be treated as having attained age 55 immediately prior to
his termination of employment. For purposes of this Agreement, "Change in
Control of the Company" shall mean the occurrence of one of the following
events:
1. Approval by the stockholders of the Company of a reorganization,
merger, consolidation (in each case with respect to which such
stockholders do not, immediately thereafter, own more than 50% of the
combined voting power of the reorganized, merged or consolidated
company's then-outstanding voting securities) or a liquidation or
dissolution of the Company or the sale of all or substantially all of
the assets of the Company;
2. Any "person" (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934 (the "Exchange Act")), other than
the Company or any person who on the date hereof is a director or office
of the Company, is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 20% or more of the combined
voting power of the Company's then outstanding securities; or
3. During any period of two consecutive years during the term of this
Agreement, individuals who at the beginning of such period constitute
the Board cease for any reason to constitute at least a majority
thereof, unless the election of each director who was not a director at
the beginning of such period has been approved in advance by directors
representing at least two-thirds of the directors then in office who
were directors at the beginning of the period.
G. If the Executive dies after his 55th birthday but while employed by
the Company and while this Agreement is in effect, his surviving spouse (if
any) shall receive an annual survivor annuity benefit equal to the annual
benefit the spouse would have received had the Executive elected a 100% joint
and survivor annuity form of benefit and retired on the day prior to his
death.
H. The Executive shall file with the Company, in writing on a form
acceptable to the Company, a designation of his spouse for purposes of the
survivor benefits described in Paragraph A, C and G, as well as any election
of an optional form of benefit permitted by this Agreement.
ARTICLE II
TERMINATION OF THE AGREEMENT
Notwithstanding anything in Article I to the contrary, this Agreement
may be terminated, and in such event the Company shall have no further
obligations under this Agreement, upon a majority vote of the Board of
Directors of the Company if the Executive ceases to be employed by the
Company in his present capacity. Absent such a vote by the Board of
Directors, this Agreement shall remain in full force and effect so long as
the Executive continues to be employed by the Company. Notwithstanding the
foregoing, following the occurrence of a Change in Control of the Company (as
defined in Paragraph F of Article I), this Agreement shall not be terminated
without the express written consent of the Executive.
ARTICLE III
MISCELLANEOUS PROVISIONS
A. This Agreement may be altered, amended or revoked by a written
instrument signed by the Company and the Executive. This Agreement
represents the entire Agreement of the parties, and supercedes all prior
agreements of the parties, with respect to the subject matter hereof.
B. This Agreement shall be governed by the laws of the State of Maine.
C. It is agreed that neither the Executive nor the Executive's spouse
shall have any right to commute, sell, assign, transfer or otherwise convey
the right to receive any payments hereunder without the written consent of
the Company. Such payments and the right thereto are expressly declared to
be non-assignable and non-transferable.
D. Except as provided in Paragraph A of this Article III, the benefits
under this Agreement shall be independent of, and in addition to, any other
agreement that may exist from time to time between the parties hereto, or any
other compensation payable by the Company to the Executive, whether as
salary, bonus or otherwise. This Agreement shall not be deemed to constitute
a contract of employment between the parties hereto, nor shall any provision
hereof restrict the right of the Company to discharge the Executive, or
restrict the right of the Executive to terminate the Executive's employment.
E. The rights of the Executive under this Agreement and of any spouse
of the Executive shall be solely those of an unsecured creditor of the
Company. Any insurance policy or any other asset acquired or held by the
Company in connection with the liabilities assumed by it hereunder shall not
be deemed to be held under any trust for the benefit of the Executive or the
Executive's spouse or to be security for the performance of the obligations
of the Company, but shall be, and remain, a general, unpledged, unrestricted
asset of the Company.
F. The benefits under this Agreement will be paid by the Company from
its general assets. To cover all or part of its potential liabilities under
the Plan, the Company may, but need not, purchase life insurance policies on
the life of the Executive, but the Executive shall not have any preferred
claim against the policies or any beneficial ownership in the policies under
this Agreement. The Company makes no representation that it will use any
life insurance policies acquired by it and insuring the life of the Executive
only to provide benefits under this Agreement or that any such policies
shall, in any way, represent security for the payment of the benefits
provided for in this Agreement. The Executive's right to a benefit under
this Agreement shall not, except as may be provided below, be limited or
governed in any way by the amount of insurance proceeds received by the
Company.
G. The Executive agrees to take whatever actions may be necessary to
enable the Company to timely apply for and acquire insurance on the life of
the Executive and to fulfill the requirements of the insurance company
relative to the issuance thereof.
H. If the Executive is required by this Agreement to submit
information to an insurance company and if the Executive has made a material
misrepresentation in an application for any insurance that is used by the
Company to cover any part of its liabilities to the Executive under this
Agreement, and if as a result of that material misrepresentation the
insurance company is not required to pay all or any part of the benefit
provided under that insurance, the Executive's right to a benefit under this
Agreement shall be reduced by the amount of the benefit that is not paid by
the insurance company because of such material misrepresentation.
I. Notwithstanding any provision in this Agreement to the contrary,
prior to the effective time of any Change in Control of the Company (as
defined in Paragraph F of Article I), the Company shall cause to be
established an irrevocable "rabbi trust" for the purpose of funding the
benefits provided under this Agreement. The trustee of such trust shall be a
bank, trust company or other financial institution with experience in such
matters. The trust shall comply with the requirements of the Internal
Revenue Service for ensuring that the Executive and his spouse are not taxed
on any amounts contributed to the trust until and to the extent they receive
a distribution of benefits from such trust. Immediately prior to the
effective time of the Change in Control of the Company, the Company shall
contribute to the trust an amount of cash or other assets having a fair
market value equal to the present value (determined on a lump sum actuarial
equivalent basis) of the annual benefit payable to the Executive and his
spouse under this Agreement. On or prior to the January 31st following each
calendar year that ends after the Change in Control of the Company, the
Company or its successor shall cause to be determined, as of December 31st
for the year then ended, the fair market value of the trust assets and the
present value (determined on a lump sum actuarial equivalent basis) of the
annual benefit payable to the Executive and his spouse under this Agreement,
and shall make such additional contributions to the trust as are necessary to
cause the fair market value of the trust assets to equal or exceed such
present value of the Executive's and his spouse's benefit. All asset
valuations and present value determinations required by this Paragraph I
shall be made by the independent actuarial or accounting firm that the
Company uses to value its qualified defined benefit pension plan. The
Company may elect to establish one "rabbi trust" to fund the benefits under
this Agreement and similar agreements with other executive officers of the
Company, in which case the funding obligations under this Paragraph I shall
be determined on an aggregate basis for all such executives.
J. The Company agrees that it will not merge or consolidate with any
other corporation or organization, or permit its business activities to be
taken over by any other organization, unless and until the succeeding or
continuing corporation or other organization agrees to assume the rights and
obligations of the Company herein set forth. The Company further agrees that
it will not cease its business activities or terminate its existence without
having made adequate provisions for the fulfilling of its obligations
hereunder.
IN WITNESS WHEREOF, the said Company has caused this Agreement to be
signed in its corporate name by its duly authorized officer, and impressed
with its corporate seal, and the said Executive has hereto set his hand, all
as of the day and year first written above.
BANGOR HYDRO-ELECTRIC COMPANY
By:
Its: