CHANGE OF CONTROL AGREEMENT
AGREEMENT made as of this 1st day of February, 1995 between
CFX BANK, a New Hampshire corporation (hereinafter "Company") and Benoit J.
Asselin , residing at 23 Christmas Tree Circle, Bedford, N.H. (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 13 hereof (the "Term").
On each December 31st 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 November 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 average annual
compensation payable by the Company, or any subsidiary in which the Company
owns more than fifty (50) percent of the outstanding shares, to the Executive
and includable by the Executive in gross income for the most recent five (5)
taxable years, or such shorter period as the Executive shall have been
employed by the Company, ending before the date on which the Change of Control
occurred.
(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 thirty-six 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.
(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 theExecutive by the Board of Directors of the Company which
specificallyidentifies 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, during the period commencing on the date
of the Termination Event and over a period of 12 months (the "Pay-Out
Period"), make equal monthly payments to the Executive in an amount such that
the present value of all such payments, determined as of the date of the
Termination Event, equals 1.00 times the Base Amount.
5. Advance Payments for Financial Hardship.
If at any time during the Pay-Out Period the Company's Board of
Directors in its sole discretion shall concur, upon application of the
Executive, the Company shall make available to the Executive, in one (l) lump
sum, an amount up to but not greater than the present value of all monthly
payments remaining to be paid to him in the Pay-Out Period, calculated with
the Federal Funds rate in effect as of the date of such Board concurrence. If
(a) the lump sum amount thus made available is less than (b) the present value
of all such remaining monthly payments, the Company shall continue to pay to
the Executive monthly payments for the duration of the Pay-Out Period, but
from such date forward such monthly payments will be in a reduced amount such
that the present value of such payments will equal the difference between (b)
and (a), above. The Executive may elect to waive any or all payments due him
under this subparagraph.
6. 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 present value of all such remaining unpaid
payments, determined as of the date of death of the Executive.
7. 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.
8. 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 during the Pay-Out Period, and the Executive shall
not be under any obligation to seek other employment or gainful pursuit during
such Pay-Out Period as a result of this Agreement.
9. Non-Competition, Future Services and Compensation.
(a) During such period as the Executive is receiving cash payments
under this Agreement, the Executive agrees:
(i) that he shall not, without the prior approval of the
Board of Directors of the Company, certified to him by the Secretary or
Acting Secretary of the Company, become an officer, employee, agent,
partner, or director of any other business in substantial competition
with the Company, its subsidiaries or any other company or bank
affiliated with the Company, including any branch or office of any of
the foregoing. Such restriction shall apply to any such other business
doing business in any county in the State of New Hampshire in which the
Company, its subsidiaries or any such other company or bank is then
conducting any material business or into which, to the knowledge of the
Executive at the time of such termination, any such entity has immediate
plans to expand its activities in material respects; and
(ii) to provide such consulting services as may be requested
by the Company.
(b) As compensation to the Executive for his promises in (a) of
this paragraph, the Bank agrees to maintain, during such period, 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.
10. 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.
11. Withholding.
Distribution of any payments under this Agreement shall be reduced for
the amount required to be withheld pursuant to any law or regulation with
respect to taxes or similar provisions.
12. 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.
13. 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.
14. 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.
15. 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.
16. 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.
17. Counterparts.
This Agreement may be made and executed in counterparts, each of which
may be considered an original for all purposes.
18. 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.
19. 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.
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:
Peter J. Baxter its duly
authorized President and CEO .
"EXECUTIVE"
Benoit J. Asselin