Exhibit 10.9
CHANGE IN CONTROL,
CONFIDENTIALITY
AND NONCOMPETITION
AGREEMENT
THIS CHANGE IN CONTROL, CONFIDENTIALITY AND NONCOMPETITION
AGREEMENT is made and entered into this _____ day of December,
2008, by and between BAR HARBOR BANKSHARES , a Maine
corporation with its headquarters located in Bar Harbor, Maine
(hereinafter "the Company"), and GERALD SHENCAVITZ , a
resident of Mount Desert, Maine (hereinafter "the Executive").
W I T N E S S E T
H:
WHEREAS, Bar Harbor Banking and Trust Company is a wholly-owned
subsidiary of Bar Harbor Bankshares; and
WHEREAS, the Executive is an employee of the Company; and
WHEREAS, the Company wishes to retain the services of the
Executive; and
WHEREAS, the Executive and the Company entered into a change in
control, confidentiality and noncompetition agreement dated
November 7, 2003; and
WHEREAS, the Executive and the Company wish to amend and restate
such change in control, confidentiality and noncompetition
agreement so that the provisions of this Agreement will supersede
the change in control, confidentiality and noncompetition agreement
dated November 7, 2003.
NOW, THEREFORE, the parties hereto do hereby agree as
follows:
1. DEFINITIONS.
1.1. Bank shall mean Bar Harbor Banking and Trust Company.
1.2. Base Compensation shall mean the annual base salary payable
by the Company to the Executive, excluding any bonuses, incentive
compensation and other forms of additional compensation.
1.3. Cause shall be deemed to exist only in the event the
Executive is convicted by a court of competent jurisdiction of a
felony involving dishonesty or fraud on the part of the Executive
in his relationship with the Company or the Bank.
1.4. Change in Control shall mean the occurrence of any one of
the following events:
(a) Any person, including a group (as such term is used in
Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) becomes the beneficial owner (as determined
pursuant to Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of Bar Harbor Bankshares representing
more than fifty percent (50%) of the combined voting power of Bar
Harbor Bankshares' then outstanding securities, other than as a
result of an issuance of securities initiated by Bar Harbor
Bankshares in the ordinary course of its business; or
(b) Bar Harbor Bankshares is party to a Business Combination (as
hereinafter defined) unless, following consummation of the Business
Combination, more than fifty percent (50%) of the outstanding
voting securities of the resulting entity are beneficially owned,
directly or indirectly, by the holders of Bar Harbor Bankshares'
outstanding voting securities immediately prior to the Business
Combination in substantially the same proportions as those existing
immediately prior to the Business Combination; or
(c) The stockholders of Bar Harbor Bankshares approve a plan of
complete liquidation of Bar Harbor Bankshares or an agreement for
the sale or disposition by Bar Harbor Bankshares of all or
substantially all of Bar Harbor Bankshares' assets to another
person or entity that is not a wholly owned subsidiary of Bar
Harbor Bankshares.
For purposes of this Section 1.4, a Business Combination means
any cash tender or exchange offer, merger or other business
combination, sale of stock, or sale of all or substantially all of
the assets, or any combination of the foregoing transactions.
For purposes of this Section 1.4, a Change in Control shall
exclude any internal corporate change, reorganization or other such
event, which occurred prior to or may occur following the date of
this Agreement.
1.5. Code shall mean the Internal Revenue Code of 1986, as
amended, and as it may be amended from time to time, together with
the rules and regulations promulgated under such code.
1.6. Company shall mean Bar Harbor Bankshares.
1.7. Date of Termination shall mean:
(a) If the Executive incurs a separation from service for
Disability, thirty (30) days after Notice of Termination for
Disability is given by the Company to the Executive and the
Executive shall not have returned to the performance of his duties
on a full-time basis during such thirty (30) day period;
(b) If the Executive's service is separated by the Company for
Cause or by the Executive for Good Reason, the date on which the
Executive separates from service with the Company; and
(c) If the Executive incurs a separation from service for any
other reason, the date on which the Executive separates from
service with the Company.
Whether the Executive has incurred a separation from service is
determined based on whether the facts and circumstances indicate
that the Company and the Executive reasonably anticipated that no
further services would be performed after a certain date.
1.8. Disability shall mean a condition: (a) which causes the
Executive to be unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which can be
expected to last for a continuous period of not less than twelve
months; or (b) which results in his receiving, by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or which can be expected to last for a
continuous period of not less than twelve months, income
replacement benefits for a period of not less than three months
under an accident and health plan covering employees of the
Company. Disability shall be deemed to exist only when the
disability has been certified to the Board of Directors of the
Company by a licensed physician approved by the Board of Directors
of the Company.
1.9. Good Reason shall mean one or more of the following events
arising without the consent of the Executive:
(a) a material diminution in the Executive’s Base
Compensation;
(b) a material diminution in the Executive’s authority,
duties or responsibilities;
(c) a material diminution in the authority, duties or
responsibilities of the person to whom the Executive is required to
report;
(d) a material diminution in the budget over which the Executive
retains authority;
(e) a material change in the geographic location at which the
Executive must perform his services; or
(f) any other action or inaction that constitutes a material
breach by the Company of the Agreement or any other agreement under
which the Executive provides services.
In order for a separation from service to occur for Good Reason,
the separation from service must occur within two years following
the initial existence of the event constituting Good Reason.
1.10. Notice of Termination shall mean the notice provided
pursuant to Section 3.
2. SEVERANCE BENEFITS.
In the event that: (a) the Company separates the Executive's
service other than as a result of Disability and other than for
Cause, or the Executive separates his service for Good Reason; and
(b) the Executive's separation from service occurs in anticipation
of or after a Change in Control, then the Company shall pay the
Executive the severance benefits described in this Section 2. The
Executive's separation from service shall be deemed to be in
anticipation of a Change in Control if it occurs within the twelve
(12) month period prior to the occurrence of the Change in
Control.
The severance benefits described in this Section 2 shall equal
the following:
(a) The Executive shall receive a lump sum severance payment
equal to 1.5 times the Executive's Base Compensation, determined as
of the Date of Termination. The lump sum severance payment shall be
paid on the fifth business day following the Executive’s Date
of Termination.
(b) The Executive and his dependents shall continue to be
eligible to receive the same medical, health, dental and life
insurance benefits which the Executive is eligible to receive on
the Date of Termination. The Executive shall be required to make
the same premium contributions that he was required to make
immediately prior to the Date of Termination. The ability of the
Executive and his dependents to receive such benefits shall
continue for the period during which the Executive would be
entitled to continue coverage under the Company’s group
health plan pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985 ("COBRA").
(c) In the event of a Change in Control, all stock options
granted but unexercised under the Bar Harbor Bankshares and
Subsidiaries Incentive Stock Option Plan of 2000 or any other
equity plan shall become 100% vested immediately prior to such
Change of Control. These grants will remain subject to all of the
other terms and conditions of the Bar Harbor Bankshares and
Subsidiaries Incentive Stock Option Plan of 2000 or any other
equity plan.
The Executive shall not be required to mitigate the amount of
any severance benefits described in this Section 2 by seeking other
employment.
3. NOTICE OF TERMINATION.
Any separation of the Executive's service by the Company due to
Disability or for Cause, or by the Executive due to Good Reason,
shall be communicated by written Notice of Termination to the other
party. A Notice of Termination must indicate the specific
provisions in this Agreement which are relied upon as the basis for
the separation of the Executive's service, and must also set forth
in reasonable detail the facts and circumstances claimed to provide
the basis for such separation from service under the provisions so
indicated.
Notwithstanding the above, in order for the Executive to
separate from service with the Company for Good Reason, the
Executive must provide the Notice of Termination to the Company no
later than ninety (90) days after the date of the initial
occurrence of the condition or conditions alleged to give rise to
Good Reason. In addition, the Executive must provide the Company a
period of at least thirty (30) days during which the Company can
remedy the condition or conditions alleged to give rise to Good
Reason and not be required to pay the amounts described in Section
2.
4. LOSS OF SEVERANCE BENEFITS.
If the Company shall separate the Executive's service due to
Disability or for Cause, or if the Executive shall separate his
service other than for Good Reason, or if the Executive shall die,
then the Executive shall have no right to receive any severance
benefits under this Agreement.
5. NO OTHER BENEFITS PAYABLE.
(a) If the Executive is entitled to receive the severance
benefits described in Section 2 of this Agreement, he shall not be
entitled to receive: (i) any severance benefits under the terms of
any general severance pay policy or plan of the Company or the
Bank; or (ii) any other compensation, benefits or payments under
the terms of any other plan of, or agreement with, the Company or
the Bank.
(b) Notwithstanding the above, the Executive shall be entitled
to receive any compensation, benefits or payments which are
specifically authorized by the terms of any plan of, or agreement
with, the Company or the Bank to be paid in addition to the
severance benefits described in Section 2 of this Agreement.
Moreover, notwithstanding the above, the Executive shall be
entitled to receive, in addition to the severance benefits
described in Section 2 of this Agreement, any compensation,
benefits or payments which the Executive is entitled to receive
under: (i) the Bar Harbor Bankshares Supplemental Executive
Retirement Plan or the Bar Harbor Bankshares Supplemental Executive
Retirement Plan – Code Section 409A; (ii) any incentive
compensation plan maintained by the Company or the Bank which
provides for payment to a separated employee of incentive
compensation earned by the employee prior to his or her separation
from service; or (iii) any payroll plan or policy of the Company or
the Bank which provides for payment to a separated employee of any
unpaid vacation, holiday or sick pay accrued by the employee prior
to his or her separation from service.
6. CERTAIN ADDITIONAL PAYMENTS BY THE
EMPLOYER.
(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 made at any time by the Company or
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 6) (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"). The Gross-Up
Payment shall equal such an amount that, after payment by the
Executive of all taxes (including, without limitation, any federal,
state or local income taxes, Social Security taxes and Medicare
taxes, and any interest or 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.
Notwithstanding the foregoing provisions of this Section 6(a),
if it shall be determined that the Executive is entitled to a
Gross-Up Payment, but that the Payments do not exceed 110% of the
greatest amount (the "Reduced Amount") that could be paid to the
Executive such that the receipt of Payments would not give rise to
any Excise Tax, then no Gross-Up Payment shall be made to the
Executive and the Payments, in the aggregate, shall be reduced to
the Reduced Amount.
(b) Subject to the provisions of Section 6(d), all
determinations required to be made under this Section 6 (including,
without limitation, whether and when a Gross-Up Payment is
required, 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 or such other certified public accounting firm as
may be designated by the Executive (the "Accounting Firm"). The
Accounting Firm shall provide detailed supporting calculations both
to the Company and to the Executive within fifteen (15) business
days after the receipt of notice from the Executive that there has
been a Payment, or such earlier time as is requested by the
Company. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting
the Change in Control, the Executive shall appoint anoth
