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EXHIBIT 10(i)
BANKNORTH GROUP, INC.
RETENTION AGREEMENT
This
Retention Agreement (this "Agreement") is made and entered into as
of
the 30th of September, 2004, by and between
Banknorth Group, Inc., a Maine
corporation, (the "Company") and Edward P.
Schreiber (the "Executive");
W I T N E S S E T H:
WHEREAS,
the Company, Berlin Delaware Inc., a Delaware corporation and
wholly owned subsidiary of the Company
("Berlin Delaware"), The Toronto Dominion
Bank, a Canadian chartered bank, ("TD"),
and Berlin Merger Co., a Delaware
corporation and wholly owned subsidiary of
TD ("Berlin Mergerco"), have entered
into an Agreement and Plan of Merger dated
as of August 25, 2004, whereby, among
other things, Berlin Mergerco will merge
with and into Berlin Delaware (the
"Merger"); and
WHEREAS,
the Company wishes to continue to retain the services of the
Executive after the Effective Date for the
benefit of its successor Berlin
Delaware;
NOW,
THEREFORE, in consideration of the foregoing, the mutual
covenants
and agreements herein contained, and other
good and valuable consideration, the
receipt and sufficiency of which are hereby
acknowledged, the Company and the
Executive hereby agree, contingent on
completion of the Merger, as follows:
1. Definitions.
(a)
Accrued Benefits
means:
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(i) all salary earned or accrued through the date the
Executive's
employment
is terminated, and any unpaid amounts described in Section
5(a);
(ii) reimbursement for any and all monies advanced in
connection
with the
Executive's employment for reasonable and necessary expenses
incurred
by the Executive through the date the Executive's employment is
terminated;
(iii) any and all other compensation previously earned by the
Executive
and deferred under or pursuant to any deferred compensation
plan
or plans
of the Company then in effect together with any interest or
deemed
earnings thereon pursuant to, and to the extent consistent
with,
the terms
of such plan or plans;
(iv) any bonus earned by the Executive for a Year or other
performance period ending prior to the Year or other performance
period in
which
employment terminates, but not yet paid to the Executive, under
any
bonus or
incentive compensation plan or plans in which the Executive is
a
participant;
(v) to the extent not previously paid or provided to the
Executive,
all other
payments and benefits to which the Executive may be entitled
under the
terms of any applicable compensation or benefit plan, program
or
arrangement of the Company except for any severance plan, or any
plan,
program or
arrangement that would result in any duplication of benefits.
(b)
Affiliate of any specified person means any other person that,
directly or indirectly, through one or more
intermediaries, controls, or is
controlled by, or is under direct or
indirect common control with such specified
person. For the purposes of this
definition, "control" means the possession,
direct or indirect, of the power to direct
or cause the direction of the
management and policies of a person,
whether through the ownership of voting
securities, by contract or
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otherwise, and the terms "controlling" and
"controlled" have meanings
correlative to the foregoing.
(c) Annual
Bonus means any bonus or incentive award under any bonus or
incentive compensation plan, program or
arrangement of the Company in which the
Executive is a participant the performance
period for which is or was initially
scheduled to be one (1) year or less.
(d) Base
Amount means an amount equal to the Executive's Annualized
Includable Compensation for the Base Period
as defined in Section 280G(d)(1) and
(2) of the Code (as hereinafter
defined).
(e)
Benefit Computation Base means either (i) the Benefit Computation
Base
as defined in the Supplemental Retirement
Agreement between Executive and the
Company or (ii) if there is no Supplemental
Retirement Agreement between the
Executive and the Company, the base annual
compensation amount used in
calculating the Executive's benefits under
the Retirement Plan.
(f) Bonus
(whether or not capitalized) means any bonus or incentive award
(including any Annual Bonus or Long-Term
Incentive Award) under any bonus or
incentive compensation plan, program or
arrangement of the Company in which the
Executive is a participant.
(g) Cause
means:
(i) the Executive's conviction of, or plea of nolo contendere to,
a
felony;
or
(ii) willful and intentional misconduct, willful neglect, or
gross
negligence
in the performance of the Executive's duties, which has caused
a
demonstrable and serious injury to the Company, monetary or
otherwise.
The
Executive shall be given written notice that the Company intends
to
terminate
the Executive's employment for Cause.
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Such
written notice shall specify the particular acts, or failures to
act,
on the
basis of which the decision to so terminate employment was
made.
In the
case of a termination for Cause as described in clause (ii),
above,
the Executive shall be given the
opportunity within thirty (30) days of the
receipt of such notice to meet with the
Board of Directors of the Company to
defend such acts, or failures to act, prior
to termination. The Company may
suspend the Executive's title and authority
pending such meeting, and such
suspension shall not constitute Good
Reason, as defined in subsection (o) below.
(h) Change
of Control means a change of control, as that term is defined
in TD's Performance Based Restricted Share
Unit Plan (Outside Canada) (as in
effect from time to time, or any successor
plan), of either TD or the Company,
with such definition being appropriately
adjusted, where necessary, to refer to
the Company.
(i) Code
means the Internal Revenue Code of 1986, as amended.
(j)
Deferred Compensation Plan means a deferred compensation plan
approved
by the Compensation Committee of the
Board.
(k)
Disability means a disability entitling the Executive to
payments
under the Company's long-term disability
plan applicable to the Executive,
provided that in no event shall the
Executive's employment be terminable by
reason of Disability unless the Executive
shall have been absent from the
Executive's duties with the Company on a
full-time basis for one hundred and
twenty (120) consecutive business days as a
result of incapacity due to mental
or physical illness that is determined to
be total and permanent by a physician
selected by the Company or its insurers and
acceptable to the Executive or the
Executive's legal representative.
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(l) Early
Retirement Benefit means either (i) the "Early Retirement
Benefit" or "Early Retirement/Termination
of Service Benefit" as defined in the
SERP Agreement or (ii) if there is no
Supplemental Retirement Agreement between
the Executive and the Company, the early
retirement benefit as defined in the
Retirement Plan.
(m)
Effective Date means the date on which the Effective Time (as
defined
in the Merger Agreement) occurs.
(n) EIP
means the Company's Executive Incentive Plan as amended and in
effect on the Merger Agreement Date.
(o) Good
Reason means:
(i) any breach of this Agreement by the Company, including
without
limitation
(A) any reduction during the Retention Period in the amount of
the
Executive's base salary, incentive compensation opportunities
or
aggregate
welfare and pension benefits as in effect on the Effective
Date,
or (B)
failure to provide the Executive with the same fringe benefits
that
were
provided to the Executive immediately prior to the Effective Date,
or
with a
package of fringe benefits (including paid vacations) that,
though
one or
more of such benefits may vary from those in effect immediately
prior to
the Effective Date, is substantially comparable in all material
respects
to such fringe benefits taken as a whole;
(ii) without the Executive's express written consent, the
assignment
to the
Executive of any duties that are materially inconsistent with
the
Executive's positions, duties, responsibilities and status
immediately
following
the Effective Date, a material change in the Executive's
reporting
responsibilities, titles or offices as an employee and as in
effect
immediately following the Effective Date, or a significant
reduction
in the
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Executive's title, duties, or responsibilities, as in effect
immediately
prior to
the Effective Date, but without regard to the Executive's
normal
and
appropriate interaction with executives of TD as a result of
the
Company's
status as an Affiliate of TD;
(iii) the relocation of the Executive's principal place of
employment, without the Executive's written consent, to a location
outside
the same
metropolitan area in which the Executive was employed at the
time
of the
Effective Date, or the imposition of any requirement that the
Executives
spend more than ninety (90) business days per year at a
location
other than such principal place of employment; or
(iv) any purported termination of the Executive's employment
for
Cause or
Disability which is not effected pursuant to a satisfactory
Notice of
Termination.
In the event of the occurrence of any of the events described
in
(i), (ii), (iii) or (iv) above, the
Executive may, within three (3) months after
the Executive has knowledge of the
occurrence of any such event, give the
Company written notice that such event
constitutes Good Reason, and the Company
shall thereafter have thirty (30) days in
which to cure. If the Company has not
cured in that time, the event shall
constitute Good Reason. If the Executive has
not given notice of Good Reason during such
three (3) month period, such event
shall not constitute Good Reason.
(p)
Long-Term Incentive Award means an incentive award under the EIP
the
performance period for which is or was
initially scheduled to be in excess of
one (1) year.
(q) Merger
Agreement means the Agreement and Plan of Merger, dated as of
August 25, 2004 among the Company, Berlin
Delaware, TD and Berlin Mergerco.
(r) Merger
Agreement Date means the date upon which the Merger Agreement
was executed by the parties thereto.
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(s) Notice
of Termination means a notice which shall indicate the specific
termination provision relied upon in this
Agreement and shall set forth in
reasonable detail the facts and
circumstances claimed to provide a basis for
termination of Executive's employment under
the provision so indicated.
(t) Plan
Year with respect to any of the Retirement Plan or the 401(k)
Plan, the "plan year" as defined in such
plan.
(u)
Post-Retention Period Severance means a severance payment
consisting
of eighteen (18) months of continuation of
the Executive's then base salary.
(v)
Pre-Merger Option means any option to purchase common stock of
the
Company that was granted prior to the date
on which the Merger Agreement was
executed by the parties thereto.
(w)
Prorated Bonus means a lump sum cash payment payable within ten
(10)
business days of the date of termination
equal to the product of (x) the average
Annual Bonus paid (whether deferred or paid
in equity) to the Executive under
the annual bonus plan of the Company for
the last three (3) full fiscal years of
the Company ending prior to the date of
termination or such shorter number of
years that the Executive has been employed
by the Company and eligible to
receive a full year bonus and (y) a
fraction, the numerator of which is the
number of days in the current fiscal year
through the date of termination and
the denominator of which is three hundred
and sixty-five (365).
(x)
Retention Amount shall be:
(i) a lump sum payment equal to $1,127,964; and
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(ii) for purposes of determining the Executive's benefit under
the
SERP
Agreement an additional thirty-six (36) months of age and of
service
shall be
credited, determined as follows:
(A) The additional thirty-six (36) months of age and service
shall be applied for purposes of benefit
accrual, vesting, eligibility for early
retirement, subsidized early retirement
factors, actuarial equivalence and any
other purposes under the SERP
Agreement.
(B) Any provision under the SERP Agreement prohibiting the
accrual of any additional benefits after
the Executive has been credited with
more than a stated number of years of
service shall be disregarded.
(C) For purposes of determining the amount of the Executive's
benefit under the SERP Agreement, the
reduction in respect of the benefit paid
under the Retirement Plan shall be based on
the Executive's actual Retirement
Plan benefit (that is, without any
additional deemed service).
(D) For purposes of determining the Early Retirement Benefit
and other forms of benefit under the SERP
Agreement, if the Executive is less
than fifty-five (55) years of age, the
Executive shall be deemed to be at least
fifty-five (55) years of age on the date
the Executive's employment with the
Company terminates, notwithstanding the
Executive's actual age, if less.
(E) The Benefit Computation Base (as defined in the SERP
Agreement) shall be determined as if it
were being calculated at the end of the
thirty-six (36) month period of service
credited to the Executive under this
paragraph (ii) and as if during such
thirty-six (36) additional month period the
Executive's annualized compensation was the
same as such compensation for (I)
the Year during which the Executive's
employment is terminated, or, (II)
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any Year before the Effective Date
occurred, whichever is greater. The parties
hereto agree that (i) any bonus amount that
would normally be payable in 2005,
but is accelerated into 2004 shall be taken
into account in determining the
Executive's Benefit Computation Base under
this paragraph (E) as if it had been
paid in 2005, (ii) no amounts payable
pursuant to Sections 5, 6 and 7 shall be
taken into account in determining the
Executive's benefits under the SERP
Agreement, and (iii) the SERP Agreement
shall be amended accordingly, if
necessary.
(F) Any amendment to the Retirement Plan after the date hereof
shall be disregarded to the extent that the
application of such amendment would
decrease the total amount of the benefits
provided for in this paragraph (ii).
(G) The Executive shall be entitled to a lump sum distribution
of SERP Agreement benefits in all events,
and the Company shall not be entitled
to require payment over a longer period. If
the Executive elects a lump sum
payment (i) the actuarial equivalent
benefit shall be determined in accordance
with the provisions of the Retirement Plan
as in effect immediately prior to the
Effective Date, or as in effect on
termination of the Executive's employment,
whichever creates the greater benefit, and
(ii) the lump sum payment shall,
unless deferred in advance by the Executive
pursuant to reasonable criteria
consistent with the requirements of the
Code, be made within thirty (30) days
following the termination of the
Executive's employment.
(H) An example of the SERP calculation described by this
Agreement will be appended hereto as
Exhibit A as soon as reasonably practicable
following the Merger Agreement Date.
(y)
Retention Period means a period commencing on the Effective Date
and
ending on the third (3rd) anniversary of
the date on which the Effective Date
occurs.
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(z)
Retirement means a termination of the Executive's employment on
account of resignation by the Executive at
or after age sixty-two and one-half
(62.5), other than a resignation for Good
Reason.
(aa)
Retirement Plan means the Banknorth Group, Inc. Retirement Plan,
as
amended and in effect from time to time and
any successor plan.
(bb) SERP
Agreement means either (i) the Supplemental Retirement
Agreement
between the Executive and the Company or
(ii) if there is no Supplemental
Retirement Agreement between the Executive
and the Company, the Banknorth Group,
Inc. Supplemental Retirement Plan, as
amended.
(cc) Year
means a calendar year unless otherwise specifically provided.
(dd)
401(k) Plan means the Banknorth Group, Inc. 401(k) Plan dated
January
1, 2001, as amended, or any successor
plan.
2. Term of Agreement.
This
Agreement shall begin on the Effective Date and shall terminate
on
the third anniversary of such date. If the
Effective Date does not occur, this
Agreement shall be null and void ab
initio.
3. Duties.
During the
Retention Period, the Executive shall serve the Company in such
capacities and positions as may be assigned
by the Company consistent with the
Executive's capacities and positions
immediately prior to the Effective Date and
shall devote the Executive's best efforts
and all of the Executive's business
time, attention and skill to the business
and affairs of the Company, as such
business and affairs now exist and as they
may hereafter be conducted.
4. Compensation.
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During the
Retention Period, the Executive shall be compensated by the
Company as follows:
(a) the
Executive shall receive, at such intervals and in accordance
with
such standard policies of the Company from
time to time, an annual base salary
not less than the Executive's annual base
salary as in effect immediately prior
to the Effective Date, subject to
adjustment as hereinafter provided, and shall
be entitled to such increases in
Executive's base salary, if any, as may be
determined from time to time in the sole
discretion of the Board, provided that
in no event may the Executive's annual base
salary be decreased;
(b) the
Executive shall be included in all plans providing incentive
compensation to executives, including but
not limited to bonus, deferred
compensation, annual or other incentive
compensation, supplemental pension,
stock ownership, stock option, stock
appreciation, stock bonus and similar or
comparable plans as any such plans are
extended by the Company from time to time
to senior corporate officers, key employees
and other employees of comparable
status, provided that in no event shall the
Executive's incentive compensation
opportunities be less favorable than the
Executive's incentive compensation
opportunities immediately prior to the
Effective Date;
(c) the
Executive shall be reimbursed, at such intervals and in
accordance
with such standard policies as may be in
effect on the Effective Date, for any
and all monies advanced in connection with
the Executive's employment for
reasonable and necessary expenses incurred
by the Executive on behalf of the
Company, including travel expenses;
(d) the
Executive shall enjoy the fringe benefits normally afforded to
the
Company's executive officers. Such fringe
benefits may vary from those in effect
immediately prior to the
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Effective Date, provided that such fringe
benefits taken as a whole are
substantially comparable in all material
respects to those in effect immediately
prior to such date;
(e) the
Executive shall be allowed to participate, on the same basis as
applicable to other employees of comparable
status and position, in any and all
plans, programs or arrangements covering
employee benefits or fringe benefits,
including but not limited to the following:
group medical insurance,
hospitalization benefits, disability
benefits, medical benefits, dental
benefits, pension benefits, profit sharing
and stock bonus plans, but excluding
severance and any similar plans, programs
or arrangements, and, in any event,
such plans, programs or arrangements shall
be no less favorable, in the
aggregate, than those in effect as of
immediately prior to the Effective Date;
(f) the
Executive shall receive annually not less than the amount of
paid
vacation and not fewer than the number of
paid holidays received annually
immediately prior to the Effective Date or,
if greater, available annually to
other employees of comparable status and
position with the Company; and
(g)
notwithstanding the terms and conditions of the pre-Merger
Options
(whether set forth in any option plan or
option agreement), the transactions
contemplated by the Merger Agreement shall
be deemed not to constitute a change
of control under the applicable plan or
agreement, and, as a consequence, none
of the pre-Merger Options shall vest and
become exercisable directly as a result
of the transactions contemplated by the
Merger Agreement.
During the
Retention Period, the Board of Directors of the Company, or an
appropriate committee thereof, will
consider and appraise, at least annually,
the contributions of the Executive to the
Company's operating efficiency,
growth, production and profits and, in
accordance with past practice, due
consideration shall be given to the upward
adjustment of the
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Executive's compensation rate, at least
annually, commensurate with increases
generally given to other senior corporate
officers and key employees and as the
scope of the Executive's duties
expands.
5. Initial Payment and
Retention Amount.
(a)
Initial Payment. Within ten (10) business days after the
Effective
Date, the Executive shall be paid any
unpaid portion of a pro-rata Long Term
Incentive Award in an amount determined as
described in Section 5 of the EIP.
(b)
Retention Amount. Subject to the provisions of Section 6 and in
consideration for the Executive's agreement
to remain employed by the Company
and to abide by the provisions of Sections
8(a) and 8(b) hereof, within ten (10)
business days following the thi
