Exhibit 10.2 (a)
EMPLOYMENT CONTINUITY AGREEMENT
THIS AGREEMENT is entered into by and
between The First National Bank of Bar
Harbor, National Banking Association (the
"Bank") and __________________ (the
"Executive"), collectively referred to as
"the parties," dated this __ day of
_________, 2000.
WHEREAS, the Bank wishes to assure itself
of continuity of management in the
event of any actual or threatened Change in
Control of the Bank (as defined
below); and
WHEREAS, the Executive desires to assure
himself financial security in the face
of actual or threatened Change in Control
of the Bank; and
WHEREAS, this Agreement is not intended to
alter the compensation and benefits
that the Executive could reasonably expect
in the absence of such a Change in
Control of the Bank,
NOW, THEREFORE, in consideration of the
agreements contained herein, the
patties agree as follows:
I. Term of Agreement.
This Agreement shall remain in place for
the duration of the Executive's
employment by the Bank or until modified in
writing by the parties hereto.
II. Effect of Change in Control.
(a) The Bank agrees that if there is a
Change in Control of the Bank and the
Executive is terminated or elects to resign
from his position within 30 days
following a Change in Control of the Bank,
the Executive shall receive in a
lump sum 299% of his "base amount" within
the meaning of Section 280G of the
Internal Revenue Code ("Base Amount") Such
amount shall be payable within ten
days after such termination or resignation
following a Change in Control of the
Bank,
(b) This Agreement shall terminate if prior
to a Change in Control of the Bank,
the Executive resigns, retires, becomes
disabled and is unable to perform the
essential functions of his job, dies, or is
terminated for any reason other
than in anticipation of or to facilitate a
Change in Control of the Bank;
(c) Notwithstanding the foregoing, in no
event shall the aggregate amount
payable to the Executive under this Section
exceed 299% of the Executive's Base
Amount. The Bank shall reduce the amount
payable to the Executive as and to the
extent necessary to ensure that the
aggregate amount payable under this Section
shall not exceed 299% of the Executive's
Base Amount;
(d) Notwithstanding the foregoing, if the
lump sum severance payment under this
Section, either alone or together with
other payments which the Executive has a
right to receive from the Bank, would
constitute a "parachute payment" (as
defined in Section 280G of the Internal
Revenue Code of 1986, as amended (the
"Code")), such lump sum severance payment
shall be reduced to the largest
amount as will result in no portion of the
lump sum severance payment under
this Section being subject to the excise
tax imposed by Section 4999 of the
Code. The determination of any reduction in
the lump sum severance payment
under this Section shall be made by
independent counsel to the Bank in
consultation with the independent certified
public accountants of the Bank;
(e) If Executive is removed from office
and/or permanently prohibited from
participating in the conduct of the Bank's
affairs pursuant to an order issued
by the FDIC or the OCC, all obligations of
the Bank under this Agreement shall
terminate, as of the effective date of the
order', but rights of the Executive
to compensation earned as of the date of
termination shall not be affected;
(f) All obligations under this Agreement
may be terminated: (1) by the FDIC or
the OCC pursuant to their valid statutory
or regulatory authority, or (2) by
the Bank when such obligation would
constitute a "golden parachute payment"
prohibited pursuant to 12 C.F.R. s.359.0 et
seq, as amended, revised or
superseded or is otherwise prohibited by
law or regulation;
(g) If the Bank is in default, as defined
to mean an adjudication or other
official determination of a court of
competent jurisdiction or other' public
authority pursuant to which a conservator,
receiver or other legal custodian is
appointed from the Bank for the purpose of
liquidation, all obligations under
this Agreement shall terminate as of the
date of default, but rights of the
Executive to compensation earned as of the
date of termination shall not be
affected.
III. Change in Control.
For purposes of this Agreement, a "Change
in Control of the Bank" shall be
deemed to have occurred if (A) any "person"
(as such term is used in Sections
13(d) and 14(d) of the Securities Exchange
Act of 19:34, as amended (the
"Exchange Act") in effect on the date of
this Agreement), other than the Bank,
FNB Bankshares ("FNBB"), a Maine
corporation which presently owns 100% of the
Bank's outstanding capital stock, or any
"person" who on the date hereof is a
director or officer of the Bank or FNBB, is
or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of
securities of the Bank or FNBB representing
25% or more of the combined voting
power of the Bank's or FNBB's then
outstanding securities, or (B) during any
period of two consecutive years during the
term of this Agreement, individuals
who at the beginning of such period
constitute the Board of Directors of the
Bank or the Board of Directors of FNBB
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.
IV. Arbitration, Any dispute ox controversy
arising under or in connection with
this Agreement shall be settled exclusively
by arbitration. Such arbitration
shall be conducted in the State of Maine in
accordance with the laws of the
State of Maine.
V. Entire Agreement. This Agreement
constitutes the entire understanding of the
Bank and Executive with respect to its
subject matter, and supersedes any and
all prior oral or written agreements,
expressions and understandings with
respect thereto. No provision of this
Agreement may be modified, waived or
discharged unless such waiver, modification
or discharge is agreed to in
writing signed by both parties. No waiver
by either p
