Exhibit 10.17
CHITTENDEN
CORPORATION
Chief Executive Officer
Severance Agreement
AGREEMENT made as of this 18th day
of March, 1998 by and among Chiittenden Corporation, a Vermont
corporation with its principal place of business in Burlington,
Vermont (the “Company” and the “Employer”),
and Paul A. Perrault of 24 Beaver Creek, Shelburne, Vermont 05482
(the “Executive”), an individual presently employed as
the President and Chief Executive Officer of the
Company.
1. Purpose . The Company
considers it essential to the best interest of its stockholders to
foster the continuous employment of key management personnel. The
Board of Directors of the Company (the “Board”)
recognizes, however, that, as is the case with many publicly held
corporations, the possibility of a Change in Control (as defined in
Section 2 hereof) exists and that such possibility, and the
uncertainty and questions which it may raise among management, may
result in the departure or distraction of management personnel to
the detriment of the Company and its stockholders. Therefore, the
Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of
members of the Employer’s management, including the
Executive, to their assigned duties without distraction in the face
of potentially disturbing circumstances arising from the
possibility of a Change in Control. Nothing in this Agreement shall
be construed as creating an express or implied contract of
employment and, except as otherwise agreed in writing between the
Executive and the Employer, the Executive shall not have any right
to be retained in the employ of the Employer.
2. Change in Control . A
“Change in Control” shall mean the occurrence of any
one of the following events:
(a) any “person,” as
such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)
(other than the Company or any corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock 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 more than 25% of the number
of the Company’s then outstanding securities; or
(b) during any period of two
consecutive years, individuals who at the beginning of such period
constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the
Company to effect a transaction described in Section 2(a), (c) or
(d) of this Section 2) whose election by the Board or nomination
for election by the Company’s stockholders was approved by a
vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or
whose election or nomination for election was previously so
approved, cease by any reason to constitute at lease one half
thereof; or
(c) the stockholders of the Company
approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or being converted into voting
securities of the surviving entity)
more than 60% of the number of outstanding securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation; or
(d) the stockholders of the Company
approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets.
3. Terminating Event . A
“Terminating Event” shall mean any of the events
provided in this Section 3 occurring within three (3) years
subsequent to a Change in Control as defined in Section
2:
(a) termination by the Employer of
the employment of the Executive with the Employer for any reason
other than death of the Executive.
A Terminating Event shall not be
deemed to have occurred pursuant to this Section 3(a) solely as a
result of the Executive being an employee of any direct or indirect
successor to the business or assets of the Employer, rather than
continuing as an employee of the Employer following a Change in
Control, or
(b) termination by the Executive of
the Executive’s employment with the Employer for any reason,
at Executive’s option.
4. Special Termination
Payments. In the event a Terminating Event occurs within three
(3) years after a Change in Control, including Executive’s
election to terminate employment, upon written notice from the
Executive to the Employer.
(a) the Employer shall pay to the
Executive an amount equal to the sum of the following:
(i) 2.99 times the amount of the
current base salary of the Executive, determined prior to any
reductions for pre-tax contributions to a cash or deferred
arrangement or a cafeteria plan; and
(ii) 2.99 times the amount of the
incentive bonus that was actually paid to the Executive in the year
of the Change in Control, and
(iii) 2.99 times the dollar amount
of the Executive’s Supplemental Employee Retirement Plan
contribution made in the year of the Change in Control, based upon
the prior year’s performance; and
(iv) 2.99 times the amount equal to
the 401 (k) match and the profit sharing portion of the 401 (K)
contribution which Executive would have received in the year of the
Change in Control; and
(v) 2.99 times the amount equal to
the 401 (k) restoration payment, if any, made to the Executive in
the year of the Change in Control; and
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(vi) 2.99 times the amount equal to
any payment made to the Executive under the supplemental executive
retirement plan for members of the executive management group;
and
(vii) a dollar amount equal to any
bonus which the Executive was scheduled to receive for performance
in the year of the Change in Control;
(viii) all bonus payments relating
to prior year bonuses and related contingent payments that have yet
to be fully paid for any reason.
Said amount shall be paid in one lump sum
payment no later than thirty-one (31) days following the Date of
Termination (as such term is defined in Section 8(b));
and
(b) the Employer shall, regardless
of whether Employer is unable to utilize Company related benefit
plans, continue to provide to the Executive at Employer’s
expense medical and dental insurance on the same terms and same
conditions as though the Executive had remained an active employee,
for Executive’s life. At Executive’s election, the
Employer will be required to pay to Executive the cash equivalent
of the foregoing, determined by a reputable accounting or actuarial
firm selected by Executive and paid for by Employer; and
(c) the Employer shall, regardless
of whether Employer is unable to utilize Company related benefit
plans, continue to provide to the Executive certain benefits,
including, without limitation, long-term disability and
supplemental long-term disability, accidental death and
dismemberment insurance, life insurance and other fringe benefits
received by Executive in the year of a Change in Control, on the
same terms and same conditions as though the Executive had remained
an active employee, for thirty-six (36) months. At
Executive’s election, the Employer will be required to pay to
Executive the cash equivalent of the foregoing, determined by a
reputable accounting or actuarial firm selected by Executive and
paid for by Employer; and
(d) the Employer shall transfer or
roll over any restricted stock or options granted by the Company to
the Executive to the successor entity after a Change in Control;
and
(e) the Employer shall provide
Executive with professional advice of a financial planner, or
actuary or an accountant of Executive’s choice to help
Executive determine which elections Executive will make with
respect to this Agreement, including the establishment of a
“Rabbi Trust” for the accrual of Executive’s
Supplemental Employee Retirement Plan or any other benefit plan of
which Executive is a participant and Employer will be required to
implement such advice elected by Executive; and
(f) Employer shall pay for
outplacement services selected by Executive and shall provide an
office and clerical assistance to the Executive for one year after
a termination of Executive’s employment.
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(g) the Employer shall pay to the
Executive all reasonable legal and mediation fees and expenses
incurred by the Executive in obtaining or enforcing any right or
benefit provided by this Agreement, except in cases involving
frivolous or bad faith litigation initiated by the
Executive.
5. Additional Benefits
.
(a) Anything in this Agreement to
the contrary notwithstanding, in the event it shall be determined
that any compensation, payment or distribution by the Employer 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 (the “Severance Payments”),
would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the “Code”),
or any
