Exhibit 10.1
CHITTENDEN
CORPORATION
Senior Executive Severance
Agreement
AGREEMENT made as of this
day of
, 2006 by and among Chittenden Corporation, a Vermont corporation
with its principal place of business in Burlington, Vermont (the
“Company” and the “Employer”), and
(the “Executive”), an individual presently employed as
the
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 least a majority 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
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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; provided that a
Change in Control will occur in the circumstances described above
only if the merger or consolidation is ultimately consummated;
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 two 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 for gross misconduct or due to death or disability of
the Executive; or
(b) termination by the Executive of
the Executive’s employment with the Employer for any reason,
at Executive’s option.
A Terminating Event shall not be
deemed to have occurred pursuant to this Section 3 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. For purposes of this Agreement, “gross
misconduct” shall mean (i) Executive’s willful
misconduct in the performance of his or her duties which is
materially injurious to the Employer or (ii) Executive’s
indictment for, or conviction of, or pleading guilty or nolo
contendere to, a felony; and “disability” shall have
the meaning given to such term in the Chittenden Corporation
Long-Term Disability Plan.
4. Special Termination
Payments. In the event a Terminating Event occurs within two
years after a Change in Control:
(a) the Employer shall pay to the
Executive an amount equal to the sum of the following:
(i) X times the amount of the
highest base salary of the Executive in effect at or following a
Change in Control, determined prior to any reductions for pre-tax
contributions to a cash or deferred arrangement or a cafeteria
plan; and
(ii) X times the amount of the
highest target bonus of the Executive in effect at or following a
Change in Control; and
(iii) X times the amount equal to
the Core Contribution that would have been contributed on behalf of
the Executive pursuant to Section 4.2 of the Chittenden
Corporation Incentive Savings and Profit Sharing Plan in the event
Executive continued employment with the Employer until the end of
the plan year in which the Terminating Event occurs; and
(iv) X times the amount equal to the
401(k) match and the profit sharing portion of the 401(k)
contribution that would have been contributed on behalf of the
Executive in the event Executive continued employment with the
Employer until the end of the plan year in which the Terminating
Event occurs; and
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(v) X times the amount equal to any
payment that would have been contributed on behalf of the Executive
under the Chittenden Corporation Supplemental Executive Savings
Plan in the event Executive continued employment with the Employer
until the end of the plan year in which the Terminating Event
occurs; and
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)), except that, if Executive is a specified
employee within the meaning of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), and such
delay is required to avoid subjecting Executive to the additional
taxes imposed under such Section, then such payment shall be made
on the first business day after the six-month anniversary of
Executive’s Date of Termination; and
(b) the Employer shall, regardless
of whether Employee is unable to utilize Company related benefit
plans, continue to provide to the Executive at Employer’s
expense all medical, dental, or other welfare 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
months, but in no event beyond the earlier of
(i) December 31 of the second calendar year commencing
after the Terminating Event or (ii) the day on which Executive
becomes eligible to receive any group medical, dental, or other
welfare benefits as the case may be, under any plan or program of
any other employer for active employees (the “Benefit
Termination Date”). 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. Following such
Benefit Termination Date, the Executive shall be eligible to
participate in Employer’s medical and dental plans and
programs until Executive becomes eligible for Medicare. The
Executive will be responsible for the full premium expense of this
coverage.
(c) 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; and
(d) 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; and
(e) 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 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
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penalties, are hereinafter collectively referred
to as the “Excise Tax”), then the Executive shall be
entitl
