EXHIBIT 10.3


 


AMENDED AND RESTATED EMPLOYMENT
AGREEMENT


 


This Amended and Restated Employment Agreement (“Agreement”) is entered
into this 13th day of May, 2004, by and between William C. Bullock, Jr.
(“Bullock”) and Merrill Merchants Bancshares, Inc. (the “Company”).


 


Preamble


 


WHEREAS, Bullock
has served as Chairman of the Board of Directors of the Company and Chairman of
the Board of Directors of Merrill Merchants Bank (the “Bank”) since their
inception;


 


WHEREAS, Bullock
will continue as a member of the Board of Directors of the Company and the Bank
for the remainder of his current respective terms;


 


WHEREAS, Bullock
intends to stand for re-election to the Board of Directors of the Company and
Bank upon the expiration of his current respective terms and desires to provide
for representation on the Board of Directors by himself or another designee of
The Bullock Family Trust (the “Trust”) or of his immediate family for so long
as the Trust and/or his immediate family owns more than three percent (3%) of
the Common Stock of the Company; and


 


WHEREAS, Bullock
has gained much valuable experience and knowledge beneficial to the Company and
he has agreed to provide advisory and related services to the Company and the
Bank;


 


NOW THEREFORE, for
and in consideration of the promises and other good and valuable consideration
set forth herein, the parties agree as follows.


 


Agreement


 


1.0                                      Services


 


1.1                                 In addition to his services as a
Director, Bullock shall provide the following services (the “Services”) to the
Company as directed by the Company for as long as he serves as a member of the
Board of Directors of the Company or of the Bank:


 


a.                                       Render advisory services and provide the
Company the benefit of his special knowledge, skill, contacts, good will and
business experience in the areas of banking and investment decisions;


 


b.                                      Keep informed as to the operation of the
Company and its subsidiaries and, as an advisor and consultant, promote their
financial welfare;


 


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c.                                       Undertake such services, duties, tasks
and responsibilities related to the operations and continued development of the
business of the Company as the Company may from time to time reasonably request;
and


 


d.                                      Perform various other duties and
responsibilities as agreed to by the Company and Bullock with respect to the
Company’s business and expansion thereof.


 


1.2                                 Bullock shall perform the Services under
the direction of the Chief Executive Officer of the Company.  The Company shall provide to Bullock all necessary
and appropriate office space and support staff, including secretarial support,
for the provision of Services. 
Notwithstanding the scope of the Services, the parties agree that the
provision of the Services by Bullock is not a, and does not require a,
full-time commitment by Bullock.


 


1.3                                 Bullock covenants that he shall:


 


a.                                       Perform the Services with due diligence
and reasonable care;


 


b.                                      Keep the Company currently informed on
matters arising under or pertaining to the Services;


 


c.                                       Maintain and furnish to the Company upon
request accurate and complete records of any reimbursed expenses; and


 


d.                                      Comply in all material respects with all
applicable federal, state and local laws, rules and regulations in the
performance of the Services.


 


1.4                                 Bullock’s relationship in the provision
of Services under this Agreement shall be construed solely to be that of an
independent contractor.


 


2.0                                      Compensation


 


2.1                                 In consideration for Bullock’s
performance of Services, effective as of June 1, 2004, the Company shall pay
and/or provide:


 


a.                                       Two thousand dollars ($2,000.00) per
month in base compensation paid through and including the month of April 2007
(in the event of the untimely death of Bullock prior to April 2007, such compensation
shall be paid to his spouse through that date), and two thousand dollars
($2,000.00) per month thereafter (payable to his spouse for the remainder of
her life in the event Bullock is survived by his spouse) (for purposes of this
Agreement, Bullock’s spouse shall mean Edith Bullock, the person to whom he is
married as of the date of this Agreement);


 


b.                                      Benefits in form and substance identical
or equivalent to all employment benefits (including health insurance, dental
insurance, life insurance, extended care insurance, and disability insurance)
now or hereafter offered to executive officers of the Company and/or the Bank
through his retirement as


 


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a director of the Company at the annual meeting in April 2007 (in the
event of the untimely death of Bullock prior to that time, such benefits shall
be provided to his spouse through that date);


 


c.                                       Use of a Bank vehicle every two years
through his retirement as a director of the Company at the annual meeting in
April 2007, such vehicle to be equivalent or similar to the vehicle currently
provided to Bullock;


 


d.                                      Use of a gasoline credit card and long distance
telephone card of the Company or Bank through April 2007; and


 


e.                                       Legal, investment banking, and related
and associated fees and expenses incurred by the Trust and/or Bullock, his
spouse, or one or more of his children or grandchildren, in the process of liquidating
all or a portion of its, his, her or their ownership of stock in the Company,
through not more than three secondary underwritings (except that each secondary
underwriting must involve at least one-third of its, his, her or their then
current stock ownership of the Company), to the extent such payment by the
Company is not inconsistent with any otherwise applicable federal, state, or
local law (including common law) or regulation, or with the Articles of
Incorporation and Bylaws of the Company or the Bank, and provided Bullock is
not in material breach of this Agreement.


 


2.2                                 In addition to the compensation provided
in section 2.1 of this Agreement, in the event there is a Change of Control (as
hereinafter defined) prior to April 2007, Bullock shall be entitled to a lump
sum payment of forty-eight thousand dollars ($48,000.00) upon the closing of
the transaction constituting the Change of Control.


 


3.0                                      Service on the Board of Directors of the Bank and the Company


 


3.1                                 To the extent not inconsistent with any
otherwise applicable federal, state, or local law (including common law) or
regulation, or with the Articles of Incorporation and Bylaws of the Company or
the Bank, and for so long as Bullock is not in material breach of this
Agreement, the Company agrees that it will re-elect Bullock to serve additional
successive one-year terms as a member of the Board of Directors of the Bank until
the first annual meeting of the shareholders of the Bank following Bullock’s seventieth
birthday (April 2007).


 


3.2                                 To the extent not inconsistent with any
otherwise applicable federal, state, or local law (including common law) or
regulation, or with the Articles of Incorporation and Bylaws of the Company or
the Bank, and for so long as Bullock is not in material breach of this
Agreement, the Company agrees that it will affirmatively recommend to its
Nominating and Corporate Governance Committee (the “Committee”) that the
Committee nominate Bullock for re-election to the Board of Directors of the
Company, pursuant to Article VI, Section 8, of the Bylaws of the Company, upon
the expiration of Bullock’s present term and each succeeding term as a member
of the Board of Directors of the Company, until the first annual meeting of the
shareholders of the Company following Bullock’s seventieth birthday (April
2007).


 


3.3                                 To the extent not inconsistent with any
otherwise applicable federal, state, or local law (including common law) or
regulation, or with the Articles of Incorporation and Bylaws of the Company


 


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or Bank, the Company agrees that in the event (i) Bullock is no longer
serving as a Director of the Company and (ii) the Trust and Bullock’s immediate
family (defined as above) combined continue to own more than three percent (3%)
of the Common Stock of the Company, the Company agrees that it will
affirmatively recommend to the Committee that the Committee nominate for
election to the Board of Directors of the Company, pursuant to Article VI,
Section 8, of the Bylaws of the Company, a representative of the Trust or of
Bullock’s immediate family (whose identity is made known to the Company by the
Trust or family prior to the annual meeting of the shareholders of the
Company).  The Company agrees that any
representative of the Trust or family elected following such nomination, who
resides outside Maine, shall be reimbursed for all reasonable travel and
lodging expenses to attend meetings of the Board of Directors of the Company
and other functions or meetings as appropriate, provided that such
reimbursement shall not exceed $10,000 in any twelve (12) month period unless
approved by the Bank and/or Company.


 


3.4                                 Should Bullock cease to reside within
twenty-five (25) miles of Bangor, Maine, he shall be reimbursed by the Company
for all reasonable travel and lodging expenses associated with his attendance
at Company and/or Bank Board meetings and related functions or in connection
with the other services to be provided pursuant to this agreement, provided
that such reimbursement shall not exceed $10,000 in any twelve (12) month
period unless approved by the Bank and/or Company.


 


4.0                                      Term


 


4.1                                 Unless earlier terminated by mutual
consent of the parties, this Agreement shall terminate on the later to occur of
(i) Bullock ceasing to serve as a member of the Board of Directors of both the
Company and the Bank, (ii) the ceasing of the Trust, and/or Bullock’s immediate
family (as defined above) combined, to own more than three percent (3%) of the
Common Stock of the Company, and (iii) the death of Bullock’s spouse.


 


5.0                                      Change of Control


 


a.                                       A Change of Control of the Bank (“Change
of Control”) shall be deemed to have occurred upon the happening of any of the
following events:


 


(i)                                     approval by the stockholders of the Bank
of a transaction that would result in the reorganization, merger or consolidation
of the Bank, respectively, with one or more other persons, other than a transaction
following which:


 


(A)  at least 51% of the equity
ownership interest of the entity resulting from such transaction are
beneficially owned (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended “Exchange Act”) in substantially
the same relative proportions by persons who, immediately prior to such
transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) at least 51% of the outstanding equity ownership
interest in the Bank; and


 


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(B)  at least 51% of the
securities entitled to vote generally in the election of directors of the
entity resulting from such transaction are beneficially owned (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the
same relative proportions by persons who, immediately prior to such
transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) at least 51% of the securities entitled to vote
generally in the election of directors of the Bank;


 


(ii)                                  the acquisition of all or substantially
all of the assets of the Bank or approval by the stockholders of the Bank of
any transaction which would result in such an acquisition;


 


(iii)                               a complete liquidation or dissolution of
the Bank, or approval by the stockholders of the Bank of a plan for such liquidation
or dissolution;


 


(iv)                              the occurrence of any event if,
immediately following such event, at least 50% of the members of the Board do
not belong to any of the following groups:


 


(A)                              individuals who were members of the Board
of the Bank on the date of this Agreement; or


 


(B)                                individuals who first became members of
the Board of the Bank after the date of this Agreement either:


 


(I)  upon
election to serve as a member of the Board of the Bank by affirmative vote of
two-thirds of the members of such Board, of a nominating committee thereof, in
office at the time of such first election; or


 


(II)  upon
election by the stockholders of the Bank to serve as a member of the Board of
the Bank, but only if nominated for election by affirmative vote of two-thirds
of the members of the Board of the Bank, or of a nominating committee thereof,
in office at the time of such first nomination;   provided,
however, that such individual’s election or nomination did not result from an actual
or threatened election contest or other actual or threatened solicitation of
proxies or consents other than by or on behalf of the Board of the Bank; or


 


(v)                                 any event which would be described in
section 5(a)(i), (ii), (iii) or (iv) if the term “Company” were substituted for
the term “Bank” therein.


 


In no event, however, shall a Change of Control be
deemed to have occurred as a result of any acquisition of securities or assets
of the Bank, the Company, or a subsidiary of either of them, by the Bank, the
Company, or a subsidiary of either of them, or by any employee benefit plan
maintained by any of them.  For purposes
of this section 5(a), the term “person” shall have the meaning assigned to it
under sections 13(d)(3) or 14(d)(2) of the Exchange Act.


 


b.                                      In the event of a Change of Control,
Bullock shall be entitled to the payments and benefits contemplated by section
2.0.  Notwithstanding anything in this
Agreement to the contrary, in no event shall any payments made or benefits
provided under this Agreement, when combined with all


 


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other payments and benefits to Bullock, be allowed to render any such
payment or benefit nondeductible under Section 280G of the Internal Revenue
Code (“Code”) or to trigger an excise tax under Section 4999 of the Code.  In such event, the payments and/or benefits
to be provided under this Agreement shall be reduced, but not below zero, such
that the aggregate benefits to be provided to Bullock do not exceed 2.99
multiplied by Bullock’s “base amount” (as such term is defined in Section 280G
of the Code).


 


6.0                                      Miscellaneous


 


6.1                                 This Agreement shall be governed by and
construed in accordance with the laws of the State of Maine.


 


6.2                                 The Trust, Bullock’s spouse, and the
remainder of Bullock’s immediate family (as defined above) are intended
third-party beneficiaries of this Agreement.


 


6.3                                 The waiver by either party of a breach of
any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach.  No waiver
shall be valid or effective unless in writing and signed by the party against
whom waiver is being asserted.


 


6.4                                 Bullock acknowledges that the services to
be rendered by him are unique and personal. 
Accordingly, Bullock may not assign any of his rights or delegate any of
his duties or obligations under this Agreement.  This Agreement shall be and is intended to be binding on, and
shall inure to the benefit of, the Company (whether or not a controlling
interest of its Common Stock is acquired by any person or persons who do not
currently own a controlling interest), any person who purchases, directly or
indirectly, substantially all of the assets of the Company or the Bank, and the
Company’s successors or assigns, through reorganization, merger, or any other
form of transaction.


 


6.5                                 The invalidity or unenforceability of any
term or provision of this Agreement shall not affect the validity or enforceability
of any other term or provision of this Agreement.


 


6.6                                 This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all such
counterparts together will constitute but one Agreement.


 


6.7                                 The terms and provisions contained in
this Agreement constitute the entire Agreement between the parties with respect
to the subject matter hereof.  This
Agreement supersedes all previous communications, representations or
Agreements, either verbal or written, between the parties.


 


 


	
   

  	
  MERRILL
  MERCHANTS BANCSHARES, INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Edwin N.
  Clift

  	
   

  
	
   

  	
  Edwin N. Clift,
  Chairman and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ William C.
  Bullock, Jr.

  	
   

  
	
   

  	
  William C.
  Bullock, Jr.

  
					



 


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