Document:

exv10w2

 

Exhibit 10.2

EMPLOYMENT AGREEMENT

     AGREEMENT by and among Banknorth Group, Inc., a Maine corporation (the
“Company”), The Toronto-Dominion Bank, a Canadian chartered bank, (“TD”) and
William J. Ryan (the “Executive”), dated as of the 25th day of August, 2004.

     In connection with the merger (the “Merger”) of Berlin Merger Co., a
Delaware corporation, a wholly owned subsidiary of TD, (“Berlin Mergerco”) with
and into Berlin Delaware Inc., a Delaware corporation (“Berlin Delaware”)
pursuant to the Agreement and Plan of Merger, dated as of August 25, 2004,
among the Company, Berlin Delaware, TD, and Berlin Mergerco (the “Merger
Agreement”), the Company wishes to secure the continued services of the
Executive.

     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     1. Effective Date. The “Effective Date” shall mean the date on
which the “Effective Time” (as defined in the Merger Agreement) occurs. In
the event that the Effective Time shall not occur this Agreement shall be null
and void ab initio and of no further force and effect.

     2. Term. This Agreement shall commence on the Effective Date and
end on the fifth anniversary thereof, or, if earlier, the date that the
Executive’s employment hereunder terminates (the “Term”).

     3. Position and Duties.

     (a) During the Term, the Executive shall serve as the Chairman, President
and Chief Executive Officer of the Company with such duties and
responsibilities as are customary to such positions. As such, the Executive
shall report directly to the Board of Directors of the Company (the “Board”).
During the Term, the Executive shall serve on the Board, shall serve as Vice
Chairman of TD, reporting to the President and Chief Executive Officer of TD,
and shall serve on the Board of Directors of TD, but shall not receive any
compensation for such service.

     (b) During the Term, the Executive will devote his full business time and
reasonable best efforts to the performance of his duties hereunder and will not
engage in any other business, profession or occupation for compensation or
otherwise which would conflict or interfere with the rendition of such services
either directly or indirectly, without the prior written consent of the Board;
provided that nothing herein shall preclude the Executive, subject to the prior
approval of the Board, from accepting appointment to or continue to serve on
any board of directors or trustees of any business corporation or any
charitable organization; provided in each case, and in the aggregate, that such
activities do not conflict or interfere with the performance of the Executive’s
duties hereunder or conflict with Sections 12(a), 12(b) or 13. Notwithstanding
the foregoing, the Executive shall be permitted, without the consent of the
Board, to continue serve on any boards of directors or as a trustee of any
business corporation or any charitable organization on which the Executive
serves as of immediately prior to the Effective Date and set forth on Exhibit
A.

 

 

     4. Base Salary. During the Term, the Company shall pay the
Executive a base salary at the annual rate not less than the annual rate in
effect immediately prior to the Effective Date, payable in regular installments
in accordance with the Company’s usual payment practices. The Executive shall
be entitled to such increases in the 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. The
Executive’s annual base salary, as in effect from time to time, is hereinafter
referred to as the “Base Salary.”

     5. Incentive Compensation. 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.

     6. Equity-Based Arrangements.

     (a) As soon as practicable after the Effective Date, the Company shall
grant the Executive the number of restricted stock units (the “RSUs”)
determined by dividing $6 million by the per-share closing price of TD common
stock on the New York Stock Exchange (the “Closing Price”) on the Effective
Date. The RSUs shall vest on the third (3rd) anniversary of the Effective
Date, provided that, subject to the provisions of Section 10, the Executive has
remained continuously in the employ of the Company from the Effective Date
through such third (3rd) anniversary. The RSUs shall be paid by the Company as
soon as practicable, in an amount of cash equal to the aggregate Closing Price
of such shares on such third (3rd) anniversary, provided that the Executive may
elect to defer such cash amount in accordance with a deferred compensation plan
approved by the Compensation Committee of the Board (a “Deferred Compensation
Plan”). The cash amount payable pursuant to this Section 6 shall be adjusted
upward or downward (but not by more than 20%) to reflect the performance of the
Company against an annual growth in operating earnings per share target
established each year by the Compensation Committee of the Board, provided that
such operating earnings per share target (i) shall not increase by more than
10% annually and (ii) shall exclude for all relevant years (x) costs associated
with the Merger, (y) costs, if any, related to the expensing of stock options,
and (z) extraordinary items. Except as specifically provided in this Agreement
(including, without limitation, Section 6 and Section 10), the terms of the
RSUs shall be governed by the terms of a RSU agreement with terms substantially
similar to the terms applicable to grants of restricted stock units under TD’s
Performance Based Restricted Share Unit Plan (Outside Canada), except that in
no event shall Sections 7.5, 7.6, 7.7 and 7.8 of the Performance Based
Restricted Share Unit Plan (Outside Canada) or provisions similar thereto apply
to the RSUs.

     (b) Notwithstanding the terms and conditions of any options to purchase
common stock of the Company that were granted prior to the date on which the
Merger Agreement was executed by the parties thereto (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,

2

 

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.

     7. Initial Payment and Non-Competition 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 Company’s Executive Incentive Plan as in effect on the date on which the
Merger Agreement was executed by the parties thereto (the “EIP”).

     (b) Non-Competition and Retention Amount. Subject to the
provisions of Section 10 and in consideration for the Executive’s agreement to
remain employed by the Company and to abide by the provisions of Sections 12(b)
and 13 hereof, within ten (10) business days following the third (3rd)
anniversary of the Effective Date, provided that, subject to the provisions of
Section 10, the Executive has continuously been in the employ of the Company
from the Effective Date through such anniversary date, the Executive shall be
paid, or be credited with, as the case may be, the “Non-Competition and
Retention Amount,” which shall be determined as follows, provided that the
Executive may elect to defer the Non-Competition and Retention Amount in
accordance with a Deferred Compensation Plan:

          (i) A lump sum payment equal to $6,081,925;

          (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
(as defined in the SERP Agreement) and other forms of benefit under
the SERP Agreement, the reductions for early commencement of
payment of Early Retirement Benefits described in the second
sentence of Section 5.2 of the SERP Agreement shall not apply.

          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

3

 

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 calendar
year during which the Executive’s employment is terminated, or,
(II) any calendar 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 7, 10 and 11 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
(as defined in Section 15), 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 B as soon as
reasonably practicable following the date hereof.

     The amounts in Section 7(b)(i) shall be increased, commencing on the
Effective Date, at an annual rate of four percent (4%), until the date of
payment thereof. As used in this Agreement, (i) “SERP Agreement” means the
Amended and Restated Supplemental Retirement Agreement dated February 18, 2004
between the Executive and the Company, as in effect on the date the Merger
Agreement was executed by the parties thereto, and (ii) “Retirement Plan” means
the Company’s Retirement Plan, as amended and in effect from time to time and
any successor plan.

     8. Employee Benefits.

     (a) 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,

4

 

programs or arrangements shall be no less favorable, in the aggregate,
than those in effect as of immediately prior to the Effective Date.

     (b) As soon as practicable after the Effective Date, the Company shall
purchase for the Executive a $5,000,000 whole life insurance policy on his life
(the “Policy”) subject to his being reasonably insurable at that time, shall
deliver the Policy to him, and shall pay the premiums on the Policy until such
Policy is fully paid up. (This purchase obligation may be satisfied by the
Company prior to the Effective Date, in which case the Company shall not be
obligated to purchase any additional policy hereunder, but shall not be
relieved of its obligations to continue to pay premiums hereunder.)

     9. Business Expenses and Fringe Benefits.

     (a) Expenses. 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;

     (b) Fringe Benefits. During the Term, the Executive shall enjoy
the fringe benefits normally afforded to the Company’s executive officers.
Specifically, 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 available annually to other
employees of comparable status and position with the Company. Such fringe
benefits may vary from those in effect immediately prior to the 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.

     10. Termination of Employment. Any termination by the Company or
the Executive of the Executive’s employment shall be communicated by written
Notice of Termination, 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 the
Executive’s employment under the provision so indicated, to the Executive if
such notice is delivered by the Company, and to the Company if such notice is
delivered by the Executive. Any payments made under this Section 10, other
than due to death, shall be contingent on the Executive’s prior execution and
non-revocation of a mutual release substantially in the form attached hereto as
Exhibit C; provided, however, that if the Company refuses to execute such
mutual release, the Executive’s obligation to execute and not revoke the
release as a precondition to receiving severance benefits shall terminate.

     (a) Termination for Disability. If the Executive’s employment is
terminated on account of the Executive’s Disability (as defined in Section 15),
the Executive shall receive (i) any Accrued Benefits (as defined in Section
15), (ii) 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
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
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) (the “Prorated Bonus”), and (iii) any unpaid
Non-Competition and Retention Amount, and shall remain eligible

5

 

for all benefits as provided pursuant to the terms of any
long-term disability programs of the Company in effect at the time of such
termination. In addition, (A) the pre-Merger Options shall become immediately
vested and exercisable (to the extent not previously vested and exercisable)
and shall remain exercisable for the period provided under the applicable
option agreement, (B) if such termination occurs prior to the third anniversary
of the Effective Date, RSUs shall vest (or to the extent such termination
occurs prior to the grant of such RSUs, the RSUs shall be granted and vest) but
shall be paid out, subject to the Executive’s continued compliance with
Sections 12(a), 12(b) and 13, on the third (3rd) anniversary of the Effective
Date, and the payout shall be determined without regard to the performance
conditions, and (C) the Company shall, if necessary to keep the Policy in
force, continue to make the premium payments on the Policy until such Policy is
fully paid up.

     (b) Termination due to the Executive’s Death or Retirement. If the
Executive’s employment is terminated on account of the Executive’s death or
resignation by the Executive at or after age 65, other than a resignation for
Good Reason (as defined in Section 15), (“Retirement”), the Executive, (or the
Executive’s estate or designated beneficiary (or beneficiaries), as
applicable), shall receive the Executive’s Accrued Benefits, the Prorated Bonus
and any unpaid Non-Competition and Retention Amount. In addition, (i) the
pre-Merger Options shall become immediately vested and exercisable (to the
extent not previously vested and exercisable) and shall remain exercisable for
the period provided under the applicable option agreement, (ii) if such
termination occurs prior to the third anniversary of the Effective Date, RSUs
shall vest (or to the extent such termination occurs prior to the grant of such
RSUs, the RSUs shall be granted and vest) but shall be paid out, subject to the
Executive’s continued compliance with Sections 12(a), 12(b) and 13, on the
third (3rd) anniversary of the Effective Date, and the payout shall be
determined without regard to the performance conditions, and (iii) the Company
shall, if necessary to keep the Policy in force, continue to make the premium
payments on the Policy until such Policy is fully paid up.

     (c) Voluntary Termination or Termination for Cause. If (i) the
Executive shall terminate employment with the Company other than for Good
Reason (as defined in Section 15) or Retirement, or (ii) the Executive’s
employment is terminated for Cause, the Executive shall receive from the
Company only the Accrued Benefits. In addition, if the Executive shall resign
other than for Good Reason after the third anniversary of the Effective Date,
the Executive will be entitled to the Medical Benefits (as defined below).

     (d) Termination by the Company Without Cause or by the Executive for
Good Reason. If the Executive’s employment with the Company is terminated
by the Company other than for Cause, or by the Executive for Good Reason, then:

          (i) the Executive shall receive from the Company the Accrued Benefits, the
Prorated Bonus and any unpaid Non-Competition and Retention Amount, which shall
be paid within ten (10) business days after the date of termination of the
Executive’s employment; and

          (ii) (A) the pre-Merger Options shall become immediately vested and
exercisable (to the extent not previously vested and exercisable) and shall
remain exercisable for the period provided under the applicable option
agreement, (B) if such termination takes place following a Change of Control
(as defined in Section 15) that occurs after the Effective Date, any

6

 

other grants of equity-based compensation awards from
TD or the Company shall become immediately vested and exercisable (to the
extent not previously vested and exercisable) and, if applicable, shall remain
exercisable for the period provided under the applicable award agreement, and
(C) if such termination occurs prior to the third anniversary of the Effective
Date, RSUs shall vest (or to the extent such termination occurs prior to the
grant of such RSUs, the RSUs shall be granted and vest) but shall be paid out,
subject to the Executive’s continued compliance with Sections 12(a), 12(b) and
13, on the third (3rd) anniversary of the Effective Date, and further the
payout shall be determined without regard to the performance conditions; and

          (iii) the “Severance Amount” shall be paid to the Executive in a lump sum
within 10 business days after the termination of the Executive’s employment.
For this purpose, the Severance Amount shall be the product of (I) the lesser
of (A) three or (B) the number of years and portions thereof remaining from the
date of termination to the fifth (5th) anniversary of the Effective Date, but
not less than 1.5; provided that, if such termination occurs after a
Change of Control, not less than two and (II) the sum of (A) the Base Salary,
(B) the average annual bonus paid (including any amounts deferred or paid in
equity) to the Executive under the annual bonus plan of the Company for the
last three 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 (C) (1)
the total aggregate value of all contributions, other than elective
contributions by the Executive and employer matching contributions relating
thereto, and forfeitures allocated to the Executive’s account under the 401(k)
Plan for the plan year ending immediately prior to the Effective Date, or, if
different, the plan year immediately prior to the termination of the
Executive’s employment, whichever year would produce the greater aggregate
value, and (2) the matching contributions under the 401(k) Plan (or its
successor) which would have been credited under such plan on the Executive’s
behalf, if the Executive had contributed the maximum salary deferral
contribution allowable under Section 402(g) of the Code, for the calendar year
in which the Executive’s employment with the Company was terminated. As used in
this Agreement, “401(k) Plan” means the Company’s 401(k) Plan dated January 1,
2001, as amended from time to time, or any successor plan; and

          (iv) the Executive shall continue to be covered at the expense of the
Company by the same or equivalent hospital, medical, dental, accident,
disability and life insurance coverage as in effect for the Executive
immediately prior to termination of the Executive’s employment, until the
earlier of (A) thirty-six (36) months following termination of employment, or
(B) the date the Executive has commenced new employment and has thereby become
eligible for comparable benefits; provided that, with respect to any of the
coverages described above, if such coverage is provided through an insurance
policy with an insurance company unaffiliated with the Company and if under the
terms of the applicable policy, it is not possible to provide continued
coverage (or if continued coverage under such policy would increase the
Company’s cost allocable to the Executive by more than one hundred percent
(100%)), then the Company shall pay the Executive a lump sum cash amount, no
later than thirty (30) days following termination of employment an amount equal
to twice the aggregate allocable cost of such coverage as applicable
immediately prior to termination of employment, such payment to be made without
any discount for present value (the “Medical Benefits”).

7

 

     (e) Termination of Employment following the end of the Term. In
the event that the Executive ceases to be employed by the Company for any
reason at or following the end of the Term (other than by reason of a
termination of the Executive’s employment by the Company for Cause), the
Executive shall be entitled to the Medical Benefits.

     11. Certain Supplemental Payments by the Company.

     (a) In the event it is determined that part or all of the compensation and
benefits to be paid to the Executive, whether or not payable hereunder, (i)
constitute “parachute payments” under Section 280G of the Code (the
“Payments”), and (ii) exceed one hundred and five percent (105%) of three (3)
times the Executive’s Base Amount, the Company, on or before the date for
payment of such excise tax, shall pay to or on behalf of the Executive, in lump
sum, an amount (the “Gross-Up Amount”) such that, after payment of all federal,
state and local income tax and any additional excise tax under Section 4999 of
the Code in respect of the Gross-Up Amount payment, the Executive will be fully
reimbursed for the amount of such excise tax. If the Payments equal three (3)
times the Executive’s Base Amount or exceed three (3) times the Executive’s
Base Amount, but by an amount less than five percent (5%) of three (3) times
the Base Amount, such payments shall be reduced by the least amount necessary
to bring such Payments below three (3) times the Executive’s Base Amount. As
used in this Agreement, “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 defined in Section 15).

     (b) The determination of the Parachute Amount, the Base Amount and the
Gross-Up Amount, as well as any other calculations necessary to implement this
Section 11 shall be made by KPMG LLP, and subject to the review and reasonable
approval of Ernst & Young LLP, unless the Executive and the Company agree
otherwise. The accounting firm’s fee shall be paid by the Company.

     (c) As promptly as practicable following such determination and the
elections hereunder, the Company shall pay to or distribute to or for the
benefit of the Executive such amounts as are then due to the Executive under
this Agreement and shall promptly pay to or distribute for the benefit of the
Executive in the future such amounts as become due to the Executive under this
Agreement.

     (d) As a result of the uncertainty in the application of Section 280G of
the Code at the time of an initial determination hereunder, it is possible that
payments will not have been made by the Company which should have been made
under clause (a) of this Section 11 (“Underpayment”). In the event that there
is a final determination by the Internal Revenue Service, or a final
determination by a court of competent jurisdiction, that an Underpayment has
been made and the Executive thereafter is required to make any payment of an
excise tax, income tax, any interest or penalty, the accounting or benefits
consulting firm selected under clause (b) above shall determine the amount of
the Underpayment that has occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the Executive. If and to the
extent that the Executive receives any tax refund from the Internal Revenue
Service that is attributable to payments by the Company pursuant to this
Section 11 of amounts in excess of the actual Gross-Up Amount as finally
determined by the Internal Revenue Service or a court of competent jurisdiction
(“Overpayment”), the Executive shall promptly pay to the Company the amount of
such refund that is attributable to the Overpayment (together with any interest
paid

8

 

or credited thereon after taxes applicable thereto); provided, however,
the Executive shall not have any obligation to pay the Company any amount
pursuant to this Section 11(d) if and to the extent that any such obligation
would cause the arrangement to be treated as a loan or extension of credit
prohibited by applicable law.

     12. Further Obligations of the Executive.

     (a) Confidentiality. During and following the Executive’s
employment by the Company, the Executive shall hold in confidence and not
directly or indirectly disclose or use or copy or make lists of any
confidential information or proprietary data of the Company, except to the
extent authorized in writing by the Board or required by any court or
administrative agency or otherwise by applicable law, other than to an employee
of the Company or a person to whom disclosure is reasonably necessary or
appropriate in connection with the performance by the Executive of duties as an
executive of the Company. Confidential information shall not include any
information known generally to the public or any information of a type not
otherwise considered confidential by persons engaged in the same business or a
business similar to that of the Company. All records, files, documents and
materials or copies thereof relating to the Company’s business which the
Executive shall prepare, or use, or come into contact with, shall be and remain
the sole property of the Company and shall be promptly returned to the Company
upon termination of employment with the Company.

     (b) Non-Solicitation. During the Term and, for a period of three
years following the date the Executive ceases to be employed by the Company
(the “Restricted Period”), the Executive will not hire, or, directly or
indirectly, contact, approach or solicit for the purpose of offering employment
to or hiring (whether as an employee, consultant, agent, independent contractor
or otherwise), or encouraging to cease work with the Company or its affiliates,
any person who is then employed or retained as a consultant by the Company, or
an affiliate of the Company, other than on behalf of the Company or an
affiliate of the Company, or was employed or retained as a consultant by the
Company or an affiliate of the Company during the one (1) year period prior to
such hiring, solicitation or other act prohibited by this Section 12(b)(i).

     (c) Certain Accelerations and Option Exercises. The Executive
agrees that the Company may, at its election, accelerate the payment of (x) the
amount described in Section 7(a) and/or (y) the annual bonus for 2004 to a date
on or before December 31, 2004 (it being understood that the amount payable
under Section 7(a) shall be based upon the date upon which the Effective Time
occurs and shall be reduced by any amount previously paid under this Section
12(c)), and agrees to exercise, prior to December 31, 2004, any vested options
to purchase Company shares that would otherwise expire by their terms during
calendar year 2004, 2005 and 2006 and that may reasonably be necessary, based
on the advice of KPMG LLP, and subject to the review and reasonable approval of
Ernst & Young, LLP, in order for the Executive to mitigate the effects of
Section 280G of the Code.

     (d) Share Ownership Guidelines. The Executive shall comply with
TD’s executive share ownership guidelines, as they may be in effect from time
to time, including the one-year holding period after termination of employment,
provided that one-half of the value of shares that the guidelines require the
Executive to hold shall be satisfied by the Executive holding TD shares, and
the other half by holding Berlin Delaware shares.

9

 

     13. Non-Competition. The Executive acknowledges and recognizes the
highly competitive nature of the businesses of the Company and its subsidiaries
and accordingly agrees as follows:

     (a) During the Restricted Period, the Executive will not, whether on the
Executive’s own behalf or on behalf of or in conjunction with any person, firm,
partnership, joint venture, association, corporation or other business
organization, entity or enterprise whatsoever (“Person”), directly or
indirectly solicit or assist in soliciting in competition with the Company, the
business of any client or prospective client:

          (i) with whom the Executive had personal contact or dealings on behalf of
the Company during the one (1) year period preceding the Executive’s
termination of employment;

          (ii) with whom employees reporting to the Executive have had personal
contact or dealings on behalf of the Company during the one (1) year
immediately preceding the Executive’s termination of employment; or

          (iii) for whom the Executive had direct or indirect responsibility during
the one (1) year immediately preceding the Executive’s termination of
employment.

     (b) During the Restricted Period, the Executive will not directly or
indirectly:

          (i) engage in any business that competes with the business of the Company
or its subsidiaries (including, without limitation, businesses which the
Company or its subsidiaries have specific plans to conduct in the future as of
the date of termination and as to which the Executive is aware of such
planning) during the Term within one hundred (100) miles of any location in
North America in which the Company or its subsidiaries provide deposit-taking
or personal and commercial banking services (a “Competitive Business”)
provided, that any business or endeavor shall cease to be a Competitive
Business if the Company and its subsidiaries are not, or cease to be, engaged
in such business or endeavor;

          (ii) enter the employ of, or render any services to, any Person (or any
division or controlled or controlling affiliate of any Person) who or which
engages in a Competitive Business;

          (iii) acquire a financial interest in, or otherwise become actively
involved with, any Competitive Business, directly or indirectly, as an
individual, partner, shareholder, officer, director, principal, agent, trustee
or consultant.

     (c) Notwithstanding anything to the contrary in this Agreement, (i) the
Executive may, directly or indirectly own, solely as an investment, securities
of any Person engaged in the business of the Company or its affiliates which
are publicly traded on a national or regional stock exchange or on the
over-the-counter market if the Executive (A) is not a controlling person of, or
a member of a group which controls, such person and (B) does not, directly or
indirectly, own five percent (5%) or more of any class of securities of such
Person and (ii) the Executive may, directly or indirectly, following
termination of the Executive’s employment, (A) provide services to any person
or entity engaged in any Competitive Business if the Executive is not involved,
directly or indirectly, in the management, supervision or

10

 

operations of such Competitive Business and the gross revenues generated
by such Competitive Business do not constitute more than the lesser of (x) 10%
of the consolidated gross revenues of such person or entity and its affiliates
or (y) 10% of the consolidated gross revenues of the Competitive Businesses in
which the Company and its subsidiaries engage as of the Executive’s termination
of employment and (iii) notwithstanding anything in any arrangement to the
contrary, the restrictive covenants set forth in this Agreement shall be the
sole restrictive covenants applicable to the Executive during the Term.

     14. Equitable Relief. The Executive acknowledges and agrees that
in the event of a breach by the Executive of any of the provisions of Sections
12(a), 12(b) and 13 hereof, the Company may suffer irreparable harm for which
monetary damages alone will constitute an insufficient remedy. Consequently,
in the event of any such breach, the Company may, in addition to other rights
and remedies existing in its favor, apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive or other
relief in order to enforce or prevent any violations of the provisions hereof,
in each case without the requirement of posting a bond or proving actual
damages.

     15. Definitions. For purposes of this Agreement, the following
terms shall have the following meanings:

     (a) Accrued Benefits means:

          (i) all salary earned or accrued through the date the Executive’s
employment is terminated, and any unpaid amounts described in Section 7(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 calendar year or other
performance period ending prior to the calendar 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) Cause means:

          (i) the Executive’s conviction of, or plea of nolo contendere to, a
felony; or

11

 

          (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. 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 below.

     (c) 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.

     (d) Code means the Internal Revenue Code of 1986, as amended.

     (e) 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.

     (f) Good Reason means:

          (i) any breach of this Agreement by the Company, including without
limitation (A) any reduction during the Term 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, a significant reduction in the Executive’s title,
duties, responsibilities or in the level of his support services, 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;

12

 

          (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 Executive 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.

     16. Expenses and Interest. If, during the Term, a good faith
dispute arises with respect to the enforcement of the Executive’s rights under
this Agreement, or if any legal or arbitration proceeding shall be brought in
good faith to enforce or interpret any provision contained herein, or to
recover damages for breach hereof, the Executive shall recover from the Company
any reasonable attorney’s fees and necessary costs and disbursements incurred
as a result of such dispute, and prejudgment interest on any money judgment or
arbitration award obtained by the Executive calculated at the rate of interest
announced by Banknorth N.A., or any successor thereto, from time to time as its
prime rate from the date that payments to the Executive should have been made
under this Agreement.

     17. Payment Obligations Absolute. The Company’s obligation during
and after the Term to pay the Executive the compensation and to make the
arrangements provided herein shall be absolute and unconditional and shall not
be affected by any circumstances, including, without limitation, any setoff,
counterclaim, recoupment, defense or other right which the Company may have
against the Executive or anyone else. All amounts payable by the Company
hereunder shall be paid without notice or demand. Each and every payment made
hereunder by the Company shall be final and the Company will not seek to
recover all or any part of such payment from the Executive or from whomsoever
may be entitled thereto, for any reason whatever except as provided in Section
11 above. In no event shall the Executive be obligated to seek other employment
or take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement, and such amounts shall
not be reduced whether or not the Executive obtains other employment.

     18. Successors.

     (a) The Company will require any successor or assign (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to the Executive, expressly, absolutely and
unconditionally to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession or assignment had taken place. Any failure of the
Company to

13

 

obtain such agreement prior to the effectiveness of any such succession or
assignment shall be a material breach of this Agreement and shall entitle the
Executive to terminate the Executive’s employment for Good Reason. As used in
this Agreement, “Company” shall mean the Company as hereinbefore defined and
any successor or assign to all or substantially all of the business and/or
assets as aforesaid which executes and delivers the agreement provided for in
this Section 18(a) or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law. Notwithstanding the
foregoing, the Executive hereby expressly agrees to the assumption of this
Agreement by Berlin Delaware.

     (b) This Agreement and all rights of the Executive shall inure to the
benefit of and be enforceable by the Executive’s personal or legal
representatives, estates, executors, administrators, heirs and beneficiaries.
All amounts payable to the Executive hereunder shall be paid, in the event of
the Executive’s death, to the Executive’s estate, heirs and representatives.
Except as provided in this Section 18, no party may assign this Agreement or
any rights, interests, or obligations hereunder without the prior written
approval of the other party. Subject to the preceding sentence, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns pursuant to Section 18(a).
This Agreement shall not be terminated by the voluntary or involuntary
dissolution of the Company. In addition, Sections 8(b), 10, 11, 12, 13, 14,
16, 17, 19 and 23 shall survive the termination of this Agreement to the extent
necessary to give effect to the terms thereof.

     19. Severability and Enforcement. The provisions of this Agreement
shall be regarded as divisible, and if any such provisions or any part hereof
are declared invalid or unenforceable by a court of competent jurisdiction, the
validity and enforceability of the remainder of such provisions or parts hereof
and the applicability thereof shall not be affected thereby. It is expressly
understood and agreed that although the Executive and the Company consider the
restrictions contained herein to be reasonable, if a final judicial
determination is made by a court of competent jurisdiction that the time or
territory or any other restriction contained in this Agreement is an
unenforceable restriction against the Executive, the provisions of this
Agreement shall not be rendered void but shall be deemed amended to apply as to
such maximum time and territory and to such maximum extent as such court may
judicially determine or indicate to be enforceable. Alternatively, if any
court of competent jurisdiction finds that any restriction contained in this
Agreement is unenforceable, and such restriction cannot be amended so as to
make it enforceable, such finding shall not affect the enforceability of any of
the other restrictions contained herein.

     20. Amendment. This Agreement may not be amended or modified at
any time except by a written instrument executed by the Company and the
Executive.

     21. Withholding. The Company shall be entitled to withhold from
amounts to be paid to the Executive hereunder any federal, state or local
withholding or other taxes, or charge which it is from time to time required to
withhold. The Company shall be entitled to rely on an opinion of counsel if
any question as to the amount or requirement of any such withholding shall
arise.

     22. Governing Law. This Agreement and the rights and obligations
hereunder shall be governed by and construed in accordance with the laws of the
State of Maine.

14

 

     23. Arbitration. Any dispute arising out of this Agreement other
than with regard to either of Sections 12(a), 12(b) or 13, shall be determined
by arbitration in the State of Maine under the rules of the American
Arbitration Association then in effect and judgment upon any award pursuant to
such arbitration may be enforced in any court having jurisdiction thereof.

     24. Notice. Notices given pursuant to this Agreement shall be in
writing and shall be deemed given when received and, if mailed, shall be mailed
by United States registered or certified mail, return receipt requested,
addressee only postage prepaid, to the Company at:

	 	 	 
	

	 	Banknorth Group, Inc.
	

	 	P.O. Box 9540
	

	 	Two Portland Square
	

	 	Portland, ME 04112
	

	 	Attn: General Counsel

or if to the Executive, at the address contained in the records of the Company,
or to such other address as the party to be notified shall have given to the
other.

     25. No Waiver. No waiver by any party at any time of any breach by
another party of, or compliance with, any condition or provision of this
Agreement to be performed by another party shall be deemed a waiver of similar
or dissimilar provisions or conditions at any time.

     26. Headings. The headings herein contained are for reference only
and shall not affect the meaning or interpretation of any provision of this
Agreement.

     27. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof
and supersedes any prior severance agreements between the Executive and the
Company.

15

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above; provided, however, that TD executes this
Agreement only with respect to its obligations under Section 3.

	 	 	 	 	 
	 	BANKNORTH GROUP, INC.

 	 
	 	By:  	/s/ Peter J. Verrill

	 
	 	  	Name: Peter J. Verrill

Title: Chief Operating Officer
 	 

	 	 	 	 	 
	 	THE TORONTO-DOMINION BANK

 	 
	 	By:  	W. Edmund Clark

	 
	 	  	Name: W. Edmund Clark

Title: President and Chief Executive Officer
 	 

	 	 	 	 	 
	 	/s/ William J. Ryan
 	 
	 	
	 
	 	William J. Ryan 	 
	 	 	 

 

 

	 	 	 	 	 

EXHIBIT A

	 	 	 
	Organization
	 	Position

	Banknorth Group, Inc./ N.A.

	 	Chairman, Director
	Anthem, Inc.

	 	Director
	eFunds Corporation

	 	Director
	UnumProvident

	 	Director
	Colby College

	 	Trustee
	Libra Foundation

	 	Trustee
	Thomas College

	 	Trustee
	Federal Reserve Advisory Council

	 	Member
	University of Southern Maine

	 	Foundation Board
	University of New England

	 	Board of Advisors
	Maine College of Art

	 	Honorary Leadership Committee
	Portland Symphony Orchestra

	 	Renaissance Group
	Catholic Foundation of Maine

	 	Operations Committee

 

 

EXHIBIT B

[EXAMPLE OF SERP CALCULATION]

 

 

EXHIBIT C

GENERAL RELEASE

     1. Release of Claims by Executive.

     (a) In consideration of the payments and benefits to be provided to
[   ] (“Executive”) pursuant to the employment agreement, dated as
of August 25, 2004, to which Executive and Banknorth Group, Inc., a Maine
corporation (the “Company”), are parties (the “Employment
Agreement”), the sufficiency of which is acknowledged hereby, Executive,
with the intention of binding himself and his heirs, executors, administrators
and assigns, does hereby release, remise, acquit and forever discharge the
Company, Toronto-Dominion Bank (“TD”) and each of their subsidiaries and
affiliates (the “Company Affiliated Group”), their present and former
officers, directors, executives, agents, attorneys and employees, and the
successors, predecessors and assigns of each of the foregoing (collectively,
the “Company Released Parties”), of and from any and all claims,
actions, causes of action, complaints, charges, demands, rights, damages,
debts, sums of money, accounts, financial obligations, suits, expenses,
attorneys’ fees and liabilities of whatever kind or nature in law, equity or
otherwise, whether accrued, absolute, contingent, unliquidated or otherwise and
whether now known or unknown, suspected or unsuspected, which Executive,
individually or as a member of a class, now has, owns or holds, or has at any
time heretofore had, owned or held, against any Company Released Party in any
capacity, including, without limitation, any and all claims (i) arising out of
or in any way connected with Executive’s service to any member of the Company
Affiliated Group (or the predecessors thereof) in any capacity, or the
termination of such service in any such capacity, (ii) for severance or
vacation benefits, unpaid wages, salary or incentive payments, (iii) for breach
of contract, wrongful discharge, impairment of economic opportunity,
defamation, intentional infliction of emotional harm or other tort, (iv) for
any violation of applicable state and local labor and employment laws
(including, without limitation, all laws concerning unlawful and unfair labor
and employment practices) and (v) for employment discrimination under any
applicable federal, state or local statute, provision, order or regulation, and
including, without limitation, any claim under Title VII of the Civil Rights
Act of 1964 (“Title VII”), the Civil Rights Act of 1988, the Fair Labor
Standards Act, the Americans with Disabilities Act (“ADA”), the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), the Age
Discrimination in Employment Act (“ADEA”) and any similar or analogous
state statute, excepting only:

          (A) the rights of Executive under the Employment Agreement;

          (B) the rights of Executive (i) relating to any stock options and other
equity-based awards held by Executive as of the date hereof (collectively, the
“Equity Arrangements”) and (ii) as a stockholder of the Company or its
affiliates;

          (C) the right of Executive to receive COBRA continuation coverage in
accordance with applicable law;

          (D) rights to indemnification Executive may have under (i) applicable
corporate law, (ii) the by-laws or certificate of incorporation of any Company
Released Party, (iii) any other agreement between Executive and a Company
Released Party (iv) as an insured

 

 

under any director’s and officer’s liability
insurance policy now or previously in force or (v) Section 6.7 of the Agreement
and Plan of Merger, dated as of August 25, 2004, among the Company, Berlin
Delaware, Inc., TD and Berlin Merger Co.; and

          (E) claims for benefits under any health, disability, retirement, life
insurance or other, similar “employee benefit plan” (within the meaning of
Section 3(3) of ERISA) of the Company Affiliated Group (the “Company Benefit
Plans”).

     (b) Executive acknowledges and agrees that the release of claims set
forth in this Section 1 is not to be construed in any way as an admission of
any liability whatsoever by any Company Released Party, any such liability
being expressly denied.

     (c) The release of claims set forth in this Section 1 applies to any
relief no matter how called, including, without limitation, wages, back pay,
front pay, compensatory damages, liquidated damages, punitive damages, damages
for pain or suffering, costs, and attorney’s fees and expenses.

     (d) Executive specifically acknowledges that his acceptance of the terms
of the release of claims set forth in this Section 1 is, among other things, a
specific waiver of his rights, claims and causes of action under Title VII,
ADEA, ADA and any state or local law or regulation in respect of discrimination
of any kind.

     (e) Executive shall have a period of 21 days to consider whether to
execute this General Release. To the extent Executive has executed this General
Release within less than twenty-one (21) days after its delivery to him, the
Executive hereby acknowledges that his decision to execute this General Release
prior to the expiration of such twenty-one (21) day period was entirely
voluntary. If Executive accepts the terms hereof and executes this General
Release, he may thereafter, for a period of 7 days following (and not
including) the date of execution, revoke this General Release. If no such
revocation occurs, this General Release shall become irrevocable in its
entirety, and binding and enforceable against Executive, on the day next
following the day on which the foregoing seven-day period has elapsed. Any
revocation of this General Release shall be deemed for all purposes a
revocation of this General Release in its entirety.

     (f) Executive acknowledges and agrees that he has not, with respect to
any transaction or state of facts existing prior to the date hereof, filed any
complaints, charges or lawsuits against any Company Released Party with any
governmental agency, court or tribunal.

     2. Effect of Unenforceability of Release. In addition to any
other remedy available to the Company hereunder, in the event that, as a result
of a challenge brought by an Employee Released Party (as defined below), the
release of claims set forth in Section 1 becomes null and void or is otherwise
determined not to be enforceable, then the Company’s obligation to make any
additional payments or to provide any additional benefits under the Employment
Agreement shall immediately cease to be of any force and effect, and Executive
shall promptly return to the Company any payments or benefits the
provision of which by the Company was conditioned on the enforceability of this
General Release.

2

 

     3. Release of Claims by the Company and TD.

     (a) The Company and TD, with the intention of binding themselves and
their subsidiaries, affiliates, predecessors and successors and their directors
and officers (collectively, the “Releasing Entities”), do hereby release,
remise, acquit and forever discharge Executive and his heirs, estate,
executors, administrators and assigns (collectively, the “Employee Released
Parties”), of and from any and all claims, actions, causes of action,
complaints, charges, demands, rights, damages, debts, sums of money, accounts,
financial obligations, suits, expenses, attorneys’ fees and liabilities of
whatever kind or nature in law, equity or otherwise, whether accrued, absolute,
contingent, unliquidated or otherwise and whether now known or unknown,
suspected or unsuspected, which the Company, TD and their subsidiaries,
affiliates, predecessors and successors, individually or as a member of a
class, now have, own or hold, or have at any time heretofore had, owned or
held, against any Employee Released Party, excepting only:

          (A) rights of the Releasing Entities under this General Release, the
Employment Agreement, the Equity Arrangements and the Company Benefit Plans;
and

          (B) rights of the Releasing Entities arising by reason of Executive
having committed a crime or an act or omission to act which constitutes fraud,
willful misconduct or gross negligence.

     (b) The Releasing Entities acknowledge and agree that the release of
claims set forth in this Section 3 is not to be construed in any way as an
admission of any liability whatsoever by any Employee Released Party, any such
liability being expressly denied.

     (c) The release of claims set forth in this Section 3 applies to any
relief no matter how called, including, without limitation, compensatory
damages, liquidated damages, punitive damages, damages for pain or suffering,
costs, and attorney’s fees and expenses.

     (d) Nothing herein shall be deemed, nor does anything contained herein
purport, to be a waiver of any right or claim or cause of action which by law
the Company is not permitted to waive.

     (e) The Company acknowledges and agrees that it has not, with respect to
any transaction or state of facts existing prior to the date hereof, filed any
complaints, charges or lawsuits against any Employee Released Party with any
governmental agency, court or tribunal.

     4. Nondisparagement. Executive agrees not to make any disparaging
statements about the Company Released Parties or the Company Affiliated Group’s
business practices, operations or personnel policies and practices to any of
the Company Affiliated Group’s customers, clients, competitors, suppliers,
directors, consultants, employees, former employees, or the press or other
media in any country. Similarly, the Company agrees to instruct its executive
officers and directors not to make any disparaging statement about the
Executive or Executive’s performance of his duties and responsibilities while
employed with the Company Affiliated Group to any of the Company Affiliated
Group’s customers, client’s, competitors, suppliers, directors, consultants,
employees, former employees or the press or other media in any country.

3

 

     5. Counterparts. This General Release may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

     6. Successors. This General Release shall be binding upon any and
all successors and assigns of Executive and the Company.

     7. Governing Law. Except for issues or matters as to which federal
law is applicable, this General Release shall be construed in accordance with
and governed by the laws of the State of Maine.

IN WITNESS WHEREOF, this General Release has been signed by or on behalf of
each of the Parties, all as of ___________ .

	 	 	 
	

	 	BANKNORTH GROUP, INC.
	 
	 	 
	

	 	

	[Executive]

	 	By:
	

	 	Its:
	 
	 	 
	Dated:
	 	Dated:
	

	 	

	

	 	THE TORONTO-DOMINION BANK
	 
	 	 
	

	 	

	

	 	By:
	

	 	Its:
	 
	 	 
	

	 	Dated:
	

	 	

4exv10w3

 

Exhibit 10.3

EMPLOYMENT AGREEMENT

     AGREEMENT by and among Banknorth Group, Inc., a Maine corporation (the
“Company”), and Peter J. Verrill (the “Executive”), dated as of the 25th day of
August, 2004.

     In connection with the merger (the “Merger”) of Berlin Merger Co., a
Delaware corporation, a wholly owned subsidiary of The Toronto-Dominion Bank,
(“Berlin Mergerco”), with and into Berlin Delaware Inc., a Delaware corporation
(“Berlin Delaware”), pursuant to the Agreement and Plan of Merger, dated as of
August 25, 2004, among the Company, Berlin Delaware, The Toronto-Dominion Bank
(“TD”), and Berlin Mergerco (the “Merger Agreement”), the Company wishes to
secure the continued services of the Executive.

     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     1. Effective Date. The “Effective Date” shall mean the date on
which the “Effective Time” (as defined in the Merger Agreement) occurs. In
the event that the Effective Time shall not occur this Agreement shall be null
and void ab initio and of no further force and effect.

     2. Term. This Agreement shall commence on the Effective Date and
end on the fourth anniversary thereof, or, if earlier, the date that the
Executive’s employment hereunder terminates (the “Term”).

     3. Position and Duties.

     (a) During the Term, the Executive shall serve as the Senior Executive
Vice President and Chief Operating Officer of the Company with such duties and
responsibilities as are customary to such positions. As such, the Executive
shall report directly to the Chief Executive Officer of the Company.

     (b) During the Term, the Executive will devote his full business time and
reasonable best efforts to the performance of his duties hereunder and will not
engage in any other business, profession or occupation for compensation or
otherwise which would conflict or interfere with the rendition of such services
either directly or indirectly, without the prior written consent of the Board;
provided that nothing herein shall preclude the Executive, subject to the prior
approval of the Board, from accepting appointment to or continue to serve on
any board of directors or trustees of any business corporation or any
charitable organization; provided in each case, and in the aggregate, that such
activities do not conflict or interfere with the performance of the Executive’s
duties hereunder or conflict with Sections 12(a), 12(b) or 13. Notwithstanding
the foregoing, the Executive shall be permitted, without the consent of the
Board, to continue serve on any boards of directors or as a trustee of any
business corporation or any charitable organization on which the Executive
serves as of immediately prior to the Effective Date and set forth on Exhibit
A.

     4. Base Salary. During the Term, the Company shall pay the
Executive a base salary at the annual rate not less than the annual rate in
effect immediately prior to the Effective Date, payable in regular installments
in accordance with the Company’s usual payment

 

 

practices. The Executive shall be entitled to such increases in
the 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. The Executive’s annual base salary, as in
effect from time to time, is hereinafter referred to as the “Base Salary.”

     5. Incentive Compensation. 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.

     6. Equity-Based Arrangements.

     (a) As soon as practicable after the Effective Date, the Company shall
grant the Executive the number of restricted stock units (the “RSUs”)
determined by dividing $3 million by the per-share closing price of TD common
stock on the New York Stock Exchange (the “Closing Price”) on the Effective
Date. The RSUs shall vest on the third (3rd) anniversary of the Effective
Date, provided that, subject to the provisions of Section 10, the Executive has
remained continuously in the employ of the Company from the Effective Date
through such third (3rd) anniversary. The RSUs shall be paid by the Company as
soon as practicable, in an amount of cash equal to the aggregate Closing Price
of such shares on such third (3rd) anniversary, provided that the Executive may
elect to defer such cash amount in accordance with a deferred compensation plan
approved by the Compensation Committee of the Board (a “Deferred Compensation
Plan”). The cash amount payable pursuant to this Section 6 shall be adjusted
upward or downward (but not by more than 20%) to reflect the performance of the
Company against an annual growth in operating earnings per share target
established each year by the Compensation Committee of the Board, provided that
such operating earnings per share target (i) shall not increase by more than
10% annually and (ii) shall exclude for all relevant years (x) costs associated
with the Merger, (y) costs, if any, related to the expensing of stock options,
and (z) extraordinary items. Except as specifically provided in this Agreement
(including, without limitation, Section 6 and Section 10), the terms of the
RSUs shall be governed by the terms of a RSU agreement with terms substantially
similar to the terms applicable to grants of restricted stock units under TD’s
Performance Based Restricted Share Unit Plan (Outside Canada), except that in
no event shall Sections 7.5, 7.6, 7.7 and 7.8 of the Performance Based
Restricted Share Unit Plan (Outside Canada) or provisions similar thereto apply
to the RSUs.

     (b) Notwithstanding the terms and conditions of any options to purchase
common stock of the Company that were granted prior to the date on which the
Merger Agreement was executed by the parties thereto (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.

2

 

     7. Initial Payment and Non-Competition 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 Company’s Executive Incentive Plan as in effect on the date on which the
Merger Agreement was executed by the parties thereto (the “EIP”).

     (b) Non-Competition and Retention Amount. Subject to the
provisions of Section 10 and in consideration for the Executive’s agreement to
remain employed by the Company and to abide by the provisions of Sections 12(b)
and 13 hereof, within ten (10) business days following the third (3rd)
anniversary of the Effective Date, provided that, subject to the provisions of
Section 10, the Executive has continuously been in the employ of the Company
from the Effective Date through such anniversary date, the Executive shall be
paid, or be credited with, as the case may be, the “Non-Competition and
Retention Amount,” which shall be determined as follows, provided that the
Executive may elect to defer the Non-Competition and Retention Amount in
accordance with a Deferred Compensation Plan:

               (i) A lump sum payment equal to $2,778,977;

               (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
(as defined in the SERP Agreement) and other forms of benefit under
the SERP Agreement, the reductions for early commencement of
payment of Early Retirement Benefits described in the second
sentence of Section 5.2 of the SERP Agreement shall not apply.

          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)

3

 

the calendar year during which the Executive’s employment is
terminated, or, (II) any calendar 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 7, 10 and 11 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
(as defined in Section 15), 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 B as soon as
reasonably practicable following the date hereof.

     The amounts in Section 7(b)(i) shall be increased, commencing on the
Effective Date, at an annual rate of four percent (4%), until the date of
payment thereof. As used in this Agreement, (i) “SERP Agreement” means the
Amended and Restated Supplemental Retirement Agreement dated February 18, 2004
between the Executive and the Company, as in effect on the date the Merger
Agreement was executed by the parties thereto, and (ii) “Retirement Plan” means
the Company’s Retirement Plan, as amended and in effect from time to time and
any successor plan.

     8. Employee Benefits. 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.

4

 

     9. Business Expenses and Fringe Benefits.

     (a) Expenses. 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;

     (b) Fringe Benefits. During the Term, the Executive shall enjoy
the fringe benefits normally afforded to the Company’s executive officers.
Specifically, 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 available annually to other
employees of comparable status and position with the Company. Such fringe
benefits may vary from those in effect immediately prior to the 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.

     10. Termination of Employment. Any termination by the Company or
the Executive of the Executive’s employment shall be communicated by written
Notice of Termination, 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 the
Executive’s employment under the provision so indicated, to the Executive if
such notice is delivered by the Company, and to the Company if such notice is
delivered by the Executive. Any payments made under this Section 10, other
than due to death, shall be contingent on the Executive’s prior execution and
non-revocation of a mutual release substantially in the form attached hereto as
Exhibit C; provided, however, that if the Company refuses to execute such
mutual release, the Executive’s obligation to execute and not revoke the
release as a precondition to receiving severance benefits shall terminate.

     (a) Termination for Disability. If the Executive’s employment is
terminated on account of the Executive’s Disability (as defined in Section 15),
the Executive shall receive (i) any Accrued Benefits (as defined in Section
15), (ii) 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
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
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) (the “Prorated Bonus”), and (iii) any unpaid
Non-Competition and Retention Amount, and shall remain eligible for all
benefits as provided pursuant to the terms of any long-term disability programs
of the Company in effect at the time of such termination. In addition, (A) the
pre-Merger Options shall become immediately vested and exercisable (to the
extent not previously vested and exercisable) and shall remain exercisable for
the period provided under the applicable option agreement, and (B) if such
termination occurs prior to the third anniversary of the Effective Date, RSUs
shall vest (or to the extent such termination occurs prior to the grant of such
RSUs, the RSUs shall be granted and vest) but shall be paid out, subject to the
Executive’s continued compliance with Sections 12(a), 12(b) and 13, on the
third (3rd) anniversary of the Effective Date, and the payout shall be
determined without regard to the performance conditions.

5

 

     (b) Termination due to the Executive’s Death or Retirement. If the
Executive’s employment is terminated on account of the Executive’s death or
resignation by the Executive at or after age 65, other than a resignation for
Good Reason (as defined in Section 15), (“Retirement”), the Executive, (or the
Executive’s estate or designated beneficiary (or beneficiaries), as
applicable), shall receive the Executive’s Accrued Benefits, the Prorated Bonus
and any unpaid Non-Competition and Retention Amount. In addition, (i) the
pre-Merger Options shall become immediately vested and exercisable (to the
extent not previously vested and exercisable) and shall remain exercisable for
the period provided under the applicable option agreement, and (ii) if such
termination occurs prior to the third anniversary of the Effective Date, RSUs
shall vest (or to the extent such termination occurs prior to the grant of such
RSUs, the RSUs shall be granted and vest) but shall be paid out, subject to the
Executive’s continued compliance with Sections 12(a), 12(b) and 13, on the
third (3rd) anniversary of the Effective Date, and the payout shall be
determined without regard to the performance conditions.

     (c) Voluntary Termination or Termination for Cause. If (i) the
Executive shall terminate employment with the Company other than for Good
Reason (as defined in Section 15) or Retirement, or (ii) the Executive’s
employment is terminated for Cause, the Executive shall receive from the
Company only the Accrued Benefits. In addition, if the Executive shall resign
other than for Good Reason after the third anniversary of the Effective Date,
the Executive will be entitled to the Medical Benefits (as defined below).

     (d) Termination by the Company Without Cause or by the Executive for
Good Reason. If the Executive’s employment with the Company is terminated
by the Company other than for Cause, or by the Executive for Good Reason, then:

          (i) the Executive shall receive from the Company the Accrued Benefits, the
Prorated Bonus and any unpaid Non-Competition and Retention Amount, which shall
be paid within ten (10) business days after the date of termination of the
Executive’s employment; and

          (ii) (A) the pre-Merger Options shall become immediately vested and
exercisable (to the extent not previously vested and exercisable) and shall
remain exercisable for the period provided under the applicable option
agreement, (B) if such termination takes place following a Change of Control
(as defined in Section 15) that occurs after the Effective Date, any other
grants of equity-based compensation awards from TD or the Company shall become
immediately vested and exercisable (to the extent not previously vested and
exercisable) and, if applicable, shall remain exercisable for the period
provided under the applicable award agreement, and (C) if such termination
occurs prior to the third anniversary of the Effective Date, RSUs shall vest
(or to the extent such termination occurs prior to the grant of such RSUs, the
RSUs shall be granted and vest) but shall be paid out, subject to the
Executive’s continued compliance with Sections 12(a), 12(b) and 13, on the
third (3rd) anniversary of the Effective Date, and further the payout shall be
determined without regard to the performance conditions; and

          (iii) the “Severance Amount” shall be paid to the Executive in a lump sum
within 10 business days after the termination of the Executive’s employment.
For this purpose, the Severance Amount shall be the product of (I) the lesser
of (A) three or (B) the number of years and portions thereof remaining from the
date of termination to the fourth (4th)

6

 

anniversary of the Effective Date, but not less than 1.5; provided
that, if such termination occurs after a Change of Control, not less than two
and (II) the sum of (A) the Base Salary, (B) the average annual bonus paid
(including any amounts deferred or paid in equity) to the Executive under the
annual bonus plan of the Company for the last three 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 (C) (1) the total aggregate value of all
contributions, other than elective contributions by the Executive and employer
matching contributions relating thereto, and forfeitures allocated to the
Executive’s account under the 401(k) Plan for the plan year ending immediately
prior to the Effective Date, or, if different, the plan year immediately prior
to the termination of the Executive’s employment, whichever year would produce
the greater aggregate value, and (2) the matching contributions under the
401(k) Plan (or its successor) which would have been credited under such plan
on the Executive’s behalf, if the Executive had contributed the maximum salary
deferral contribution allowable under Section 402(g) of the Code, for the
calendar year in which the Executive’s employment with the Company was
terminated. As used in this Agreement, “401(k) Plan” means the Company’s 401(k)
Plan dated January 1, 2001, as amended from time to time, or any successor
plan; and

          (iv) the Executive shall continue to be covered at the expense of the
Company by the same or equivalent hospital, medical, dental, accident,
disability and life insurance coverage as in effect for the Executive
immediately prior to termination of the Executive’s employment, until the
earlier of (A) thirty-six (36) months following termination of employment, or
(B) the date the Executive has commenced new employment and has thereby become
eligible for comparable benefits; provided that, with respect to any of the
coverages described above, if such coverage is provided through an insurance
policy with an insurance company unaffiliated with the Company and if under the
terms of the applicable policy, it is not possible to provide continued
coverage (or if continued coverage under such policy would increase the
Company’s cost allocable to the Executive by more than one hundred percent
(100%)), then the Company shall pay the Executive a lump sum cash amount, no
later than thirty (30) days following termination of employment an amount equal
to twice the aggregate allocable cost of such coverage as applicable
immediately prior to termination of employment, such payment to be made without
any discount for present value (the “Medical Benefits”).

     (e) Termination of Employment following the end of the Term. In
the event that the Executive ceases to be employed by the Company for any
reason at or following the end of the Term (other than by reason of a
termination of the Executive’s employment by the Company for Cause), the
Executive shall be entitled to the Medical Benefits.

     11. Certain Supplemental Payments by the Company.

     (a) In the event it is determined that part or all of the compensation and
benefits to be paid to the Executive, whether or not payable hereunder, (i)
constitute “parachute payments” under Section 280G of the Code (the
“Payments”), and (ii) exceed one hundred and five percent (105%) of three (3)
times the Executive’s Base Amount, the Company, on or before the date for
payment of such excise tax, shall pay to or on behalf of the Executive, in lump
sum, an amount (the “Gross-Up Amount”) such that, after payment of all federal,
state and local income tax and any additional excise tax under Section 4999 of
the Code in respect of the Gross-Up Amount payment, the Executive will be fully
reimbursed for the amount of such excise tax. If

7

 

the Payments equal three (3) times the Executive’s Base Amount or exceed
three (3) times the Executive’s Base Amount, but by an amount less than five
percent (5%) of three (3) times the Base Amount, such payments shall be reduced
by the least amount necessary to bring such Payments below three (3) times the
Executive’s Base Amount. As used in this Agreement, “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 defined in
Section 15).

     (b) The determination of the Parachute Amount, the Base Amount and the
Gross-Up Amount, as well as any other calculations necessary to implement this
Section 11 shall be made by KPMG LLP, and subject to the review and reasonable
approval of Ernst & Young LLP, unless the Executive and the Company agree
otherwise. The accounting firm’s fee shall be paid by the Company.

     (c) As promptly as practicable following such determination and the
elections hereunder, the Company shall pay to or distribute to or for the
benefit of the Executive such amounts as are then due to the Executive under
this Agreement and shall promptly pay to or distribute for the benefit of the
Executive in the future such amounts as become due to the Executive under this
Agreement.

     (d) As a result of the uncertainty in the application of Section 280G of
the Code at the time of an initial determination hereunder, it is possible that
payments will not have been made by the Company which should have been made
under clause (a) of this Section 11 (“Underpayment”). In the event that there
is a final determination by the Internal Revenue Service, or a final
determination by a court of competent jurisdiction, that an Underpayment has
been made and the Executive thereafter is required to make any payment of an
excise tax, income tax, any interest or penalty, the accounting or benefits
consulting firm selected under clause (b) above shall determine the amount of
the Underpayment that has occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the Executive. If and to the
extent that the Executive receives any tax refund from the Internal Revenue
Service that is attributable to payments by the Company pursuant to this
Section 11 of amounts in excess of the actual Gross-Up Amount as finally
determined by the Internal Revenue Service or a court of competent jurisdiction
(“Overpayment”), the Executive shall promptly pay to the Company the amount of
such refund that is attributable to the Overpayment (together with any interest
paid or credited thereon after taxes applicable thereto); provided, however,
the Executive shall not have any obligation to pay the Company any amount
pursuant to this Section 11(d) if and to the extent that any such obligation
would cause the arrangement to be treated as a loan or extension of credit
prohibited by applicable law.

     12. Further Obligations of the Executive.

     (a) Confidentiality. During and following the Executive’s
employment by the Company, the Executive shall hold in confidence and not
directly or indirectly disclose or use or copy or make lists of any
confidential information or proprietary data of the Company, except to the
extent authorized in writing by the Board or required by any court or
administrative agency or otherwise by applicable law, other than to an employee
of the Company or a person to whom disclosure is reasonably necessary or
appropriate in connection with the performance by the Executive of duties as an
executive of the Company. Confidential information shall not include any
information known generally to the public or any information of a type not otherwise

8

 

considered confidential by persons engaged in the
same business or a business similar to that of the Company. All records,
files, documents and materials or copies thereof relating to the Company’s
business which the Executive shall prepare, or use, or come into contact with,
shall be and remain the sole property of the Company and shall be promptly
returned to the Company upon termination of employment with the Company.

     (b) Non-Solicitation. During the Term and, for a period of three
years following the date the Executive ceases to be employed by the Company
(the “Restricted Period”), the Executive will not hire, or, directly or
indirectly, contact, approach or solicit for the purpose of offering employment
to or hiring (whether as an employee, consultant, agent, independent contractor
or otherwise), or encouraging to cease work with the Company or its affiliates,
any person who is then employed or retained as a consultant by the Company, or
an affiliate of the Company, other than on behalf of the Company or an
affiliate of the Company, or was employed or retained as a consultant by the
Company or an affiliate of the Company during the one (1) year period prior to
such hiring, solicitation or other act prohibited by this Section 12(b)(i).

     (c) Certain Accelerations and Option Exercises. The Executive
agrees that the Company may, at its election, accelerate the payment of (x) the
amount described in Section 7(a) and/or (y) the annual bonus for 2004 to a date
on or before December 31, 2004 (it being understood that the amount payable
under Section 7(a) shall be based upon the date upon which the Effective Time
occurs and shall be reduced by any amount previously paid under this Section
12(c)), and agrees to exercise, prior to December 31, 2004, any vested options
to purchase Company shares that would otherwise expire by their terms during
calendar year 2004, 2005 and 2006 and that may reasonably be necessary, based
on the advice of KPMG LLP, and subject to the review and reasonable approval of
Ernst & Young, LLP, in order for the Executive to mitigate the effects of
Section 280G of the Code.

     (d) Share Ownership Guidelines. The Executive shall comply with
TD’s executive share ownership guidelines, as they may be in effect from time
to time, including the one-year holding period after termination of employment,
provided that one-half of the value of shares that the guidelines require the
Executive to hold shall be satisfied by the Executive holding TD shares, and
the other half by holding Berlin Delaware shares.

     13. Non-Competition. The Executive acknowledges and recognizes the
highly competitive nature of the businesses of the Company and its subsidiaries
and accordingly agrees as follows:

     (a) During the Restricted Period, the Executive will not, whether on the
Executive’s own behalf or on behalf of or in conjunction with any person, firm,
partnership, joint venture, association, corporation or other business
organization, entity or enterprise whatsoever (“Person”), directly or
indirectly solicit or assist in soliciting in competition with the Company, the
business of any client or prospective client:

          (i) with whom the Executive had personal contact or dealings on behalf of
the Company during the one (1) year period preceding the Executive’s
termination of employment;

9

 

          (ii) with whom employees reporting to the Executive have had personal
contact or dealings on behalf of the Company during the one (1) year
immediately preceding the Executive’s termination of employment; or

          (iii) for whom the Executive had direct or indirect responsibility during
the one (1) year immediately preceding the Executive’s termination of
employment.

     (b) During the Restricted Period, the Executive will not directly or
indirectly:

          (i) engage in any business that competes with the business of the Company
or its subsidiaries (including, without limitation, businesses which the
Company or its subsidiaries have specific plans to conduct in the future as of
the date of termination and as to which the Executive is aware of such
planning) during the Term within one hundred (100) miles of any location in
North America in which the Company or its subsidiaries provide deposit-taking
or personal and commercial banking services (a “Competitive Business”)
provided, that any business or endeavor shall cease to be a Competitive
Business if the Company and its subsidiaries are not, or cease to be, engaged
in such business or endeavor;

          (ii) enter the employ of, or render any services to, any Person (or any
division or controlled or controlling affiliate of any Person) who or which
engages in a Competitive Business;

          (iii) acquire a financial interest in, or otherwise become actively
involved with, any Competitive Business, directly or indirectly, as an
individual, partner, shareholder, officer, director, principal, agent, trustee
or consultant.

     (c) Notwithstanding anything to the contrary in this Agreement, (i) the
Executive may, directly or indirectly own, solely as an investment, securities
of any Person engaged in the business of the Company or its affiliates which
are publicly traded on a national or regional stock exchange or on the
over-the-counter market if the Executive (A) is not a controlling person of, or
a member of a group which controls, such person and (B) does not, directly or
indirectly, own five percent (5%) or more of any class of securities of such
Person and (ii) the Executive may, directly or indirectly, following
termination of the Executive’s employment, (A) provide services to any person
or entity engaged in any Competitive Business if the Executive is not involved,
directly or indirectly, in the management, supervision or operations of such
Competitive Business and the gross revenues generated by such Competitive
Business do not constitute more than the lesser of (x) 10% of the consolidated
gross revenues of such person or entity and its affiliates or (y) 10% of the
consolidated gross revenues of the Competitive Businesses in which the Company
and its subsidiaries engage as of the Executive’s termination of employment,
and (iii) notwithstanding anything in any arrangement to the contrary, the
restrictive covenants set forth in this Agreement shall be the sole restrictive
covenants applicable to the Executive during the Term.

     14. Equitable Relief. The Executive acknowledges and agrees that
in the event of a breach by the Executive of any of the provisions of Sections
12(a), 12(b) and 13 hereof, the Company may suffer irreparable harm for which
monetary damages alone will constitute an insufficient remedy. Consequently,
in the event of any such breach, the Company may, in addition to other rights
and remedies existing in its favor, apply to any court of law or

10

 

equity of competent jurisdiction for specific performance and/or
injunctive or other relief in order to enforce or prevent any violations of the
provisions hereof, in each case without the requirement of posting a bond or
proving actual damages.

     15. Definitions. For purposes of this Agreement, the following
terms shall have the following meanings:

     (a) Accrued Benefits means:

          (i) all salary earned or accrued through the date the Executive’s
employment is terminated, and any unpaid amounts described in Section 7(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 calendar year or other
performance period ending prior to the calendar 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) 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. 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 below.

11

 

     (c) 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.

     (d) Code means the Internal Revenue Code of 1986, as amended.

     (e) 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.

     (f) Good Reason means:

          (i) any breach of this Agreement by the Company, including without
limitation (A) any reduction during the Term 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, a significant reduction in the Executive’s title,
duties, responsibilities or in the level of his support services, 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 Executive 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

12

 

Executive has not given notice of Good Reason during such three (3) month
period, such event shall not constitute Good Reason.

     16. Expenses and Interest. If, during the Term, a good faith
dispute arises with respect to the enforcement of the Executive’s rights under
this Agreement, or if any legal or arbitration proceeding shall be brought in
good faith to enforce or interpret any provision contained herein, or to
recover damages for breach hereof, the Executive shall recover from the Company
any reasonable attorney’s fees and necessary costs and disbursements incurred
as a result of such dispute, and prejudgment interest on any money judgment or
arbitration award obtained by the Executive calculated at the rate of interest
announced by Banknorth N.A., or any successor thereto, from time to time as its
prime rate from the date that payments to the Executive should have been made
under this Agreement.

     17. Payment Obligations Absolute. The Company’s obligation during
and after the Term to pay the Executive the compensation and to make the
arrangements provided herein shall be absolute and unconditional and shall not
be affected by any circumstances, including, without limitation, any setoff,
counterclaim, recoupment, defense or other right which the Company may have
against the Executive or anyone else. All amounts payable by the Company
hereunder shall be paid without notice or demand. Each and every payment made
hereunder by the Company shall be final and the Company will not seek to
recover all or any part of such payment from the Executive or from whomsoever
may be entitled thereto, for any reason whatever except as provided in Section
11 above. In no event shall the Executive be obligated to seek other employment
or take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement, and such amounts shall
not be reduced whether or not the Executive obtains other employment.

     18. Successors.

     (a) The Company will require any successor or assign (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to the Executive, expressly, absolutely and
unconditionally to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession or assignment had taken place. Any failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession or assignment shall be a material breach of this Agreement and shall
entitle the Executive to terminate the Executive’s employment for Good Reason.
As used in this Agreement, “Company” shall mean the Company as hereinbefore
defined and any successor or assign to all or substantially all of the business
and/or assets as aforesaid which executes and delivers the agreement provided
for in this Section 18(a) or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law. Notwithstanding the
foregoing, the Executive hereby expressly agrees to the assumption of this
Agreement by Berlin Delaware.

     (b) This Agreement and all rights of the Executive shall inure to the
benefit of and be enforceable by the Executive’s personal or legal
representatives, estates, executors, administrators, heirs and beneficiaries.
All amounts payable to the Executive hereunder shall be paid, in the event of
the Executive’s death, to the Executive’s estate, heirs and representatives.
Except as provided in this Section 18, no party may assign this Agreement or
any rights,

13

 

interests, or obligations hereunder without the prior written approval of
the other party. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns pursuant to Section 18(a). This
Agreement shall not be terminated by the voluntary or involuntary dissolution
of the Company. In addition, Sections 10, 11, 12, 13, 14, 16, 17, 19 and 23
shall survive the termination of this Agreement to the extent necessary to give
effect to the terms thereof.

     19. Severability and Enforcement. The provisions of this Agreement
shall be regarded as divisible, and if any such provisions or any part hereof
are declared invalid or unenforceable by a court of competent jurisdiction, the
validity and enforceability of the remainder of such provisions or parts hereof
and the applicability thereof shall not be affected thereby. It is expressly
understood and agreed that although the Executive and the Company consider the
restrictions contained herein to be reasonable, if a final judicial
determination is made by a court of competent jurisdiction that the time or
territory or any other restriction contained in this Agreement is an
unenforceable restriction against the Executive, the provisions of this
Agreement shall not be rendered void but shall be deemed amended to apply as to
such maximum time and territory and to such maximum extent as such court may
judicially determine or indicate to be enforceable. Alternatively, if any
court of competent jurisdiction finds that any restriction contained in this
Agreement is unenforceable, and such restriction cannot be amended so as to
make it enforceable, such finding shall not affect the enforceability of any of
the other restrictions contained herein.

     20. Amendment. This Agreement may not be amended or modified at
any time except by a written instrument executed by the Company and the
Executive.

     21. Withholding. The Company shall be entitled to withhold from
amounts to be paid to the Executive hereunder any federal, state or local
withholding or other taxes, or charge which it is from time to time required to
withhold. The Company shall be entitled to rely on an opinion of counsel if
any question as to the amount or requirement of any such withholding shall
arise.

     22. Governing Law. This Agreement and the rights and obligations
hereunder shall be governed by and construed in accordance with the laws of the
State of Maine.

     23. Arbitration. Any dispute arising out of this Agreement other
than with regard to either of Sections 12(a), 12(b) or 13, shall be determined
by arbitration in the State of Maine under the rules of the American
Arbitration Association then in effect and judgment upon any award pursuant to
such arbitration may be enforced in any court having jurisdiction thereof.

     24. Notice. Notices given pursuant to this Agreement shall be in
writing and shall be deemed given when received and, if mailed, shall be mailed
by United States registered or certified mail, return receipt requested,
addressee only postage prepaid, to the Company at:

	 	 	Banknorth Group, Inc.

P.O. Box 9540

Two Portland Square

Portland, ME 04112

Attn: General Counsel

14

 

or if to the Executive, at the address contained in the records of the Company,
or to such other address as the party to be notified shall have given to the
other.

     25. No Waiver. No waiver by any party at any time of any breach by
another party of, or compliance with, any condition or provision of this
Agreement to be performed by another party shall be deemed a waiver of similar
or dissimilar provisions or conditions at any time.

     26. Headings. The headings herein contained are for reference only
and shall not affect the meaning or interpretation of any provision of this
Agreement.

     27. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof
and supersedes any prior severance agreements between the Executive and the
Company.

15

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.

	 	 	 	 	 
	 	 	BANKNORTH GROUP, INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ Carol L. Mitchell
	

	 	 	 	

	 
	 	 	 	Name: Carol L. Mitchell

Title: Executive Vice President, General Counsel and Chief
Administrative Officer
	 
	 	 	 	 
	 	 	/s/ Peter J. Verrill
	 	 	

	 	 	Peter J. Verrill

 

 

EXHIBIT A

	 	 	 
	Organization
	 	Position

	The Cromwell Disabilities Center

	 	Director and Chairman of the Board
	TrainRiders Northeast

	 	Director and Treasurer
	Pine Tree Council Boy Scouts of America

	 	Director
	Roman Catholic Diocese of Maine

	 	Director (Finance Committee)
	The Ronald McDonald House

	 	Director
	United Way of Greater Portland

	 	Former Director
	United Way Foundation

	 	Founding Member
	Maine Society of Public Accountants

	 	Member
	American Institute of Certified Public

	 	Member
	Accountants
	 	 

 

 

EXHIBIT B

[EXAMPLE OF SERP CALCULATION]

 

 

EXHIBIT C

GENERAL RELEASE

     1. Release of Claims by Executive.

     (a) In consideration of the payments and benefits to be provided to
[                   ] (“Executive”) pursuant to the employment agreement, dated as
of August 25, 2004, to which Executive and Banknorth Group, Inc., a Maine
corporation (the “Company”), are parties (the “Employment
Agreement”), the sufficiency of which is acknowledged hereby, Executive,
with the intention of binding himself and his heirs, executors, administrators
and assigns, does hereby release, remise, acquit and forever discharge the
Company, Toronto-Dominion Bank (“TD”) and each of their subsidiaries and
affiliates (the “Company Affiliated Group”), their present and former
officers, directors, executives, agents, attorneys and employees, and the
successors, predecessors and assigns of each of the foregoing (collectively,
the “Company Released Parties”), of and from any and all claims,
actions, causes of action, complaints, charges, demands, rights, damages,
debts, sums of money, accounts, financial obligations, suits, expenses,
attorneys’ fees and liabilities of whatever kind or nature in law, equity or
otherwise, whether accrued, absolute, contingent, unliquidated or otherwise and
whether now known or unknown, suspected or unsuspected, which Executive,
individually or as a member of a class, now has, owns or holds, or has at any
time heretofore had, owned or held, against any Company Released Party in any
capacity, including, without limitation, any and all claims (i) arising out of
or in any way connected with Executive’s service to any member of the Company
Affiliated Group (or the predecessors thereof) in any capacity, or the
termination of such service in any such capacity, (ii) for severance or
vacation benefits, unpaid wages, salary or incentive payments, (iii) for breach
of contract, wrongful discharge, impairment of economic opportunity,
defamation, intentional infliction of emotional harm or other tort, (iv) for
any violation of applicable state and local labor and employment laws
(including, without limitation, all laws concerning unlawful and unfair labor
and employment practices) and (v) for employment discrimination under any
applicable federal, state or local statute, provision, order or regulation, and
including, without limitation, any claim under Title VII of the Civil Rights
Act of 1964 (“Title VII”), the Civil Rights Act of 1988, the Fair Labor
Standards Act, the Americans with Disabilities Act (“ADA”), the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), the Age
Discrimination in Employment Act (“ADEA”) and any similar or analogous
state statute, excepting only:

          (A) the rights of Executive under the Employment Agreement;

          (B) the rights of Executive (i) relating to any stock options and other
equity-based awards held by Executive as of the date hereof (collectively, the
“Equity Arrangements”) and (ii) as a stockholder of the Company or its
affiliates;

          (C) the right of Executive to receive COBRA continuation coverage in
accordance with applicable law;

          (D) rights to indemnification Executive may have under (i) applicable
corporate law, (ii) the by-laws or certificate of incorporation of any Company
Released Party, (iii) any other agreement between Executive and a Company Released Party
(iv) as an insured under any director’s and officer’s liability insurance
policy now or previously in force or (v)

 

 

Section 6.7 of the Agreement and Plan of Merger, dated as of August 25, 2004, among the Company, Berlin Delaware,
Inc., TD and Berlin Merger Co.; and

          (E) claims for benefits under any health, disability, retirement, life
insurance or other, similar “employee benefit plan” (within the meaning of
Section 3(3) of ERISA) of the Company Affiliated Group (the “Company Benefit
Plans”).

     (b) Executive acknowledges and agrees that the release of claims set
forth in this Section 1 is not to be construed in any way as an admission of
any liability whatsoever by any Company Released Party, any such liability
being expressly denied.

     (c) The release of claims set forth in this Section 1 applies to any
relief no matter how called, including, without limitation, wages, back pay,
front pay, compensatory damages, liquidated damages, punitive damages, damages
for pain or suffering, costs, and attorney’s fees and expenses.

     (d) Executive specifically acknowledges that his acceptance of the terms
of the release of claims set forth in this Section 1 is, among other things, a
specific waiver of his rights, claims and causes of action under Title VII,
ADEA, ADA and any state or local law or regulation in respect of discrimination
of any kind.

     (e) Executive shall have a period of 21 days to consider whether to
execute this General Release. To the extent Executive has executed this General
Release within less than twenty-one (21) days after its delivery to him, the
Executive hereby acknowledges that his decision to execute this General Release
prior to the expiration of such twenty-one (21) day period was entirely
voluntary. If Executive accepts the terms hereof and executes this General
Release, he may thereafter, for a period of 7 days following (and not
including) the date of execution, revoke this General Release. If no such
revocation occurs, this General Release shall become irrevocable in its
entirety, and binding and enforceable against Executive, on the day next
following the day on which the foregoing seven-day period has elapsed. Any
revocation of this General Release shall be deemed for all purposes a
revocation of this General Release in its entirety.

     (f) Executive acknowledges and agrees that he has not, with respect to
any transaction or state of facts existing prior to the date hereof, filed any
complaints, charges or lawsuits against any Company Released Party with any
governmental agency, court or tribunal.

     2. Effect of Unenforceability of Release. In addition to any
other remedy available to the Company hereunder, in the event that, as a result
of a challenge brought by an Employee Released Party (as defined below), the
release of claims set forth in Section 1 becomes null and void or is otherwise
determined not to be enforceable, then the Company’s obligation to make any
additional payments or to provide any additional benefits under the Employment
Agreement shall immediately cease to be of any force and effect, and Executive
shall promptly return to the Company any payments or benefits the provision of
which by the Company was conditioned on the enforceability of this General
Release.

2

 

     3. Release of Claims by the Company and TD.

     (a) The Company and TD, with the intention of binding themselves and
their subsidiaries, affiliates, predecessors and successors and their directors
and officers (collectively, the “Releasing Entities”), do hereby release,
remise, acquit and forever discharge Executive and his heirs, estate,
executors, administrators and assigns (collectively, the “Employee Released
Parties”), of and from any and all claims, actions, causes of action,
complaints, charges, demands, rights, damages, debts, sums of money, accounts,
financial obligations, suits, expenses, attorneys’ fees and liabilities of
whatever kind or nature in law, equity or otherwise, whether accrued, absolute,
contingent, unliquidated or otherwise and whether now known or unknown,
suspected or unsuspected, which the Company, TD and their subsidiaries,
affiliates, predecessors and successors, individually or as a member of a
class, now have, own or hold, or have at any time heretofore had, owned or
held, against any Employee Released Party, excepting only:

          (A) rights of the Releasing Entities under this General Release, the
Employment Agreement, the Equity Arrangements and the Company Benefit Plans;
and

          (B) rights of the Releasing Entities arising by reason of Executive
having committed a crime or an act or omission to act which constitutes fraud,
willful misconduct or gross negligence.

     (b) The Releasing Entities acknowledge and agree that the release of
claims set forth in this Section 3 is not to be construed in any way as an
admission of any liability whatsoever by any Employee Released Party, any such
liability being expressly denied.

     (c) The release of claims set forth in this Section 3 applies to any
relief no matter how called, including, without limitation, compensatory
damages, liquidated damages, punitive damages, damages for pain or suffering,
costs, and attorney’s fees and expenses.

     (d) Nothing herein shall be deemed, nor does anything contained herein
purport, to be a waiver of any right or claim or cause of action which by law
the Company is not permitted to waive.

     (e) The Company acknowledges and agrees that it has not, with respect to
any transaction or state of facts existing prior to the date hereof, filed any
complaints, charges or lawsuits against any Employee Released Party with any
governmental agency, court or tribunal.

     4. Nondisparagement. Executive agrees not to make any disparaging
statements about the Company Released Parties or the Company Affiliated Group’s
business practices, operations or personnel policies and practices to any of
the Company Affiliated Group’s customers, clients, competitors, suppliers,
directors, consultants, employees, former employees, or the press or other
media in any country. Similarly, the Company agrees to instruct its executive
officers and directors not to make any disparaging statement about the
Executive or Executive’s performance of his duties and responsibilities while
employed with the Company Affiliated Group to any of the Company Affiliated
Group’s customers, client’s, competitors, suppliers, directors, consultants,
employees, former employees or the press or other media in any country.

3

 

     5. Counterparts. This General Release may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

     6. Successors. This General Release shall be binding upon any and
all successors and assigns of Executive and the Company.

     7. Governing Law. Except for issues or matters as to which federal
law is applicable, this General Release shall be construed in accordance with
and governed by the laws of the State of Maine.

IN WITNESS WHEREOF, this General Release has been signed by or on behalf of
each of the Parties, all as of                    .

	 	 	 
	

	 	BANKNORTH GROUP, INC.
	 
	 	 
	

	 	

	[Executive]

	 	By:
	

	 	Its:
	 
	 	 
	Dated:

	 	Dated: 
	

	 	

	

	 	THE TORONTO-DOMINION BANK
	 
	 	 
	

	 	

	

	 	By:
	

	 	Its:
	 
	 	 
	

	 	Dated:
	

	 	

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00071-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00071-of-00352.parquet"}]]