Document:

exv10w6

 

Exhibit 10.6

TD BANKNORTH INC.

PERFORMANCE-BASED

RESTRICTED STOCK UNIT AWARD AGREEMENT – CASH SETTLEMENT

AMENDED AND RESTATED 2003 EQUITY INCENTIVE PLAN

     THIS
AWARD AGREEMENT (the “Agreement”) is made as of this ______ day of May 2005 (hereinafter
referred to as the “Date of Grant”) by and between TD Banknorth Inc. (the “Company”) and
______ (the “Participant”). Defined terms, unless otherwise defined herein, shall have
the same meaning as set forth in the Plan (as hereinafter defined).

WITNESSETH:

     WHEREAS, the Company has adopted the Amended and Restated 2003 Equity Incentive Plan (the
“Plan”), which is hereby incorporated in its entirety by reference herein; and

     WHEREAS, the Company desires to grant to the Participant Performance-Based Restricted Stock
Units, as described in the Plan.

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other
good and valuable consideration, the Company and the Participant agree as follows:

     1. Restricted Stock Units. The Company hereby grants to the Participant an Award of
___ Performance-Based Restricted Stock Units (the “Target Units”), with each Target Unit
representing one share of common stock, $0.01 par value per share, of the Company (the “Common
Stock”), upon the terms and conditions set forth herein. The number of Target Units is subject to
adjustment as provided in the Plan and in this Agreement. The Target Units represent an unfunded,
unsecured deferred compensation obligation of the Company.

     2. Performance Criteria and Determination of Actual Units.

     (a) The Target Units will become vested only if the Company achieves at least a 4% compound
average increase in diluted operating earnings per share (“Operating EPS”) during the period April
1, 2005 through and including December 31, 2007 (the “Performance Period”), as compared to its
Operating EPS of $2.31 for the year ended December 31, 2004. In determining the compound average
increase during the Performance Period, the Company’s Operating EPS for the nine months ending
December 31, 2005 shall be annualized. If the Company achieves at least a 4% compound average
increase in Operating EPS during the Performance Period, the number of Target Units will be
multiplied by the applicable percentage set forth in the following table to determine the actual
number of restricted stock units upon which a cash payment will be based (the “Actual Units”).

 

 

	 	 	 	 	 
	 Three-Year Compound Average	 	Actual Units as a	 
	 Increase in Operating EPS(1)	 	Percent of Target Units	 
	Less than 4.0%
	 	 	0	%
	4.0% (Threshold)
	 	 	25	%
	5.0%
	 	 	40	%
	6.0%
	 	 	60	%
	7.0%
	 	 	80	%
	8.0% (Target)
	 	 	100	%
	9.0%
	 	 	125	%
	10.0%
	 	 	150	%
	11.0%
	 	 	175	%
	12.0%
	 	 	200	%
	13.0%
	 	 	230	%
	14.0%
	 	 	265	%
	15.0% or higher (Maximum)
	 	 	300	%

	(1)	 	Increases in Operating EPS that fall between specified percentages will be
interpolated to determine the number of Actual Units.

     (b) Operating EPS shall equal the Company’s diluted earnings per share calculated in
accordance with accounting principles generally accepted in the United States, exclusive of the
after-tax effects of (i) merger and consolidation costs, (ii) deleveraging programs implemented by
the Company, (iii) changes in unrealized gain (loss) on speculative derivatives, (iv) the
amortization of intangible assets and (v) extraordinary items.

     (c) In the event of a Change of Control during the Performance Period, the number of Target
Units shall be multiplied by a percentage equal to the greater of (i) the percentage in the table
in Section 2(a) corresponding to the Company’s actual compound average increase in Operating EPS
for the period April 1, 2005 through and including the end of the calendar quarter immediately
preceding the date of the Change of Control, with partial years annualized, and (ii) 100%, in order
to determine the number of Actual Units.

     3. Adjustments to Number of Actual Units.

     (a) The performance criteria and targets were determined based on a full three-year cycle.
Because the Company previously paid out long-term incentive awards for a three-year performance
period ending December 31, 2007 on a pro rata basis through February 28, 2005, the number of Actual
Units to be paid out hereunder, if any, will be adjusted downward so that no Participant will
receive a duplicate payment for the first eight weeks of 2005. The number of Actual Units will be
multiplied by a Service Percentage as defined below to determine the number of Final Units.

     (b) For Participants who remain continuously employed with the Company from March 1, 2005
through and including December 31, 2007, the Service Percentage shall equal 148 weeks divided by
156 weeks, or 94.9%. For Participants whose employment is terminated during the Performance Period
due to death, Retirement (as defined below) or Disability, the

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Service Percentage shall equal the following quotient: (a) the number of calendar weeks from March
1, 2005 through and including the date of termination of employment, divided by (b) 156 weeks,
rounded to the nearest one-tenth of a percent. For Participants who are on an unpaid leave of
absence at any time on or after March 1, 2005 through and including December 31, 2007, or who were
first employed by the Company after March 1, 2005, the Service Percentage shall equal the following
quotient: (x) the number of calendar weeks the Participant was actively working for the Company
during the period March 1, 2005 through and including December 31, 2007, divided by (y) 156 weeks,
rounded to the nearest one-tenth of a percent.

     (c) In the event a Change of Control occurs during the Performance Period, the Service
Percentage for each Participant who is employed by the Company immediately prior to the Change of
Control shall be calculated as if the Participant had remained employed with the Company through
and including December 31, 2007.

     (d) If the Participant is promoted to a higher grade level during the Performance Period, the
Committee shall adjust the number of Target Units set forth in Section 1 hereof (and thus the
number of Actual Units) to provide for an appropriate increase to reflect the job promotion, with
such increase to reflect the number of Target Units granted on the Date of Grant to employees in
the higher grade level and pro-rated as of the effective date of the promotion; provided, however,
that the Committee shall not adjust the number of Target Units for any Participant who is a
“covered employee” within the meaning of Section 162(m) of the Code if such adjustment would cause
any of the cash payments to be made under this Agreement to no longer be qualified
performance-based compensation under Section 162(m) of the Code and the regulations thereunder,
including Treas. Reg. §1.162-27(e). All determinations made in good faith by the Committee
pursuant to this Section 3(d) shall be final and binding on the Participant.

     (e) For purposes of this Agreement, “Retirement” means voluntary termination of employment
with the Company or any Affiliate after the Participant has (A) attained age 65 with at least five
years of service to the Company and (B) either (1) has become eligible for a fully vested benefit
under the Company’s Retirement Plan, or (2) if at the time of retirement, the Participant was
employed by an Affiliate that is not an “Employer” as defined in the Retirement Plan, would have
become so eligible if his or her Affiliate employer were an “Employer” as defined in the Retirement
Plan, provided that no Retirement may occur prior to the one-year anniversary of the Date of Grant.

     (f) If the Participant’s employment by the Company shall be terminated during the Performance
Period and prior to a Change in Control for any reason other than death, Disability or Retirement,
including without limitation a termination of employment for “cause” (as determined pursuant to
Section 13(b) of the Plan) or a voluntary termination of employment by the Participant, then this
Agreement and the Target Units covered hereby shall expire immediately upon such termination and
all of the Target Units shall be forfeited. The Participant shall thereafter have no rights under
this Agreement and no rights to receive the cash payment specified in Section 4 below. The Company
shall have the power in all cases to determine whether the Participant has been terminated for
cause and the date upon which such termination for cause occurs. Any such determination shall be
final, conclusive and binding upon the Participant.

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     4. Settlement of Final Units in Cash.

          (a) Except as set forth in Section 4(b) below, as soon as practicable after the number of
Final Units is determined following the end of the Performance Period, the Company shall pay a lump
sum cash amount to the Participant equal to (i) the closing sales price of one share of Common
Stock on December 31, 2007 (or the nearest immediately preceding trading date if the Common Stock
is not traded on such date), multiplied by (ii) the number of Final Units, minus applicable
withholding. If a Participant’s employment is terminated due to death, Disability or Retirement,
the cash payment to the Participant for his or her Final Units shall be made as soon as practicable
following the end of the Performance Period.

          (b) If a Change of Control occurs during the Performance Period, then the Company shall,
within 60 days following the Change of Control, pay a lump sum cash amount to the Participant equal
to (i) the closing sales price of one share of Common Stock on the last trading day immediately
preceding the date of the Change of Control, multiplied by (ii) the number of Final Units, minus
applicable withholding.

     5. Withholding. The Company’s obligation to deliver the cash payment specified in
Section 4 hereof shall be subject to the Participant’s satisfaction of all applicable federal,
state, local and other income and employment tax withholding requirements as required by the Plan.

     6. No Voting of Underlying Shares of Common Stock; No Dividends. Because no shares of
Common Stock will be issued pursuant to this Agreement, the Participant shall have no right to vote
the underlying shares of Common Stock at any time or to receive any dividends thereon.

     7. Terms and Conditions. The terms and conditions included in the Plan are
incorporated herein by reference, and to the extent that any conflict may exist between the terms
and conditions included in the Plan and the terms of this Agreement, the terms and conditions
included in the Plan shall control.

     8. Transferability. Neither this Agreement nor the Target Units covered by this
Agreement nor the cash payable for the Final Units may be assigned, alienated, pledged, attached,
sold or otherwise transferred, encumbered or disposed of by the Participant at any time, except
that this Agreement, the Target Units and the cash payable for the Final Units may be transferred
by will or the laws of descent and distribution or pursuant to a QDRO.

     9. Administration and Interpretation. The authority to interpret and administer this
Agreement shall be vested in the Committee, and the Committee shall have all powers with respect to
this Agreement as it has with respect to the Plan. Any interpretation of the Committee of the
provisions of the Plan or this Agreement made in good faith shall be final and binding on all
parties.

     10. Not an Employment Contract. The grant of the Target Units covered by this
Agreement does not confer on the Participant any right with respect to continuance of employment or
other Service with the Company or any Affiliate, nor shall it interfere in any way with any right
the Company or any Affiliate would otherwise have to terminate or modify the terms of the
Participant’s employment or other Service at anytime.

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     11. Notices. Any written notice provided for in this Agreement or the Plan shall be
in writing and shall be deemed sufficiently given if it is hand delivered, sent by fax or overnight
courier, or sent by postage paid first class mail. Notices sent by mail shall be deemed received
three business days after mailing but in no event later than the date of actual receipt. Notices
shall be directed, if to the Participant, at the Participant’s address indicated by the Company’s
records, or if to the Company, at the following address: TD Banknorth Inc., P.O. Box 9540, Two
Portland Square, Portland, Maine 04112-9540 Attention: General Counsel.

     12. Amendment. Except as provided herein, this Agreement may not be amended or
otherwise modified unless evidenced in writing and signed by the Company and the Participant. In
the event that the Committee determines, after a review of Section 409A of the Code and all
applicable Internal Revenue Service guidance, that the Plan or any provision thereof or Award
thereunder should be amended to comply with Section 409A of the Code, the Committee may amend the
Plan and this Agreement to make any changes required to comply with Section 409A of the Code.

     13. No Personal Liability. The Participant agrees that no member of the Committee or
of the Board or the Company or its Affiliates shall be personally liable for any actions taken in
good faith in connection with the Plan or this Agreement.

     14. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.

[NOTE: Section 15 below is only for inclusion in grant agreements for the 23 officers who have an
employment or retention agreement.]

     15. Consent to Amended Definition. The Company and the Participant expressly agree
that, notwithstanding any provision in any employment or retention agreement between the Company
and the Participant to the contrary, the term “Change of Control” shall have the meaning set forth
in the Plan, and not as set forth in any employment or retention agreement between the Company and
the Participant. The Participant acknowledges that the definition of Change of Control included in
the Plan may in certain circumstances be less favorable to the Participant, and the Participant
agrees to such change. Except as expressly noted in this Section 15, this Agreement shall not by
implication or otherwise alter, modify, amend or in any way affect any of the terms of any
employment or retention agreement between the Company and the Participant.

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     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer, and the Participant has hereunto set his or her hand, all as of the day first
above written.

	 	 	 	 	 	 	 
	ATTEST:	 	 	 	TD BANKNORTH INC.
	 
	 	 	 	 	 	 
	 	 	 	 	By:
	 	 	 	 	 
	Name:

	 	 	 	Name:	 	 
	

	 	 
	 	 	 	 
	Title:

	 	 	 	Title:	 	 
	

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	PARTICIPANT
	 
	 	 	 	 	 	 
	 	 	 	 	 
	

	 	 	 	Name:	 	 
	

	 	 	 	 	 	 

6exv10w7

 

Exhibit 10.7

Non-employee directors

TD BANKNORTH INC.

RESTRICTED STOCK AGREEMENT

AMENDED AND RESTATED 2003 EQUITY INCENTIVE PLAN

     THIS
AGREEMENT (the “Agreement”) is made as of this ______ day of May 2005 (hereinafter
referred to as the “Date of Grant”) by and between TD Banknorth Inc. (the “Company”) and
______ (the “Participant”). Defined terms, unless otherwise defined herein, shall have
the same meaning as set forth in the Plan (as hereinafter defined).

WITNESSETH:

     WHEREAS, the Company has adopted the Amended and Restated 2003 Equity Incentive Plan (the
“Plan”), which is hereby incorporated in its entirety by reference herein; and

     WHEREAS, the Company desires to grant to the Participant a Restricted Stock Award, as
described in the Plan.

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other
good and valuable consideration, the Company and the Participant agree as follows:

     1. Restricted Stock Award. The Company hereby grants to the Participant a Restricted
Stock Award of ___ shares of common stock, $0.01 par value per share, of the Company (the
“Shares”), upon the terms and conditions set forth herein. The number of Shares are subject to
adjustment as provided in the Plan.

     2. Vesting of Restricted Stock Award. The Shares granted by this Agreement shall be
100% vested on the Date of Grant.

     3. Restrictions on Transfer of Shares. The Shares granted by this Agreement may not
be sold, assigned, transferred (including transfer by gift or donation but excluding transfers
pursuant to a QDRO), pledged or otherwise encumbered, except that such restrictions shall lapse
upon (i) the Participant’s death, Disability or voluntary termination of service as a director, or (ii) the
occurrence of a Change of Control. During the time these restrictions are in effect, the stock
certificates for the Shares shall be held either by the Company or by the Company’s transfer agent.

     4. Delivery of Stock Certificates. When the restrictions set forth in Section 3
lapse, the Company or its transfer agent shall deliver a stock certificate to the Participant for
the Shares. Such certificate shall be subject to such stop transfer orders and other restrictions
as the Committee may deem advisable under the Plan or the rules, regulations and other requirements
of the SEC, any stock exchange or national market quotation system upon which such Shares are then
listed or quoted, respectively, and any applicable Federal or state laws, and the Committee may
cause a legend or legends to be put on any such certificates to make appropriate reference to

 

 

such restrictions. As a condition precedent to the issuance of the Shares, the Company may
require the Participant to take any reasonable action to meet such requirements and to represent
and warrant at the time of issuance or transfer that the Shares are being acquired only for
investment purposes and without any current intention to sell or distribute such Shares.

     5. Withholding. The Company’s obligation to deliver shares of Common Stock pursuant
to Section 4 hereof shall be subject to the Participant’s satisfaction of any applicable federal,
state, local and other income and employment tax withholding requirements as required by the Plan.

     6. Voting of Underlying Shares of Common Stock; Dividends. The Participant shall be
entitled to vote the Shares granted by the Agreement prior to the delivery of the stock
certificates pursuant to Section 4 hereof. In addition, all cash dividends paid on the Shares
prior to the delivery of the stock certificates shall be paid to the Participant on the dividend
payment dates established by the Company.

     7. Terms and Conditions. The terms and conditions included in the Plan are
incorporated herein by reference, and to the extent that any conflict may exist between the terms
and conditions included in the Plan and the terms of this Agreement, the terms and conditions
included in the Plan shall control.

     8. Administration and Interpretation. The authority to interpret and administer this
Agreement shall be vested in the Board, and the Board shall have all powers with respect to this
Agreement as it has with respect to the Plan. Any interpretation of the Board of the provisions of
the Plan or this Agreement made in good faith shall be final and binding on all parties.

     9. Not a Service Contract. The grant of the Shares covered by this Agreement does not
confer on the Participant any right with respect to continuance of Service with the Company or any
Affiliate, nor shall it interfere in any way with any right the Company or any Affiliate would
otherwise have to terminate or modify the terms of the Participant’s Service at any time.

     10. Notices. Any written notice provided for in this Agreement or the Plan shall be
in writing and shall be deemed sufficiently given if it is hand delivered, sent by fax or overnight
courier, or sent by postage paid first class mail. Notices sent by mail shall be deemed received
three business days after mailing but in no event later than the date of actual receipt. Notices
shall be directed, if to the Participant, at the Participant’s address indicated by the Company’s
records, or if to the Company, at the following address: TD Banknorth Inc., P.O. Box 9540, Two
Portland Square, Portland, Maine 04112-9540 Attention: General Counsel.

     11. Amendment. Except as provided herein, this Agreement may not be amended or
otherwise modified unless evidenced in writing and signed by the Company and the Participant. In
the event that the Board determines, after a review of Section 409A of the Code and all applicable
Internal Revenue Service guidance, that the Plan or any provision thereof or Award thereunder
should be amended to comply with Section 409A of the Code, the Board may amend the Plan and this
Agreement to make any changes required to comply with Section 409A of the Code.

2

 

     12. No Personal Liability. The Participant agrees that no member of the Board or the
Company or its Affiliates shall be personally liable for any actions taken in good faith in
connection with the Plan or this Agreement.

     13. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer, and the Participant has hereunto set his or her hand, all as of the day first
above written.

	 	 	 	 	 	 	 
	ATTEST:	 	 	 	TD BANKNORTH INC.
	 
	 	 	 	 	 	 
	 	 	 	 	By:
	 	 	 	 	 
	Name:

	 	 	 	Name:	 	 
	

	 	 
	 	 	 	 
	Title:

	 	 	 	Title:	 	 
	

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	PARTICIPANT
	 
	 	 	 	 	 	 
	 	 	 	 	 
	

	 	 	 	Name:	 	 
	

	 	 	 	 	 	 

3

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