INDEPENDENT BANKSHARES, INC.
EMPLOYEE RETENTION AGREEMENT
This Agreement, effective as of its execution, by and
between Independent Bankshares, Inc., a Texas corporation, and
its successors and assigns (collectively the "Company"), and
________, a key employee and a select member of management of the
Company (the "Executive"), provides as follows:
WHEREAS, the Executive is currently an employee and a select
member of management of the Company, serving at the pleasure of
the Board of Directors of the Company; and
WHEREAS, the Company desires to provide additional
incentives to the Executive to continue his employment with the
Company in the event that there is a change in control of the
Company; and
WHEREAS, the Company and the Executive now desire to enter
into this Agreement to establish the sole and exclusive terms and
conditions upon which such payments will be made.
NOW, THEREFORE, in consideration of the mutual undertakings
set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are
acknowledged, the Company and the Executive agree as follows:
ARTICLE I DEFINITIONS
1.1 "Beneficiary" shall mean the person(s) described in
Article 4 of this Agreement.
1.2 "Board" shall mean the Board of Directors of the
Company.
1.3 "Cause" when used in this Agreement concerning the
termination of the Executive's employment by the
Company shall mean:
i. any act on the part of the Executive which
constitutes fraud or willful malfeasance of duty
or an act of moral turpitude and which is
demonstrably likely to lead to material injury to
the Company;
ii. a conviction for a felony or misdemeanor involving
moral turpitude; or
iii. the suspension or removal of the Executive by
federal or state regulatory authorities.
1.4 "Change in Control" shall mean and shall be deemed to
have occurred for purposes of this Agreement on the
first to occur of the following:
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i. the Company is merged or consolidated with another
corporation and as a result of such merger of
consolidation, less than fifty percent (50%) of
the outstanding voting securities of the surviving
or resulting corporation are owned in the
aggregate by the former shareholders of the
Company;
ii. the Company sells all or substantially all of its
assets to another corporation, which is not a
wholly owned subsidiary of the Company or an
entity owned by substantially the same shareholder
as the Company; or
iii. any person, entity or group (within the meaning of
the Securities Exchange Act of 1934, as amended),
acquires (together with voting securities of the
Company held by such person, entity or group)
fifty percent (50%) or more of the outstanding
voting securities of the Company (whether
directly, indirectly, beneficially or of record)
pursuant to any transaction or combination of
transactions.
1.5 "Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.6 "Compensation" shall mean the amount reported on the
Executive's Form W-2 for the calendar year immediately
preceding the date a Change in Control occurs.
1.7 "Constructive Termination" shall mean any circumstance
pursuant to which Executive's Compensation is
diminished, job title is changed to a position of
lesser importance, or responsibilities are materially
reduced.
1.8 "Disability" or "Disabled" shall mean the total and
permanent disability as defined in the Company's long-
term disability plan, or if the Company has no long-
term disability plan in effect at the time of the
Executive's disability, shall have the meaning provided
in section 22(e)(3) of the Code.
1.9 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
1.10 "Retention Benefit" shall mean a cash lump sum payment
equal to the product of two (2) multiplied by the
Executive's Compensation.
1.11 "Retention Period" shall mean the period beginning on
the date of a Change of Control and ending three
hundred sixty-five (365) days after the date of a
Change in Control.
ARTICLE II BENEFITS
2.1 Eligibility. Subject to the provisions of Article 6
hereof, the Executive is entitled to receive a
Retention Benefit at the conclusion of the Retention
Period unless the
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Executive is not employed by the Company upon the
expiration of the Retention Period; and the reason the
Executive is no longer employed is because either (i)
he was terminated by the Company with Cause or (ii) he
resigns or xxxxxx his employment with the Company for
any reason other than a Constructive Termination.
Without limitation, in the event the Executive dies or
becomes Disabled after the Company enters into an
agreement that results in a Change in Control but prior
to the end of the Retention Period, Executive will be
entitled to receive the Retention Benefit pro rated for
the portion of the Retention Period that he served with
the Company prior to his death or Disability.
2.2 Payment. The Retention Benefit shall be paid by the
Company in a cash lump sum payment within thirty (30)
days after the end of the Retention Period, unless
Executive is terminated without Cause, dies or becomes
Disabled prior to such time. In the event of such a
termination without Cause, including a Constructive
Termination, a death or Disability, the Retention
Benefit or the pro rated portion of the Retention
Benefit, as the case may be, shall be paid by the
Company within thirty (30) days of such termination,
death or Disability.
ARTICLE III RESTRICTIONS UPON FUNDING
3.1 No Funding Obligation. The Company shall have no
obligation to set aside, earmark or entrust any fund or
money with which to pay its obligations under this
Agreement. The Executive, his Beneficiary or any
successor-in-interest to his shall be and remain simply
a general creditor of the Company in the same manner as
any other creditor having a general unsecured claim.
3.2 Unfunded Arrangement. For purposes of the Code, the
Company intends this Agreement to be an unfunded,
unsecured promise to pay on the part of the Company.
For purposes of ERISA, the Company intends that this
Agreement not be subject to ERISA. If this Agreement
is deemed subject to ERISA, it is intended to be an
unfunded arrangement for the benefit of a select member
of management who is a highly compensated employee of
the Company, for the purpose of qualifying this
Agreement for the "top hat" plan exception under
sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.
3.3 No Right to Investments. Should the Company elect to
purchase life insurance, mutual funds, disability
policies or annuities pursuant to this Agreement, the
Company reserves the absolute right, in its sole
discretion, to terminate such investments at any time,
in whole or in part. At no time shall the Executive
have, or be deemed to have, any lien, right, title or
interest in or to any specific investment or to any
assets of the Company as a result of this Agreement;
rather, the Executive shall remain a general unsecured
creditor of the Company.
3.4 Insurance, Disability or Annuity Policy. If the
Company elects to invest in a life insurance,
disability or annuity policy upon the life of the
Executive, the
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Executive shall assist the Company by freely
submitting to a physical examination and supplying such
additional information necessary to obtain such
insurance or annuities.
ARTICLE IV DESIGNATION OF BENEFICIARIES
4.1 Payment to Beneficiary. Should the Executive die prior
to full payment of amounts due under Article 2, payment
shall be made to his Beneficiary. The Executive's
written designation of one or more persons or entities
as his Beneficiary shall operate to designate the
Executive's Beneficiary under this Agreement. The
Executive shall file with the Company a copy of his
Beneficiary designation on the form supplied to the
Executive by the Company. The last such designation
form received by the Company shall be controlling, and
no designation or change or revocation of a designation
shall be effective unless received by the Company prior
to the Executive's death.
4.2 Payment to Estate. If no Beneficiary designation is in
effect at the time of the Executive's death, if no
designated Beneficiary survives the Executive, or if
the otherwise applicable Beneficiary designation
conflicts with applicable law, the Executive's estate
shall be the Beneficiary.
ARTICLE V INTERPRETATION, AMENDMENT, AND TERMINATION
The Board shall have the exclusive power and authority to
interpret and construe the Agreement. The Board may engage
agents to assist it, including legal counsel, who may be counsel
to the Company. Other than as provided in Article 6, this
Agreement may be amended, suspended, or terminated, in whole or
in part, only by a written instrument signed by both a duly
authorized officer of the Company other than the Executive and by
the Executive.
ARTICLE VI TERMINATION OF AGREEMENT
This Agreement will terminate, unless renewed, upon the
earlier of the following: (i) the payment of a Retention Benefit
in accordance with Article 2, (ii) the expiration of one (1) year
from the effective date of this Agreement, if an agreement
providing for a Change of Control has not been executed or (iii)
termination of the Executive's employment on a basis that does
not entitle the Executive to a Retention Benefit under Section
2.1. This Agreement shall automatically annually renew unless
thirty (30) days prior to the end of the annual anniversary date
of this Agreement, the Company provides Executive with written
notice of termination of this Agreement.
ARTICLE VII MISCELLANEOUS
7.1 Alienability and Assignment Prohibition. Neither the
Executive, his spouse, nor any other Beneficiary under
this Agreement shall have any power or right to
transfer, assign, anticipate, hypothecate, mortgage,
commute, modify or otherwise
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encumber in advance any of the benefits payable under
this Agreement nor shall any of said benefits be
subject to seizure for the payment of any debts,
judgments, alimony or separate maintenance owed by the
Executive or his Beneficiary, nor be transferable by
operation of law in the event of bankruptcy, insolvency
or otherwise.
7.2 Gender. Whenever in this Agreement words are used in
the masculine or neuter gender, they shall be read and
construed as in the masculine, feminine or neuter
gender, whenever they should so apply.
7.3 Effect on Other Corporate Benefit Plans. Nothing
contained in this Agreement shall affect the right of
the Executive to participate in or be covered by any
qualified or non-qualified pension, profit sharing,
group, bonus or other supplemental compensation or
fringe benefit plan constituting a part of the
Company's existing or future compensation structure.
7.4 Headings. Headings and subheadings in this Agreement
are inserted for reference and convenience only and
shall not be deemed a part of this Agreement.
7.5 Applicable Law. The validity and interpretation of
this Agreement shall be governed by the laws of the
State of Texas. This Agreement, as amended from time
to time in writing, shall establish the sole and
exclusive terms and conditions upon which payments will
be made under this Agreement. The venue for any
litigation involving the subject matter of this
Agreement shall be Xxxxxx County, Texas.
7.6 No Employment Agreement. No provision of this
Agreement shall be deemed or construed to create
specific employment rights to the Executive nor limit
the right of the Company to discharge the Executive at
any time with or without cause. In a similar fashion,
no provision shall limit the Executive's rights to
voluntarily sever his employment at any time.
7.7 Withholding of Taxes. The Company shall deduct from
the amount of any payment made pursuant to this
Agreement any amounts required to be paid or withheld
by the Company with respect to applicable Federal
income, Federal Insurance Contributions Act or Federal
Unemployment Tax Act taxes or applicable state taxes.
By executing this Agreement, the Executive agrees to
all such deductions.
7.8 Severability. In case any one or more of the
provisions contained in this Agreement shall be
invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining
provisions in this Agreement shall not in any way be
affected or impaired.
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7.9 Binding Effect. This Agreement shall bind the
Executive and the Company, and their successors,
assigns, beneficiaries, survivors, executors,
administrators and transferees.
7.10 Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be
considered an original of this instrument, and all or
both of which shall be considered one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto acknowledge that each
has carefully read this Agreement and executed an original hereof
on the _____ day of _____________________, 1999, and that, upon
execution, each has received a counterpart hereof.
EXECUTIVE
______________________________
INDEPENDENT BANKSHARES, INC.
By:
----------------------------
Name:
----------------------------
Title:
--------------------------
The above and foregoing Agreement having been presented to
the Board of Directors of Independent Bankshares, Inc. the same
day has been formally approved by the Board of Directors on the
15th day of September, 1999.
---------------------------------
Xxxxx Xxxxxxxxxx, Xx., Chairman of the
Board of Directors
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STATE OF TEXAS )
)
COUNTY OF )
This instrument was acknowledged before me by _____________,
on this ______________ day of___________________ , 1999.
___________________________________
Notary Public-State of Texas
My Commission Expires:
______________________
STATE OF TEXAS )
)
COUNTY OF )
This instrument was acknowledged before me by_______________ ,
of INDEPENDENT BANKSHARES, INC. on this ______________ day of
__________________ , 1999.
__________________________________
Notary Public-State of Texas
My Commission Expires:
______________________
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