EXHIBIT 10-5
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), dated this 24th day of January,
2005, between The Banc Corporation, a Delaware corporation ("Parent"), The Bank,
an Alabama banking corporation (the "Bank") and C. Xxxxxxx Xxxxxx (the
"Executive").
WHEREAS, the Executive wishes to provide services as an employee of,
and executive to, Parent and the Bank for the period provided in this Agreement,
and Parent and the Bank each wish to have the Executive provide such services
for such period, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parent and the Executive agree
as follows:
1. Employment. The Parent hereby employs the Executive, and the
Executive hereby accepts such employment by the Parent, upon the terms and
conditions set forth in this Agreement.
2 Term. The term of the Executive's employment by the Parent under this
Agreement shall begin immediately upon the date hereof and shall terminate at
midnight, Central Standard Time on January 31, 2008; provided, however, that
such term shall be automatically extended annually, beginning one (1) year from
the date of the commencement of the term and on each anniversary date
thereafter, for an additional one-year period, so that the remaining term of
this Agreement shall be three (3) years from each such anniversary date unless,
with respect to any such one-year extension, either party shall notify the other
party in writing, not less than thirty (30) days prior to such anniversary date,
that he or it, as the case may be, desires to terminate this Agreement as of the
end of the term then in effect. The term during which the Executive serves as an
employee of the Parent pursuant to this Agreement is hereinafter referred to as
the "Employment Period."
3. Positions and Duties. The Executive shall serve as the Chief
Executive Officer of the Parent and the Bank and as a member of the board of
directors of the Parent and the Bank. If Xxxxx X. Xxxxxx, Xx. shall cease to
serve as Chairman of the Board of the Parent or Bank for any reason, the
Executive shall serve as his successor during the Employment Period. At the
request of the Board of Directors of the Bank (the "Bank Board") or the Board of
Directors of the Parent (the "Parent Board"), the Executive shall also serve as
an officer or director, or both, of each subsidiary of the Bank or the Parent,
whether direct or indirect. The Executive, in his capacity as an officer of the
Bank and the Parent and as an officer or director of
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any subsidiary of the Bank or the Parent, shall perform such duties and services
as may be assigned to him by the Boards of either the Bank or the Parent,
subject to the supervision and control of the Bank Board or the Parent Board, as
the case may be. The Parent, the Bank and any subsidiary of either for which the
Executive shall perform duties and services shall be responsible for their
respective proportionate shares of the Executive's compensation. The Executive
shall not be entitled to receive any director fees or other separate
compensation for his service as a director (including without limitation service
as chairman, as a member of any committees of the Bank Board or the Parent
Board, or otherwise) of the Parent, the Bank or any subsidiary of either the
Parent or the Bank.
4. Salary. The Parent shall pay the Executive a salary during the
Employment Period of $33,333.33 per calendar month (the "Base Salary"). All
salary shall be paid to the Executive no less frequently than twice each month.
Any salary paid with respect to less than a full one-month period shall be
pro-rated, with such proration being based on the number of days in such month
and the number of days during such month that are within the Employment Period.
Such salary will be reviewed during January of each year and may be increased
annually, as determined by the Board of Directors, on the recommendation of its
compensation committee. The Parent shall not have the right to reduce such
salary at any time during the Employment Period without the written consent of
the Executive.
The Executive shall have the right, at his option, to defer any salary
specified in this Section 4 to any subsequent period, provided that the
Executive gives the Parent written notice of his election to defer such salary
prior to performance of the services for which such salary would be paid. Any
salary deferral shall comply with the requirements of Section 409A of the
Internal Revenue Code, as amended (the "Code") to the extent necessary to avoid
inclusion in income in the year deferred. This Agreement shall be amended prior
to December 31, 2005 to comply with Section 409A of the Code, or the Parent may
create a plan of deferred compensation that complies with Section 409A of the
Code to allow the salary deferral contemplated hereby. Moreover, if the
Executive and the Parent (by action of the Parent Board on the recommendation of
its compensation committee) mutually agree, any salary specified in this Section
4 may be paid in kind, including common stock, stock options, life insurance
policies, annuities, or other property.
5. Extent of Service. During the Employment Period, the Executive shall
devote substantially his entire working time, attention and energy to the
business and affairs of the Bank and the Parent and in the advancement of the
best interests of the Bank and the Parent. The foregoing sentence shall not,
however, preclude the Executive from devoting reasonable periods of time in
connection with the following activities, provided that such activities do not
materially interfere with the performance of his duties and services hereunder:
(a) serving as a director or a member of a committee of any other company or
organization, if serving in such capacity does not involve any conflict with the
business of the Bank or the Parent and such company or organization is not in
competition, in any manner whatsoever, with
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the business of the Bank or the Parent; (b) fulfilling speaking engagements; (c)
engaging in charitable and community activities; and (d) managing his personal
investments. If the Executive serves on any board at the request of or for the
benefit of the Parent or the Bank, the Executive will be indemnified for any
personal liability, including costs of defense and attorneys' fees, that he may
incur as a result of such service. The Executive shall be authorized to receive
and retain fees for serving on such boards, except as may be otherwise
specifically agreed between the Executive and the Parent or the Bank in respect
to any particular such board or boards, provided, however, that nothing herein
shall authorize or entitle the Executive to receive and retain fees for serving
on the boards of the Parent, the Bank or any of their subsidiaries.
6. Expenses. Subject to compliance by the Executive with such policies
regarding expenses and expense reimbursement as may be adopted from time to time
by the Bank and the Parent, the Executive will be reimbursed by the Bank or the
Parent, as the case may be, for reasonable expenses incurred in the performance
of his duties and services hereunder for the Bank and the Parent, and in the
furtherance of the business of the Bank and the Parent, upon the presentation by
the Executive of an itemized account, accompanied by the appropriate receipts,
satisfactory to the Bank and the Parent, in substantiation of such expenses.
7. Vacations. The Executive shall be entitled to take such vacations,
with pay, as the other executive officers of the Bank and Parent are generally
entitled to take, but not less than four (4) calendar weeks in each year.
Executive shall take into consideration the needs of Parent and the Bank in
scheduling such vacations.
8. Employee Benefits. The Executive shall, during the Employment
Period, be eligible to participate in such insurance, medical and other
employee-benefit plans of the Parent (or Bank, if providing Executive with more
generous benefits) which may be in effect, from time to time, to the extent such
plans and benefits, respectively are generally available to the other executive
officers of the Bank or Parent, or to the extent that such benefits have been
approved by the Board for the sole benefit of the Executive; provided, however,
that in addition to all other life insurance that may be available to Executive
pursuant any benefit plans of the Parent or the Bank, the Executive shall be
provided term life insurance coverage paying at least $1.0 million (the "Stated
Amount") in death benefits to the beneficiary of his choice. If such coverage is
not available at unrated premium costs, then either (i) Executive will pay the
portion of the premiums that exceed an amount equal to the unrated premium costs
of such coverage if it had been available, or (ii) if Executive is unwilling to
pay the difference in premium, the amount of death benefit provided shall be the
death benefit that could be provided if a policy was acquired for the unrated
premium costs of a policy in the Stated Amount. Parent shall provide to the
Executive an automobile owned or leased by Parent of a make and model
appropriate to Executive's status and similar automobiles historically provided
to other senior executives of Parent (such as a Lexus) and customary
automobile-related benefits. Upon the Executive's ceasing to be employed
hereunder, he shall be entitled, at his
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sole cost, to maintain in effect the aforesaid insurance, medical, and other
benefits, except in those circumstances where, under this Agreement, such
post-employment benefits are to be provided to Executive by the Parent and/or
the Bank, or its or their successor(s).
9. Location of Employment. The Executive's principal office will be
located in Birmingham, Alabama. The Executive shall be required to engage in
such travel as may be necessary in the performance of his duties and services
hereunder. Executive shall, within a reasonable time following the commencement
of the Employment Period establish his permanent residence in the Birmingham,
Alabama metropolitan area.
10. Club Memberships. It is contemplated that, after the Executive
commences performance hereunder, he may request that the Parent purchase, or
provide funds (net of taxes) to the Executive for the purchase of membership in
any club (or clubs), having facilities suitable for the Executive to use for
business entertainment on behalf of the Bank or the Parent, as the Parent Board
shall deem appropriate and in the interest of the Parent and the Bank. Upon
authorization by the Parent Board, the Parent shall pay any required initiation
fees and shall pay, either directly or as an ongoing payroll expense to
reimburse the Executive (net of taxes), for monthly dues, periodic assessments,
and other such costs of any such membership. The Executive shall be responsible
for any personal charges that he may incur in utilizing the facilities of any
such club. If the Executive ceases his membership in any such clubs and any
bonds or other capital payments made by Parent are repaid to the Executive, the
Executive shall pay over such payments to Parent.
11. Bonuses. The Executive shall be entitled to receive, within two and
one-half months of the close of each calendar year, based upon the achievement
of agreed-upon performance goals for the Parent and/or the Bank (as approved by
the Parent Board upon the recommendation of its compensation committee), a
targeted annual bonus (the "Target Bonus") equal to fifty percent (50%) of his
Base Salary for such calendar year. Notwithstanding the foregoing, Executive
shall be eligible to participate in any bonus or long-term incentive plan of the
Bank and/or the Parent, or as established by the Board of Directors of the Bank
or the Parent as the case may be, for similarly situated executive officers, and
may be awarded such grants thereunder as are approved by the Parent Board or the
Bank Board or their respective compensation committees.
12. Termination.
(a) Automatic. This Agreement, and the Executive's rights
hereunder (except as to salary, bonuses and other rights accrued prior
thereto), shall terminate automatically as provided in Section 2 above,
unless terminated earlier pursuant to subsection (b), (c), (d) or (e)
of this Section 12.
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(b) By Executive. The Executive may terminate this Agreement
in the event of any material adverse change or reduction by the Parent
or the Bank, without the Executive's prior written consent, of the
Executive's functions, duties or responsibilities, assignment by the
Parent or the Bank of the Executive to another place of employment more
than fifty (50) miles from Birmingham, Alabama, or other material
breach of this Agreement by the Parent or the Bank, and such
termination may be effected by written notice to the Bank, specifying
the event relied upon for such termination, given within thirty (30)
days after such event. Such termination will have the same effect as a
termination without cause by the Parent or the Bank as set forth it
Section 12(e) hereof.
(c) Death of Executive. If the Executive dies during the
Employment Period, this Agreement and the Executive's rights hereunder
shall automatically terminate as of his death, except as to accrued but
not paid salary, bonus and other vested rights in compensation or
benefit programs.
(d) Disability of Executive. If the Executive is disabled, as
defined hereinafter, during the Employment Period, this Agreement and
the Executive rights hereunder shall automatically terminate as of the
occurrence of such disability. For purposes of this Agreement, the
Executive shall be deemed to be "disabled" if for medical (including
psychological) reasons he has been unable to fully perform his duties
and services hereunder for one hundred twenty (120) consecutive days,
or an aggregate of one hundred eighty (180) days in any period of
twelve (12) consecutive months. Notwithstanding the foregoing, the
Executive's rights to salary and other benefits under this Agreement
shall continue for one (1) year after the occurrence of such
disability; provided, however, that salary payments during such
one-year period shall be reduced by the amount of any payments with
respect to such one-year period that the Executive shall receive from
disability programs provided by the Bank or the Parent. After the
expiration of such one-year period, the Executive shall be covered by a
disability program or insurance similar to that generally available to
the other executive officers of the Bank (or Parent, if providing
Executive with more generous benefits).
(e) By Parent. The Parent Board may terminate the Executive's
employment at any time by giving written notice of such termination to
the Executive in the manner provided below for the giving of notices,
such termination to be effective on a date specified therein which is
not less than sixty (60) days from the date of such notice (except in
the case of termination for Cause (as defined in (g) below), in which
case the effective date shall be not less than (10) days from the date
of such notice); provided, however, that any termination other than for
Cause (as defined in (g) below) shall not prejudice the Executive's
right to compensation or other benefits under this Agreement during the
balance of the Employment Period (as provided in Section 2 hereof, and
without regard to such termination). The monthly salary
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component of such compensation for the balance of the Employment Period
shall equal the Base Salary in effect on the effective date of
termination and shall be prorated for any partial-month period(s)
included in the balance of the Employment Period. The bonus component
of such compensation for the balance of the Employment Period shall be
based on an annual bonus amount equal to the most recent annual bonus
paid or payable to the Executive and shall be prorated for any
partial-year period(s) included in the balance of the Employment
Period. Such compensation shall be paid at the same time as it would
have been payable had this Agreement not been terminated, or, at the
election of the Executive made by written request to the Parent, in a
lump sum to the extent not previously paid, which shall be disbursed to
the Executive within thirty (30) days after delivery of such written
request. Such lump-sum payment is to be calculated by discounting the
payment amount using a discount rate equal to six percent (6%). The
Executive's participation in all benefit programs and stock option
agreements shall continue throughout the Employment Period (as provided
in Section 2 hereof, and without regard to such termination) as if the
Executive was still an employee and all non vested benefits shall
immediately vest, in each case as to the extent provided in the
applicable benefit plan; provided, however, that the stock options to
be awarded pursuant to Section 15 hereof shall vest as provided in said
Section 15. Ownership of the automobile provided to the Executive shall
be transferred immediately to the Executive, and no further
reimbursement shall be provided with respect to such automobile. Unless
terminated for Cause, the Executive shall have the right (but shall not
be obligated), at any time following receipt of notice of termination
under this Section 12(e) until the effective date thereof to resign as
an officer and/or a director of the Bank and the Parent while
continuing to serve as an employee at the same compensation, but with
such reduction in duties as may be appropriate in order that the
Executive shall no longer be an officer of the Bank and the Parent
within the meaning of Section 16(b) of the Securities and Exchange Act
of 1934. If the Executive is terminated by Parent for Cause (as defined
in (g) below) Executive's right to compensation or other benefits under
this Agreement shall terminate as of the effective date of such
termination except as to accrued but not paid salary, bonus and other
vested rights in compensation or benefit programs.
(f) Dispute. The parties have agreed that in the case of any
termination that the Bank or the Parent contends is for Cause, but the
Executive claims is not for Cause, if the Bank continues to pay
compensation to the Executive during the pendency of such dispute, the
Bank shall be entitled to the return of all compensation so paid, with
interest at the discount rate payable by the Bank on borrowings from
its Federal Home Loan Bank, and reasonable legal fees as provided in
Section 29 hereof, if it is ultimately determined that such termination
was for Cause; and if the Bank shall cease such payments and it shall
be determined that such termination was not for Cause, the parties
further agree that the Executive shall be entitled to recovery
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of the amount due to the Executive for payments not made, together with
interest at the discount rate payable by the Bank on borrowings from
its Federal Home Loan Bank, and reasonable legal fees as provided in
Section 29 hereof and, in addition, shall thereafter make any further
payments due under Section 12(d), if such section is applicable, as due
thereunder for the remainder of the period specified therein. This
provision is made by the parties hereto for the purpose of compensating
the Executive for the loss that he would suffer in the event of an
unfounded discontinuation of compensation payments, and to encourage
fairness and equitable dealing between the parties in the event of
dispute.
(g) For Cause. The termination of the Executive's employment
shall be for "Cause" if it is a result of:
(i) any act (including any omission or failure to act) that
constitutes, on the part of the Executive, fraud, dishonesty,
gross negligence, willful misconduct, incompetence, breach of
fiduciary duty involving direct or indirect gain to or
personal enrichment of the Executive, intentional failure to
perform stated duties or to follow lawful direction of the
Parent Board or Bank Board, willful violation of any law, rule
or regulation (other than traffic violations or similar
offenses) or final cease-and-desist order, or material breach
of this Agreement; or
(ii) the conviction (from which no appeal may be or is timely
taken) of the Executive of (A) a felony or (B) a misdemeanor
involving fraud or dishonesty; or
(iii) the suspension or removal of the Executive by federal or
state banking regulatory authorities acting under lawful
authority pursuant to provisions of federal or state law or
regulation which may be in effect from time to time;
provided, however, that in the case of clauses (i) and (ii)(B) above,
such conduct shall not constitute Cause unless (A) there shall have
been delivered to the Executive a written notice setting forth with
specificity the reasons that the Parent Board believes the Executive's
conduct constitutes the criteria set forth in clause (i) or clause
(ii)(B), as the case may be, (B) the Executive shall have been provided
the opportunity to be heard in person by the Parent Board (with the
assistance of the Executive's counsel if the Executive so desires), and
(C) after such hearing, the termination is evidenced by a resolution
adopted in good faith by a majority of the members of the Parent Board
(other than the Executive).
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13. Federal Rules and Regulations. This Agreement is subject to all the
laws, rules and regulations governing Alabama state chartered member banks, and,
in particular, the provisions of 12 U.S.C. Section 1828(k) and 12 C.F.R. Part
359.
To the extent that any provision of this Agreement is inconsistent with
applicable federal laws, rules or regulations, such laws, rules or regulations
shall control. In such case, such provision of the Agreement shall be invalid,
but only to the extent necessary for this Agreement to comply with applicable
federal laws, rules and regulations. To the extent that any provision of any
other Section of this Agreement is inconsistent with any provision of this
Section 13, such provision of this Section 13 shall govern.
14. [Intentionally Omitted]
15. Options.
(a) The Executive shall receive options, for a term of ten (10) years,
to acquire 711,970 shares of Common Stock of Parent, at an exercise price of
$8.17 per share, vesting in accordance with the following schedule:
(i) 50% vesting ninety (90) days from the date hereof;
(ii) 50% vesting upon the fifth anniversary of the date
hereof, unless sooner vesting in accordance with the
following;
(A) 20% vesting upon the later of (1) the Common
Stock's reaching a market value (adjusted for any
stock splits, stock dividends, or other changes in
capital structure), based upon an average of the
closing price of the Common Stock over fifteen (15)
consecutive trading days (the "Market Value") of at
least ten dollars ($10.00), but less than twelve
dollars ($12.00), per share or (2) June 29, 2005 (the
"Alternate Vesting Date") ;
(B) 15% vesting upon the later of (1) the Common
Stock's reaching a Market Value of at least twelve
dollars ($12.00), but less than fourteen dollars
($14.00), per share or (2) the Alternate Vesting
Date; and
(C) 15% vesting upon the later of (1) the Common
Stock's reaching a Market Value of at least fourteen
dollars ($14.00) per share or (2) the Alternate
Vesting Date.
(b) Notwithstanding the vesting schedule set forth in Section 15(a)
above or any other provisions of this Agreement to the contrary:
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(i) With respect to the options granted pursuant to
Section 15(a)(i) hereof, such options shall instead
vest immediately upon the termination of Executive's
employment hereunder unless resulting from (A) a
voluntary termination by Executive other than
pursuant to Section 23(b) hereof in the event of a
Change of Control or (B) a termination by Parent for
Cause, and
(ii) with respect to the options granted pursuant to
Section 15(a)(ii) hereof, if the Executive ceases to
be employed hereunder after any respective Market
Value price is achieved but before the Alternate
Vesting Date, the options which would have otherwise
vested, by reason of such Market Value price, upon
the Alternate Vesting Date shall instead vest
immediately upon the termination of Executive's
employment hereunder unless resulting from (A) a
voluntary termination by Executive other than
pursuant to Section 23(b) hereof in the event of a
Change of Control or (B) a termination by Parent for
Cause.
(c) Should the Executive cease to be employed hereunder as a result of
the expiration of the term hereof in accordance with Section 2, the Executive
shall be entitled, at any time within three (3) months after the date on which
the Executive ceases to be so employed, to exercise any and all options vested
hereunder; provided, however, if cessation of employment results from the
disability of the Executive, the post termination exercise period is extended to
one (1) year. If this Agreement should terminate by reason of the death of the
Executive, the personal representative of the estate of the Executive shall be
entitled, at any time within one (1) year after the date of death, to exercise
any and all options vested hereunder.
(d) Assignment. Upon the consent of the Parent Board, which shall not
be unreasonably withheld, the Parent Board shall permit (on such terms and
conditions as it shall reasonably establish) such options to be transferred to a
trust, partnership, corporation, limited liability company, or similar vehicle
for the benefit of Executive's immediate family members (collectively, the
"Permitted Transferees"), but otherwise, (i) no option shall be assignable or
transferable except by will, or by the laws of descent and distribution , and
(ii) during the lifetime of Executive, the option shall be exercisable only by
such Executive or such Executive's guardian, legal representative or, if
applicable, the Permitted Transferees.
16. Compliance with Section 409A. This Agreement shall be amended prior
to December 31, 2005 to the extent necessary to comply with Section 409A of the
Code. Prior to such amendment, and notwithstanding anything contained herein to
the contrary, this Agreement shall be construed in a manner consistent with
Section
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409A of the Code and the parties shall take such actions as are required to
comply in good faith with the provisions of Section 409A of the Code.
17. Non-Disclosure Covenant. The Executive shall not, at any time, both
during and after the Employment Period, except in the course of the performance
of his duties and services hereunder, communicate or disclose to any person, or
use for his own account, without the prior written consent of the Bank or the
Parent, any confidential or proprietary information or trade secrets of the Bank
or the Parent, or of any person or entity that directly or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, the Bank or the Parent, or of any person or entity which is
directly, or indirectly through one or more intermediaries, controlled by such
person or entity (all such persons and entities being collectively referred to
herein as the "Affiliates"). The Executive shall retain all such information and
trade secrets in trust for the sole benefit of the Bank and the Parent and each
of the Affiliates and their respective successors and assigns. The Executive
shall also execute and deliver to the Bank or the Parent any and all such
confidentiality agreements as the Bank or the Parent may reasonably require,
from time to time, the Bank's or the Parent's other executive officers to
provide.
18. Covenant of Non-Interference. During the Employment Period and for
a period of one (1) year thereafter, with respect to any person or entity which
is a then current employee, consultant, customer, or vender of the Bank, the
Parent or any of the Affiliates, the Executive shall not, whether for his own
account or for the account of any third party, interfere with the relationship
of the Bank, the Parent or such Affiliate with such person or entity, or
endeavor to entice such person or entity to cease being an employee, consultant,
customer or vendor of the Bank, the Parent or such Affiliate.
19. Covenant with Respect to Records and Documents. All written
materials, records and document, made by the Executive or coming into his
possession prior to, during or subsequent to the Employment Period and
concerning the business or affairs of the Bank, the Parent or any of the
Affiliates shall be the sole property of the Bank, the Parent or the Affiliates,
as the case may be, and upon the termination of the Employment Period or upon
the request of the Bank, the Parent or the Affiliates, the Executive shall
promptly deliver all copies of the same which are then in his possession to the
Bank, the Parent or the Affiliates, as the case may be.
20. Covenant Not To Compete.
(a) During the Employment Period and for a period of one (1) year
thereafter, the Executive shall not, directly or indirectly,
(i) form, or acquire a five percent (5%) or greater
equity ownership, voting or profit participation interest in,
or actively participate in, control, manage, finance a five
percent (5%) or greater
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interest of, or invest a five percent (5%) or greater interest
in, any Competitor (as defined below); or
(ii) except as set forth in Section 20(c), associate
(which, as used in this Section 20, shall include association
as an officer, employee, partner, director, consultant, agent,
representative or advisor) with any Competitor.
(b) For purposes of this Agreement, a "Competitor" is any bank, savings
and loan or other financial institution, that operates or has a
physical location within (i) the State of Alabama or (ii) any county
outside the State of Alabama in which the Parent or the Bank, during
the Employment Period, operates or has a physical location or (the
"Restricted Area"), or could reasonably be construed to be in
competition with Parent and the Bank within the Restricted Area.
(c) Notwithstanding the foregoing provisions of this Section 20, the
Executive shall be deemed not to violate the provisions of Section
20(a) with respect to a Competitor that is headquartered outside of the
Restricted Area if the Executive is associated with such Competitor in
an executive or operational capacity outside the Restricted Area so
long as the operations of such Competitor in the Restricted Area do not
constitute such Competitor's principal business and any responsibility
that the Executive has for the local operations of such Competitor in
the Restricted Area are not directly included within the Executive's
personal responsibilities for such Competitor (it being understood,
however, that it would be a violation of Section 20(a) for such
Executive to associate with a Competitor and either (i) direct or have
more than an indirect and secondary responsibility for the introduction
or strategic expansion of a Competitor's business in the Restricted
Area or (ii) solicit or cause others to solicit customers or employees
of Parent or the Bank in connection with such introduction or strategic
expansion).
21. Relocation Expenses.
(a) The Parent will provide the Executive with relocation benefits
including: (i) temporary living expenses (which shall consist,
initially of hotel charges and meals, and, subsequently, apartment
rental and utilities) until the earlier of the Executive's move into a
new home in the Birmingham area, or December 31, 2005; (ii) payment or
reimbursement for all costs of packing and moving the household goods,
furniture, and other belongings of the Executive and his family from
their present home to their new home, and packing and moving the
Executive's office furnishing and equipment to the Parent's offices;
and (iii) all costs incurred, by the Executive and the Executive's
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family, in making up to three (3) trips to the Birmingham area for
house hunting.
(b) Parent (i) shall, until the Executive's present home located in
Little Rock, Arkansas shall have been sold or until December 31, 2005,
whichever first occurs, reimburse the Executive for interest costs
payable on the purchase of his new home, and (ii) shall pay, or shall
reimburse the Executive for, all closing costs incurred in both the
sale of the Executive's present home and the purchase of the
Executive's new home, and the Parent shall pay, or shall reimburse the
Executive for, all real estate commissions in connection with such
sale.
22. Change In Control. In the event a third person begins a tender or
exchange offer, circulates a proxy to stockholders, or takes other steps to
effect a Change in Control (as herein defined), Executive agrees that he will
not voluntarily leave the employ of Parent, the Bank or any subsidiary then
employing him on less than six (6) months written notice to the Chairman of the
Board of the Parent, and notwithstanding such period, the Executive will
continue to render the services expected of his position, and will act in all
things related to the possible Change in Control in the manner he believes in
good faith to be in the best interests of the shareholders of the Parent, until
the third person has abandoned or terminated its efforts to effect a Change in
Control or until a Change in Control has occurred.
For purposes of this Agreement, a "Change in Control" is hereby defined
to be:
(a) a merger, consolidation or other corporate reorganization of Parent
in which the Parent does not survive, or if it survives, the
shareholders of Parent before such transaction do not own more than
fifty percent (50%) of, respectively, the Common Stock of the surviving
entity, and the combined voting power of any other outstanding
securities entitled to vote on the election of directors of the
surviving entity.
(b) the acquisition, other than from the Parent, by any individual,
entity or group (within the meaning of Section 13 (d)(3) or 14 (d)(2)
of the Exchange Act) of beneficial ownership of 25% or more of either
the then outstanding shares of Common Stock of the Parent or the
combined voting power of the then outstanding voting securities of the
Parent entitled to vote generally in the election of directors;
provided, however, that neither of the following shall constitute a
Change in Control:
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(i) any acquisition by the Parent, any of its
subsidiaries, or any employee benefit plan (or
related trust) of the Parent or its subsidiaries, or;
(ii) any acquisition by any corporation, entity, or group,
if, following such acquisition, more than 50% of the
then outstanding voting rights of such corporation,
entity or group are owned, directly or indirectly, by
all or substantially all of the persons who were the
owners of the Common Stock of the Parent immediately
prior to such acquisition;
(c) individuals who, as of the effective date of this Agreement,
constitute the Parent Board (the "Incumbent Parent Board") cease for
any reason to constitute at least a majority of the Parent Board,
provided that any individual becoming a director subsequent to such
date, whose election, or nomination for election by the Parent's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Parent Board, shall be
considered as though such individual were a member of the Incumbent
Parent Board, but excluding, for this purpose, any individual whose
initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors
of the Parent (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act); or
(d) approval by the shareholders of the Parent of a:
(i) complete liquidation or dissolution of the Parent, or
(ii) the sale or other disposition of all or substantially
all the assets of the Parent, other than to a
corporation, with respect to which immediately
following such sale or other disposition more than
50% of, respectively, the then outstanding shares of
common stock of such corporation, and the combined
voting power of the then outstanding voting
securities of such corporation entitled to vote
generally in the election of directors, is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who
were the beneficial owners, respectively, of the
outstanding Common Stock of the Parent, and the
outstanding voting securities of the Parent
immediately prior to such sale or other disposition,
in substantially the same proportions as their
ownership, immediately prior to such sale or
disposition, of the outstanding
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Common Stock of the Parent and outstanding securities
of the Parent, as the case may be.
(e) Notwithstanding the foregoing, if Section 409A of the Code would
apply to any payment or right arising hereunder as a result of a Change
in Control as hereinabove described, then with respect to such right or
payment the only events that would constitute a Change in Control for
purposes hereof shall be those events that would constitute a change in
the ownership or effective control of the corporation, or in the
ownership of a substantial portion of the assets of the corporation in
accordance with said section 409A.
23. Termination Following Change in Control. Except as otherwise
provided in Section 24 hereof, Parent will provide or cause to be provided to
Executive the rights and benefits described in Section 24 hereof in the event
that Executive's employment is terminated at any time within two years (or, if
Section 409A is applicable, and a lesser period is required thereunder, then
such lesser period) following a Change in Control (as such term is defined in
Section 22) under the circumstances stated in (a) or (b) below:
(a) by Parent or the Bank for reasons other than for Cause (as is
defined in Section 12 (g) hereof) or other than as consequence of
Executive's death, permanent disability or attainment of normal
retirement date; or
(b) by Executive following the occurrence of any of the following
events:
(i) the assignment of Executive to any duties or
responsibilities that are materially inconsistent with his
position, duties, responsibilities or status immediately
preceding such Change in Control, or a change in his reporting
responsibilities or titles in effect at such time resulting in
a reduction of his responsibilities or position;
(ii) the reduction of Executive's Base Salary or Target Bonus
(including any deferred portions thereof) or substantial
reduction in the Executive's level of benefits or supplemental
compensation;
(iii) the transfer of Executive to a location requiring a
change in residence or a material increase in the amount of
travel normally required of Executive in connection with his
employment; or
(iv) if after six months following the Change in Control, it
is the good faith determination by Executive that due to the
Change in Control (including any changes in circumstances at
Parent or Bank
14
that directly or indirectly affect the Executive's position,
duties, responsibilities or status immediately preceding such
Change in Control) he is no longer able effectively to
discharge his duties and responsibilities. Executive shall
then have sixty days to notify Parent or its successor in
writing of his termination.
24. Rights and Benefits Upon Termination upon Change in Control. In the
event of the termination of Executive's employment under any circumstance set
forth in Section 23 hereof ("Termination"), Parent agrees to provide or cause to
be provided to Executive the following rights and benefits:
(a) Salary and Other Payments at Termination. Executive shall be
entitled to receive payment in cash in the amount of three (3) times
Executive's Earnings (at such time as defined in this Section 24 (a)).
Payment shall be made in lump sum to the Executive within 30 days of
termination. For purposes of this Agreement, "Earnings" shall mean the
sum of (i) Executive's annual Base Salary as approved by the Parent
Board for the year in which the Change in Control occurs, plus (ii) the
Target Bonus Executive would have been entitled to receive for the
calendar year in which the Change in Control occurs as if the
performance targets had been achieved.
(b) Lapse of Restrictions on Benefits. Except to the extent expressly
prohibited by any applicable law or regulation or the terms of any
applicable benefit plans, any and all restrictions, vesting schedules
or schedule of exercise provided in any agreement with the Executive
shall immediately lapse and Executive shall be entitled immediately to
receive all benefits and exercise all rights previously granted him
thereunder. Notwithstanding any provision of this Agreement to the
contrary, the options granted under Section 15 hereof shall immediately
vest upon a Termination.
(c) Deferred Cash Payments. Any payments, of whatever nature, from
Parent or its subsidiaries to Executive, the receipt of which has been
deferred by means of a written instrument signed by Executive and the
payer, shall within 30 days of termination be paid in a lump sum to
Executive.
(d) Target Bonus. Notwithstanding any provision of any plan or
arrangement, any Target Bonus under Section 11 for a year prior to the
year of the Termination with respect to a Change in Control, which has
not been paid, shall be paid within 30 days of the Termination, and a
Target Bonus for the year of the Termination with respect to a Change
in Control shall be paid in an amount equal to 1/12th of the Target
Bonus for the prior year times each full month in the current year
prior to the month of the Executive's Termination.
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(e) Insurance and Other Special Benefits. For three (3) years following
an Executive's Termination, Executive shall continue to be covered by
the life insurance, medical insurance, dental insurance and accident
and disability insurance plans of Parent and its subsidiaries or any
successor plan or program in effect at or after Termination for
employees in the same class or category as was Executive prior to his
Termination. In the event, Executive is ineligible to continue to be so
covered under the terms of any such benefit program, or, in the event
the Executive is eligible but the benefits applicable to Executive
under any such plan or program after Termination are not substantially
equivalent to the benefits applicable to Executive immediately prior to
Termination, then, Parent shall for a period of three years following
his Termination date, pay, provide or cause to be provided, benefits,
or such additional benefits as may be necessary to make the benefits
applicable to the Executive substantially equivalent to those in effect
before termination, through other sources; provided however, that if
during such period Executive should enter into the employ of another
company or firm which provides substantially similar benefit coverage,
Executive's participation in the comparable benefit provided by Parent
either directly or through such other sources shall cease. Nothing
contained in this paragraph shall be deemed to require or permit
termination or restriction of any Executive's coverage under any plan
or program to Parent or any of its subsidiaries or any successor plan
or program thereto which Executive is entitled under the terms of such
plan or program.
(f) Ownership of Perquisites. The ownership of all club memberships,
automobiles, and other perquisites approved by the Parent Board for the
Executive prior to his Termination shall be transferred, fully paid and
free of charge, to him within 30 days of his Termination, provided that
Executive pays to the Parent an amount equal to any capital, bond or
other equity amount paid by Parent related to such membership.
(g) Other Benefit Plans. The specific arrangements referred to in this
Section 24 are not intended to exclude Executive's participation in
other benefit plans in which Executive currently participates or which
are or may become available to Executive, or to preclude other
compensation or benefits as may be authorized by the Parent Board from
time to time.
(h) No Duty to Mitigate. Executive's entitlement to benefits hereunder
shall not be governed by any duty to mitigate his damages by seeking
further employment nor offset by any compensation that he may receive
from future employment.
(i) Payment Obligation Absolute. Unless Section 25 is applicable,
Parent's obligation to pay or cause to be paid to Executive the
benefits and
16
to make arrangements provided in this Section 24 shall be absolute and
unconditional and shall not be affected by any circumstances,
including, without limitation, any offset, counterclaim, recoupment,
defense or other right, which Parent or Bank may have against him or
anyone else. All amounts payable by or on behalf of Parent under this
Section 24 shall, unless specifically stated to the contrary herein, be
paid without notice or demand. Each and every payment made under this
Section 24 by or on behalf of Parent shall be final and Parent or Bank
and their subsidiaries shall not, for any reason whatsoever, seek to
recover all or any part of such payment from Executive or from whoever
shall be entitled thereto.
(k) Gross-Up Payment.
(i) In the event it shall be finally determined, in a
proceeding that is non-appealable, that any payment, award,
benefit or distribution by the Parent (or any of its
affiliated entities) to or for the benefit of the Executive
(whether pursuant to the terms of this Agreement or otherwise,
but determined without regard to any additional payments
required under this Section 24(k) (a "Payment") is subject to
the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code") or any corresponding
provisions of state or local tax laws, or any interest or
penalties are incurred by the Executive with respect to such
excise tax (such excise tax, together with any such interest
and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an amount such
that after payment by the Executive of all taxes (including
any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes or employment
taxes (and any interest and penalties imposed with respect
thereto) and Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to
the Excise Tax imposed upon the Payments. As a result of the
uncertainty in the application of Section 4999 of the Code, it
is possible that Gross-Up Payments which will not have been
made by the Parent should have been made ("Underpayment"),
consistent with the calculations required to be made
hereunder. In the event that the Parent exhausts its remedies
pursuant to Section 24(k)(ii) and the Executive thereafter is
required to make a payment of any Excise Tax, any such
Underpayment shall be promptly paid by the Parent to or for
the benefit of the Executive.
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(ii)The Executive shall notify the Parent in writing of any
claim by the Internal Revenue Service that, if successful,
would require the payment by the Parent of the Gross-Up
Payment. Such notification shall be given as soon as
practicable but no later than ten (10) business days after the
Executive is informed in writing of such claim and shall
apprise the Parent of the nature of such claim and the date on
which such claim is requested to be paid. The Executive shall
not pay such claim prior to the expiration of the 30-day
period following the date on which it gives such notice to the
Parent (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the
Parent notifies the Executive in writing prior to the
expiration of such period that it desires to contest such
claim, the Executive shall:
(A) give the Parent any information
reasonably requested by the Parent relating to such
claim;
(B) take such action in connection with
contesting such claim as the Parent shall reasonably
request in writing from time to time, including,
without limitation, accepting legal representation
with respect to such claim by an attorney reasonably
selected by the Parent;
(C) cooperate with the Parent in good faith
in order effectively to contest such claim; and
(D) permit the Parent to participate in any
proceedings relating to such claim; provided,
however, that the Parent shall bear and pay directly
all costs and expenses (including additional interest
and penalties) incurred in connection with such
contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax
or income tax (including interest and penalties with
respect thereto) imposed as a result of such
representation and payment of costs and expenses.
Without limitation on the foregoing provisions of
this Section 2(b), the Parent shall control all
proceedings taken in connection with such contest
and, at its sole option, may pursue or forgo any and
all administrative appeals, proceedings, hearings and
conferences with the taxing authority in
18
respect of such claim and may, at its sole option,
either direct the Executive to pay the tax claimed
and xxx for a refund or contest the claim in any
permissible manner and the Executive agrees to
prosecute such contest to a determination before any
administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as
the Parent shall determine.
provided, however, that if the Parent directs the Executive to
pay such claim and xxx for a refund, the Parent shall advance
the amount of such payment to the Executive, on an
interest-free basis and shall indemnify and hold the Executive
harmless, on an after-tax basis, from any Excise Tax or income
tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any
imputed income with respect to such advance; provided,
further, that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount.
Furthermore, the Parent's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled
to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing
authority.
(iii) If, after the receipt by the Executive
of an amount advanced by the Parent pursuant to
Section 24(k)(ii), the Executive becomes entitled to
receive any refund with respect to such claim, the
Executive shall (subject to the Parent's complying
with the requirements of Section 24(k)(ii)) promptly
pay to the Parent the amount of such refund (together
with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by
the Executive of an amount advanced by the Parent
pursuant to Section 24(k)(ii), a determination is
made that the Executive shall not be entitled to any
refund with respect to such claim and the Parent does
not notify the Executive in writing of its intent to
contest such denial of refund prior to the expiration
of 30 days after such determination, then such
advance shall be forgiven and shall not be required
to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.
19
(l) Parent shall pay or reimburse Executive for all costs and expenses,
including, without limitation, court costs and attorneys' fees,
incurred by Executive as a result of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Parent of
the Gross-Up Payment, if Parent contest such claim as herein above
provided or otherwise fails to timely pay the Gross-Up Payment.
(m) If the Executive is terminated for Cause as defined in Section 1(g)
hereof, Parent shall have no obligation to provide or cause to be
provided to Executive the rights and benefits described in this Section
24.
25. Remedies. The Executive acknowledges that the Bank and the Parent
will have no adequate remedy at law if the Executive violates any of the terms
hereof, and the Bank and the Parent shall have the right, in addition to any
other rights the Bank and the Parent may have, to obtain, in any court of
competent jurisdiction, injunctive relief to restrain any breach or threatened
breach hereof or otherwise to specifically enforce any of the provisions hereof.
26. Compliance with Other Agreements. The Executive represents and
warrants to the Bank and the Parent that the execution and delivery by him of
this Agreement, and the performance by him of his obligations hereunder will
not, with or without the giving of notice or the passage of time, or both, (a)
violate any judgment, writ, injunction or order of any court, arbitrator or
governmental agency applicable to him, or (b) to the knowledge of the Executive,
conflict with, result in the breach or termination of, constitute a default
under, or require a material modification of, any agreement to which the
Executive is a party or by which the Executive is or may be bound.
27. Waiver. No waiver of any obligation of any party hereto under this
Agreement shall be effective unless in a writing specifying such waiver and
executed by the other party. No waiver of any right or remedy of any party
hereto under this Agreement shall be effective unless in a writing specifying
such waiver and executed by such party. A waiver by any party hereto of any of
its rights or remedies under this Agreement on any occasion shall not be a bar
to the exercise of the same right or remedy on any subsequent occasion or of any
other right or remedy at any time.
28. Binding Effect; Benefits. This Agreement shall inure to the benefit
of, and shall be binding upon, the parties hereto and their respective
successors, permitted assigns, heirs and legal representatives, including,
without limitation, any corporation with which the Bank or the Parent may merge
or consolidate; provided, however, that this Agreement, because it relates to
personal services, cannot be assigned by the Executive.
29. Attorneys' Fees and Costs. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party
20
shall be entitled to reasonable attorneys' fees, costs, and necessary
disbursements in addition to any other relief to which he or it may be entitled.
30. Notices. Any notice or other written communication, with respect to
the employment of the Executive by the Bank and the Parent, or any matter
related to the rights or obligations of any party under this Agreement, and to
be given to a party hereto, shall be given to such parry at the address for such
party provided herein, or such other address as such party shall hereafter
provide, in writing, to the other party.
To Executive: X.X. Xxx 000
Xxxxxxxxx, XX 00000
To Parent: 00 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, XX 00000
All such notices or communications shall be given by being personally delivered,
placed in the United States mail, postage prepaid, certified or registered mail,
or by being sent by prepaid air freight, overnight delivery, which is guaranteed
and acknowledgement of receipt of which is required, to the party to which such
notice or communication is to be given at the address for such party specified
above. Each such notice shall be deemed to be effective upon receipt, if
personally delivered, one business day after being so sent by air freight, or
five business days after being so mailed. For purposes of this Agreement, a
business day shall mean a day other than a Saturday, Sunday or federal or
Alabama state holiday.
31. Integration and Amendments. This Agreement constitutes the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersedes any prior agreement or understanding,
whether written or oral, relating to such subject matter. No modification or
amendment to this Agreement shall be effective or binding unless in writing,
specifying such modification or amendment, executed by all of the parties
hereto.
32. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect the construction or interpretation
of this Agreement.
33. Severability. Should any section, provision, or portion of this
Agreement be declared invalid or unenforceable in any jurisdiction, then such
section, provision or portion shall be deemed to be (a) severable from this
Agreement as to such jurisdiction (but not elsewhere) and shall not affect the
remainder hereof, and (b) amended to the extent, and only to the extant,
necessary to permit such section, provision or portion, as the case may be, to
be valid and enforceable in such jurisdiction (but not elsewhere).
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34. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall, when executed, be deemed to be an original,
but all of which together shall constitute one and the same instrument.
35. Governing Law. This Agreement is made and shall be construed under
the internal laws, but not the conflicts of law provisions, of the State of
Alabama.
36. Survival/Effectiveness of Certain Provisions. The rights and
obligations of the parties under Sections 17, 18, 19, 20, 22, 23, 24, 25 and 29
hereof shall survive the termination of the Employment Period and this
Agreement. The rights and obligation of the parties under Section 15 hereof
shall be effective immediately, notwithstanding the termination of the
Executive's employment for any reason other than as provided in said Section 15
hereof prior to the execution of an award agreement with respect to the options
under Section 15.
[Signatures Appear on Immediately Following Page]
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IN WITNESS WHEREOF the parties have executed this Agreement as of the
date first written above.
EXECUTIVE:
/s/ C. Xxxxxxx Xxxxxx
------------------------------------------
C. Xxxxxxx Xxxxxx
THE BANC CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxxxx
Chairman of the Compensation Committee
of the Board of Directors
BANK:
THE BANK
By: /s/ X. Xxxxxxx XxXxxxxx, Jr.
---------------------------------------
X. Xxxxxxx XxXxxxxx, Jr.
Executive Vice President and
General Counsel
23
