EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made by and among THE
BANC CORPORATION (the "Company"), and Xxxxx X. Xxxxxx, an individual resident
of Alabama (the "Executive") as of the 1st day of January, 2002.
1. Employment. The Company shall employ the Executive, and the
Executive shall continue to serve the Company, as Chairman of the Board and
Chief Executive Officer and as Chairman of the Board of The Bank, a wholly
owned subsidiary of the Company, and any other position agreed upon by the
parties, upon the terms and conditions set forth herein. The Executive shall
have such authority and responsibilities consistent with his position and which
may be set forth in the Company's bylaws or assigned by the Company's Board
from time to time. The Executive shall devote his business time, attention,
skill and efforts to the performance of his duties hereunder, except during
periods of illness or periods of vacation and leaves of absence consistent with
Company policy. The Executive may devote reasonable periods of time to serve as
a director or advisor to other organizations, to charitable and community
activities and to managing his personal investments, provided that such
activities do not materially interfere with the performance of his duties
hereunder and are not in conflict or competitive with, or adverse to, the
interests of the Company.
2. Term. Unless earlier terminated as provided herein, the
Executive's employment under this Agreement shall be for a continuing term (the
"Term") of five years which shall be extended automatically (without further
action of the Company or the Executive) each day for an additional day so that
the remaining term shall continue to be five years; provided that either party
may at any time, by written notice to the other, fix the Term to a finite term
of five years, without further automatic extension, commencing with the date of
such notice.
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3. Compensation and Benefits.
(a) Executive shall receive a base salary of $293,200
per annum. The base salary shall be paid according to Company policy. The
Company's Board (or its compensation committee) shall review the Executive's
salary at least annually and may increase the Executive's base salary if it
determines in its sole discretion that an increase is appropriate.
(b) The Executive shall participate in a management
incentive program and shall receive quarterly payments of fifteen percent (15%)
of his annual base salary then in effect. The first quarterly bonus payment
shall be due March 31, 2002 for the quarter then ended. In addition, the
Company's Board of Directors shall annually consider the Executive's
performance, and determine if any additional bonus is appropriate.
(c) The Executive shall be entitled to participate in
and be eligible for the grant of stock options, restricted stock and other
awards thereunder.
(d) The Executive shall participate in all retirement,
welfare, deferred compensation, life and health insurance and other benefit
plans or programs of the Company now or hereafter applicable to the Executive
or applicable generally to employees of the Company or to a class of employees
that includes senior executives of the Company upon reaching 64 years of age.
Prior to reaching age 64, the Executive may participate in all retirement,
welfare, deferred compensation, life and health insurance and other benefit
plans or programs of the Company now or hereafter applicable to the Executive
or applicable generally to employees of the Company or to a class of employees
that includes senior executives of the Company if Executive is not covered
under any similar plan or plans, the premium or provision of which are paid by
third parties. During any period during the Term that the Executive is subject
to a Disability, and during the 180 day period of physical or mental infirmity
leading up
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to the Executive's Disability, the amount of the Executive's compensation
provided under this Section 3 shall be reduced by the sum of the amounts, if
any, paid to the Executive for the same period under any disability benefit or
pension plan of the Company or any of its subsidiaries. The Company shall
maintain a "Key Man" life insurance policy in the face amount of $6,000,000 and
disability insurance with a benefit of up to a maximum of $25,000 per month,
assuming Executive qualifies for such an amount of disability insurance under
such benefit programs or plans. Executive shall be entitled to ownership of
one-half of this "Key Man" policy, including all rights and benefits related
thereto. Executive shall also be entitled to receive up to $10,000 per annum
for medical expenses not covered by insurance. Regardless of whether or not
Executive owns any portion of any insurance policy, the Company shall continue
to make 100% of all premium payments to keep these insurance policies in force.
(e) The Company shall provide to the Executive an
automobile owned or leased by the Company of a make and model appropriate to
the Executive's status or, in lieu thereof, shall provide the Executive with an
annual allowance of not less than $15,000 to partially cover the cost of the
business use of an automobile owned or leased by the Executive.
(f) The Company shall reimburse the Executive's
reasonable expenses for initiation fees, dues and capital assessments for
athletic, country and dining club memberships currently held by the Executive;
provided that if the Executive during the term of his employment with the
Company ceases his membership in any such clubs and any bonds or other capital
payments made by the Company are repaid to the Executive, the Executive shall
pay over such payments to the Company.
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(g) The Company shall reimburse the Executive for
travel, seminar and other expenses related to the Executive's duties which are
incurred and accounted for in accordance with the historic practices of the
Company.
(h) Executive shall be entitled to four weeks of paid
vacation per year.
(i) The Company shall lease to the Executive Xxxx 00 of
The Bank Condominiums (the "Condominium") located on the nineteenth floor of
the Xxxx X. Hand Building as a residence and the Company shall pay the rental
payments for such Condominium as determined by independent appraisals of the
fair market rental value and the expenses associated with the Executive's
relocation to such residence. In addition, the Company hereby grants to the
Executive the exclusive option to purchase the Condominium at fair market value
at such time that the purchase would not cause a recapture of any historical
tax credits by the Company.
4. Termination.
(a) The Executive's employment under this Agreement may
be terminated prior to the end of the Term only as follows:
(i) upon the death of the Executive;
(ii) by the Company due to the Disability of the
Executive upon delivery of a Notice of Termination to the Executive;
(iii) by the Company for Cause upon delivery of a
Notice of Termination to the Executive; and
(iv) by the Executive for Good Reason upon
delivery of a Notice of Termination to the Company after any occurrence of a
Change in Control or in the event of a Constructive Termination.
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(d) If the Executive's employment with the Company shall
be terminated during the Term (i) by reason of the Executive's death, or (ii)
by the Company for Disability or Cause, the Company shall pay to the Executive
(or in the case of his death, the Executive's estate) within fifteen days after
the Termination Date a lump sum cash payment equal to the Accrued Compensation
and, if such termination is other than by the Company for Cause, the Pro Rata
Bonus.
(e) If the Executive's employment with the Company shall
be terminated by the Company in violation of this Agreement, by the Executive
for Good Reason or in the event of a Constructive Termination, in addition to
other rights and remedies available in law or equity, the Executive shall be
entitled to the following:
(i) The Company shall pay the Executive in cash
within fifteen days of the Termination Date an amount equal to all Accrued
Compensation and the Pro Rata Bonus;
(ii) The Company shall pay to the Executive in
cash at the end of each of the sixty consecutive thirty day periods following
the Termination Date an amount equal to one-twelfth of the sum of the Base
Amount (including any increases in base salary called for by Section 3(a) of
this Agreement) plus the Bonus Amount (including any increases in bonus amount
called for by Section 3(b) of this Agreement) plus all benefits provided in
Section 3 and all Director's fees, including retainers, to which the Executive
would be entitled for the same period, or within 30 days, at the Executive's
option, a lump sum equal to the present value of the payments due under this
paragraph (c)(ii); provided, however, that such lump sum amount shall be
reduced to its net present value assuming an interest rate equal to six percent
(6%) and 60 equal monthly payments commencing on the Termination Date;
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(iii) For the period from the Termination Date
through the date that Executive attains the age of 75 (the "Continuation
Period"), the Company shall at its expense continue on behalf of the Executive
and his dependents and beneficiaries the life insurance, disability, medical,
dental and hospitalization benefits provided (x) to the Executive at any time
during the 90-day period prior to the Change in Control or at any time
thereafter or (y) to other similarly situated executives who continue in the
employ of the Company during the Continuation Period. The coverage and benefits
(including deductibles and costs) provided in this Section 4(c)(iii) during the
Continuation Period shall be no less favorable to the Executive and his
dependents and beneficiaries than the most favorable of such coverages and
benefits during any of the periods referred to in clauses (x) and (y) above.
The Company's obligation hereunder with respect to the foregoing benefits shall
be limited to the extent that the Executive obtains any such benefits pursuant
to a subsequent employer's benefit plans, in which case the Company may reduce
the coverage of any benefits it is required to provide the Executive hereunder
as long as the aggregate coverages and benefits of the combined benefit plans
are no less favorable to the Executive than the coverages and benefits required
to be provided hereunder. Further, all benefits under this subsection (iii)
(other than health insurance and other medical, dental and hospitalization
benefits which shall continue for the entire Continuation Period) shall not be
continued longer than five years after the Termination Date, even if the
Executive has not obtained such other benefits under another employer's benefit
plan. This subsection (iii) shall not be interpreted so as to limit any
benefits to which the Executive or his dependents or beneficiaries may be
entitled under any of the Company's employee benefit plans, programs or
practices following the Executive's termination of employment, including
without limitation, retiree medical and life insurance benefits; and
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(iv) The restrictions on any outstanding
incentive awards (including stock options and restricted stock awards) granted
to the Executive under any Company's stock option plan or under any other
incentive plan or arrangement shall lapse and such incentive award shall become
100% vested, all stock options and stock appreciation rights granted to the
Executive shall be immediately exercisable and shall be 100% vested. The period
in which Executive may exercise any option granted shall be the full term of
such option.
(v) The Company shall, at its expense, for a
period of five years continue to maintain on behalf of the Executive the "Key
Man" life insurance and shall immediately convey, assign and transfer all of
its interest in the policy to the Executive on a tax neutral basis.
(vi) The Company shall continue to lease to the
Executive the Condominium and the Company shall pay the rental payments as
provided by Section 3(i) of the Agreement for five years from the Termination
Date. Nothing in the preceding sentence shall effect Executive's exclusive
option to purchase the Condominium at fair market value as provided in Section
3(i).
(vii) Executive shall be 100% vested in all
deferred compensation arrangements provided by the Corporation or any of its
subsidiaries through his role as a director, officer or any other capacity.
(f) The Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other
employment or otherwise, and no such payment shall be offset or reduced by the
amount of any compensation or benefits provided to the Executive in any
subsequent employment except as provided in Section 4(c)(iii).
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(g) In the event that any payment or benefit (within the
meaning of Section 280 G of the Internal Revenue Code of 1986, as amended (the
"Code")) to the Executive (or for his benefit) paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise in
connection with, or arising out of, his relationship with the Company or a
change in ownership or effective control of the Company or of a substantial
portion of its assets (a "Payment" or "Payments"), would be subject to the
excise tax imposed by Section 4999 of the Code, or any interest or penalties
are incurred by the Executive with respect to any such excise or other taxes
(such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax" and any other tax
together with any such interest and penalties are herein referred to as "Other
Taxes"), then the Executive will 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, other than interest and
penalties imposed by reason of the Executive's failure to file timely a tax
return or pay taxes shown due on his return, imposed with respect to such Other
Tax and the Excise Tax), including any Excise Tax or Other Tax imposed upon the
Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal
to the Excise Tax or Other Taxes imposed upon the Payments.
(h) The severance pay and benefits provided for in this
Section 4 shall be in lieu of any other severance or termination pay to which
the Executive may be entitled under any Company severance or termination plan,
program, practice or arrangement. The Executive's entitlement to any other
compensation or benefits shall be determined in accordance with the Company's
employee benefit plans and other applicable programs, policies and practices
then in effect.
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5. Trade Secrets. The Executive shall not, at any time, either
during the Term of his employment or after the Termination Date, if such
Termination is for cause, use or disclose any Trade Secrets of the Company,
except in fulfillment of his duties as the Executive during his employment, for
so long as the pertinent information or data remain Trade Secrets, whether or
not the Trade Secrets are in written or tangible form.
6. Successors; Binding Agreement.
(a) This Agreement shall be binding upon and shall inure
to the benefit of the Company, its Successors and Assigns and the Company shall
require any Successors and Assigns to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession or assignment had taken place.
(b) Neither this Agreement nor any right or interest
hereunder shall be assignable or transferable by the Executive, his
beneficiaries or legal representatives, except by will or by the laws of
descent and distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal personal representative.
7. Fees and Expenses. The Company shall pay all legal fees and
related expenses (including but not limited to the costs of experts,
accountants and counsel) incurred by the Executive as they become due as a
result of (a) the Executive's termination of employment (including all such
fees and expenses, if any, incurred in contesting or disputing any such
termination of employment) and (b) the Executive seeking to obtain or enforce
any right or benefit provided by this Agreement; provided, however, that the
circumstances set forth in clauses (a) and (b) occurred on or after a Change in
Control.
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8. Notice. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses last given by each party
to the other, provided that all notices to the Company shall be directed to the
attention of the Board of Directors with a copy to the Secretary of the
Company. All notices and communications shall be deemed to have been received
on the date of delivery thereof.
9. Settlement of Claims. The Company's obligation to make the
payments provided for in this Agreement and to otherwise perform its
obligations hereunder shall not be affected by any circumstances, including,
without limitation, any set-off, counterclaim, recoupment, defense or other
right which the Company may have against the Executive or others. The Company
may, however, withhold from any benefits payable under this Agreement all
federal, state, city or other taxes as shall be required pursuant to any law or
governmental regulation or ruling,
10. Modification and Waiver. No provisions of this Agreement may
be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing and signed by the Executive and the Company. No waiver
by any party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
11. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Alabama
without giving effect to the conflict of laws principles thereof. Any action
brought by any party to this Agreement shall be brought and maintained in a
court of competent jurisdiction in the State of Alabama.
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12. Severability. The provisions of this Agreement shall be
deemed severable, and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.
13. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof.
14. Headings. The headings of Sections herein are included solely
for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
16. Demand Registration Rights.
(a) Subject to the provisions of this Section 16(a),
upon the Executive's termination of employment, for any reason, the Executive
may request registration for sale under the Act of all or part of the Common
Stock then held by him (excluding, for purposes of this Section 16(a), shares
subject to the stock options held by the Executive as to which the vesting
provisions shall not have lapsed). Any such request shall specify the number of
shares proposed to be registered and sold and the name of the managing
underwriter of the proposed offering (who must be acceptable to the Company in
its reasonable discretion).
(b) Exceptions. The Company shall not be required to
effect a demand registration under the Act pursuant to Section 16(a) above if
(i) the aggregate market value of the shares of Common Stock proposed to be
registered does not equal or exceed $1,000,000; (ii)
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within twelve months prior to any such request for registration, a registration
of securities of the Company has been effected in which the Executive had the
right to participate pursuant to this Section 16 or Section 17 hereof; (iii)
the Company receives such request for registration within 180 days preceding
the anticipated effective date of a proposed underwritten public offering of
securities of the Company approved by the Company's Board of Directors prior to
the Company's receipt of such request; or (iv) the Board of Directors of the
Company reasonably determines in good faith that effecting such a demand
registration at such time would have a material adverse effect upon a proposed
sale of all (or substantially all) of the assets of the Company, or a merger,
reorganization, recapitalization or similar transaction materially affecting
the capital structure or equity ownership of the Company which is actively
being negotiated with another party whose identity is disclosed to the
Executive; provided, however, that the Company may only delay a demand
registration pursuant to this Section 16(b)(iv) for a period not exceeding 6
months (or until such earlier time as such transaction is consummated or no
longer proposed). The Company shall promptly notify the Executive in writing of
any decision not to effect any such request for registration pursuant to this
Section 16(b), which notice shall set forth in detail the reason for such
decision and shall include an undertaking by the Company to promptly notify the
Executive as soon as a demand registration may be effected.
(c) Reduction. If the managing underwriters advise the
Company and the Executive participating in the demand registration in writing
that in their opinion the number of shares of Common Stock held by the
Executive which they requested to be included in such registration exceeds the
number which can be sold in such offering, then the amount of such shares that
may be included in such registration shall be reduced to the number of shares
that the managing underwriters determine is marketable.
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(d) Withdrawal. The Executive may withdraw at any time
before a registration statement filed pursuant to this section is declared
effective, in which event the Company may withdraw such registration statement.
If the Company withdraws a registration statement under this Section 16(d) in
respect of a registration for which the Company would otherwise be required to
pay some expenses under Section 18(c), (d) and (e) hereof, then the Executive
shall be liable to the Company for all expenses of such registration specified
in Section 18(c), (d) and (e) hereof.
17. Piggyback Registration Rights.
(a) Rights. Subject to the provisions of this Section
17, if the Company proposes to make a registered public offering of any of its
securities under the Act (whether to be sold by it or by one or more third
parties), other than an offering pursuant to a demand registration under
Section 16 hereof or an offering registered on Form X-0, Xxxx X-0 or comparable
forms, the Company shall, not less than 45 days prior to the proposed filing
date of the registration form, give written notice of the proposed registration
to the Executive, and at the written request of the Executive delivered to the
Company within 15 days after the receipt of such notice, shall include in such
registration and offering, and in any underwriting of such offering, all shares
of Common Stock as may have been designated in the Executive's request.
(b) Primary Offering Reduction. If a registration in
which the Executive has the right to participate pursuant to this Section 17 is
an underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering, the Company shall include in such
registration (i)
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first, the securities of the Company proposed to be sold, and (ii) second, the
Common Stock owned by the Executive.
(c) Secondary Offering Reduction. If a registration in
which the Executive has the right to participate pursuant to this Section 17 is
an underwritten secondary registration, and the managing underwriters advise
the Company in writing that in their opinion the number of shares requested to
be included in such registration exceeds the number of shares which can be sold
in such offering, then the Company shall include in such offering the number of
shares of Common Stock owned and proposed to be sold by the Company and by any
other participants (including Executive) proposing (and entitled) to sell
shares pursuant to such registration which the underwriters advise the Company
can be sold in the offering, in proportion to the number of shares of Common
Stock so requested by each of them to be included.
18. Other Registration Issues.
(a) The Company shall have no obligation to file a
registration statement pursuant to Section 16 hereof, or to include shares of
Common Stock owned by the Executive in a registration statement pursuant to
Section 17 hereof, unless and until the Executive has furnished the Company
with all information and statements about or pertaining to the Executive in
such reasonable detail as is reasonably deemed by the Company to be necessary
or appropriate with respect to the preparation of the registration statement.
Whenever any Executive has requested that any shares of Common Stock be
registered pursuant to Sections 16 or 17 hereof, subject to the provisions of
those Sections, the Company shall, as expeditiously as reasonably possible:
(i) prepare and file with the SEC a
registration statement with respect to such shares and use its best efforts to
cause such registration statement to become effective as
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soon as reasonably practicable thereafter (provided that before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company shall furnish counsel for the Executive with copies of all such
documents proposed to be filed);
(ii) prepare and file with the SEC such
amendments and supplements to such registration statement and prospectus used
in connection therewith as may be necessary to keep such registration statement
effective for a period of not less than nine months or until the underwriters
have completed the distribution described in such registration statement,
whichever occurs first;
(iii) furnish to the Executive such number of
copies of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus), and such other documents as the Executive may
reasonably request;
(iv) use its best efforts to register or qualify
such shares under such other securities or Blue Sky Laws of such jurisdictions
as the Executive reasonably requests (and to maintain such registrations and
qualifications effective for a period of nine months or until the underwriters
have completed the distribution of such shares, whichever occurs first), and to
do any and all other acts and things which may be necessary or advisable to
enable the Executive or underwriters to consummate the disposition in such
jurisdictions of such shares; provided, however, that the Company will not be
required to (a) qualify generally to do business in any jurisdiction where it
would not be required but for this Section 18(a)(iv), or (b) subject itself to
taxation in any such jurisdiction; provided, further, that, notwithstanding
anything to the contrary in this Agreement with respect to the bearing of
expenses, if any such jurisdiction shall require that expenses incurred in
connection with the qualification of such shares in that jurisdiction be
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borne in part or full by the Executive, then the Executive shall pay such
expenses to the extent required by such jurisdiction;
(v) cause all such shares to be listed on
securities exchanges, if any, on which similar securities issued by the Company
are then listed;
(vi) provide a transfer agent and registrar for
all such shares not later than the effective date of such registration
statements;
(vii) enter into such customary agreements
(including an underwriting agreement in customary form) and take all such other
actions as the Executive and underwriters reasonably request (and subject to
approval by the Company's counsel) in order to expedite or facilitate the
disposition of such shares; and
(viii) make available for inspection by the
Executive, by any underwriter participating in any distribution pursuant to
such registration statement, and by any attorney, accountant or other agent
retained by the Executive or underwriter, or by any such underwriter, all
financial and other records, pertinent corporate documents, and properties
(other than confidential intellectual property) of the Company; provided,
however, that the Company can condition delivery of any information, records or
corporate documents upon the receipt from the Executive and the underwriter and
their counsel, accountants, advisors and agents, of a confidentiality agreement
in form and substance acceptable to the Company and its counsel in the exercise
of their exclusive discretion,
(b) Holdback Agreement. In the event that the Company
effects an underwritten public offering of any of the Company's equity
securities, the Executive agrees, if requested by the managing underwriters,
not to effect any sale or distribution, including any sale pursuant to Rule 144
under the Act, of any equity securities (except as part of such underwritten
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offering) during the 180-day period commencing with the effective date of the
registration statement for such offering.
(c) Stockholder Expenses. If, pursuant to Section 16 or
17 hereof, shares of Common Stock owned by the Executive are included in a
registration statement, then the Executive shall pay all transfer taxes, if
any, relating to the sale of his shares, the fees and expenses of his own
counsel, and his pro rata portion of any underwriting discounts, fees or
commissions or the equivalent thereof.
(d) The Company's Expenses. Except for the fees and
expenses specified in Section 18(c) hereof and except as provided in this
Section 18(d), the Company shall pay all expenses incident to the registration
and to the Company's performance of or compliance with this Agreement,
including, without limitation, all registration and filing fees, fees and
expenses of compliance with securities or Blue Sky Laws, underwriting
discounts, fees and commissions (other than the Executive's pro rata portion of
any underwriting discounts or commissions or the equivalent thereof), printing
expenses, messenger and delivery expenses, and fees and expenses of counsel for
the Company and all independent certified public accountants and other persons
retained by the Company. If the Company shall previously have paid, pursuant to
this Section 18(d), the expenses of a registration, then the Executive shall
pay all expenses described in this Section 18(d) (but not expenses described in
Section 18(e) hereof).
(e) Other. With respect to any registration pursuant to
Section 16 or 17 hereof, the Company shall pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties) and the expenses and fees for
listing the securities to be registered on exchanges on which similar
securities issued by the Company are then listed.
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(f) Indemnity. In the event that any shares of Common
Stock owned by the Executive are offered or sold by means of a registration
statement pursuant to Section 16 or 17 hereof, the Company agrees to indemnify
and hold harmless the Executive and each person, if any, who controls or may
control the Executive within the meaning of the Act (the Executive and any such
other persons being hereinafter referred to individually as an "Indemnified
Person" and collectively as "Indemnified Persons") from and against all
demands, claims, actions or causes of action, assessments, losses, damages,
liabilities, costs and expenses, including, without limitation, interest,
penalties and reasonable attorneys fees and disbursements, asserted against,
resulting to, imposed upon or incurred by such Indemnified Person, jointly or
severally, directly or indirectly (hereinafter referred to in this Section
18(f) in the singular as a "claim" and in the plural as "claims"), based upon,
arising out of or resulting from any untrue statement or alleged untrue
statement of a material fact contained in the registration statement, any
preliminary or final prospectus contained therein, or any amendment or
supplement thereto, or any document incident to registration or qualification
of any such shares, or any omission or alleged omission to state therein a
material fact necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading, or any violation by
the Company of the Act of any state securities or Blue Sky Laws, except insofar
as such claim is based upon, arises out of or results from information
developed or certified by the Executive for use in connection with the
registration statement or arises out of or results from the omission of
information and known to the Executive prior to the violation or alleged
violation, provided, that the maximum amount of liability in respect of such
indemnification shall be limited, in the case of the Company or the Executive,
respectively, to an amount equal to the net proceeds actually received by the
Company or the Executive, respectively, from the sale of such shares effected
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pursuant to such registration. The Executive agrees to indemnify and hold
harmless the Company, its officers and directors, and each person, if any, who
controls or may control the Company within the meaning of the Act (the Company,
its officers and directors, and any such persons also being hereinafter
referred to individually in this context as an "Indemnified Person" and
collectively as "Indemnified Persons") from and against all claims based upon,
arising out of, or resulting from any untrue statement of a material fact
contained in the registration statement, or any omission to state therein a
material fact necessary in order to make the statement made therein, in the
light of the circumstances under which they were made, not misleading, to the
extent that such claim is based upon, arises out of, or results from
information developed or certified by the Executive for use in connection with
the registration statement or arises out of, or results from an omission of
information known to the Executive prior to the violation or alleged violation.
The indemnifications set forth herein shall be in addition to any liability the
Company or the Executive may otherwise have to the Indemnified Persons.
Promptly after actually receiving definitive notice of any claim in respect of
which an Indemnified Person may seek indemnification under this Section 18(f),
such Indemnified Person shall submit written notice thereof to either the
Company or the Executive, as the case may be (sometimes being hereinafter
referred to as an "Indemnifying Person"). The omission of the Indemnified
Person to so notify the Indemnifying Person of any such claim shall not relieve
the Indemnifying Person from any liability it may have hereunder except to the
extent that (a) such liability was caused or increased by such omission, or (b)
the ability of the Indemnifying Person to reduce such liability was materially
adversely affected by such omission. In addition, the omission of the
Indemnified Person to notify the Indemnifying Person of any such claim shall
not relieve the Indemnifying Person from any liability it may have otherwise
than hereunder.
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The Indemnifying Person shall have the right to undertake, by counsel or
representatives of its own choosing, the defense, compromise or settlement
(without admitting liability of the Indemnified Person) of any such claim
asserted, such defense, compromise or settlement to be undertaken at the
expense and risk of the Indemnifying Person, and the Indemnified Person shall
have the right to engage separate counsel, at its own expense, whom counsel for
the Indemnifying Person shall keep informed and consult with in a reasonable
manner. In the event the Indemnifying Person shall elect not to undertake such
defense by its own representatives, the Indemnifying Person shall give prompt
written notice of such election to the Indemnified Person, and the Indemnified
Person shall undertake the defense, compromise or settlement (without admitting
liability of the Indemnified Person) thereof on behalf of and for the account
and risk of the Indemnifying Person by counsel or other representatives
designed by the Indemnified Person. In the event that any claim shall arise out
of a transaction or cover any period or periods wherein the Company and the
Executive shall each be liable hereunder for part of the liability or
obligation arising therefrom, then the parties shall, each choosing its own
counsel and bearing its own expenses, defend such claim, and no settlement or
compromise of such claim may be made without the joint consent or approval of
the Company and the Executive. Notwithstanding the foregoing, no Indemnifying
Person shall be obligated hereunder with respect to amounts paid in settlement
or any claim if such settlement is effected without the consent of such
Indemnifying Person (which consent shall not be unreasonably withheld).
19. Definitions. For purposes of this Agreement, the following
terms shall have the following meanings:
(a) "Accrued Compensation" shall mean an amount which
shall include all amounts earned or accrued through the Termination Date but
not paid as of the Termination Date
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including without limitation, (i) base salary, (ii) reimbursement for
reasonable and necessary expenses incurred by the Executive on behalf of the
Company during the period ending on the Termination Date, and (iii) bonuses and
incentive compensation, including stock options, (other than the Pro Rata
Bonus).
(b) "Act" shall mean the Securities Act of 1933, as
amended.
(c) "Base Amount" shall mean the greater of the
Executive's annual base salary (i) at the rate in effect on the Termination
Date or (ii) at the highest rate in effect at any time during the ninety day
period prior to the Change in Control, and shall include all amounts of his
base salary that are deferred under the qualified and non-qualified employee
benefit plans of the Company or any other agreement or arrangement,
(d) "Bonus Amount" shall mean the greater of (i) the
most recent annual bonus paid or payable to the Executive, or, if greater, the
annual bonus paid or payable for the year ended prior to the fiscal year during
which a Change in Control occurred, (ii) the average of the annual bonuses paid
or payable during the three full fiscal years ended prior to the Termination
Date or, if greater, the three full fiscal years ended prior to the Change in
Control (or, in each case, such lesser period for which annual bonuses were
paid or payable to the Executive), or (iii) the bonuses scheduled to be paid
quarterly during the applicable year during the Term under Section 3(a).
(e) The termination of the Executive's employment shall
be for "Cause" if it is a result of:
(i) any act that (A) constitutes, on the part
of the Executive, fraud, dishonesty gross or malfeasance of duty and (B) is
demonstrably likely to lead to material injury
21
to the Company or resulted or was intended to result in direct or indirect gain
to or personal enrichment of the Executive; or
(ii) the conviction (from which no appeal may be
or is timely taken) of the Executive of a felony; 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
clause (i) above, such conduct shall not constitute Cause:
(x) unless (A) there shall have been delivered
to the Executive a written notice setting forth with specificity the reasons
that the Board believes the Executive's conduct constitutes the criteria set
forth in clause (i), (B) the Executive shall have been provided the opportunity
to be heard in person by the 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 two-thirds of
the members of the Board (other than the Executive); or
(y) if such conduct (A) was believed by the
Executive in good faith to have been in or not opposed to the interests of the
Company, and (B) was not intended to and did not result in the direct or
indirect gain to or personal enrichment of the Executive.
(f) A "Change in Control" shall mean the occurrence
during the Term of any of the following events:
(i) An acquisition (other than directly from
the Company) of any voting securities of the Company (the "Voting Securities")
by any "Person" (as the term person is used for purposes of Section 13(d) or
14(d) of the Securities Exchange Act of 1934 (the "1934
22
Act")) immediately after which such Person has "Beneficial Ownership" (within
the meaning of Rule 13d-3 promulgated under the 0000 Xxx) of 20% or more of the
combined voting power of the Company's then outstanding Voting Securities;
provided, however, that in determining whether a Change in Control has
occurred, Voting Securities which are acquired in a "Non-Control Acquisition"
(as hereinafter defined) shall not constitute an acquisition which would cause
a Change in Control. A "Non-Control Acquisition" shall mean an acquisition by
(1) an employee benefit plan (or a trust forming a part thereof) maintained by
(x) the Company or (y) any corporation or other Person of which a majority of
its voting power or its equity securities or equity interest is owned directly
or indirectly by the Company (a "Subsidiary"), (2) the Company or any
Subsidiary, or (3) any Person in connection with a "Non-Control Transaction"
(as hereinafter defined).
(ii) The individuals who, as of the date of this
Agreement, are members of the Board (the "Incumbent Board") cease for any
reason to constitute at least two-thirds of the Board; provided, however, that
if the election, or nomination for election by the Company's stockholders, of
any new director was approved by a vote of at least two-thirds of the Incumbent
Board, such new director shall, for purposes of this Agreement, be considered
as a member of the Incumbent Board; provided, further, however, that no
individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11 promulgated under
the 0000 Xxx) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board (a "Proxy Contest") including
by reason of any agreement intended to avoid or settle any Election Contest or
Proxy Contest; or
(iii) Approval by stockholders of the Company of:
23
(A) A merger, consolidation or
reorganization involving the Company, unless
(1) the stockholders of the
Company, immediately before such merger, consolidation or reorganization, own,
directly or indirectly, immediately following such merger, consolidation or
reorganization, at least two-thirds of the combined voting power of the
outstanding voting securities of the corporation resulting from such merger or
consolidation or reorganization (the "Surviving Corporation") in substantially
the same proportion as their ownership of the Voting Securities immediately
before such merger, consolidation or reorganization, and
(2) the individuals who were
members of the Incumbent Board immediately prior to the execution of the
agreement providing for such merger, consolidation or reorganization constitute
at least two-thirds of the members of the board of directors of the Surviving
Corporation.
(A transaction described in clauses (1) and (2) shall herein be referred to as
a "Non-Control Transaction.")
(B) A complete liquidation or
dissolution of the Company; or
(C) An agreement for the sale or other
disposition of all or substantially all of the assets of the Company to any
Person (other than a transfer to a Subsidiary).
(iv) Notwithstanding anything contained in this
Agreement to the contrary, if the Executive's employment is terminated prior to
a Change in Control and the Executive reasonably demonstrates that such
termination (A) was at the request of a third party who has indicated an
intention or taken steps reasonably calculated to effect a Change in Control
24
and who effectuates a Change in Control (a "Third Party") or (B) otherwise
occurred in connection with, or in anticipation of, a Change in Control which
actually occurs, then for all purposes of this Agreement, the date of a Change
in Control with respect to the Executive shall mean the date immediately prior
to the date of such termination of the Executive's employment.
(g) "Constructive Termination" shall mean Executive's
voluntary Termination of Service within ninety (90) days following the
occurrence of one or more of the following events, except if such event is
approved in writing by Executive prior to its occurrence:
(i) A material breach of this Agreement by the
Company that is not remedied within thirty (30) business days after receiving
written notification by Executive of such failure; or
(ii) A material reduction in Executive's title
or responsibilities unless replaced with a new title or new responsibilities of
comparable stature or value to the Company within thirty (30) business days.
(h) "Continuation Period" shall have the meaning
ascribed to it in Section 4(c)(iii).
(i) "Disability" shall mean a physical or mental
infirmity which impairs the Executive's ability to substantially perform his
duties with the Company for a period of 180 consecutive days, as determined by
an independent physician selected with the approval of both the Company and the
Executive.
(j) "Effective Date" shall mean
(k) "Good Reason" shall mean the occurrence after a
Change in Control of any of the events or conditions described in subsections
(i) through (viii) hereof:
25
(i) a change in the Executive's status, title,
position or responsibilities (including reporting responsibilities) which, in
the Executive's reasonable judgment, represents an adverse change from his
status, title, position or responsibilities as in effect at any time within
ninety days preceding the date of a Change in Control or at any time
thereafter; the assignment to the Executive of any duties or responsibilities
which, in the Executive's reasonable judgment, are inconsistent with his
status, title, position or responsibilities as in effect at any time within
ninety days preceding the date of a Change in Control or at any time
thereafter; any removal of the Executive from or failure to reappoint or
reelect him to any of such offices or positions, except in connection with the
termination of his employment for Disability, Cause, as a result of his death
or by the Executive other than for Good Reason, or any other change in
condition or circumstances that in the Executive's reasonable judgment makes it
materially more difficult for the Executive to carry out the duties and
responsibilities of his office than existed at any time within ninety days
preceding the date of Change in Control or at any time thereafter;
(ii) a reduction in the Executive's base salary
or any failure to pay the Executive any compensation or benefits to which he is
entitled within five days of the date due;
(iii) the Company's requiring the Executive to be
based at any place outside a 30-mile radius from the executive offices occupied
by the Executive immediately prior to the Change in Control, except for
reasonably required travel on the Company's business which is not materially
greater than such travel requirements prior to the Change in Control;
(iv) the failure by the Company to (A) continue
in effect (without reduction in benefit level and/or reward opportunities) any
material compensation or employee benefit plan in which the Executive was
participating at any time within ninety days preceding the date of a Change in
Control or at any time thereafter, unless such plan is replaced with a plan
26
that provides substantially equivalent compensation or benefits to the
Executive or (B) provide the Executive with compensation and benefits, in the
aggregate, at least equal (in terms of benefit levels and/or reward
opportunities) to those provided for under each other employee benefit plan,
program and practice in which the Executive was participating at any time
within ninety days preceding the date of a Change in Control or at any time
thereafter;
(v) the insolvency or the filing (by any party,
including the Company) of a petition for bankruptcy of the Company, which
petition is not dismissed within sixty days;
(vi) any material breach by the Company of any
provision of this Agreement;
(vii) any purported termination of the
Executive's employment for Cause by the Company which does not comply with the
terms of this Agreement; or
(viii) the failure of the Company to obtain an
agreement, satisfactory to the Executive, from any Successors and Assigns to
assume and agree to perform this Agreement, as contemplated in Section 6
hereof.
Any event or condition described in clause (i) through (viii) above
which occurs prior to a Change in Control but which the Executive reasonably
demonstrates (A) was at the request of a Third Party, or (B) otherwise arose in
connection with, or in anticipation of, a Change in Control which actually
occurs, shall constitute Good Reason for purposes of this Agreement,
notwithstanding that it occurred prior to the Change in Control. The
Executive's right to terminate his employment for Good Reason shall not be
affected by his incapacity due to physical or mental illness.
(l) "Notice of Termination" shall mean a written notice
of termination from the Company or the Executive which specifies an effective
date of termination, indicates the specific
27
termination provision in this Agreement relied upon, and sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision of indicated.
(m) "Incentive Stock Option Plan" shall mean any
incentive Stock Option Plan adopted by the Company's Board of Directors.
(n) "Pro Rata Bonus" shall mean an amount equal to the
Bonus Amount multiplied by a fraction the numerator of which is the number of
days in the applicable year through the Termination Date and the denominator of
which is 365.
(o) "Successors and Assigns" shall mean a corporation or
other entity acquiring all or substantially all the assets and business of the
Company (including this Agreement), whether by operation of law or otherwise.
(p) "Termination Date" shall mean, in the case of the
Executive's death, his date of death, and in all other cases, the date
specified in the Notice of Termination.
(q) "Trade Secrets" shall mean any information,
including but not limited to technical or non-technical data, a formula, a
pattern, a compilation, a program, a device, a method, a technique, a drawing,
a process, financial data, financial plans, product plans, information on
customers, or a list of actual or potential customers or suppliers, which: (i)
derives economic value, actual or potential, from not being generally known to,
and not being readily ascertainable by proper means by, other persons who can
obtain economic value from its disclosure or use, and (ii) is the subject of
efforts that are reasonable under the circumstances to maintain its secrecy.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and its seal to be affixed hereunto by its officers thereunto duly
authorized, and the Executive has signed and sealed this Agreement, effective
as of the date first above written.
THE BANC CORPORATION
By:
---------------------------------------
Its:
--------------------------------------
ATTEST:
----------------------------------
X. Xxxxxxx XxXxxxxx, Jr.
Corporation Secretary
(CORPORATE SEAL)
EXECUTIVE:
(L.S.)
------------------------------------
Xxxxx X. Xxxxxx
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