EXHIBIT 10.5
SEVERANCE, EMPLOYMENT AND RETENTION AGREEMENTS
Exhibit 10.5 includes the severance, employment and retention
agreements for executive officers.
The following new employment contract for Xxxxx X. Xxxxxxxxxx, Chairman,
President and Chief Executive Officer of Star Banc Corporation and
Star Bank, N.A. was agreed to in 1996.
EMPLOYMENT AGREEMENT
AGREEMENT by and between Star Banc Corporation, an Ohio corporation
(the "Company") and Xxxxx X. Xxxxxxxxxx (the "Executive"), dated as of the
12th day of May, 1996.
1. Certain Definitions. The "Effective Date" shall mean the first date after
the date hereof on which a Change of Control (as defined in Section 2)
occurs. Anything in this Agreement to the contrary notwithstanding, if a
Change of Control occurs and if the Executive's employment with the Company
is terminated prior to the date on which the Change of Control occurs, and
if it is reasonably demonstrated by the Executive that such termination of
employment (i) was at the request of a third party who has taken steps
reasonably calculated to effect a change of Control or (ii) otherwise arose
in connection with or anticipation of a Change of Control, then for all
purposes of this Agreement the "Effective Date" shall mean the date
immediately prior to the date of such termination of employment.
2. Change of Control. For the purpose of this Agreement, a "Change of
Control" shall mean:
(a) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 35% or more of either (i) the then outstanding shares of common
stock of the Company (the "Outstanding Company Common Stock") or (ii)
the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors
(the "Outstanding Company Voting Securities"); provided, however, that
for purposes of this subsection (a), the following acquisitions shall
not constitute a Change of Control: (i) any acquisition directly from
the Company, (ii) any acquisition by the Company, (iii) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company or (iv) any
acquisition by any corporation pursuant to a transaction which complies
with clauses (i), (ii) and (iii) of subsection (c) of this Section 2;
or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming
a director subsequent to the date hereof whose election, or nomination
for election by the Company's shareholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board;
or
(c) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following
such Business combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively,
of the outstanding Company Common Stock and Outstanding Company Voting
securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting
from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or
all or substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same proportions
as their ownership, immediately prior to such Business Combination of
the outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (ii) no Person (excluding any employee
benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly
or indirectly, 35% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership
existed prior to the Business Combination and (iii) at least a majority
of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination; or
(d) Approval by the shareholders of the Company of a complete liquidation
or dissolution of the Company.
3. Employment Period. The Company hereby agrees to continue the Executive in
its employ, and the Executive hereby agrees to remain in the employ of the
Company subject to the terms and conditions of this Agreement, for the
period commencing on the date hereof and ending on the third anniversary of
such date (the "Employment Period"); provided, however, that upon a Change
of Control, if the Executive is still employed by the Company, the
Employment Period shall be extended until the third anniversary of the
Effective Date, or if the Employment Period has terminated prior to the
Change of Control, a new three year Employment Period shall commence upon a
Change of Control.
4. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, the Executive shall be Chairman,
President and Chief Executive officer of the Company and, in such
capacity, the Executive shall be responsible for the strategic
direction and operations of the Company, and shall serve on the
Company's Board of Directors and shall have such other duties,
responsibilities and authority as shall be consistent therewith.
The Executive shall also be Chairman, President and Chief
Executive officer of Star Bank N. A. and shall serve on its Board
of Directors.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote full attention and time during normal
business hours to the business and affairs of the Company and to
use the Executive's reasonable best efforts to perform faithfully
and efficiently such responsibilities. During the Employment
Period it shall not be a violation of this Agreement for the
Executive to (A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal
investments, so long as such activities do not significantly
interfere with the performance of the Executive's responsibilities
as an employee of the Company in accordance with this Agreement.
It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to
the Effective Date, the continued conduct of such activities (or
the conduct of activities similar in nature and scope thereto)
subsequent to the Effective Date shall not thereafter be deemed to
interfere with the performance of the Executive's responsibilities
to the Company.
(b) Compensation.
(i) Base Salary. Commencing on January 1, 1996 and during the
Employment Period, the Executive shall receive an annual base
salary ("Annual Base Salary") of $700,000 until December 31, 1996,
$750,000 for the period of January 1, 1997 through December 31,
1997, and $800,000 for the remainder of the Employment Period.
The Annual Base Salary shall be paid in equal monthly
installments. During the Employment Period, the Annual Base
Salary shall be reviewed at least every 12 months. Any increase
in Annual Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. Annual Base
Salary shall not be reduced after any such increase and the term
Annual Base Salary as utilized in this Agreement shall refer to
Annual Base Salary as so increased.
(ii) Annual Bonus. In addition to Annual Base Salary, the Executive
shall be awarded, for each fiscal year ending during the
Employment Period, an annual bonus (the "Annual Bonus") pursuant
to the Company's annual incentive plans, pro rated in the case of
a bonus for any year during which the Executive was employed for
less than 12 months; provided, however, after the Effective Date,
the Annual Bonus shall be no less than 75% of the Executive's
Annual Base Salary (the "Minimum Bonus"). Each such Annual Bonus
shall be paid no later than the end of the third month of the
fiscal year next following the fiscal year for which the Annual
Bonus is awarded, unless the Executive shall elect to defer the
receipt of such Annual Bonus.
(iii) Stock Awards. The Executive shall be considered annually for
awards under the Company's 1991 Stock Incentive Plan.
(iv) Incentive, Savings and Retirement Plans. During the Employment
Period, the Executive shall be eligible to participate in all
incentive, savings and retirement plans, practices, policies and
programs applicable generally to other peer executives of the
Company and its affiliated companies, including, without
limitation, the Company's Non-Qualified Retirement Plan (the
"NQRP") under which, if the Executive is employed by the Company
on May 12, 1996, Executive shall be given service credit for his
service with BankAmerica Corporation, Security Pacific Corporation
and Xxxxx Fargo N. A. (together, the "Prior Employers"), provided
that the Company's obligation under the NQRP shall be offset by
any pension benefits to which the Executive is entitled from the
Prior Employers, provided further that after the Effective Date in
no event shall such plans, practices, policies and programs
provide the Executive with incentive opportunities (measured with
respect to both regular and special incentive opportunities, to
the extent, if any, that such distinction is applicable), savings
opportunities and retirement benefit opportunities, in each case,
less favorable, in the aggregate, than the most favorable of those
provided by the Company and its affiliated companies for the
Executive under such plans, practices, policies and programs as in
effect at any time during the 120-day period immediately preceding
the Effective Date or, if more favorable to the Executive, those
provided generally at any time after the Effective Date to other
peer executives of the Company and its affiliated companies, after
taking into account the difference in age between the Executive
and the peer executives.
(v) Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall
be eligible for participation in and shall receive all benefits
under welfare benefit plans, practices, policies and programs
provided by the Company and its affiliated companies including,
without limitation, medical, prescription, dental, disability,
salary continuance, employee life, group life, accidental death
and travel accident insurance plans and programs) to the extent
applicable generally to other peer executives of the Company and
its affiliated companies, provided that after the Effective Date
in no event shall such plans, practices, policies and programs
provide the Executive with benefits which are less favorable, in
the aggregate, than the most favorable of such plans, practices,
policies and programs in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date
or, if more favorable to the Executive, those provided generally
at any time after the Effective Date to other peer executives of
the Company and its affiliated companies.
(vi) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable
business expenses incurred by the Executive.
(vii) Fringe Benefits. During the Employment Period, the Executive
shall be entitled to fringe benefits, including, without
limitation, tax and financial planning services, payment of club
dues, and a monthly car allowance of $1,000, net to the Executive
after giving effect to (x) all income taxes payable by Executive
that are attributable to such allowance, and (y) any benefits that
result from the deductibility by the Executive of any such taxes.
(viii) Vacation. During the Employment Period, the Executive shall be
entitled to four weeks of paid vacation.
5. Termination of Employment.
(a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period.
If the Company determines in good faith that the Disability of the
Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive
written notice in accordance with Section 12(b) of this Agreement of
its intention to terminate the Executive's employment. In such event,
the Executive's employment with the Company shall terminate effective
on the 30th day after receipt of such notice by the Executive (the
"Disability Effective Date"), provided that, within the 30 days after
such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the
Executive's duties with the Company on a full-time basis for 180
consecutive business days as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the
Executive or the Executive's legal representative.
(b) Cause. The Company may terminate the Executive's employment during the
Employment Period for Cause. For purposes of this Agreement, "Cause"
shall mean:
(i) the willful and continued failure of the Executive to perform
substantially the Executive's duties with the Company or one of
its affiliates (other than any such failure resulting from
incapacity due to physical or mental illness), after a written
demand for substantial performance is delivered to the Executive
by the Board or the Chief Executive Officer of the Company which
specifically identifies the manner in which the Board or Chief
Executive Officer believes that the Executive has not substantially
performed the Executive's duties, or
(ii) the willful engaging by the Executive in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the
Company. For purposes of this provision, no act or failure to act, on
the part of the Executive, shall be considered "willful" unless it is
done, or omitted to be done, by the Executive in bad faith or without
reasonable belief that the Executive's action or omission was in the
best interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or
based upon the advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by the Executive in good
faith and in the best interests of the Company. The cessation of
employment of the Executive shall not be deemed to be for Cause unless
and until there shall have been delivered to the Executive a copy
of a resolution duly adopted by the affirmative vote of a majority of
the entire membership of the Board at a meeting of the Board called and
held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with
counsel, to be heard before the Board), finding that, in the good faith
opinion of the Board, the Executive is guilty of the conduct described
in subparagraph (i) or (ii) above, and specifying the particulars
thereof in detail.
(c) Good Reason. The Executive's employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, "Good
Reason" shall mean:
(i) the assignment to the Executive of any duties inconsistent with the
Executive's position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated
by Section 4(a) of this Agreement, or any other action by the Company
which results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial
and inadvertent action not taken in bad faith and which is remedied by
the Company promptly after receipt of notice thereof given by the
Executive;
(ii) any failure by the Company to comply with any of the provisions of
Section 4(b) of this Agreement, other than an isolated, insubstantial
and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given
by the Executive;
(iii) the Company's requiring the Executive to be based at any office
or location after the Effective Date other than where the Executive was
located immediately prior to the Effective Date other than in
connection with a change of the Company's headquarters if the Executive
is relocated to such headquarters, or, after the Effective Date, the
Company's requiring the Executive to travel on Company business to a
substantially greater extent than required immediately prior to the
Effective Date;
(iv) any purported termination by the Company of the Executive's
employment otherwise than as expressly Permitted by this Agreement; or
(v) any failure by the Company to comply with and satisfy Section 11(c)
of this Agreement.
For purposes of this Section 5(c), any good faith determination of "Good
Reason" made by the Executive shall be conclusive. Anything in this Agreement
to the contrary notwithstanding, a termination by the Executive for any reason
during the 30-day period immediately following the first anniversary of the
Effective Date shall be deemed to be a termination for Good Reason for all
purposes of this Agreement.
(d) Notice of Termination. Any termination by the Company for Cause, or by
the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section
12(b) of this Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of
such notice, specifies the termination date (which date shall be not
more than thirty days after the giving of such notice). The failure by
the Executive or the Company to set forth in the Notice of Termination
any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the
Executive or the Company, respectively, hereunder or preclude the
Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights
hereunder.
(e) Date of Termination. "Date of Termination" means if the Executive's
employment is terminated by the Company for Cause, or by the Executive
for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein I as the case may be, (ii) if the
Executive's employment is terminated by the Company other than for
Cause or Disability, the Date of Termination shall be the date on which
the Company notifies the Executive of such termination and (iii) if the
Executive's employment is terminated by reason of death or Disability,
the Date of Termination shall be the date of death of the Executive or
the Disability Effective Date, as the case may be.
6. Obligations of the Company upon Termination.
(a) Good Reason; Other Than for Cause, Death or Disability. If, during the
Employment Period, the Company shall terminate the Executive's
employment other than for Cause or Disability or the Executive shall
terminate employment for Good Reason:
(i) the Company shall pay to the Executive in a lump sum in cash within
30 days after the Date of Termination the aggregate of the following
amounts:
A. the sum of (1) the Executive's Annual Base Salary through the Date
of Termination to the extent not theretofore paid, (2) the product
of (x) the higher of (I) the Minimum Bonus and (II) the Annual Bonus
paid or payable, including any bonus or portion thereof which has
been earned but deferred (and annualized for any fiscal year
consisting of less than twelve full months or during which the
Executive was employed for less than twelve full months), for the
most recently completed fiscal year during the Employment Period, if
any (such higher amount being referred to as the "Highest Annual
Bonus") and (y) a fraction, the numerator of which is the number of
days in the current fiscal year through the Date of Termination, and
the denominator of which is 365 and (3) any compensation previously
deferred by the Executive (together with any accrued interest or
earnings thereon) and any accrued vacation pay, in each case to the
extent not theretofore paid (the sum of the amounts described in
clauses (1), (2), and (3) shall be hereinafter referred to as the
"Accrued obligations"); and
B. the amount equal to the product of (1) three and (2) the sum of (x)
the Executive's Annual Base Salary and (y) the Highest Annual Bonus;
and
C. if the Date of Termination is on or after the Effective Date, an
amount equal to the difference between (a) the actuarial equivalent
of the benefit (utilizing actuarial assumptions no less favorable to
the Executive than those in effect under the Company's qualified
defined benefit retirement plan (the "Retirement Plan") immediately
prior to the Effective Date) under the Retirement Plan and any
excess or supplemental retirement plan in which the Executive
participates (together, the "SERP") which the Executive would
receive if the Executive's employment continued for three years
after the Date of Termination assuming for this purpose that all
accrued benefits are fully vested, and, assuming that the
Executive's compensation in each of the three years is that required
by Section 4(b)(i) and Section 4(b)(ii), and (b) the actuarial
equivalent of the Executive's actual benefit (paid or payable), if
any, under the Retirement Plan and the SERP as of the Date of
Termination;
(ii) all stock options, restricted stock and other stock-based
compensation shall become immediately exercisable or vested, as the
case may be;
(iii) for three years after the Executive's Date of Termination, or
such longer period as may be provided by the terms of the
appropriate plan, program, practice or policy, the Company
shall-continue benefits to the Executive and/or the Executive's
family at least equal to those which would have been provided to
them in accordance with the plans, programs, practices and policies
described in Section 4(b)(v) of this Agreement if the Executive's
employment had not been terminated or, if more favorable to the
Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated
companies and their families, provided, however, that if the
Executive becomes re-employed with another employer and is
eligible to receive medical or other welfare benefits under another
employer provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under such
other plan during-such applicable period of eligibility. For
purposes of determining eligibility (but not the time of
commencement of benefits) of the Executive for retiree benefits
pursuant to such plans, practices, programs and policies, the
Executive shall be considered to have remained employed until three
years after the Date of Termination and to have retired on the last
day of such period;
(iv) the Company shall, at its sole expense as incurred, provide the
Executive with outplacement services the scope and provider of
which shall be selected by the Executive in his sole discretion; and
(v) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts or
benefits required to be paid or provided or which the Executive is
entitled to receive under any plan, program, policy or practice or
contract or agreement of the Company and its affiliated companies
(such other amounts and benefits shall be hereinafter referred to as
the "Other Benefits").
(b) Death. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal
representatives under this Agreement, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to the Executive's estate or
beneficiary, as applicable, in a lump Sum in cash within 30 days of the
Date of Termination. With respect to the provision of Other Benefits
after the Effective Date, the term Other Benefits as utilized in this
Section 6(b) shall include, without limitation, and the Executive's
estate and/or beneficiaries shall be entitled to receive, benefits at
least equal to the most favorable benefits provided by the Company and
affiliated companies to the estates and beneficiaries of peer
executives of the Company and such affiliated companies under such
plans, programs, practices and policies relating to death benefits, if
any, as in effect with respect to other peer executives and their
beneficiaries at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive's
estate and/or the Executive's beneficiaries, as in effect on the date
of the Executive's death with respect to other peer executives of the
Company and its affiliated companies and their beneficiaries.
(c) Disability. If the Executive's employment is terminated by reason of
the Executive's Disability during the Employment Period, this Agreement
shall terminate without further obligations to the Executive, other
than for payment of Accrued obligations and the timely payment or
provision of Other Benefits. Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of
Termination. With respect to the provision of Other Benefits after
the Effective Date, the term Other Benefits as utilized in this Section
6(c) shall include, and the Executive shall be entitled after the
Disability Effective Date to receive, disability and other benefits at
least equal to the most favorable of those generally provided by the
Company and its affiliated companies to disabled executives and/or
their families in accordance with such plans, programs, practices and
policies relating to disability, if any, as in effect generally with
respect to other peer executives and their families at any time during
the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive and/or the Executive's family, as in effect
at any time thereafter generally with respect to other peer executives
of the Company and its affiliated companies and their families.
(d) Cause; Other than for Good Reason. If the Executive's employment shall
be terminated for Cause during the Employment Period, this Agreement
shall terminate without further obligations to the Executive other than
the obligation to pay to the Executive (x) his Annual Base Salary
through the Date of Termination, (y) the amount of any compensation
previously deferred by the Executive, and (z) Other Benefits, in each
case to the extent theretofore unpaid. If the Executive voluntarily
terminates employment during the Employment Period, excluding a
termination for Good Reason, this Agreement shall terminate without
further obligations to the Executive, other than for Accrued
Obligations and the timely payment or provision of Other Benefits. In
such case, all Accrued Obligations shall be paid to the Executive in a
lump sum in cash within 30 days of the Date of Termination. Upon a
termination of the Executive's employment for Cause by the Company or
by the Executive without Good Reason, the Executive shall forfeit all
stock options that are not vested on the Date of Termination.
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its
affiliated companies and for which the Executive may qualify nor shall
anything herein limit or otherwise affect such rights as the Executive
may have under any contract or agreement with the Company or any of its
affiliated companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, policy, practice
or program of or any contract or agreement with the Company or any of its
affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or
contract or agreement except as explicitly modified by this Agreement.
8. Full Settlement. The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder
shall not be affected by any set-off, counterclaim, recoupment, defense or
other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of
the amounts payable to the Executive under any of the provisions of this
Agreement and such amounts shall not be reduced whether or not the
Executive obtains other employment. The Company agrees to pay as incurred,
to the full extent permitted by law, all legal fees and expenses which the
Executive may reasonably incur as a result of any contest (regardless of
the outcome thereof) by the Company, the Executive or others of the
validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of
any contest by the Executive about the amount of any payment pursuant to
this Agreement), plus in each case interest on any delayed payment at the
applicable Federal rate provided for in Section 7872(f)(2)(A) of the
Internal Revenue Code of 1986, as amended (the "Code"); provided that the
Company shall have no such obligation if it is determined by a court
that the Company was not in breach of the Agreement and that the
Executive's claims were not made in good faith.
9. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by the
Company to or for the benefit of the Executive (whether paid or payable
or distributed or distributable pursuant to the terms of this Agreement
or otherwise, but determined without regard to any additional payments
required under this Section 9) (a "Payment") 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 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 and any benefits that result from the
deductibility by the Executive of such taxes (including, in each case,
any interest or penalties imposed with respect to such taxes),
including, without limitation, any income 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.
(b) Subject to the provisions of Section 9(c), all determinations required
to be made under this Section 9, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be
made by KPMG Peat Marwick or such other certified public accounting
firm as may be designated by the Executive (the "Accounting Firm")
which shall provide detailed supporting calculations both to the
Company and the Executive within 15 business days of the receipt of
notice from the Executive that there has been a Payment, or such
earlier time as is requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the individual,
entity or group effecting the Change of Control, the Executive shall
appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the Company. Any Gross-Up
Payment, as determined pursuant to this Section 9, shall be paid by the
Company to the Executive within five days of the receipt of the
Accounting Firm's determination. Any determination by the Accounting
Firm shall be binding upon the Company and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the Accounting Firm hereunder,
it is possible that Gross-Up Payments which will not have been made by
the Company should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to Section 9(c) and the
Executive thereafter is required to make a payment of any Excise Tax,
the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by
the company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notification shall be
given as soon as practicable but no later than ten business days after
the Executive is informed in writing of such claim and shall apprise
the Company 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 Company (or such shorter period
ending on the date that any payment of taxes with respect to
such claim is due). If the Company notifies the Executive in writing
prior to the expiration of such period that it desires to contest such
claim, the Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as the
Company 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
Company,
(iii) cooperate with the Company in good faith in order effectively to
contest such claim, and
(iv) permit the Company to participate in any proceedings relating to
such claim; provided, however, that the Company 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 9(c), the Company 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 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 Company shall
determine; provided, however, that if the Company directs the Executive
to pay such claim and xxx for a refund, the Company 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; and further
provided 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 Company'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.
(d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 9(a) or 9(c), the Executive becomes
entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Company's complying with the
requirements of Section 9(c)) promptly pay to the Company 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 Company pursuant to Section
9(c), a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Company 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.
10. Confidential Information; Covenant Not to Compete.
(a) Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its
affiliated companies, and their respective businesses, which shall have
been obtained by the Executive during the Executive's employment by the
Company or any of its affiliated companies and which shall not be
or become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement). After
termination of the Executive's employment with the Company, the
Executive shall not, without the prior written consent of the Company
or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than
the Company and those designated by it. In no event shall an asserted
violation of the provisions of this Section 10 constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive
under this Agreement.
(b) Covenant Not to Compete.
A. Executive agrees that for a period of one (1) year following his
termination of employment with the Company for Cause or other than
Good Reason, he will not in any way engage in, represent, furnish
consulting services to, be employed by, or have any interest in any
"Banking Institution" (as hereinafter defined) that has
headquarters in Ohio or contiguous states. Further, Executive
shall not (1) induce or attempt to induce any person or entity which
is a customer of the Company or any of its affiliates as of the date
of termination of Executive's employment to cease or reduce doing
business with the Company or any of its affiliates, or (2) solicit
or endeavor to cause any employee of the Company or its affiliates
to leave the employ of the Company or any of its affiliates.
Notwithstanding the foregoing, the Executive shall not be prevented
from owning up to three percent (3%) of the outstanding stock of any
publicly traded company which is a Banking Institution.
B. As used herein, the term "Banking Institution" means any national or
state chartered bank, bank holding company, any other institution
that engages as its principal activity in taking deposits or making
loans, or any affiliates of any such institutions.
C. Executive agrees that this covenant is reasonable with respect to
its duration, geographic area and scope, and acknowledges that
compliance with Section 10 (b)is necessary to protect the business
and goodwill of the Company.
11. Successors.
(a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
(c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially
all of the business and/or assets of the Company to assume expressly
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 had taken place. As used in this Agreement, "Company" shall
mean the Company as hereinbefore defined and any successor to its
business and/or-assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
12. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Ohio, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This Agreement
may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors
and legal representatives.
(b) All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
Xxxxx X. Xxxxxxxxxx
c/o Wachtell, Lipton, Xxxxx & Xxxx
00 X. 00 Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
If to the Company:
Star Banc Corporation
Star Bank Center
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: General Counsel
or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications
shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability off any other provision
of this Agreement.
(d) The Company may withhold from any amounts payable under this Agreement
such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right the Executive or the
Company may have hereunder, including, without limitation, the right of
the Executive to terminate employment for Good Reason pursuant to
Section 5(c)(i)-(v) of this Agreement, shall not be deemed to
be a waiver of such provision or right or any other provision or right
of this Agreement.
13. No Prohibited Payments. Notwithstanding anything in this Agreement to the
contrary, the Company shall not make any payment to the Executive which,
according to the opinion of the Company's outside counsel, would violate
Section 2523(k) of the Comprehensive Thrift and Bank Fraud Prosecution and
Taxpayer Recovery Act of 1990 (codified at 12 U.S.C. 1828(k)), or any rules
or regulations promulgated thereunder.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
XXXXX X. XXXXXXXXXX
_______________________________________________________________________________
STAR BANC CORPORATION
By _________________________
Xxxxxxxx X. Xxxxxxxx, Xx.
Chairman, Compensation Committee
By __________________________
Xxxxxx X. Xxxxx
Executive Vice President,
General Counsel and Secretary
EXHIBIT 10.5(cont.)
THREE (3) YEAR SEVERANCE AGREEMENT:
The included three year severance agreement was modified in 1996 and covers
the following executive officers:
Xxxxx X. Xxxxxxx, Executive Vice President and Chief
Financial Officer, Star Banc Corporation
and Star Bank, N.A.
Xxxxxxx X. Xxxxx, Executive Vice President, Star Banc
Corporation and Star Bank, N.A.
Xxxxxx X. Xxxxxxxxxx, Executive Vice President, Star Banc
Corporation and Star Bank, N.A.
## Xxxxxx X. Xxxxxxx, Executive Vice President, Star Banc
Corporation and Star Bank, N.A.
## The three year agreement for Xxxxxx X. Xxxxxxx was added in 1995 and
includes the same provisions as the attached three year agreement with the
exception of the elimination of sections 2.4 and 2.5, which provide for
additional years of service and coverage for pension and medical benefits.
EXECUTIVE SEVERANCE AGREEMENT
This Executive Severance Agreement (hereinafter called the "Agreement"),
made as of the 8th day of October, 1996, between Star Banc Corporation, an
Ohio corporation (hereinafter called "Star Banc") and its Subsidiaries
(hereinafter individually and collectively called the "Company"), and
(hereinafter called the "Executive").
WITNESSETH:
WHEREAS, the Company considers the recruitment and maintenance of sound and
vital management to be essential to protecting and enhancing its best interests
and those of its shareholders; and
WHEREAS, the Company recognizes that it is in an industry where there is a
strong potential for a change in control and that the potential for a change in
control may make it difficult to hire and retain strong management personnel;
and
WHEREAS, the Company recognizes that the possibility of a change in control
of Star Banc may exist and that, in the event negotiations are commenced to
bring about such a change in control, uncertainty and questions may arise among
management that could result in the distraction or departure of management
personnel to the detriment of the Company and the shareholders; and
WHEREAS, the Company has determined that appropriate steps should be taken
to reinforce and encourage the Executive's continued attention and dedication
as an executive officer to his assigned duties without distraction in the face
of potentially disruptive circumstances arising from the possibility of a
change in control of Star Banc;
NOW THEREFORE, the Company and the Executive do hereby agree as follows:
1. Definitions
The following words and terms as used herein shall have the following
meaning:
1.1 Change of Control. For the purpose of this Agreement, a "Change of
Control" shall mean:
(a) The acquisition by any individual, entity or group (within the meaning
of Section 13 (d) (3) or 14 (d) (2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 35% or more of either (i) the then outstanding shares
of common stock of the Company (the "Outstanding Company Common Stock")
or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided,
however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from the Company, (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses
(i), (ii) and (iii) of subsection (c) of this Section 1; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming
a director subsequent to the date hereof whose election, or nomination
for election by the Company's shareholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent
Board shall be considered asthough such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board;
or
(c) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following
such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively,
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined voting power of
the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns
the Company or all or substantially all of the Company's assets either
directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (ii) no
Person (excluding any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 35% or more of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to
the Business Combination and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or
(d) Approval by the shareholders of the Company of a complete liquidation
or dissolution of the Company.
1.2 Cause means conviction for the commission of a felony or removal from
office by order of the Comptroller of the Currency, Federal Reserve Board,
or other appropriate agency.
1.3 Date of Termination means the date the Executive's employment is
terminated under this Agreement whether by the Company or by the
Executive.
1.4 Disability means disability as such term is defined in the Star Banc
Salary Continuation Plan.
1.5 Effective Date means the first date after the date hereof on which a
Change in Control occurs.
1.6 Employment Agreement means an employment agreement, if any, between the
Company and the Executive.
1.7 Good Reason means:
(a) A reduction by the Company in the Executive's base salary as in
effect on the date hereof or as the same may be increased from
time-to-time or a failure by the Company to increase the
Executive's base salary each year during the Protected Period by an
amount which at least equals, on a percentage basis, the lesser of:
(i) the average percentage increase in base salary for all officers
of the Company during the three full calendar years immediately
preceding the Change in Control; or (ii) the average percentage
increase in base salary for the Executive during the three full
calendar years immediately preceding the Change in Control; or
(b) A change in the Executive's reporting responsibilities, titles,
job responsibilities or offices which in the Executive's sole
opinion result in a diminution of his status, control, or
authority as in effect immediately prior to a Change in Control; or
(c) The assignment to the Executive of any positions, duties or
responsibilities inconsistent in the sole opinion of the Executive
with the Executive's positions, duties and responsibilities or
status with the Company immediately prior to the Change in Control
or that requires the Executive to travel more than prior to the
Change in Control; or
(d) A failure by the Company (i) to continue any cash bonus or other
incentive plans in substantially the same form and with the same
opportunity levels and perceived potential for obtaining performance
objectives, in effect immediately prior to the Change in Control, or
(ii) to continue the Executive as a participant in such plans on at
least the same basis as the Executive participated in accordance
with the plans immediately prior to the Change in Control; or
(e) A requirement by the Company that the Executive be based or perform
his duties anywhere other than at the Company's corporate office
location either (i) immediately prior to the Change in Control, or
(ii) within one mile of such prior corporate office location if the
Company's corporate office location is moved; or
(f) A failure by the Company to continue in effect any benefit, whether
or not qualified, or other compensation plan or the Company's
failure to provide the Executive with the number of paid vacation
days to which he is entitled in accordance with the Company's
normal vacation practices with respect to the Executive at the time
of the Change in Control; or
(g) An agreement between the Board of Directors of Star Banc and the
Executive that employment should be terminated.
For purposes of this Section 1.7, any good faith determination of
"Good Reason" made by the Executive shall be conclusive. Anything in this
Agreement to the contrary notwithstanding, a termination by the Executive
for any reason during the 30-day period immediately following the first
anniversary of the Effective Date shall be deemed to be a termination for
Good Reason for all purposes of this Agreement.
1.8 Protected Period means the thirteen (13) month period immediately
following each and every Change in Control.
1.9 Termination Benefits means those benefits described in Section 2
of the Agreement.
1.10 Subsidiaries means any and all companies at least fifty percent
(50%) owned, directly or indirectly, by Star Banc.
2. Benefits Upon Termination of Employment.
2.1 General. If, during the Protected Period following each Change
in Control, the Executive's employment is terminated either (i) by
the Company (other than for Cause or Disability), or (ii) by the
Executive for Good Reason, then the Executive (or his estate or
personal representative), shall be entitled to the Termination
Benefits provided in this Section 2.
2.2 Base Salary and Bonus Through Date of Termination. The Company
shall promptly pay the Executive his full base salary through the Date
of Termination at the rate in effect at the time notice of termination
is given. In addition, the Company shall promptly pay the amount of
any bonus or incentive for the year in which the Date of Termination
occurs (based on the target bonus for the Executive for the year)
prorated to the Date of Termination (without application of any denial
provisions based on unsatisfactory personal performance or any other
reason). The Company shall also pay the Executive for any vacation
earned but not taken with such payment being equal to the Executive's
calculated daily base salary rate times the applicable days of such
vacation.
2.3 Severance Payment. The Company shall pay the Executive a severance
payment equal to three (3) times the sum of: (a) the Executive's highest
rate of pay, on an annualized basis, established by the Company during
the last five years plus (b) the highest bonus earned by the Executive,
with respect to any single year, over the last five (5) years. The
severance payment shall be made in a lump-sum within thirty (30) days of
the Date of Termination.
2.4 Pension Payment. The Company shall pay the Executive a supplemental
pension benefit equal to the lump sum benefit which the Executive would
be entitled to receive under the Star Banc Employees' Pension Plan if the
Executive were 100% vested and had three (3) additional years of service
minus the lump sum benefit actually payable to the Executive under the
Star Banc Employees' Pension Plan. Payment of this supplemental pension
benefit shall be made within thirty (30) days of the Date of Termination.
2.5 Medical Coverage. The Company shall, at its expense, maintain the
Executive's life, health and accidental death and disability insurance
coverage with the coverages maintained at the higher level in effect
either immediately prior to the date of the Change in Control or on the
Date of Termination, for a period of three (3) years following the Date of
Termination.
2.6 Termination Which Does Not Require Payment Of Termination Benefits. No
Termination Benefits need to be provided by the Company to the Executive
under this Section 2 if the Executive's employment is terminated:
(a) By the Executive for any reason other than for Good Reason;
(b) By the Company for Cause or Disability; or
(c) By death.
3. New Employment; Reduction of Termination Benefits.
The Termination Benefits provided under Section 2 shall not be treated
as damages, but rather shall be treated as severance compensation to which
the Executive is entitled. The Executive shall not be required to mitigate
the amount of any Termination Benefit provided under Section 2 by seeking
other employment or otherwise.
4. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by the
Company to or for the benefit of the Executive (whether paid or
payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 4) (a "Payment")
would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), 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 and any benefits that
result from the deductibility by the Executive of such taxes
(including, in each case, any interest or penalties imposed with
respect to such taxes), including, without limitation, any income
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.
(b) Subject to the provisions of Section 4(c), all determinations
required to be made under this Section 4, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving at such
determination, shall be made by KPMG Peat Marwick or such other
certified public accounting firm as may be designated by the
Executive (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the Executive within
15 business days of the receipt of notice from the Executive that
there has been a Payment, or such earlier time as is requested by
the Company. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting
the Change of Control, the Executive shall appoint another nationally
recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company. Any Gross-Up Payment,
as determined pursuant to this Section 4, shall be paid by the
Company to the Executive within five days of the receipt of the
Accounting Firm's determination. Any determination by the Accounting
Firm shall be binding upon the Company and the Executive. As a
result of the uncertainty in the application of Section 4999 of the
Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have
been made by the Company should have been made ("Underpayment"),
consistent with the calculations required to be made hereunder. In
the event that the Company exhausts its remedies pursuant to
Section 4(c) and the Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall determine the
amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the
benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification
shall be given as soon as practicable but no later than ten business
days after the Executive is informed in writing of such claim and
shall apprise the Company 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 Company
(or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company notifies
the Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as
the Company 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
Company,
(iii) cooperate with the Company in good faith in order effectively
to contest such claim, and
(iv) permit the Company to participate in any proceedings relating
to such claim;
provided, however, that the Company 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 4(c), the Company 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 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 administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive
to pay such claim and xxx for a refund, the Company 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; and further
provided 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 Company'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.
(d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 4(a) or 4(c), the Executive becomes
entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Company's complying with the
requirements of Section 4(c)) promptly pay to the Company 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 Company pursuant to
Section 4(c), a determination is made that the Executive shall not
be entitled to any refund with respect to such claim and the Company
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.
5. Notice of Termination.
Any purported termination by the Company of the Executive's employment
for Cause or Disability or by the Executive for Good Reason shall be
communicated by notice of termination to the other party. A notice of
termination shall include the specific reason for termination relied upon
and shall set forth in reasonable detail, the facts and circumstances
claimed to provide a basis for termination of employment.
Any dispute by a party hereto regarding a notice of termination
delivered to such party must be conveyed to the other party within thirty
(30) days after the notice of termination is given. If the particulars
of the dispute are not conveyed within the thirty (30) day period, then
the disputing party's claims regarding the termination shall be deemed
forever waived.
6. Successor; Binding Agreement.
Star Banc will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially
all of the business and/or assets of Star Banc expressly to assume and
agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had
taken place (the assumption shall be by agreement in form and substance
satisfactory to the Executive). Failure of Star Banc to obtain such
agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle the Executive, at his election,
to Termination Benefits from the Company in the same amount and on the same
terms as the Executive would be entitled to hereunder if he terminated his
employment for Good Reason, except that for purposes of implementing the
foregoing, the date on which any such election becomes effective shall be
deemed the Date of Termination. As used in this Agreement, "Company" shall
mean the Company and any successor to its business and/or assets as described
above or which otherwise becomes bound by all the terms and provision of this
Agreement by operation of law.
In addition, as used in this Agreement, "Star Banc" shall mean Star Banc
and any successor to its business and/or assets as described above or which
otherwise becomes bound by all the terms and provision of this Agreement by
operation of law.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive
should die while any amount would still be payable to him hereunder if he
had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to his designee
or, if there be no such designee, to his estate.
7. Miscellaneous.
7.1 Notice. All notices, elections, waivers and all other communications
provided for in this Agreement shall be in writing and shall be deemed to
have been duly given when delivered or mailed by United States certified
mail, return receipt requested, postage prepaid, to such address as either
party may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon
receipt.
7.2 No Waiver. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and the Chief Executive Officer of the
Company. No waiver by either party at any time of any breach by the other
party 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. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been
made by either party which are not set forth expressly in this Agreement.
7.3 Indemnification. If litigation shall be brought to enforce or interpret
any provision contained herein, the Company hereby agrees to indemnify the
Executive for his attorney's fees and disbursement incurred in such
litigation, and hereby agrees to pay prejudgment interest on any money
judgment obtained by the Executive, calculated at the prime interest rate
announced as such by the Wall Street Journal from time-to-time, from the
earliest date that payment(s) to him should have been made under this
Agreement. If the Wall Street Journal announces two or more rates as the
prime rate, then the highest rate shall be used.
7.4 Payment Obligations Absolute. The Company's obligation to pay the
Executive the compensation and to make the arrangements provided herein
shall be absolute and unconditional and shall not be affected by any
circumstances, including, without limitation, any set-off, counterclaim,
recoupment, defense or other right which the Company may have against
the Executive or any third party. All amounts payable by the Company
hereunder shall be paid without notice or demand. Each and every payment
made hereunder by the Company shall be final and the Company will not
seek, nor permit its subsidiaries, affiliates, successors or assigns to
seek, to recover all or any part of such payment from the Executive or
from whosoever may be entitled thereto, for any reason whatsoever.
7.5 Term of Agreement. The term of this Agreement shall continue for an
initial period of three (3) years from the date of this Agreement. On
each anniversary of this Agreement, the term shall be extended for an
additional year unless prior to an anniversary date Star Banc's Board
of Directors cause a notice of nonrenewal to be sent to the Executive.
Any Termination Benefits due pursuant to this Agreement shall continue
to be an obligation of the Company and enforceable by the Executive
until paid in full.
7.6 Controlling Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Ohio.
7.7 Interpretation of Agreement. In the event of any ambiguity,
vagueness or other matter involving the interpretation or meaning of
this Agreement, this Agreement shall be construed liberally so as to
provide to the Executive the full benefits set out herein.
7.8 Severability. Each section, subsection or paragraph of this
Agreement shall be deemed severable and if for any reason any portion
of this Agreement is unenforceable, invalid or contrary to any
existing or future law, such unenforceability or invalidity shall
not affect the applicability or validity of any other portion of
this Agreement.
7.9 U.S. Dollars. All payments required to be made under this Agreement
shall be made in United States Dollars.
7.10 Employment Agreement. Any benefits provided to the Executive
under this Agreement will, unless specifically stated otherwise in this
Agreement, be in addition to and not in lieu of any benefits that may
be provided the Executive under an Employment Agreement, if any, with
the Company.
Nothing in this Agreement is to be deemed to give the Company the
right to take any action or engage in any omission with respect to the
Executive at any time when any such action or omission is not permissible
and proper under any Employment Agreement if then in force. Similarly,
except as provided otherwise in this Agreement, nothing in this Agreement
is to be deemed to give the Executive the right to take any action or
engage in any omission with respect to the Company at any time when any
such act or omission is not permissible and proper under any Employment
Agreement if then in force.
This Agreement shall continue in force so long as the Executive remains
employed by the Company and shall not be affected by any termination of
any Employment Agreement.
7.11 Footnotes, Title and Captions. All footnotes or section, subsection
or paragraph titles or captions contained in this Agreement are for
convenience only and shall not be deemed part of the text of this
Agreement.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.
STAR BANC CORPORATION, on
behalf of itself and each Subsidiary
Attest: By:
_______________________________ ____________________________________
Name Xxxxxxx X. Xxxxx
Executive Vice President -
_______________________________ Human Resources
Title
EXECUTIVE:
___________________________________
Name
EXHIBIT 10.5(cont.)
TWO (2) YEAR EXECUTIVE SEVERANCE AGREEMENT:
- 1 year protection period
- 30 day walkaway rights
- Severance payment: two (2) times highest salary + highest bonus
- 2 year continuation of medical coverage
- Pension coverage includes additional 2 years of service
- No 280G limitation
- Additional grossup provision for any excise tax owed.
- Term of Agreement: Initial 3 year term and renewal on each anniversary
The included two year severance agreement was modified in 1996 and covers
the following executive officers:
Xxxxxx X. Xxxxxxx, Executive Vice President, Star Banc
Corporation and Star Bank, N.A.
Xxxxxxx X. Xxxxxxx, Executive Vice President, Star Banc
Corporation and Star Bank, N.A.
S. Xxx Xxxxxx, Executive Vice President, Star Banc
Corporation and Star Bank, N.A.
Xxxxxx X. Xxxxxxxx, Executive Vice President, Star Banc
Corporation and Star Bank, N.A.
Xxxxxx X. Xxxxx, Executive Vice President, Star Banc
Corporation and Star Bank, N.A.
Xxxxxx X. Xxx, Executive Vice President, Star Banc
Corporation and Star Bank, N.A.
Xxxxx X. Xxxxxxxxx, Executive Vice President, Star Banc
Corporation and Star Bank, N.A.
Xxxxxxx X. Xxxxx, Executive Vice President, Star Banc
Corporation and Star Bank, N.A.
EXECUTIVE SEVERANCE AGREEMENT
This Executive Severance Agreement (hereinafter called the "Agreement"),
made as of the 8th day of October, 1996, between Star Banc Corporation,
an Ohio corporation (hereinafter called "Star Banc") and its Subsidiaries
(hereinafter individually and collectively called the "Company"), and
(hereinafter called the "Executive").
WITNESSETH:
WHEREAS, the Company considers the recruitment and maintenance of sound
and vital management to be essential to protecting and enhancing its best
interests and those of its shareholders; and
WHEREAS, the Company recognizes that it is in an industry where there is
a strong potential for a change in control and that the potential for a
change in control may make it difficult to hire and retain strong management
personnel; and
WHEREAS, the Company recognizes that the possibility of a change in
control of Star Banc may exist and that, in the event negotiations are
commenced to bring about such a change in control, uncertainty and questions
may arise among management that could result in the distraction or departure
of management personnel to the detriment of the Company and the
shareholders; and
WHEREAS, the Company has determined that appropriate steps should be taken
to reinforce and encourage the Executive's continued attention and dedication
as an executive officer to his assigned duties without distraction in the face
of potentially disruptive circumstances arising from the possibility of a
change in control of Star Banc;
NOW THEREFORE, the Company and the Executive do hereby agree as follows:
1. Definitions
The following words and terms as used herein shall have the following
meaning:
1.1 Change of Control. For the purpose of this Agreement, a
"Change of Control" shall mean:
(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d) (3) or 14 (d) (2) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act") (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 35% or more of either (i) the then outstanding shares of common stock of
the Company (the "Outstanding Company Common Stock") or (ii) the combined
voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this subsection (a), the
following acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from the Company, (ii) any acquisition by the Company,
(iii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by
the Company or (iv) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of subsection (c)
of this Section 1; or
(b) Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or
(c) Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following such
Business Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or indirectly,
more than 50% of, respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same proportions as
their ownership, immediately prior to such Business Combination of
the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (ii) no Person (excluding any employee benefit
plan (or related trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 35% or more
of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination and
(iii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of
the action of the Board, providing for such Business Combination; or
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
1.2 Cause means conviction for the commission of a felony or
removal from office by order of the Comptroller of the Currency, Federal
Reserve Board, or other appropriate agency.
1.3 Date of Termination means the date the Executive's employment is
terminated under this Agreement whether by the Company or by the Executive.
1.4 Disability means disability as such term is defined in the
Star Banc Salary Continuation Plan.
1.5 Effective Date means the first date after the date hereof on which a
Change in Control occurs.
1.6 Employment Agreement means an employment agreement, if any,
between the Company and the Executive.
1.7 Good Reason means:
(a) A reduction by the Company in the Executive's base salary
as in effect on the date hereof or as the same may be increased from
time-to-time or a failure by the Company to increase the Executive's base
salary each year during the Protected Period by an amount which at least
equals, on a percentage basis, the lesser of: (i) the average percentage
increase in base salary for all officers of the Company during the three full
calendar years immediately preceding the Change in Control; or (ii) the
average percentage increase in base salary for the Executive during the three
full calendar years immediately preceding the Change in Control; or
(b) A change in the Executive's reporting responsibilities,
titles, job responsibilities or offices which in the Executive's sole opinion
result in a diminution of his status, control, or authority as in effect
immediately prior to a Change in Control; or
(c) The assignment to the Executive of any positions, duties or
responsibilities inconsistent in the sole opinion of the Executive with the
Executive's positions, duties and responsibilities or status with the Company
immediately prior to the Change in Control or that requires the Executive to
travel more than prior to the Change in Control; or
(d) A failure by the Company (i) to continue any cash bonus or
other incentive plans in substantially the same form and with the same
opportunity levels and perceived potential for obtaining performance
objectives, in effect immediately prior to the Change in Control, or (ii) to
continue the Executive as a participant in such plans on at least the same
basis as the Executive participated in accordance with the plans immediately
prior to the Change in Control; or
(e) A requirement by the Company that the Executive be based or
perform his duties anywhere other than at the Company's corporate office
location either (i) immediately prior to the Change in Control, or (ii) within
one mile of such prior corporate office location if the Company's corporate
office location is moved; or
(f) A failure by the Company to continue in effect any benefit,
whether or not qualified, or other compensation plan or the Company's failure
to provide the Executive with the number of paid vacation days to which he is
entitled in accordance with the Company's normal vacation practices with
respect to the Executive at the time of the Change in Control; or
(g) An agreement between the Board of Directors of Star Banc
and the Executive that employment should be terminated.
For purposes of this Section 1.7, any good faith determination of "Good
Reason" made by the Executive shall be conclusive. Anything in this Agreement
to the contrary notwithstanding, a termination by the Executive for any reason
during the 30-day period immediately following the first anniversary of the
Effective Date shall be deemed to be a termination for Good Reason for all
purposes of this Agreement.
1.8 Protected Period means the thirteen (13) month period immediately
following each and every Change in Control.
1.9 Termination Benefits means those benefits described in Section 2 of
the Agreement.
1.10 Subsidiaries means any and all companies at least fifty percent
(50%) owned, directly or indirectly, by Star Banc.
2. Benefits Upon Termination of Employment.
2.1 General. If, during the Protected Period following each
Change in Control, the Executive's employment is terminated either (i) by the
Company (other than for Cause or Disability), or (ii) by the Executive for Good
Reason, then the Executive (or his estate or personal representative),
shall be entitled to the Termination Benefits provided in this Section 2.
2.2 Base Salary and Bonus Through Date of Termination. The Company
shall promptly pay the Executive his full base salary through the Date of
Termination at the rate in effect at the time notice of termination is given.
In addition, the Company shall promptly pay the amount of any bonus or
incentive for the year in which the Date of Termination occurs (based on the
target bonus for the Executive for the year) prorated to the Date of
Termination (without application of any denial provisions based on
unsatisfactory personal performance or any other reason). The Company
shall also pay the Executive for any vacation earned but not taken with such
payment being equal to the Executive's calculated daily base salary rate times
the applicable days of such vacation.
2.3 Severance Payment. The Company shall pay the Executive a severance
payment equal to two (2) times the sum of: (a) the Executive's highest rate of
pay, on an annualized basis, established by the Company during the last five
years plus (b) the highest bonus earned by the Executive, with respect to any
single year, over the last five (5) years. The severance payment shall be made
in a lump-sum within thirty (30) days of the Date of Termination.
2.4 Pension Payment. The Company shall pay the Executive a supplemental
pension benefit equal to the lump sum benefit which the Executive would be
entitled to receive under the Star Banc Employees' Pension Plan if the
Executive were 100% vested and had two (2) additional years of service
minus the lump sum benefit actually payable to the Executive under the Star
Banc Employees' Pension Plan. Payment of this supplemental pension benefit
shall be made within thirty (30) days of the Date of Termination.
2.5 Medical Coverage. The Company shall, at its expense, maintain the
Executive's life, health and accidental death and disability insurance coverage
with the coverages maintained at the higher level in effect either immediately
prior to the date of the Change in Control or on the Date of Termination, for a
period of two (2) years following the Date of Termination.
2.6 Termination Which Does Not Require Payment Of Termination Benefits.
No Termination Benefits need to be provided by the Company to the Executive
under this Section 2 if the Executive's employment is terminated:
(a) By the Executive for any reason other than for Good Reason;
(b) By the Company for Cause or Disability; or
(c) By death.
3. New Employment; Reduction of Termination Benefits.
The Termination Benefits provided under Section 2 shall not be treated as
damages, but rather shall be treated as severance compensation to which the
Executive is entitled. The Executive shall not be required to mitigate the
amount of any Termination Benefit provided under Section 2 by seeking other
employment or otherwise.
4. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding,
in the event it shall be determined that any payment or distribution by the
Company to or for the benefit of the Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 4) (a "Payment") would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"),
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 and any benefits that result from the deductibility by the Executive of
such taxes (including, in each case, any interest or penalties imposed with
respect to such taxes), including, without limitation, any income 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.
(b) Subject to the provisions of Section 4(c), all determinations
required to be made under this Section 4, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by KPMG Peat
Marwick or such other certified public accounting firm as may be designated by
the Executive (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of
the receipt of notice from the Executive that there has been a Payment, or such
earlier time as is requested by the Company. In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity or group
effecting the Change of Control, the Executive shall appoint another nationally
recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder).
All fees and expenses of the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined pursuant to this Section 4, shall
be paid by the Company to the Executive within five days of the receipt of the
Accounting Firm's determination. Any determination by the Accounting Firm
shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 4(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be
given as soon as practicable but no later than ten business days after the
Executive is informed in writing of such claim and shall apprise the Company 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 Company
(or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies the Executive in
writing prior to the expiration of such period that it desires to contest such
claim, the Executive shall:
(i) give the Company any information reasonably requested by
the Company relating to such claim,
(ii) take such action in connection with contesting such claim
as the Company 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 Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company 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 4(c), the Company 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 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 administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company directs the
Executive to pay such claim and xxx for a refund, the Company 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; and further provided 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 Company'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.
(d) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 4(a) or 4(c), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject to
the Company's complying with the requirements of Section 4(c)) promptly
pay to the Company 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 Company pursuant to Section 4(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company 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.
5. Notice of Termination.
Any purported termination by the Company of the Executive's employment for
Cause or Disability or by the Executive for Good Reason shall be communicated
by notice of termination to the other party. A notice of termination shall
include the specific reason for termination relied upon and shall set forth
in reasonable detail, the facts and circumstances claimed to provide a basis
for termination of employment.
Any dispute by a party hereto regarding a notice of termination delivered
to such party must be conveyed to the other party within thirty (30) days after
the notice of termination is given. If the particulars of the dispute are not
conveyed within the thirty (30) day period, then the disputing party's
claims regarding the termination shall be deemed forever waived.
6. Successor; Binding Agreement.
Star Banc will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of Star Banc expressly to assume and agree to
perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken
place (the assumption shall be by agreement in form and substance satisfactory
to the Executive). Failure of Star Banc to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive, at his election, to Termination Benefits from the
Company in the same amount and on the same terms as the Executive would be
entitled to hereunder if he terminated his employment for Good Reason, except
that for purposes of implementing the foregoing, the date on which any such
election becomes effective shall be deemed the Date of Termination. As used in
this Agreement, "Company" shall mean the Company and any successor to its
business and/or assets as described above or which otherwise becomes bound by
all the terms and provision of this Agreement by operation of law.
In addition, as used in this Agreement, "Star Banc" shall mean Star
Banc and any successor to its business and/or assets as described above or
which otherwise becomes bound by all the terms and provision of this Agreement
by operation of law.
This Agreement shall inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive
should die while any amount would still be payable to him hereunder if he had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to his designee or, if
there be no such designee, to his estate.
7. Miscellaneous.
7.1 Notice. All notices, elections, waivers and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States certified mail,
return receipt requested, postage prepaid, to such address as either
party may have furnished to the other in writing in accordance herewith, except
that notices of change of address shall be effective only upon receipt.
7.2 No Waiver. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and the Chief Executive Officer of the Company.
No waiver by either party at any time of any breach by the other party 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. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement.
7.3 Indemnification. If litigation shall be brought to enforce or
interpret any provision contained herein, the Company hereby agrees to
indemnify the Executive for his attorney's fees and disbursement incurred in
such litigation, and hereby agrees to pay prejudgment interest on any money
judgment obtained by the Executive, calculated at the prime interest rate
announced as such by the Wall Street Journal from time-to-time, from the
earliest date that payment(s) to him should have been made under this
Agreement. If the Wall Street Journal announces two or more rates as the prime
rate, then the highest rate shall be used.
7.4 Payment Obligations Absolute. The Company's obligation to pay the
Executive the compensation and to make the arrangements provided herein shall
be absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense
or other right which the Company may have against the Executive or any third
party. All amounts payable by the Company hereunder shall be paid without
notice or demand. Each and every payment made hereunder by the Company shall
be final and the Company will not seek, nor permit its subsidiaries,
affiliates, successors or assigns to seek, to recover all or any part of such
payment from the Executive or from whosoever may be entitled thereto, for any
reason whatsoever.
7.5 Term of Agreement. The term of this Agreement shall continue for an
initial period of three (3) years from the date of this Agreement. On each
anniversary of this Agreement, the term shall be extended for an additional
year unless prior to an anniversary date Star Banc's Board of Directors
cause a notice of nonrenewal to be sent to the Executive. Any Termination
Benefits due pursuant to this Agreement shall continue to be an obligation of
the Company and enforceable by the Executive until paid in full.
7.6 Controlling Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.
7.7 Interpretation of Agreement. In the event of any ambiguity, vagueness
or other matter involving the interpretation or meaning of this Agreement, this
Agreement shall be construed liberally so as to provide to the Executive the
full benefits set out herein.
7.8 Severability. Each section, subsection or paragraph of this
Agreement shall be deemed severable and if for any reason any portion of this
Agreement is unenforceable, invalid or contrary to any existing or future law,
such unenforceability or invalidity shall not affect the applicability or
validity of any other portion of this Agreement.
7.9 U.S. Dollars. All payments required to be made under this Agreement
shall be made in United States Dollars.
7.10 Employment Agreement. Any benefits provided to the Executive under
this Agreement will, unless specifically stated otherwise in this Agreement, be
in addition to and not in lieu of any benefits that may be provided the
Executive under an Employment Agreement, if any, with the Company.
Nothing in this Agreement is to be deemed to give the Company
the right to take any action or engage in any omission with respect to the
Executive at any time when any such action or omission is not permissible and
proper under any Employment Agreement if then in force. Similarly, except as
provided otherwise in this Agreement, nothing in this Agreement is to be deemed
to give the Executive the right to take any action or engage in any omission
with respect to the Company at any time when any such act or omission is not
permissible and proper under any Employment Agreement if then in force.
This Agreement shall continue in force so long as the Executive
remains employed by the Company and shall not be affected by any termination of
any Employment Agreement.
7.11 Footnotes, Title and Captions. All footnotes or section, subsection
or paragraph titles or captions contained in this Agreement are for convenience
only and shall not be deemed part of the text of this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.
STAR BANC CORPORATION, on
behalf of itself and each Subsidiary
Attest: By:
_______________________________ ____________________________________
Name Xxxxxxx X. Xxxxx
Executive Vice President - Human Resources
_______________________________
Title
EXECUTIVE:
___________________________________
Name
EXHIBIT 10.5(cont.)
EXECUTIVE RETENTION AGREEMENT
The executive retention agreement was previously filed as an exhibit to the
regristrant's Annual Report on Form 10K for the year ended December 31, 1994
and is incorporated herein by reference.
This agreement covers the following executive officers of the Corporation for
the amounts indicated:
Xxxxx X. Xxxxxxx, $350,000
Executive Vice President and Chief Financial Officer
Xxxxxxx X. Xxxxx, $350,000
Executive Vice President
Xxxxxx X. Xxxxxxx, $250,000
Executive Vice President
Xxxxxx X. Xxxxxxxx, $250,000
Executive Vice President
Xxxxxx X. Xxxxxxxxxx $200,000
Executive Vice President
Xxxxx X. Xxxxxxxxx, $200,000
Executive Vice President
Xxxxxxx X. Xxxxx, $200,000
Executive Vice President
