EMPLOYMENT AGREEMENT
Exhibit
10.26
AGREEMENT
entered into as of this 23rd day of May, 2008, by and between WEST
BANCORPORATION, INC., an Iowa corporation (the “Company”), and XXXX X.
XXXXXXXXXXXX (“Xxxxxxxxxxxx”), to be effective as of the date stated above
(“Effective Date”).
WITNESSETH:
WHEREAS,
Winterbottom has been employed as the Company’s Executive Vice President, as
West Bank’s Director and President; and as Director of WB Capital Management
Inc.; and
WHEREAS,
the Company wishes that Winterbottom continue such employment pursuant to the
terms and conditions hereof, and in order to induce Winterbottom to enter into
this agreement (the “Agreement”) and to secure the benefits to accrue from his
performance hereunder, is willing to undertake the obligations assigned to
it
herein; and
WHEREAS,
Winterbottom is willing to continue his employment as described above under
the
terms hereof and to enter into the Agreement;
WHEREAS,
Winterbottom desires that his current Employment Agreement dated July 11, 1997,
as amended, be replaced and superseded in its entirety with this
Agreement.
NOW
THEREFORE, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the receipt of which
is
hereby acknowledged, the parties hereto agree as follows:
1. Positions;
Duties; Responsibilities.
1.1 Winterbottom
shall serve as Executive Vice-President of the Company, Director and President
of West Bank, and Director of WB Capital Management Inc. Winterbottom shall
report to the Chief Executive Officer of the Company. He shall perform the
duties ordinarily expected of the positions that he is assigned. Winterbottom
shall have such other responsibilities consistent with the status, titles,
and
reporting requirements set forth herein as are appropriate to said position,
subject to change from time to time by the Chief Executive Officer or the Board
of Directors of the Company or West Bank.
1.2 During
the course of his employment, Winterbottom agrees to devote his full time and
attention to the business affairs of the Company and West Bank.
2. Term.
Subject
to the terms and conditions hereof, the Company agrees to employ, and
Winterbottom hereby accepts employment, for an Initial Term commencing on the
Effective Date and ending December 31, 2010. This Agreement will be renewed
annually without written notice on each January 1 hereafter for a three year
period, provided the Company has not given notice of nonrenewal by November
30
of the preceding year. Accordingly, and by way of example, the intent of the
parties is that as of January 1, 2009, the Term will be a rolling three year
term beginning on each subsequent January 1, unless timely notice of nonrenewal
is given. In the event of a timely notice of nonrenewal, this Agreement will
expire at the end of the Initial Term or any then existing three-year term.
References to “Initial Term” or “Term” in this Agreement mean either the Initial
Term or any subsequent Term as the context requires.
3. Compensation
and Benefits.
3.1 Base
Salary.
The
Company shall pay Winterbottom a base salary during the Term of this Agreement
at the minimum annual rate of Two-hundred ten thousand Dollars ($210,000) (“Base
Salary”), payable in accordance with the standard payroll practices of the
Company. It is understood that the Base Salary is to be Winterbottom’s minimum
annual compensation during the Term. Winterbottom’s Base Salary will be reviewed
by the Compensation Committee of the Board at least annually, and may be
increased (but not reduced). If the Base Salary stated above is increased,
the
new Base Salary shall be noted in Board minutes and shall become a term of
this
Agreement by reference without need for attachment or addendum.
3.2 Annual
Bonus/Incentive Target/Incentive Payment.
In
addition to other compensation to be paid under Section 3, each year during
the
Term of this Agreement, Winterbottom shall be eligible for an annual incentive
bonus (“Annual Bonus”). An annual incentive bonus target (“Incentive Target”)
shall be set for each year by the Board, based on a recommendation of the
Compensation Committee. The annual incentive payment actually awarded and paid
to Winterbottom for each year (“Incentive Payment”) will be determined by the
Board in its sole discretion, with consideration to the Compensation Committee
recommendation, and paid by the Company as soon as reasonably possible after
the
end of each fiscal year.
3.3 Equity
Appreciation Plans.
In
addition to other compensation to be paid under this Section 3, the Company
may
grant stock options, stock appreciation rights, restricted stock, or other
forms
of equity participation rights to Winterbottom as a participant, if a plan
is
adopted by the Company.
3.4 Vacation.
Winterbottom shall be entitled to not less than 25 days of paid time off, plus
all Company-recognized holidays, during each full year of employment hereunder
in accordance with the general terms of the vacation policy adopted by the
Company. Upon Termination under Section 4 of this Agreement, Winterbottom will
be paid for any accrued vacation that has not been taken through the date of
Termination.
3.5 Reimbursement
of Expenses.
The
Company shall reimburse Winterbottom in accordance with Company’s expense
reimbursement policies for all reasonable, ordinary, and necessary business
expenses incurred by Winterbottom while performing duties on behalf of the
Company. In addition, the Company shall pay Winterbottom’s monthly dues at one
local country club or one other similar club, and expenses related to
Winterbottom’s use of such club for matters related to the Company’s
business.
3.6 Employee
Benefits.
Winterbottom shall be entitled to receive any perquisites and participate in
any
employee benefit plans, including profit-sharing plans, now existing or
established hereafter generally available to employees and/or senior officers
of
the Company, provided Winterbottom is otherwise qualified and eligible for
such
benefits. As part of its normal course of business, the Company may amend and/or
terminate any such employee benefits or plans.
3.7 Benefits
Not in Lieu of Compensation.
No
benefit or perquisite provided to Winterbottom shall be deemed to be in lieu
of
Base Salary, Annual Bonus, or other compensation, provided that the reporting
of
any benefits shall be consistent with IRS regulations.
3.8 Short-Term
Disability.
Any
period of short-term disability experienced by Winterbottom shall be treated
under the Company’s Short-Term Disability benefits policy(ies).
3.9 Indemnification
and Insurance.
Except
for disputes between the parties concerning this Agreement, the Company shall
protect and indemnify Winterbottom against any and all legal claims or actions
involving him as a consequence of his employment hereunder to the maximum extent
allowed under the Iowa Business Corporation Act. The Company shall provide
Winterbottom the maximum insurance coverage provided any other employee or
director of the Company. The Company agrees to continue Winterbottom’s coverage
under such directors and officers’ liability insurance policies as shall from
time to time be in effect for Company officers and employees for not less than
six years following Winterbottom’s termination of employment.
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4. Consequences
of Termination of Employment and/or Change of Control.
4.1 Death.
In the
event of Winterbottom’s death during the Term of this Agreement, this Agreement
shall terminate, and all obligations to Winterbottom shall cease as of the
date
of death except that, (a) within ten (10) business days of termination, the
Company shall pay to Winterbottom’s designated beneficiary, as defined below in
this Section, or the legal representative of his estate a sum equal to one
month
of Base Salary and Seventy-Five percent (75%) of the amount of his Incentive
Target prorated to the date of death—provided, however, that if Winterbottom’s
death is preceded by a leave of absence associated with a period of disability,
any Incentive Target shall be restricted to the fiscal year in which such leave
commenced and prorated to the last date worked. All rights and benefits of
Winterbottom under the benefit plans and programs of the Company in which
Winterbottom is a participant, will be provided as determined in accordance
with
the terms and provisions of such plans and programs. All awards of restricted
stock, stock options, and any other benefits under any long-term incentive
plans
shall be handled in accordance with the terms of the relevant plan and
agreements entered into between Winterbottom and the Company with respect to
such awards.
Winterbottom
may designate a beneficiary by filing a written designation with the head of
personnel of the Company. Winterbottom may revoke or modify the designation
at
any time by filing a new designation. However, designations will only be
effective if signed by Winterbottom and received by the Company during
Winterbottom’s lifetime. Winterbottom’s beneficiary designation shall be deemed
automatically revoked if the beneficiary predeceases Winterbottom, or if
Winterbottom names a spouse as beneficiary and the marriage is subsequently
dissolved. If Winterbottom dies without a valid beneficiary designation, all
payments shall be made to Winterbottom’s estate.
If
a
benefit is payable to a minor, to a person declared incompetent, or to a person
incapable of handling the disposition of his or her property, the Company may
pay such benefit to the guardian, legal representative, or person having the
care or custody of such minor, incompetent, or incapable person. The Company
may
require proof of incompetence, minority, or guardianship as it may deem
appropriate prior to distribution of the benefit. Such distribution shall
completely discharge the Company from all liability with respect to such
benefit.
4.2 Permanent
Disability.
If
Winterbottom shall become permanently incapacitated by reasons of sickness,
accident, or other physical or mental disability (“Permanent Disability”) as
defined hereunder during the Term of this Agreement, this Agreement and all
obligations to Winterbottom shall cease except as provided below. Permanent
Disability shall be determined in one of two ways: (1) Winterbottom shall be
considered to be Permanently Disabled for purposes of this Agreement if he
becomes entitled to Long-Term Disability benefits under the Company’s Long-Term
Disability Plan, in which case, this Agreement and all obligations to
Winterbottom shall cease except that for a period of twelve (12) months, the
Company shall supplement Winterbottom’s Long-Term Disability payments to the
extent necessary for the Long-Term Disability payments plus the supplemental
payments to equal Winterbottom’s Base Pay as defined in Section 3.1 herein; (2)
alternatively, if Winterbottom becomes permanently incapacitated and such
incapacitation is certified by a physician chosen by the Company and reasonably
acceptable to Winterbottom (if he is then able to exercise sound judgment),
and
Winterbottom shall therefore be unable to perform his normal duties hereunder,
then the employment of Winterbottom hereunder and this Agreement may be
terminated by Winterbottom or the Company upon thirty (30) days’ written notice
to the other party following such certification. Should Winterbottom not
acquiesce (or should he be unable to acquiesce) in the selection of the
certifying doctor, a doctor chosen by Winterbottom (or if he is not then able
to
exercise sound judgment, by his spouse or personal representative) and
reasonably acceptable to the Company shall be required to concur in the medical
determination of incapacitation, failing which, the two doctors shall designate
a third doctor whose decision shall be determinative as of the end of the
calendar month in which such concurrence or third-doctor decision, as the case
may be, is made. After the final certification is made and the 30-day written
notice is provided, the Company shall pay to Winterbottom, at such times as
Base
Salary provided for in Section 3.1 of this Agreement would normally be paid,
Winterbottom’s then-current Base Salary for a period of twelve (12) months.
Under either determination of Permanent Disability, Winterbottom shall be paid
Seventy-Five percent (75%) of the amount of his Incentive Target for the year
in
which disability is certified prorated to the last day worked. If no Incentive
Target has been determined for the year in which final certification occurs,
the
last determined Incentive Target shall apply.
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Following
termination pursuant to either of the above alternatives, any rights and
benefits Winterbottom may have under the employee benefit plans and programs
of
the Company in which Winterbottom is a participant shall be determined in
accordance with the terms and provisions of such plans and programs. All awards
of restricted stock, stock options and any other benefits under any long-term
incentive plans shall be handled in accordance with the terms of the relevant
plan and agreements entered into between Winterbottom and the Company with
respect to such awards.
4.3 Due
Cause.
The
Company may terminate Winterbottom’s employment, remove him as an officer and
director of the Company, and its subsidiaries and terminate this Agreement
at
any time for Due Cause. In the event of such termination for Due Cause,
Winterbottom shall continue to receive Base Salary payments provided for in
this
Agreement only through the date of such termination for Due Cause, and
Winterbottom shall be entitled to no further compensation under this Agreement,
except that any rights and benefits Winterbottom may have under the employee
benefit plans and programs of the Company or its subsidiaries in which
Winterbottom is a participant shall be determined in accordance with the terms
and provisions of such plans and programs. Winterbottom understands and agrees
that in the event of the termination of employment, removal as an officer and
director, and termination of this Agreement pursuant to this Section 4.3: (a)
all awards of restricted stock, stock options, and any other benefits under
long-term incentive plans shall be handled in accordance with the terms of
the
relevant plan and agreements entered into between Winterbottom and the Company
with respect to such awards; and (b) the Company shall have no obligation to
pay
any Annual Bonus to Winterbottom under the terms of this Agreement; but (c)
the
obligations of Winterbottom under Sections 7 and 8 of this Agreement shall
remain in full force and effect.
The
term
“Due Cause” shall mean (i) the willful and continued failure of Winterbottom to
substantially perform his duties with the Company (other than any such failure
resulting from Permanent Disability), after a demand for substantial performance
is delivered to Winterbottom by the Board that specifically identifies the
manner in which Winterbottom has not substantially performed his duties; (ii)
willful misconduct by Winterbottom that is materially injurious to the Company
or its subsidiaries, monetarily or otherwise; (iii) gross negligence in the
performance of duties assumed pursuant to this Agreement or gross neglect of
such duties; or (iv) conviction for a felony or a serious misdemeanor involving
moral turpitude. For purposes of this definition, no act, or failure to act,
on
the part of Winterbottom shall be considered “willful” unless it is done, or
omitted to be done, by Winterbottom in bad faith and without reasonable belief
that Winterbottom’s action or omission was in the best interests of the Company
or its subsidiaries. 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
the General Counsel of the Company shall be conclusively presumed to be done,
or
omitted to be done, by Winterbottom in good faith and in the best interests
of
the Company.
4.4 Without
Cause.
The
other provisions of this Agreement notwithstanding, the Company may terminate
Winterbottom’s employment, remove him as an officer and director, and terminate
this Agreement at any time for whatever reason it deems appropriate with or
without cause and with or without prior notice. In the event of such a
termination of Winterbottom’s employment and this Agreement, Winterbottom shall
have no further obligations of any kind under or arising out of the Agreement
(except for the obligations of Winterbottom under Sections 7 and 8 of this
Agreement), and the Company shall be obligated to promptly pay Winterbottom
only
the following “Severance Payment”: Three times Winterbottom’s Base Salary as of
the date of Termination Without Cause—provided, however, that in the event that
as a result of such termination of employment, Winterbottom would otherwise
be
entitled to a Change of Control Benefit under Section 4.7 of this Agreement,
Winterbottom shall be entitled to elect either: (i) the Severance Payment
described above, or (ii) the Change of Control Benefit described in Section
4.7
of this Agreement, but in no event shall he be entitled to both payments.
Payment shall be made in a lump sum within 60 days of the date of termination.
In addition, the Company shall pay the insurance premiums to provide
Winterbottom family health coverage under COBRA for one year after Winterbottom
ceases employment by the Company.
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Winterbottom
agrees that the payments described in this Section 4.4 shall be full and
adequate compensation to Winterbottom for all damages Winterbottom may suffer
as
a result of the termination of his employment pursuant to this Section 4.4,
and
in consideration of the payments and benefits provided in this Section 4.4,
Winterbottom agrees to execute a waiver and release agreement acceptable to
the
Company—provided, however, that except as specifically provided for under this
Section 4.4, any rights and benefits Winterbottom may have under the employee
benefit plans and programs of the Company or its subsidiaries in which
Winterbottom is a participant shall be determined in accordance with the terms
and provisions of such plans and programs. All awards of restricted stock,
stock
options, and any other benefits under any long-term incentive plans shall be
handled in accordance with the terms of the relevant plan and agreements entered
into between Winterbottom and the Company with respect to such
awards.
4.5 Employee
Voluntary.
In the
event Winterbottom terminates his employment of his own volition prior to the
end of the Term of this Agreement, except for a termination for Good Reason
as
specifically defined in Section 4.6 below, such termination shall constitute
a
voluntary termination and in such event the Company’s only obligation to
Winterbottom shall be to make Base Salary payments provided for in this
Agreement through the date of such voluntary termination. Winterbottom
understands and agrees that in the event of termination of employment pursuant
to this Section 4.5: (a) any rights and benefits Winterbottom may have under
the
employee benefit plans and programs of the Company or its subsidiaries in which
he is a participant shall be determined in accordance with the terms and
provisions of such plans and programs; (b) all awards of restricted stock,
stock
options, and any other benefits under any long-term incentive plans shall be
handled in accordance with the terms of the relevant plan and agreements entered
into between Winterbottom and the Company with respect to such awards; (c)
the
Company shall have no obligation to pay any Annual Bonus, Incentive Target,
or
Incentive Payment to Winterbottom under the terms of this Agreement and (d)
the
obligations of Winterbottom under Sections 7 and 8 of this Agreement shall
remain of full force and effect.
4.6 Good
Reason.
Winterbottom may terminate this Agreement on ninety (90) days’ notice for Good
Reason.
(a) For
purposes of this Agreement, “Good Reason” shall mean:
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(1)
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Without
Winterbottom’s express written consent, the assignment to Winterbottom of
any duties or responsibilities materially inconsistent with the employment
described in Section 1.1 above, or a material change in the reporting
responsibilities, titles, or offices as described in Section 1.1,
or any
removal of Winterbottom from, or any failure to re-elect Winterbottom
to,
any of such responsibilities or positions, except in connection with
the
termination of Winterbottom’s employment for Due Cause, Permanent
Disability, retirement, or Death or except in connection with employment
under the Six-Month Rule set forth in Section 4.7(c)(1)
herein.
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(2)
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A
material reduction in Winterbottom’s Base
Salary;
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(3)
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Failure
of the Company to obtain the assumption of, or the agreement to perform,
this Agreement by any successor as defined in Section 9.3 hereof;
or
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(4)
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The
Company requiring Winterbottom to be based anywhere other than Polk
County, Iowa, or a county contiguous thereto, except
for required travel for Company business to an extent substantially
consistent with Winterbottom’s duties as described under Section 1.1, or
in the event Winterbottom consents to any relocation, the failure
by the
Company to pay (or reimburse Winterbottom) for all reasonable moving
and
relocation expenses incurred by Winterbottom relating to a change
of
Winterbottom’s principal residence in connection with such
relocation.
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5
(b) Good
Reason Severance Payment:
In
the
event Winterbottom appropriately terminates his employment and this Agreement
for Good Reason (after having giving notice to the Board of the “Good Reason”
and allowing the Board at least a 30 day period to cure the Good Reason),
Winterbottom shall have no further obligations of any kind under or arising
out
of the Agreement (except for the obligations of Winterbottom under Sections
7
and 8 of this Agreement), and the Company shall be obligated to pay Winterbottom
an amount equal to his Base Salary plus $100,000 per year for the remainder
of
the then-existing Term of this Agreement, but no less than a total of one year
of Base Salary plus $100,000 (“Good Reason Severance Payment”)—provided,
however, that in the event that as a result of such termination of employment
by
Winterbottom for Good Reason, Winterbottom would otherwise be entitled to a
Change of Control Benefit under Section 4.7 of this Agreement, Winterbottom
shall be entitled to elect either: (i) the Good Reason Severance Payment
described in this Section 4.6(b) or (ii) the Change of Control Benefit described
in Section 4.7 of this Agreement, but in no event shall he be entitled to both
payments. Any Good Reason Severance Benefit paid pursuant to this Section 4.6
shall be paid as soon as reasonably possible (i.e. within sixty days) after
the
expiration of any revocation period following Winterbottom’s execution of the
release referred to in Section 4.6(c) below. In addition, the Company shall
pay
the insurance premiums to provide Winterbottom family health coverage under
COBRA for one year after Winterbottom ceases employment by the
Company.
(c) Release
of Claims
Winterbottom
agrees that the payments described in this Section 4.6 shall be full and
adequate compensation to Winterbottom for all damages Winterbottom may suffer
as
a result of his termination of employment for Good Reason pursuant to Section
4.6 of this Agreement, and in consideration of the payments and benefits
provided in this Section 4.6, Winterbottom agrees to execute a waiver and
release agreement acceptable to the Company—provided, however, that except as
specifically provided for under this Section 4.6, any rights and benefits
Winterbottom may have under the employee benefit plans and programs of the
Company or its subsidiaries in which Winterbottom is a participant shall be
determined in accordance with the terms and provisions of such plans and
programs. All awards of restricted stock, stock options, and any other benefits
under any long-term incentive plans shall be handled in accordance with the
terms of the relevant plan and agreements entered into between Winterbottom
and
the Company with respect to such awards.
4.7 Change
in Control.
If
within 12 months after, or 2 months prior to, a Change in Control of the Company
as defined below, the Company terminates Winterbottom’s employment for reasons
other than those under Sections 4.1, 4.2, or 4.3 herein or if Winterbottom
terminates his employment for Good Reason as defined in Section 4.6 herein,
the
Company shall pay to Winterbottom a benefit as defined in Section 4.7(b)
(“Change in Control Benefit”).
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(a)
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Change
in Control.
The term “Change in Control” shall have the following meaning:
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(1)
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Any
person or entity or group of affiliated persons or entities (other
than
the Company) becomes a beneficial owner, directly or indirectly,
of 30% or
more of the Company’s voting securities or all or substantially all of the
assets of the Company; or
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(2)
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The
Company enters into a definitive agreement that contemplates the
merger,
consolidation, or combination of the Company with an unaffiliated
entity
in which either or both of the following is to occur: (i) the Board
of
Directors of the Company, immediately prior to such merger, consolidation,
or combination will constitute less than a majority of the board
of
directors of the surviving, new, or combined entity; or (ii) less
than 50%
of the outstanding voting securities of the surviving, new, or combined
entity will be beneficially owned by the stockholders of the Company
immediately prior to such merger, consolidation, or combination—provided,
however, that if any definitive agreement to merge, consolidate,
or
combine is terminated without consummation of the transaction, then
no
Change in Control shall be deemed to have occurred pursuant to this
paragraph; or
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(3)
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The
Company enters into a definitive agreement that contemplates the
transfer
of all or substantially all of the Company’s assets, other than to a
wholly-owned subsidiary of the Company—provided, however, that if any
definitive agreement to transfer assets is terminated without consummation
of the transfer, then no Change in Control shall be deemed to have
occurred pursuant to this paragraph;
or
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(4)
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A
majority of the members of the Board of Directors of the Company
shall be
persons who: (i) were not members of such Board on the Effective
Date
(“current members”); or (ii) were not nominated by a vote of such Board
which included the affirmative vote of a majority of the current
members
on such Board at the time of their nomination (“future designees”); or
(iii) were not nominated by a vote of such Board which included the
affirmative vote of a majority of the current members and future
designees, taken as a group, on such Board at the time of their
nomination.
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(b)
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Change
in Control Benefit.
Upon a termination of Winterbottom’s employment under the circumstances
described in Section 4.7, Winterbottom will be eligible for a Change
in
Control Benefit of three times Winterbottom’s Current Annual Compensation
as defined in Section 4.7(b) as of the date of the Change in Control.
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(1)
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Current
Annual Compensation.
For purposes of this Agreement “Current Annual Compensation” means the sum
of Winterbottom’s annual Base Salary for the fiscal year in which
termination occurs, plus
$100,000. This definition covers amounts includible in compensation
prior
to any cash or deferred
arrangements.
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(2)
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Insurance
Benefit. In addition, the Company shall pay the insurance premiums
to
provide Winterbottom family health coverage under COBRA for one year
after
Winterbottom ceases employment by the
Company.
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Consideration
of Benefit.
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(1)
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Six-Month
Rule.
Notwithstanding any other provision of this Agreement, in the event
of a
termination by the Company or a successor or termination by Winterbottom
for Good Reason in conjunction with a Change in Control, as consideration
for the benefit created in Section 4.7(b), at the discretion of the
Company or the successor as defined in Section 9.3, Winterbottom
must make
himself available to work with the Company and/or the successor for
a
transition period of not more than six months after a Change of Control
has occurred (“Transition Period”). If Winterbottom fails to remain
employed for said period, (unless he terminates for Good Reason under
Section 4.6(a)(2), (3) or (4) herein), or if the Company or the successor
terminates Winterbottom’s employment for Due Cause during said period,
then no Change in Control Benefit shall be paid to Winterbottom.
Any
Change of Control Benefit paid pursuant to this Section 4.7 shall
be paid
as soon as reasonably possible (i.e. within sixty days) after the
waiver
or the expiration of the Transition Period and after the expiration
of any
revocation period following Winterbottom’s execution of the release
referred to in Section 4.7(c)(2)
below.
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(2)
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Release
of Claims.
Winterbottom agrees that the payments described in Section 4.7(b)
shall be
full and adequate compensation to Winterbottom for all damages
Winterbottom may suffer as a result of the termination of his employment
or his resignation for Good Reason in conjunction with a Change in
Control, and in consideration of the payments and benefits provided
in
Section 4.7(b), Winterbottom agrees to execute a waiver and release
agreement acceptable to the Company, and, if applicable, to the
successor—provided, however, that any rights and benefits Winterbottom may
have under the employee benefit plans and programs of the Company
or its
subsidiaries in which Winterbottom is a participant shall be determined
in
accordance with the terms and provisions of such plans and programs.
All
awards of restricted stock, stock options, and any other benefits
under
any long-term incentive plans shall be handled in accordance with
the
terms of the relevant plan and agreements entered into between
Winterbottom and the Company with respect to such
awards.
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5. Limited
Benefit.
Notwithstanding
any of the provisions of Section 4.7 or other provisions in this Agreement
to
the contrary, if any payments or benefits received, or to be received, by
Winterbottom (whether pursuant to the terms of this Agreement or any other
plan,
arrangement, or agreement with the Company or its subsidiaries; any person
whose
actions result in a Change of Control; or any person affiliated with the Company
or such person) constitute “parachute payments” within the meaning of Section
280G(b)(2)(A) of the Internal Revenue Code (the “Code”), and the value thereof
exceeds 2.99 times Winterbottom’s “base amount,” as defined in Section
280G(b)(3) of the Code, then in lieu thereof, the Company shall pay
Winterbottom, as soon as practicable following the termination of Winterbottom’s
employment by the Company but in no event later than thirty (30) days after
the
expiration of any revocation period following Winterbottom’s execution of any
release referred to in this Agreement, a lump-sum cash payment equal to 2.99
times his “base amount” (the “Alternative Severance Payment”), reduced as
provided below. The value of the payments to be made under Section 4.7(b) and
Winterbottom’s base amount shall be determined in accordance with temporary or
final regulations, if any, promulgated under Section 280G of the Code and based
upon the advice of the tax counsel referred to below.
The
Alternative Severance Payment shall be reduced by the amount of any other
payment or the value of any benefit received, or to be received, by Winterbottom
in connection with a Change of Control of the Company or his termination of
employment unless (i) Winterbottom shall have effectively waived his receipt
or
enjoyment of such payment or benefit prior to the date of payment of the
Alternative Severance Payment; (ii) in the opinion of tax counsel selected
by
the Company’s independent auditors, such other payment or benefit does not
constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the
Code; or (iii) in the opinion of such tax counsel, the Alternative Severance
Payment plus all other payments or benefits that constitute “parachute payments”
within the meaning of Section 280G(b)(2) of the Code are reasonable compensation
for services actually rendered within the meaning of Section 280G(b)(4) of
the
Code or are otherwise not subject to disallowance as a deduction by reason
of
Section 280G of the Code. The value of any non-cash benefit or any deferred
payment or benefit shall be determined in accordance with the principles of
Section 280G(d)(3) and (4) of the Code.
6. Section
162(m) Limitation.
In
the
event and to the extent that the payments due to Winterbottom under this
Agreement exceed the “reasonable compensation” limitations of Section 162(m) of
the Code, the portion thereof that would not be deductible by the Company in
the
taxable year in which the payment is due shall be deferred by the Company and
paid to Winterbottom on the date that is sixteen (16) months following the
termination of Winterbottom’s employment, together with interest thereon at the
rate provided in Section 7872(f)(2) of the Code.
7. Covenants
of Winterbottom.
7.1 Confidential
Information.
Winterbottom acknowledges that as a result of the services to be rendered to
the
Company hereunder, Winterbottom will be brought into close contact with many
confidential affairs of the Company, its subsidiaries and affiliates, not
readily available to the public. Winterbottom further acknowledges that the
services to be performed under this Agreement are of a special, unique, unusual,
extraordinary, and intellectual character; that the Company’s goods and services
are marketed throughout Iowa and various parts of the United States; and that
the Company competes with other organizations that are or could be located
in
nearly any part of the United States or various parts of the world.
8
7.2 Restriction
on Use of Confidential Information.
In
recognition of the foregoing, Winterbottom covenants and agrees that, except
as
is necessary in providing services under this Agreement or to the extent
necessary to comply with law or the valid order of a court or government agency
of competent jurisdiction, Winterbottom will neither knowingly use for his
own
benefit, nor knowingly divulge any Confidential Information and Trade Secrets
of
the Company, its subsidiaries, or affiliated entities that are not otherwise
in
the public domain and, so long as they remain Confidential Information and
Trade
Secrets not in the public domain, will not intentionally disclose them to anyone
outside of the Company either during or after his employment. For the purposes
of this Agreement, “Confidential Information and Trade Secrets of the Company”
means information that is secret to the Company, its subsidiaries, or affiliated
entities. It may include, but is not limited to, information relating to the
products, services, new and future concepts, and business of the Company, its
subsidiaries, or affiliates, in the form of memoranda, reports, computer
software and data banks, customer lists, employee lists, books, records,
financial statements, manuals, papers, contracts and strategic plans. As a
guide, Winterbottom is to consider as being secret and confidential information
originated, owned, controlled, or possessed by the Company, its subsidiaries,
or
affiliated entities that is not disclosed in printed publications stated to
be
available for distribution outside the Company, its subsidiaries, or affiliated
entities. In instances where doubt does or should reasonably be understood
to
exist in Winterbottom’s mind as to whether information is secret and
confidential to the Company, its subsidiaries, or affiliated entities,
Winterbottom agrees to request an opinion, in writing, from the Company before
disclosing such information.
7.3 Public
Information.
Anything to the contrary in this Section 7 notwithstanding, Winterbottom shall
disclose to the public and discuss such information as is customary or legally
required to be disclosed by a Company whose stock is publicly traded, or that
is
otherwise legally required to be disclosed, or that is in the best interests
of
the Company to disclose.
7.4 Company
Property.
Winterbottom will deliver promptly to the Company on the termination of his
employment with the Company, or at any other time the Company may so request,
all memoranda, notes, records, reports, and other documents relating to the
Company, its subsidiaries, or affiliated entities, and all property owned by
or
originating from the Company, its subsidiaries, or affiliated entities that
Winterbottom may then possess or have under his control.
7.5 No
Competition, Solicitation, or Tampering.
Throughout the Term of the Agreement and for a period of one (1) year
immediately following any termination or resignation of Winterbottom’s
employment under this Agreement (except that the time period of such
restrictions shall be extended by any period during which Winterbottom is in
violation of this Section 7.5), Winterbottom shall not directly or indirectly
engage in any other business in which the Company engages during the Term of
the
Agreement—provided, however, that the restriction in Section 7.5 shall apply
only to counties in which the Company or its subsidiaries have offices or in
contiguous counties. For purposes of Section 7.5, Winterbottom shall be deemed
to engage in a business if he directly or indirectly engages or invests in,
owns, manages, operates, controls, or participates in the ownership, management,
operation or control of, is employed by, associated or in any manner connected
with, or renders services or advice to, any business in which the Company
engages—provided, however, that Winterbottom may invest in the securities of any
enterprise (but without otherwise participating in the activities of such
enterprise) if two conditions are met: (a) such securities are listed on any
national or regional securities exchange (or have been registered under Section
12(g) of the Securities Exchange Act of 1934) and (b) Winterbottom does not
beneficially own (as defined by Rule 13d-3 promulgated under the Securities
Exchange Act of 1934) in excess of 5% of the outstanding capital stock of such
enterprise. The provisions of this paragraph shall survive and apply regardless
of the reason for Winterbottom’s termination.
During
the period described in the first paragraph of Section 7.5, Winterbottom will
not, directly or indirectly, for the benefit of any bank or financial
institution or any company or other entity affiliated, directly or indirectly,
with another bank or financial institution other than the Company, solicit
the
employment or services of, hire, or assist in the hiring of any person eligible
for the Company’s or its subsidiaries’ compensation or benefit plans for senior
officers or executives.
During
the period described in the first paragraph of Section 7.5, Winterbottom shall
not directly or indirectly request, induce, or attempt to influence any existing
or prospective customers, vendors, or licensors of the Company or its
subsidiaries to curtail or cancel any business they may transact with the
Company. For purposes of this Section 7.5, “prospective customers” shall mean
individuals or entities who the Company or its subsidiaries have contacted
within the twelve (12) months immediately preceding the termination of this
Agreement. The provisions of this paragraph shall survive regardless of the
reason for Winterbottom’s termination or resignation.
9
7.6 Intellectual
Property.
Winterbottom will promptly disclose to the Company all inventions, processes,
original works of authorship, trademarks, patents, improvements, and discoveries
related to the business of the Company, its subsidiaries, or affiliated entities
(collectively “Developments”), conceived or developed during Winterbottom’s
employment with the Company and based upon information to which he had access
during the term of employment, whether or not conceived during regular working
hours, through the use of Company time, material, or facilities or otherwise.
All such Developments shall be the sole and exclusive property of the Company,
and upon request, Winterbottom shall deliver to the Company all outlines,
descriptions, and other data and records relating to such Developments, and
shall execute any documents deemed necessary by the Company to protect the
Company’s rights thereunder. Winterbottom agrees upon request to assist the
Company to obtain United States or foreign letters patent and copyright
registrations covering inventions and original works of authorship belonging
to
the Company hereunder. If the Company is unable because of Winterbottom’s mental
or physical incapacity to secure Winterbottom’s signature to apply for or to
pursue any application for any United States or foreign letters patent or
copyright registrations covering inventions and original works of authorship
belonging to the Company hereunder, then Winterbottom hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents
as his agent and attorney in fact, to act for and in his behalf and stead to
execute and file any such applications and to do all other lawfully permitted
acts to further the prosecution and issuance of letters patent or copyright
registrations thereon with the same legal force and effect as if executed by
him. Winterbottom hereby waives and quitclaims to the Company any and all
claims, of any nature whatsoever, that he may hereafter have for infringement
of
any patents or copyright resulting from any such application for letters patent
or copyright registrations belonging to the Company hereunder.
7.7 Equitable
Remedies.
Winterbottom agrees that the remedy at law for any breach or threatened breach
of any covenant contained in this Section 7 may be inadequate and that the
Company, in addition to such other remedies as may be available to it in law
or
in equity, shall be entitled to injunctive relief without bond or other
security.
7.8 Modification
of Remedies.
Although the covenants contained in this Section 7 above are considered by
the
parties hereto to be fair and reasonable in the circumstances, it is recognized
that restrictions of such nature may fail for technical reasons, and
accordingly, it is hereby agreed that if any of such restrictions shall be
adjudged to be void or unenforceable for whatever reason, but would be valid
if
part of the wording thereof were deleted, or the period thereof reduced or
the
area dealt with reduced in scope, the restrictions contained herein shall be
enforced to the maximum extent permitted by law, and the parties consent and
agree that such scope or wording may be accordingly judicially modified in
any
proceeding brought to enforce such restrictions.
7.9 Survival
of Rights and Obligations.
Notwithstanding that Winterbottom’s employment hereunder may expire or be
terminated as provided in Sections 2 or 4 above, this Agreement shall continue
in full force and effect insofar as is necessary to enforce the covenants and
agreements of Winterbottom contained in this Section 7. In addition, the
Company’s obligations under Sections 4 and 7 shall continue in full force and
effect with respect to Winterbottom or his estate.
8. Dispute
Resolution.
The
parties shall use their best efforts and good will to settle any and all
disputes by amicable negotiations. Subject to the Company’s right to seek
injunctive relief in court as provided in Section 7.7 of this Agreement, any
dispute, controversy, or claim arising out of or in relation to or in connection
with this Agreement, including without limitation, any dispute as to the
construction, validity, interpretation, enforceability, or breach of this
Agreement, including a claim for indemnification under Section 3.9 or disability
under Section 3.8 or 4.2, that cannot be resolved by negotiation shall be
resolved by impartial binding arbitration. In the event that either the Company
or Winterbottom demands arbitration, Winterbottom and the Company agree that
such arbitration shall be the exclusive, final, and binding forum for resolution
of such claims, subject to any rights of appeal that either party may have
under
any controlling law dealing with the review of arbitration
decisions.
10
8.1 Arbitration.
Arbitration shall be heard and determined in Des Moines, Iowa by one arbitrator,
who shall be impartial and who shall be selected by mutual agreement of the
parties. If the parties cannot agree to selection of an arbitrator, the
arbitrator shall be appointed by a Judge of the Iowa District Court for Polk
County. Either party to this Agreement may commence an action in the Iowa
District Court for Polk County for the limited purpose of appointment of an
arbitrator hereunder. The Court shall select the arbitrator from candidates
nominated by the parties hereto. Each party may nominate up to two candidates.
In determining the arbitrator, the Court should give due consideration to the
impartiality, background, and experience of the nominees relating to the issues
to be resolved in the arbitration. The Court’s decision as to the identity of
the arbitrator shall be final. It is intended that controversies or claims
submitted to arbitration under this Section 8 shall remain confidential, and
to
that end, it is agreed by the parties, and must be agreed to by the arbitrator,
that neither the facts disclosed in the arbitration, the issues arbitrated,
nor
the views or opinions of any persons concerning them, shall be disclosed to
third persons at any time, except to the extent necessary to enforce an award
or
judgment or as required by law or in response to legal process or in connection
with such arbitration. The parties shall be entitled to disclose the facts
disclosed in arbitration, the issues arbitrated, and the views or opinions
of
any person concerning them to legal or tax advisors as long as such advisors
agree to be bound by the confidentiality terms of this Section. Either party
to
this Agreement may initiate arbitration by serving a written demand for
arbitration upon the other party. Such a demand must be served within twelve
months of the events giving rise to the dispute and specifically identify and
describe the dispute to be arbitrated. Any claim that is not timely made, as
defined herein, by written notice to the other party shall be deemed absolutely
and finally waived. The cost of the arbitration proceeding (including attorneys’
fees and expenses) shall be allocated by the arbitrator. Any award of money
damages shall be increased by interest at the rate of 6% per annum from the
date
that the arbitrator finds any such money was due and payable until paid in
full.
Winterbottom and the Company agree that the hearing, if any, for any arbitration
commenced pursuant to this Section shall be submitted to the arbitrator for
decision within 180 days of the notice demanding arbitration.
8.2 Acknowledgement
of Parties.
The
Company and Winterbottom understand and acknowledge that this Section 8 means
that neither of them can pursue a claim against the other in a court of law
regarding or related to this Agreement, except as specifically stated above
in
Sections 7.7 or 8.1.
9. Successors
and Assigns.
9.1 Assignment
by the Company.
This
Agreement shall inure to the benefit of, and shall be binding upon, the
successors and assigns of the Company.
9.2 Assignment
by Winterbottom.
Winterbottom may not assign this Agreement or any part thereof—provided,
however, that nothing herein shall preclude one or more beneficiaries of
Winterbottom from receiving any amount that may be payable following the
occurrence of his legal incompetency or his death and shall not preclude the
legal representative of his estate from receiving such amount or from assigning
any right hereunder to the person(s) entitled thereto under his will or, in
the
case of intestacy, to the person or persons entitled thereto under the laws
of
intestate succession applicable to his estate.
9.3 Successors
of the Company.
The
Company will require any successor to all or substantially all of the business
and/or assets of the Company (whether direct or indirect by purchase, merger,
consolidation, or otherwise), by agreement in form and substance acceptable
to
Winterbottom, 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. As used in this Agreement, “Company”
as heretofore defined shall include any successor to its business and/or assets
as aforesaid that executes and delivers the agreement provided for in this
Section 9.3 or that otherwise becomes bound by all the terms and provisions
of
this Agreement by operation of law.
10. Governing
Law.
This
Agreement shall be deemed a contract made under, and for all purposes shall
be
construed in accordance with, the laws of the State of Iowa without reference
to
the principles of conflict of laws.
11
11. Entire
Agreement.
This
Agreement and those plans and agreements referenced herein contain all the
understandings and representations between the parties hereto pertaining to
the
subject of the employment of Winterbottom by the Company and its subsidiaries
and supersede all undertakings and agreements, whether oral or in writing,
if
any there be, previously entered into by them with respect thereto, including
all prior Employment Agreements and any amendments thereto.
12. Amendment
or Modification; Waiver.
No
provision of this Agreement may be amended or modified unless such amendment
or
modification is agreed to in writing, signed by Winterbottom and by a duly
authorized officer or director of the Company, and approved in advance and
authorized by the Board. Except as otherwise specifically provided in this
Agreement, no waiver by either party hereto of any breach by the other party
of
any condition or provision of the Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar provision or condition
at
the same or any prior or subsequent time.
13. Notices.
Any
notice to be given hereunder shall be in writing and delivered personally or
sent by overnight mail, such as Federal Express, addressed to the party
concerned at the address indicated below or to such other address as such party
may subsequently give notice of hereunder in writing:
If
to
Company:
Chairman
of the Compensation Committee
Board
of
Directors
West
Bancorporation, Inc.
0000
00xx
Xxxxxx
Xxxx
Xxx
Xxxxxx, Xxxx 00000
If
to
Winterbottom:
Xxxx
X.
Xxxxxxxxxxxx
0000
00xx
Xxxxxx
Xxxxxxxxx,
Xxxx 00000
14. Severability.
In
the
event that any provision or portion of this Agreement is determined to be
invalid or unenforceable for any reason, the remaining provisions or portions
of
this Agreement shall be unaffected thereby and shall remain in full force and
effect to the fullest extent permitted by law.
15. Withholding.
Anything
in this Agreement to the contrary notwithstanding, all payments required to
be
made by the Company hereunder to Winterbottom or his beneficiaries, including
his estate, shall be subject to withholding and deductions as the Company may
reasonably determine it should withhold or deduct pursuant to any applicable
law
or regulation. In lieu of withholding or deducting such amounts, in whole or
in
part, the Company may, in its sole discretion, accept other provision for
payment as permitted by law, provided it is satisfied in its sole discretion
that all requirements of law affecting its responsibilities to withhold or
deduct such amounts have been satisfied.
12
16. Deferred
Payments.
Any
amounts required under this Agreement to be paid to Winterbottom that
Winterbottom can and does elect to defer under any Company benefit plan or
program shall be deemed to have been paid to him for purposes of this
Agreement—provided, however, that if the Company breaches the terms of any
deferred compensation plan, arrangement, or agreement with respect to which
such
amounts are to be paid, Winterbottom may claim a breach of this
Agreement.
Notwithstanding
anything in this Agreement or elsewhere to the contrary:
(a) If
payment or provision of any amount or other benefit that is “deferred
compensation” subject to Section 409A of the Code at the time otherwise
specified in this Agreement or elsewhere would subject such amount or benefit
to
additional tax pursuant to Section 409A(a)(1)(B) of the Code, and if payment
or
provision thereof at a later date would avoid any such additional tax, then
the
payment or provision thereof shall be postponed to the earliest date on which
such amount or benefit can be paid or provided without incurring any such
additional tax. In the event this Section requires a deferral of any payment,
such payment shall be accumulated and paid in a single lump sum on such earliest
date together with interest for the period of delay, compounded annually, equal
to the prime rate (as published in The Wall Street Journal), and in effect
as of
the date the payment should otherwise have been provided.
(b) If
any
payment or benefit permitted or required under this Agreement, or otherwise,
is
reasonably determined by either party to be subject for any reason to a material
risk of additional tax pursuant to Section 409A(a)(1)(B) of the Code, then
the
parties shall promptly agree in good faith on appropriate provisions to avoid
such risk without materially changing the economic value of this Agreement
to
either party.
17. Survival.
The
respective rights and obligations of the parties hereunder shall survive any
termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations.
18. Duty
to Mitigate; Set-off; Reimbursement.
Winterbottom
shall not be required to seek employment, nor shall the amount of any payment
provided for under this Agreement be reduced by any compensation earned by
Winterbottom as the result of employment by another employer, as allowed and
without violating this Agreement, after the date of termination of
Winterbottom’s employment pursuant to this Agreement. 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, right of reimbursement, or other claim, right, or action
that the Company may have against Winterbottom or others, except to the extent
that Winterbottom violates Section 7.5 of this Agreement or Winterbottom is
obligated to reimburse the Company pursuant to Section 304 of the Xxxxxxxx-Xxxxx
Act of 2002.
19. Headings.
Headings
of the sections of this Agreement, where used, are intended solely for
convenience, and no provision of this Agreement is to be construed by reference
to the title of any section.
20. Knowledge
and Representation.
The
Company and Winterbottom acknowledge that they understand the terms of this
Agreement, that they understand the nature and extent of the rights and
obligations provided under this Agreement, and that they have been represented
by legal counsel and other professional advisors in the negotiation and
preparation of this Agreement to the extent of their wishes.
13
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first set forth above.
XXXX
X.
XXXXXXXXXXXX
|
/s/
Xxxx X. Xxxxxxxxxxxx
|
||
|
Xxxx
X. Xxxxxxxxxxxx
|
||
|
WEST
BANCORPORATION, INC.
|
||
|
By:
|
/s/
Xxxxxx X. Xxxxxx
|
|
|
Xxxxxx
X. Xxxxxx
|
||
|
Chair,
Compensation Committee
|
||
|
West
Bancorporation, Inc.
|
||
14
