Exhibit 10.(d)
FORM OF CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement (this "Agreement"), is made and
entered into as of the 1st day of January, 1998, (the "Effective Date") by and
between Merchants Bancorp, Inc., a Delaware corporation (the "Employer"), and
________________ (the "Executive").
RECITALS
A. The Executive is currently serving as the __________________ of
Merchants Bank (the "Bank").
B. The Employer owns all of the issued and outstanding capital stock of
the Bank.
C. The Employer desires to continue to employ the Executive as an
officer of the Employer and the Executive is willing to continue such
employment.
D. In addition, the Employer recognizes that circumstances may arise in
which a change of control of the Employer through acquisition or otherwise may
occur thereby causing uncertainty of employment without regard to the competence
or past contributions of the Executive, which uncertainty may result in the loss
of valuable services of the Executive, and the Employer and the Executive wish
to provide reasonable security to the Executive against changes in the
employment relationship in the event of any such change of control.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter contained, it is covenanted and agreed by and between
the parties hereto as follows:
AGREEMENTS
1. TERM AND TERMINATION.
(a) BASIC TERM. The term of this Agreement shall be for two
(2) year(s) commencing as of the Effective Date. In the event of a Change of
Control (as defined below) during the term of this Agreement, the Agreement
shall remain in effect for __________ (___) year(s) from the date of such Change
of Control.
(b) TERMINATION UPON CHANGE OF CONTROL.
(i) In the event of a Change in Control (as defined
below) of the Employer and the termination of the Executive's
employment or a Change in Duties of the Executive (as defined below)
within the six (6) months preceding or the _______ (___) year(s)
following the Change in Control, the Executive shall be entitled to a
lump sum payment equal to _______ (___) time(s) his annual salary and
bonus for the immediately preceding calendar year less any salary and
bonus amounts paid to the Executive during the period from the date of
the Change of Control until the date of the termination of the
Executive's employment, payable at the later of the date of the Change
in Control or employment termination. The Employer shall also continue
to
provide coverage for the Executive under the Employer sponsored health
insurance program for the ________ (___) year(s) following the Change
in Control, upon the same terms and conditions as apply to similarly
situated employees of the Employer.
(ii) For purposes of this paragraph, the term "Change
in Control" shall mean the following:
A. The consummation of the acquisition by any person (as
such term is defined in Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the
"1934 Act")) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the 0000 Xxx)
of thirty-three percent (33%) or more of the combined
voting power of the then outstanding voting
securities of the Employer; or
B. The individuals who, as of the date hereof or any
renewal date, are members of the Board of Directors
of the Employer (the "Board") cease for any reason to
constitute a majority of the Board, unless the
election, or nomination for election by the
stockholders of the Employer, of any new director was
approved by a vote of a majority of the Board, and
such new director shall, for purposes of this
Agreement, be considered as a member of the Board; or
C. The consummation of: (1) a merger or consolidation if
the stockholders of the Employer immediately before
such merger or consolidation do not, as a result of
such merger or consolidation, own, directly or
indirectly, more than sixty-seven percent (67%) of
the combined voting power of the then outstanding
voting securities of the entity resulting from such
merger or consolidation in substantially the same
proportion as their ownership of the combined voting
power of the voting securities of the Employer
outstanding immediately before such merger or
consolidation; or (2) a complete liquidation or
dissolution or an agreement for the sale or other
disposition of all or substantially all of the assets
of the Employer.
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because thirty-three percent (33%) or more of the
combined voting power of the then outstanding securities of the
Employer is acquired by: (1) a trustee or other fiduciary holding
securities under one or more employee benefit plans maintained for
employees of the Employer; or (2) any corporation which, immediately
prior to such acquisition, is owned directly or indirectly by the
stockholders of the Employer in the same proportion as their ownership
of stock immediately prior to such acquisition.
(iii) For purposes of this paragraph, the term
"Change in Duties" shall mean the following:
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A. A significant change in the nature or scope of the
Executive's authority or duties;
B. A reduction in the Executive's annual salary;
C. A diminution in the Executive's eligibility to
participate in bonus, stock option, incentive award
and other compensation plans which provide
opportunities to receive compensation, from the
opportunities provided by the successor of the
Employer (including its affiliates) for executives
with comparable duties;
D. A diminution in employee benefits (including but not
limited to medical, dental, life insurance and
long-term disability plans) and perquisites
applicable to the Executive, from the employee
benefits and perquisites provided by the successor of
the Employer (including its affiliates) to executives
with comparable duties; or
E. A change, without the Executive's written agreement,
in the location of the Executive's principal place of
employment with the Employer (including its
affiliates) by more than twenty-five (25) miles from
the location where he is principally employed.
(iv) If it is determined, in the opinion of the
certified public accountants then regularly retained by the Employer in
consultation with legal counsel acceptable to the Executive, that any
amount payable to the Executive by the Employer under this Agreement,
or any other plan or agreement under which the Executive participates
or is a party, would constitute an "Excess Parachute Payment" within
the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code") and be subject to the excise tax imposed by
Section 4999 of the Code (the "Excise Tax"), the Employer shall pay to
the Executive the amount of such Excise Tax and all federal and state
income or other taxes with respect to the payment of the amount of such
Excise Tax, including all such taxes with respect to any such
additional amount. If at a later date, the Internal Revenue Service
assesses a deficiency against the Executive for the Excise Tax which is
greater than that which was determined at the time such amounts were
paid, the Employer shall pay to the Executive the amount of such Excise
Tax plus any interest, penalties and professional fees or expenses,
incurred by the Executive as a result of such assessment, including all
such taxes with respect to any such additional amount. The highest
marginal tax rate applicable to individuals at the time of payment of
such amounts will be used for purposes of determining the federal and
state income and other taxes with respect thereto. The Employer shall
withhold from any amounts paid under this Agreement the amount of any
Excise Tax or other federal, state or local taxes then required to be
withheld. Computations of the amount of any supplemental compensation
paid under this subparagraph shall be made by the independent public
accountants then regularly retained by the Employer in consultation
with legal counsel acceptable to Executive. The Employer shall pay all
accountant and legal counsel fees and expenses.
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(c) REGULATORY SUSPENSION AND TERMINATION.
(i) If the Executive is suspended from office and/or
temporarily prohibited from participating in the conduct of the
Employer's affairs by a notice served under Section 8(e)(3) (12
U.S.C. Section 1818(e)(3)) or 8(g) (12 U.S.C. Section 1818(g)) of
the Federal Deposit Insurance Act, as amended, the Employer's
obligations under this Agreement shall be suspended as of the date
of service, unless stayed by appropriate proceedings. If the charges
in the notice are dismissed, the Employer may in its discretion (A)
pay the Executive all or part of the compensation withheld while
their Agreement obligations were suspended and (B) reinstate (in
whole or in part) any of the obligations which were suspended.
(ii) If the Executive is removed and/or permanently
prohibited from participating in the conduct of the Employer's
affairs by an order issued under Section 8(e) (12 U.S.C. Section
1818(e)) or 8(g) (12 U.S.C. Section 1818(g)) of the Federal Deposit
Insurance Act, as amended, all obligations of the Employer under
this Agreement shall terminate as of the effective date of the
order, but vested rights of the contracting parties shall not be
affected.
(iii) If the Employer is in default as defined in Section
3(x) (12 U.S.C. Section 1813(x)(1)) of the Federal Deposit Insurance
Act, as amended, all obligations of the Employer under this
Agreement shall terminate as of the date of default, but this
paragraph shall not affect any vested rights of the contracting
parties.
(iv) All obligations of the Employer under this Agreement
shall be terminated, except to the extent determined that
continuation of this Agreement is necessary for the continued
operation of the institution by the Federal Deposit Insurance
Corporation (the "FDIC"), at the time the FDIC enters into an
agreement to provide assistance to or on behalf of the Employer
under the authority contained in Section 13(c) (12 U.S.C. Section
1823(c)) of the Federal Deposit Insurance Act, as amended, or when
the Employer is determined by the FDIC to be in an unsafe or unsound
condition. Any rights of the parties that have already vested,
however, shall not be affected by such action.
(v) Any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their
compliance with Section 18(k) (12 U.S.C. Section 1828(k)) of the
Federal Deposit Insurance Act, as amended, and any regulations
promulgated thereunder.
2. WITHHOLDING. The Employer shall be entitled to withhold from amounts
payable to the Executive hereunder, any federal, state or local withholding or
other taxes or charges which it is from time to time required to withhold. The
Employer shall be entitled to rely upon the opinion of its legal counsel with
regard to any question concerning the amount or requirement of any such
withholding.
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3. INTERCORPORATE TRANSFERS. If the Executive shall be voluntarily
transferred to an affiliate of the Employer, such transfer shall not be deemed
to terminate or modify this Agreement and the employing corporation to which the
Executive shall have been transferred shall, for all purposes of this Agreement,
be construed as standing in the same place and stead as the Employer as of the
date of such transfer. For purposes hereof, an affiliate of the Employer shall
mean any corporation directly or indirectly controlling, controlled by, or under
common control with the Employer.
4. INTEREST IN ASSETS. Neither the Executive nor his estate shall
acquire hereunder any rights in funds or assets of the Employer, otherwise than
by and through the actual payment of amounts payable hereunder; nor shall the
Executive or his estate have any power to transfer, assign, anticipate,
hypothecate or otherwise encumber in advance any of said payments; nor shall any
of such payments be subject to seizure for the payment of any debt, judgment,
alimony, separate maintenance or be transferable by operation of law in the
event of bankruptcy, insolvency or otherwise of the Executive.
5. NOT AN EMPLOYMENT AGREEMENT. Nothing in this Agreement shall give
the Executive any rights (or impose any obligations) to continued employment by
the Employer or successor of the Employer, nor shall it give the Employer any
rights (or impose any obligations) for the continued performance of duties by
the Executive for the Employer or successor of the Employer.
6. GENERAL PROVISIONS.
(a) SUCCESSORS; ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the Executive, the Employer and his and its
respective personal representatives, successors and assigns, and any successor
or assign of the Employer shall be deemed the "Employer" hereunder. The Employer
shall require any successor to all or substantially all of the business and/or
assets of the Employer, whether directly or indirectly, by purchase, merger,
consolidation, acquisition of stock, or otherwise, by an agreement in form and
substance satisfactory to the Executive, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent as the Employer
would be required to perform if no such succession had taken place.
(b) ENTIRE AGREEMENT; MODIFICATIONS. This Agreement
constitutes the entire agreement between the parties respecting the employment
of the Executive, and supersedes all prior negotiations, undertakings,
agreements and arrangements with respect thereto, whether written or oral.
Except as otherwise explicitly provided herein, this Agreement may not be
amended or modified except by written agreement signed by the Executive and the
Employer.
(c) ENFORCEMENT AND GOVERNING LAW. The provisions of this
Agreement shall be regarded as divisible and separate; if any of said provisions
should be declared invalid or unenforceable by a court of competent
jurisdiction, the validity and enforceability of the remaining provisions shall
not be affected thereby. This Agreement shall be construed and the
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legal relations of the parties hereto shall be determined in accordance with the
laws of the state of Illinois without reference to the law regarding conflicts
of law.
(d) ARBITRATION. Any dispute or controversy arising under
or in connection with this Agreement shall be settled exclusively by
arbitration, conducted before a panel of three arbitrators sitting in a
location selected by the Executive within fifty (50) miles of the principal
office of the Employer, in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
(e) LEGAL FEES. All reasonable legal fees paid or incurred by
the prevailing party pursuant to any dispute or question of interpretation
relating to this Agreement shall be paid or reimbursed by the losing party if
the prevailing party is successful on the merits pursuant to a legal judgment,
arbitration or settlement.
(f) WAIVER. 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 the other party, shall be deemed a waiver of
any similar or dissimilar provisions or conditions at the same time or any prior
or subsequent time.
(g) NOTICES. Notices pursuant to this Agreement shall be in
writing and shall be deemed given when received; and, if mailed, shall be mailed
by United States registered or certified mail, return receipt requested, postage
prepaid; and if to the Employer, addressed to the principal headquarters of the
Employer, attention: Chairman; or, if to the Executive, to the address set forth
below the Executive's signature on this Agreement, or to such other address as
the party to be notified shall have given to the other.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
MERCHANTS BANCORP, INC. EXECUTIVE
/S/ XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx, President ---------------------------
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(Address)
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SCHEDULE A TO EXHIBIT 10(D)
Term of Agreement Once
Executive's Name Change of Control Occurs
---------------- ------------------------
J. Xxxxxxx Xxxxxxxx 2 years
Xxxxxxx X. Xxxxx 2 years
Xxxxxxx X. Xxxxxxxxx 1 year
Xxxxxx Xxxxxxx 1 year
Xxxxxx St. Xxxxx 2 years
Xxxxx X. Xxxxx 3 years
Xxxxxx X. Xxxxxx 2 years