Exhibit 10.23
THE BANK OF MOBILE
CHANGE IN CONTROL COMPENSATION AGREEMENT
This Agreement dated as of the 14 day of November, 1995 by
and between The Bank of Mobile (the "Bank"), an Alabama banking
corporation having its principal place of business in Mobile,
Alabama and W. Xxxx Xxxxx, Jr. (the "Executive").
RECITALS:
A. The Compensation Committee of the Board of Directors of
the Bank has recommended, and the Board of Directors has
approved, that the Bank enter into agreements with key executives
of the Bank designated from time to time by the Compensation
Committee which provide for compensation under certain
circumstances after a change in control.
B. Executive is a key executive of the Bank and has been
selected by the Compensation Committee to enter into this
Agreement.
C. If the Bank should become subject to any proposed or
threatened Change in Control (as hereinafter defined), the Board
of Directors of the Bank believes it imperative that the Bank and
the Board of Directors be able to rely upon Executive to continue
in his position and that the Bank be able to receive and rely
upon his advice, if requested, as to the best interests of the
Bank and its stockholders, without concern that he might be
distracted by the personal uncertainties and risks created by
such a proposal or threat.
D. If the Bank should receive any such proposal, Executive
may be called upon to assist in the assessment thereof, advise
management and the Board of Directors as to whether such proposal
would be in the best interests of the Bank and its stockholders,
and take such other actions above and beyond his regular duties
as the Board might determine to be appropriate.
NOW, THEREFORE, as assurance to the Bank that it will have
the continued dedication of Executive and the availability of his
advice and counsel notwithstanding the possibility, threat or
occurrence of an effort to take over control of the Bank, and
as an inducement to Executive to remain in the employ of the
Bank, and for other good and valuable consideration, the Bank and
Executive agree as follows:
1. Services During Certain Events. In the event any
person, firm or corporation unaffiliated with the Bank begins a
tender or exchange offer, circulates a proxy to stockholders, or
takes other steps to effect a Change in Control (as hereinafter
defined), Executive agrees that he will not voluntarily leave the
employ of the Bank on less than 4 months written notice to the
Chairman of the Board or Chairman of the Executive Committee of
the Bank, will render the services expected of his position and
will act in all things related to the possible Change in Control
in the manner he believes in good faith to be in the best
interests of the shareholders of the Bank until such person, firm
or corporation has abandoned or terminated his or its efforts to
effect a Change in Control or until a Change in Control has
occurred.
2. Termination Following Change in Control. Except as
provided in Section 4, the Bank will provide or cause to be
provided to Executive the rights and benefits described in
Section 3 in the event that Executive's employment is terminated
at any time within two years following a Change in Control (as
such term is defined in this Section 2) under the circumstances
stated in (a) or (b) below:
(a) by the Bank for reasons other than for "cause" (as
such term is defined in Section 4) or other than as a consequence
of Executive's death, permanent disability or attainment of the
normal retirement date as provided under the Bank's pension plan
(the "Retirement Plan") as in effect immediately preceding such
date ("Normal Retirement Date"); or
(b) by Executive following the occurrence of any of
the following events:
(i) the assignment of Executive to any duties or
responsibilities that are inconsistent with his
position, duties, responsibilities or status
immediately preceding such Change in Control or a
change in his reporting responsibilities or titles in
effect at such time, in either case resulting in
reduction of his responsibilities or position;
(ii) the reduction of Executive's annual
compensation, meaning thereby the fair market value of
all remuneration paid to the Executive by the Bank
during the immediately preceding calendar year,
including, without limitation, deferred compensation
and other forms of incentive compensation awards,
coverage under any employee benefit plan (such
as a pension, thrift, medical, dental, life insurance
or long-term disability plan) and other perquisites;
(iii)the transfer of Executive to a location
requiring a change in his residence or a material
increase in the amount of travel normally required of
Executive in connection with his employment.
For purposes of this Agreement, a "Change in Control" is
hereby defined to be: (1) a merger, consolidation or other
corporate reorganization of the Bank or its parent company in
which either the Bank or its parent company fails to survive; (2)
disposition by the Bank's parent company of the Bank; (3) the
beneficial ownership by one person or a closely related group of
persons of as much as 40% of the outstanding voting stock of the
Bank's parent company, unless the acquisition of stock resulting
in such ownership by such person or related group had been
approved in advance by the Board of Directors of the Bank or the
parent company; or (4) as may otherwise be defined by the Board
of Directors from time to time.
3. Rights and Benefits Upon Termination. In the event of
the termination of Executive's employment under any of the
circumstances set forth in Section 2 hereof ("Termination"), the
Bank agrees to provide or cause to be provided to Executive the
following rights and benefits:
(a) Salary and Other Payments at Termination.
Executive shall be entitled to receive payment in cash in the
amount of three times Executive's Average Annual Earnings, as
such term is defined in this Section 3(a), during the most recent
three year fiscal periods (or the period during which the
Executive has been employed by the Bank if less than three
years.) However, if such amount exceeds limits provided in the
then existing provisions of the Internal Revenue Code
for the imposition of tax penalties on such payments, the amount
shall be reduced to the highest amount allowed to avoid such
penalties. At the election of Employee, payment shall be made in
equal monthly payments over a three-year period beginning
with the month following Termination, or payment shall be made in
a lump sum. Any lump sum payment request must be made in writing
at least six months prior to Termination.
If Executive shall die prior to the time all payments which
may otherwise have been due to Executive, under this Section 3(a)
or otherwise in this agreement, have been made, then, as soon as
practicable after his death and in no event later than 3 months
after the appointment of Executive's personal representative, the
Bank shall pay in a lump sum in cash all sums not distributed to
Executive prior to his death. Payment shall be made to the
beneficiary named as such under the life insurance plan
maintained by the Bank on the date of Executive's death. If no
such beneficiary is named, such sums shall be paid to Executive's
personal representative. No reduction to present value of any
such sums shall be made.
For purposes of this Agreement, "Annual Earnings" shall mean
the amounts earned by Executive for personal service rendered to
the Bank and its affiliates as reportable on Treasury Department
Form W-2, including bonuses, and excluding the following: (1)
moving and educational expenses, (2) income included under
Section 79 of the Internal Revenue Code of 1986, as amended and
(3) income imputed to Executive from personal use of employer
owned automobiles and employer paid club dues. Earnings shall
not include any income attributable to grants of and dividends
on shares awarded under any stock option plan.
(b) Insurance and Other Special Benefits. During the
three-year severance pay period, and if the Bank may do so under
the terms of its benefit plans existing at the time of
Termination, Executive shall continue to be covered by the life
insurance, medical insurance, and accident and disability
insurance plans of the Bank and its affiliates or any successor
plan or program in effect at or after Termination for employees
in the same class or category as was Executive prior to his
Termination, subject to the terms of such plans and to
Executive's making any payments therefor required of employees in
the same class or category as was Executive prior to his
Termination. In the event Executive is ineligible to continue to
be so covered under the terms of any such benefit plan or
program, Bank shall have no further obligation. Anything herein
to the contrary notwithstanding, if during such period Executive
should enter into the employ of another company or firm which
provides substantially similar benefit coverage, Executive's
participation in the comparable benefits provided by the Bank
either directly or through such other sources shall cease.
Nothing contained in this paragraph shall be deemed to require or
permit termination or restriction of any of Executive's coverage
under any plan or program of the Bank or any of its affiliates,
or any successor plan or program, to which Executive is entitled
under the terms of such plan or program.
(c) Automobile and Club Dues. Executive shall be
entitled to purchase the automobile then furnished to him by the
Bank for a price equal to 50% of its then book value on the books
of the Bank. Also, Bank will pay to Executive during the
three-year severance pay period an amount equal to the country
club dues then being paid on his behalf by the Bank, but not to
exceed $150 per month.
(d) Other Benefit Plans. The specific arrangements
referred to in this Section 3 are not intended to exclude
Executive's participation in other benefit plans in which
Executive currently participates or which are or may become
available to executive personnel generally in the class or
category of Executive or to preclude other compensation or
benefits as may be authorized by the Board of Directors from
time to time.
(e) No Duty to Mitigate. Executive's entitlement to
benefits hereunder shall not be governed by any duty to mitigate
his damages by seeking further employment nor, except as
specifically provided above in paragraph 3(b), be offset by any
compensation or benefit which he may receive from future
employment.
4. Conditions to the Obligations of the Bank. The Bank
shall have no obligation to provide or cause to be provided to
Executive the rights and benefits described in Section 3 hereof
if either of the following events shall occur:
(a) Termination for Cause. The Bank shall terminate
Executive's employment for "cause". For purposes of this
Agreement, termination of employment for "cause" shall mean
termination because of fraud, misappropriation of or intentional
damage to the property of the Bank or the commission of a felony
by the Executive;
(b) Resignation as Director or Officer. Executive
shall fail, promptly after Termination and upon receiving a
written request to do so, to resign as a director and/or officer
of the Bank and each affiliate of the Bank of which he is then
serving as a director and/or officer.
5. Confidentiality; Non-Solicitation; Cooperation;
Consultancy.
(a) Confidentiality. Executive agrees that following
Termination he will not without the prior written consent of the
Bank disclose to any person, firm or corporation any confidential
information of the Bank or its affiliates which is now known to
him or which hereafter (whether before or after his Termination)
may become known to him as a result of his employment or
association with the Bank and which could be helpful to a
competitor; provided, however, that the foregoing shall not
apply to confidential information which becomes publicly
disseminated by means other than a breach of this Agreement.
(b) Cooperation. Executive agrees that following
Termination he will furnish such information and render such
assistance and cooperation as may reasonably be requested in
connection with any litigation or legal proceedings concerning
the Bank or any of its affiliates (other than any legal
proceedings concerning Executive's employment). In connection
with such cooperation, the Bank will pay or reimburse Executive
for all reasonable expenses incurred in cooperating with such
requests.
(c) Remedies for Breach. It is recognized that
damages in the event of breach of this Section 5 by Executive
would be difficult, if not impossible, to ascertain, and it is
therefore agreed that the Bank, in addition to and without
limiting any other remedy or right it may have, shall have the
right to an injunction or other equitable relief in any court of
competent jurisdiction enjoining any such breach, and Executive
hereby waives any and all defenses he may have on the ground of
lack of jurisdiction or competence of the court to grant such an
injunction or other equitable relief. The existence of this
right shall not preclude the Bank from pursuing any other rights
and remedies at law or in equity which the Bank may have.
6. Term of Agreement. This Agreement shall terminate on
December 31, 1996; provided, however, that this Agreement shall
automatically renew for successive one-year terms unless the Bank
notifies Executive in writing at least 90 days prior to a
December 31 expiration date that it does not desire to renew the
Agreement for an additional term; and provided further, however,
that such notice shall not be given and if given shall have no
effect (i) within two years after a Change in Control or (ii)
during any period of time when the Bank has reason to believe
that any third person has begun a tender or exchange offer,
circulated a proxy to stockholders, or taken other steps or
formulated plans to effect a Change in Control, such period of
time to end when, in the opinion of the Compensation Committee,
the third person has abandoned or terminated his efforts or plans
to effect a Change in Control.
7. Expenses. The Bank shall pay or reimburse Executive
for all costs and expenses, including, without limitation, court
costs and attorney's fees, incurred by Executive as a result of
any claim, action or proceeding by Executive against the Bank
arising out of, or challenging the validity or enforceability of,
this Agreement or any provision hereof.
8. Miscellaneous.
(a) Assignment. No right, benefit or interest
hereunder shall be subject to assignment, anticipation,
alienation, sale, encumbrance, charge, pledge, hypothecation or
set-ff in respect of any claim, debt or obligation, or to
execution, attachment, levy or similar process; provided,
however, that Executive may assign any right, benefit or interest
hereunder if such assignment is permitted under the terms
of any plan or policy of insurance or annuity contract governing
such right, benefit or interest.
(b) Construction of Agreement. Nothing in this
Agreement shall be construed to amend any provision of any plan
or policy of the Bank other than as specifically stated herein.
This Agreement is not, and nothing herein shall be deemed to
create an employment contract between Executive and the Bank or
any of its subsidiaries.
(c) Inurement. This Agreement shall be binding upon
and inure to the benefit of the Bank and the Executive and their
respective heirs, executors, administrators, successors and
assigns.
(d) Nature of Obligation. The Bank intends that its
obligations hereunder be construed in the nature of severance
pay. The Bank's obligations under Section 3 are absolute and
unconditional and shall not be affected by any circumstance,
including, without limitation, any right of offset, counterclaim,
recoupment, defense, or other right which the Bank may have
against the Executive or others. All amounts payable by the Bank
hereunder shall be paid without notice or demand.
(e) Choice of Law. The Agreement shall be governed
and construed in accordance with the laws of the State of
Alabama.
(f) Invalidity. In the event that any one or more
provisions of this Agreement shall, for any reason, be held
invalid, illegal or unenforceable in any manner, such invalidity,
illegality or unenforceability shall not affect any other
provision of this Agreement.
In Witness Whereof, Executive has hereunto set his hand and
seal and the Bank has caused this Agreement to be executed by its
officers thereunto duly authorized as of the 14 day of November,
1995.
/s/W. Xxxx Xxxxx, Jr. (SEAL)
W. XXXX XXXXX, JR.
ATTEST: THE BANK OF MOBILE
Xxxxxx Xxxxxx BY:/s/F. Xxxxxxx Xxxxxxx
Its:Vice-President Its:Executive Vice-President
