EMPLOYMENT AGREEMENT
Exhibit
10.25
AGREEMENT
entered into as of this 23rd day of May, 2008, by and between WEST
BANCORPORATION, INC., an Iowa corporation (the “Company”), and XXXXXXX X.
XXXXXXX (“Xxxxxxx”), to be effective as of the date stated above (“Effective
Date”).
WITNESSETH:
WHEREAS,
Xxxxxxx has been employed as the Company’s Executive Vice President and Chief
Financial Officer (“CFO”), as West Bank’s Director and Chief Financial Officer,
and as WB Capital Management Inc.’s Director and Treasurer; and
WHEREAS,
the Company wishes that Xxxxxxx continue such employment pursuant to the terms
and conditions hereof, and in order to induce Xxxxxxx 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,
Xxxxxxx is willing to continue his employment as described above under the
terms
hereof and to enter into the Agreement;
WHEREAS,
Xxxxxxx desires that his current Employment Agreement dated January 9, 2003,
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amended, be replaced and superseded in its entirety with this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 Xxxxxxx
shall serve as Executive Vice-President and CFO of the Company, Director and
CFO
of West Bank, and Director and Treasurer of WB Capital Management Inc. Xxxxxxx
shall report to the Chief Executive Officer of the Company. He shall perform
the
duties ordinarily expected of the positions that he is assigned. Xxxxxxx shall
have such other responsibilities consistent with the status, titles, and
reporting requirements set forth herein and under state and federal law as
are
applicable or 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, Xxxxxxx 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 Xxxxxxx
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 Xxxxxxx 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 Xxxxxxx’x minimum annual
compensation during the Term. Xxxxxxx’x 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, Xxxxxxx 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 Xxxxxxx
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 Xxxxxxx as a participant, if a plan is adopted
by the Company.
3.4 Vacation.
Xxxxxxx
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, Xxxxxxx 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 Xxxxxxx in accordance with Company’s expense
reimbursement policies for all reasonable, ordinary, and necessary business
expenses incurred by Xxxxxxx while performing duties on behalf of the Company.
In addition, the Company shall pay Xxxxxxx’x monthly dues at one local country
club or one other similar club, and expenses related to Xxxxxxx’x use of such
club for matters related to the Company’s business.
3.6 Employee
Benefits.
Xxxxxxx
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 Xxxxxxx 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 Xxxxxxx 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 Xxxxxxx 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 Xxxxxxx 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
Xxxxxxx the maximum insurance coverage provided any other employee or director
of the Company. The Company agrees to continue Xxxxxxx’x 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 Xxxxxxx’x 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 Xxxxxxx’x death during the Term of this Agreement, this Agreement shall
terminate, and all obligations to Xxxxxxx shall cease as of the date of death
except that, (a) within ten (10) business days of termination, the Company
shall
pay to Xxxxxxx’x 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 Xxxxxxx’x 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 Xxxxxxx under
the
benefit plans and programs of the Company in which Xxxxxxx 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 Xxxxxxx and the Company with respect to such awards.
Xxxxxxx
may designate a beneficiary by filing a written designation with the head of
personnel of the Company. Xxxxxxx may revoke or modify the designation at any
time by filing a new designation. However, designations will only be effective
if signed by Xxxxxxx and received by the Company during Xxxxxxx’x lifetime.
Xxxxxxx’x beneficiary designation shall be deemed automatically revoked if the
beneficiary predeceases Xxxxxxx, or if Xxxxxxx names a spouse as beneficiary
and
the marriage is subsequently dissolved. If Xxxxxxx dies without a valid
beneficiary designation, all payments shall be made to Xxxxxxx’x
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.
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4.2 Permanent
Disability.
If
Xxxxxxx 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 Xxxxxxx shall cease except as provided below. Permanent Disability shall
be
determined in one of two ways: (1) Xxxxxxx 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 Xxxxxxx shall cease except that
for
a period of twelve (12) months, the Company shall supplement Xxxxxxx’x Long-Term
Disability payments to the extent necessary for the Long-Term Disability
payments plus the supplemental payments to equal Xxxxxxx’x Base Pay as defined
in Section 3.1 herein; (2) alternatively, if Xxxxxxx becomes permanently
incapacitated and such incapacitation is certified by a physician chosen by
the
Company and reasonably acceptable to Xxxxxxx (if he is then able to exercise
sound judgment), and Xxxxxxx shall therefore be unable to perform his normal
duties hereunder, then the employment of Xxxxxxx hereunder and this Agreement
may be terminated by Xxxxxxx or the Company upon thirty (30) days’ written
notice to the other party following such certification. Should Xxxxxxx not
acquiesce (or should he be unable to acquiesce) in the selection of the
certifying doctor, a doctor chosen by Xxxxxxx (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 Xxxxxxx, at such times as Base
Salary provided for in Section 3.1 of this Agreement would normally be paid,
Xxxxxxx’x then-current Base Salary for a period of twelve (12) months. Under
either determination of Permanent Disability, Xxxxxxx 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.
Following
termination pursuant to either of the above alternatives, any rights and
benefits Xxxxxxx may have under the employee benefit plans and programs of
the
Company in which Xxxxxxx 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 Xxxxxxx and the Company with respect to such
awards.
4.3 Due
Cause.
The
Company may terminate Xxxxxxx’x 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, Xxxxxxx
shall continue to receive Base Salary payments provided for in this Agreement
only through the date of such termination for Due Cause, and Xxxxxxx shall
be
entitled to no further compensation under this Agreement, except that any rights
and benefits Xxxxxxx may have under the employee benefit plans and programs
of
the Company or its subsidiaries in which Xxxxxxx is a participant shall be
determined in accordance with the terms and provisions of such plans and
programs. Xxxxxxx 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 Xxxxxxx and the Company with respect to such awards; and (b) the
Company shall have no obligation to pay any Annual Bonus to Xxxxxxx under the
terms of this Agreement; but (c) the obligations of Xxxxxxx under Sections
7 and
8 of this Agreement shall remain in full force and effect.
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The
term
“Due Cause” shall mean (i) the willful and continued failure of Xxxxxxx 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 Xxxxxxx by the Board that specifically identifies the manner
in
which Xxxxxxx has not substantially performed his duties; (ii) willful
misconduct by Xxxxxxx 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
Xxxxxxx shall be considered “willful” unless it is done, or omitted to be done,
by Xxxxxxx in bad faith and without reasonable belief that Xxxxxxx’x 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
Xxxxxxx 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
Xxxxxxx’x 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
Xxxxxxx’x employment and this Agreement, Xxxxxxx shall have no further
obligations of any kind under or arising out of the Agreement (except for the
obligations of Xxxxxxx under Sections 7 and 8 of this Agreement), and the
Company shall be obligated to promptly pay Xxxxxxx only the following “Severance
Payment”: Three times Xxxxxxx’x 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, Xxxxxxx would otherwise be entitled to a Change
of
Control Benefit under Section 4.7 of this Agreement, Xxxxxxx 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 Xxxxxxx family health coverage under COBRA
for
one year after Xxxxxxx ceases employment by the Company.
Xxxxxxx
agrees that the payments described in this Section 4.4 shall be full and
adequate compensation to Xxxxxxx for all damages Xxxxxxx 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, Xxxxxxx
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 Xxxxxxx may have under the employee benefit
plans and programs of the Company or its subsidiaries in which Xxxxxxx 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 Xxxxxxx and the Company with respect to such awards.
4.5 Employee
Voluntary.
In the
event Xxxxxxx 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 Xxxxxxx
shall be to make Base Salary payments provided for in this Agreement through
the
date of such voluntary termination. Xxxxxxx understands and agrees that in
the
event of termination of employment pursuant to this Section 4.5: (a) any rights
and benefits Xxxxxxx 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 Xxxxxxx 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 Xxxxxxx under the terms
of this Agreement and (d) the obligations of Xxxxxxx under Sections 7 and 8
of
this Agreement shall remain of full force and effect.
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4.6 Good
Reason.
Xxxxxxx
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
Xxxxxxx’x express written consent, the assignment to Xxxxxxx 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 Xxxxxxx from, or any failure to re-elect Xxxxxxx to, any
of
such responsibilities or positions, except in connection with the
termination of Xxxxxxx’x 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 Xxxxxxx’x 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 Xxxxxxx 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 Xxxxxxx’x duties as described under Section 1.1, or in the
event Xxxxxxx consents to any relocation, the failure by the Company
to
pay (or reimburse Xxxxxxx) for all reasonable moving and relocation
expenses incurred by Xxxxxxx relating to a change of Xxxxxxx’x principal
residence in connection with such
relocation.
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(b) Good
Reason Severance Payment:
In
the
event Xxxxxxx 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), Xxxxxxx
shall have no further obligations of any kind under or arising out of the
Agreement (except for the obligations of Xxxxxxx under Sections 7 and 8 of
this
Agreement), and the Company shall be obligated to pay Xxxxxxx 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 Xxxxxxx for Good Reason,
Xxxxxxx would otherwise be entitled to a Change of Control Benefit under Section
4.7 of this Agreement, Xxxxxxx 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
Xxxxxxx’x execution of the release referred to in Section 4.6(c) below. In
addition, the Company shall pay the insurance premiums to provide Xxxxxxx family
health coverage under COBRA for one year after Xxxxxxx ceases employment by
the
Company.
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(c) Release
of Claims
Xxxxxxx
agrees that the payments described in this Section 4.6 shall be full and
adequate compensation to Xxxxxxx for all damages Xxxxxxx 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, Xxxxxxx 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 Xxxxxxx may have under the employee
benefit plans and programs of the Company or its subsidiaries in which Xxxxxxx
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 Xxxxxxx 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 Xxxxxxx’x employment for reasons other
than those under Sections 4.1, 4.2, or 4.3 herein or if Xxxxxxx terminates
his
employment for Good Reason as defined in Section 4.6 herein, the Company shall
pay to Xxxxxxx 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 Xxxxxxx’x employment under the circumstances
described in Section 4.7, Xxxxxxx will be eligible for a Change in
Control
Benefit of three times Xxxxxxx’x Current Annual Compensation as defined in
Section 4.7(b) as of the date of the Change in Control.
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| (1) |
Current
Annual Compensation.
For purposes of this Agreement “Current Annual Compensation” means the sum
of Xxxxxxx’x 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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7
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Insurance
Benefit. In addition, the Company shall pay the insurance premiums
to
provide Xxxxxxx family health coverage under COBRA for one year after
Xxxxxxx ceases employment by the
Company.
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(c) 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 Xxxxxxx
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, Xxxxxxx 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 Xxxxxxx 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 Xxxxxxx’x
employment for Due Cause during said period, then no Change in Control
Benefit shall be paid to Xxxxxxx. 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 Xxxxxxx’x 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.
Xxxxxxx agrees that the payments described in Section 4.7(b) shall
be full
and adequate compensation to Xxxxxxx for all damages Xxxxxxx 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), Xxxxxxx 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 Xxxxxxx may have under the employee benefit plans and programs
of
the Company or its subsidiaries in which Xxxxxxx 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 Xxxxxxx 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
Xxxxxxx (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 Xxxxxxx’x “base amount,” as defined in Section 280G(b)(3) of
the Code, then in lieu thereof, the Company shall pay Xxxxxxx, as soon as
practicable following the termination of Xxxxxxx’x employment by the Company but
in no event later than thirty (30) days after the expiration of any revocation
period following Xxxxxxx’x 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 Xxxxxxx’x 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.
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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 Xxxxxxx
in
connection with a Change of Control of the Company or his termination of
employment unless (i) Xxxxxxx 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 Xxxxxxx 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
Xxxxxxx on the date that is sixteen (16) months following the termination of
Xxxxxxx’x employment, together with interest thereon at the rate provided in
Section 7872(f)(2) of the Code.
7. Covenants
of Xxxxxxx.
7.1 Confidential
Information.
Xxxxxxx
acknowledges that as a result of the services to be rendered to the Company
hereunder, Xxxxxxx will be brought into close contact with many confidential
affairs of the Company, its subsidiaries and affiliates, not readily available
to the public. Xxxxxxx 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.
7.2 Restriction
on Use of Confidential Information.
In
recognition of the foregoing, Xxxxxxx 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, Xxxxxxx 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, Xxxxxxx 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 Xxxxxxx’x mind as to whether information is secret and confidential to
the Company, its subsidiaries, or affiliated entities, Xxxxxxx 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, Xxxxxxx 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.
Xxxxxxx
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 Xxxxxxx may
then
possess or have under his control.
9
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 Xxxxxxx’x employment
under this Agreement (except that the time period of such restrictions shall
be
extended by any period during which Xxxxxxx is in violation of this Section
7.5), Xxxxxxx 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, Xxxxxxx 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 Xxxxxxx
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) Xxxxxxx 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 Xxxxxxx’x
termination.
During
the period described in the first paragraph of Section 7.5, Xxxxxxx 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, Xxxxxxx 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
Xxxxxxx’x termination or resignation.
7.6 Intellectual
Property.
Xxxxxxx
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 Xxxxxxx’x 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,
Xxxxxxx 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.
Xxxxxxx 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 Xxxxxxx’x mental or physical incapacity to secure Xxxxxxx’x
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 Xxxxxxx
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. Xxxxxxx 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.
Xxxxxxx
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.
10
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 Xxxxxxx’x 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 Xxxxxxx 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
Xxxxxxx 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 Xxxxxxx demands arbitration, Xxxxxxx 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.
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.
Xxxxxxx 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 Xxxxxxx 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.
11
9.2 Assignment
by Xxxxxxx.
Xxxxxxx
may not assign this Agreement or any part thereof—provided, however, that
nothing herein shall preclude one or more beneficiaries of Xxxxxxx 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
Xxxxxxx, 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. 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 Xxxxxxx 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 Xxxxxxx 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
Xxxxxxx:
Xxxxxxx
X. Xxxxxxx
0000
Xxxxxxxxxx Xxxxx
Xxxxxxxxx,
Xxxx 00000
12
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 Xxxxxxx 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.
16. Deferred
Payments.
Any
amounts required under this Agreement to be paid to Xxxxxxx that Xxxxxxx 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, Xxxxxxx 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.
Xxxxxxx
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
Xxxxxxx as the result of employment by another employer, as allowed and without
violating this Agreement, after the date of termination of Xxxxxxx’x 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 Xxxxxxx or others, except to the extent that Xxxxxxx
violates Section 7.5 of this Agreement or Xxxxxxx is obligated to reimburse
the
Company pursuant to Section 304 of the Xxxxxxxx-Xxxxx Act of 2002.
13
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 Xxxxxxx 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.
14
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first set forth above.
XXXXXXX
X. XXXXXXX
|
/s/
Xxxxxxx X. Xxxxxxx
|
|
Xxxxxxx
X. Xxxxxxx
|
WEST
BANCORPORATION, INC.
|
By:
|
/s/
Xxxxxx X. Xxxxxx
|
|
Xxxxxx
X. Xxxxxx
|
|
|
Chair,
Compensation Committee
|
|
|
West
Bancorporation, Inc.
|
|
15
