EXHIBIT 10.6
IBERIABANK CORPORATION
IBERIABANK
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CHANGE IN CONTROL SEVERANCE AGREEMENT
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THIS AGREEMENT entered into this day of , 2000 (the "Effective Date"), by
and between ________________ (the "Employee"), IBERIABANK (the "Company"), and
IBERIABANK Corporation (the "Holding Company").
WHEREAS, the Employee has heretofore been employed by the Company as an
executive officer, and the Company and the Holding Company deem it to be in
their respective best interests to enter into this Agreement as an additional
incentive to the Employee to continue as an executive employee of the Company
and to provide as-needed services benefiting the Holding Company; and
WHEREAS, the parties desire by this writing to set forth their
understanding as to their respective rights and obligations in the event a
change of control occurs with respect to the Company or the Holding Company.
NOW, THEREFORE, the undersigned parties AGREE as follows:
1. Defined Terms
When used anywhere in this Agreement, the following terms shall have the
meaning set forth herein.
(a) "Change in Control" shall mean (i) a change in control of the Holding
Company, of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended ("Exchange Act") or any successor thereto, whether or
not any security of the Holding Company is registered under Exchange Act;
provided that, without limitation, such a Change in Control shall be deemed to
have occurred if any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, or securities of the
Holding Company representing 25% or more of the combined voting power of the
Holding Company then outstanding securities; (ii) during any period of two
consecutive years, individuals (the "Continuing Directors") who at the beginning
of such period constitute the Board of Directors (the "Existing Board") of the
Holding Company cease for any reason to constitute at least two-thirds thereof,
provided that any individual whose election or nomination for election as a
member of the Existing Board was approved by a vote of at least two-thirds of
the Continuing Directors then in office shall be considered a Continuing
Director unless his or her initial assumption of office occurs as a result of an
actual or threatened contest with respect to the election or removal of
directors or other
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actual or threatened solicitation of proxies by or on behalf of someone other
than a Continuing Director; or (iii) the acquisition of ownership, holding or
power to vote more than 25% of the voting stock of the Company by any person
other than the Holding Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and as interpreted through applicable rulings and regulations in
effect from time to time.
(c) "Code ss.280G Maximum" shall mean the product of 2.99 and the
Employee's "base amount" within the meaning of Code ss.280G(b)(3).
(d) "Disability" shall mean termination by the Company of the Employee's
employment because of any physical or mental impairment which qualifies the
Employee for disability benefits under the applicable long-term disability plan
maintained by the Employers or, if no such plan applies, which would qualify the
Employee for disability benefits under the Federal Social Security System.
(e) "Good Reason" shall mean (i) without the Employee's express written
consent: the assignment to the Employee, by the Company or the Holding Company,
of any duties which are materially inconsistent with the Employee's positions,
duties, responsibilities and status with the Company or the Holding Company
immediately prior to a Change in Control of the Corporation, or a material
change or diminution in the Employee's reporting responsibilities, titles or
offices as an employee and as in effect immediately prior to such a Change in
Control, or any removal of the Employee from or any failure to re-elect the
Employee to any of such responsibilities, titles or offices, except in
connection with the termination of the Employee's employment for Just Cause or
Disability or as a result of the Employee's death or by the Employee other than
for Good Reason; (ii) without the Employee's express written consent, a
reduction by the Company or the Holding Company in the Employee's base salary as
in effect on the date of the Change in Control of the Corporation or as the same
may be increased from time to time thereafter or a reduction in the package of
fringe benefits provided to the Employee; (iii) any purported termination of the
Employee's employment for Just Cause or Disability which is not effected
pursuant to a Notice of Termination satisfying the requirements hereof ;(iv) the
failure by the Company or the Holding Company to obtain the assumption of and
agreement to perform this Agreement by any successor as contemplated in Section
6 hereto; (v) requirement that the Employee principally perform all services at
location more than 30 miles from such location on the Effective date. For
purposes of this Section 1(e), any good faith determination of "Good Reason"
made by the Employee shall create a rebuttable presumption that "Good Reason"
exists. Anything in this Agreement to the contrary notwithstanding, a
termination by the Employee for any reason during the 30-day period immediately
following the first anniversary of the Effective Date shall be deemed to be a
termination for Good Reason for all purposes of this Agreement.
(f) "Just Cause" shall mean, in the good faith determination of the Board,
the Employee's personal dishonesty, incompetence in the performance of duties,
willful violation of
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any law, rule, regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of this Agreement.
No act or failure to act, on the Employee's part shall be considered
"willful" unless it is done, or omitted to be done, by him in bad faith or
without reasonable belief that his action or omission was in the Company's best
interests. Any act, or failure to act, based upon authority given pursuant to a
resolution of the Board or instructions of the Chief Executive Officer or a
senior officer of the Company or the advice of counsel for the Company shall be
conclusively presumed to be in good faith and in the Company's best interests.
The cessation of Employee's employment shall not be deemed to be for Just Cause
unless and until there shall have been delivered to him a copy of a resolution
duly adopted by the vote of not less than three-quarters of the entire
membership of the Board at a meeting called and held for such purpose (after
reasonable notice is provided to the Employee and he is given an opportunity,
together with counsel, to be heard before the Board), finding that, in the
Board's good faith opinion, the Employee is guilty of the conduct described in
the preceding paragraph, and specifying the particulars thereof in detail.
(g) "Notice of Termination" shall mean any purported termination by the
Company for Just Cause or Disability or by the Employee for Good Reason shall be
communicated by written "Notice of Termination" to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
(i) indicates the specific termination provision in this Agreement relied upon,
(ii) sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Employee's employment under the provision so
indicated, (iii) specifies a date of termination, which shall be not less than
thirty (30) nor more than ninety (90) days after such Notice of Termination is
given, except in the case of the Company's termination of Employee's employment
for Just Cause, and (iv) is given in the manner specified in this Agreement.
(h) "Protected Period" shall mean the period that begins on the date three
months before a Change in Control and ends on the later of the third annual
anniversary of the Change in Control or the expiration date of this Agreement;
except that if the Employee's employment with the Company is terminated prior to
the first day of this period at the request of a third party who has taken steps
reasonably calculated to effect a Change of Control or otherwise in connection
with or anticipation of a Change in Control, then the Protected Period shall
commence on the date immediately prior to the date of such termination.
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2. Trigger Events
The Employee shall be entitled to collect the severance benefits set forth
in Section 3 of this Agreement in the event that (i) the Employee voluntarily
terminates employment within 90 days of an event that both occurs during the
Protected Period and constitutes Good Reason, (ii) the Company or its
successor(s) in interest terminate the Employee's employment for any reason
other than Just Cause during the Protected Period, or (iii) the employee
voluntarily terminates employment for any reason other than Just Cause within 30
days after a Change in Control.
3. Amount of Severance Benefit
(a) If the Employee becomes entitled to collect severance benefits pursuant
to Section 2 hereof, the Employee shall receive from the Company a severance
benefit equal to 100% of the Code ss.280G Maximum.
(b) The amount payable under this Section 3(a) shall be paid either (i) in
one lump sum within ten days of the later of the date of the Change in Control
and the Employee's last date of employment with the Company, or (ii) according
to the schedule elected in duly executed irrevocable written form by the Board
on the date of approval of this Agreement, but only if filed with the Company
prior to the date which is 90 days before the date on which a Change in Control
occurs. Deferred amounts shall bear interest from the date on which they would
otherwise be payable until the date paid at a rate equal to 120% of the
applicable federal rate.
(c) In addition, for 39 months following termination, the Company will
maintain in full force and effect for the continued benefit of the Employee and
his dependents each employee's medical and life benefit plan (as such term is
defined in the Employee Retirement Income Security Act of 1974, as amended) in
which the Employee was entitled to participate immediately prior to the date of
his termination, unless an essentially equivalent benefit is provided by another
source. If the terms of any employee medical and life benefit plan of the
Company or applicable laws do not permit continued participation by the
Employee, the Company will arrange to provide to the Employee a benefit
substantially similar to, and no less favorable than, the benefit he was
entitled to receive under such plan at the end of the period of coverage. The
right of Employee to continued coverage under the health and medical insurance
plans of the Company pursuant to Section 4980B of the Code shall commence upon
the expiration of such period.
(d) If the Employee becomes liable, in any taxable year, for the payment of
an excise tax under Section 4999 of the Code on account of any payments to the
Employee pursuant to this Section 3, and the Company chooses not to contest the
liability or have exhausted all administrative and judicial appeals contesting
the liability, the Company shall pay the Employee (i) an amount equal to the
excise tax for which the Employee is liable under Section 4999 of the Code, (ii)
the federal, state, and local income taxes, and interest if any, for which the
Employee is liable on account of the payments pursuant to item (i), and (iii)
any additional excise tax under
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Section 4999 of the Code and any federal, state and local income taxes for which
the Employee is liable on account of payments made pursuant to items (i) and
(ii).
(e) This subsection 5(e) applies if the amount of payments to the Employee
under subsection 5(d) has not been determined with finality by the exhaustion of
administrative and judicial appeals. In such circumstances, the Company and the
Employee shall, as soon as practicable after the event or series of events has
occurred giving rise to the imposition of the excise tax, cooperate in
determining the amount of the Employee's excise tax liability for purposes of
paying the estimated tax. The Employee shall thereafter furnish to the Company
or their successors a copy of each tax return which reflects a liability for an
excise tax under Section 4999 of the Code at least 20 days before the date on
which such return is required to be filed with the IRS. The liability reflected
on such return shall be dispositive for the purposes hereof unless, within 15
days after such notice is given, the Company furnishes the Employee with a
letter of the auditors or tax advisor selected by the Banks indicating a
different liability or that the matter is not free from doubt under the
applicable laws and regulations and that the Employee may, in such auditor's or
advisor's opinion, cogently take a different position, which shall be set forth
in the letter with respect to the payments in question. Such letter shall be
addressed to the Employee and state that he is entitled to rely thereon. If the
Company furnishes such a letter to the Employee, the position reflected in such
letter shall be dispositive for purposes of this Agreement, except as provided
in subsection 5(f) below.
(f) Notwithstanding anything in this Agreement to the contrary, if the
Employee's liability for the excise tax under Section 4999 of the Code for a
taxable year is subsequently determined to be less than the amount paid by the
Company pursuant to subsection 5(e), the Employee shall repay the Company at the
time that the amount of such excise tax liability is finally determined, the
portion of such income and excise tax payments attributable to the reduction
(plus interest on the amount of such repayment at the rate provided on Section
1274(b)(2)(B) of the code) and if the Employee's liability for the excise tax
under Section 4999 of the Code for a taxable year is subsequently determined to
exceed the amount paid by the Banks pursuant to Section 5, the Company shall
make an additional payment of income and excise taxes in the amount of such
excess, as well as the amount of any penalty and interest assessed with respect
thereto at the time that the amount of such excess and any penalty and interest
is finally determined.
4. Funding of Grantor Trust upon Change in Control
(a) Not later than ten business days after a Change in Control, the Company
shall (i) establish a grantor trust (the "Trust") designed in accordance with
Revenue Procedure 92-64 and having a trustee independent of the Company and the
Company, (ii) deposit in said Trust an amount equal to the Code ss.280G Maximum,
unless the Employee has previously provided a written release of any claims
under this Agreement, and (iii) provide the trustee of the Trust with a written
direction to hold said amount and any investment return thereon in a segregated
account for the benefit of the Employee, and to follow the procedures set forth
in the next paragraph as to the payment of such amounts from the Trust.
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(b) During the 39-consecutive month period after a Change in Control, the
Employee may provide the trustee of the Trust with a written notice requesting
that the trustee pay to the Employee an amount designated in the notice as being
payable pursuant to this Agreement. Within three business days after receiving
said notice, the trustee of the Trust shall pay such amount to the Employee, and
coincidentally shall provide the Company or its successor with notice of such
payment. Upon the earlier of the Trust's final payment of all amounts due under
the preceding paragraph or the date 39 months after the Change in Control, the
trustee of the Trust shall pay to the Company the entire balance remaining in
the segregated account maintained for the benefit of the Employee. The Employee
shall thereafter have no further interest in the Trust.
5. Term of the Agreement. This Agreement shall remain in effect for the
period commencing on the Effective Date and ending on the earlier of (i) the
date thirty-six months after the Effective Date, and (ii) the date on which the
Employee terminates employment with the Company; provided that the Employee's
rights hereunder shall continue following the termination of this employment
with the Company under any of the circumstances described in Section 2 hereof.
Additionally, on each annual anniversary date from the Effective Date, the term
of this Agreement shall be extended for an additional one-year period beyond the
then effective expiration date, unless the Boards of Directors of the Company
has notified the Employee in writing that this Agreement shall not be extended.
6. Termination or Suspension Under Federal Law.
(a) If the Employee is removed and/or permanently prohibited from
participating in the conduct of the Company's affairs by an order issued under
Sections 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act ("FDIA") (12
U.S.C. 1818(e)(4) or (g)(1)), all obligations of the Company under this
Agreement shall terminate, as of the effective date of the order, but the vested
rights of the parties shall not be affected.
(b) If the Company is in default (as defined in Section 3(x)(1) of FDIA),
all obligations of the Company under this Agreement shall terminate as of the
date of default; however, this Paragraph shall not affect the vested rights of
the parties.
(c) If a notice served under Section 8(e)(3) or (g)(1) of the FDIA (12
U.S.C. 1818(e)(3) and (g)(1)) suspends and/or temporarily prohibits the Employee
from participating in the conduct of the Company's affairs, the Company's
obligations under this Agreement shall be suspended as of the date of such
service, unless stayed by appropriate proceedings. If the charges in the notice
are dismissed, the Company shall (i) pay the Employee all or part of the
compensation withheld while its contract obligations were suspended, and (ii)
reinstate (in whole or in part) any of its obligations which were suspended.
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7. Expense Reimbursement.
In the event that any dispute arises between the Employee and the Company
or the Holding Company as to the terms or interpretation of this Agreement,
whether instituted by formal legal proceedings or otherwise, including any
action that the Employee takes to enforce the terms of this Agreement or to
defend against any action taken by the Company or the Holding Company, they
shall reimburse the Employee for all costs and expenses, including reasonable
attorneys' fees, arising from such dispute, proceedings or actions. Such
reimbursement shall be paid within ten days of Employee's furnishing to the
Company written evidence, which may be in the form, among other things, of a
cancelled check or receipt, of any costs or expenses incurred by the Employee.
8. Successors and Assigns.
(a) This Agreement shall not be assignable by the Company, provided that
this Agreement shall inure to the benefit of and be binding upon any corporate
or other successor of the Company which shall acquire, directly or indirectly,
by merger, consolidation, purchase or otherwise, all or substantially all of the
assets or stock of the Company.
(b) Since the Company is contracting for the unique and personal skills of
the Employee, the Employee shall be precluded from assigning or delegating his
rights or duties hereunder without first obtaining the written consent of the
Company; provided, however that nothing in this paragraph shall preclude (i) the
Employee from designating a beneficiary to receive any benefit payable hereunder
upon his death, or (ii) the executors, administrators, or other legal
representatives of the Employee or his estate from assigning any rights
hereunder to the person or person entitled thereunto.
9. Amendments
No amendments or additions to this Agreement shall be binding unless made
in writing and signed by all of the parties, except as herein otherwise
specifically provided.
10. Applicable Law
Except to the extent preempted by Federal law, the laws of the State of
Louisiana shall govern this Agreement in all respects, whether as to its
validity, construction, capacity, performance or otherwise.
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11. Severability
The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
12. Entire Agreement
This Agreement, together with any understanding or modifications thereof as
agreed to in writing by the parties, shall constitute the entire agreement
between the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first hereinabove written.
IBERIABANK
_____________________ By _____________________
Witness Xxxxxxx Xxxx
Chairman, Board Compensation
Committee
_____________________ By _____________________
Witness Xxxxx X. Xxxx
President and CEO
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Witness Employee
IN CONSIDERATION of the Employee's provision of valuable services for the
Company and the Employee's past, present, or future services for the Holding
Company, IT IS AGREED by the Holding Company that it shall be jointly and
severally liable for the Company's obligations under this Agreement (determined
without regard for Section 6 of the Agreement).
IBERIABANK CORPORATION
By ______________________
Xxxxxxx Xxxx
Chairman, Board Compensation
Committee
By ______________________
Xxxxx X. Xxxx
President and CEO
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