CHANGE IN CONTROL AGREEMENT
Execution Copy
Exhibit 10.3
This CHANGE IN CONTROL AGREEMENT (this “Agreement”), dated as of the 6th day of June, 2006,
between ServisFirst Bank, an Alabama State chartered bank (the “Bank”), and Xxxxxxxx Xxxxxxx (the
“Executive”).
WHEREAS, the Bank employs the Executive as Executive Vice President, and in consideration of
such employment the Bank and the Executive wish to provide for certain payment to the Executive in
the event such employment is terminated following a Change in Control (as defined herein).
NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Bank
and the Executive agree as follows:
1. Employment Status. The Bank has employed the Executive as Executive Vice President
as an employee-at-will. Unless and until a Change in Control shall have occurred, nothing in this
Agreement shall modify, amend or vary the terms of such employment or constitute any independent
obligation of the Bank to employ, or continue to employ, the Executive.
2. Change In Control. For purposes of this Agreement, a “Change in Control” is hereby
defined to be:
(a) a merger, consolidation or other corporate reorganization (other than a holding
company reorganization) of the Bank in which the Bank does not survive, or if it survives,
the shareholders of the Bank before such transaction do not own more than 50% of,
respectively, (i) the Common Stock of the surviving entity, and (ii) the combined voting
power of any other outstanding securities entitled to vote on the election of directors of
the surviving entity.
(b) the acquisition, other than from the Bank, by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended from time to time (the “Exchange Act”)) of beneficial ownership of 50% or more of
either the then outstanding shares of Common Stock of the Bank or the combined voting power
of the then outstanding voting securities of the Bank entitled to vote generally in the
election of directors; provided, however, that neither of the following shall constitute a
Change in Control:
(i) any acquisition by the Bank, any of its subsidiaries, or any employee
benefit plan (or related trust) of the Bank or its subsidiaries, or;
(ii) any acquisition by any corporation, entity, or group, if, following such
acquisition, more than 50% of the then outstanding voting rights of such
corporation, entity or group are owned, directly or indirectly, by all or
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substantially all of the persons who were the owners of the Common Stock of the
Bank immediately prior to such acquisition; or
(c) individuals who, as of the effective date of this Agreement, constitute the Board
of Directors of the Bank (the “Incumbent Bank Board”) cease for any reason to constitute at
least a majority of such Board of Directors (the “Board”), provided that any individual
becoming a director subsequent to such date, whose election, or nomination for election by
the Bank’s shareholders, was approved by a vote of at least a majority of the directors then
comprising the Incumbent Bank Board, shall be considered as though such individual were a
member of the Incumbent Bank Board, but excluding, for this purpose, any individual whose
initial assumption of office is in connection with an actual or threatened election contest
relating to the election of the directors of the Bank (as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act); or
(d) approval by the shareholders of the Bank of:
(i) a complete liquidation or dissolution of the Bank, or
(ii) the sale or other disposition of all or substantially all the assets of
the Bank, other than to a corporation, with respect to which immediately following
such sale or other disposition, more than 50% of, respectively, the
then outstanding shares of common stock of such corporation, and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote generally in
the election of directors, is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the outstanding Common Stock of the Bank, and the
outstanding voting securities of the Bank immediately prior to such sale or other
disposition, in substantially the same proportions as their ownership, immediately
prior to such sale or disposition, of the outstanding Common Stock of the Bank and
outstanding securities of the Bank, as the case may be.
By way of illustration, and not limitation, Section 2(d)(ii) would not be applicable to
the sale of the assets of the Bank to a new corporation (“Newco”) assuming the shareholders
of the Bank own more than 50% of the outstanding shares and voting power of Newco in
substantially the same proportions as they held in the Bank.
(e) Notwithstanding the foregoing, if Section 409A of the Internal Revenue Code of 1986
(the “Code”) would apply to any payment or right arising hereunder as a result of a Change
in Control as hereinabove described, then with respect to such right or payment the only
events that would constitute a Change in Control for purposes hereof shall be those events
that would constitute a change in the ownership or effective control of the corporation, or
in the ownership of a substantial portion of the assets of the corporation in accordance
with said section 409A.
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3. Termination Following Change in Control. Except as otherwise provided in Section 4
hereof, the Bank will provide or cause to be provided to the Executive the payment described in
Section 4 hereof in the event that the Executive’s employment is terminated at any time within two
years (or, if Section 409A is applicable, and a lesser period is required thereunder, then such
lesser period) following a Change in Control (as such term is defined in Section 2) under the
circumstances stated in (a) or (b) below:
(a) by the Bank for reasons other than for Cause (as is defined below) or other than as
a consequence of the Executive’s death, permanent disability or attainment of normal
retirement date; or
(b) by the Executive following the occurrence of any of the following events:
(i) the assignment of the Executive to any duties or responsibilities that are
materially 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 resulting in a reduction of his
responsibilities or position;
(ii) the reduction of the Executive’s base salary or, to the extent such has
been established by the Bank Board or its Compensation Committee, target bonus
(including any deferred portions thereof) or substantial reduction in the
Executive’s level of benefits or supplemental compensation from those in effect
immediately preceding such Change in Control; or
(iii) the transfer of the Executive to a location requiring a change in
residence or a material increase in the amount of travel normally required of the
Executive in connection with his employment.
Termination of the Executive’s employment for “Cause” shall mean: (A) a pattern of conduct which
tends to hold the Bank up to ridicule, or which adversely affects the Bank, in the business
community, (B) engaging in conduct disloyal to the Bank, (C) non-diligent performance of
Executive’s duties, (D) failure to appear for work during regularly scheduled hours without a
sufficient reason, (E) failure to comply with any of the Bank’s policy and procedures as from time
to time amended, (F) any action against the Executive by federal or state banking regulatory
authorities acting under lawful authority pursuant to provisions of federal or state law or
regulation which may be in effect from time to time, (G) any act (including any omission or failure
to act) that constitutes, on the part of the Executive, fraud, dishonesty, gross negligence,
misconduct, incompetence, or breach of fiduciary duty involving direct or indirect gain to or
personal enrichment of the Executive, (H) conviction of any felony crime and (I) dependence upon,
or abuse of, any addictive substance, including but not limited to, alcohol, amphetamines,
barbiturates, LSD, cocaine, marijuana, or narcotic drugs; provided, however, that in the
case of clauses (A) through (E) above, such conduct shall not constitute Cause unless (1) there
shall have been delivered to the Executive a written notice setting forth with specificity the
reasons that the Bank Board believes the Executive’s conduct constitutes the criteria set forth in
clause (A) through (E), as the case may be, (2) the Executive shall have been provided the
opportunity
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to be heard in person by the Bank Board (with the assistance of the Executive’s counsel if the
Executive so desires), and (3) after such hearing, the termination is evidenced by a resolution
adopted in good faith by a majority of the members of the Bank Board (other than the Executive).
4. Rights and Payment Upon Termination upon Change in Control. In the event of the
termination of the Executive’s employment under any circumstance set forth in Section 3 hereof
(“Termination”), the Bank agrees to pay in cash to the Executive an amount equal to one (1) times
the Executive’s then current annual base salary as approved by the Bank Board or its Compensation
Committee or any designee thereof for the year in which the Change in Control occurs. Payment
shall be made in a lump sum to the Executive within 30 days of Termination. The Bank’s obligation
to pay the Executive the payment provided in this Section 4 shall be absolute and unconditional and
shall not be affected by any circumstances, including, without limitation, any offset,
counterclaim, recoupment, defense or other right, which the Bank or any subsidiary may have against
him or anyone else. All amounts payable by or on behalf of the Bank under this Section 4 shall,
unless specifically stated to the contrary herein, be paid without notice or demand. Each and
every payment made under this Section 4 by or on behalf of the Bank shall be final and the Bank and
its subsidiaries shall not, for any reason whatsoever, seek to recover all or any part of such
payment from the Executive or from whoever shall be entitled thereto. If the Executive is
terminated for Cause as defined in Section 3 hereof, the Bank shall have no obligation to provide
or cause to be provided to the Executive the payment described in this Section 4.
5. Federal Rules and Regulations. This Agreement is subject to all the laws, rules
and regulations governing Alabama state chartered member banks, and, in particular, the provisions
of 12 U.S.C. Section 1828(k) and 12 C.F.R. Part 359.
To the extent that any provision of this Agreement is inconsistent with applicable federal
laws, rules or regulations, such laws, rules or regulations shall control. In such case, such
provision of this Agreement shall be invalid, but only to the extent necessary for this Agreement
to comply with applicable federal laws, rules and regulations. To the extent that any provision of
any other Section of this Agreement is inconsistent with any provision of this Section 5, such
provision of this Section 5 shall govern.
6. Compliance with Section 409A. This Agreement shall be amended prior to December
31, 2006 to the extent necessary to comply with Section 409A of the Code. Prior to such amendment,
and notwithstanding anything contained herein to the contrary, this Agreement shall be construed in
a manner consistent with Section 409A of the Code and the parties shall take such actions as are
required to comply in good faith with the provisions of Section 409A of the Code.
7. Waiver. No waiver of any obligation of any party hereto under this Agreement shall
be effective unless in a writing specifying such waiver and executed by the other party. No waiver
of any right or remedy of any party hereto under this Agreement shall be effective unless in a
writing specifying such waiver and executed by such party. A waiver by any party hereto of any of
its rights or remedies under this Agreement on any occasion shall not be a bar to the
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exercise of the same right or remedy on any subsequent occasion or of any other right or remedy at
any time.
8. Binding Effect; Benefits. This Agreement shall inure to the benefit of, and shall
be binding upon, the parties hereto and their respective successors, permitted assigns, heirs and
legal representatives, including, without limitation, any corporation with which the Bank or the
Bank may merge or consolidate; provided, however, that this Agreement, because it relates to
personal services, cannot be assigned by the Executive.
9. Attorneys’ Fees and Costs. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys’ fees, costs, and necessary disbursements in addition to any other relief to
which he or it may be entitled.
10. Notices. Any notice or other written communication, with respect to the
employment of the Executive by the Bank, or any matter related to the rights or obligations of any
party under this Agreement, and to be given to a party hereto, shall be given to such party at the
address for such party provided herein, or such other address as such party shall hereafter
provide, in writing, to the other party.
To the Executive:
|
Xxxxxxxx Xxxxxxx | |
| 000 Xxxxxxxx Xxxxx | ||
| Xxxxxxxxxx, Xxxxxxx 00000 | ||
To the Bank (personally delivered, |
||
airfreight or overnight delivery):
|
0000 Xxxxxx Xxxx, Xxxxx 000 | |
| Xxxxxxxxxx, Xxxxxxx 00000 | ||
| Attention: Chief Executive Officer | ||
To the Bank (via mail):
|
X.X. Xxx 0000 | |
| Xxxxxxxxxx, Xxxxxxx 00000-0000 | ||
| Attention: Chief Executive Officer |
All such notices or communications shall be given by being personally delivered, placed in the
United States mail, postage prepaid, certified or registered mail, or by being sent by prepaid air
freight, overnight delivery, which is guaranteed and acknowledgement of receipt of which is
required, to the party to which such notice or communication is to be given at the address for such
party specified above. Each such notice shall be deemed to be effective upon receipt, if personally
delivered, one business day after being so sent by air freight, or five business days after being
so mailed. For purposes of this Agreement, a business day shall mean a day other than a Saturday,
Sunday or federal or Alabama state holiday.
11. Integration and Amendments. This Agreement constitutes the entire agreement and
understanding between the parties hereto with respect to the subject matter hereof and supersedes
any prior agreement or understanding, whether written or oral, relating to such subject matter. No
modification or amendment to this Agreement shall be effective or binding
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unless in writing, specifying such modification or amendment, executed by all of the parties
hereto.
12. Headings. The headings contained in this Agreement are for reference purposes
only and shall not affect the construction or interpretation of this Agreement.
13. Severability. Should any section, provision, or portion of this Agreement be
declared invalid or unenforceable in any jurisdiction, then such section, provision or portion
shall be deemed to be (a) severable from this Agreement as to such jurisdiction (but not elsewhere)
and shall not affect the remainder hereof, and (b) amended to the extent, and only to the extant,
necessary to permit such section, provision or portion, as the case may be, to be valid and
enforceable in such jurisdiction (but not elsewhere).
14. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall, when executed, be deemed to be an original, but all of which together shall
constitute one and the same instrument.
15. Governing Law. This Agreement is made and shall be construed under the internal
laws, but not the conflicts of law provisions, of the State of Alabama.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.
| EXECUTIVE: | ||||||
| /s/ Xxxxxxxx Xxxxxxx | ||||||
| Xxxxxxxx Xxxxxxx | ||||||
| SERVISFIRST BANK | ||||||
| By: | /s/ Xxxxxx X. Xxxxxxxxx III | |||||
| Xxxxxx X. Xxxxxxxxx III | ||||||
| Chief Executive Officer | ||||||
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