Form of
Exhibit 10.41
CHANGE IN CONTROL SEVERANCE AGREEMENT
This AGREEMENT entered into as of by and among Xxxxxx Capital
Group, Inc. a Delaware corporation, Xxxx Xxxxxx Bank, an Illinois banking
corporation (the "Bank"), and Employee Name (the "executive").
WITNESSETH:
WHEREAS, the Executive provides valuable services as an employee of the
Bank;
WHEREAS, the Company wishes to provide security to the Executive to
induce the Executive to continue in the employ of the Bank.
NOW THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained the value of which is hereby acknowledged, the
Executive and the Bank agree as follows:
1. Bank Obligation. Subject to the limitations of this Agreement, if
during the Change in Control Period the Bank shall terminate the Executive's
employment, or if during the Change in Control Period the Executive shall
terminate his employment with the Bank for Good Reason, the Bank shall pay to
the Executive in a single sum within thirty (30) days after the termination of
employment an amount equal to [one and one-half (1-1/2) times] the Executive's
annual Compensation and the Bank shall continue to the Executive, for a period
of eighteen consecutive months beginning with the date of the Executive's
termination of employment, Medical and Hospital Benefits. The Bank shall also
provide executive level outplacement assistance benefits beginning with the date
of the Executive's termination of employment. If the Executive's employment is
terminated with the Bank during the Change in Control Period for any reason,
excluding a termination for Good Reason, or if the Bank shall terminate the
Executive's employment due to Cause, death or the Executive's disability which
renders him unable to perform the essential functions of the position, this
Agreement shall terminate without any obligation of the Company to the Executive
hereunder. If the Executive is offered employment by a successor to the Bank or
its business or assets or by an Affiliate or a successor to an Affiliate or its
business or assets on terms and conditions that are reasonably comparable to the
Executive's terms and conditions of employment with the Bank (including this
Agreement), the Company shall not have an obligation hereunder to the Executive.
If any payment under this Agreement, either alone or together with any other
payment, benefit or transfer of property which the Executive receives or has a
right to receive from the Bank or its Affiliate, ("Total Payments"), would
constitute a nondeductible "excess parachute payment" (as defined in Section
280G of the Internal Revenue Code of 1986, amended
("Code")) or nondeductible "employee remuneration" under Section 162(m) of the
Code, such payment under this Agreement shall be reduced to the largest amount
as will result in no portion of the payment under this Agreement being such a
nondeductible payment under the Code. The Bank agrees to undertake such
reasonable efforts as it may determine in its sole discretion to prevent any
payment under this Agreement from constituting a nondeductible payment, provided
the Bank is not obligated to incur additional cost in order to make a payment
nondeductible. The determination of any reduction under the preceding sentences
shall be made by the Bank in good faith, and such determination shall be binding
on the Executive. The reduction provided by the fifth sentence of this paragraph
1 shall apply only if, after reduction for any applicable federal excise tax
imposed by Section 4999 of the Code and federal income tax imposed by the Code,
the total payment accruing to the Executive would be less than the amount of the
Total Payments as reduced under said fifth sentence and after reduction for
federal income taxes.
2. Other Benefits. Nothing in this Agreement shall prevent or limit the
Executive's continuing or future participation in any other plan, program,
policy or practice of the Company, Bank or any Affiliate for which the Executive
may qualify, nor shall anything in this Agreement limit or otherwise affect the
rights of the Bank or the Executive under any other plan, program, policy,
practice, contract or agreement to which the Company, Bank or any Affiliate may
be a party. Any amounts payable or rights or benefits furnished the Executive
under any other plan, program, policy, practice, contract or agreement with the
Company, Bank or any of its Affiliates at or subsequent to the date of the
Executive's termination of employment shall be payable in accordance with the
terms of such plan, program, policy, practice, contract or agreement and without
regard to this Agreement, except as explicitly modified by this Agreement.
Amounts payable or in respect of this Agreement shall not be taken into account
with respect to any other employee benefit plan or arrangement.
3. Mitigation. The Executive shall not be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under this Agreement, and the amount payable under this
Agreement shall not be reduced whether or not the Executive obtains other
employment. The Company's obligation to make the payment provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Company may have against the Executive or others.
4. Successors.
(a) This Agreement is personal to the Executive and
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shall not be assignable by the Executive. This Agreement shall inure to
the benefit of and be enforceable by the Executive's legal
representatives including the Executive's executor, trustee or
administrator.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to
assume expressly and agree to perform this Agreement.
5. Resolution of Disputes. Any dispute related to the interpretation or
enforcement of this Agreement shall be enforceable only by arbitration in Xxxx
County, Illinois (or such other metropolitan area to which the Company's
principal executive officers may be relocated if such relocation does not result
in Good Reason for the Executive to terminate employment), in accordance with
the commercial arbitration rules then in effect of the American Arbitration
Association, before a panel of three arbitrators, one of whom shall be selected
by the Company, the second of whom shall be selected by the Executive and the
third of whom shall be selected by the other two arbitrators. In the absence of
the American Arbitration Association, or if for any reason arbitration under the
arbitration rules of the American Arbitration Association cannot be initiated,
or if one of the parties fails or refuses to select an arbitrator, or if the
arbitrators selected by the Company and the Executive cannot agree on the
selection of the third arbitrator within seven days after such time as the
Company and the Executive have each been notified of the selection of the
other's arbitrator, the necessary arbitrator or arbitrators shall be selected by
the presiding judge of the court of general jurisdiction in the metropolitan
area where arbitration under this Section would otherwise have been conducted.
The arbitrators shall award to the Executive his reasonable legal fees and
expenses in connection with any arbitration proceeding hereunder if (i) the
arbitration is commenced by the Company, and the Company has no reasonable basis
for initiating such proceeding, or (ii) the arbitration is commenced by the
Executive, and the Executive prevails on the Executive's claim in the
arbitration proceeding. The arbitrators shall award to the Company its legal
fees and expenses incurred in connection with any arbitration proceeding
hereunder if the arbitration proceeding is commenced by the Executive, and the
Executive has no reasonable basis for initiating such proceeding. The parties
agree that the arbitration panel shall construe this paragraph to determine
whether either party is entitled to recover its cost and fees hereunder. Any
award entered by the arbitrators shall be formal, binding and nonappealable and
judgment may be entered thereon by
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any party in accordance with applicable law in any court of competent
jurisdiction. This arbitration provision shall be specifically enforceable.
6. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois, without reference to
principles of conflict of laws. The captions of this Agreement are not
part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective successors
and legal representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive:
Employee Name
Employee Address
Employee City, State, Zip
If to the Company:
Xxxxxx Capital Group, Inc.
000 Xxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Chairperson of the Compensation Committee
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement.
(d) The Company may withhold from any amounts payable under
this Agreement such Federal, state or local taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
(e) The Executive and the Company acknowledge that, except as
may otherwise be provided under any other written agreement between the
Executive and the Company or the Bank,
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the employment of the Executive by the Bank is 'at will" and, may be
terminated by either the Executive or the Company at any time.
Moreover, if prior to the Effective Date, the Executive's employment
with the Bank terminates, then the Executive shall have no rights under
this Agreement.
(f) This Agreement constitutes the entire agreement between
the parties hereto and contains all the agreements between such parties
with respect to the subject matter hereof. This Agreement supersedes
all other agreements, oral or in writing, between the parties hereto
with respect to the subject matter hereof.
7. Defined Terms. For purposes of this Agreement the following whenever
used in the capitalized form shall have the meaning set forth below unless the
context clearly indicates otherwise.
(a) "Affiliate" means, with respect to any person, any
individual, corporation, partnership, association, joint-stock company,
trust, unincorporated association or other entity (other than such
person) that directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with that
person.
(b) "Annual Bonus" means the gross, annual bonus payable to
the Executive for the fiscal year of the Company ending immediately
preceding the Effective Date, but annualized in the event the Executive
was not employed for the entire fiscal year with respect to which such
bonus was paid.
(c) "Cause" shall means termination because of (1) an act of
fraud, embezzlement or theft in connection with the Employee's duties
or in the course of the Employee's employment, (2) unreasonable neglect
or refusal by the Employee to perform his duties (other than any such
failure resulting from the Employee's incapacity due to disability),
(3) the engaging by the Employee in willful, reckless, or grossly
negligent misconduct which is or may be materially injurious to the
Company, or (4) the Employee's conviction of or plea of guilty or nolo
contendere to a felony.
(d) "Change of Control" means, and be deemed to have occurred,
on the date of the first to occur of any of the following:
(i) upon the vote of the shareholders of the Company
approving a merger or consolidation in which the Company's
shareholders immediately prior to the
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effective time of the merger or consolidation will
beneficially own immediately after the effective time of the
merger or consolidation securities of the surviving or new
corporation having less than 50% of the "voting power" of the
surviving or new corporation, including "voting power"
exercisable on a contingent or deferred basis as well as
immediately exercisable "voting power"; provided, however,
that no such merger or consolidation shall constitute a
"change of control" in the event that following such
transaction the Xxxxxx Family (as defined below) owns,
directly or indirectly, 30% or more of the combined "voting
power" of the surviving or new corporation's outstanding
securities, excluding "voting power" exercisable on a
contingent or deferred basis.
(ii) upon the consummation of a sale, lease, exchange
or other transfer or disposition by the Company of all or
substantially all of the assets of the Company on a
consolidated basis, provided, however, that the mortgage,
pledge or hypothecation of all or substantially all of the
assets of the Company on a consolidated basis, in connection
with a bona fide financing shall not constitute a Sale of the
Company; or
(iii) when any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of
1934) is or becomes the "beneficial owner" (as defined in Rule
13d-3 of the Securities Exchange Act as in effect on date
hereof, but excluding (a) any Company sponsored employee
benefit plan and (b) any member of the Xxxxxx Family),
directly or indirectly, of shares of Company stock such that
the Xxxxxx Family owns less than 30% of the combined "voting
power" of the Company's then outstanding securities, excluding
"voting power" exercisable on a contingent or deferred basis.
(e) "Change in Control Period" means the continuous period
commencing on the Effective Date and ending on the SECOND anniversary
of the Effective Date.
(f) "Compensation" means the gross, annual base salary and
Annual Bonus paid by the Bank (including amounts accrued but not paid)
to the Executive in accordance with the generally applied payroll
practices of the Bank for the completed fiscal year of the Bank
immediately preceding the Effective Date. Compensation, for purposes of
applying the one and one half (1-1/2) multiplier in paragraph 1 of
this agreement, does not include any accrued balances in the 1997
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Long Term Incentive Plan or any other compensation program the
executive participates in. For purposes of this Agreement, any amounts
due the Executive under any compensation plan other than base salary
and annual bonus, shall be paid out in accordance with the provisions
of the specific plan governing those said programs.
(g) "Effective Date" means the date on which a Change in Control
occurs. Anything in this Agreement to the contrary notwithstanding, if
a Change in Control occurs and if the Executive's employment with the
Company is terminated prior to the date on which the Change in Control
occurs, and if it is reasonably demonstrated by the Executive that such
termination of employment (i) was at the request of a third party who
has taken steps reasonably calculated to effect the Change in Control
or (ii) otherwise arose in connection with or anticipation of the
Change in Control, then for all purposes of this Agreement the
"Effective Date" shall mean the date immediately prior to the date of
such termination of employment.
(h) "Good Reason" shall mean the occurrence of any of the following
events unless, (i) such event occurs with the Executive's express prior
written consent, (ii) the event is an isolated, insubstantial or
inadvertent action or failure to act which was not in bad faith and
which is remedied by the Company promptly after receipt of notice
thereof given by the Executive, (iii) the event occurs in connection
with the termination of the Executive's employment for Cause,
Disability or death or (iv) the event occurs in connection with the
Executive's voluntary termination of employment or other than due to
the occurrence of one of the following events:
(A) the assignment to the Executive by the Company or
the Bank of any duties which are inconsistent with, or are a
diminution of, the Executive's positions, duty, title, office,
responsibility and status with the Company or the Bank,
including without limitation, any diminution of the
Executive's position or responsibility in the decision or
management processes of the Company, or any removal of the
Executive from, or any failure to reelect the Executive to,
any of such positions;
(B) a reduction by the Company or the Bank in the
Executive's rate of base salary as in effect on the Effective
Date or as the same may be increased from time to time during
the term of the Agreement, other than a reduction which is a
reduction generally applicable to all senior officers or
executives of the
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Company;
(C) any failure to either continue in effect any
material benefit or incentive plan or arrangement (including,
without limitation, a plan meeting the applicable provisions
of Section 401(a) of the Code, group life insurance plan,
medical, dental, accident and disability plans) in which the
Executive is participating or eligible to participate on the
Effective Date or to substitute and continue other plans
providing the Executive with substantially similar benefits
(all of the foregoing is hereinafter referred to as "Benefit
Plans"), or the taking of any action which would substantially
and adversely affect the Executive's participation in or
materially reduce the Executive's benefits or compensation
under any such Benefit Plan or deprive the Executive of any
material fringe benefit enjoyed by the Executive on the
Effective Date;
(D) a relocation of more than 50 miles from their
location of the principal executive offices of the Company or
the Bank, or the relocation of the Executive's principal place
of employment for the Company or the Bank of more than 50
miles, to any place other than the location at which the
Executive performed his duties on the Effective Date; and
(E) any failure by any successor or assignee of the
Company to continue this Agreement in full force and effect.
If the Executive does not notify the Company or the Bank and incurs the
termination of employment within 120 days of the date the Executive
knew or should have reasonably known of the event giving rise to Good
Reason, the Executive shall be deemed to have waived his right to a
termination for Good Reason based upon such event or the continuing
effect or occurrence of such event.
(i) "Medical and Hospital Benefits" mean the medical and hospital
benefits that would have been offered to the Executive and the
Executive's family members if the Executive's employment had not
terminated based on the same terms and conditions applicable to
non-terminated similarly situated executives of the Company or its
successor and their family members. Notwithstanding anything contained
herein to the contrary, (A) any Medical and Hospital Benefits offered
in accordance with this Agreement run simultaneously with any rights to
health coverage continuation available to the Executive and the
Executive's family under applicable law and this Agreement shall
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constitute notice to the Executive and the Executive's eligible family
members of any right to elect health continuation coverage under the
provisions of Section 4980B of the Internal Revenue Service of 1986, as
amended, Section 601 et. al. of the Employee Retirement Income Security
Act of 1974, as amended, (to the extent applicable) following the
expiration of the Medical and Hospital Benefits coverage period under
this Agreement; and (B) if the Executive or any of the Executive's
family members are covered under a group health plan of another
employer, nothing in this Agreement shall obligate a plan maintained by
the Company to pay benefits on a primary basis with respect to such
person.
(j) "Xxxxxx Family" means (A) Xxxxxx X. Xxxxxx and Xxxx Xxxxxx, (B) a
descendant of Xxxxxx X. Xxxxxx and Xxxx Xxxxxx, (C) any estate, trust,
guardianship or custodianship for the primary benefit of any individual
described in (A) or (B) above, or (C) a proprietorship, partnership,
limited liability company, or corporation controlled by and
substantially all the interest in which are owned, directly or
indirectly, by one or more individuals or entities described in (A),
(B), or (C) above.
IN WITNESS WHEREOF, the parties have executed this Change of Control
and Severance Agreement on the date first written above. Executed this 15th day
of June, 2000.
XXXXXX CAPITAL GROUP, INC.
By:
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Xxxxxxx Xxxxxx, Chairman & Chief
Executive Officer
XXXX XXXXXX BANK
By:
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Xxxxx X. Xxxxxx
President and CEO
EXECUTIVE
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Employee Name
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