Exhibit (10).29
MONROE COUNTY BANK
CHANGE IN CONTROL COMPENSATION AGREEMENT
This Agreement dated as of the 31st day of March, 1997, by and between
Monroe County Bank (the "Bank"), an Alabama state banking corporation having
its principal place of business in Monroeville, Alabama and Xxxx X. Xxxxxxx,
III (the "Executive").
RECITALS:
A. The Compensation Committee of the Board of Directors of the Bank
has recommended, and the Board of Directors has approved, that the Bank enter
into agreements with key executives of the Bank designated from time to time
by the Compensation Committee which provide for compensation under certain
circumstances after a change in control.
B. Executive is a key executive of the Bank and has been selected by
the Compensation Committee to enter into this Agreement.
C. If the Bank should become subject to any proposed or threatened
Change in Control (as hereinafter defined), the Board of Directors of the
Bank believes it imperative that the Bank and the Board of Directors be able
to rely upon Executive to continue in his position and that the Bank be able
to receive and rely upon his advice, if requested, as to the best interests
of the Bank and its stockholders, without concern that he might be distracted
by the personal uncertainties and risks created by such a proposal or threat.
D. If the Bank should receive any such proposal, Executive may be
called upon to assist in the assessment thereof, advise management and the
Board of Directors as to whether such proposal would be in the best interests
of the Bank and its stockholders, and take such other actions above and
beyond his regular duties as the Board might determine to be appropriate.
NOW, THEREFORE, as assurance to the Bank that it will have the continued
dedication of Executive and the availability of his advice and counsel
notwithstanding the possibility, threat or occurrence of an effort to take
over control of the Bank, and as an inducement to Executive to remain in the
employ of the Bank, and for other good and valuable consideration, the Bank
and Executive agree as follows:
1. Services During Certain Events. In the event any person, firm or
corporation unaffiliated with the Bank begins a tender or exchange offer,
circulates a proxy to stockholders, or takes other steps to effect a Change
in Control (as hereinafter defined), Executive agrees that he will not
voluntarily leave the employ of the Bank on less than 4 months written notice
to the Chairman of the Board or Chairman of the Executive Committee of the
Bank, will render the services expected of his position and will act in all
things related to the possible Change in Control in the manner he believes in
good faith to be in the best interests of the shareholders of the Bank until
such person, firm or corporation has abandoned or terminated his or its
efforts to effect a Change in Control or until a Change in Control has
occurred.
2. Termination Following Change in Control. Except as provided in
Section 4, the Bank will provide or cause to be provided to Executive the
rights and benefits described in Section 3 in the event that Executive's
employment is terminated at any time within two years following a Change in
Control (as such term is defined in this Section 2) under the circumstances
stated in (a) or (b) below:
(a) by the Bank for reasons other than for "cause" (as such term
is defined in Section 4) or other than as a consequence of Executive's death,
permanent disability or attainment of the normal retirement date as provided
under the Bank's pension plan (the "Retirement Plan") as in effect
immediately preceding such date ("Normal Retirement Date"); or
(b) by Executive following the occurrence of any of the following
events:
(i) the assignment of Executive to any duties or
responsibilities that are inconsistent with his position, duties,
responsibilities or status immediately preceding such Change in
Control or a change in his reporting responsibilities or titles in
effect at such time, in either case resulting in reduction of his
responsibilities or position;
(ii) the reduction of Executive's annual compensation, meaning
thereby the fair market value of all remuneration paid to the
Executive by the Bank during the immediately preceding calendar
year, including, without limitation, deferred compensation and
other forms of incentive compensation awards, coverage under any
employee benefit plan (such as a pension, thrift, medical, dental,
life insurance or long-term disability plan) and other perquisites;
(iii) the transfer of Executive to a location requiring a
change in his residence or a material increase in the amount of
travel normally required of Executive in connection with his
employment.
For purposes of this Agreement, a "Change in Control" is hereby defined
to be: (1) a merger, consolidation or other corporate reorganization of the
Bank or its parent company in which either the Bank or its parent company
fails to survive; (2) disposition by the Bank's parent company of the Bank;
(3) the beneficial ownership by one person or a closely related group of
persons of as much as 40% of the outstanding voting stock of the Bank's
parent company, unless the acquisition of stock resulting in such ownership
by such person or related group had been approved in advance by the Board of
Directors of the Bank or the parent company; or (4) as may otherwise be
defined by the Board of Directors from time to time.
3. Rights and Benefits Upon Termination. In the event of the
termination of Executive's employment under any of the circumstances set
forth in Section 2 hereof ("Termination"), the Bank agrees to provide or
cause to be provided to Executive the following rights and benefits:
(a) Salary and Other Payments at Termination. Executive shall be
entitled to receive payment in cash in the amount of Executive's Average
Annual Earnings, as such term is defined in this Section 3(a), during the
most recent three year fiscal periods (or the period during which the
Executive has been employed by the Bank if less than three years.) However,
if such amount exceeds limits provided in the then existing provisions of the
Internal Revenue Code for the imposition of tax penalties on such payments,
the amount shall be reduced to the highest amount allowed to avoid such
penalties. At the election of Employee, payment shall be made in equal
monthly payments over an eighteen (18) month period beginning with the month
following Termination, or payment shall be made in a lump sum. Any lump sum
payment request must be made in writing at least six months prior to
Termination if known by then and in any event within thirty (30) days prior
to termination.
If Executive shall die prior to the time all payments which may
otherwise have been due to Executive, under this Section 3(a) or otherwise in
this agreement, have been made, then, as soon as practicable after his death
and in no event later than 3 months after the appointment of Executive's
personal representative, the Bank shall pay in a lump sum in cash all sums
not distributed to Executive prior to his death. Payment shall be made to the
beneficiary designated by the Executive in a writing delivered to the Bank.
If no such beneficiary is named, such sums shall be paid to Executive's
personal representative. No reduction to present value of any such sums
shall be made.
For purposes of this Agreement, "Annual Earnings" shall mean the amounts
earned by Executive for personal service rendered to the Bank and its
affiliates as reportable on Treasury Department Form W-2 or 1099, including
bonuses, and excluding the following: (1) moving and educational expenses,
(2) income included under Section 79 of the Internal Revenue Code of 1986, as
amended and (3) income imputed to Executive from personal use of employer
owned automobiles and employer paid club dues. Earnings shall not include
any income attributable to grants of and dividends on shares awarded under
any stock option plan.
(b) Insurance and Other Special Benefits. During the eighteen
month severance pay period, and if the Bank may do so under the terms of its
benefit plans existing at the time of Termination, Executive shall continue
to be covered by the life insurance, medical insurance, and accident and
disability insurance plans of the Bank and its affiliates or any successor
plan or program in effect at or after Termination for employees in the same
class or category as was Executive prior to his Termination, subject to the
terms of such plans and to Executive's making any payments therefor required
of employees in the same class or category as was Executive prior to his
Termination. In the event Executive is ineligible to continue to be so
covered under the terms of any such benefit plan or program, Bank shall have
no further obligation. Anything herein to the contrary notwithstanding, if
during such period Executive should enter into the employ of another company
or firm which provides substantially similar benefit coverage, Executive's
participation in the comparable benefits provided by the Bank either directly
or through such other sources shall cease. Nothing contained in this
paragraph shall be deemed to require or permit termination or restriction of
any of Executive's coverage under any plan or program of the Bank or any of
its affiliates, or any successor plan or program, to which Executive is
entitled under the terms of such plan or program.
(c) Other Benefit Plans. The specific arrangements referred to in
this Section 3 are not intended to exclude Executive's participation in other
benefit plans in which Executive currently participates or which are or may
become available to executive personnel generally in the class or category of
Executive or to preclude other compensation or benefits as may be authorized
by the Board of Directors from time to time.
(d) No Duty to Mitigate. Executive's entitlement to benefits
hereunder shall not be governed by any duty to mitigate his damages by
seeking further employment nor, except as specifically provided above in
paragraph 3(b), be offset by any compensation or benefit which he may receive
from future employment.
4. Conditions to the Obligations of the Bank. The Bank shall have no
obligation to provide or cause to be provided to Executive the rights and
benefits described in Section 3 hereof if either of the following events
shall occur:
(a) Termination for Cause. The Bank shall terminate Executive's
employment for "cause". For purposes of this Agreement, termination of
employment for "cause" shall mean termination because of fraud,
misappropriation of or intentional damage to the property of the Bank or the
commission of a felony by the Executive;
(b) Resignation as Director or Officer. Executive shall fail,
promptly after Termination and upon receiving a written request to do so, to
resign as a director and/or officer of the Bank and each affiliate of the
Bank of which he is then serving as a director and/or officer.
5. Confidentiality; Non-Solicitation; Cooperation; Consultancy.
(a) Confidentiality. Executive agrees that following Termination
he will not without the prior written consent of the Bank disclose to any
person, firm or corporation any confidential information of the Bank or its
affiliates which is now known to him or which hereafter (whether before or
after his Termination) may become known to him as a result of his employment
or association with the Bank and which could be helpful to a competitor;
provided, however, that the foregoing shall not apply to confidential
information which becomes publicly disseminated by means other than a breach
of this Agreement.
(b) Cooperation. Executive agrees that following Termination he
will furnish such information and render such assistance and cooperation as
may reasonably be requested in connection with any litigation or legal
proceedings concerning the Bank or any of its affiliates (other than any
legal proceedings concerning Executive's employment). In connection with
such cooperation, the Bank will pay or reimburse Executive for all reasonable
expenses incurred in cooperating with such requests.
(c) Remedies for Breach. It is recognized that damages in the
event of breach of this Section 5 by Executive would be difficult, if not
impossible, to ascertain, and it is therefore agreed that the Bank, in
addition to and without limiting any other remedy or right it may have, shall
have the right to an injunction or other equitable relief in any court
of competent jurisdiction enjoining any such breach, and Executive hereby
waives any and all defenses he may have on the ground of lack of jurisdiction
or competence of the court to grant such an injunction or other equitable
relief. The existence of this right shall not preclude the Bank from
pursuing any other rights and remedies at law or in equity which the Bank may
have.
6. Term of Agreement. This Agreement shall terminate on December 31,
1997; provided, however, that this Agreement shall automatically renew for
successive one-year terms unless the Bank notifies Executive in writing at
least 90 days prior to a December 31 expiration date that it does not desire
to renew the Agreement for an additional term; and provided further, however,
that such notice shall not be given and if given shall have no effect (i)
within two years after a Change in Control or (ii) during any period of time
when the Bank has reason to believe that any third person has begun a tender
or exchange offer, circulated a proxy to stockholders, or taken other steps
or formulated plans to effect a Change in Control, such period of time to
end when, in the opinion of the Compensation Committee, the third person has
abandoned or terminated his efforts or plans to effect a Change in Control.
7. Expenses. The Bank shall pay or reimburse Executive for all costs
and expenses, including, without limitation, court costs and attorney's fees,
incurred by Executive as a result of any claim, action or proceeding by
Executive against the Bank arising out of, or challenging the validity or
enforceability of, this Agreement or any provision hereof.
8. Miscellaneous.
(a) Assignment. No right, benefit or interest hereunder shall be
subject to assignment, anticipation, alienation, sale, encumbrance, charge,
pledge, hypothecation or set-off in respect of any claim, debt or obligation,
or to execution, attachment, levy or similar process; provided, however, that
Executive may assign any right, benefit or interest hereunder if such
assignment is permitted under the terms of any plan or policy of insurance or
annuity contract governing such right, benefit or interest.
(b) Construction of Agreement. Nothing in this Agreement shall be
construed to amend any provision of any plan or policy of the Bank other than
as specifically stated herein. This Agreement is not, and nothing herein
shall be deemed to create an employment contract between Executive and the
Bank or any of its subsidiaries.
(c) Inurement. This Agreement shall be binding upon and inure to
the benefit of the Bank and the Executive and their respective heirs,
executors, administrators, successors and assigns.
(d) Nature of Obligation. The Bank intends that its obligations
hereunder be construed in the nature of severance pay. The Bank's
obligations under Section 3 are absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, any right of
offset, counterclaim, recoupment, defense, or other right which the Bank may
have against the Executive or others. All amounts payable by the Bank
hereunder shall be paid without notice or demand.
(e) Choice of Law. The Agreement shall be governed and construed
in accordance with the laws of the State of Alabama.
(f) Invalidity. In the event that any one or more provisions of
this Agreement shall, for any reason, be held invalid, illegal or
unenforceable in any manner, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement.
In Witness Whereof, Executive has hereunto set his hand and seal and the
Bank has caused this Agreement to be executed by its officers thereunto duly
authorized as of the 31st day of March, 1997.
/s/ Xxxx X. Xxxxxxx, III
(SEAL) XXXX X. XXXXXXX, III
ATTEST: MONROE COUNTY BANK
/s/ Xxxx X. Xxxxxxx, Xx. BY: /s/Xxxxxx X. Xxxxx
Its: Sr. VP and Cashier Its: President and CEO
