EXHIBIT 10.8
ALLEGIANT BANCORP, INC.
XXXXX X. XXXXX
EXECUTIVE RETENTION AGREEMENT
This Executive Retention Agreement (this "Agreement") has been
entered into as of the 1st day of January, 2002, by and between Allegiant
Bancorp, Inc., a Missouri corporation (the "Company"), and XXXXX X. XXXXX,
an individual ("Executive").
RECITALS
The Board of Directors of the Company (the "Board"), has determined
that it is in the best interests of the Company and its shareholders to
reinforce and encourage the continued attention and dedication of the
Executive to the Company as a member of the Company's management and to
assure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change in Control
(as defined below) with respect to the Company. The Board desires to provide
for the continued employment of the Executive, and the Executive is willing
to commit to continue to serve the Company. Additionally, the Board believes
it is imperative to diminish the inevitable distraction of the Executive by
virtue of the personal uncertainties and risks created by a pending or
threatened Change in Control, to encourage the Executive's full attention
and dedication to the Company currently and in the event of any threatened
or pending Change in Control, and to provide the Executive with compensation
and benefits arrangements upon a termination of employment after a Change in
Control which ensure that the compensation and benefits expectations of the
Executive will be satisfied and which are competitive with those of other
corporations. Therefore, in order to accomplish these objectives, the Board
has caused the Company to enter into this Agreement.
IT IS AGREED AS FOLLOWS:
SECTION 1: DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. For purposes of this Agreement, the
following words and phrases, whether or not capitalized, shall have the
meanings specified below, unless the context plainly requires a different
meaning.
1.1(a) "ANNUAL BASE SALARY" shall mean the rate
of base salary (excluding benefits, bonuses, incentive
compensation or other forms of compensation or benefits)
at which Executive is being paid as of a particular date.
1.1(b) "BOARD" means the Board of Directors of
the Company.
1.1(c) "CHANGE IN CONTROL" means:
(i) The acquisition by any individual,
entity or group, or a Person of ownership of 30% or more
of either (a) the then outstanding shares of common stock
of the Company (the "Outstanding Company Common Stock") or
(b) the combined voting power of the then outstanding
voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding
Company Voting Securities"); or
(ii) Individuals who, as of the date
hereof, constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least a majority of the
Board; provided, however, that for purposes of the
definition of "Incumbent
Board," any individual becoming a director subsequent to
the date hereof whose election, or nomination for election
by the Company's shareholders, was approved by a vote of
at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but
excluding, as a member of the Incumbent Board, any such
individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest
(as such terms are used in Rule l4a-11 of Regulation l4A
promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or
(iii) Approval by the shareholders of the
Company (and subsequent consummation) of a reorganization,
merger or consolidation, in each case, unless, following
such reorganization, merger or consolidation, (a) more
than fifty percent (50%) of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such reorganization, merger or
consolidation 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
Company Common Stock and Outstanding Company Voting
Securities immediately prior to such reorganization,
merger or consolidation in substantially the same
proportions as their ownership, immediately prior to such
reorganization, merger or consolidation, of the
Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (b) no Person
(excluding the Company, any employee benefit plan (or
related trust) of the Company or such corporation
resulting from such reorganization, merger or
consolidation and any Person beneficially owning,
immediately prior to such reorganization, merger or
consolidation, directly or indirectly, twenty percent
(20%) or more of the Outstanding Company Common Stock or
Outstanding Voting Securities, as the case may be)
beneficially owns, directly or indirectly, twenty percent
(20%) or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from
such reorganization, merger or consolidation or the
combined voting power of the then outstanding voting
securities of such corporation, entitled to vote generally
in the election of directors and (c) at least a majority
of the members of the board of directors of the
corporation resulting from such reorganization, merger or
consolidation were members of the Incumbent Board at the
time of the execution of the initial agreement providing
for such reorganization, merger or consolidation; or
(iv) Approval by the shareholders of the
Company (and consummation) of (a) a complete liquidation
or dissolution of the Company or (b) the sale or other
disposition of all or substantially all of the assets of
the Company, other than to a corporation, with respect to
which following such sale or other disposition, (1) more
than fifty percent (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 Company Common Stock and
Outstanding Company Voting Securities immediately prior to
such sale or other disposition in substantially the same
proportion as their
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ownership, immediately prior to such sale or other
disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be,
(2) no Person (excluding the Company and any employee
benefit plan (or related trust) of the Company or such
corporation and any Person beneficially owning,
immediately prior to such sale or other disposition,
directly or indirectly, twenty percent (20%) or more of
the Outstanding Company Common Stock or Outstanding
Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, twenty percent
(20%) or more 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 and (3) at least a majority
of the members of the board of directors of such
corporation were members of the Incumbent Board at the
time of the execution of the initial agreement or action
of the Board providing for such sale or other disposition
of assets of the Company.
1.1(d) "CHANGE IN CONTROL DATE" shall mean the
date of the Change in Control; provided, however, that the
Change in Control Date shall mean the date immediately
prior to the date the Executive's employment with the
Company was terminated by the Company if (i) Executive's
employment with the Company was terminated by the Company
prior to the occurrence of a Change in Control, and (ii)
Executive's employment (either in fact or as reasonably
demonstrated by Executive) was terminated either at the
request of a third party who has taken steps reasonably
calculated to effect a Change in Control, or otherwise
occurred in connection with or anticipation of a Change in
Control.
1.1(e) "CODE" shall mean the Internal Revenue
Code of 1986, as amended.
1.1(f) "COMPANY" means Allegiant Bancorp, Inc., a
Missouri corporation.
1.1(g) "EFFECTIVE DATE" shall mean January 1,
2002.
1.1(h) "EXCHANGE ACT" means the Securities
Exchange Act of 1934, as amended.
1.1(i) "PERSON" means any "person" within the
meaning of Sections 13(d) and 14(d) of the Exchange Act.
1.1(j) "TERM" means the period that begins on the
Effective Date and ends on the earlier of: (i) January 1,
2005, or (ii) the date Executive's employment terminates.
1.2 GENDER AND NUMBER. When appropriate, pronouns in this
Agreement used in the masculine gender include the feminine gender, words in
the singular include the plural, and words in the plural include the
singular.
1.3 HEADINGS. All headings in this Agreement are included
solely for ease of reference and do not bear on the interpretation of the
text. Accordingly, as used in this Agreement, the terms "Article" and
"Section" mean the text that accompanies the specified Article or Section of
the Agreement.
1.4 APPLICABLE LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Missouri, without
reference to its conflict of law principles.
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SECTION 2: EMPLOYMENT; EMPLOYMENT TERMINATION.
2.1 EMPLOYMENT. Executive is employed by the Company on an
at will basis for no definite term. Either the Company or Executive may
terminate Executive's employment at any time with or without Cause or reason
by giving notice to the other party. The Executive's employment shall
terminate automatically upon the Executive's death.
2.2 TERMINATION OF EMPLOYMENT PRIOR TO A CHANGE OF
CONTROL. Upon termination of Executive's employment with the Company prior
to a Change in Control, whether employment is terminated by the Company, by
Executive, or otherwise, this Agreement shall terminate and neither party
shall have any rights or obligations hereunder except to the extent provided
for under Section 3 or otherwise under this Agreement; provided, however,
that Executive shall have all rights under this Agreement as if a Change in
Control occurred on the date immediately before the date Executive's
employment with the Company was terminated by the Company if (i) Executive's
employment with the Company was terminated by the Company prior to the
occurrence of a Change in Control, and (ii) Executive's employment (either
in fact or as reasonably demonstrated by Executive) was terminated either at
the request of a third party who has taken steps reasonably calculated to
effect a Change in Control, or otherwise occurred in connection with or
anticipation of a Change in Control.
2.3 TERMINATION OF EMPLOYMENT AFTER A CHANGE IN CONTROL.
After a Change in Control, the following provisions shall apply.
2.3(a) DEATH. The Executive's employment shall
terminate automatically upon the Executive's death.
2.3(b) DISABILITY. If the Company determines in
good faith that the Disability of the Executive has
occurred (pursuant to the definition of Disability set
forth below), it may give to the Executive written notice
in accordance with Section 6.1 of its intention to
terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate
effective on the thirtieth (30th) day after receipt of
such notice by the Executive (the "Disability Effective
Date"), provided that, within the thirty (30) days after
such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties. For
purposes of this Agreement, "Disability" shall mean that
the Executive has been unable to perform the services
required of the Executive hereunder on a full-time basis
(with reasonable accommodation) for a period of one
hundred eighty (180) consecutive business days by reason
of a physical and/or mental condition. "Disability" shall
be deemed to exist when certified by a physician selected
by the Company or its insurers and acceptable to the
Executive or the Executive's legal representative (such
agreement as to acceptability not to be withheld
unreasonably). The Executive will submit to such medical
or psychiatric examinations and tests as such physician
deems necessary to make any such Disability determination.
2.3(c) TERMINATION FOR CAUSE. The Company may
terminate the Executive's employment after a Change in
Control for "Cause," which shall mean termination based
upon: (i) the Executive's willful and continued failure to
substantially perform Executive's duties with the Company
(other than as a result of Disability), after a demand for
substantial performance is delivered to Executive by the
Company, which specifically identifies the manner in which
the Executive has not substantially performed Executive's
duties, (ii) the Executive's commission of an act in
connection with Executive's employment constituting a
criminal offense involving moral turpitude, dishonesty, or
breach of trust, (iii) Executive has engaged in any
conduct which would preclude Executive from employment
with the Company or any of its subsidiary banks or
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corporations, or the Executive is disqualified or
precluded from being employed by or providing any services
to the Company or any of its subsidiary banks or
corporations by reason of any federal or state banking law
or regulation or any order or written request of any
regulatory agency which has jurisdiction over Company or
any of its subsidiaries, or (iv) the Executive's material
breach of any provision of this Agreement. For purposes of
this Section, no act, or failure to act on the Executive's
part shall be considered "willful" unless done, or omitted
to be done, without good faith and without reasonable
belief that the act or omission was in the best interest
of the Company. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for
Cause unless and until (i) Executive receives a Notice of
Termination (as defined in Section 2.4) from the Company,
(ii) Executive is given the opportunity, with counsel, to
be heard before the Board, and (iii) the Board finds, in
its good faith opinion, the Executive was guilty of the
conduct set forth in the Notice of Termination.
2.3(d) GOOD REASON. After a Change In Control,
the Executive may voluntarily terminate Executive's
employment with the Company for "Good Reason," which shall
mean termination based upon:
(i) Any action by the Company which
results in a material diminution in the duties or
responsibilities held by Executive as of the
Change in Control Date, excluding for this
purpose any action not taken in bad faith and
which is remedied by the Company promptly after
receipt of notice thereof given by the Executive
and any actions which are a necessary incident of
a merger or consolidation (e.g., the elimination
or consolidation of a position) provided the
Executive is assigned duties and responsibilities
of an executive nature in lieu thereof;
(ii) The Company's reduction in the Annual
Base Salary at which the Executive was paid as of
the Change in Control Date;
(iii) (a) the failure by the Company to
continue in effect any benefit or compensation
plan, stock ownership plan, life insurance plan,
health and accident plan or disability plan to
which the Executive was entitled as of the Change
in Control Date, (b) the taking of any action by
the Company which would adversely affect the
Executive's participation in, or materially
reduce the Executive's benefits under, any such
plan or benefit, or deprive the Executive of any
material fringe benefit enjoyed by the Executive
as of the Change in Control Date, or (c) the
failure by the Company to provide the Executive
with the number of paid vacation days which the
Executive was entitled to receive on an annual
basis as of the Change in Control Date;
(iv) The Company's requiring the Executive
to be regularly based at any office or location
outside the greater metropolitan St. Louis area;
or
(v) A material breach by the Company of
any provision of this Agreement.
For purposes of this Section any good faith determination
of "Good Reason" made by the Executive shall be
conclusive.
2.3(e) TERMINATION WITHOUT CAUSE AFTER A CHANGE
IN CONTROL. After a Change in Control, the Company and
Executive shall continue to have the right to terminate
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Executive's employment without Cause and for any or no
reason, and nothing in this Agreement shall be construed
as limiting the Company's or Executive's right to
terminate Executive's employment at any time without Cause
and for any or no reason.
2.4 NOTICE OF TERMINATION. Any termination of the
Executive's employment with the Company (other than for death) by the
Company or by the Executive, shall be communicated by Notice of Termination
to the other party, given in accordance with Section 6.1. For purposes of
this Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon,
(ii) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated, and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than
fifteen (15) days after the giving of such notice, except as otherwise
provided for in Section 2.3(b)). The failure by the Executive or the Company
to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right
of the Executive or the Company hereunder or preclude the Executive or the
Company from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.
2.5 DATE OF TERMINATION. "Date of Termination" means the
effective date of termination of Executive's employment with the Company,
determined as follows: (i) if after a Change of Control the Executive's
employment is terminated after a Change of Control by the Company for Cause,
or by the Executive for Good Reason, the Date of Termination shall be the
date of receipt of the Notice of Termination or any later date specified
therein, as the case may be, (ii) if after a Change of Control the
Executive's employment is terminated by reason of death or Disability, the
Date of Termination shall be the date of death of the Executive or the
Disability Effective Date, as the case may be, (iii) if after a Change of
Control the Executive's employment is terminated by the Company other than
for Cause, death, or Disability, or by the Executive without Good Reason,
the Date of Termination shall be the date of receipt of the Notice of
Termination, or (iv) if the Executive's employment is terminated by the
Company or Executive prior to a Change in Control other than for Executive's
death or disability, the Date of Termination shall be the date of receipt of
the Notice of Termination; provided that if within thirty (30) days after
any Notice of Termination is given, the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
reason for the termination, solely for the purpose of determining the timing
of any payment calculated from the Date of Termination the Date of
Termination shall be the date on which the dispute is finally determined,
either by mutual written agreement of the parties, or by a final judgment,
order or decree of a court of competent jurisdiction (the time for appeal
therefrom having expired and no appeal having been perfected).
SECTION 3: CERTAIN BENEFITS UPON TERMINATION.
3.1 TERMINATION OF EMPLOYMENT PRIOR TO A CHANGE IN
CONTROL. If, prior to a Change in Control: (i) the Company shall terminate
the Executive's employment, or (ii) the Executive shall terminate employment
with the Company, and such termination is not due to Executive's death or
Disability, then:
3.1(a) "Accrued Obligations": Within 30 days
after the Date of Termination, the Company shall pay to
the Executive the sum of (1) the Executive's Annual Base
-----------
Salary through the Date of Termination to the extent not
------
previously paid, (2) any compensation previously deferred
by the Executive (together with any accrued interest or
earnings thereon) and (3) any accrued vacation pay; in
each case to the extent not previously paid.
3.1(b) "Other Benefits": To the extent not
previously paid or provided, the Company shall timely pay
or provide to the Executive and/or the Executive's family
any
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other amounts or benefits required to be paid or provided
for which the Executive and/or the Executive's family is
eligible to receive pursuant to this Agreement and under
any plan, program, policy or practice or contract or
agreement of the Company as those provided generally to
other peer executives and their families during the ninety
(90) day period immediately preceding the Effective Date
or, if more favorable to the Executive, as those provided
generally after the Effective Date to other peer
executives of the Company and their families; to the
extent permissible under the terms of the applicable plan
and applicable law.
3.1(c) "Severance Amount": Company may, at its
option, waive the provisions of Section 4.1 hereof, in
which event, Executive shall not be entitled to any amount
in addition to that described in 3.1(a) and 3.1 (b). If
Employer elects not to waive the provisions of Section
4.1, within thirty (30) days after the Date of Termination
and subject to satisfaction of the provisions of Section
3.9, Company shall begin paying to Executive twelve (12)
monthly installments which together equal the Employee's
Annual Base Salary. Payments shall be made in accordance
------------------
with the payroll practice of Company but no less
frequently than once a month. Executive's right to receive
the Severance Amount under this Section 3.1(c) is
conditioned on Executive's compliance with Section 4.1
3.2 BENEFITS UPON TERMINATION OF EMPLOYMENT AFTER A CHANGE
IN CONTROL WITHOUT CAUSE OR FOR GOOD REASON. If a Change in Control occurs
while Executive is employed by the Company, and within three (3) years after
a Change in Control: (i) the Company shall terminate the Executive's
employment without Cause, or (ii) the Executive shall terminate employment
with the Company for Good Reason, then upon satisfaction of the conditions
set forth in Section 3.9 below (with respect to the payments specified in
Section 3.2 (b)) the Executive shall be entitled to the benefits provided
below:
3.2(a) "Accrued Obligations": Within thirty (30)
days after the Date of Termination, the Company shall pay
to the Executive the sum of (1) the Executive's Annual
Base Salary through the Date of Termination to the extent
not previously paid, (2) any compensation previously
deferred by the Executive (together with any accrued
interest or earnings thereon) and (3) any accrued vacation
pay; in each case to the extent not previously paid.
3.2(b) "Severance Amount": Within thirty (30)
days after the Date of Termination and satisfaction of the
provisions of Section 3.9, Company shall pay to Employee a
lump sum cash amount or monthly installments, as Employee
chooses, equal to the product of 2.99 times the Employee's
Highest Annual Compensation. For purposes of this
subparagraph, "Highest Annual Compensation" shall mean the
highest total annual compensation (salary and incentive)
paid by the Company to the Employee in any one of the
three most recent completed calendar years preceding the
Date of Termination. If Employee chooses to receive this
payment in a lump sum, this amount shall be paid within 30
days after the effective date of involuntary termination
or Diminution of Status. If Employee chooses to receive
this payment in a series of equal monthly installments
over a one and one-half year period, payments shall be
made in accordance with the payroll practice of Company
but no less frequently than once a month.
3.2(c) "Stock Options": To the extent not
otherwise provided for under the terms of the Company's
stock option plan or the Executive's stock option
agreements (if any), all such stock options shall become
fully exercisable as of the Date of Termination and,
except for "incentive stock options" within the meaning of
Code Section 422 granted
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prior to the date hereof, shall remain fully exercisable
for six months following the Date of Termination.
3.2(d) "Health Insurance": For the period of
three (3) years commencing on the Date of Termination, the
Company shall provide, at its expense, to the Executive
and Executive's eligible family members full coverage
under the Company's Health Insurance Plan (or its full
equivalent) and the Company's Dental Insurance Plan (or
its full equivalent).
3.2(e) "Other Benefits": To the extent not
previously paid or provided, the Company shall timely pay
or provide to the Executive and/or the Executive's family
any other amounts or benefits required to be paid or
provided for which the Executive and/or the Executive's
family is eligible to receive pursuant to this Agreement
and under any plan, program, policy or practice or
contract or agreement of the Company as those provided
generally to other peer executives and their families
during the ninety (90) day period immediately preceding
the Effective Date or, if more favorable to the Executive,
as those provided generally after the Effective Date to
other peer executives of the Company and their families;
to the extent permissible under the terms of the
applicable plan and applicable law.
3.3 DEATH; DISABILITY. If the Executive's employment is
terminated by reason of the Executive's death (either prior or subsequent to
a Change in Control), this Agreement shall terminate without further
obligations to the Executive's legal representatives under this Agreement,
other than for (i) payment of Accrued Obligations (as defined in Section
3.1(a)) (which shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within thirty (30) days of the Date of
Termination); (ii) and the timely payment or provision of Other Benefits (as
defined in Section 3.1(b)), including death benefits pursuant to the terms
of any plan, policy, or arrangement of the Company.
If the Executive's employment is terminated by
reason of the Executive's Disability (either prior or subsequent
to a Change in Control), this Agreement shall terminate without further
obligations to the Executive, other than for (i) payment of Accrued
Obligations (as defined in Section 3.1(a)) (which shall be paid to the
Executive in a lump sum in cash within thirty (30) days of the Date of
Termination) and (ii) the timely payment or provision of Other Benefits (as
defined in Section 3.1(b)) including disability benefits pursuant to the
terms of any plan, policy or arrangement of the Company.
3.4 TERMINATION AFTER A CHANGE OF CONTROL FOR CAUSE; OTHER
THAN GOOD REASON. If the Executive's employment shall be terminated for
Cause subsequent to a Change in Control, this Agreement shall terminate
without further obligations to the Executive other than the obligation to
pay to the Executive the Executive's Accrued Obligations (as defined in
Section 3.1(a)). If the Executive terminates employment with the Company
other than for Good Reason and subsequent to a Change of Control, if the
Executive terminates employment with the Company for Good Reason more than
three (3) years after a Change of Control, or if the Company terminates the
Executive without Cause more than three (3) years after a Change of Control,
this Agreement shall terminate without further obligations to the Executive,
other than for the payment of Accrued Obligations (as defined in Section
3.1(a)) and the timely payment or provision of Other Benefits (as defined in
Section 3.1(b)). In such case, all Accrued Obligations shall be paid to the
Executive in a lump sum in cash within thirty (30) days of the Date of
Termination.
3.5 CERTAIN ADDITIONAL PAYMENTS BY COMPANY.
3.5(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that
any payment or distribution by the Company or any
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successor or affiliate to or for the benefit of Executive
(whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise,
determined with regard to accelerated vesting of stock
options and other forms of compensation on account of a
change of control as defined in the Code or as the result
of any provision in this Agreement, but determined without
regard to any additional payments required under this
section) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the "Code") or any interest or penalties
are incurred by Executive with respect to such excise tax
(such excise tax, together with any interest and
penalties, are hereinafter collectively referred to as the
"Excise Tax"), then Executive shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an amount
such that after payment by Executive of all taxes
(including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income
taxes (and any interest and penalties imposed with respect
thereto) and Excise Tax imposed upon the Gross-Up Payment,
Executive retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Payments. For purposes
of determining the amount of the Gross-Up Payment, the
Employee shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation in
the calendar year in which the Gross-Up Payment is to be
made, and state and local income taxes at the highest
marginal rate of taxation in either the state and locality
of the Employee's place of employment at the time of the
Change in Control or in the state and locality of
residence at the time or times of payment, as applicable,
net of the maximum reduction in federal income taxes that
could be obtained from the deduction of the state and
local taxes.
3.5(b) Subject to the provisions of subsection
3.5(c), all determinations required to be made under this
section, including whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such
determination, shall be made by Ernst & Young LLP ("the
"Accounting Firm") which shall provide detailed supporting
calculations both to the Company and Executive within
fifteen (15) business days of the receipt of notice from
Executive that there has been a Payment, or such earlier
time as is requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for
the individual, entity or group effecting the Change in
Control, Executive shall appoint another nationally
recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees
and expenses of the Accounting Firm shall be borne solely
by the Company. Any Gross-Up Payment, as determined
pursuant to this section, shall be paid by the Company to
Executive within five (5) days of the receipt of the
Accounting Firm's determination. If the Accounting Firm
determines that no Excise Tax is payable by Executive, it
shall furnish Executive with a written opinion that
failure to report the Excise Tax on Executive's applicable
federal income tax return would not result in the
imposition of a negligence or similar penalty. Any
determination by the Accounting Firm shall be binding upon
the Company and Executive. As a result of the uncertainty
in the application of Section 4999 of the Code at the time
of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which
will not have been made by the Company should have been
made (an "Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to subsection
3.5(c) and Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by the
Company to or for the benefit of Executive.
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3.5(c) Executive shall notify the Company in
writing of any claim by the Internal Revenue Service that,
if successful, would require the payment by the Company of
the Gross-Up Payment. Such notification shall be given as
soon as practicable, but no later than ten (10) business
days after Executive is informed in writing of such claim,
and shall apprise the Company of the nature of such claim
and the date on which such claim is requested to be paid.
Executive shall not pay such claim prior to the expiration
of the thirty (30) day period following the date on which
Executive gives such notice to the Company (or such
shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company
notifies Executive in writing prior to the expiration of
such period that it desires to contest such claim,
Executive shall:
(i) give the Company any information
reasonably requested by the Company relating to
such claim;
(ii) take such action in connection with
contesting such claim as the Company shall
reasonably request in writing from time to time,
including without limitation, accepting legal
representation with respect to such claim by an
attorney reasonably selected by the Company;
(iii) cooperate with the Company in good
faith in order effectively to contest such claim;
and
(iv) permit the Company to participate in
any proceedings relating to such claim;
provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional
interest and penalties) incurred in connection with such
contest and shall indemnify and hold Executive harmless,
on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto)
imposed as a result of such representation and payment of
costs and expenses. Without limitation on the foregoing
provisions of this subsection, the Company shall control
all proceedings taken in connection with such contest and,
at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such
claim and may, at its sole option, either direct Executive
to pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner, and Executive agrees to
prosecute such contest to a determination before any
administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the
Company directs Executive to pay such claim and xxx for a
refund, the Company shall advance the amount of such
payment to Executive, on an interest-free basis, and shall
indemnify and hold Executive harmless, on an after-tax
basis, from any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed
income with respect to such advance; and further provided
that any extension of the statute of limitations relating
to payment of taxes for the taxable year of Executive with
respect to which such contested amount is claimed to be
due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment
would be payable hereunder, and Executive shall be
entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any
other taxing authority.
3.5(d) If, after the receipt by Executive of an
amount advanced by the Company pursuant to subsection
3.5(c), Executive becomes entitled to receive any refund
with
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respect to such claim, Executive shall (subject to the
Company's complying with the requirements of subsection
3.5(c)) promptly pay to the Company the amount of such
refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the
receipt by Executive of an amount advanced by the Company
pursuant to subsection 3.5(c), a determination is made
that Executive shall not be entitled to any refund with
respect to such claim and the Company does not notify
Executive in writing of its intent to contest such denial
of refund prior to the expiration of thirty (30) days
after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the
amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be
paid.
3.6 NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement
shall prevent or limit the Executive's entitlement to accrued benefits under
any plan, program, policy or practice provided by the Company and for which
the Executive may qualify. Amounts which are vested benefits of which the
Executive is otherwise entitled to receive under any plan, policy, practice
or program of, or any contract or agreement with, the Company at or
subsequent to the Date of Termination, shall be payable in accordance with
such plan, policy, practice or program or contract or agreement except as
explicitly modified by this Agreement.
3.7 FULL SETTLEMENT. 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 or other claim, right or action which the Company may
have against the Executive or others. In no event shall the Executive be
obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and such amounts shall not be reduced whether
or not the Executive obtains other employment.
3.8 RESOLUTION OF DISPUTES. If after a Change in Control
there shall be any dispute between the Company and the Executive (i) in the
event of any termination of the Executive's employment by the Company,
whether such termination was for Cause or Disability, or (ii) in the event
of any termination of employment by the Executive, whether Good Reason
existed, then, unless and until there is a final, nonappealable judgment by
a court of competent jurisdiction declaring that such termination was for
Cause or that the determination by the Executive of the existence of Good
Reason was not made in good faith, the Company shall pay all amounts, and
provide all benefits, to the Executive and/or the Executive's family or
other beneficiaries, as the case may be, that the Company would be required
to pay or provide pursuant to this Agreement as though such termination were
by the Company without Cause or by the Executive with Good Reason; provided,
however, that the Company shall not be required to pay any disputed amounts
pursuant to this Section except upon receipt of an undertaking by or on
behalf of the Executive to repay all such amounts to which the Executive is
ultimately adjudged by such court not to be entitled.
3.9 CONDITIONS TO PAYMENTS. To be eligible to receive (and
continue to receive) and retain the payments and benefits described in
Section 3.1(c) or 3.2 (b), Executive must execute and deliver to the Company
an agreement, in form and substance satisfactory to the Company, effectively
releasing and giving up all claims Executive may have against the Company or
any of its subsidiaries or affiliates (and each of their respective
employees, officers, plans or agents) arising out of any facts or conduct
occurring prior to that date. The agreement will be prepared by the Company
and provided to Executive at the time Executive's employment is terminated
or as soon as administratively practicable thereafter. The agreement will
require Executive to consult with Company representatives, and voluntarily
appear as a witness for trial or deposition (and to prepare for any such
testimony) in connection with, any claim which may be asserted by or against
the Company, or any business matter concerning the Company or any of its
transactions or operations.
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SECTION 4: NON-COMPETITION. The provisions of this Section 4 and any
related provisions survive termination of this Agreement and/or Executive's
employment with the Company.
4.1 NON-COMPETE AGREEMENT.
4.1(a) It is agreed that during the period
beginning (i) in the case where a Change of Control has
occurred, on the Change in Control Date, and (ii) in all
other cases, on the date the Executive's employment with
the Company terminates and ending one (1) year thereafter,
the Executive shall not, without prior written approval of
the Board, become an officer, employee, agent, partner,
manager, member or director of any business enterprise in
substantial direct competition (as defined in Section
4.1(b)) with the Company.
4.1(b) For purposes of Section 4.1, a business
enterprise shall be considered in substantial direct
competition, if such entity competes with the Company in
any business in which the Company or any of its direct or
indirect subsidiaries is engaged and is within the
Company's market area (as defined herein) as of the date
the Executive's Company employment terminates. The
Company's market area is defined for this purpose, as the
greater metropolitan St. Louis area, including without
limitation the City of St. Louis and the Counties of St.
Louis, St. Xxxxxxx, and Xxxxxxxxx, in Missouri and the
Counties of Madison and St. Clair in Illinois.
4.1(c) The above constraint shall not prevent the
Executive from making passive investments, not to exceed
five percent (5%), in any enterprise.
4.2 CONFIDENTIAL INFORMATION. The Executive shall hold in
a fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company or any
of its affiliated companies or direct or indirect subsidiaries, and their
respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company and which shall not be or
become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement). After
termination of the Executive's employment with the Company, the Executive
shall not, without the prior written consent of the Company, or as may
otherwise be required by law or legal process, use, or communicate or
divulge, any such information, knowledge or data to anyone other than the
Company and those designated by it. In no event shall an asserted violation
of the provisions of this Section constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under this
Agreement.
4.3 REMEDIES. In addition to any other remedies available
to the Company at law or in equity, the Executive's failure to comply with
the provisions of this Section 4 shall give the Company the right (in
addition to all other remedies the Company may have) to terminate any
benefits or compensation to which the Executive may be otherwise entitled
following termination of his employment hereunder. The Executive represents
that due to his education and qualifications and the significant
consideration which he will receive pursuant to this Agreement, his ability
to earn a livelihood would not be impaired if Company is granted equitable
relief to enforce the obligations set forth in Section 4 of this Agreement.
The parties acknowledge that any breach of this Section 4 by Executive will
cause irreparable harm to the Company. As a consequence, the parties agree
that if the Executive fails to abide by the terms of Section 4 of this
Agreement, the Company will be entitled to specific performance, including
immediate issuance of a temporary restraining order or preliminary
injunction enforcing this Agreement, and to judgment for damages caused by
such breach, and to any and all other remedies provided by equity or
applicable law.
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SECTION 5: SUCCESSORS.
5.1 SUCCESSORS OF EXECUTIVE. This Agreement is personal to
the Executive and, without the prior written consent of the Company, the
rights (but not the obligations) shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
5.2 SUCCESSORS OF COMPANY. This Agreement is freely
assignable by the Company. 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 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. Failure of the Company to obtain such agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to terminate the Agreement at
Executive's option on or after the Change in Control Date for Good Reason.
As used in this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets which assumes and
agrees to perform this Agreement by operation of law, or otherwise.
SECTION 6: MISCELLANEOUS.
6.1 NOTICE. For purposes of this Agreement, notices and
all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses as set forth below; provided that all
notices to the Company shall be directed to the attention of the Chairman of
the Board, or to such other address as one party may have furnished to the
other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
Notice to Executive:
--------------------
Xxxxx X. Xxxxx
00 Xxxx Xxxxxx Xxxxx
Xx. Xxxxx, XX 00000
Notice to Company:
------------------
Allegiant Bancorp, Inc.
0000 Xxxxxxx Xxxx.
Xx. Xxxxx, XX 00000
Attn: Chairman
6.2 VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement. If any provision of Section 4, or
any part thereof, is held to be unenforceable, the court making such
determination shall have the power to modify such provisions so that the
restriction imposed thereby is no greater than what would otherwise be
permissible under the applicable law.
6.3 WITHHOLDING; ATTORNEYS FEES. 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. If any lawsuit is filed to declare this Agreement invalid in
whole or in part, or to enforce any party's rights or obligations under this
Agreement, then the party to this Agreement who prevails in such litigation
with respect to any such issue (other than by reason of a
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settlement) shall be entitled to recover from the other party to this
Agreement all court costs, litigation expenses and reasonable attorney's
fees incurred by that prevailing party in defending against and/or
prosecuting that issue (as the case may be).
6.4 WAIVER. The Executive's or the Company's failure to
insist upon strict compliance with any provision hereof or any other
provision of this Agreement or the failure to assert any right the Executive
or the Company may have hereunder, including, without limitation, the right
of the Executive to terminate employment for Good Reason pursuant to Section
3.2(ii), shall not be deemed to be a waiver of such provision or right or
any other provision or right of this Agreement.
6.5 ENTIRE AGREEMENT; NO AMENDMENT. This Agreement
contains the entire agreement between the parties respecting the subject
matter hereof and supersedes all prior oral or written communications and
agreements between the parties relating to employment or payments in the
event employment terminates. Neither this Agreement, nor any of its terms,
may be changed, added to, amended, waived or varied except in a writing
signed by Executive and the Company.
6.6 TERMINATION. This Agreement terminates on January 1,
2005 or the date Executive's employment with the Company terminates,
whichever first occurs. Termination does not affect accrued rights or
obligations (including but not limited to payment obligations under Section
3), or (if applicable) the provisions of Section 4 or any related
provisions.
IN WITNESS WHEREOF, the Executive and, the Company, pursuant to the
authorization from its Board, have caused this Agreement to be executed in
its name on its behalf, all as of the day and year first above written.
Date: February 28, 2002 /s/ Xxxxx X. Xxxxx
----------------------------------------
Xxxxx X. Xxxxx
ALLEGIANT BANCORP, INC.
By /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------------------
Date: February 28, 2002 Title: Executive Vice President and
Chief Operations Officer
----------------------------------
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