Exhibit 10.24
AMENDED AND RESTATED SEVERANCE AGREEMENT
This Amended and Restated Severance Agreement is made and entered into
as of this 5th day of March, 1998 by and between The Xxxxx National Bank, a
national banking association (the "Bank"), and
Xxxxx X. Xxxxx ("Executive").
R E C I T A L S
A. The Board of Directors of the Bank believes that the Executive is a
critically important member of the management of the Bank upon whose continuing
services the Bank depends and will depend for its future growth and prosperity.
B. The Board of Directors desires to assure itself of the uninterrupted
and unimpaired performance and loyalty of the Executive to the Bank in the event
of any actual or proposed Change in Control of the Bank or its parent, Xxxxxxx
Xxxxx National Bancorp, Inc. (the "Company").
C. Events occurring after the failure to obtain stockholder approval of
the acquisition of Ballston Bancorp have increased the degree of uncertainty as
to future job security for the Executive.
D. The Board of Directors believes that the interests of the Bank and
the Company will best be served by providing the Executive with economic
assurances which will help to relieve her of uncertainty about her personal
economic interests in the event of any actual or proposed change in control, and
thereby permit her to devote her uninterrupted attention to the continued
performance of her duties to the Bank.
NOW, THEREFORE, IT IS AGREED:
1. Definitions. For Purposes of this Agreement, the following
terms have the meanings indicated:
(a) "Change in Control" means any of the following events:
(i) when the Company or the Bank acquires actual
knowledge that any person (as such term is used in Section
13(d) and 15(d)(2) of the Securities and Exchange Act of 1934
(the "Exchange Act")), other than an employee benefit plan
established or maintained by the Company or the Bank, is or
becomes the beneficial owner (as defined in Rule 13d-3 of the
Exchange Act) directly or indirectly, or record owner of
securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding
securities;
(ii) upon the first purchase of the Company's common
stock pursuant to a tender or exchange offer (other than a
tender or exchange offer made by the Company or an employee
benefit plan established or maintained by the Company or the
Bank);
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(iii) upon the approval by the Company's stockholders
of (A) a merger or consolidation of the Company with or into
another corporation (other than a merger or consolidation the
definitive agreement for which provides that at least
two-thirds of the directors of the surviving or resulting
corporation immediately after the transaction are Continuing
Directors (hereinafter defined)), (B) a sale or disposition of
all or substantially all of the Company's assets or (C) a plan
of liquidation or dissolution of the Company;
(iv) if during any period of two consecutive years,
individuals who at the beginning of such period constitute the
Board of Directors of either the Company or the Bank (the
"Continuing Directors") cease for any reason to constitute at
least two-thirds thereof;
(v) upon a sale of (A) common stock of the Bank if
after such sale any person (as defined above), other than the
Company or an employee benefit plan established or maintained
by the Company or the Bank, owns a majority of the Bank's
common stock or (B) all or substantially all of the Bank's
assets; or
(vi) any other agreement, happening or device which
has substantially the same effect on control of the Company or
the Bank as any of the foregoing.
The events described above shall be deemed a Change in Control
regardless of whether such event was approved in advance by a majority of the
Continuing Directors then in office.
(b) The Executive will be deemed to be "Terminated" upon the
occurrence of any one of the following events:
(i) the involuntary termination without cause of
the Executive's employment with the Bank;
(ii) the relocation of the principal place at which
the Executive's duties are to be performed to a location
outside a 35-mile radius of the District of Columbia;
(iii) a reduction in the Executive's compensation;
(iv) a change in benefits or perquisites provided to
the Executive which is deemed materially adverse by the
Executive;
(v) a change in the Executive's responsibilities,
authorities or functions which is deemed materially adverse by
the Executive; or
(vi) the Executive is requested by management or the
Board of Directors to engage in conduct which the Executive
can demonstrate is illegal.
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(c) "Rabbi Trust" means a grantor trust, as that term is
defined in Section 671 of the Internal Revenue Code, established pursuant to a
trust agreement entered into between the Bank and NationsBank.
2. Compensation. Executive shall be entitled to resign from the Bank
within the one year period following a Change in Control of the Bank or the
Company and if the Change in Control has not been approved by a majority of the
Continuing Directors then in office, the Executive shall receive a lump sum
payment equal to one year's full base salary at the rate applicable to the
Executive in effect immediately prior to the Change in Control (the "Severance
Payment"). Executive shall also receive the Severance Payment in the event she
is asked to resign or her employment with the Bank is Terminated as a condition
to, in preparation for, or otherwise in connection with a Change in Control, or
within the one year period following a Change in Control, prior to the
resignation of the Executive, whether or not such change in Control was approved
by a majority of the Continuing Directors.
3. Limitation on Severance Payment. Any Severance Payment payable in
accordance with this Agreement shall be reduced to the extent that any such
payment constitutes an "Excess Parachute Payment," as such term is defined in
the Internal Revenue Code of 1986, as amended.
4. Consideration. This Agreement is for the purpose of inducing the
Executive to continue her employment with the Bank and in consideration of the
services rendered by the Executive to the Bank from and after the date of this
Agreement, which consideration the Bank hereby acknowledges is fair and
adequate.
5. Rabbi Trust. In conjunction with the execution of this Agreement,
the Bank shall establish an irrevocable Rabbi Trust in order to fund its
Severance Payment obligations under this Agreement. The terms of the Rabbi Trust
are incorporated by reference. To the extent that the Executive acquires a right
to receive benefits under this Agreement, such right shall be no greater than
the right of any unsecured general creditor of the Bank.
6. Successors. This Agreement shall inure to the benefit of the
Executive, her heirs, personal representatives and assigns and shall bind the
Bank and its successors.
7. Waiver. The parties hereto acknowledge that this Amended and
Restated Severance Agreement and the related Rabbi Trust was prepared pursuant
to their mutual request by the law firm of Ober, Kaler, Xxxxxx & Xxxxxxx,
counsel solely to the Company and the Bank. The Executive acknowledges that she
is sophisticated in business matters (including, but not limited to, employment
agreements) and that she has had the opportunity to seek independent legal
advice. Each of the Executive and the Bank specifically waives any actual or
apparent conflict of interest of Xxxx Xxxxx, Xxxxxx & Xxxxxxx in connection with
the preparation and negotiation of this Amended and Restated Severance
Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
THE XXXXX NATIONAL BANK
By: _____________________________________
Xxxxxxx Xxxxx Xxxx
Chairwoman, President and
Chief Executive Officer
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Name: _____________________________
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