Exhibit 10.27
Agreement between Xxxxxx X. XxXxxxxxxxxx and the Company regarding
the change in control arrangement, dated December 31, 1994.
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AGREEMENT
This Agreement ("Agreement") effective this 31st day of December,
1994, by and between Xxxxxxx Xxxxx, Inc., an Iowa bank holding
company with its principal place of business in Des Moines, Iowa
("Employer") and Xxxxxx X. XxXxxxxxxxxx ("Employee").
Whereas, Employer desires to provide certain employment security
to Employee, a key employee of Employer, to induce Employee to
continue his employment with Employer and enhance his ability to
perform effectively without undue distraction should Employer
become a target of an attempted acquisition, takeover or merger;
and
Whereas, in an effort to induce Employee to remain in the employ
of Employer and in consideration of his continuing employment,
Employer desires to enter into this Agreement for the payment of
certain benefits in the event that Employee employment is
terminated or subject to a significant change as provided herein,
following a change of control of Employer.
Now, therefore, in consideration of the promises herein contained,
and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Term. Except as otherwise provided, this Agreement shall
remain in full force and effect until the earlier of the death or
disability of Employee, or the expiration of the Employee's rights
to receive any benefits payable pursuant to this Agreement.
2. Entitlement to Benefits. Employee shall be entitled to
benefits if the Employee is employed by Employer when a Change in
Control of Employer occurs and, within three years thereafter,
there is a Termination of Existing Employment of Employee.
3. Change of Control. For purposes of this Agreement, a Change
of Control of Employer shall mean any transaction or series of
transactions, the result of which is: (a) a direct or indirect
acquisition of all or substantially all of the assets of the
Employer; (b) a change in ownership whereby the stockholders of
Employer immediately prior to such transaction(s) own less than a
majority of the combined voting power of all issued and
outstanding securities of Employer or its successor following the
transaction(s); or (c) a person and their affiliates own a greater
number of shares of the Company than the Xxxxxxx Family.
Transactions resulting in a Change of Control shall include but
not be limited to direct acquisitions of assets or securities or
indirect acquisitions by merger, consolidation, or other legal
reorganization of Employer. The "Xxxxxxx Family" for purposes of
this section, shall include all descendants of Xxxxxx Xxxxxxx and
their spouses and affiliates including but not limited to any
shares owned by trusts, corporations or persons which the
descendants of Xxxxxx Xxxxxxx have control over or are for the
benefit of said descendants or their spouses.
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4. Termination of Existing Employment. For purposes of this
Agreement, a Termination of Existing Employment shall occur if
there is a substantial reduction in duties in Employee's
employment or such employment is terminated by Employer,
Employer's subsidiary, a successor to Employer or such successor's
subsidiary.
5. Calculation of Benefits. Upon a Termination of Existing
Employment within one year of a Change in Control, Employee shall
be entitled to receive Benefits in the amount of Five Hundred
Thousand Dollars ($500,000); upon a Termination of Existing
Employment more than one year but prior to three years following a
Change in Control, the Benefits to be received by the Employee
shall be reduced by $10,417 for each full month the Employee
remains employed by the Company beyond the 12th month following
the change in control. No benefits shall accrue to the Employee
if there is a Termination of Existing Employment more than three
years following a Change in Control. For example, if the Employee
is terminated during the 17th month following the change in
control, the Employee will receive $458,332 ($500,000 - ((16-12) x
$10417)). The benefits payable hereunder shall be paid to the
Employee within 10 days following the event causing the payment to
become due.
6. Ratable Decrease in Benefits with Age. The Benefits
calculated under Paragraph 5 above shall remain unchanged for any
Change of Control that occurs before Employee reaches age 61. In
the event that a Change of Control occurs after Employee turns 61,
the Benefits calculated thereunder shall be reduced by 20% during
the year Employee is age 61, reduced by 40% during the year
Employee is age 62, reduced by 60% during the year Employee is age
63, reduced by 80% during the year Employee is age 64, and
Employee shall no longer be entitled to receive benefits if a
Change in Control occurs after Employee turns age 65. For
example, a Change of Control and Termination of Existing
Employment occurs when Employee is age 62 and the Benefits
calculated in accordance with Paragraph 5 above are $500,000, the
Benefits are decreased by 40% to $300,000. In the preceding
example, if the Termination of Existing Employment occurred during
the twenty-fifth month following the Change of Control and the
Employee is age 64, the Benefits in the amount of $374,996
calculated in accordance with Paragraph 5 would be decreased by
80% to $74,999.20.
7. Limitation on Benefits. Notwithstanding the foregoing, in the
event that the amount of Benefits payable to Employee exceeds 2.9
times the Employee's "base amount" allocated to the payment
hereunder as determined under I.R.C. Section 280G(b)(3)(B), the
Benefits payable to Employee shall be limited to 2.9 times the
Employee's "base amount" allocated to the payment hereunder as
determined under I.R.C. Section 280G(b)(3)(B).
8. No Reduction in Salary. If, following a Change in Control,
the Employee remains employed by Employer or its successor, the
Employer or its successor may not, for a period of three years
following the Change of Control, reduce the Employee's salary
below the salary level paid immediately prior to the Change in
Control.
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9. No Contract of Employment. The rights and obligations created
hereunder shall have no effect on Employee's status as an employee
at will of Employer. Employee acknowledges that this Agreement
creates no right to be employed by Employer and shall be construed
solely as creating additional financial security in the event of a
Change of Control of Employer.
10. Binding Agreement. This Agreement shall be binding on
Employer, its successors and assigns.
11. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the
State of Iowa.
12. Waiver. Following a Change of Control, no successor to
Employer shall request or require Employee to release, modify,
waive or discharge his rights hereunder. Failure of Employee to
enforce his rights hereunder at the time of any breach or non-
compliance with any condition or provision of this Agreement by
Employer, its successors or assigns, shall not be deemed to be a
waiver of such provision and shall have no effect on the
enforcement of the same or any other condition herein contained.
13. Severability. In the event that any provision of this
Agreement is deemed to be invalid or unenforceable, such invalid
or unenforceable provision shall be deemed to be modified in such
a manner as to make it valid and enforceable and shall have no
affect on the validity or enforceability of any other provision of
this Agreement.
14. Prior Agreements. This Agreement shall supersede all prior
agreements between the parties relating to Change of Control of
Employer, and all such prior agreements, whether oral or written,
are hereby canceled, terminated, and revoked.
Wherefore, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
Xxxxxxx Xxxxx, Inc., Employee
By__________________________ _________________________
C. Xxxxxx Xxxxxxx, Xxxxxx X. XxXxxxxxxxxx
Chairman ofthe Board
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