1
MAGNA GROUP, INC.
AGREEMENT
---------
This agreement ("Agreement") has been entered into this
24th day of March, 1997, by and between Magna Group, Inc.,
a Delaware corporation ("Company"), and Xxxxxx X. Xxxxxxx, 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
stockholders to reinforce and encourage the continued attention and
dedication of the Executive to the Company as a member of the
Company's management (including, if applicable, management of a
wholly owned subsidiary) 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) of the Company. The Board desires to provide for
the continued employment of the Executive on the terms hereof, 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 the
breach of this Agreement by the Employer or 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" means the
dollar amount approved by the Company
Director Compensation Committee or the
Company Chief Executive Officer.
1.1(b) "BOARD" means the Board of Directors
of the Company.
1.1(c) "CHANGE IN CONTROL" means a change
in control of the Company of a
nature that would be required to be
reported in response to Item 6(e) of
Schedule 14A of Regulation 14A
promulgated under the Exchange Act;
provided that, for purposes of this
Agreement, a Change in Control shall
be deemed to have occurred if (i)
any Person (other than the Company)
is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the
Exchange Act),
2
directly or indirectly, of securities of the
Company which represent 20% or more
of the combined voting power of the
Company's then outstanding
securities; (ii) during any period
of two (2) consecutive years,
individuals who at the beginning of
such period constitute the Board
cease for any reason to constitute
at least a majority thereof, unless
the election, or the nomination for
election, by the Company's
stockholders, of each new director
is approved by a vote of at least
two-thirds (2/3) of the directors
then still in office who were
directors at the beginning of the
period but excluding any individual
whose initial assumption of office
occurs as a result of either an
actual or threatened election
contest (as such term is used in
Rule 14a-11 of Regulation 14A
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; (iii) there is
consummated any consolidation or
merger of the Company in which the
Company is not the continuing or
surviving corporation or pursuant to
which shares of the Company's Common
Stock is converted into cash,
securities, or other property, other
than a merger of the Company in
which the holders of the Company's
Common Stock immediately prior to
the merger have the same
proportionate ownership of common
stock of the surviving corporation
immediately after the merger; (iv)
there is consummated any
consolidation or merger of the
Company in which the Company is the
continuing or surviving corporation
in which the holders of the
Company's Common Stock immediately
prior to the merger do not own fifty
percent (50%) or more of the stock
of the surviving corporation
immediately after the merger; (v)
there is consummated any sale,
lease, exchange, or other transfer
(in one transaction or a series of
related transactions) of all, or
substantially all, of the assets of
the Company, or (vi) the
stockholders of the Company approve
any plan or proposal for the
liquidation or dissolution of the
Company.
1.1(d) "CHANGE IN CONTROL DATE" shall mean
the date of the Change in Control.
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 a Change in
Control or (ii) otherwise arose in
connection with or anticipation of a
Change in Control, then for all
purposes of this Agreement, the
"Change in Control Date" shall mean
the date immediately prior to the
date of such termination of
employment, and a Change in Control
shall be deemed to have occurred on
the Change in Control Date.
1.1(e) "CODE" shall mean the Internal
Revenue Code of 1986, as amended.
1.1(f) "COMPANY" means Magna Group, Inc., a
Delaware corporation.
1.1(g) "EFFECTIVE DATE" shall mean March 1,
1997.
1.1(h) "EXCHANGE ACT" means the Securities
Exchange Act of 1934, as amended.
-2-
3
1.1(i) "INCENTIVE BONUS" shall mean the
incentive bonus provided through any
incentive compensation plan, which
is generally available to other peer
executives of the Company, awarded
to the Executive for the year
preceding termination. To the
extent such incentive bonus is paid
in shares of restricted stock,
Incentive Bonus shall include the
value of such shares on their award
date without any discount; provided,
however, such restricted shares
shall include only those awarded in
lieu of compensation payable as
determined by the Compensation
Committee of the Board.
1.1(j) "PERSON" means any "person" within
the meaning of Sections 13(d) and
14(d) of the Exchange Act.
1.1(k) "TERM" means the period that begins
on the Effective Date and ends on
the earlier of: (i) the Date of
Termination as defined in Section
3.7, or (ii) the close of business
on December 31 of any calendar year
during which notice is given, by
December 1 of such year, by either
party (as provided in Section 7) of
such party's intent not to renew
this Agreement.
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.
SECTION 2: TERMS AND CONDITIONS OF EMPLOYMENT.
2.1 EMPLOYMENT. If the Executive is in the employ of the
Company (or in the employ of a wholly owned subsidiary) on a Change
in Control Date, then the Executive shall thereafter remain in the
employ of the Company (or in the employ of a wholly owned
subsidiary) in accordance with the terms and provisions of this
Agreement.
2.2 POSITIONS AND DUTIES.
2.2(a) Following a Change in Control Date, the
Executive shall continue to serve in the Executive's then
current capacity, subject to the reasonable directions of
the Board. The Executive shall thereafter devote the
Executive's full working time and attention to such
business and affairs of the Company and/or any subsidiary
of the Company as directed by the Board, as may be
compatible with the Executive's titles and positions. In
addition, the Executive's position (including status,
offices, titles and reporting requirements), authority,
duties and responsibilities shall be at least commensurate
in all material respects with those assigned to, or held
and exercised by, the Executive immediately preceding a
Change in Control Date.
-3-
4
2.2(b) Following a Change in Control Date and
thereafter throughout the Term of this Agreement (but
excluding any periods of vacation and sick leave to which
the Executive is entitled), the Executive shall devote
reasonable attention and time during normal business hours
to the business and affairs of the Company and shall use
the Executive's reasonable best efforts to perform
faithfully and efficiently such responsibilities as are
assigned to the Executive under or in accordance with this
Agreement; provided that, it shall not be a violation of
this paragraph for the Executive to (i) serve on
corporate, civic or charitable boards or committees,
(ii) deliver lectures or fulfill speaking engagements, or
(iii) manage personal investments, so long as such
activities do not significantly interfere with the
performance of the Executive's responsibilities as an
employee of the Company in accordance with this Agreement
or violate the Company's conflict of interest policy as in
effect immediately prior to the Effective Date.
2.3 SITUS OF EMPLOYMENT. Following a Change in Control
Date and thereafter throughout the Term of this Agreement, the
Executive's services shall be performed at the location where the
Executive was employed immediately preceding the Change in Control
Date.
2.4 COMPENSATION. For any calendar year including and
following a Change in Control Date, the Executive shall receive an
Annual Base Salary equal to the Annual Base Salary being received
immediately prior to a Change in Control Date, which shall be paid
in equal or substantially equal monthly installments. The Annual
Base Salary payable to the Executive shall be reviewed thereafter
at least annually but need not be adjusted upward as a result of
such review and shall not be reduced after any increase thereof.
SECTION 3: TERMINATION OF AGREEMENT.
3.1 DEATH. This Agreement shall terminate
automatically upon the Executive's death during the Term of this
Agreement.
3.2 DISABILITY. If, following a Change in Control
Date, the Company determines in good faith that the Disability of
the Executive has occurred during the Term of this Agreement
(pursuant to the definition of Disability set forth below), it may
give to the Executive written notice in accordance with Section 8.1
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 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.
3.3 PRIOR TO CHANGE IN CONTROL. Executive is employed
at will. Any notice of termination by Executive or Company shall
be given in accordance with Section 3.6 of the Agreement.
-4-
5
3.4 FOLLOWING A CHANGE IN CONTROL - TERMINATION BY
COMPANY FOR CAUSE. Following a Change in Control Date, the Company
may terminate the Executive's employment during the Term of this
Agreement for "Cause," which shall mean termination based upon:
(i) the Executive's willful and continued failure to substantially
perform the Executive's duties with the Company (other than as a
result of incapacity due to physical or mental condition), after a
demand for substantial performance is delivered to the Executive by
the Chief Executive Officer of the Company or the Chairman of the
Compensation Committee of the Board, which specifically identifies
the manner in which the Executive has not substantially performed
the Executive's duties, (ii) the Executive's willful commission of
misconduct which is materially injurious to the Company, monetarily
or otherwise, or (iii) the Executive's material breach of any
provision of this Agreement. For purposes of this paragraph, 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) the Executive receives a Notice of Termination
(as defined in Section 3.6) from the Chief Executive Officer of the
Company or the Chairman of the Compensation Committee of the Board,
(ii) the 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.
3.5 FOLLOWING A CHANGE IN CONTROL - TERMINATION BY
EXECUTIVE FOR GOOD REASON. Following a Change in Control Date, the
Executive may terminate the Executive's employment with the Company
for "Good Reason," which shall mean termination based upon:
(i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position
(including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 2.2(a) or any other action by the
Company which results in a material diminution in such
position, authority, duties or responsibilities, 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;
(ii) 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 is entitled, the
taking of any action by the Company which would adversely
affect the Executive's participation in, or materially
reduce the Executive's benefits such plans, or deprive the
Executive of any material fringe benefit enjoyed by the
Executive or the failure by the Company to provide the
Executive with the number of paid vacation days to which
the Executive is entitled.
(iii) the Company's requiring the Executive to be based
at any office or location other than that described in
Section 2.3;
(iv) a material breach by the Company of any provision
of this Agreement;
(v) any failure by the Company to renew this Agreement
so that the Term ends prior to the second anniversary of
the Change in Control Date or any purported termination by
the Company of the Executive's employment otherwise than
as expressly permitted by this Agreement;
-5-
6
(vi) within a period ending at the close of business on
the date two (2) years after the Change in Control Date,
any failure by the Company to comply with and satisfy
Section 6.2 on or after the Change in Control Date; or
(vii) within a period ending at the close of business
on the date one (1) year after the Change in Control Date,
the Executive, in the Executive's sole and absolute
discretion, determines and notifies the Company in
writing, that the Executive does not wish to continue
employment with the Company.
For purposes of this Section any good faith determination of "Good
Reason" made by the Executive shall be conclusive.
3.6 NOTICE OF TERMINATION. Any termination by the
Company, or by the Executive, shall be communicated by Notice of
Termination to the other party, given in accordance with Section
8.1. 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). 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.
3.7 DATE OF TERMINATION. "Date of Termination" means
(i) if the Executive's employment is terminated by the Company with
or without Cause, or by the Executive for Good Reason or otherwise,
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, or (ii) if 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.
SECTION 4: CERTAIN BENEFITS UPON TERMINATION OF EMPLOYMENT.
4.1 TERMINATION WITHOUT CAUSE PRIOR TO A CHANGE IN
CONTROL. If, prior to a Change in Control, during the Term of this
Agreement the Company shall terminate the Executive's employment
without Cause, then on the tenth (10th) business day following the
Date of Termination, the Company shall pay to the Executive the sum
of (1) the Executive's Annual Base Salary prorated through the Date
of Termination to the extent not previously paid, and (2) any
accrued vacation pay to the extent not previously paid.
4.2 TERMINATION AFTER A CHANGE IN CONTROL. If a Change
in Control occurs during the Term of this Agreement and within two
(2) years after such 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 the Executive shall be entitled to the benefits
provided below:
-6-
7
4.2(a) "Accrued Obligations": On the tenth (10th)
business day following the Date of Termination, the
Company shall pay to the Executive the sum of (1) the
Executive's Annual Base Salary prorated through the Date
of Termination to the extent not previously paid, and (2)
any accrued vacation pay to the extent not previously
paid.
4.2(b) "Severance Amount": On the tenth (10th)
business day following the Date of Termination, the
Company shall pay to the Executive as severance pay a lump
sum cash payment in an amount equal to 2 (two) times the
sum of the Executive's Annual Base Salary in effect on the
Date of Termination and the Executive's Incentive Bonus.
4.2(c) "Stock Options": To the extent not otherwise
provided for under the terms of any of the Company's stock
option agreements, 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 prior to the date hereof, shall
remain fully exercisable in accordance with their terms.
4.2(d) "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.
4.2(e) "Excess Parachute Payment": Anything in this
Agreement to the contrary notwithstanding, in the event
that an independent accountant shall determine that any
payment or distribution by the Company to or for the
benefit of Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or otherwise) (a "Payment") would be
nondeductible by the Company for Federal income tax
purposes because of Code Section 280G or would constitute
an "excess parachute payment" (as defined in Code Section
280G), then the aggregate present value of amounts payable
or distributable to or for the benefit of Executive
pursuant to this Agreement (such payments or distributions
pursuant to this Agreement are hereinafter referred to as
"Agreement Payments") shall be reduced (but not below
zero) to the Reduced Amount. For purposes of this
paragraph, the "Reduced Amount" shall be an amount
expressed in present value which maximizes the aggregate
present value of Agreement Payments without causing any
Payment to be nondeductible by the Company because of Code
Section 280G or without causing any portion of the Payment
to be subject to the excise tax imposed by Code
Section 4999.
If the independent accountant determines that any Payment
would be nondeductible by the Company because of Code
Section 280G or that any portion of the Payment will be
subject to the excise tax imposed by Code Section 4999,
the Company shall promptly give Executive notice to that
effect and a copy of the detailed calculation thereof and
of the Reduced Amount. The Executive may then elect, in
the Executive's sole discretion, which and how much of the
Agreement Payments shall be eliminated or reduced (as long
as after
-7-
8
such election the aggregate present value of the
Agreement Payments equals the Reduced Amount), and shall
advise the Company in writing of the Executive's election
within ten (10) days of the Executive's receipt of such
notice. If no such election is made by Executive within
such ten-day period, the Company may elect which and how
much of the Agreement Payments shall be eliminated or
reduced (as long as after such election the aggregate
present value of the Agreement Payments equals the Reduced
Amount) and shall notify the Executive promptly of such
election. For purposes of this paragraph, present value
shall be determined in accordance with Code Section
280G(d)(4). All determinations made by the independent
accountant under this paragraph shall be binding upon the
Company and the Executive and shall be made within sixty
(60) days of a termination of employment of the Executive.
As promptly as practicable following such determination
and the elections hereunder, the Company shall pay to or
distribute to or for the benefit of the Executive such
amounts as are then due to the Executive under this
Agreement and shall promptly pay to or distribute for the
benefit of the Executive in the future such amounts as
become due to the Executive under this Agreement.
As a result of the uncertainty in the application of Code
Sections 280G and 4999 at the time of the initial
determination by the independent accountant hereunder, it
is possible that Agreements Payments will be made by the
Company which should not have been made ("Overpayment") or
that additional Agreement Payments which have not been
made by the Company should have been made
("Underpayment"), in each case, consistent with the
calculation of the Reduced Amount hereunder. In the event
that the independent accountant, based upon the assertion
of a deficiency by the Internal Revenue Service against
the Company or the Executive which the independent
accountant believes has a high probability of success,
determines that an Overpayment has been made, any such
Overpayment shall be treated for all purposes as a loan to
the Executive which the Executive shall repay to the
Company together with interest at the applicable Federal
rate provided for in Code Section 7872(f)(2); provided,
however, that no amount shall be payable by the Executive
to the Company if and to the extent such payment would not
reduce the amount which is subject to taxation under Code
Section 4999 or if the period of limitations for
assessment of tax under Code Section 4999 against the
Executive shall have expired. If the Executive is
required to repay an amount under this Section, the
Executive shall repay such amount over a period of time
not to exceed one (1) year for each twenty-five thousand
dollars ($25,000) which the Executive must repay to the
Company. In the event that the independent accountant,
based upon controlling precedent, determines that an
Underpayment has occurred, any such Underpayment shall be
promptly paid by the Company to or for the benefit of the
Executive together with interest at the applicable Federal
rate provided for in Code Section 7872(f)(2)(A).
4.3 DEATH. If the Executive's employment is terminated
by reason of the Executive's death during the Term of this
Agreement (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 payment of Accrued Obligations (as defined in Section 4.1)
(which shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within ten (10) days of the Date
of Termination).
4.4 DISABILITY. If the Executive's employment is
terminated by reason of the Executive's Disability during the Term
of this Agreement (either prior or subsequent to a Change in
Control), this
-8-
9
Agreement shall terminate without further obligations to the
Executive, other than for payment of Accrued Obligations (as defined
in Section 4.1) (which shall be paid to the Executive in a lump sum in
cash within ten (10) days of the Date of Termination).
4.5 TERMINATION FOR CAUSE; EXECUTIVE'S TERMINATION OTHER
THAN FOR GOOD REASON AFTER A CHANGE IN CONTROL. If the Executive's
employment shall be terminated for Cause during the Term of this
Agreement (either prior to or 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 Accrued
Obligations (as defined in Section 4.1). If the Executive
terminates employment with the Company during the Term of this
Agreement, (other than for Good Reason after a Change in Control)
this Agreement shall terminate without further obligations to the
Executive, other than for Accrued Obligations (as defined in
Section 4.1). In such case, all Accrued Obligations shall be paid
to the Executive in a lump sum cash payment within thirty (30) days
of the Date of Termination. If the Executive's employment shall
terminate for the reasons stated in this Section, the provisions of
Section 5 shall continue to apply.
4.6 NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement
shall prevent or limit the Executive's continuing or future
participation in any plan, program, policy or practice provided by
the Company and for which the Executive may qualify, nor shall
anything herein limit or otherwise affect such rights as the
Executive may have under any contract or agreement with the
Company. 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.
4.7 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. The Company agrees, only on and after a
Change in Control Date to pay promptly as incurred, to the full
extent permitted by law, all legal fees and expenses which the
Executive may reasonable incur as a result of any contest
(regardless of the outcome thereof) by the Company, the Executive
or others of the validity or enforceability of, or liability under,
any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive
regarding the amount of any payment pursuant to this Agreement),
plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Code Section 7872(f)(2)(A).
4.8 RESOLUTION OF DISPUTES. If 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 (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, only on and after a Change in Control
Date 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 Section 4.2 as though such termination were by the
Company without Cause or
-9-
10
by the Executive with Good Reason; provided, however, that the Company
shall not be required to pay any disputed amounts pursuant to this
paragraph 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.
SECTION 5: CONFIDENTIAL INFORMATION.
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, 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,
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.
SECTION 6: SUCCESSORS.
6.1 SUCCESSORS OF EXECUTIVE. This Agreement is personal
to the Executive and, without the prior written consent of the
Company, amounts receivable hereunder 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.
6.2 SUCCESSORS OF 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 upon the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle the Executive to
terminate the Agreement at the 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 7: TERMS OF AGREEMENT.
This Agreement will automatically renew for annual one-year
periods beginning on January 1 of each year and ending on the
following December 31; provided that, the last annual period shall
be the twelve (12) month period beginning on January 1 and ending
on the following December 31 during which written notice is given
by December 1, by either party, of such party's intent not to renew
this Agreement. If notice is given by either party after December
1 of any year, but prior to January 1 of the next succeeding year,
then the last renewal period shall be the twelve (12) month period
which begins
-10-
11
on the January 1 following the date notice is given and ending the
following December 31. Notwithstanding the foregoing, in the event a
Change in Control shall have occurred, this Agreement shall terminate
two (2) years after a Change in Control Date.
SECTION 8: MISCELLANEOUS.
8.1 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 of the
Company with a copy to the Secretary of the Company, 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:
-------------------
Xxxxxx X. Xxxxxxx
0000 Xxxxxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000-0000
Notice to Company:
-----------------
Magna Group, Inc.
0000 Xxxxx Xxxxxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
8.2 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.
8.3 WITHHOLDING. 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.
8.4 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 3.5 shall not be
deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
8.5 EFFECT ON OTHER EMPLOYMENT AGREEMENTS. The terms of
this Agreement shall supersede all other employment or other
agreements with respect to severance entered into by and between
the Executive and the Company, or the Executive and any other
employer, and this Agreement shall constitute the sole agreement
pursuant to which the Company shall have an obligation to the
Executive upon the termination of the Executive's relationship with
the Company or any subsidiary.
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.
-11-
12
/s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Executive
MAGNA GROUP, INC.
By /s/ G. Xxxxxx Xxxxx
------------------------------------------
Name: G. Xxxxxx Xxxxx
Title: Chairman of the Board, President and
Chief Executive Officer
-12-
