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[letterhead of Magna Group, Inc.]
March 5, 1997
Xx. Xxx X. Xxxxxxxxxx
Chief Executive Officer
Homeland Bankshares Corporation
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Dear Erl:
This letter agreement serves to formalize our agreement with
respect to your future relationship with Magna Group, Inc.
("Magna") following the combination of Homeland Bankshares
("Homeland") and Magna pursuant to the Merger Agreement between
Magna and Homeland dated as of August 30, 1996 (the "Merger
Agreement"). Terms not otherwise defined herein shall have the
meanings ascribed to them in the Merger Agreement.
Commencing on the Closing Date of Magna's acquisition of
Homeland, you will be elected as a member of the Board of Directors
of Magna Group, Inc. and will continue as a member of the Board
until the third annual anniversary of the Closing Date. As a
director, you agree to meet the usual responsibilities as a
director in promoting banking, trust, and correspondent business
for Magna and to report on any business development or other
director-related activities to X. Xxxxxx Xxxxx, the Chief Executive
Officer.
Effective on the Closing Date, you will retire as an officer
and employee of Homeland, and you agree to resign your positions as
Chairman, President, and Chief Executive Officer of Homeland
Bankshares Corporation and Chairman of Homeland Bank, N.A.,
Homeland Bank (Indianola), Homeland Bank (Oelwein), Homeland Bank
(Monticello) and Homeland Bank FSB (collectively known as
Homeland).
In lieu of the provisions of your October 15, 1992 Severance
Agreement between you and Iowa National Bankshares Corporation as
to severance payments due upon a Change of Control, you agree to
accept an annual amount of $261,714 for three years beginning July
1, 1997. Since you wish to be paid on a quarterly basis, the
quarterly payments will be $65,428.50 beginning July 1, 1997 and
continuing for three years. In the event of your death before the
payments to you have been completed, the remaining balance of
payments will be made to your assignee or estate, in the event no
assignment has been made by you.
All payments owed to you pursuant to the terms of the Homeland
Bankshares Corporation Pension Plan and Trust and the Homeland
Bankshares Corporation Profit Sharing and 401(k) Plan will be
honored. Xxxxx will also pay your sick leave accumulated up to
March 1,1997 per Homeland policy, which is $67,063. In addition,
Magna will pay for any
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Xx. Xxx X. Xxxxxxxxxx
March 5, 1997
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vacation time not used per Homeland/Magna policy. This amount is
$20,522. Both lump sum payments will be made to you within thirty
days of the Closing Date.
All payments owed to you under the Homeland Bankshares
Corporation Supplemental Retirement Income Plan ("SERP") dated June
20, 1995 will also be honored. You agree that pursuant to the
provisions of the SERP, your payments will be $94,039 annually for
fifteen years. In the event of your death before the payments to
you have been completed, the remaining balance of payments will be
made to your assignee or estate, in the event no assignment has
been made by you.
Xxxxx agrees to pay for you to maintain your current country
club membership for three years after the Closing Date. Xxxxx also
agrees to pay you $27,500, the value of the automobile previously
provided to you.
As of March 1, 1997 you and your spouse, individually or
jointly, shall be entitled from and after that date through March
of 2005, to be covered, at your sole cost and expense, under
Magna's major medical health insurance plan with such coverage to
be the same as or comparable to those that are in effect during
said period for the officers of Magna and their dependents.
Magna shall, at its expense, provide you with an office and
telephone at a location agreed to by the Chief Executive Officer of
Magna, from the Closing Date until the third anniversary of the
Closing Date; provided, however, you shall have no authority over
any employee or officer of Magna.
This agreement contains the entire agreement between Magna and
you and supersedes and replaces any existing oral or written
agreements between you and Magna or Homeland Bankshares Corporation
(or any subsidiary or predecessor of either corporation) respecting
your employment, its termination, or benefits or rights in the
event of a change of control or employment termination. All such
prior or existing agreements are terminated, and neither party
shall have any further rights thereunder.
Beginning on your Retirement Date (March 1, 1997) and
continuing through the period ending three years after you cease to
be a member of the Magna Group, Inc. Board of Directors, you shall
not, without the prior written approval of the Magna Board of
Directors, become an officer, employee, agent, partner or director
of any business enterprise in substantial direct competition (as
hereinafter defined) with Magna. For purposes of this section, a
business enterprise with which you become associated as an officer,
employee, agent, partner or director shall be considered in
substantial direct competition with Magna if such entity (i)
competes with Magna in any business in which Magna is engaged as of
your Retirement Date or at any time during the period described
above and (ii) is within Magna's market area (as defined herein).
Magna's market area is defined for this purpose as the area which
constitutes central and southern Illinois, the eastern one-half of
the State of Missouri,
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March 5, 1997
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and the eastern one-half of the State of Iowa; and, if Xxxxx
becomes the successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) after the date hereof to all
or substantially all of the business and/or assets of another
business enterprise, it is also the geographical areas in which
such predecessor business enterprise conducts substantial business
activity.
This agreement may be executed in counterparts.
If you have any questions on the provisions of this agreement,
please give me a call at (000) 000-0000.
Sincerely,
/s/ X. Xxxxxx Xxxxx
X. Xxxxxx Xxxxx
Chairman of the Board and
Chief Executive Officer
Accepted On March 6, 1997
By /s/ Xxx X. Xxxxxxxxxx
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