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EXHIBIT 10.3
AGREEMENT
AGREEMENT, dated this 7th day of July 1999, between ISB Financial
Corporation (the "Corporation"), a Louisiana-chartered corporation, IBERIABANK
(the "Bank"), a Louisiana-chartered bank and a wholly-owned subsidiary of the
Corporation, and Xxxxxx X. Xxxxxx (the "Executive").
WITNESSETH
WHEREAS, the Executive is presently an officer of the Corporation and the
Bank (together the "Employers"); and
WHEREAS, the Employers desire to be ensured of the Executive's continued
active participation in the business of the Employers; and
WHEREAS, in order to induce the Executive to remain in the employ of the
Employers and in consideration of the Executive's agreeing to remain in the
employ of the Employers, the parties desire to specify the severance benefits
which shall be due the Executive in the event that his employment with the
Employers is terminated under specified circumstances;
NOW THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereby agree as follows:
1. DEFINITIONS. The following words and terms shall have the meanings set
forth below for the purposes of this Agreement:
(a) BASE SALARY. "Base Salary" shall have the meaning set forth in Section
3(a) hereof.
(b) CAUSE. Termination of the Executive's employment for "Cause" shall
mean, in the good faith determination of the Board of Directors of each of the
Corporation and the Bank and after giving the Executive Notice of Termination
satisfying the requirements of paragraph (i) below and a reasonable opportunity
to cure, termination because of personal dishonesty, incompetence in the
performance of his duties, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful
violation of any law, rule or regulation (other than traffic violations or
similar offenses) or final cease-and-desist order or 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, by the Executive not in good faith and without reasonable
belief that the Executive's action or omission was in the best interest of the
Employers.
(c) CHANGE IN CONTROL. "Change in Control" shall mean (i) a change in
control 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 Securities Exchange
Act of 1934, as amended ("Exchange Act") or any
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successor thereto, whether or not any security of the Corporation is registered
under Exchange Act; provided that, without limitation, such a Change in Control
shall be deemed to have occurred if any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation representing 25% or more of the
combined voting power of the Corporation's then outstanding securities; (ii)
during any period of two consecutive years, individuals (the "Continuing
Directors") who at the beginning of such period constitute the Board of
Directors of the Corporation (the "Existing Board") cease for any reason to
constitute at least two-thirds thereof, provided that any individual whose
election or nomination for election as a member of the Existing Board was
approved by a vote of at least two-thirds of the Continuing directors then in
office shall be considered a Continuing Director; or (iii) the acquisition of
ownership, holding or power to vote more than 25% of the voting stock of the
Bank by any person other than the Corporation.
(d) CODE. "Code" shall mean the Internal Revenue Code of 1986, as amended.
(e) DATE OF TERMINATION. "Date of Termination" shall mean (i) if the
Executive's employment is terminated for Cause or for Disability, the date
specified in the Notice of Termination, and (ii) if the Executive's employment
is terminated for any other reason, the date on which a Notice of Termination is
given or as specified in such Notice.
(f) DISABILITY. Termination by the Employers of the Executive's employment
based on "Disability" shall mean termination because of any physical or mental
impairment which qualifies the Executive for disability benefits under the
applicable long-term disability plan maintained by the Employers or any
subsidiary or, if no such plan applies, which would qualify the Executive for
disability benefits under the Federal Social Security System.
(g) GOOD REASON. Termination by the Executive of the Executive's employment
for "Good Reason" shall mean termination by the Executive based on:
(i) Without the Executive's express written consent, the failure to
elect or to re- elect or to appoint or to re-appoint the
Executive to the positions held immediately prior to a Change in
Control or a material adverse change made by the Employers in the
Executive's functions, duties or responsibilities with the
Employers;
(ii) Without the Executive's express written consent, a reduction by
the Employers in the Executive's Base Salary as the same may be
increased from time to time or, except to the extent permitted by
Section 3(b) hereof, a reduction in the package of fringe
benefits provided to the Executive, taken as a whole;
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(iii) The principal executive office of the Employers is relocated
outside of the parishes of Iberia or Lafayette, Louisiana, or,
without the Executive's express written consent, the Employers
require the Executive to be based anywhere other than an area in
which the Employers' principal executive office is located,
except for reasonably required travel on business of the
Employers;
(iv) Any purported termination of the Executive's employment for
Cause, Disability or Retirement which is not effected pursuant to
a Notice of Termination satisfying the requirements of paragraph
(i) below; or
(v) The failure by the Employers to obtain the assumption of and
agreement to perform this Agreement by any successor as
contemplated in Section 8 hereof.
(h) IRS. IRS shall mean the Internal Revenue Service.
(i) NOTICE OF TERMINATION. Any purported termination of the Executive's
employment by the Employers for any reason, including without limitation for
Cause, Disability or Retirement, or by the Executive for any reason, including
without limitation for Good Reason, shall be communicated by written "Notice of
Termination" to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated, (iii)
specifies a Date of Termination, which shall be not less than thirty (30) nor
more than ninety (90) days after such Notice of Termination is given, except in
the case of the Employers' termination of Executive's employment for Cause; and
(iv) is given in the manner specified in Section 9 hereof.
(j) PARACHUTE PAYMENT. The term "Parachute Payment" has the meaning as set
forth in Section 280G of the Code and applicable Treasury regulations (without
regard to Section 280G(b)(2)(A)(ii) of the Code and the Treasury regulations
thereunder).
(k) RETIREMENT. Termination by the Employers of the Executive's employment
based on "Retirement" shall mean voluntary termination by the Employee in
accordance with the Employers' retirement policies, including early retirement,
generally applicable to their salaried employees.
2. TERM OF EMPLOYMENT.
(a) The term of employment under this Agreement shall be for two years,
commencing on the date of this Agreement (the "Commencement Date"), subject to
earlier termination as provided for herein. Beginning on the day which is one
year subsequent to the Commencement Date and on each annual anniversary
thereafter (each an "Anniversary Date"), the term of this Agreement shall be
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extended for an additional year, provided that the Employers have not given
notice to the Executive in writing at least 90 days prior to any such
Anniversary Date that the term of this Agreement shall not be extended further.
Reference herein to the term of this Agreement shall refer to both such initial
term and such extended terms. During the period from the Commencement Date until
July 1, 2000, the Employers hereby employ the Executive as Chief Executive
Officer of the Corporation and Executive hereby accepts said employment and
agrees to render such services to the Corporation on the terms and conditions
set forth in this Agreement. Subsequent to June 30, 2000 and for the remainder
of the term of this Agreement, Executive shall serve in such additional
capacities with the Corporation as may be mutually agreed upon by Executive and
the Corporation. In addition, the Executive will serve as Chairman of the Board
of the Bank from the date hereof and for the remainder of the term hereof.
(b) During the term of this Agreement, the Executive shall perform such
executive services for the Employers as may be consistent with his titles and
from time to time assigned to him by the Employers' Board of Directors.
(c) Notwithstanding anything to the contrary herein or in the Corporation's
1996 Stock Option Plan ("1996 Plan"), its Recognition and Retention Plan ("RRP")
or 1999 Stock Option Plan ("1999 Plan"), the Employers agree to take all
necessary and appropriate actions, including but not limited to continuing the
service of Executive as a director, director emeritus or advisory director of
the Corporation, the Bank or any subsidiary, in order to assure Executive that
he shall become vested in all options granted to Executive as of the date hereof
and that he shall receive payment of unrestricted shares awarded to him under
the RRP and that such options shall have a duration of not less than five years
subsequent to the vesting date.
3. COMPENSATION AND BENEFITS.
(a) The Employers shall compensate and pay Executive for his services
during the term of this Agreement a minimum salary of $228,000 per year, which
may be increased from time to time in such amounts as may be determined by the
Board of Directors of the Employers and may not be decreased without the
Executive's express written consent (hereinafter, referred to as Executive's
"Base Salary"). In addition, the Executive will participate in the Employers'
Executive Bonus Plan.
(b) During the term of the Agreement, Executive shall be entitled to
participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing, stock option, employee stock ownership, or other
plans, benefits and privileges given to employees and executives of the
Employers, to the extent commensurate with his then duties and responsibilities,
as fixed by the Board of Directors of the Employers. The Employers shall not
make any changes in such plans, benefits or privileges which would adversely
affect Executive's rights or benefits thereunder, unless such change occurs
pursuant to a program applicable to all executive officers of the Employers and
does not result in a proportionately greater adverse change in the rights of or
benefits to Executive as compared with any other executive officer of the
Employers. Nothing paid to Executive under any
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plan or arrangement presently in effect or made available in the future shall be
deemed to be in lieu of the salary payable to Executive pursuant to Section 3(a)
hereof.
(c) During the term of this Agreement, Executive shall be entitled to paid
annual vacation in accordance with the policies as established from time to time
by the Board of Directors of the Employers, which shall in no event be less than
three weeks per annum. Executive shall not be entitled to receive any additional
compensation from the Employers for failure to take a vacation, nor shall
Executive be able to accumulate unused vacation time from one year to the next,
except to the extent authorized by the Board of Directors of the Employers.
(d) In the event of termination by the Employers of the Executive's
employment based on Disability (as defined herein), the Employers shall provide
continued medical insurance for the benefit of the Executive and his spouse
until the Executive shall have attained the age of 65, and such insurance shall
be comparable to that which is provided to the Executive as of the date of this
Agreement notwithstanding anything to the contrary in this Agreement; provided
further, in the event of the death of the Executive prior to the Executive
attaining age 65, the Employers shall provide said medical insurance for the
benefit of the Executive's spouse until the Executive's current spouse attains
the age of 65.
(e) In the event of the Executive's death during the term of this
Agreement, his spouse, estate, legal representative or named beneficiaries (as
directed by the Executive in writing) shall be paid on a monthly basis the
Executive's annual compensation from the Employers at the rate in effect at the
time of the Executive's death for a period of twelve (12) months from the date
of the Executive's death.
4. EXPENSES. The Employers shall reimburse Executive or otherwise provide
for or pay for all reasonable expenses incurred by Executive in furtherance of,
or in connection with the business of the Employers, including, but not by way
of limitation, automobile and traveling expenses, and all reasonable
entertainment expenses (whether incurred at the Executive's residence, while
traveling or otherwise), subject to such reasonable documentation and other
limitations as may be established by the Board of Directors of the Employers. If
such expenses are paid in the first instance by Executive, the Employers shall
reimburse the Executive therefor.
5. TERMINATION.
(a) The Employers shall have the right, at any time upon prior Notice of
Termination, to terminate the Executive's employment hereunder for any reason,
including without limitation termination for Cause, Disability or Retirement,
and Executive shall have the right, upon prior Notice of Termination, to
terminate his employment hereunder for any reason.
(b) In the event that (i) Executive's employment is terminated by the
Employers for Cause, Disability or Retirement or in the event of the Executive's
death, or (ii) Executive terminates his employment hereunder other than for Good
Reason, Executive shall have no right pursuant to this
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Agreement to compensation or other benefits for any period after the applicable
Date of Termination other than as enumerated in subsections 3(d) and 3(e)
hereinabove.
(c) In the event that Executive's employment is terminated by the Employers
for other than Cause, Disability, Retirement or the Executive's death or such
employment is terminated by the Executive for Good Reason or due to a material
breach of this Agreement by the Employers, which breach has not been cured
within fifteen (15) days after a written notice of non-compliance has been given
by the Executive to the Employers, then the Employers shall, subject to the
provisions of Section 6 hereof, if applicable:
(A) pay to the Executive, in equal monthly installments beginning with
the first business day of the month following the Date of Termination,
a cash severance amount equal to the greater of (x) the Base Salary
which the Executive would have earned over the remaining term of this
Agreement as of his Date of Termination or (y) an amount equal to one
(1) times the Executive's Base Salary as of his Date of Termination;
and
(B) maintain and provide for a period ending at the earlier of (x) the
expiration of the remaining term of employment pursuant hereto prior
to the Notice of Termination or (y) the date of the Executive's
full-time employment by another employer (provided that the Executive
is entitled under the terms of such employment to benefits
substantially similar to those described in this subparagraph (B), at
no cost to the Executive, the Executive's continued participation in
all group insurance, life insurance, health and accident, disability
and other employee benefit plans, programs and arrangements in which
the Executive was entitled to participate immediately prior to the
Date of Termination (other than stock option and restricted stock
plans of the Employers), provided that in the event that the
Executive's participation in any plan, program or arrangement as
provided in this subparagraph (B) is barred, or during such period any
such plan, program or arrangement is discontinued or the benefits
thereunder are materially reduced or such benefits are less than the
benefits provided to Executive immediately prior to his termination of
employment with the Employers, the Employers shall arrange to provide
the Executive with benefits which (together with any benefits provided
to Executive by another Employer in the event Executive has accepted
full-time employment with another employer) are substantially similar
to those which the Executive was entitled to receive under such plans,
programs and arrangements immediately prior to the Date of
Termination.
(d) In the event that Executive's employment is terminated for Good Reason
or without Cause subsequent to a Change in Control, then the Employers shall,
subject to the provisions of Section 6 hereof, if applicable:
(A) pay to the Executive, in equal monthly installments beginning with
the first business day of the month following the Date of Termination,
a cash severance
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amount equal to the greater of (x) the Base Salary which the Executive
would have earned over the remaining term of this Agreement or (y) an
amount equal to two (2) times the Executive's Base Salary as of his
Date of Termination; and
(B) maintain and provide for a period ending at the earlier of (x) the
expiration of the remaining term of employment pursuant hereto prior
to the Notice of Termination or (y) the date of the Executive's
full-time employment by another employer (provided that the Executive
is entitled under the terms of such employment to benefits
substantially similar to those described in this subparagraph (B), at
no cost to the Executive, the Executive's continued participation in
all group insurance, life insurance, health and accident, disability
and other employee benefit plans, programs and arrangements in which
the Executive was entitled to participate immediately prior to the
Date of Termination (other than stock option and restricted stock
plans of the Employers), provided that in the event that the
Executive's participation in any plan, program or arrangement as
provided in this subparagraph (B) is barred, or during such period any
such plan, program or arrangement is discontinued or the benefits
thereunder are materially reduced or such benefits are less than the
benefits provided to Executive immediately prior to his termination of
employment with the Employers, the Employers shall arrange to provide
the Executive with benefits which (together with any benefits provided
to Executive by another Employer in the event has accepted full-time
employment with another employer) are substantially similar to those
which the Executive was entitled to receive under such plans, programs
and arrangements immediately prior to the Date of Termination.
(e) If the Executive becomes liable, in any taxable year, for the payment
of an excise tax under Section 4999 of the Code on account of any payments to
the Executive pursuant to this Section 5, and the Employers choose not to
contest the liability or have exhausted all administrative and judicial appeals
contesting the liability, the Employers shall pay the Executive (i) an amount
equal to the excise tax for which the Executive is liable under Section 4999 of
the Code, (ii) the federal, state, and local income taxes, and interest if any,
for which the Executive is liable on account of the payments pursuant to item
(i), and (ii) any additional excise tax under Section 4999 of the Code and any
federal, state and local income taxes for which the Executive is liable on
account of payments made pursuant to items (i) and (ii).
(f) This subsection 5(f) applies if the amount of payments to the Executive
under subsection 5(e) has not been determined with finality by the exhaustion of
administrative and judicial appeals. In such circumstances, the Employers and
the Executive shall, as soon as practicable after the event or series of events
has occurred giving rise to the imposition of the excise tax, cooperate in
determining the amount of the Executive's excise tax liability for purposes of
paying the estimated tax. The Executive shall thereafter furnish to the
Employers or their successors a copy of each tax return which reflects a
liability for an excise tax under Section 4999 of the Code at least 20 days
before the date on which such return is required to be filed with the IRS. The
liability reflected on such return shall be dispositive for the purposes hereof
unless, within 15 days after such notice is
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given, the Employers furnish the Executive with a letter of the auditors or tax
advisor selected by the Employers indicating a different liability or that the
matter is not free from doubt under the applicable laws and regulations and that
the Executive may, in such auditor's or advisor's opinion, cogently take a
different position, which shall be set forth in the letter with respect to the
payments in question. Such letter shall be addressed to the Executive and state
that he is entitled to rely thereon. If the Employers furnish such a letter to
the Executive, the position reflected in such letter shall be dispositive for
purposes of this Agreement, except as provided in subsection 5(g) below.
(g) Notwithstanding anything in this Agreement to the contrary, if the
Executive's liability for the excise tax under Section 4999 of the Code for a
taxable year is subsequently determined to be less than the amount paid by the
Employers pursuant to subsection 5(f), the Executive shall repay the Employers
at the time that the amount of such excise tax liability is finally determined,
the portion of such income and excise tax payments attributable to the reduction
(plus interest on the amount of such repayment at the rate provided on Section
1274(b)(2)(B) of the Code and if the Executive's liability for the excise tax
under Section 4999 of the Code for a taxable year is subsequently determined to
exceed the amount paid by the Employers pursuant to Section 5, the Employers
shall make an additional payment of income and excise taxes in the amount of
such excess, as well as the amount of any penalty and interest assessed with
respect thereto at the time that the amount of such excess and any penalty and
interest is finally determined.
6. MITIGATION; EXCLUSIVITY OF BENEFITS.
(a) The Executive shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise, nor shall the
amount of any such benefits be reduced by any compensation earned by the
Executive as a result of employment by another employer after the Date of
Termination or otherwise.
(b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Employers pursuant to employee benefit plans
of the Employers or otherwise.
7. WITHHOLDING. All payments required to be made by the Employers hereunder
to the Executive shall be subject to the withholding of such amounts, if any,
relating to tax and other payroll deductions as the Employers may reasonably
determine should be withheld pursuant to any applicable law or regulation.
8. ASSIGNABILITY. The Employers may assign this Agreement and its rights
and obligations hereunder in whole, but not in part, to any corporation, bank or
other entity with or into which the Employers may hereafter merge or consolidate
or to which the Employers may transfer all or substantially all of its assets,
if in any such case said corporation, bank or other entity shall by operation of
law or expressly in writing assume all obligations of the Employers hereunder as
fully as if it had been originally made a party hereto, but may not otherwise
assign this Agreement or its
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rights and obligations hereunder. The Executive may not assign or transfer this
Agreement or any rights or obligations hereunder.
9. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this 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 set forth below:
To the Employers: ISB Financial Corporation
IBERIABANK
0000 Xxxx Xxxxxxx Xxxxx Xxxxx
Xxx Xxxxxx, Xxxxxxxxx 00000
To the Executive: Xxxxxx X. Xxxxxx
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxx, Xxxxxxxxx 00000
10. AMENDMENT; WAIVER. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and such officer or officers as may be
specifically designated by the Board of Directors of the Employers to sign on
its behalf. No waiver by any party hereto at any time of any breach by any other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
11. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Louisiana.
12. NATURE OF OBLIGATIONS. Nothing contained herein shall create or require
the Employers to create a trust of any kind to fund any benefits which may be
payable hereunder, and to the extent that the Executive acquires a right to
receive benefits from the Employers hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Employers.
13. HEADINGS. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
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15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
16. REGULATORY PROHIBITION. Notwithstanding any other provision of this
Agreement to the contrary, any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with Section 18(k) of the FDIA (12 U.S.C. Section 1828(k)) and any regulations
promulgated thereunder.
17. ARBITRATION. The Executive acknowledges that he has previously entered
into the "IBERIABANK Arbitration Agreement." Any and all payments and benefits
provided for under the terms of this Agreement shall be subject to the terms of
such Arbitration Agreement.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date first
above written.
Attest: ISB FINANCIAL CORPORATION
/s/ X. X. Xxxxxxxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx, Xx.
----------------------------- --------------------------------------------
Xxxxx X. Xxxxxxxxx, Xx.
Chairman of the Board
Attest: IBERIABANK
/s/ X. X. Xxxxxxxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx, Xx.
----------------------------- --------------------------------------------
Xxxxx X. Xxxxxxxxx, Xx.
Chairman of the Board
Witness: XXXXXX X. XXXXXX
/s/ Xxxxxxxx Xxxx By: /s/ Xxxxxx X. Xxxxxx
----------------------------- --------------------------------------------
Xxxxxx X. Xxxxxx, Individually
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