EXHIBIT 10.14
SEVERANCE AGREEMENT
THIS AGREEMENT is made and entered into as of this
____day of _______________, 1994 by and between Fourth
Financial Corporation, a Kansas corporation (the "Company")
and ________________ (the "Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Board of Directors of the Company has
approved the Company entering into severance agreements with
certain key executives of the Company; and
WHEREAS, the Executive is a key executive of the
Company; and
WHEREAS, the Company desires assurance that it
will have the continued dedication of the Executive and the
availability of his advice and counsel notwithstanding any
possibility or occurrence of a change in control of the
Company; and
WHEREAS, the Executive desires to continue working
for the Company upon the terms and conditions set forth
herein;
NOW THEREFORE, in consideration of the mutual
covenants contained herein, and other good and valuable
consideration, the receipt of which is acknowledged, the
parties hereto agree as follows:
1. Agreement to Provide Services; Right to
Terminate.
(i) Except as otherwise provided in paragraph
(ii) below, the Company or the Executive may terminate
Executive's employment at any time, subject to the Company's
providing the benefits hereinafter specified in accordance
with the terms hereof.
(ii) In the event a tender offer or exchange offer
is made by a Person (as hereinafter defined) for more than
25% of the combined voting power of the Company's out-
standing securities ordinarily having the right to vote at
elections of directors ("Voting Securities"), including
shares of Fourth Financial Common Stock of the Company (the
"Company Shares"), or in the event of the execution by the
Company of a merger agreement, Executive agrees that he will
not leave the employ of the Company (other than as a result
of Disability or upon Retirement, as such terms are
hereinafter defined) and will render the services
contemplated in the recitals to this Agreement until such
tender offer, exchange offer or merger agreement has been
abandoned or terminated or a change in control of the
Company, as defined in Section 3 hereof, has occurred. For
purposes of this Agreement, the term "Person" shall mean and
include any individual, corporation, partnership, group,
association or other "person", as such term is used in Sec-
tion 14(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"), other than the Company, a wholly owned
subsidiary of the Company or any employee benefit plan(s)
sponsored by the Company or a subsidiary of the Company.
2. Term of Agreement. This Agreement shall
commence on the date hereof (the "Effective Date") and shall
continue until the date that is the second anniversary of
the Effective Date; provided, however, that the term of this
Agreement shall automatically be extended for one additional
year unless at least 90 days prior to such anniversary, the
Company or Executive shall have given notice that this
Agreement shall not be extended; and provided, further,
that, notwithstanding the delivery of any such notice, this
Agreement shall continue in effect for a period of twenty-
four (24) months after a change in control of the Company,
as defined in Section 3 hereof, if such change in control
shall have occurred during the term of this Agreement, as it
may be extended by the first proviso set forth above.
Notwithstanding anything in this Section 2 to the contrary,
this Agreement shall terminate if Executive or the Company
terminates Executive's employment prior to a change in
control of the Company.
3. Change in Control. For purposes of this
Agreement, a "change in control" of the Company shall be
deemed to occur if (A) any "person" (as such term is defined
in Section 3(a)(9) and as used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), excluding the Company or any of its
subsidiaries, a trustee or any fiduciary holding securities
under an employee benefit plan of the Company or any of its
subsidiaries, an underwriter temporarily holding securities
pursuant to an offering of such securities or a corporation
owned, directly or indirectly, by stockholders of the
Company in substantially the same proportion as their
ownership of the Company, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the
Company's then outstanding securities ("Voting Securities");
or (B) during any period of not more than two years,
individuals who constitute the Board as of the beginning of
the period and any new director (other than a director
designated by a person who has entered into an agreement
with the Company to effect a transaction described in clause
(A) or (C) of this sentence) whose election by the Board or
nomination for election by the Company's shareholders was
approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at
such time or whose election or nomination for election was
previously so approved, cease for any reason to constitute a
majority thereof; or (C) the shareholders of the Company
approve a merger, consolidation or share exchange of or by
the Company with any other corporation, other than a merger,
consolidation or share exchange which would result in the
Voting Securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining
outstanding or by being converted into Voting Securities of
the surviving entity) at least 60% of the combined voting
power of the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger,
consolidation or share exchange or the shareholders of the
Company approve a plan of complete liquidation of the
Company or any agreement for the sale or disposition by the
Company or all or substantially all of the Company's assets.
4. Termination Following Change in Control. If
any of the events described in Section 3 hereof constituting
a change in control of the Company shall have occurred,
Executive shall be entitled to the benefits provided in
Section 5 hereof upon the termination of Executive's
employment with the Company (whether by the Company or by
Executive for Good Reason) within twenty-four (24) months
after such event, unless such termination is (a) because of
the death of Executive or Retirement, (b) by the Company for
Cause or Disability or (c) by Executive other than for Good
Reason (as all such capitalized terms are hereinafter
defined).
(i) Disability. Termination by the Company of
Executive's employment based on "Disability" shall mean
termination because of Executive's absence from his duties
with the Company on a full time basis for ninety (90)
consecutive days as a result of Executive's incapacity due
to physical or mental illness, unless within thirty (30)
days after Notice of Termination (as hereinafter defined) is
given to Executive following such absence Executive shall
have returned to the full time performance of his duties.
(ii) Retirement. Termination by Executive of
Executive's employment based on "Retirement" shall mean
termination on or after Executive's normal retirement date
under the terms of the Company's Pension Plan (or any
successor or substitute plan or plans of the Company put
into effect prior to a change in control) (the "Pension
Plan").
(iii) Cause. Termination by the Company of
Executive's employment for "Cause" shall mean termination
upon (a) the willful and continued failure by Executive to
perform substantially his duties with the Company (other
than any such failure resulting from Executive's incapacity
due to physical or mental illness) after a demand for
substantial performance is delivered to Executive by the
Chairman of the Board or President of the Company which
specifically identifies the manner in which Executive has
not substantially performed his duties, or (b) the willful
engaging by Executive in illegal conduct which is materially
and demonstrably injurious to the Company. For purposes of
this paragraph (iii), no act, or failure to act, on the part
of Executive shall be considered "willful" unless done, or
omitted to be done, in bad faith and without reasonable
belief that Executive's action or omission was in, or not
opposed to, the best interests of the Company. Any act, or
failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or based upon the
advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by Executive in
good faith and in the best interests of the Company. It is
also expressly understood that Executive's attention to
matters not directly related to the business of the Company
shall not provide a basis for termination for Cause so long
as the Board has granted prior written approval of
Executive's engagement in such activities. Notwithstanding
the foregoing, Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been
delivered to Executive a copy of a resolution duly adopted
by the affirmative vote of not less than a majority of the
entire membership of the Board at a meeting of the Board
called for such purpose (after reasonable notice to you and
an opportunity for you, together with your counsel, to be
heard before the Board), finding that in the good faith
opinion of the Board Executive was guilty of the conduct set
forth above in (a) or (b) of this paragraph (iii) and
specifying the particulars thereof in detail.
(iv) Good Reason. Termination by Executive of his
employment for "Good Reason" shall mean termination based
on:
(a) a determination by Executive, in his
reasonable judgment, that there has been an adverse
change in his status or position(s) as an officer of
the Company as in effect immediately prior to the
change in control, including, without limitation, any
substantial adverse change in Executive's status or
position as a result of a diminution in Executive's
duties or responsibilities (other than, if applicable,
any such change directly attributable to the fact that
the Company is no longer publicly owned) or the
assignment to Executive of any duties or
responsibilities which are inconsistent with such
status or position(s), or any removal of Executive from
or any failure to reappoint or reelect Executive to
such position(s) (except in connection with the
termination of Executive's employment for Cause,
Disability or Retirement or as a result of Executive's
death or by Executive other than for Good Reason);
(b) a reduction by the Company in Executive's
base salary or annual target bonus as in effect
immediately prior to the change in control;
(c) the failure by the Company to continue in
effect any Plan (as hereinafter defined) in which
Executive participates at the time of the change in
control of the Company (or Plans providing Executive
with at least substantially similar benefits) other
than as a result of the normal expiration of any such
Plan in accordance with its terms as in effect at the
time of the change in control;
(d) the failure by the Company to provide and
credit Executive with the number of paid vacation days
to which Executive is then entitled in accordance with
the Company's normal vacation policy as in effect
immediately prior to the change in control;
(e) the Company's requiring Executive to be based
at an office that is greater than 50 miles from where
Executive's office is located immediately prior to the
change in control except for required travel on the
Company's business;
(f) the failure by the Company to obtain from any
Successor (as hereinafter defined) the assent to this
Agreement contemplated by Section 6 hereof; or
(g) any purported termination by the Company of
Executive's employment which is not effected pursuant
to a Notice of Termination satisfying the requirements
of paragraph (v) below (and, if applicable, paragraph
(iii) above); and for purposes of this Agreement, no
such purported termination shall be effective.
For purposes of this Agreement, "Plan" shall mean any
compensation plan such as an incentive, stock option or
restricted stock plan or any employee benefit plan such as a
thrift, pension, profit sharing, medical, disability, acci-
dent, life insurance plan or a relocation plan or policy or
any other material plan, program or policy of the Company
intended to benefit employees.
(v) Notice of Termination. Any purported termi-
nation by the Company or by Executive following a change in
control 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 notice
which shall indicate the specific termination provision in
this Agreement relied upon.
(vi) Date of Termination. "Date of Termination"
following a change in control shall mean (a) if Executive's
employment is to be terminated for Disability, thirty (30)
days after Notice of Termination is given (provided that
Executive shall not have returned to the performance of his
duties on a full-time basis during such thirty (30) day
period), (b) if Executive's employment is to be terminated
by the Company for Cause or by Executive for Good Reason,
the date specified in the Notice of Termination, or (c) if
Executive's employment is to be terminated by the Company
for any reason other than Cause, the date specified in the
Notice of Termination, which in no event shall be a date
earlier than ninety (90) days after the date on which a
Notice of Termination is given, unless an earlier date has
been expressly agreed to by Executive in writing.
5. Compensation Upon Termination; Other
Agreements.
(i) If Executive's employment shall be terminated
for Disability following a change in control of the Company,
the Company shall pay Executive's salary through the Date of
Termination at the rate in effect just prior to the time a
Notice of Termination is given plus any benefits or awards
under any Plans which pursuant to the terms of any Plans
have been earned or become payable, but which have not been
paid to Executive. Thereafter, benefits shall be determined
in accordance with the Plans then in effect.
(ii) If Executive's employment shall be terminated
for Cause following a change in control of the Company, the
Company shall pay Executive's salary through the Date of
Termination at the rate in effect just prior to the time a
Notice of Termination is given plus any benefits or awards
(including both the cash and stock components) which pur-
suant to the terms of any Plans have been earned or become
payable, but which have not yet been paid to Executive.
Thereupon the Company shall have no further obligations to
Executive under this Agreement.
(iii) Subject to Section 8 hereof, if, within
twenty-four (24) months after a change in control of the
Company, as defined in Section 3 above, shall have occurred,
Executive's employment by the Company shall be terminated
(a) by the Company other than for Cause, Disability or
Retirement or (b) by Executive for Good Reason, then the
Company shall pay or provide to Executive, without regard to
any contrary provisions of any Plan, the following:
(A) _____________________ times (A) the
Executive's highest base salary during the 12-month
period prior to the change in control of the Company
and (B) Executive's three year average bonus percentage
multiplied by Executive's target bonus in effect
immediately prior to the change in control of the
Company. For purposes of this Agreement, the bonus
percentage is the ratio of actual bonuses paid to
Executive as a percent of Executive's Base Salary to
Executive's target bonuses as a percent of Executive's
Base salary;
(B) for a period of _____________________ years
after the Date of Termination continuation of all
insured and self-insured medical, life insurance and
disability benefit Plans in which Executive
participated immediately prior to the Date of
Termination, at no cost to Executive. In the event
that Executive's participation in any such Plan is
barred, the Company, at its sole cost and expense,
shall arrange to have issued for the benefit of
Executive and his dependents individual policies of
insurance providing benefits substantially similar (on
an after-tax basis) to those which Executive otherwise
would have been entitled to receive under such Plans
pursuant to this paragraph (iv) or, if such insurance
is not available at a reasonable cost to the Company,
the Company shall otherwise provide you and your
dependents with equivalent benefits (on an after-tax
basis);
(C) full and immediate vesting of Executive's
outstanding stock options which shall be purchased by
the Company for a price equal to the fair market value
of such options; provided, however, that at the option
of Executive, the Company shall purchase any
outstanding stock options which have been granted to
Executive within the six-month period immediately prior
to the Date of Termination no earlier than six months
following the date of grant. For purposes of this
Agreement, fair market value shall mean the average of
the high and low trading price of the common stock of
the Company on the Date of Termination, less the
exercise price of the options;
(D) the present value, in a lump sum, equal to
Executive's enhanced benefit under the Company's
Supplemental Executive Retirement Plan, calculated
under the terms of the plan but increasing Executive's
attained age and credited service by ________________
_____years;
(E) a lump sum payment of Executive's accrued
vacation pay; and
(F) the value of any unvested employer
contributions with respect to all defined contribution
plans in which Executive participates.
(iv) The amount of any payment provided for in
this Section 5 shall not be reduced, offset or subject to
recovery by the Company by reason of any compensation earned
by Executive as the result of employment by another employer
after the Date of Termination, or otherwise.
6. Successors; Binding Agreement.
(i) The Company will seek, by written request at
least five business days prior to the time a Person becomes
a Successor (as hereinafter defined), to have such Person
assent to the fulfillment of the Company's obligations under
this Agreement. Failure of such Person to furnish such
assent by the later of (A) three business days prior to the
time such Person becomes a Successor or (B) two business
days after such Person receives a written request to so
assent shall constitute Good Reason for termination by
Executive of his employment if a change in control of the
Company occurs or has occurred. For purposes of this
Agreement, "Successor" shall mean any Person that succeeds
to, or has the practical ability to control (either
immediately or with the passage of time), the Company's
business directly, by merger or consolidation, or
indirectly, by purchase of the Company's Voting Securities
or otherwise.
(ii) This Agreement shall inure to the benefit of
and be enforceable by Executive's personal or legal
representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If Executive
dies while any amount is still payable to Executive
hereunder, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this
Agreement to Executive's devisee, legatee or other designee
or, if there be no such designee, to Executive's estate.
(iii) For purposes of this Agreement, the "Company"
shall include any corporation or other entity which is the
surviving or continuing entity in respect of any merger,
consolidation or form of business combination in which the
Company ceases to exist.
7. Fees and Expenses. The Company shall
reimburse Executive, on a current basis, for all reasonable
legal fees and related expenses incurred by Executive in
connection with the Agreement following a change in control
of the Company, including, without limitation, (a) all such
fees and expenses, if any, incurred in contesting or
disputing any termination of employment or incurred by
Executive in seeking advice with respect to the matters set
forth in Section 8 hereof or (b) Executive's seeking to
obtain or enforce any right or benefit provided by this
Agreement, in each case, regardless of whether or not
Executive's claim is upheld by a court of competent
jurisdiction.
8. Taxes.
(i) All payments to be made to Executive under
this Agreement will be subject to required withholding of
federal, state and local income and employment taxes.
(ii) Notwithstanding anything in the foregoing to
the contrary, if any of the payments provided for in this
Agreement, together with any other payments which Executive
has the right to receive from the Company or any corporation
which is a member of an "affiliated group" (as defined in
Section 1504(a) of the Code without regard to
Section 1504(b) of the Code) of which the Company is a
member, would constitute a "parachute payment" (as defined
in Section 280G(b)(2) of the Code), the payments pursuant to
this Agreement shall be reduced to the largest amount as
will result in no portion of such payments being subject to
the excise tax imposed by Section 4999 of the Code;
provided, however, that the determination as to whether any
reduction in the payments under this Agreement pursuant to
this proviso is necessary shall be made by Executive in good
faith, and such determination shall be conclusive and
binding on the Company with respect to its treatment of the
payment for tax reporting purposes and, provided further
that Executive may determine in his discretion what payment
or payments provided for herein shall be reduced.
9. Survival. The respective obligations of, and
benefits afforded to, the Company and Executive as provided
in Sections 5, 6, 7, 8, 13 and 14 of this Agreement shall
survive termination of this Agreement.
10. 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 United States
registered mail, return receipt requested, postage prepaid
and addressed, in the case of the Company, to the address
set forth on the first page of this Agreement or, in the
case of the Executive, to the address set forth below his
signature, provided that all notices to the Company shall be
directed to the attention of the Chairman of the Board or
President of the Company, with a copy to the Secretary of
the Company, or to such other address as either 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.
11. Miscellaneous. No provision of this Agreement
may be modified, waived or discharged unless such modifi-
cation, waiver or discharge is agreed to in a writing signed
by Executive and the Chairman of the Board or President of
the Company. No waiver by either party hereto at any time
of any breach by the other party hereto of, or of 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. No agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by
either party which are not expressly set forth in this
Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws
of the State of Kansas.
12. Severability. The invalidity or
unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full
force and effect.
13. Arbitration. Any dispute or controversy
arising under or in connection with this Agreement shall be
settled by arbitration, conducted by a panel of three
arbitrators in a location selected by Executive within fifty
(50) miles from the location of his job with the Company, in
accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the
arbitrators' award in any court having jurisdiction;
provided, however, that Executive shall be entitled to seek
specific performance of his right to be paid until the Date
of Termination during the pendency of any dispute or
controversy arising under or in connection with this
Agreement.
14. Employee's Commitment. Executive agrees that
subsequent to his period of employment with the Company,
Executive will not at any time communicate or disclose to
any unauthorized person, without the written consent of the
Company, any proprietary processes of the Company or any
subsidiary or other confidential information concerning
their business, affairs, products, suppliers or customers
which, if disclosed, would have a material adverse effect
upon the business or operations of the Company and its
subsidiaries, taken as a whole; it being understood,
however, that the obligations of this Section 14 shall not
apply to the extent that the aforesaid matters (a) are
disclosed in circumstances where you are legally required to
do so or (b) become generally known to and available for use
by the public otherwise than by your wrongful act or
omission.
15. Counterparts. This Agreement may be executed
in several counterparts, each of which shall be deemed to be
an original but all of which together will constitute one
and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed
this Agreement as of the date first written above.
FOURTH FINANCIAL CORPORATION
By:___________________________
Darrell G. Knudson
______________________________