Letter Agreement

 

Change in Control Compensation Agreement

 

Change in Control Compensation Agreement

 

Change in Control Amendment

 

EX-10.3 7 h65289exv10w3.htm EX-10.3

Exhibit 10.3

December 17, 2008

Via Hand Delivery

[Name of Officer]
100 St. Joseph St.
Mobile, AL 36652

Dear [Name of Officer],

     BancTrust Financial Group, Inc. (the “Company”) anticipates entering into a Securities Purchase Agreement (the “Purchase Agreement”), with the United States Department of Treasury (the “Treasury”) that provides for the Company’s participation in the Treasury’s Troubled Asset Relief Program Capital Purchase Program (the “CPP”).

     For the Company to participate in the CPP and as a condition to the closing of the investment contemplated by the Purchase Agreement, the Company is required to establish specified standards for incentive compensation to its Senior Executive Officers (as hereinafter defined) and to make changes to its compensation arrangements. The Company has determined that you are a Senior Executive Officer for purposes of the CPP. To comply with these requirements, and in consideration of the benefits that you will receive as a result of the Company’s participation in the CPP and for other good and valuable consideration, the sufficiency of which you hereby acknowledge, you acknowledge and agree as follows:

     1. No Golden Parachute Payments. You will not be entitled to receive from the Company any Golden Parachute Payment (as hereinafter defined) during any CPP Covered Period (as hereinafter defined).

     2. Recovery of Bonus and Incentive Compensation. You will be required to and shall return to the Company any bonus or incentive compensation paid to you by the Company during a CPP Covered Period if the payments were based on the Company’s materially inaccurate financial statements or any other materially inaccurate performance metric criteria.

     3. Compensation Review. The Company shall promptly review, and in no event more than 90 days after the Treasury’s investment, and place limits on executive compensation to exclude incentives for unnecessary and excessive risks that threaten the value of the Company during the CPP Period. Thereafter, the Company shall conduct similar annual reviews. To the extent any such review requires revisions to any Benefit Plan (as hereinafter defined) with respect to you, the Company shall be permitted to make such changes as it deems necessary or appropriate to comply with the requirements of the CPP without your further consent.

 


 

[Name of Officer]
December 17, 2008
Page 2 of 3

     4. Waiver. You will execute a waiver (the “Waiver”), substantially in the form attached hereto as Exhibit A, waiving any claims against the Treasury or the Company for any changes to your compensation or benefits as required to comply with regulations issued under the CPP and acknowledging that the regulation may require modification of your Benefit Plans during the CPP Period.

     5. Compensation Program Amendments. Each of the Company’s compensation, bonus, incentive, deferred compensation and other benefit plans, arrangements and agreements that do not comply with the requirements of the CPP and as set forth above (including golden parachute, severance, change in control and employment agreements) (collectively, “Benefit Plans”) with respect to you is hereby amended to the extent necessary to comply with the requirements of the CPP and as set forth above. For reference, certain, but not necessarily all, of the affected Benefit Plans are set forth in Appendix 1 to this letter.

     This letter shall be interpreted in light of the following definitions:

     a. “Company” includes any entities treated as a single employer with the Company under 31 C.F.R. § 30.1(b). As between the Company and you, the term “employer” or “employer and its affiliates” in the Waiver will be deemed to mean the Company as used in this letter.

     b. “CPP Covered Period” shall mean any period during which (i) you are a Senior Executive Officer and (ii) the Treasury holds an equity or debt position acquired from the Company in the CPP; provided, however, that such term shall be limited by, and interpreted in a manner consistent with, 31 C.F.R. § 30.10.

     c. “EESA” means the Emergency Economic Stabilization Act of 2008 as implemented by guidance or regulation issued by the Department of the Treasury and as published in the Federal Register on October 20, 2008.

     d. “Golden Parachute Payment” is used with the same meaning as in Section 111(b)(2)(C) of EESA.

     e. “Senior Executive Officer” means the Company’s “senior executive officers” as defined in subsection 111(b)(3) of the EESA and interpreted in a manner consistent with, 31 C.F.R. § 30.2.

     This letter is intended to, and will be interpreted, administered and construed to, comply with Section 111 of the EESA (and, to the maximum extent consistent with the preceding, to permit operation of the Benefit Plans in accordance with their terms before giving effect to this letter).

     To the extent not subject to federal law, this letter will be governed by and construed in accordance with the laws of the State of Alabama. This letter may be executed in two or more counterparts, each of which will be deemed to be an original. A signature transmitted by facsimile will be deemed an original signature. If the Company does not participate or ceases at any time to participate in the CPP, this letter shall be of no further force and effect.

 


 

[Name of Officer]
December 17, 2008
Page 3 of 3

     The Company’s Board of Directors appreciates the concessions you are making and looks forward to your continued leadership during these financially turbulent times.

 

 

 

 

 

 

Very Truly Yours,

BancTrust Financial Group, Inc.
 

 

 

By:  

 

 

 

J. Stephen Nelson 

 

 

Chairman of the Board of Directors  

 

 

     Intending to be legally bound, I agree with and accept the foregoing terms as of the date set forth below. 

 

 

 

 

 

Date:

 

 

 

 

 

 

 

 

 

 

 

 

 

[Name of Officer]

 


 

Exhibit A

Form of Waiver

WAIVER BY SENIOR EXECUTIVE OFFICER

In consideration for the benefits I will receive as a result of BancTrust Financial Group, Inc.’s participation the United States Department of the Treasury’s TARP Capital Purchase Program, I hereby voluntarily waive any claim against the United States or my employer or its affiliates for any changes to my compensation or benefits that are required to comply with the regulation issued by the Department of the Treasury as published in the Federal Register on October 20, 2008.

I acknowledge that this regulation may require modification of the compensation, bonus, incentive and other benefit plan, arrangements, policies and agreements (including so-called “golden parachute” agreements) that I have with my employer or in which I participate as they relate to the period the United States holds any equity or debt securities of BancTrust Financial Group, Inc. acquired through the TARP Capital Purchase Program.

This waiver includes all claims I may have under the laws of the United States or any state related to the requirements imposed by the aforementioned regulation, including without limitation a claim for any compensation or other payments I would otherwise received, any challenge to the process by which this regulation was adopted and any tort or constitutional claim about the effect of these regulations on my employment relationship.

Dated: December 19, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Name of Officer]

 

 

 

 

[Title]

 

 

 

 

BancTrust Financial Group, Inc.

 

 

 


 

Appendix 1

Affected Benefit Plans

1.

 

The Company’s Annual Management Incentive Plan.

 

2.

 

The Company’s 1993 Incentive Compensation Plan.

 

3.

 

The Company’s 2001 Incentive Compensation Plan.

 

4.

 

The Company’s Change of Control Agreement with [Name of Officer].

 

5.

 

The Company’s Supplemental Retirement Plan with [Name of Officer]1.

 

1

 

Item 5 was only included in the agreements for F. Michael Johnson, Bruce C. Finley, Jr. and W. Bibb Lamar, Jr.

 

THE BANK OF MOBILE
             CHANGE IN CONTROL COMPENSATION AGREEMENT
 
 
     This Agreement dated as of the 14 day of November, 1995 by
and between  The Bank of Mobile (the "Bank"), an Alabama banking
corporation having its principal place of business in Mobile,
Alabama and W. Bibb Lamar, Jr. (the "Executive").
 
                            RECITALS:
 
     A.   The Compensation Committee of the Board of Directors of
the Bank has recommended, and the Board of Directors has
approved, that the Bank enter into agreements with key executives
of the Bank designated from time to time by the Compensation
Committee which provide for compensation under certain
circumstances after a change in control. 
 
     B.   Executive is a key executive of the Bank and has been
selected by the Compensation Committee to enter into this
Agreement.
 
     C.   If the Bank should become subject to any proposed or
threatened Change in Control (as hereinafter defined), the Board
of Directors of the Bank believes it imperative that the Bank and
the Board of Directors be able to rely upon Executive to continue
in his position and that the Bank be able to receive and rely
upon his advice, if requested, as to the best interests of the
Bank and its stockholders, without concern that he might be
distracted by the personal uncertainties and risks created by
such a proposal or threat.
 
     D.   If the Bank should receive any such proposal, Executive
may be called upon to assist in the assessment thereof, advise
management and the Board of Directors as to whether such proposal
would be in the best interests of the Bank and its stockholders,
and take such other actions above and beyond his regular duties
as the Board might determine to be appropriate.
 
     NOW, THEREFORE, as assurance to the Bank that it will have
the continued dedication of Executive and the availability of his
advice and counsel notwithstanding the possibility, threat or
occurrence of an effort to take over control of the Bank, and
as an inducement to Executive to remain in the employ of the
Bank, and for other good and valuable consideration, the Bank and
Executive agree as follows:
 
     1.   Services During Certain Events.  In the event any
person, firm or corporation unaffiliated with the Bank begins a
tender or exchange offer, circulates a proxy to stockholders, or
takes other steps to effect a Change in Control (as hereinafter
defined), Executive agrees that he will not voluntarily leave the
employ of the Bank on less than 4 months written notice to the
Chairman of the Board or Chairman of the Executive Committee of
the Bank, will render the services expected of his position and
will act in all things related to the possible Change in Control
in the manner he believes in good faith to be in the best
interests of the shareholders of the Bank until such person, firm
or corporation has abandoned or terminated his or its efforts to
effect a Change in Control or until a Change in Control has
occurred.
 
     2.   Termination Following Change in Control.  Except as
provided in Section 4, the Bank will provide or cause to be
provided to Executive the rights and benefits described in
Section 3 in the event that Executive's employment is terminated
at any time within two years following a Change in Control (as
such term is defined in this Section 2) under the circumstances
stated in (a) or (b) below: 
 
          (a)  by the Bank for reasons other than for "cause" (as
such term is defined in Section 4) or other than as a consequence
of Executive's death, permanent disability or attainment of the
normal retirement date as provided under the Bank's pension plan
(the "Retirement Plan") as in effect immediately preceding such
date ("Normal Retirement Date"); or
 
          (b)  by Executive following the occurrence of any of
the following events:
 
               (ithe assignment of Executive to any duties or
          responsibilities that are inconsistent with his         
          position, duties, responsibilities or status            
          immediately preceding such Change in Control or a       
          change in his reporting responsibilities or titles in   
          effect at such time, in either case resulting in        
          reduction of his responsibilities or position;
 
               (ii) the reduction of Executive's annual           
          compensation, meaning thereby the fair market value of  
          all remuneration paid to the Executive by the Bank      
          during the immediately preceding calendar year,         
          including, without limitation, deferred compensation    
          and other forms of incentive compensation awards,       
          coverage under any employee benefit plan (such
          as a pension, thrift, medical, dental, life insurance   
          or long-term disability plan) and other perquisites;
 
               (iii)the transfer of Executive to a location       
          requiring a change in his residence or a material       
          increase in the amount of travel normally required of   
          Executive in connection with his employment.
 
     For purposes of this Agreement, a "Change in Control" is
hereby defined to be: (1) a merger, consolidation or other
corporate reorganization of the Bank or its parent company in
which either the Bank or its parent company fails to survive; (2)
disposition by the Bank's parent company of the Bank; (3) the
beneficial ownership by one person or a closely related group of
persons of as much as 40% of the outstanding voting stock of the
Bank's parent company, unless the acquisition of stock resulting
in such ownership by such person or related group had been
approved in advance by the Board of Directors of the Bank or the
parent company; or (4) as may otherwise be defined by the Board
of Directors from time to time.
 
     3.   Rights and Benefits Upon Termination.  In the event of
the termination of Executive's employment under any of the
circumstances set forth in Section 2 hereof ("Termination"), the
Bank agrees to provide or cause to be provided to Executive the
following rights and benefits:
 
          (a)  Salary and Other Payments at Termination.          
Executive shall be entitled to receive payment in cash in the
amount of three times Executive's Average Annual Earnings, as
such term is defined in this Section 3(a), during the most recent
three year fiscal periods (or the period during which the
Executive has been employed by the Bank if less than three
years.)  However, if such amount exceeds limits provided in the
then existing provisions of the Internal Revenue Code
for the imposition of tax penalties on such payments, the amount
shall be reduced to the highest amount allowed to avoid such
penalties.  At the election of Employee, payment shall be made in
equal monthly payments over a three-year period beginning
with the month following Termination, or payment shall be made in
a lump sum.  Any lump sum payment request must be made in writing
at least six months prior to Termination.
 
     If Executive shall die prior to the time all payments which
may otherwise have been due to Executive, under this Section 3(a)
or otherwise in this agreement, have been made, then, as soon as
practicable after his death and in no event later than 3 months
after the appointment of Executive's personal representative, the
Bank shall pay in a lump sum in cash all sums not distributed to
Executive prior to his death.  Payment shall be made to the
beneficiary named as such under the life insurance plan
maintained by the Bank on the date of Executive's death.  If no
such beneficiary is named, such sums shall be paid to Executive's
personal representative.  No reduction to present value of any
such sums shall be made.
 
     For purposes of this Agreement, "Annual Earnings" shall mean
the amounts earned by Executive for personal service rendered to
the Bank and its affiliates as reportable on Treasury Department
Form W-2, including bonuses, and excluding the following:  (1)
moving and educational expenses, (2) income included under
Section 79 of the Internal Revenue Code of 1986, as amended and
(3) income imputed to Executive from personal use of employer
owned automobiles and employer paid club dues.  Earnings shall
not include any income attributable to grants of and dividends
on shares awarded under any stock option plan.
 
          (b)  Insurance and Other Special Benefits.  During the
three-year severance pay period, and if the Bank may do so under
the terms of its benefit plans existing at the time of
Termination,  Executive shall continue to be covered by the life
insurance, medical insurance, and accident and disability
insurance plans of the Bank and its affiliates or any successor
plan or program in effect at or after Termination for employees
in the same class or category as was Executive prior to his
Termination, subject to the terms of such plans and to
Executive's making any payments therefor required of employees in
the same class or category as was Executive prior to his
Termination.  In the event Executive is ineligible to continue to
be so covered under the terms of any such benefit plan or
program,  Bank shall have no further obligation.  Anything herein
to the contrary notwithstanding, if during such period Executive
should enter into the employ of another company or firm which
provides substantially similar benefit coverage, Executive's
participation in the comparable benefits provided by the Bank
either directly or through such other sources shall cease. 
Nothing contained in this paragraph shall be deemed to require or
permit termination or restriction of any of Executive's coverage
under any plan or program of the Bank or any of its affiliates,
or any successor plan or program, to which Executive is entitled
under the terms of such plan or program.
 
          (c)  Automobile and Club Dues.  Executive shall be
entitled to purchase the automobile then furnished to him by the
Bank for a price equal to 50% of its then book value on the books
of the Bank.  Also, Bank will pay to Executive during the
three-year severance pay period an amount equal to the country
club dues then being paid on his behalf by the Bank, but not to
exceed $150 per month.  
 
          (d)  Other Benefit Plans.  The specific arrangements
referred to in this Section 3 are not intended to exclude
Executive's participation in other benefit plans in which
Executive currently participates or which are or may become
available to executive personnel generally in the class or
category of Executive or to preclude other compensation or
benefits as may be authorized by the Board of Directors from
time to time.
 
          (e)  No Duty to Mitigate.  Executive's entitlement to
benefits hereunder shall not be governed by any duty to mitigate
his damages by seeking further employment nor, except as
specifically provided above in paragraph 3(b), be offset by any
compensation or benefit which he may receive from future
employment.
 
     4.   Conditions to the Obligations of the Bank.  The Bank
shall have no obligation to provide or cause to be provided to
Executive the rights and benefits described in Section 3 hereof
if either of the following events shall occur:
 
          (a)  Termination for Cause.  The Bank shall terminate
Executive's employment for "cause".  For purposes of this
Agreement, termination of employment for "cause" shall mean
termination because of fraud, misappropriation of or intentional
damage to the property of the Bank or the commission of a felony
by the Executive;
 
          (b)  Resignation as Director or Officer.  Executive
shall fail, promptly after Termination and upon receiving a
written request to do so, to resign as a director and/or officer
of the Bank and each affiliate of the Bank of which he is then
serving as a director and/or officer.
 
     5.   Confidentiality; Non-Solicitation; Cooperation;
Consultancy.
 
          (a)  Confidentiality.  Executive agrees that following
Termination he will not without the prior written consent of the
Bank disclose to any person, firm or corporation any confidential
information of the Bank or its affiliates which is now known to
him or which hereafter (whether before or after his Termination)
may become known to him as a result of his employment or
association with the Bank and which could be helpful to a
competitor; provided, however, that the foregoing shall not
apply to confidential information which becomes publicly
disseminated by means other than a breach of this Agreement.
 
          (b)  Cooperation.  Executive agrees that following
Termination he will furnish such information and render such
assistance and cooperation as may reasonably be requested in
connection with any litigation or legal proceedings concerning
the Bank or any of its affiliates (other than any legal
proceedings concerning Executive's employment).  In connection
with such cooperation, the Bank will pay or reimburse Executive
for all reasonable expenses incurred in cooperating with such
requests.
 
          (c)  Remedies for Breach.  It is recognized that
damages in the event of breach of this Section 5 by Executive
would be difficult, if not impossible, to ascertain, and it is
therefore agreed that the Bank, in addition to and without
limiting any other remedy or right it may have, shall have the
right to an injunction or other equitable relief in any court of
competent jurisdiction enjoining any such breach, and Executive
hereby waives any and all defenses he may have on the ground of
lack of jurisdiction or competence of the court to grant such an
injunction or other equitable relief.  The existence of this
right shall not preclude the Bank from pursuing any other rights
and remedies at law or in equity which the Bank may have.
 
     6.   Term of Agreement.  This Agreement shall terminate on
December 31, 1996; provided, however, that this Agreement shall
automatically renew for successive one-year terms unless the Bank
notifies Executive in writing at least 90 days prior to a
December 31 expiration date that it does not desire to renew the
Agreement for an additional term; and provided further, however,
that such notice shall not be given and if given shall have no
effect (i) within two years after a Change in Control or (ii)
during any period of time when the Bank has reason to believe
that any third person has begun a tender or exchange offer,
circulated a proxy to stockholders, or taken other steps or
formulated plans to effect a Change in Control, such period of
time to end when, in the opinion of the Compensation Committee,
the third person has abandoned or terminated his efforts or plans
to effect a Change in Control.
 
     7.   Expenses.  The Bank shall pay or reimburse Executive
for all costs and expenses, including, without limitation, court
costs and attorney's fees, incurred by Executive as a result of
any claim, action or proceeding by Executive against the Bank
arising out of, or challenging the validity or enforceability of,
this Agreement or any provision hereof.
 
     8.   Miscellaneous.
 
          (a)  Assignment.  No right, benefit or interest
hereunder shall be subject to assignment, anticipation,
alienation, sale, encumbrance, charge, pledge, hypothecation or
set-ff in respect of any claim, debt or obligation, or to
execution, attachment, levy or similar process; provided,
however, that Executive may assign any right, benefit or interest
hereunder if such assignment is permitted under the terms
of any plan or policy of insurance or annuity contract governing
such right, benefit or interest.
 
          (b)  Construction of Agreement.  Nothing in this
Agreement shall be construed to amend any provision of any plan
or policy of the Bank other than as specifically stated herein. 
This Agreement is not, and nothing herein shall be deemed to
create an employment contract between Executive and the Bank or
any of its subsidiaries.  
 
          (c)  Inurement.  This Agreement shall be binding upon
and inure to the benefit of the Bank and the Executive and their
respective heirs, executors, administrators, successors and
assigns.
 
          (d)  Nature of Obligation.  The Bank intends that its
obligations hereunder be construed in the nature of severance
pay.  The Bank's obligations under Section 3 are absolute and
unconditional and shall not be affected by any circumstance,
including, without limitation, any right of offset, counterclaim,
recoupment, defense, or other right which the Bank may have
against the Executive or others.  All amounts payable by the Bank
hereunder shall be paid without notice or demand.
 
          (e)  Choice of Law.  The Agreement shall be governed
and construed in accordance with the laws of the State of
Alabama.
 
          (f)  Invalidity.  In the event that any one or more
provisions of this Agreement shall, for any reason, be held
invalid, illegal or unenforceable in any manner, such invalidity,
illegality or unenforceability shall not affect any other
provision of this Agreement.
 
     In Witness Whereof, Executive has hereunto set his hand and
seal and the Bank has caused this Agreement to be executed by its
officers thereunto duly authorized as of the 14 day of November,
1995.
 
 
                       /s/W. Bibb Lamar, Jr.           (SEAL)
                       W. BIBB LAMAR, JR.
 
 
 
ATTEST:                       THE BANK OF MOBILE
 
 
Pamela Watson                 BY:/s/F. Michael Johnson            
Its:Vice-President                 Its:Executive Vice-President

 

 

EX-10.4 8 h65289exv10w4.htm EX-10.4

Exhibit 10.4

BANCTRUST FINANCIAL GROUP, INC.

CHANGE IN CONTROL COMPENSATION AGREEMENT

     This Change in Control Compensation Agreement (this “Agreement”) is dated as of the 1st day of January, 2009 by and among BancTrust Financial Group, Inc., an Alabama corporation having its principal place of business in Mobile, Alabama (“BancTrust”), BankTrust, an Alabama banking corporation and wholly-owned subsidiary of BancTrust (“BankTrust” and together with BancTrust the “Company”); and W. Bibb Lamar, Jr. (the “Executive”).

RECITALS:

     A. The Compensation Committee of the Board of Directors of BancTrust has recommended, and the Board of Directors has approved, that BancTrust and its subsidiaries enter into agreements with key executives of the Company designated from time to time by the Compensation Committee to provide for compensation under certain circumstances after a change in control.

     B. Executive is a key executive of the Company and has been selected by the Compensation Committee to enter into this Agreement.

     C. If the Company, or any subsidiary of the Company that employs Executive as a key executive officer (an “Applicable Subsidiary”), should become subject to any proposed or threatened Change in Control (as hereinafter defined), the Board of Directors of the Company believes it imperative that the Company and the Board of Directors be able to rely upon Executive to continue in his position and that the Company be able to receive and rely upon his advice, if requested, as to the best interests of the Company and its shareholders, without concern that he might be distracted by the personal uncertainties and risks created by such a proposal or threat.

 


 

     D. If the Company should receive any such proposal, Executive may be called upon to assist in the assessment thereof, advise management and the Board of Directors as to whether such proposal would be in the best interests of the Company and its shareholders, and take such other actions above and beyond his regular duties as the Board might determine to be appropriate.

     NOW, THEREFORE, as assurance to the Company that it will have the continued dedication of Executive and the availability of his advice and counsel notwithstanding the possibility, threat or occurrence of an effort to take over control of BancTrust or any Applicable Subsidiary, as an inducement to Executive to remain in the employ of the Company, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Executive agree as follows:

     1. Services During Certain Events. In the event any person, firm or corporation unaffiliated with the Company begins a tender or exchange offer, circulates a proxy to shareholders, or takes other steps to effect a Change in Control (as hereinafter defined), Executive agrees that he will not voluntarily leave the employ of the Company on less than 4 months written notice to the Chairman of the Board or Chairman of the Executive Committee of the Company, will render the services expected of his position and will act in all things related to the possible Change in Control in the manner he believes in good faith to be in the best interests of the shareholders of the Company until such person, firm or corporation has abandoned or terminated his or its efforts to effect a Change in Control or until a Change in Control has occurred.

     2. Termination Following Change in Control. Except as provided in Section 4, the Company will provide or cause to be provided to Executive the rights and benefits described in Section 3 in the event that Executive’s employment is terminated at any time within two years following a Change in Control (as such term is defined in this Section 2) under the circumstances stated in (a) or (b) below:

2


 

          (a) by the Company without Executive’s consent and where Executive is willing and able to continue providing his services, i.e., for reasons other than for “cause” (as such term is defined in Section 4) or other than as a consequence of Executive’s death, permanent disability or attainment of the date he or she reaches “full retirement age” as provided under the statutes and regulations governing Social Security benefits in the United States of America (“Normal Retirement Date”); or

          (b) by Executive within 120 days following the occurrence of any of the following events:

(ia material reduction in Executive’s base salary from his or her base salary immediately prior to the Change in Control;

(ii) a reduction in Executive’s total annual compensation paid by the Company as reported by the Company on Form W-2 (“W-2 Compensation”) such that Executive’s W-2 Compensation is materially less than the average of Executive’s annual W-2 Compensation from the Company for the three most recently completed years prior to the Change in Control (or the average of Executive’s annual W-2 Compensation from the Company for his or her entire period of employment with the Company, if less than three full years, with compensation annualized for periods of less than a full year); or

(iii) a material change in the geographic location at which Executive must perform his services without the Executive’s consent, meaning, the transfer of Executive, without his consent, to a location requiring a change in his residence or a material increase in the amount of travel normally required of Executive in connection with his employment;

3


 

provided, however, that Executive must provide the Company notice of the occurrence of such event within 90 days after the occurrence of such event and give the Company an opportunity to remedy the condition within 30 days thereafter, and, if such condition has been timely remedied, the Company will not be required to provide any of the rights and benefits described in Section 3.

     For purposes of this Agreement, a “Change in Control” is hereby defined to be: (1) a merger, consolidation or other corporate reorganization of the Company or any Applicable Subsidiary in which either the Company or the Applicable Subsidiary fails to survive, other than a merger of the Applicable Subsidiary into the Company or another subsidiary of the Company; (2) disposition by the Company of an Applicable Subsidiary; (3) the acquisition of the beneficial ownership by one person or a closely related group of persons of as much as 40% of the outstanding voting stock of the Company or an Applicable Subsidiary, unless the acquisition of stock resulting in such ownership by such person or related group had been approved in advance by the Board of Directors of the Company; or (4) as may otherwise be defined by the Board of Directors from time to time.

     3. Rights and Benefits Upon Termination. In the event of the termination of Executive’s employment under any of the circumstances set forth in Section 2 hereof (“Termination”), the Company agrees to provide or cause to be provided to Executive the following rights and benefits:

          (a) Salary and Other Payments at Termination. Executive shall be entitled to receive payment in cash equal to three times the sum of Executive’s annualized compensation, as such term is defined in this Section 3(a), based upon the annual rate of pay for services provided to the Company for the Executive’s taxable year preceding the Executive’s taxable year in which the Termination occurs (adjusted for any increase during that year that was expected to continue indefinitely if the Termination had not occurred). However, if such amount, when combined with other payments or

4


 

benefits that are aggregated with such amount pursuant to the requirements of the Internal Revenue Code of 1986, as amended (the “IRC”), exceeds the limit provided in Section 280G of the IRC or any corresponding or similar provision of the IRC for the imposition of tax penalties on such payments (but excluding IRC Section 162(m) or corresponding or similar provisions regarding deductibility of such payments), the amount shall be reduced to the highest amount allowed to avoid such penalties. Payment shall be made in one lump sum 15 days after the Termination to Executive or the personal representative of Executive’s estate if Executive dies during such 15-day period.

     For purposes of this Agreement, “annualized compensation” shall mean the amounts earned by Executive for personal service rendered to the Company and its affiliates as reportable on Treasury Department Form W-2, including bonuses, and excluding the following: (1) moving and educational expenses, (2) income included under Section 79 of the IRC and (3) income imputed to Executive from personal use of employer-owned automobiles and employer paid club dues. Earnings shall not include any income attributable to grants of and dividends on shares awarded under any stock-based incentive compensation plan.

          (b) Medical Insurance. The Company shall reimburse Executive for COBRA premiums paid by Executive, not reimbursed by any third party and allowable as a deduction under Section 213 of the IRC (disregarding the requirement of Section 213(a) that the deduction is available only to the extent that such expenses exceed 7.5 percent of adjusted gross income) during Executive’s applicable COBRA continuation period as permitted by Section 409A of the IRC. Anything herein to the contrary notwithstanding, if during such period Executive should enter into the employ of another company or firm which provides medical insurance coverage, the Company’s reimbursement shall cease.

5


 

          (c) Other Benefit Plans. The specific arrangements referred to in this Section 3 are not intended to exclude Executive’s participation in other benefit plans in which Executive currently participates or which are or may become available to executive personnel generally in the class or category of Executive or to preclude other compensation or benefits as may be authorized by the Board of Directors from time to time.

          (d) No Duty to Mitigate. Executive’s entitlement to benefits hereunder shall not be governed by any duty to mitigate his damages by seeking further employment nor, except as specifically provided above in Section 3(b), and subject to the covenants of Section 10, be offset by any compensation or benefit which he may receive from future employment.

          (e) Substantial Risk of Forfeiture. Executive understands that any rights and benefits provided to him pursuant to this Agreement are subject to a substantial risk of forfeiture and Executive is not entitled to any rights or benefits pursuant to this Agreement unless (1) a Change in Control of the Company has occurred, (2) Executive’s employment has been terminated pursuant to Section 2 of this Agreement and (3) the conditions in Section 4 of this Agreement have not occurred.

     4. Conditions to the Obligations of the Company. The Company shall have no obligation to provide or cause to be provided to Executive the rights and benefits described in Section 3 hereof if any of the following events shall occur:

          (a) Termination for Cause. The Company shall terminate Executive’s employment for “cause.” For purposes of this Agreement, termination of employment for “cause” shall mean:

(i) Executive’s willful and continued failure to perform the duties and responsibilities of his position that is not corrected within a thirty day correction

6


 

period that begins upon delivery to Executive of a written demand for performance from the Board of Directors of the Company that describes the basis for the Board’s belief that Executive has not substantially performed his duties;

(ii) Any act of personal dishonesty taken by Executive in connection with his responsibilities as an employee of the Company or an Applicable Subsidiary with the intention or reasonable expectation that such act may result in substantial and personal enrichment of Executive; or

(iii) Executive’s conviction of, or plea of nolo contendre to, a felony that the Board reasonably believes has had or will have a material detrimental effect on the Company’s reputation or business.

          (b) Other Terminations. The Company shall terminate Executive because of Executive’s death, permanent disability or attainment of the Normal Retirement Date.

          (c) Resignation as Director or Officer. Executive shall fail, promptly after Termination and upon receiving a written request to do so, to resign as a director and/or officer of the Company and each affiliate of the Company of which he is then serving as a director and/or officer.

     5. Confidentiality; Cooperation; Remedies.

          (a) Confidentiality. Executive agrees that following Termination he will not without the prior written consent of the Company disclose to any person, firm or corporation any confidential information of the Company or its affiliates which is now known to him or which hereafter (whether before or after his Termination) may become known to him as a result of his employment or

7


 

association with the Company and which could be helpful to a competitor; provided, however, that the foregoing shall not apply to confidential information which becomes publicly disseminated by means other than a breach of this Agreement.

          (b) Cooperation. Executive agrees that following Termination he will furnish such information and render such assistance and cooperation as may reasonably be requested in connection with any litigation or legal proceedings concerning the Company or any of its affiliates (other than any legal proceedings concerning Executive’s employment). In connection with such cooperation, the Company will pay or reimburse Executive for all reasonable expenses incurred in cooperating with such requests.

          (c) Remedies for Breach. It is recognized that damages in the event of breach of this Section 5 by Executive would be difficult, if not impossible, to ascertain, and it is therefore agreed that the Company, in addition to and without limiting any other remedy or right it may have, shall have the right to an injunction or other equitable relief in any court of competent jurisdiction enjoining any such breach, and Executive hereby waives any and all defenses he may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief. The existence of this right shall not preclude the Company from pursuing any other rights and remedies at law or in equity which the Company may have.

     6. Term of Agreement. This Agreement shall terminate on December 31, 2009; provided, however, that this Agreement shall automatically renew for successive one-year terms unless the Company notifies Executive in writing at least 90 days prior to a December 31 expiration date that it does not desire to renew this Agreement for an additional term; and provided further, however, that such notice shall not be given and if given shall have no effect (i) within two years after a Change in Control or (ii) during any period of time when the Company has reason to believe that any third person has begun a

8


 

tender or exchange offer, circulated a proxy to shareholders, or taken other steps or formulated plans to effect a Change in Control, with such period of time to end when, in the opinion of the Compensation Committee, the third person has abandoned or terminated such person’s efforts or plans to effect a Change in Control.

     7. Expenses. The Company shall pay or reimburse Executive for all costs and expenses, including, without limitation, court costs and attorney’s fees, incurred by Executive as a result of any successful claim, action or proceeding by Executive against the Company to enforce the provisions of this Agreement following the refusal without justification by the Company after written demand by Executive to fulfill its obligations hereunder.

     8. Miscellaneous.

          (a) Assignment. No right, benefit or interest hereunder shall be subject to assignment, anticipation, alienation, sale, encumbrance, charge, pledge, hypothecation or set-off in respect of any claim, debt or obligation, or to execution, attachment, levy or similar process; provided, however, that Executive may assign any right, benefit or interest hereunder if such assignment is permitted under the terms of any plan or policy of insurance or annuity contract governing such right, benefit or interest.

          (b) Construction of Agreement. Nothing in this Agreement shall be construed to amend any provision of any plan or policy of the Company other than as specifically stated herein. This Agreement is not, and nothing herein shall be deemed to create an employment contract between Executive and the Company or any of its subsidiaries. Executive acknowledges that he is an “at-will” employee.

9


 

          (c) Inurement. This Agreement shall be binding upon and inure to the benefit of the Company and its affiliates and the Executive and their respective heirs, executors, administrators, successors and assigns.

          (d) Nature of Obligation. The Company intends that its obligations hereunder be construed in the nature of severance pay. Except as set forth in Section 4, the Company’s obligations under Section 3 are absolute and unconditional and shall not be affected by any circumstance, including, without limitation, any right of offset, counterclaim, recoupment, defense, or other right which the Company may have against the Executive or others. All amounts payable by the Company hereunder shall be paid without notice or demand.

          (e) Choice of Law. This Agreement shall be governed and construed in accordance with the laws of the State of Alabama.

          (f) Invalidity. In the event that any one or more provisions of this Agreement shall, for any reason, be held invalid, illegal or unenforceable in any manner, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement.

          (g) Entire Agreement. This Agreement contains the entire agreement of the parties hereto and supersedes all prior understandings and agreements, oral or written, between the parties with respect to the subject matter hereof, including, but not limited to, any prior Change in Control Compensation Agreement entered into by Executive and the Company, any prior Change of Control Employment Agreement entered into by Executive, The Peoples BancTrust Company, Inc., and The Peoples Bank and Trust Company, or any similar agreement between the Executive and any predecessor employer or company acquired by the Company or an Applicable Subsidiary.

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     9. Section 409A. This Agreement is intended to comply with the requirements of Section 409A of the IRC and the regulations and guidance thereunder (“Section 409A”) and shall be construed accordingly. No acceleration or deceleration of any payments or benefits provided herein shall be permitted unless allowed under the requirements of Section 409A. If any compensation or benefits provided by this Agreement may result in the application of Section 409A, the Executive hereby consents to the modification of this Agreement by the Company in the least restrictive manner (as determined by the Company) and without any diminution in the value of the payments to the Executive as may be necessary in order to exclude such compensation from the definition of “deferred compensation” within the meaning of Section 409A or in order to comply with the provisions of Section 409A, other applicable provision(s) of the IRC and/or any rules, regulations, and/or regulatory guidance issued under such statutory provisions.

     10. Nonsolicitation Covenants.

          (a) Prohibited conduct:

(i) Covenant Not to Solicit Customers. Executive covenants, acknowledges and agrees that for a period of 12 months following the termination of his/her employment which results in the Executive being granted the rights and benefits set forth in Section 3 of this Agreement (a “Covered Termination”), Executive will not, directly or indirectly, on his/her own behalf or in the service or on behalf of others, whether as a consultant, independent contractor, employee, owner, partner, joint venturer or otherwise, solicit, contact, attempt to divert or appropriate any person or entity who was a Customer or Account of the Company or a subsidiary of the Company, for the purposes of providing the same or similar services and products as provided by the Company or its subsidiaries. The term “Customer or Account” for purposes of this Section 10 is defined as those individuals or entities for whom the Executive performed work on the Company’s, or a

11


 

subsidiary’s, behalf at the time of the Covered Termination or at any time during the two year period prior to such termination.

(ii) Covenant Not to Solicit Prospects. Executive covenants, acknowledges and agrees that for a period of 12 months following a Covered Termination, Executive will not, directly or indirectly, on his/her own behalf or in the service or on behalf of others, whether as a consultant, independent contractor, employee, owner, partner, joint venturer or otherwise, solicit, contact, attempt to divert, or appropriate, for the purpose of providing the same or similar services as provided by the Company or its Subsidiaries, any person or entity whom Executive was soliciting, or helping someone else from the Company or its subsidiaries to solicit, as a potential Customer or Account of the Company or its subsidiaries, at any time during the six month period prior to the Covered Termination.

(iii) Covenant not to Perform Services for Customer or Account. Executive covenants, acknowledges and agrees that for a period of 12 months following a Covered Termination, Executive will not, directly or indirectly, on his/her own behalf or in the service or on behalf of others, whether as a consultant, independent contractor, employee, owner, partner, joint venturer or otherwise, perform services the same or similar to those which Executive performed for the Company or any subsidiary of the Company for any Customer or Account of the Company or its subsidiaries.

(iv) Covenant Not to Solicit Employees. Executive covenants, acknowledges and agrees that for a period of 12 months following a Covered Termination, Executive will not, either directly or indirectly, on his/her own behalf or in the service or on behalf of

12


 

others, whether as a consultant, independent contractor, employee, owner, partner, joint venturer or otherwise, solicit, recruit or entice any employee of the Company or its subsidiaries to leave employment with the Company or its subsidiaries.

          (b) Executive hereby acknowledges and agrees that the covenants contained above are supported by independent valuable consideration; contain reasonable limitations as to time, geographic scope and scope of activity prohibited; and do not impose a greater restraint than is necessary to protect the goodwill, customer relationships, employee relationships and other legitimate protectable business interests of the Company and its subsidiaries.

          (c) Executive recognizes that damages in the event of breach of this Section 10 by Executive would be difficult, if not impossible, to ascertain, and, therefore, the Company, in addition to and without limiting any other remedy or right it may have, shall have the right to an injunction or other equitable relief in any court of competent jurisdiction enjoining any such breach, and Executive hereby waives any and all defenses he/she may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief. The existence of this right shall not preclude the Company from pursuing any other rights and remedies at law or in equity which the Company may have, and the Company may pursue equitable relief without the necessity of posting a bond or other security. In the event of a breach or threatened breach by the Executive of the covenants contained in this Section 10 the Executive consents and agrees that the period of any injunction will correspond to the time restrictions set forth in Section 10 and that the restriction period will start to commence from the date of entry of an order granting such injunction by a court of competent jurisdiction. Executive agrees to reimburse the Company for all fees and expenses it incurs (including reasonable attorneys fees and related expenses) as a result of Executive’s breach or threatened breach of this Section 10 or related to or arising out of the

13


 

Company’s enforcement of such Sections. If Executive violates any of the covenants contained in Section 10(a) hereinabove, then the Company shall be entitled to retain and not pay or furnish, and Executive shall forfeit, any amounts and benefits due under Section 3 of this Agreement not already paid to Executive; and Executive shall, within thirty days after demand, repay to the Company all amounts previously paid to or expended for the benefit of Executive under Section 3 of this Agreement. If a court of competent jurisdiction declares any provisions (or sub-provisions) of this Agreement unenforceable, the parties acknowledge and agree that the court may revise or reconstruct such unenforceable provisions (or sub-provisions) to better effectuate the parties’ intent to reasonably restrict the activity of the Executive to the greatest extent allowed by law and needed to protect the business interests of the Company and its subsidiaries.

     IN WITNESS WHEREOF, Executive has hereunto set his hand and seal and the Company and BankTrust have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the date first written above.

 

 

 

 

 

 

 

 

 

 

 

/s/ W. Bibb Lamar, Jr.

 

(SEAL)

 

 

 

 

 

 

 

 

 

 

 

W. BIBB LAMAR, JR.

 

 

 

 

 

 

Dated: December 18, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

ATTEST:

 

BANCTRUST FINANCIAL GROUP, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ J. Dianne Hollingsworth

 

 

 

 

 

 

 

 

 

 

BY:

 

/s/ F. Michael Johnson

 

 

 

 

 

 

 

 

 

 

 

Its: Senior Vice President

 

 

 

Its: Chief Financial Officer

 

 

 

 

 

 

Dated: December 18, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

ATTEST:

 

BANKTRUST

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Mark E. Thompson

 

 

 

 

 

 

 

 

 

 

BY:

 

/s/ F. Michael Johnson

 

 

 

 

 

 

 

 

 

 

 

Its: Senior Vice President

 

 

 

Its: Senior Vice President

 

 

 

 

 

 

Dated: December 18, 2008

 

 

 

 

14

 

 

 

EX-10 2 ex10_1.htm AMENDMENT TO CHANGE IN CONTROL AGREEMENT CEO

Exhibit 10.1

BANCTRUST FINANCIAL GROUP, INC.

AMENDMENT TO CHANGE IN CONTROL COMPENSATION AGREEMENT

This Amendment to Change in Control Compensation Agreement (this "Amendment") is made and entered into as of the 11th day of September, 2009, by and among BancTrust Financial Group, Inc., an Alabama corporation having its principal place of business in Mobile, Alabama ("BancTrust"), BankTrust, an Alabama banking corporation and wholly-owned subsidiary of BancTrust ("BankTrust" and together with BancTrust the "Company"), and W. Bibb Lamar, Jr. (the "Executive").

RECITALS:

  1. The Company and the Executive are Parties to that certain Change in Control Compensation Agreement dated as of the 1st day of January, 2009 (the "Agreement").
  2. The Company is a participant in the TARP Capital Purchase Program (the "Capital Purchase Program") of the United States Treasury (the "Treasury") and, as such, is subject to limitations regarding executive compensation practices; and the Company may be prohibited by law from making payments or providing benefits to Executive under the Agreement.
  3. The Company has requested that the Executive execute and deliver this Amendment to acknowledge the restrictions applicable to participants in the Capital Purchase Program and to excuse the Company from performing its obligations hereunder in the event that it is prohibited by law from doing so.
  4. The Executive is willing to execute and deliver this Amendment in order to induce the Company not to exercise its right under the Agreement to terminate the Agreement.

NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual covenants and agreements of the parties contained herein and in the Agreement, as amended hereby, the Company and the Executive do hereby amend the Agreement as follows:

    1. The introductory paragraph to Section 2 of the Agreement is deleted in its entirety and replaced with the following:

2. Termination Following Change in Control. Except as provided in Section 4 and Section 11, the Company will provide or cause to be provided to Executive the rights and benefits described in Section 3 in the event that Executive's employment is terminated at any time within two years following a Change in Control (as such term is defined in this Section 2) under the circumstances stated in (a) or (b) below:

    1. Section 3(e) of the Agreement shall be deleted in its entirety and replaced with the following:

(e) Substantial Risks of Forfeiture. Executive understands that any rights and benefits provided to him pursuant to this Agreement are subject to a substantial risk of forfeiture and Executive is not entitled to any rights or benefits pursuant to this Agreement unless (1) a Change in Control of the Company has occurred, (2) Executive's employment has been terminated pursuant to Section 2 of this Agreement, (3) the conditions in Section 4 of this Agreement have not occurred, and (4) the Company is permitted by law to provide such rights or benefits.

    1. Section 8(d) of the Agreement is deleted in its entirety and replaced with the following:

(d) Nature of Obligation. The Company intends that its obligations hereunder be construed in the nature of severance pay. Except as set forth in Section 4 and Section 11, the Company's obligations under Section 3 are absolute and unconditional and shall not be affected by any circumstance, including, without limitation, any right of offset, counterclaim, recoupment, defense, or other right which the Company may have against the Executive or others. All amounts payable by the Company hereunder shall be paid without notice or demand.

    1. The following shall be added as a new Section 11 to the Agreement:

11. Performance Excused in Certain Circumstances. The Company has disclosed to the Executive that it is a participant in the Capital Purchase Program pursuant to which it sold shares of its senior preferred stock to the Treasury. As a participant in the Capital Purchase Program, the Company is subject to certain limitations affecting its executive compensation practices. Subsequent to the Company's issuance of senior preferred shares to the Treasury, in February of 2009, Congress passed, and the President signed, the American Recovery and Reinvestment Act of 2009 (the "ARRA") which mandated that the Treasury modify, by making more restrictive, the executive compensation limitations applicable to participants in the Capital Purchase Program and other similar programs of the Treasury. On June 10, 2009, the Treasury issued an Interim Final Rule captioned "TARP Standards for Compensation and Corporate Governance" to implement the changes to the executive compensation limitations mandated by the ARRA. This Interim Final Rule provides that BancTrust must prohibit any "golden parachute payment" to certain executives and

highly-compensated employees during the period beginning when the Company was paid by the Treasury for the senior preferred shares of the Company the Treasury purchased and ending on the last date upon which any obligation arising from financial assistance from the Treasury remains outstanding (disregarding any warrants to purchase common stock of the Company that the Treasury may hold). These limitations, and other limitations that may not be specifically discussed herein or that may be enacted in the future, could effectively prohibit the Company or a successor of the Company from satisfying certain or all of its obligations hereunder, and the Executive acknowledges that to the extent that the Company, or its successor, is, in its reasonable good faith judgment, prohibited by law from performing any or all of its obligations hereunder, then such performance, to the extent of such prohibition, shall be excused, and the Executive shall have no claim against the Company or its successor for any such excused failure to perform.

The Company and Executive hereby ratify and confirm the terms of the Agreement, as amended by this Amendment.

IN WITNESS WHEREOF, Executive has hereunto set his hand and seal and BancTrust and BankTrust have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the date first written above.

EXECUTIVE

 

/s/ W. Bibb Lamar, Jr.

W. BIBB LAMAR, JR.

Dated: September 11, 2009

BANCTRUST FINANCIAL GROUP, INC.

 

BY: /s/ F. Michael Johnson

Its: Chief Financial Officer

Dated: September 11, 2009

BANKTRUST

 

BY: /s/ F. Michael Johnson

Its: Executive Vice President

Dated: September 11, 2009