Exhibit 10.5
CHANGE IN CONTROL
AGREEMENT
AGREEMENT by and between Colonial
BancGroup, Inc., a Delaware corporation (the
“Company”), and
(the “Employee”), dated as of the
day of
, 20
.
WHEREAS, the Board of Directors of
the Company (the “Board”) recognizes the possibility
that a Change in Control (as hereinafter defined) of the Company
could occur and that such an event could result in significant
distraction of the Company’s key personnel because of the
uncertainties inherent in such a situation; and
WHEREAS, the Board has determined
that it is essential and in the best interest of the Company and
its stockholders to be able to retain the services of the Employee
notwithstanding the possibility of a Change in Control and to
ensure the Employee’s continued dedication and efforts in
such an event without undue concern for the Employee’s
personal financial and employment security;
NOW, THEREFORE, in consideration of
the respective agreements of the parties set forth herein, it is
hereby agreed as follows:
1. Certain
Definitions.
(a) “Accrued
Compensation” shall mean the sum of: (i) the
Employee’s annual base salary through the Termination Date,
to the extent not theretofore paid, (ii) reimbursement (in
accordance with the Company’s expense reimbursement policy)
for reasonable and necessary business expenses incurred by the
Employee on behalf of the Company prior to the Termination Date,
(iii) Employee’s accrued and unused vacation pay (in
accordance with the Company’s vacation policy) to the extent
not theretofore paid, and (iv) bonuses and incentive
compensation, prorated through the Termination Date, to which the
Employee is entitled under the terms of applicable bonus or
incentive plans or awards maintained by the Company.
(b) “Affiliate” shall
mean any entity directly or indirectly, controlled by, controlling
or under common control with the Company or any corporation or
other entity acquiring, directly or indirectly, all or
substantially all the assets and business of the Company, whether
by operation of law or otherwise.
(c) “Base Amount” shall
mean the Employee’s annual base salary at the rate in effect
at the date hereof or, if greater, at any time thereafter,
determined without regard to any salary reduction or deferred
compensation elections made by the Employee.
(d) “Bonus Amount” shall
mean the highest bonus or bonuses paid or payable to Employee under
the Company’s Management Team Incentive Plan (or such
similar
successor plan as may be adopted by
the Company and in which the Employee is a participant) in respect
of any of the three (3) full fiscal years ended prior to the
Termination Date or, if greater, the three (3) full fiscal
years ended prior to the Change in Control.
(e) “Cause” shall
include, but is not limited to the Following:
(i) the willful and continued
failure of the Employee to perform substantially the
Employee’s reasonably assigned duties with the Company or any
of its Affiliates (other than any such failure resulting from
incapacity due to physical or mental illness), which failure
continued for a period of at least thirty (30) days after a
written demand for substantial performance, signed by a duly
authorized officer of the Company, has been delivered to the
Employee specifying the manner in which the Employee has failed
substantially to perform, or
(ii) the Employee’s breach of
fiduciary duty involving personal profit, commission of a felony or
a crime involving fraud or moral turpitude, or material breach of
any provision of this Agreement, or
(iii) the willful engaging by the
Employee in illegal conduct or gross misconduct which is materially
injurious to the Company.
Notwithstanding the foregoing, no
termination of the Employee’s employment shall be for Cause
until (i) there shall have been delivered to the Employee a
copy of a written notice, signed by a duly authorized officer of
the Company, indicating that the Employee was guilty of the conduct
described in this Section 1(e) and specifying the particulars
thereof in detail, and (ii) the Employee shall have been
provided an opportunity to be heard in person by the Personnel and
Compensation Committee of the Board.
For purposes of this provision, no
act or failure to act, on the part of the Employee, shall be
considered “willful” unless it is done, or omitted to
be done, by the Employee in bad faith or without reasonable belief
that the Employee’s action or omission was legal, proper, and
in the best interests of the Company. Any act, or failure to act,
based upon authority and directives given pursuant to a resolution
duly adopted by the Board or upon the lawful instructions of a
senior officer of the Company or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or
omitted to be done, by the Employee in good faith and in the best
interests of the Company. Notwithstanding anything set forth in
this Agreement to the contrary, no failure to perform by the
Employee after a Notice of Termination is given to the Company by
the Employee shall constitute Cause for the purposes of this
Agreement.
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(f) “ Change in Control
” shall mean any of the following events:
(i) the acquisition by any
“Person” (as the term “person” is used for
the purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”))
of direct or indirect beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 50% or more of
the combined voting power of the then-outstanding securities of the
Company entitled to vote in the election of directors (the
“Voting Securities”); or
(ii) individuals who, as of the date
hereof, constitute the Board (the “Incumbent
Directors”) cease for any reason to constitute at least a
majority of the Board; provided, however , that any
individual becoming a director subsequent to the date hereof whose
election, or nomination for election, was approved by a vote of at
least a majority of the Incumbent Directors then on the Board, or
the Nominating and Corporate Governance Committee of the Board,
shall be an Incumbent Director, unless such individual is initially
elected or nominated as a director of the Company as a result of an
actual or threatened election contest with respect to the election
or removal of directors (“Election Contest”) or other
actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board (“Proxy
Contest”), including by reason of any agreement intended to
avoid or settle any Election Contest or Proxy Contest;
or
(iii) The consummation of a merger,
consolidation, reorganization, statutory share exchange, or similar
form of corporate transaction involving the Company, the sale or
other disposition of all or substantially all of the
Company’s assets, or the acquisition of assets or stock of
another entity by the Company (each a “Business
Combination”), unless such Business Combination is a
“Non-Control Transaction.” A “Non-Control
Transaction” is a Business Combination immediately following
which the following conditions are met:
(A) the stockholders of the Company
immediately before such Business Combination own, directly or
indirectly, more than fifty percent (50%) of the combined
voting power of the then-outstanding voting securities entitled to
vote in the election of directors of the corporation resulting from
such Business Combination (including, without limitation, a
corporation that as a result of such Business Combination owns the
Company or all of substantially all of the Company’s assets
or stock either directly or through one or more subsidiaries) (the
“Surviving Corporation”) in substantially the same
proportion as their ownership of the Company Voting Securities
immediately before such Business Combination;
(B) at least a majority of the
members of the board of directors of the Surviving Corporation were
Incumbent Directors at the time of the Board’s approval of
the execution of the initial Business Combination agreement;
and
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(C) no person other than
(i) the Company or any of its subsidiaries, (ii) the
Surviving Corporation or its ultimate parent corporation, or
(iii) any employee benefit plan (or related trust) sponsored
or maintained by the Company immediately prior to such Business
Combination beneficially owns, directly or indirectly, fifty
percent (50%) or more of the combined voting power of the
Surviving Corporation’s then-outstanding voting securities
entitled to vote in the election of directors; or
(iv) Approval by the stockholders of
the Company of a complete liquidation or dissolution of the
Company.
Notwithstanding the foregoing, a
Change in Control shall not be deemed to occur solely because any
Person (the “Subject Person”) acquired Beneficial
Ownership of more than the permitted amount of the outstanding
Voting Securities as a result of the acquisition of Voting
Securities by the Company which, by reducing the number of Voting
Securities outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a Change
in Control would occur (but for the operation of this sentence) and
after such acquisition of Voting Securities by the Company, the
Subject Person becomes the Beneficial Owner of any additional
Voting Securities, then a Change in Control shall occur.
(g) “Company” shall mean
Colonial BancGroup, Inc. its successors and assigns.
(h) “Disability” shall
mean that the Employee has become eligible to receive benefits
under any group long-term disability plan or policy maintained by
the Company or any of its Affiliates that is by its terms
applicable to the Employee.
(i) “Effective Date”
shall mean the first date on which a merger is con
