Exhibit
10.5
TWO-YEAR
CHANGE IN CONTROL
AGREEMENT
(BANKLIBERTY)
This AGREEMENT
(“Agreement”) is hereby entered into as of
July 21, 2006, by
and between BankLiberty (the “Bank”),
a federally chartered financial institution, with its principal
offices at 16 West Franklin Street, Liberty, Missouri 64068,
Mark E. Hecker (“Executive”) and
Liberty Bancorp, Inc. (the “Company”),
a Missouri-chartered corporation and the holding company of the
Bank, as guarantor.
WHEREAS, the Bank recognizes the importance of
Executive to the Bank’s operations and wishes to protect his
position with the Bank in the event of a change in control of the
Bank or the Company for the period provided for in this Agreement;
and
WHEREAS, Executive and the Board of Directors of
the Bank desire to enter into an agreement setting forth the terms
and conditions of payments due to Executive in the event of a
change in control and the related rights and obligations of each of
the parties.
NOW, THEREFORE, in consideration of the promises
and mutual covenants herein contained, it is hereby agreed as
follows:
(a) The term of this Agreement shall be (i) the
initial term, consisting of the period commencing on the date of
this Agreement (the “Effective Date”) and ending on the
second anniversary of the Effective Date, plus (ii) any and all
extensions of the initial term made pursuant to this Section
1.
(b) Commencing on the first anniversary of the
Effective Date and continuing each anniversary date thereafter, the
Board of Directors of the Bank (the “Board of
Directors”) may extend the term of this Agreement for an
additional one (1) year period beyond the then effective expiration
date, provided that Executive shall not have given at least sixty
(60) days’ written notice of his desire that the term not be
extended.
(c) Notwithstanding anything in this Section to the
contrary, this Agreement shall terminate if Executive or the Bank
terminates Executive’s employment prior to a Change in
Control.
(a) Upon the occurrence of a Change in Control of
the Company followed at any time during the term of this Agreement
by the termination of Executive’s employment in accordance
with the terms of this Agreement, other than for Cause, as defined
in Section 2(c) of this Agreement, the provisions of Section 3 of
this Agreement shall apply. Upon the occurrence of a Change in
Control, Executive shall have the right to elect to voluntarily
terminate his employment at any time during the term of this
Agreement following an event constituting “Good
Reason.”
For purposes of this Section 2, “Good
Reason” means, unless Executive has consented in writing
thereto, the occurrence following a Change in Control, of any of
the following:
(i) the assignment to Executive of
any duties materially inconsistent with Executive’s position,
including any material change in status, title, authority, duties
or responsibilities or any other action that results in a material
diminution in such status, title, authority, duties or
responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and
that is remedied by the Bank or Executive’s employer
reasonably promptly after receipt of notice thereof given by the
Executive;
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(ii)
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a reduction by
the Bank or Executive’s employer of the Executive’s
base salary in effect immediately prior to the Change in
Control;
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(iii)
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the relocation
of the Executive’s office to a location more than fifty (50)
miles from its location as of the date of this
Agreement;
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(iv)
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the taking of
any action by the Bank or any of its affiliates or successors that
would materially adversely affect the Executive’s overall
compensation and benefits package, unless such changes to the
compensation and benefits package are made on a non-discriminatory
basis to all employees; or
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the failure of
the Bank or the affiliate of the Bank by which Executive is
employed, or any affiliate that directly or indirectly owns or
controls any affiliate by which Executive is employed, to obtain
the assumption in writing of the Bank’s obligation to perform
this Agreement by any successor to all or substantially all of the
assets of the Bank or such affiliate within thirty (30) days after
a reorganization, merger, consolidation, sale or other disposition
of assets of the Bank or such affiliate.
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(b) For purposes of this Agreement, a “Change
in Control” shall be deemed to occur on the earliest
of:
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Merger : The Company or the Bank merges into or
consolidates with another corporation, or merges another
corporation into the Company or the Bank, and as a result less than
a majority of the combined voting power of the resulting
corporation immediately after the merger or consolidation is held
by persons who were stockholders of the Company immediately before
the merger or consolidation.
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(ii)
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Acquisition
of Significant Share Ownership : There is filed or required to be filed a
report on Schedule 13D or another form or schedule (other than
Schedule 13G) required under Sections 13(d) or 14(d) of the
Securities Exchange Act of 1934, if the schedule discloses that the
filing person or persons acting in concert has or have become the
beneficial owner of 25% or more of a class of the Company’s
voting securities, but this clause (ii) shall not apply to
beneficial ownership of Company voting shares held in a fiduciary
capacity by an entity of which the Company directly or indirectly
beneficially owns 50% or more of its outstanding voting
securities.
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(iii)
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Change in
Board Composition :
During any period of two consecutive years, individuals who
constitute the Bank’s or the Company’s Board of
Directors at the beginning of the two-year period cease for any
reason to constitute at least a majority of the Company’s or
the Bank’s Board of Directors; provided, however, that for
purposes of this clause (iii), each director who is first elected
by the board (or first nominated by the board for election by the
stockholders) by a vote of at least two-thirds (2/3) of the
directors who were directors at the beginning of the two-year
period shall be deemed to have also been a director at the
beginning of such period; or
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(iv)
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Sale of
Assets : The Company or
the Bank sells to a third party all or substantially all of its
assets.
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(c) Executive shall not have the right to receive
termination benefits pursuant to Section 3 hereof upon termination
for Cause. The term “Cause” shall mean termination
because of Executive’s personal dishonesty, incompetence,
willful misconduct, any breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful
violation of any law, rule, regulation (other than traffic
violations or similar offenses), final cease and desist order, or
any material breach of any provision of this Agreement. Executive
shall not have the right to receive compensation or other benefits
for any period after termination for Cause. During the period
beginning on the date of the Notice of Termination for Cause
pursuant to Section 4 hereof through the Date of Termination, stock
options granted to Executive under any stock option plan shall not
be exercisable nor shall any unvested stock
awards granted to Executive under any stock benefit plan of the
Bank, the Company or any subsidiary or affiliate thereof, vest. At
the Date of Termination, such stock options and any such unvested
stock awards shall become null and void and shall not be
exercisable by or delivered to Executive at any time subsequent to
such termination for Cause.
(a) If Executive’s employment is voluntarily
(in accordance with Section 2(a) of this Agreement) or
involuntarily terminated within two (2) years of a Change in
Control, Executive shall receive:
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a lump sum cash
payment equal to two (2) times the Executive’s “base
amount,” within the meaning of Section 280G(b)(3) of the
Internal Revenue Code of 1986, as amended (the “Code”).
Such payment shall be made not later than five (5) days following
Executive’s termination of employment and shall be reduced,
if necessary, to avoid an
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