Exhibit 10.25
EMPLOYMENT AGREEMENT
AGREEMENT
entered into as of this 23rd day of May, 2008, by and between
WEST BANCORPORATION, INC., an Iowa corporation (the
“Company”), and DOUGLAS R. GULLING
(“Gulling”), to be effective as of the date stated
above (“Effective Date”).
WITNESSETH:
WHEREAS,
Gulling has been employed as the Company’s Executive
Vice President and Chief Financial Officer
(“CFO”), as West Bank’s Director and Chief
Financial Officer, and as WB Capital Management Inc.’s
Director and Treasurer; and
WHEREAS,
the Company wishes that Gulling continue such employment
pursuant to the terms and conditions hereof, and in order to
induce Gulling to enter into this agreement (the
“Agreement”) and to secure the benefits to accrue
from his performance hereunder, is willing to undertake the
obligations assigned to it herein; and
WHEREAS,
Gulling is willing to continue his employment as described
above under the terms hereof and to enter into the
Agreement;
WHEREAS,
Gulling desires that his current Employment Agreement dated
January 9, 2003, as amended, be replaced and superseded in its
entirety with this Agreement.
NOW
THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable
consideration, the receipt of which is hereby acknowledged,
the parties hereto agree as follows:
1.
Positions; Duties; Responsibilities .
1.1
Gulling
shall serve as Executive Vice-President and CFO of the
Company, Director and CFO of West Bank, and Director and
Treasurer of WB Capital Management Inc. Gulling shall report
to the Chief Executive Officer of the Company. He shall
perform the duties ordinarily expected of the positions that
he is assigned. Gulling shall have such other responsibilities
consistent with the status, titles, and reporting requirements
set forth herein and under state and federal law as are
applicable or appropriate to said position, subject to change
from time to time by the Chief Executive Officer or the Board
of Directors of the Company or West Bank.
1.2
During
the course of his employment, Gulling agrees to devote his
full time and attention to the business affairs of the Company
and West Bank.
2.
Term .
Subject
to the terms and conditions hereof, the Company agrees to
employ, and Gulling hereby accepts employment, for an Initial
Term commencing on the Effective Date and ending December 31,
2010. This Agreement will be renewed annually without written
notice on each January 1 hereafter for a three year period,
provided the Company has not given notice of nonrenewal by
November 30 of the preceding year. Accordingly, and by way of
example, the intent of the parties is that as of January 1,
2009, the Term will be a rolling three year term beginning on
each subsequent January 1, unless timely notice of nonrenewal
is given. In the event of a timely notice of nonrenewal, this
Agreement will expire at the end of the Initial Term or any
then existing three-year term. References to “Initial
Term” or “Term” in this Agreement mean
either the Initial Term or any subsequent Term as the context
requires.
3.
Compensation and Benefits.
3.1
Base Salary .
The Company shall pay Gulling a base salary during the Term of this
Agreement at the minimum annual rate of Two-hundred ten thousand
Dollars ($210,000) (“Base Salary”), payable in
accordance with the standard payroll practices of the Company. It
is understood that the Base Salary is to be Gulling’s minimum
annual compensation during the Term. Gulling’s Base Salary
will be reviewed by the Compensation Committee of the Board at
least annually, and may be increased (but not reduced). If the Base
Salary stated above is increased, the new Base Salary shall be
noted in Board minutes and shall become a term of this Agreement by
reference without need for attachment or addendum.
3.2
Annual Bonus/Incentive Target/Incentive Payment
.
In addition to other compensation to be paid under Section 3, each
year during the Term of this Agreement, Gulling shall be eligible
for an annual incentive bonus (“Annual Bonus”). An
annual incentive bonus target (“Incentive Target”)
shall be set for each year by the Board, based on a recommendation
of the Compensation Committee. The annual incentive payment
actually awarded and paid to Gulling for each year
(“Incentive Payment”) will be determined by the Board
in its sole discretion, with consideration to the Compensation
Committee recommendation, and paid by the Company as soon as
reasonably possible after the end of each fiscal year.
3.3
Equity Appreciation Plans. In
addition to other compensation to be paid under this Section 3, the
Company may grant stock options, stock appreciation rights,
restricted stock, or other forms of equity participation rights to
Gulling as a participant, if a plan is adopted by the
Company.
3.4
Vacation. Gulling
shall be entitled to not less than 25 days of paid time off, plus
all Company-recognized holidays, during each full year of
employment hereunder in accordance with the general terms of the
vacation policy adopted by the Company. Upon Termination under
Section 4 of this Agreement, Gulling will be paid for any accrued
vacation that has not been taken through the date of
Termination.
3.5
Reimbursement of Expenses. The
Company shall reimburse Gulling in accordance with Company’s
expense reimbursement policies for all reasonable, ordinary, and
necessary business expenses incurred by Gulling while performing
duties on behalf of the Company. In addition, the Company shall pay
Gulling’s monthly dues at one local country club or one other
similar club, and expenses related to Gulling’s use of such
club for matters related to the Company’s
business.
3.6
Employee Benefits. Gulling
shall be entitled to receive any perquisites and participate in any
employee benefit plans, including profit-sharing plans, now
existing or established hereafter generally available to employees
and/or senior officers of the Company, provided Gulling is
otherwise qualified and eligible for such benefits. As part of its
normal course of business, the Company may amend and/or terminate
any such employee benefits or plans.
3.7
Benefits Not in Lieu of Compensation. No
benefit or perquisite provided to Gulling shall be deemed to be in
lieu of Base Salary, Annual Bonus, or other compensation, provided
that the reporting of any benefits shall be consistent with IRS
regulations.
3.8
Short-Term Disability. Any
period of short-term disability experienced by Gulling shall be
treated under the Company’s Short-Term Disability benefits
policy(ies).
3.9
Indemnification and Insurance .
Except for disputes between the parties concerning this Agreement,
the Company shall protect and indemnify Gulling against any and all
legal claims or actions involving him as a consequence of his
employment hereunder to the maximum extent allowed under the Iowa
Business Corporation Act. The Company shall provide Gulling the
maximum insurance coverage provided any other employee or director
of the Company. The Company agrees to continue Gulling’s
coverage under such directors and officers’ liability
insurance policies as shall from time to time be in effect for
Company officers and employees for not less than six years
following Gulling’s termination of employment.
4.
Consequences of Termination of Employment and/or Change of
Control .
4.1
Death .
In the event of Gulling’s death during the Term of this
Agreement, this Agreement shall terminate, and all obligations to
Gulling shall cease as of the date of death except that, (a) within
ten (10) business days of termination, the Company shall pay to
Gulling’s designated beneficiary, as defined below in this
Section, or the legal representative of his estate a sum equal to
one month of Base Salary and Seventy-Five Percent (75%) of the
amount of his Incentive Target prorated to the date of
death—provided, however, that if Gulling’s death is
preceded by a leave of absence associated with a period of
disability, any Incentive Target shall be restricted to the fiscal
year in which such leave commenced and prorated to the last date
worked. All rights and benefits of Gulling under the benefit plans
and programs of the Company in which Gulling is a participant, will
be provided as determined in accordance with the terms and
provisions of such plans and programs. All awards of restricted
stock, stock options, and any other benefits under any long-term
incentive plans shall be handled in accordance with the terms of
the relevant plan and agreements entered into between Gulling and
the Company with respect to such awards.
Gulling
may designate a beneficiary by filing a written designation
with the head of personnel of the Company. Gulling may revoke
or modify the designation at any time by filing a new
designation. However, designations will only be effective if
signed by Gulling and received by the Company during
Gulling’s lifetime. Gulling’s beneficiary
designation shall be deemed automatically revoked if the
beneficiary predeceases Gulling, or if Gulling names a spouse
as beneficiary and the marriage is subsequently dissolved. If
Gulling dies without a valid beneficiary designation, all
payments shall be made to Gulling’s estate.
If
a benefit is payable to a minor, to a person declared
incompetent, or to a person incapable of handling the
disposition of his or her property, the Company may pay such
benefit to the guardian, legal representative, or person
having the care or custody of such minor, incompetent, or
incapable person. The Company may require proof of
incompetence, minority, or guardianship as it may deem
appropriate prior to distribution of the benefit. Such
distribution shall completely discharge the Company from all
liability with respect to such benefit.
4.2
Permanent Disability .
If Gulling shall become permanently incapacitated by reasons of
sickness, accident, or other physical or mental disability
(“Permanent Disability”) as defined hereunder during
the Term of this Agreement, this Agreement and all obligations to
Gulling shall cease except as provided below. Permanent Disability
shall be determined in one of two ways: (1) Gulling shall be
considered to be Permanently Disabled for purposes of this
Agreement if he becomes entitled to Long-Term Disability benefits
under the Company’s Long-Term Disability Plan, in which case,
this Agreement and all obligations to Gulling shall cease except
that for a period of twelve (12) months, the Company shall
supplement Gulling’s Long-Term Disability payments to the
extent necessary for the Long-Term Disability payments plus the
supplemental payments to equal Gulling’s Base Pay as defined
in Section 3.1 herein; (2) alternatively, if Gulling becomes
permanently incapacitated and such incapacitation is certified by a
physician chosen by the Company and reasonably acceptable to
Gulling (if he is then able to exercise sound judgment), and
Gulling shall therefore be unable to perform his normal duties
hereunder, then the employment of Gulling hereunder and this
Agreement may be terminated by Gulling or the Company upon thirty
(30) days’ written notice to the other party following such
certification. Should Gulling not acquiesce (or should he be unable
to acquiesce) in the selection of the certifying doctor, a doctor
chosen by Gulling (or if he is not then able to exercise sound
judgment, by his spouse or personal representative) and reasonably
acceptable to the Company shall be required to concur in the
medical determination of incapacitation, failing which, the two
doctors shall designate a third doctor whose decision shall be
determinative as of the end of the calendar month in which such
concurrence or third-doctor decision, as the case may be, is made.
After the final certification is made and the 30-day written notice
is provided, the Company shall pay to Gulling, at such times as
Base Salary provided for in Section 3.1 of this Agreement would
normally be paid, Gulling’s then-current Base Salary for a
period of twelve (12) months. Under either determination of
Permanent Disability, Gulling shall be paid Seventy-Five Percent
(75%) of the amount of his Incentive Target for the year in which
disability is certified prorated to the last day worked. If no
Incentive Target has been determined for the year in which final
certification occurs, the last determined Incentive Target shall
apply.
Following
termination pursuant to either of the above alternatives, any
rights and benefits Gulling may have under the employee
benefit plans and programs of the Company in which Gulling is
a participant shall be determined in accordance with the terms
and provisions of such plans and programs. All awards of
restricted stock, stock options and any other benefits under
any long-term incentive plans shall be handled in accordance
with the terms of the relevant plan and agreements entered
into between Gulling and the Company with respect to such
awards.
4.3
Due Cause .
The Company may terminate Gulling’s employment, remove him as
an officer and director of the Company and its subsidiaries, and
terminate this Agreement at any time for Due Cause. In the event of
such termination for Due Cause, Gulling shall continue to receive
Base Salary payments provided for in this Agreement only through
the date of such termination for Due Cause, and Gulling shall be
entitled to no further compensation under this Agreement, except
that any rights and benefits Gulling may have under the employee
benefit plans and programs of the Company or its subsidiaries in
which Gulling is a participant shall be determined in accordance
with the terms and provisions of such plans and programs. Gulling
understands and agrees that in the event of the termination of
employment, removal as an officer and director, and termination of
this Agreement pursuant to this Section 4.3: (a) all awards of
restricted stock, stock options, and any other benefits under
long-term incentive plans shall be handled in accordance with the
terms of the relevant plan and agreements entered into between
Gulling and the Company with respect to such awards; and (b) the
Company shall have no obligation to pay any Annual Bonus to Gulling
under the terms of this Agreement; but (c) the obligations of
Gulling under Sections 7 and 8 of this Agreement shall remain in
full force and effect.
The
term “Due Cause” shall mean (i) the willful and
continued failure of Gulling to substantially perform his
duties with the Company (other than any such failure resulting
from Permanent Disability), after a demand for substantial
performance is delivered to Gulling by the Board that
specifically identifies the manner in which Gulling has not
substantially performed his duties; (ii) willful misconduct by
Gulling that is materially injurious to the Company or its
subsidiaries, monetarily or otherwise; (iii) gross negligence
in the performance of duties assumed pursuant to this
Agreement or gross neglect of such duties; or (iv) conviction
for a felony or a serious misdemeanor involving moral
turpitude. For purposes of this definition, no act, or failure
to act, on the part of Gulling shall be considered
“willful” unless it is done, or omitted to be
done, by Gulling in bad faith and without reasonable belief
that Gulling’s action or omission was in the best
interests of the Company or its subsidiaries. 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 the General Counsel of the Company shall be conclusively
presumed to be done, or omitted to be done, by Gulling in good
faith and in the best interests of the Company.
4.4
Without Cause .
The other provisions of this Agreement notwithstanding, the Company
may terminate Gulling’s employment, remove him as an officer
and director, and terminate this Agreement at any time for whatever
reason it deems appropriate with or without cause and with or
without prior notice. In the event of such a termination of
Gulling’s employment and this Agreement, Gulling shall have
no further obligations of any kind under or arising out of the
Agreement (except for the obligations of Gulling under Sections 7
and 8 of this Agreement), and the Company shall be obligated to
promptly pay Gulling only the following “Severance
Payment”: Three times Gulling’s Base Salary as of the
date of Termination Without Cause —provided, however, that in
the event that as a result of such termination of employment,
Gulling would otherwise be entitled to a Change of Control Benefit
under Section 4.7 of this Agreement, Gulling shall be entitled to
elect either: (i) the Severance Payment described above, or (ii)
the Change of Control Benefit described in Section 4.7 of this
Agreement, but in no event shall he be entitled to both payments.
Payment shall be made in a lump sum within 60 days of the date of
termination. In addition, the Company shall pay the insurance
premiums to provide Gulling family health coverage under COBRA for
one year after Gulling ceases employment by the
Company.
Gulling
agrees that the payments described in this Section 4.4 shall
be full and adequate compensation to Gulling for all damages
Gulling may suffer as a result of the termination of his
employment pursuant to this Section 4.4, and in consideration
of the payments and benefits provided in this Section 4.4,
Gulling agrees to execute a waiver and release agreement
acceptable to the Company—provided, however, that except
as specifically provided for under this Section 4.4, any
rights and benefits Gulling may have under the employee
benefit plans and programs of the Company or its subsidiaries
in which Gulling is a participant shall be determined in
accordance with the terms and provisions of such plans and
programs. All awards of restricted stock, stock options, and
any other benefits under any long-term incentive plans shall
be handled in accordance with the terms of the relevant plan
and agreements entered into between Gulling and the Company
with respect to such awards.
4.5
Employee Voluntary .
In the event Gulling terminates his employment of his own volition
prior to the end of the Term of this Agreement, except for a
termination for Good Reason as specifically defined in Section 4.6
below, such termination shall constitute a voluntary termination
and in such event the Company’s only obligation to Gulling
shall be to make Base Salary payments provided for in this
Agreement through the date of such voluntary termination. Gulling
understands and agrees that in the event of termination of
employment pursuant to this Section 4.5: (a) any rights and
benefits Gulling may have under the employee benefit plans and
programs of the Company or its subsidiaries in which he is a
participant shall be determined in accordance with the terms and
provisions of such plans and programs; (b) all awards of restricted
stock, stock options, and any other benefits under any long-term
incentive plans shall be handled in accordance with the terms of
the relevant plan and agreements entered into between Gulling and
the Company with respect to such awards; (c) the Company shall have
no obligation to pay any Annual Bonus, Incentive Target, or
Incentive Payment to Gulling under the terms of this Agreement and
(d) the obligations of Gulling under Sections 7 and 8 of this
Agreement shall remain of full force and effect.
4.6
Good Reason .
Gulling may terminate this Agreement on ninety (90) days’
notice for Good Reason.
(a)
For
purposes of this Agreement, “Good Reason” shall
mean:
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(1)
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Without
Gulling’s express written consent, the assignment to Gulling
of any duties or responsibilities materially inconsistent with the
employment described in Section 1.1 above, or a material change in
the reporting responsibilities, titles, or offices as described in
Section 1.1, or any removal of Gulling from, or any failure to
re-elect Gulling to, any of such responsibilities or positions,
except in connection with the termination of Gulling’s
employment for Due Cause, Permanent Disability, retirement, or
Death or except in connection with employment under the Six-Month
Rule set forth in Section 4.7(c)(1) herein.
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(2)
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A
material reduction in Gulling’s Base Salary;
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(3)
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Failure
of the Company to obtain the assumption of, or the agreement to
perform, this Agreement by any successor as defined in Section 9.3
hereof; or
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(4)
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The
Company requiring Gulling to be based anywhere other than Polk
County, Iowa, or a county contiguous thereto,
except
for required travel for Company business to an extent substantially
consistent with Gulling’s duties as described under Section
1.1, or in the event Gulling consents to any relocation, the
failure by the Company to pay (or reimburse Gulling) for all
reasonable moving and relocation expenses incurred by Gulling
relating to a change of Gulling’s principal residence in
connection with such relocation.
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(b)
Good
Reason Severance Payment:
In
the event Gulling appropriately terminates his employment and
this Agreement for Good Reason (after having giving notice to
the Board of the “Good Reason” and allowing the
Board at least a 30 day period to cure the Good Reason),
Gulling shall have no further obligations of any kind under or
arising out of the Agreement (except for the obligations of
Gulling under Sections 7 and 8 of this Agreement), and the
Company shall be obligated to pay Gulling an amount equal to
his Base Salary plus $100,000 per year for the remainder of
the then-existing Term of this Agreement, but no less than a
total of one year of Base Salary plus $100,000 (“Good
Reason Severance Payment”)—provided, however, that
in the event that as a result of such termination of
employment by Gulling for Good Reason, Gulling would otherwise
be entitled to a Change of Control Benefit under Section 4.7
of this Agreement, Gulling shall be entitled to elect either:
(i) the Good Reason Severance Payment d
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