Employment Agreement [Amendment] - Riggs National Corp. and Joe L. Allbritton
AMENDED EMPLOYMENT AGREEMENT
This Amendment effective as of the 28th day of December, 1999 to
the Employment Agreement effective July 15, 1999, by and between RIGGS
NATIONAL CORPORATION (the "Company") and JOE L. ALLBRITTON (the "Executive").
WHEREAS, the Executive has been the Chief Executive Officer of the
Company since 1982;
WHEREAS, the Board of Directors of the Company has determined that it
is important to the continued success of the Company to insure that the
Executive continue as the Chief Executive Office of the Company for at least the
next five (5) years;
WHEREAS, the Executive voluntarily reduced his compensation in 1992 in
order to improve the profitability of the Company and to assist it in returning
to a healthy and profitable company with the reasonable expectation that once
the Company returned to historic profitability levels, his compensation would be
increased to historic levels and some recognition would be given to the fact of
his voluntary reduction ; and
WHEREAS, the Board of Directors has determined that now that the
Company has earned record profits that it is appropriate to increase the
Executive's compensation to levels consistent with his historic compensation and
for the Company to recognize the personal sacrifice of the Executive in reducing
his compensation in order to benefit the Company and its shareholders;
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the parties agree as follows:
1. Employment, Term and Duties.
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1.1. Employment. The Company hereby employs the Executive and the
Executive hereby accepts employment by the Company on the terms and
conditions set forth in this Agreement.
1.2. Term. The Executive's employment under this Agreement shall commence on the
date hereof (the "Effective Date") and shall terminate on July 15, 2004, unless
earlier terminated as provided in Section 3 below (the "Term")
1.3. Duties. During the Term, the Executive shall serve as the Chief Executive
Officer of the Company, with such customary duties and responsibilities as are
incident to said positions, including such authority, duties, and
responsibilities as set forth with respect to such office in the Company's
articles and bylaws. The Executive agrees to devote at least the same amount of
attention and time to the business and affairs of the Company and to the
duties and responsibilities assigned to the Executive as he has in the past
and will use his reasonable best efforts to perform faithfully and
effectively such duties and responsibilities.
2.Compensation and Other Benefits
2.1. Base Compensation. As compensation for services rendered during the
Term, the Company shall pay to the Executive an annual salary of $800,000 (the
"Base Salary"). The Compensation Committee of the Board of Directors of the
Company (the "Committee") shall conduct an annual review of the Base Salary
at such time or times as the Committee reviews the annual compensation of its
executives in general, and, if approved by the Board of Directors, the
Executive shall be entitled to an increase in the Base Salary as is in
accordance with the then prevailing policy of the Company with respect to
executive compensation in general; provided, that such salary may not be
reduced at any time. The Base Salary shall be payable in accordance with the
payroll policies of the Company as from time to time in effect.
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2.2. Annual Performance Bonus.
(1) In addition to the Base salary, the Executive shall be eligible to
receive, for each calendar year or portion thereof occurring during the
Term, an annual performance bonus (the "Annual Bonus") in an amount equal to
one hundred fifty percent(150%) of the Executive's Base Salary for such calendar
year or portion thereof; provided that the bonus for the year ending December
31, 1999 shall be equal to 150% of the Executive's Base Salary for an entire
year. The amount of any such Annual Bonus shall be based upon the performance
of the Company and determined in accordance with the procedures set forth
on Exhibit A hereto. The Annual Bonus shall be paid to the Executive at such
time or times as is in accordance with the then prevailing policy of the
Company relating to incentive compensation payments.
(2) No later than the next annual meeting of shareholders of the
Company, the Company shall submit to its shareholders (the
"Shareholders") for approval, with a recommendation of the Board of
Directors of the Company of such approval, an Executive Incentive Plan which,
among other things, covers the Annual Bonus provided for in this Agreement.
If the Executive Incentive Plan is approved by the Shareholders, the
Executive will be entitled to the Annual Bonus if earned in accordance with
the terms and conditions of the Executive Incentive Plan. If the Executive
Incentive Plan is not approved by the Shareholders, the Company shall not be
obligated to pay the Annual Bonus for any year prior to the year for which the
plan is subsequently approved. If the Company fails to submit such Executive
Incentive Plan to the Shareholders with such a recommendation by the
Board of Directors by the next annual meeting of shareholders of the
Company, the Company shall remain obligated to pay the Annual Bonuses which
accrue after 1999 as and when they become due under the terms of
subsection (a) of this Section 2.2.
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If the Company is not obligated to pay the Annual Bonus as a result of the
failure of the Shareholders to approve such Executive Incentive Plan, the
Company and the Executive shall attempt for a period of 30 days to agree upon
another form or method of compensation to the Executive to adjust for the
loss of the opportunity to earn the Annual Bonuses. If the Company and
the Executive, each in their sole and absolute discretion, can not agree on
another form or method of compensation, the Executive, upon 30 days written
notice to the Company, may terminate this Agreement. In the event of such
termination, the Executive shall be entitled to a lump sum payment of one
year's Base Salary and continuation of all Benefits and Other Benefit Plans for
a period of one year.
2.3. Participation in Employee Benefit Plans. The Company agrees to permit the
Executive during the Term to participate in any group life, hospitalization
and/or disability insurance plan, health program, supplemental executive
retirement plan, nonqualified compensation plan, pension and/or savings plans,
long-term incentive plan, receive "fringe benefits," club memberships and
automobile allowance, and participate in such other benefit plans or programs of
the Company (collectively "Benefits") subject to the generally applicable
eligibility requirements relating to such Benefits.
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The Company also agrees to continue to provide to the Executive substantially
the same benefits, programs and privileges which it currently provides to
the Executive and to implement such other benefit plans (the "Other Benefit
Plans") for the benefit of the Executive to the extent the Company offers its
comparable senior executives benefits that are not currently offered by the
Company. The Company also agrees to provide life insurance to the Executive
during the Term at least equivalent to the life insurance coverage provided
to the Executive under the existing split dollar insurance maintained by the
Company.
2.4. General Business Expenses. The Company shall pay or reimburse the Executive
for all expenses that are incurred by the Executive in the performance of the
Executive's duties under this Agreement in accordance with its regular expense
reimbursement policies and procedures upon presentation of such documentation as
the Company customarily requires of its executive employees prior to making such
payments or reimbursements.
2.5. Vacation. During the Term, the Executive shall be entitled to six (6) weeks
of vacation per year. The Executive shall not be permitted to accumulate and
carryover unused vacation time or pay from year to year except to the extent
permitted in accordance with the Company's vacation policy for senior
executives.
2.6. Tax Withholding. All payments required to be made to the Executive shall
be reduced by any amount required to be deducted or withheld therefrom by
applicable law or regulation.
3. Termination.
3.1.Termination upon Death or Disability. If the Executive either dies or
becomes entitled to benefits under a Company long-term disability plan or
program during the Term (whether before or after a Change of Control),
the Term shall automatically terminate thereupon, and the Executive or the
Executive's estate, as the case may be, shall be entitled to receive, in
addition to any life insurance or disability benefits which are payable,
as soon as reasonably practicable after the separate determinations thereof,
(i) a lump sum payment equal to the Base Salary for the remaining Term (as
otherwise determined before such termination), (ii) any unpaid vested
Benefits accrued up to such date of termination, (iii) an amount equal to the
product of (a) the Annual Bonus, if any, otherwise payable with respect to the
year in which the Term is terminated, multiplied by (b) a fraction, the
numerator of which is the number of days elapsed in such year as of the
termination date and the denominator of which is 365. These items are in
addition to and shall not reduce any other benefits to which the Executive or
his estate may be entitled.
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3.2. Other Termination.
(1) Termination By the Company. Notwithstanding any provision of the
Agreement to the contrary, the Company, with the approval of a majority of the
Board of Directors, has the right, at any time during the Term, exercisable by
serving written notice, effective on or after the date of service of such
notice as specified therein, to terminate the Executive's employment
under this Agreement and to discharge the Executive with or without Cause.
(2) Termination With Cause. Any termination of employment of the Executive
by the Company with Cause shall terminate the Term and thereafter no amounts
shall be payable to Executive under this Agreement except (i)his Base Salary
through the date of termination, and (ii) any unpaid vested Benefits, and
(iii) the Annual Bonuses, if any, payable with respect to the prior calendar
year if it has not yet been paid. All of the foregoing amounts shall be payable
in a lump sum, less such amounts as shall be required to be deducted or withheld
therefrom by applicable law and regulations, within fifteen (15) days after
the termination date.
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For purposes of this Agreement, "Cause" shall mean (i) the conviction of
the Executive of a felony specifically involving his actions with respect
to the Company, (ii) the Executive's willful refusal without legal cause to
perform his duties as Chief Executive Officer of the Company which refusal
continues for more than thirty (30) days after written notice to the
Executive from the Board of Directors of the Company directing the Executive
to discontinue same, or (iii) a material breach of his fiduciary duty to the
Company through the misappropriation of funds or property of the Company.
Nothing in this Agreement shall prevent the Executive's right to terminate his
employment with the Company.
(3) Termination Without Cause; Termination by the Employee for Good Reason
or Termination Following Change of Control. Notwithstanding any
provision of this Agreement to the contrary, in the event that the
Executive's employment is terminated following a Change of Control of the
Company, by the Company without Cause or by the Employee for Good Reason, the
following amounts shall be payable or provided by the Company: (i) the Base
Salary then earned, but unpaid, plus an amount equal to the Base Salary
which would have been earned up to and including the end of the Term (as
otherwise determined before such termination), (ii) any unpaid vested
Benefits accrued to such date of termination, (iii) an amount equal to the
aggregate Annual Bonuses which would have been payable on account of any
periods ending on or before the end of the Term (as otherwise determined
before such termination) which bonuses shall, for each such period be equal to
one hundred fifty percent (150%) of the then current Base Salary.
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All of the foregoing amounts shall be payable in a lump sum, less such amounts
as shall be required to be deducted or withheld therefrom by applicable law and
regulations, within fifteen (15) days after the termination date. To the
extent the Executive is eligible thereunder, for a period through the end of
the Term (as otherwise determined before such termination), the
Executive shall continue to be provided life insurance, disability,
long-term disability policies and any other Benefits provided to the
Executive on the date hereof, or such successor policies in effect at
the time of the Executive's termination, and shall also continue to be
covered for the applicable period by such other insurance, disability,
health or other Benefit program, plan or policy by which he was covered
at the time of the Executive's termination. In the event the Executive is
ineligible to continue to be so covered under the terms of any such life
insurance, disability, long-term disability, insurance, health or other
Benefit program, plan or policy, the Company shall provide to the Executive
through other sources such benefits, including such additional
benefits, as may be necessary to make the benefits applicable to the
Executive substantially equivalent to those in effect immediately prior to such
termination.
For purposes of this Agreement, a "Change of Control" of the Company shall be
deemed to occur upon the happening of any of the following:
(1) individuals who, on the date hereof, constitute the Board (the
"Incumbent Directors") cease for any reason to constitute at least a majority
of the Board, provided that any person becoming a director subsequent
to the date hereof, whose election or nomination for election was approved by
a vote of at least two-thirds of the Incumbent Directors then on the Board
(either by a specific vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for director, without
written objection to such nomination)
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shall be an Incumbent Director; provided however, that no individual
initially elected or nominated as a director of the Company as a result of
an actual or threatened election contest (as described in Rule 14a-11 under
the Securities Exchange Act of 1934 (the "Act") ("Election Contest") or
other actual or threatened solicitation of proxies or consent by or on
behalf of any "person" (as such term is defined in Section 3(a)(9) of the
Act and as used in Sections 13(d)(3) and 14(d)(2) of the Act) other than
the Board ("Proxy Contest"), including by reason of any agreement intended to
avoid or settle any Election Contest or Proxy Contest, shall be deemed an
Incumbent Director;
(2) any person is or becomes a "beneficial owner" (as defined in
Rule 13d-3 under the Act), directly or indirectly, of securities of the
Company representing 25% or more of the combined voting power of the
Company's then outstanding securities eligible to vote for the election of the
Board (the "Company Voting Securities"); provided, however, that the event
described in this paragraph (ii) shall not be deemed to be a Change in Control
of the Company by virtue of any of the following acquisitions: (A) by the
Company or any subsidiary, (B) by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any subsidiary, (C) by any
underwriter temporarily holding securities pursuant to an offering of such
securities, (D) pursuant to a Non-Qualifying Transaction (as defined in
paragraph (iii)), (E) pursuant to any acquisition by the Executive or any
group of persons including the Executive (or any entity controlled by the
Executive or any group of persons including the Executive); or (F) a
transaction (other than one described in (iii) below) in which Company
Voting Securities are acquired from the Company, if a majority of the
Incumbent Directors (including the Executive if he is then an Incumbent
Director) approve a resolution providing expressly that the acquisition
pursuant to this clause (F) does not constitute a Change in Control of the
Company under this paragraph (ii).
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(3) the consummation of a merger, consolidation, statutory share exchange
or similar form of corporate transaction involving the Company or any of its
subsidiaries that requires the approval of the Company's stockholders,
whether for such transaction or the issuance of securities in the transaction
(a "Reorganization"), or sale or other disposition of all or substantially
all of the Company's assets to an entity that is not an affiliate of the
Company (a "Sale"), unless immediately following such Reorganization or
Sale: (A) more than 60% of the total voting power of (x) the corporation
resulting from such Reorganization or the corporation which has acquired all or
substantially all of the assets of the Company (in either case, the "Surviving
Corporation), or (y) if applicable, the ultimate parent corporation that
directly or indirectly has beneficial ownership of at least a majority of the
voting securities eligible to elect directors of the Surviving Corporation
(the "Parent Corporation"), is represented by Company Voting Securities
that were outstanding immediately prior to such Reorganization or Sale
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(or, if applicable, is represented by shares into which such Company Voting
Securities were converted pursuant to such Reorganization or Sale), and such
voting power among the holders thereof is in substantially the same proportion
as the voting power of such Company Voting Securities among the holders thereof
immediately prior to the Reorganization or Sale, (B) no person (other than the
Executive and affiliates of the Executive or any employee benefit plan (or
related trust)sponsored or maintained by the Surviving Corporation or the
Parent Corporation), is or becomes the beneficial owner, directly or
indirectly, of 25% or more of the total voting power of the outstanding voting
securities eligible to elect directors of the Parent Corporation (or, if there
is no Parent Corporation, the Surviving Corporation) and (C)at least a majority
of the members of the board of directors of the Parent Corporation (or, if
there is no Parent Corporation, the Surviving Corporation) following the
consummation of the Reorganization of the Reorganization or Sale were
Incumbent Directors at the time of the Board's approval of the execution
of the initial agreement providing for such Reorganization or Sale (any
Reorganization or Sale which satisfies all of the criteria specified in (A), (B)
and (C) above shall be deemed to be a "Non-Qualifying Transaction"); or
(4) the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company. Notwithstanding the foregoing, a Change in
Control of the Company shall not be deemed to occur solely because any person
acquires beneficial ownership of more than 25% of the Company Voting
Securities as a result of the acquisition of Company Voting Securities by
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the Company which reduces the number of Company Voting Securities outstanding;
provided, that if after such acquisition by the Company such person
becomes the beneficial owner of additional Company Voting Securities that
increases the percentage of outstanding Company Voting Securities
beneficially owned by such person, a Change in Control of the Company shall
then occur.
For purposes hereof, "Good Reason" shall mean
(1) Removal without the consent of the Executive in
writing, from any of the offices now held by the Executive in the Company
or any subsidiary of the Company, or any material reduction in Executive's
authority or responsibility, other than or a result of a termination for
Cause or on account of disability.
(2) The Company otherwise commits a material breach of his Agreement.
3.3. Certain Additional Payments by the Company. Anything in this Agreement to
the contrary notwithstanding, in the event it shall be determined that any
payment or distribution by the Company to or for the benefit of the Executive,
whether paid or payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise (a "Payment"), would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code") or any interest or penalties with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Executive shall be
entitled to receive an additional payment (a "Gross-Up Payment") in an amount
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such that after payment by the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including any Excise Tax imposed
upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments. Subject to the
provisions of this Section 3.3, all determinations required to be made
hereunder, including whether a Gross-Up Payment is required and the amount of
such Gross-Up Payment, shall be made by Ernst & Young or such other accounting
firm selected by the Executive (the "Accounting Firm") at the sole expense of
the Company, which shall provide detailed supporting calculations both to the
Company and the Executive within fifteen (15) business days of the date of
termination of the Executive's employment under this Agreement, if applicable,
or such earlier time as is requested by the Company. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, the Accounting Firm
shall furnish the Executive with an opinion that he has substantial authority
not to report any Excise Tax on his federal income tax return. Any determination
by the Accounting Firm shall be binding upon the Company and the Executive. As a
result of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments, which will not have been made by the Company
should have been made (an "Underpayment"), consistent with the calculations
required to be made hereunder. If the Company exhausts its remedies pursuant
hereto and the Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company to or
for the benefit of the Executive.
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The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive knows of
such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. The Executive shall not pay
such claim prior to the expiration of the 30-day period following the date on
which it gives such notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due). If the
Company notifies the Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:
(1) give the Company any information reasonably requested by the Company
relating to such claim,
(2) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time,
including (without limitation) accepting legal representation with respect
to such claim by an attorney reasonably selected by the Company,
(3) cooperate with the Company in good faith to contest effectively such claim,
and
(4) permit the Company to participate in any proceedings relating to such
claim; provided that the Company shall bear and pay directly all ,costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax, including interest and
penalties with respect thereto, imposed as a result of such representation
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and payment of costs and expenses. Without limitation on the foregoing
provisions hereof the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo
any and all administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and may, at its sole
option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive
agrees to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine, provided that if the Company
directs the Executive to pay such claim and sue for a refund, the Company shall
advance the amount of such payment to the Executive, on an interest-free
basis and shall indemnify and hold the Executive harmless, on an after-tax
basis, from any Excise Tax or income tax, including interest or penalties
with respect thereto, imposed with respect to such advance or with respect
to any imputed income with respect to such advance, and further provided that
any extension of the statute of limitations relating to payment of taxes for
the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.
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If, after the receipt by the Executive of an amount advanced
by the Company pursuant hereto, the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements hereof) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant hereto, a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive
in writing of its intent to contest such denial of refund prior to the
expiration of thirty (30) days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
4. Other Provisions.
4.1. Nondisclosure. During the term of this Agreement and thereafter, the
Executive shall not, without the prior written consent of the Board of
Directors, disclose or use for any purpose (except in the course of his
employment under this Agreement and in furtherance of the business of the
Company confidential information or proprietary data of the Company (or any of
its subsidiaries), except as required by applicable law or legal process;
provided, however, that confidential information shall not include any
information known generally to the public or ascertainable from public or
published information (other than as a result of unauthorized disclosure by the
Executive) or any information of a type not otherwise considered confidential by
persons engaged in the same business or a business similar to that conducted by
the Company (or any of its subsidiaries.
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4.2. Noncompetition. The Company and the Executive agree that the services
rendered by Employee hereunder are unique and irreplaceable. The Executive
hereby agrees that, during the term of this Agreement and for a period of
six months thereafter, if the Executive's employment is terminated by the
Company for Cause or by the Executive without Good Reason, he shall not
(except in the course of his employment under this Agreement and in
furtherance of the business of the Company (or any of its subsidiaries) (i)
engage in as principal, consultant or employee in any segment of a business of
a company, partnership or firm ("Business Segment") that is directly
competitive with any significant business of the Company in one of its major
commercial or geographic markets or (ii) hold an interest (except as a
holder of a less than 5% interest in a publicly traded firm or mutual fund, or
as a minority stockholder or unitholder in a firm not publicly traded) in a
company, partnership, or firm with a Business Segment that is directly
competitive with the Company, without prior written consent of the Company.
4.3. Remedies. The Executive acknowledges that irreparable damage would result
to the Company if the provisions of paragraph 4.1 or 4.2 above are not
specifically enforced and agrees that the Company shall be entitled to any
appropriate legal, equitable or other remedy, including injunctive relief, in
respect of any failure to comply with such provisions.
4.4. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage prepaid. Any such notice shall be deemed
given when so delivered personally, telegraphed, telexed or sent by facsimile
transmission or, if mailed, on the date of actual receipt thereof, as follows:
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(i) If to the Company, to:
Riggs National Corporation
800 17th Street, N.W.
Washington, D.C. 20006
Attention: Director
Human Resources
(ii) If to the Executive, to:
Joe L. Allbritton
800 17th Street, N.W.
Washington, D.C. 20006
Any party may change its address for notice hereunder by notice to the
other party hereto.
4.5. Entire Agreement. This Agreement, including the attached Exhibit A which is
a part hereof for all purposes, contains the entire agreement and understanding
between the parties with respect to the subject matter hereof and supersedes all
prior agreements, written or oral, with respect thereto.
4.6. Governing Law; Validity. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which other
provisions shall remain in full force and effect.
4.7. Assignment. The obligations of the Executive hereunder are personal and
may not be assigned or delegated by him or transferred in any manner
whatsoever, nor are such obligations subject to involuntary alienation,
assignment or transfer. The Company shall have the right to assign this
Agreement and to delegate all rights, duties and obligations hereunder,
either in whole or in part, to any parent, affiliate, successor or
subsidiary organization or company of the Company, so long as the
obligations of the Company under this Agreement remain the obligations of the
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Company and of the Company, that the Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise), to all or
substantially all of the business and/or assets of the Company, by agreement
in form and substance reasonably acceptable to the Executive, to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.
4.8. Termination. Except as otherwise provided expressly herein, this
Agreement shall terminate on July 15, 2004.
5. Resolution of Disputes.
5.1. Negotiation. The parties shall attempt in good faith to resolve any dispute
arising out of or relating to this Agreement promptly by negotiations between
the Executive and a representative of the Compensation Committee of the Company
who has authority to settle the controversy. Any party may give the other party
written notice of any dispute not resolved in the normal course of business.
Within ten (10) days after the effective date of such notice, the Executive and
a representative of the Compensation Committee of the Company shall meet as
often as they reasonably deem necessary, to exchange relevant information and to
attempt to resolve the dispute. If the matter has not been resolved within
thirty (30) days of the disputing party's notice, or if the parties fail to meet
within ten (10) days, either party may initiate arbitration of the controversy
or claim as provided hereinafter. If a negotiator intends to be accompanied at a
meeting by an attorney, the other negotiator shall be given at least three
business days' notice of such intention and may also be accompanied by an
attorney. All negotiations pursuant to this Section 5.1 shall be treated as
compromise and settlement negotiations for the purposes of the federal and state
rules of evidence and procedure.
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5.2. Arbitration. Any dispute arising out of or relating to this Agreement or
the breach, termination or validity thereof, which has not been resolved by
non-binding means as provided in Section 5.1 within sixty (60) days of the
initiation of such procedure, shall be finally settled by arbitration conducted
expeditiously in accordance with the Center for Public Resources, Inc.
("CPR") Rules for Non-Administered Arbitration of Business Disputes by three
independent and impartial arbitrators, of whom each party shall appoint
one, provided that if one party has requested the other to participate in
a non-binding procedure and the other has failed to participate, the
requesting party may initiate arbitration before the expiration of such
period. Any such party shall be appointed from the CPR Panels of Neutrals. The
arbitration shall be governed by the United States Arbitration Act and any
judgment upon the award decided upon the arbitrators may be entered by any court
having jurisdiction thereof. The arbitrators are not empowered to award damages
in excess of compensatory damages and each party hereby irrevocably waives any
damages in excess of compensatory damages. Each party hereby acknowledges that
compensatory damages include (without limitation) any benefit or right of
indemnification given by another party to the other under this Agreement.
5.3. Expenses. The Company shall promptly pay or reimburse the Executive for all
costs and expenses, including, without limitation, court costs and attorneys'
fees, reasonably incurred by the Executive as a result of any claim, action or
proceeding (including, without limitation a claim, action or proceeding by the
Executive against the Company) arising out of, or challenging the validity or
enforceability of, this Agreement or any provision hereof.
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6. Successors. This Agreement shall be binding upon and inure to the benefit
of the Executive and his heirs, executors, administrators and legal
representatives. This Agreement shall be binding upon and inure to the benefit
of the Company and its successors and assigns.
7. No Mitigation or Set-Off. The provisions of this Agreement are not intended
to, nor shall they be construed to, require that the Executive mitigate the
amount of any payment provided for in this Agreement by seeking or accepting
other employment, nor shall the amount of any payment provided for in this
Agreement be reduced by any compensation earned by the Executive as a
result of his employment by another employer or otherwise. The Company's
obligations to make the payments to the Executive required under this Agreement
and otherwise to perform its obligations hereunder shall not be affected by any
set off, counterclaim, recoupment, defense or other claim, right or action that
`the Company may have against the Executive.
8. Amendment. No provision of this Agreement may be modified or waived unless
such modification or waiver is agreed to in writing and signed by the Executive
and by a duly authorized officer of the Company who has been authorized to sign
by the Compensation Committee of the Company. No waiver by either party hereto
at any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. Failure by the Executive or the
Company to insist upon strict compliance with any provision of this Agreement or
to assert any right the Executive or the Company may have hereunder, including
without limitation, the right of the Executive to terminate employment for Good
Reason, shall not be deemed to be a waiver of such provision or right or any
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other provision or right of this Agreement. Except as otherwise specifically
provided herein, the rights of, and benefits payable to, the Executive, his
estate or his beneficiaries pursuant to this Agreement are in addition to any
rights of, or benefits payable to, the Executive, his estate or his
beneficiaries under any other employee benefit plan or compensation program of
the Company.
9. Full Settlement. The Company's obligation to make any payments provided for
in this Agreement in respect of the Executive's termination of employment
and otherwise to perform its obligations hereunder shall be in lieu and in
full settlement of all other severance payments to the Executive under any
severance plan of the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
for all purposes as of the date first above written.
RIGGS NATIONAL CORPORATION
By:/s/ TIMOTHY C. COUGHLIN
-----------------------
Name: Timothy C. Coughlin
-------------------
Title: President
---------
/s/ JOE L. ALLBRITTON
-----------------
Joe L. Allbritton
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EXHIBIT A
Any capitalized term used herein which is not otherwise defined shall
have the meaning attributed to it in the Executive's Employment Agreement (the
"Employment Agreement").
The Employment Agreement provides that the Executive shall be paid an
Annual Bonus as determined by the Compensation Committee (or a subcommittee
thereof comprised solely of "outside directors," within the meaning of Section
162(m) of the Internal Revenue Code of 1986, if the Committee is not so
comprised, and references herein to the Compensation Committee shall be deemed
references to such subcommittee). The purpose of this Exhibit is to set forth
the procedure for (i) setting the annual objectives (the "Objective") for each
year, (ii) determining whether the Objective has been obtained, and (iii)
setting the magnitude of the Annual Bonus based upon the Company's performance
vis-a-vis the Objective.
On or prior to February 28 of each calendar year, the Executive shall
submit a proposed business plan to the Compensation Committee. The business plan
shall set forth a forecast of the net income after tax for the Company for the
then current year. The proposed business plan shall be subject to review and
approval by the Compensation Committee. The Executive and the Compensation
Committee shall discuss in good faith any revisions to the proposed plan
required by the Compensation Committee, but notwithstanding such discussions,
the business plan shall be subject to the approval of the Compensation Committee
in the exercise of its discretion. On or prior to the 90th day of each calendar
year, the Compensation Committee shall determine, based on the business plan,
specific objective performance criteria which must be met for the Executive to
receive the Annual Bonus; provided however, the Executive shall be entitled to
receive an Annual Bonus with respect to calendar year 1999 if the Company's net
income available for Common Stock for the five months ended December 31, 1999
equals or exceeds an amount determined by the Compensation Committee on or prior
to August 27, 1999.
Within ten (10) days after the year end financial results of the
Company are made available to the Compensation Committee, it shall determine
whether, in its good faith judgment, the Objective has been met or exceeded.
Based upon the Compensation Committee's conclusions with respect to the
Company's performance vis-a-vis the Objective, the Executive shall be entitled
to the Annual Bonus.
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