PVTB » Topics » POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

This excerpt taken from the PVTB DEF 14A filed May 4, 2009.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
 
Our employment agreements with Messrs. Richman, Klaeser, Hague, Lubin and Van Solkema include the following provisions:
 
General Provisions
• Title, duties and responsibilities
 
Compensation Provisions
• Minimum level of base salary, subject to review and possible increase from time-to-time; decrease limited to across-the board salary reductions applicable to senior executives
 
• Participation in annual bonus plan with minimum target opportunity, equity awards, and other benefit and fringe benefit plans
 
• Inducement equity grant and potential “make whole” and other bonuses for newly-recruited officers or a special equity grant for members of existing management
 
Severance Protection
• Triggered in event of involuntary termination without cause or voluntary resignation for good reason, generally triggered by an uncured breach of the agreement by the Company or a requirement that the executive relocate
 
• Severance benefits based on 100% to 150% of base salary plus the average annual bonus for prior 3 years (or such lesser number of years that executive has been employed and based on target bonus for the initial year); plus a pro rata bonus for the year of termination based on the prior year’s bonus (or target bonus for the initial year); subsidized health insurance coverage for 12 to 18 months; and partial or full vesting of inducement or special equity awards
 
Change in Control Protection
• Triggered in event of involuntary termination without cause or voluntary resignation for good reason within two years following or six months prior to a change in control
 
• Severance benefits equal to 150% to 300% of base salary and the higher of the prior year’s bonus or the average of the last 3 years’ annual bonuses, plus a pro rata bonus for the year of termination, subsidized health insurance coverage for 18 to 36 months and outplacement assistance
 
• Full golden parachute excise tax gross up if payments exceed the threshold level for the golden parachute tax by more than 10%; if the excess is less than 10%, the payments will be reduced below the threshold (except in the case of Mr. Richman)


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Confidentiality and Restrictive Covenants
• Obligated to not disclose or misuse confidential information
 
• Precluded from soliciting clients or customers to not do business with the Company while employed or for one year thereafter
 
• Precluded from soliciting employees to terminate their employment with the Company
 
• Precluded from joining a competing financial institution while employed or for one year thereafter
 
• Breach of non-competition provision results in forfeiture of inducement and special equity award and obligation to return any shares then held or amounts realized upon sale of shares from those awards received during three-year period preceding date of termination
 
• Breach of other commitments subjects executive to suit for injunctive relief and damages
 
Information with respect to the levels of base salary, annual bonus opportunity, inducement equity, sign-on, make-whole or special retention awards provided to Messrs. Richman, Klaeser, Hague, Lubin and Van Solkema is included in the Compensation Discussion and Analysis and tables and narrative set forth above. Information with respect to our agreement with Mr. Killips, our new Chief Financial Officer, is also included in the Compensation Discussion and Analysis.
 
The following discussion looks at each termination of employment situation — voluntary resignation, discharge for cause, discharge without cause, resignation due to constructive discharge, death or disability, and a change in control of the Company, and describes any additional amounts that the Company would pay or provide to these executive officers or their beneficiaries as a result. The discussion below and the amounts shown reflect certain assumptions we have made in accordance with the SEC’s rules. These assumptions are that the termination of employment or change in control occurred on December 31, 2008 and that the value of a share of our stock on that day was $32.46, the closing price on December 31, 2008, the last trading day of 2008.
 
In addition, the following discussion and amounts do not include the payments and benefits that are not enhanced by the termination of employment or change in control. These payments and benefits include:
 
  •  benefits accrued under the Company’s KSOP in which all employees participate;
 
  •  accrued vacation pay, health plan continuation and other similar amounts payable when employment terminates under programs applicable to the Company’s salaried employees generally;
 
  •  balances accrued under our Deferred Compensation Plan;
 
  •  make-whole bonus payments (Messrs. Hague, Lubin and Van Solkema) earned but not yet paid;
 
  •  stock options that have vested and are exercisable; and
 
  •  shares of restricted stock that have vested.
 
For convenience, the payments and benefits described above are referred to in the following discussion as the executive’s “vested benefits.”
 
Finally, as required by SEC rules, we have presented information relating to Mr. Klaeser under each of the termination scenarios, as if his termination occurred December 31, 2008. As discussed elsewhere in this proxy statement, Mr. Klaeser’s employment terminated March 31, 2009 under circumstances entitling him to severance benefits under his employment agreement. Mr. Klaeser is entitled to severance benefits consisting of 12 months payments of approximately $38,820 each, subsidized medical insurance and accelerated vesting


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with respect to approximately 27,000 stock options granted as part of his 2007 special equity awards. Because these amounts were calculated as of March 31, 2009, they differ from the amounts in the following tables.
 
This excerpt taken from the PVTB DEF 14A filed Apr 4, 2008.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
 
Our current agreements are based on the form of agreements used in the recruitment of Mr. Richman and the other former LaSalle officers. In addition to the agreements with the newly-recruited executives, we entered into new agreements with our foundation officers patterned after the agreements for the new recruits. In general, the employment agreements we have entered into with Messrs Richman, Klaeser, Hague and Lubin, Ms. Case and our other current executive officers include the following provisions:
 
     
Agreement Provision   Description
 
General Provisions
 
•   Title, duties and responsibilities
Compensation Provisions
 
•   Minimum level of base salary, subject to review and possible increase from time-to-time; decrease limited to across-the board salary reductions applicable to senior executives
   
•   Participation in annual bonus plan with minimum target opportunity, equity awards, and other benefit and fringe benefit plans
   
•   Inducement equity grant and potential “make whole bonus” for newly-recruited officers; a special equity grant for members of existing management
Severance Protection
 
•   Triggered in event of involuntary termination without cause or voluntary resignation for good reason, generally triggered by an uncured breach of the agreement by the Company or a requirement that the executive relocate
   
•   Severance benefits based on 100% to 150% of base salary and average annual bonus for prior 3 years; pro rata bonus for the year of termination based on the prior year’s bonus; subsidized health care premiums for 12 to 18 months; and partial or full vesting of inducement or special equity awards
Change in Control Protection
 
•   Triggered in event of involuntary termination without cause or voluntary resignation for good reason following change in control
   
•   Severance benefits equal to 200 percent to 300 percent of base salary and higher of prior year or 3-year average annual bonus, a pro rata bonus for the year of termination, subsidized health care premiums for 24 to 36 months and outplacement assistance
   
•   Full golden parachute excise tax gross up if payments exceed the threshold level for the golden parachute tax by more than 10%; if the excess is less than 10%, the payments will be reduced below the threshold


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Agreement Provision   Description
 
Confidentiality and Restrictive Covenants
 
•   Obligated to not disclose or misuse confidential information
   
•   Precluded from soliciting clients or customers to not do business with the Company while employed or for one year thereafter, provided this limitation does not apply to former customers of LaSalle Bank with whom executive had contact if termination of employment prior to December 31, 2008
   
•   Precluded from joining a competing financial institution while employed or for one year thereafter, provided, this restriction does not apply to the newly recruited officers if employment terminates prior to December 31, 2008
   
•   Breach of non-competition provision results in forfeiture of inducement and special equity award and obligation to return any shares then held or amounts realized upon sale of shares from those awards received during three-year period preceding breach
   
•   Breach of other commitments subjects executive to suit for injunctive relief and damages
 
In connection with the management succession and Strategic Growth Plan, Mr. Mandell became the executive Chairman of the Board of Directors. As a result, we entered into changes to Mr. Mandell’s employment arrangements to provide for his continuing service through 2012. Mr. Mandell’s base compensation has been set at $660,000 for 2007, $710,000 for 2008 and $760,000 for 2009, with a target bonus in each of those years of 185% of base salary and annual equity awards with a value of $600,000, provided one-half in stock options and one-half in restricted stock. Mr. Mandell will be entitled to receive total compensation of $2 million in 2010 and $1 million in each of 2011 and 2012, and will not participate in bonus or incentive plans during those years. Mr. Mandell also received a special retention equity award and a succession equity award.
 
Information with respect to the levels of base salary, annual bonus opportunity, inducement equity, sign-on, make-whole or special retention awards provided to Messrs. Richman, Klaeser, Hague and Lubin and Ms. Case and compensation provided to Mr. Mandell, is set forth in the Compensation Discussion and Analysis and tables and narrative set forth above. The following discussion looks at each termination of employment situation — voluntary resignation, discharge for cause, discharge without cause, resignation due to constructive discharge, death and disability — and a change in control of the Company, and describes any additional amounts that the Company would pay or provide to these executive officers or their beneficiaries as a result. The discussion below and the amounts shown reflect certain assumptions we have made in accordance with the SEC’s rules. These assumptions are that the termination of employment or change in control occurred on December 31, 2007 and that the value of a share of our stock on that day was $32.65, the closing price on December 31, 2007, the last trading day of 2007.
 
In addition, the following discussion and amounts do not include the payments and benefits that are not enhanced by the termination of employment or change in control. These payments and benefits include:
 
  •  benefits accrued under the Company’s KSOP in which all employees participate;
 
  •  accrued vacation pay, health plan continuation and other similar amounts payable when employment terminates under programs applicable to the Company’s salaried employees generally;
 
  •  balances accrued under our Deferred Compensation Plan;
 
  •  stock options that have vested and become exercisable; and
 
  •  shares of restricted stock that have vested.
 
For convenience, the payments and benefits described above are referred to in the following discussion as the executive’s “vested benefits.”

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This excerpt taken from the PVTB DEF 14A filed Mar 14, 2007.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
 
We have entered into agreements and maintain plans covering our NEOs that will require the Company to provide incremental compensation in the event of retirement, involuntary termination of employment or a change in control of the Company. We describe these obligations below.
 
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