Exhibit 10.1
EMPLOYMENT AGREEMENT
Employment Agreement (this "Agreement") dated as of June 10, 1998, by and
between The First Bancshares, Inc., a Mississippi corporation (the "Employer"),
which is the proposed bank holding company for The First National Bank of the
Pine Belt, a proposed national bank (the "Bank"), and Xxxxxxx X. Xxxxxxxx, an
individual residing in Laurel, Xxxxx County, Mississippi (the "Executive").
W I T N E S S E T H:
WHEREAS, the Employer intends to employ the Executive as President and CEO of
the Bank, which is proposed, and intends to assure the Executive that his
employment will be of a reasonably secure nature; and
WHEREAS, the Employer desires to provide for the employment of the Executive
pursuant to this Agreement; and
WHEREAS, the Executive desires to be employed by the Employer pursuant to this
Agreement; and
WHEREAS, it is the intent of the parties that this Agreement will be assigned
to the Bank;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Employer and the
Executive hereby agree as follows:
Section 1. Definitions. For the purpose of this Agreement, the terms used as
headings in this Section 1, and parenthetically defined elsewhere in this
Agreement, shall have the indicated meanings.
1.1. Adequate Justification. The occurrence after a Change in Control of any
of the following events or conditions: (i) a material failure of the Employer
to comply with the terms of this Agreement, (ii) any relocation of the
Executive outside the Territory, as amended from time to time, that is not
approved by a majority of the members of the Board of Directors who were part
of the Organizing Group, or (iii) other than as provided for herein, any
substantial diminution in the Executive's authority or the Executive's
responsibilities that is not approved by a majority of the members of the Board
of Directors who were a part of the Organizing Group.
1.2. Affiliate. Any business entity controlled by, controlling or under
common control with the Employer.
1.3. Board of Directors. The Board of Directors of the Employer.
1.4. Business. The operation of a depository financial institution,
including, without limitation, the solicitation and acceptance of deposits of
money and commercial paper, the solicitation and funding of loans, and the
provision of other banking services, and any other related business engaged in
by the Employer or any of its Affiliates as of the date of termination.
1.5. Cause. As defined in Section 7.3(a)(iii).
1.6. Change in Control. The occurrence during the Term of any of the
following events:
(a) The individuals who, as of the date of this Agreement, are members of the
Board of Directors (the "Incumbent Board") cease for any reasons to constitute
at least a majority of the Board of Directors; provided, however, that if the
election, or nomination for election by the Employer's shareholders, of any new
director was approved in advance by a vote of at least a majority of the
Incumbent Board, such new director shall, for purposes of this Agreement, be
considered as a member of the Incumbent Board; provided, further, that no
individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as result of either an actual or threatened
"Election Contest" (as described in Rule 14a-11 promulgated under the
Securities Exchange Act of 1934 (the "Exchange Act") or other actual or
threatened solicitation of proxies or consents by or on behalf of any person
other than the Board of Directors (a "Proxy Contest"), including by reason of
any agreement intended to avoid or settle any Election Contest or Proxy
Contest.
(b) An acquisition (other than directly from the Employer) of any voting
securities of the Employer (the "Voting Securities") by any "Person" (as the
term "person" is used for purposes of Section 13(d) or 14(d) of the Exchange
Act) immediately after which such Person has "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the
combined voting power of the Employer's then outstanding Voting Securities;
provided, however, that in determining whether a Change in Control has
occurred, Voting Securities which are acquired in a Non-Control Acquisition
shall not constitute an acquisition which would cause a Change in Control.
(c) Approval by the shareholders of the Employer of: (i) a merger,
consolidation, or reorganization involving the Employer, unless such merger,
consolidation, or reorganization is a Non-Control Transaction; (ii) a complete
liquidation or dissolution of the Employer; or (iii) an agreement for the sale
or other disposition of all or substantially all of the assets of the Employer
to any Person (other than a transfer to a Subsidiary).
(d) A notice of an application is filed with the Federal Reserve Board (the
"FRB") pursuant to Regulation "Y" of the FRB under the Change in Bank Control
Act or the Bank Holding Employer Act for permission to acquire control of the
Employer or any of its banking subsidiaries.
1.7 COBRA. Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.
1.8. Common Stock. The common stock of the Employer, par value $1.00 per
share.
1.9. Competing Business. Any business that, in whole or in part, is the same
or substantially the same as the Business.
1.10. Confidential Business Information. Any non-public information of a
competitively sensitive or personal nature, other than Trade Secrets, acquired
by the Executive, directly or indirectly, in connection with the Executive's
employment (including his employment with the Employer prior to the date of
this Agreement), including (without limitation) oral and written information
concerning the Employer or its Affiliates relating to financial position and
results of operations (revenues, margins, assets, net income, etc.), annual and
long-range business plans, marketing plans and methods, account invoices, oral
or written customer information, and personnel information. Confidential
Business Information also includes information recorded in manuals, memoranda,
projections, minutes, plans, computer programs, and records, whether or not
legended or otherwise identified by the Bank and its Affiliates as Confidential
Business Information, as well as information which is the subject of meetings
and discussions and not so recorded. Confidential Business Information shall
not include information that was available to the Executive on a non-
confidential basis prior to its disclosure to the Executive. Provided, however,
that Confidential Business Information disclosed by the Executive in violation
of this Agreement or otherwise placed in the public domain without the express
written consent of the Employer may not be used by the Executive on any action
arising under or related to this Agreement.
1.11. Escrow Period. The period from the date hereof to the date the escrow
agent releases the subscription proceeds from escrow.
1.12. Secondary Offering. The public offering of the Common Stock to raise
capital for the formation of the Bank.
1.13. Non-Control Acquisition. An acquisition by (a) an employee benefit plan
(or a trust forming a part thereof maintained by (i) the Employer or (ii) any
corporation or other Person of which a majority of its voting power or its
equity securities or equity interest is owned directly or indirectly by the
Employer (a "Subsidiary"), (b) the Employer or any Subsidiary, or (c) any
person in connection with a Non-Control Transaction.
1.14. Non-Control Transaction. A transaction described in clauses (a) and (b)
below:
(a) the shareholders of the Employer, immediately before such merger,
consolidation, or reorganization, own, directly or indirectly, immediately
following such merger, consolidation, or reorganization, at least two-thirds of
the combined voting power of the outstanding voting securities of the
corporation resulting from such merger, consolidation, or reorganization (the
"Surviving Corporation") in substantially the same proportion as their
ownership of the Voting Securities immediately before such merger,
consolidation, or reorganization, and
(b) the individuals who were members of the Incumbent Board immediately prior
to the execution of the agreement providing for such merger, consolidation, or
reorganization constitute at least two-thirds of the members of the board of
directors of the Surviving Corporation.
1.15. Opening Date. The date of the opening of the Bank.
1.16. Organizing Group. Xxx X. Xxxxxxxx, Xxxxxx X. (Xxxx) Chancellor, Xxxxxxx
X. Xxxxxxxxxx, Xxxxx Xxxx, Xxxxxx X. Xxxxx, M.D., Xxxxxxx X. Xxxxxxxx, Xxxx X.
(Xxx) Xxxxxxxxx, Xxxx X. XxXxxx, M.D., P.E. (Gene) Xxxxxx, Xxxxx Xxxxxx, Xxxxx
X. Xxxx, III, D.M.D., J. Xxxxxxx Xxxxxxxxxx, C.P.A., Xxxxx X. Xxxxxxx, Xxxx
Xxxxx, Xxxxxxx X. Xxxxx, Xxx. Xxxxx X. (Jo) Xxxxxx, and any other person that
the Board of Directors may add from time to time prior to the opening of the
Bank.
1.17. Term. As defined in Section 7.1.
1.18. Territory. A radius of 50 miles from (i) the main office of the Bank,
(ii) any branch office of the Bank or (iii) any office of the Employer or its
affiliates or holding company or companies.
1.19. Trade Secret. Any information, including, but not limited to, technical
or non-technical data, a formula, a pattern, a compilation, a program, a plan,
a device, a method, a technique, a drawing, a process, financial data,
financial plans, product plans, or a list of actual or potential customers or
suppliers, which: (a) derives economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from its disclosure or use, and
(b) is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.
1.20. UBPR. As defined in Section 5.3(b).
Section 2. Employment. (a) The Employer hereby employs the Executive to
serve in the positions described in Section 3 below during the Term and to
perform those acts and duties for, and to furnish services to, the Bank, the
Employer, and their Affiliates as may be designated from time to time by the
Board of Directors. The Executive hereby accepts such employment. The
Executive will have such executive or managerial duties as the Board of
Directors shall direct from time to time. In the performance of his duties
hereunder, the Executive shall comply with all laws, rules, and regulations
which may be applicable to the Employer and the Bank from time to time.
(b) The Executive shall use his best efforts to promote the interests of the
Employer, the Bank, and their Affiliates and shall devote his full business
time and attention to his employment under this Agreement. The Executive may
devote a reasonable amount of time to serve as a director or advisor to
charitable and community activities and to manage his personal investments;
provided, however, that such activities and investments do not materially
interfere with the performance of his duties hereunder and are not in conflict
or competitive with, or adverse to, the interests of the Employer, the Bank and
their Affiliates, in the sole judgment of the Board of Directors.
Section 3. Titles. The Executive shall hold the title of vice president of
the Employer until the Opening Date, at which time the Agreement will be
assigned to the bank and the Executive shall hold the title of President and
CEO of the Bank.
Section 4. Comepnsation and Benefits; Disability.
4.1. Compensation. The Employer shall pay the Executive a salary at a rate of
$85,000.00 per annum in accordance with the salary payment practices of the
Employer. The Board of Directors shall determine, in its sole discretion, with
the Executive abstaining from participating in the consideration of and vote on
the matter, whether a salary increase for the Executive is merited based upon
annual performance and a cost of living review.
4.2. Bonus. For the first, second and third years after the Opening Date, the
Executive shall be eligible to receive a cash bonus equal to 10% or more of the
Executive's base salary, with the Executive abstaining from participating in
the consideration of and vote on the matter, based upon the Bank meeting the
performance goals set forth in Section 5.3 hereof for such years. Thereafter,
Executive shall be eligible to receive a cash bonus of 15% or more of his base
salary, based upon such tangible criteria (including, without limitation,
compliance with the Bank's business plan, meeting the performance goals for
such year, and the Bank's overall asset quality and earnings) as the Board of
Directors shall establish.
4.3. Other Benefits. During the term, the Employer shall provide the
Executive with life insurance in an amount of $250,000.00 payable to the
beneficiary named by the Executive, dental and health insurance, disability
insurance providing coverage for 60% of the Executive's base salary, and such
other benefits or plans as are generally afforded other personnel of the
Employer. During the Escrow Period and until such time as coverage is obtained
by the Employer for its employees, the Employer shall provide the Executive:
(i) reimbursement of the Executive's COBRA health insurance coverage, (ii)
disability insurance providing coverage for 60% of the executive's base salary
and (iii) life insurance in an amount of $250,000.00 payable to the beneficiary
named by the Executive; and, after the Escrow Period, the Employer will provide
the Executive with an automobile (with a cost not to exceed $22,500) owned or
leased by the Employer of a make and model appropriate to the Executive's
status.
The requirement of providing disability, life and/or health insurance for the
Executive is conditioned upon the insurability of the Executive, and the
availability of the level of coverage set forth herein at standard rates. If
the Executive is not insurable at standard rates, or if the Employer is unable
to place the coverage at the level set forth in this Agreement at a reasonable
cost to Employer, then the Employer will only be responsible for the cost of
standard coverage.
Employer shall also pay Executive's initiation fee at Laurel Country Club of
$1,200.00, as well as Executive's routine monthly dues at Laurel Country Club
(currently $128.00 per month). In addition, the Employer shall pay the
Executive's dues pertaining to the Rotary Club in Laurel, Mississippi.
4.4. Vacation and Sick Leave. The Executive shall be allowed three weeks paid
vacation per year during the Term, or any extensions or renewals thereof.
Vacation time shall not be allowed to carry over from year to year, and
Executive may not take more than two weeks vacation at any single time.
Vacation dates over one week at a time shall be subject to Board approval.
Executive shall also be entitled to ten days of sick leave per year during the
Term, or any extensions or renewals thereof, which shall not be allowed to
carry over from year to year.
4.5. Severance Package. In the event that the Bank fails to commence
operations or receive regulatory approval, the Employer shall pay to the
Executive severance compensation in an amount equal to 100% of his then current
monthly base salary each month for a period ending on the earlier of 12 months
from the date of termination or the date on which the Executive obtains a new
employment position.
4.6. Committees. The Executive shall serve on all committees of the board of
directors of the Bank except for the audit committee. If the loan committee
approves a loan over the objection of the Executive, the loan committee shall
take the loan to the full board of directors of the Bank for approval. The
compensation committee and the board of directors of the Bank shall appoint the
CEO. The compensation committee and the board of directors of the Bank shall
also appoint two senior vice-presidents of the Bank, based upon the
recommendation of the CEO. The board of directors of the Bank shall authorize
the CEO and senior vice-presidents to appoint all other executive officers and
to hire all other employees of the Bank.
Section 5. Stock Options.
5.1. Grant of Options. (a) If the Executive is still employed under the
provisions of the Agreement following the Secondary Offering, the Employer
hereby agrees to grant to the Executive an option to purchase the number of
shares of Common Stock equal to 2.5% of the number of shares sold in the
Secondary Offering. The award agreement for the stock options will provide
that one-third of the options to purchase Common Stock shall vest on each of
the first three anniversaries of the Opening Date, but only if the Executive
remains employed by the Employer on such date and the Bank has met the
performance goals set forth in Section 5.3 hereof for such year. In addition,
the award agreement will provide that (i) the options shall be subject to
immediate vesting in the event of a Change in Control pursuant to Section 5.2
hereof; (ii) all options shall be exercisable at any time during the seven
years following their vesting at a price per share equal to the public offering
price in the Secondary Offering (subject to standard antidilution adjustments
in the event of stock splits, dividends or combinations); (iii) all unexercised
options will expire 180 days after termination of employment for any reason;
and (iv) all options shall be transferable and assignable by the Executive or
by any other person entitled hereunder to exercise any such rights on the same
basis as any other option granted to the other directors of the Employer, if
any.
(b) The parties understand that the Employer may adopt another incentive stock
option plan or increase the size of the Employer's existing incentive stock
option plan (with customary provisions and benefits) at a meeting of the
shareholders after the effective date of this Agreement. Upon the shareholders
adoption of an incentive stock option plan, or approval to increase the size of
the existing plan, all of the Executive's options shall be converted into
incentive stock options under the same terms as if the options had originally
been incentive stock options when granted, except that the Executive
acknowledges that the exercise price cannot be less than the fair market value
on the date of such meeting.
5.2. Acceleration in the Event of a Change in Control. If the event of a
Change in Control, the restrictions on any outstanding incentive awards
(including restricted stock) granted to the Executive under any incentive plan
or arrangement shall lapse and such incentive award shall become 100% vested;
all stock options and stock appreciation rights granted to the Executive shall
become immediately exercisable and shall become 100% vested; and all
performance units granted to the Executive shall become 100% vested.
5.3. Performance Levels. For each twelve month period beginning on the first
day of the first month following the Bank's commencement of banking business,
and as a condition to the vesting of the options in such year (except in the
event of a Change in Control), the Bank must meet the following performance
criteria:
(a) earnings for the Bank shall meet or exceed 50% of the projections
identified in the application of the Bank to the Office of the Comptroller of
the Currency for the second year of operations of the Bank, 60% of the
projections for the third year, and 70% of the projections for each year
thereafter; and
(b) for the fiscal quarter ending with or immediately prior to the Bank's
fiscal year, the Bank's ratio of non-performance loans to total loans, as
determined in the Uniform Bank Performance Report (the "UBPR"), shall not
exceed by more than ten percent (10%) the ratio of non-performance loans to
total loans for banks in the Bank's peer group, as defined in the UBPR.
Section 6. Expenses. Pursuant to the Employer's customary policies in force
at the time of payment, the Executive shall be promptly reimbursed, against
presentation of vouchers or receipts therefor, for all expenses properly and
reasonably incurred by him on behalf of the Employer or its Affiliates in the
performance of his duties hereunder. In addition, during the Escrow Period,
the Employer shall provide the Executive reimbursement for automobile mileage
incurred on the Employer's business and appropriately documented at the
standard mileage rate allowed by the Internal Revenue Service guidelines.
Section 7. Termination.
7.1. Term. The Executive's employment hereunder shall be for a term
commencing on the date hereof and ending on the third anniversary of the
Opening Date (the "Term"), unless further extended or sooner terminated as
provided below.
7.2. Extension of Term. On the last day of this Agreement, the term of the
Executive's employment shall be automatically extended for one additional
three-year term without further action by the parties unless, prior to the last
day of this Agreement, either party shall serve 30 days written notice upon the
other of its intention that this Agreement shall not be so extended; provided,
that if the Employer does not renew this Agreement for an additional three-year
term pursuant to this Section, the Employer shall pay the Executive severance
compensation in an amount equal to 100% of his then current monthly base salary
each month for a period ending nine months from the last day of this Agreement.
7.3. Termination. (a) Notwithstanding the provisions of Section 7.1 or
Section 7.2, the Executive's employment hereunder shall terminate upon the
occurrence of any of the following events:
(i) The death of the Executive, in which event such employment shall terminate
automatically.
(ii) The disability of the Executive, which renders him unable to perform the
essential functions of his job, and for which reasonable accommodation is
unavailable. For purposes of this Agreement, a "disability" is defined as a
physical or mental impairment that substantially limits one or more major life
activities; and a "reasonable accommodation" is one that does not impose an
undue hardship on the Employer. The Executive acknowledges that the position
of CEO and President is one that requires the full time and energy of the
Executive and that any accommodation based on part-time employment would pose
an undue hardship on the Employer.
(iii) Upon the determination of Cause for termination, in which event such
employment may be terminated by written notice at the election of the Employer.
For purposes of this Agreement, "Cause" shall consist of any of (A) the
commission by the Executive of a willful act (including, without limitation, a
dishonest or fraudulent act) or a grossly negligent act, or the willful or
grossly negligent omission to act by the Executive, which is intended to cause,
causes or is reasonably likely to cause material harm to the Employer
(including harm to its business reputation), (B) the indictment of the
Executive for the commission or perpetration by the Executive of any felony or
any crime involving dishonesty, moral turpitude or fraud, (C) the material
breach by the Executive of this Agreement that, if susceptible of cure, remains
uncured 30 days following written notice to the Executive of such breach, (D)
the receipt of any form of notice, written or otherwise, that any regulatory
agency having jurisdiction over the Employer or the Bank intends to institute
any form of formal or informal regulatory action against the Executive or the
Employer or the Bank (provided, that the respective board of directors
determines in good faith, with the Executive abstaining from participating in
the consideration of and vote on the matter, that the subject matter of such
action involves acts or omissions by or under the supervision of the Executive
or that termination of the Executive would materially advance the Employer's or
the Bank's compliance with the purpose of the action or would materially assist
the Employer or the Bank in avoiding or reducing the restrictions or adverse
effects to the Employer or the Bank related to the regulatory action); (E) the
Executive exhibits a standard of behavior within or without the scope of his
employment that is materially disruptive to the orderly conduct of the
Employer's business operations (including, without limitation, substance abuse
or sexual misconduct) to a level which, in the Board of Directors' good faith
and reasonable judgment, with the Executive abstaining from participating in
the consideration of and vote on the matter, is materially detrimental to the
Employer's best interest, that, if susceptible of cure remains uncured 30 days
following written notice to the Executive of such specific inappropriate
behavior; (F) as provided in Section 2(b), the failure of the Executive to
devote his full business time and attention to his employment under this
Agreement that, if susceptible of cure, remains uncured 30 days following
written notice to the Executive of such failure; or (G) the failure of the Bank
to meet the performance criteria as set forth in Section 5.3.
(b) If the Executive's employment is terminated by the Employer pursuant to
Section 7.3(a)(i), the Executive's estate shall receive any sums due him as
base salary and/or reimbursement of expenses through the end of the month
during which death occurred, plus a pro rata share of any bonus under Section
4.2 and options vested under Section 5 if otherwise payable with respect to the
fiscal year during which the Executive died which was earned as of the date of
the Executive's death as a result of the Bank achieving the goals determined by
the Board of Directors.
(c) In the event of the physical or mental incapacity (other than incapacity
caused by involuntary disability) of the Executive which, if continued for a
sufficient period, would provide the Employer with grounds for termination of
the Executive's employment under Section 7.3(a)(ii), the Employer shall
continue to pay the Executive his full base salary at the rate then in effect
under Section 4.1 and all prerequisites and other benefits (other than any
bonus under Section 4.2 and options vested under Section 5) until the Executive
becomes eligible for benefits under any long-term disability plan or insurance
program maintained by the Employer. Furthermore, the Executive shall receive
his pro rata share of any bonus under Section 4.2 or options vested under
Section 5 which was earned on the date the Executive became disabled as a
result of the Bank achieving the goals determined by the Board of Directors.
Provided, however, that the Executive shall not receive any benefits under this
paragraph if the disability results in whole or in part from substance abuse,
including but not limited to prescription or nonprescription drugs, or alcohol.
Nothing in this Section 7.3(c) shall preclude the Employer from terminating the
Executive's employment under Section 7.3(a)(iii).
(d) If the Executive's employment is terminated for Cause pursuant to Section
7.3(a)(iii), or if the Executive resigns without Adequate Justification, the
Executive shall receive any sums due him as base salary and/or reimbursement of
expenses through the date of such termination. Adequate Justification shall
only be deemed to have occurred if not cured by the Employer within 30 days
following receipt of written notice from the Executive which specifies with
particularity the events which constitute such Adequate Justification.
(e) If the Employer terminates the Executive other than pursuant to clauses
(i), (ii), or (iii) of Section 7.3(a), the Employer shall pay to the Executive
severance compensation in an amount equal to 100% of his then current monthly
base salary each month for a period ending on the date which is twelve months
from the date of termination. If the Employer terminates the Executive other
than pursuant to clauses (i), (ii), or (iii) of Section 7.3(a) the Employer
shall also pay the Executive his pro rata share of any bonus pursuant to
Section 4.2 or options vested under Section 5 which was earned as of the date
of his termination by achievement of the goals determined by the Board of
Directors.
(f) After a Change in Control, the Executive shall have the option of
receiving, within 30 days of the Change in Control, any sums due him under
Section 4.1 and reimbursement of expenses through the date of the Change in
Control plus severance compensation payable in one lump sum payment in an
amount equal to twelve months salary.
(g) With the exceptions of (i) the provisions of Section 7.3(b), (ii) the
provisions of Section 7.3(c), (iii) the provisions of Section 7.3(d), (iv) the
provisions of Section 7.3(e), and (v) the provisions of Section 7.3(f), and the
express terms of any benefit plan under which the Executive is a participant,
it is agreed that, upon termination of the Executive's employment, the Employer
shall have no obligation to the Executive for, and the Executive waives and
relinquishes, any further compensation or benefits (exclusive of COBRA
benefits). At the time of termination of employment, the Employer and the
Executive shall enter into a mutually satisfactory form of release
acknowledging such remaining obligations arising out of or in connection with
the Executive's employment by the Employer, including the circumstances of such
termination.
(h) In the event that the Executive's employment is terminated for cause under
Section 7.3(a)(iii) or the Executive is no longer a shareholder of the Employer
for any reason, the Executive shall (and does hereby) tender his resignation as
a director of the Employer and its Affiliates effective as of the date of
termination.
(i) In the event that the Employer terminates the Executive, other than
pursuant to Section 7.3(a)(iii), the Employer shall, within 10 days after
termination, offer to repurchase all of the Executive's Common Stock, at a
purchase price equal to the fair market value of the Common Stock, as
determined by the Board of Directors in good faith. In the event that the
Employer terminates the Executive pursuant to Section 7.3(a)(iii), the
Executive shall be required to sell all of his Common Stock, and he shall be
deemed to have offered such Common Stock, to the Employer at a purchase price
equal the fair market value of the Common Stock, as determined by the Board of
Directors in good faith.
Section 8. Confidential Information and Related Matters.
8.1. Confidential Information. (a) The Executive agrees to maintain in strict
confidence, and not use or disclose except pursuant to written instructions
from the Employer, any Trade Secret of the Employer and its Affiliates, for so
long as the pertinent data or information remains a Trade Secret, provided that
the obligation to protect the confidentiality of any such information or data
shall not be excused if such information or data ceases to qualify as a Trade
Secret as a result of the acts or omissions of the Executive.
(b) The Executive agrees to maintain in strict confidence and, except as
necessary to perform his duties for the Employer, not to use or disclose any
Confidential Business Information for so long as the pertinent data or
information remains Confidential Business Information.
(c) Upon termination of employment, the Executive shall leave with the
Employer all business records, contracts, calendars, telephone lists,
rolodexes, and other materials or business records relating to the Employer and
its Affiliates, its business or customers, including all physical, electronic,
and computer copies thereof, whether or not the Executive prepared such
materials or records himself. Upon such termination, the Executive shall
retain no copies of any such materials, provided, however, the Executive may
remove and retain all personal items and materials.
(d) The Executive may disclose Trade Secrets or Confidential Business
Information pursuant to any order or legal process requiring him (in his legal
counsel's reasonable opinion) to do so; provided, however, that for a period of
two years following the date of termination of this Agreement, the Executive
shall first have notified the Employer of the request or order to so disclose
the Trade Secrets or Confidential Business Information in sufficient time (at
least ten business days) to allow the Employer to seek an appropriate
protective order.
8.2. Agreement Not to Compete. If the Executive leaves the employ of
Employer for any reason other than following a Change in Control, then for a
period of one year following the date of termination, the Executive shall not
(without the prior written consent of the Employer) compete with the Employer
or any of its Affiliates by, directly or indirectly, forming, serving as an
organizer, director or officer of, or consultant to, or acquiring or
maintaining more than a 1% passive investment in, a depository financial
institution or holding company therefor if such depository institution or
holding company has one or more offices or branches located in the Territory.
8.3. Agreement Not to Solicit Customers. If the Executive leaves the employ of
Employer for any reason other than following a Change in Control, then for a
period of one year following the date of termination, the Executive shall not
(except on behalf of or with the prior written consent of the Employer), either
directly or indirectly, on the Executive's own behalf or in the service or on
behalf of others, (i) solicit, divert, or appropriate to or for a Competing
Business, or (ii) attempt to solicit, divert, or appropriate to or for a
Competing Business, any person or entity that was a customer of the Employer or
any of its Affiliates on the date of termination and is located in the
Territory.
8.4. Agreement Not to Solicit Employees. If the Executive leaves the employ of
Employer for any reason other than following a Change in Control, then for a
period of one year following the date of termination, the Executive will not,
either directly or indirectly, on the Executive's own behalf or in the service
or on behalf of others, (i) solicit, divert, or hire away, or (ii) attempt to
solicit, divert, or hire away, to any business located in the Territory, any
employee of or consultant to the Employer or any of its Affiliates engaged or
experienced in the Business, regardless of whether the employee or consultant
is full-time or temporary, the employment or engagement is pursuant to written
agreement, or the employment is for a determined period or is at will.
8.5. Extension of Term of Restrictions. If the Executive violates any of the
restrictions set forth in Sections 8.1 to 8.4 of this Agreement, the duration
of such restriction shall be extended by a number of days equal to the number
of days in which the Executive shall have been determined to be or shall have
admitted to being in violation of such restriction.
8.6 Remedies. The Executive acknowledges and agrees that great loss and
irreparable damage would be suffered by the Employer is the Executive should
breach or violate any of the terms or provisions of the covenants and
agreements set forth in Sections 8.1 to 8.4 of this Agreement. The Executive
further acknowledges and agrees that each of these covenants and agreements is
reasonably necessary to protect and preserve the interests of the Employer and
its Affiliates. The parties agree that money damages for any breach of
Sections 8.1 to 8.4 of this Agreement by the Executive are impossible to
measure, that the Employer is entitled to preliminary and permanent injunctive
relief in the event that the Executive violates any of the terms or provisions
of the covenants set forth in Sections 8.1 to 8.4, and that the Executive or
any of the Executive's affiliates, as the case may be, will, to the extent
permitted by law, waive in any proceeding initiated to enforce such provisions
any claim or defense that an adequate remedy at law exists, as well as any
requirements of bond. The existence of any claim, demand, action, or cause of
action against the Employer, whether predicated upon this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Employer of
any of the covenants or agreements in this Agreement; provided, however, that
nothing in this Agreement shall be deemed to deny the Executive the right to
defend against this enforcement on the basis that the Employer has no right to
its enforcement under the terms of this Agreement.
8.7. Severability; Reformation. The Executive acknowledges and agrees that
(i) the covenants and agreements contained in Sections 8.1 to 8.4 of this
Agreement are the essence of this Agreement; (ii) that the Executive has
receive good, adequate and valuable consideration for each of these covenants;
(iii) each of these covenants is reasonable and necessary to protect and
preserve the interests and properties of the Employer and the Business; (iv)
the Employer, through its Affiliates, is and will be engaged in and throughout
the Territory in the Business; (v) a Competing Business could be engaged in
from any place in the Territory; and (vi) the Employer has a legitimate
business interest in restricting the Executive's activities throughout the
Territory. The Executive also acknowledges and agrees that (i) irreparable
loss and damage will be suffered by the Employer should the Executive breach
any of these covenants and agreements; (ii) each of these covenants and
agreements in Sections 8.1 to 8.4 is separate, distinct and severable not only
from the other covenants and agreements but also from the remaining provisions
of this Agreement; and (iii) the unenforceability of any covenants or
agreements shall not affect the validity or enforceability of any of the other
covenants or agreements or any other provision or provisions of this Agreement.
The Executive acknowledges and agrees that if any of the provisions of Sections
8.1 to 8.4 of this Agreement shall ever be deemed to exceed the time, activity,
or geographic limitations permitted by applicable law, then such provisions
shall be and hereby are reformed to the maximum time, activity, or geographical
limitations permitted by applicable law.
8.8. Modification of Section 8 and Definitions. The Executive and the
Employer hereby agree that they will negotiate in good faith to amend this
Agreement from time to time to modify the terms of this Section 8, the
definition of the term "Territory," and the definition of the term "Business",
to reflect changes in the Employer's business and affairs so that the scope of
the limitations placed on the Executive's activities by this Section 8
accomplishes the parties' intent in relation to the then current facts and
circumstances. Any such amendment shall be effective only when completed in
writing and signed by the Executive and the Employer.
Section 9. Key-Man Life Insurance. The Executive will cooperate with Employer
in placing and maintaining key-man life insurance on the Executive in the
amount of $500,000.00, with the proceeds payable to the Employer or its
designee as beneficiary.
Section 10. Notices. All notices and other communications provided for or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally or sent by registered or certified mail (return
receipt requested) postage prepaid to the parties at the following addresses
(or at such other address for any party as shall be specified by like notice,
provided that notices of a change of address shall be effective only upon
receipt thereof):
(a) If to the Employer:
Xxxxx X. Xxxxxxx, CEO
The First Bancshares, Inc.
P. O. Xxx 00000
Xxxxxxxxxxx, XX 00000-0000
-and-
Xxxxx X. Xxxxxxx
0000 Xxxxx 0xx Xxxxxx
Xxxxxx, XX 00000
With a copy (which shall not constitute notice) to:
Xxxxxx X. Xxxxxxx, Esq.
Law Offices of Xxxxxx X. Xxxxxxx, P.A.
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
(b) If to the Executive:
Xxxxxxx X. Xxxxxxxx
0 Xxx Xxxxxx
Xxxxxx, XX 00000
With a copy (which shall not constitute notice) to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxxx Law Xxxxxx
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
Section 11. Miscellaneous.
11.1 Representations and Covenants. In order to induce the Employer to enter
into this Agreement, the Executive makes the following representations and
covenants to the Employer and acknowledges that the Employer is relying upon
such representations and covenants:
(a) No restrictive covenants and/or non-compete agreements exist to which the
Executive is a party or otherwise bound which will interfere with or in any way
impede his ability to perform all of the terms and conditions of this
Agreement.
(b) The Executive, during the term of this Agreement, shall use his best
efforts to disclose to the Board of Directors by any effective method any bona
fide information known by him concerning the Bank or an Affiliate that would
have any material negative impact (in excess of $50,000) on the Employer or an
Affiliate.
11.2 Valuation of Stock. In the event of any disagreement between the
Executive and the Employer regarding the fair market value of the Common Stock,
the question of fair market value of the Common Stock shall be submitted to an
impartial and reputable appraiser selected by the mutual agreement of the
Executive and the Employer, or, failing such agreement, two appraisers (one of
which shall be selected by the Employer and the other by the Executive). The
determination of the question of the fair market value of the Common Stock by
such appraiser or appraisers shall be final and binding on the Executive and
the Employer for purposes of this Agreement. The Employer shall pay the
reasonable fees and expense of such appraiser or appraisers.
11.3 Assignability. This Agreement shall be assignable by the Employer to the
Bank, upon the formation of the Bank.
11.4 Entire Agreement. This Agreement contains the entire understanding of the
parties as to the subject matter hereof and fully supersedes all prior oral and
written agreements and understandings between the parties with respect to such
subject matter.
11.5 Amendment; Waiver. This Agreement may not be amended, supplemented,
canceled, or discharged, except by written instrument executed by the party
against whom enforcement is sought. No failure to exercise, and no delay in
exercising, any right, power or privilege hereunder shall operate as a waiver
thereof. No waiver of any breach of this Agreement shall be deemed to be a
waiver of any preceding or succeeding breach of this Agreement.
11.6. Binding Effect; Assignment. The Executive's rights and obligations
under this Agreement may not be assigned by him, except that his right to
receive accrued but unpaid compensation, unreimbursed expenses and other
rights, if any, provided under this Agreement which survive termination of this
Agreement shall pass after death to the personal representatives of his estate.
11.7. Headings. The headings contained in this Agreement (except those in
Section 1) are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
11.8. Counterparts. This Agreement may be executed in one or more copies,
each of which shall be deemed an original.
11.9. Governing Law. This Agreement has been executed and delivered in the
State of Mississippi, and its validity, interpretations, performance, and
enforcement shall be governed by the internal laws but not the conflicts of law
rules of such State. Venue for any action arising out of or related to this
Agreement shall be the Chancery Court for the Second Judicial District of Xxxxx
County, Mississippi.
11.10 Agreement to Arbitrate. The parties agree that all controversies,
disputes, or claims between the parties arising out of or related to this
Agreement or the validity of this Agreement or any other agreement between the
parties or any other provision of any such agreements, will be submitted for
arbitration on demand of either party. All arbitration proceedings shall take
place in Hattiesburg, Mississippi or the closest hearing site to Hattiesburg,
Mississippi offered by the American Arbitration Association. If either party
is not a resident of or does not maintain a presence in the above-designated
State in which the designated hearing site is situated, then such party hereby
agrees to submit personally to the jurisdiction of arbitration proceeding with
respect to any award entered thereon, to the jurisdiction of the court of
competent subject matter jurisdiction located in the above designated state and
county. Except as otherwise provided in this Agreement, arbitration
proceedings will be heard by one arbitrator in accordance with the then current
commercial arbitration rules of the American Arbitration Association. All
matters relating to arbitration will be governed by the Federal Arbitration Act
(9 U.S.C. Section 1 et seq.) and not by any state arbitration law.
11.11. Further Assurances. Each party agrees at any time, and from time to
time, to execute, acknowledge, deliver and perform and cause to be executed,
acknowledged, delivered and performed, all such further acts, deeds,
assignments, transfers, conveyances, powers of attorney and assurances as may
be necessary or proper to carry out the provisions and intent of this
Agreement.
11.12. Gender; Number. In this Agreement, the use of one gender (e.g., "he",
"she" and "it") shall mean each other gender; and the singular shall mean the
plural, and vice versa, all as the context may require.
11.13. Severability. The parties acknowledge that the terms of this Agreement
are fair and reasonable at the date signed by them. However, in light of the
possibility of a change of conditions or differing interpretations by a court
of what is fair and reasonable, the parties stipulate as follows: if any one
or more of the terms, provisions, covenants or restrictions of this Agreement
shall be determined by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired, or invalidated; further, if any one or more of
the provisions contained in this Agreement shall for any reason be determined
by a court of competent jurisdiction to be excessively broad as to duration,
geographical scope, activity or subject, it shall be construed, by limiting or
reducing it, so as to be enforceable to the extent compatible with then
applicable law.
11.14. Consents. Any consent, approval or authorizations required hereunder
shall mean the written consent, approval or authorization of the chairman of
the board of the Employer or such other officer as may be designated in writing
by the Board of Directors.
11.15. Indemnification and Expenses. Both the Employer and the Bank will
indemnify the Executive and his legal representatives to the fullest extent
permitted by the laws of the State of Mississippi or any other state where the
Employer shall be incorporated from time to time and the existing or any future
bylaws of either of the Employer or the Bank, against all costs, charges and
expenses whatsoever incurred or sustained by him or his legal representatives
in connection with any action, suit or proceeding to which he or his legal
representatives may be made a party by reason of his being or having been a
director or officer of the Employer or the Bank (other than an action, suit or
proceeding against the Executive under this Agreement), and the Executive shall
be entitled to the protection of any insurance policies the Employer or the
Bank elect to maintain generally for the benefit of its directors and officers.
To the extent permitted by law, the Bank and the Employer shall advance all
reasonable costs, charges and expenses incurred by the Executive in defending
himself against any action referred to in this Section.
IN WITNESS WHEREOF, the Employer has caused this Agreement to be executed and
its seal to be affixed hereunto by its officers thereunto duly authorized, and
the Executive has signed and sealed this Agreement, effective as of the date
first above written.
THE FIRST BANCSHARES, INC.
BY: /s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, CEO
/s/ Xxxxxxx X. Xxxxxxxx
XXXXXXX X. XXXXXXXX
STATE OF MISSISSIPPI
COUNTY OF XXXXX
Personally appeared before me, the undersigned authority in and for the
jurisdiction aforesaid, the within named XXXXX X. XXXXXXX, CEO of FIRST
BANCSHARES, INC., a Mississippi Corporation, who acknowledged that he executed
and delivered the above and foregoing Employment Agreement on the day and year
therein mentioned as the act and deed of said corporation, having been first
duly authorized so to do.
Given under my hand and official seal this the 8th day of June, 1998.
/s/ Xxxxx Xxxxx Xxxxxx
Notary Public
My commission expires:
June 13, 1999
STATE OF MISSISSIPPI
COUNTY OF XXXXX
Personally appeared before me, the undersigned authority in and for the
jurisdiction aforesaid, the within named XXXXXXX X. XXXXXXXX, who acknowledged
that he executed and delivered the above and foregoing Employment Agreement on
the day and year therein mentioned.
Given under my hand and official seal this the 10th day of June, 1998.
/s/ Xxxxx X. Xxxxxx
Notary Public
My commission expires:
December 29, 2000