EXECUTIVE EMPLOYMENT AGREEMENT
This
EXECUTIVE
EMPLOYMENT AGREEMENT
(the
“Agreement”) is made and entered into as of this 10th
day of
March, 2005, by and between Bank of Birmingham, a Michigan state bank (“Bank”),
and Xxxxxxx X. Xxxx, an individual resident of the State of Michigan
(“Executive”).
WHEREAS,
the
Executive has considerable experience, expertise and training in management
related to banking and services offered by the Bank; and
WHEREAS,
the
Bank
desires for the Executive to be employed as Executive Vice President and
Director of Sales and Marketing of the Bank, and Executive desires to accept
employment, subject to and on the terms and conditions set forth in this
Agreement; and
WHEREAS,
both
the
Bank and the Executive have read and understood the terms and provisions set
forth in this Agreement and have been afforded a reasonable opportunity to
review this Agreement with their respective legal counsel.
NOW,
THEREFORE,
in
consideration of the mutual promises and covenants set forth in this Agreement,
the Executive and the Bank agree as follows:
A.
DURATION
1. This
Agreement shall become effective (the “Effective Date”) upon the date that the
Bank opens for business and shall continue in full force and effect, subject
to
Paragraph 2 below, until the third anniversary of the Effective Date, unless
earlier terminated as provided herein.
2. The
Bank
and the Executive acknowledge and agree that the parties may agree to continue
the employment relationship upon such terms as they may mutually agree.
Following the initial three year term of this Agreement, the Agreement shall
automatically renew annually for a term of one year, unless either party elects
to terminate this Agreement by sending written notice of non-renewal at least
thirty (30) calendar days prior to the expiration of the then current term.
If
this Agreement expires as a result of non-renewal, the employment of the
Executive
shall automatically terminate upon the expiration of the then current
term.
B.
COMPENSATION
3. All
payments of salary and other compensation to the Executive
shall be payable in accordance with the Bank’s ordinary payroll and other
policies and procedures.
a.
During
the term of this Agreement, the Bank agrees to pay the Executive
a base
salary of not less than $125,000 annually, appropriately prorated for partial
months
at
the commencement and end of the term of this Agreement.
b. The
Bank
shall have the right to deduct from any payment of compensation to Executive
hereunder any federal, state or local taxes required by law to be withheld
with respect to such payments and any other amounts specifically authorized
to be withheld or deducted by Executive.
c. During
the term of this Agreement, it is anticipated that the Board of Directors
or a
delegated committee thereof will adopt an executive incentive bonus plan
based
upon the asset growth and profitability of the Bank. The Executive will
be
entitled to participate in such plan.
d. Executive
shall receive options to purchase shares of common stock of the Bank at an
exercise price of $10.00 per share, the number of options to be equal to 25,000.
The options shall have a term of ten years from the date of issuance, which
shall be the Effective Date, and to the extent permitted by law, shall be
treated as incentive stock options. The options shall be evidenced by a stock
option agreement, which shall have such terms as are consistent with those
set
forth above and such additional terms, including with respect to vesting, as
may
be set forth in the stock option agreement or the stock option plan pursuant
to
which the options are granted.
4. The
Bank
shall provide the Executive with a cellular phone and laptop computer for use
in
the performance of his duties and obligations under this Agreement. The Bank
shall also reimburse the Executive for all reasonable expenses, including,
but
not limited to, travel expenses, lodging expenses, and meals and entertainment
expenses, that the Executive may incur in the performance of his duties and
obligations under this Agreement; provided, however, that the Executive shall
be
required to submit receipts or other acceptable documentation to the cashier
of
the Bank or such other officer designated by the Board to verify such expenses
prior to any reimbursements. In addition to the reimbursement of expenses listed
in this Paragraph, the Bank shall pay, or reimburse Executive, for reasonable
initiation fees for trade association memberships deemed to be acceptable and
appropriate by the Board of Directors.
5. Subject
to the provisions of Paragraph 9 of this Agreement, the Executive shall be
entitled to receive employee and dependent health insurance, dental insurance,
paid sick leave and four (4) weeks of paid vacation per year, and any additional
benefits provided to all Bank employees all in accordance with the Bank’s
employment policies.
6. The
Bank
shall also provide the Executive with a salary continuation plan, with such
terms as are approved by Executive and the Board of Directors of the
Bank.
7. The
Bank
shall also provide the Executive with term life insurance coverage in an initial
amount not to exceed 200% of Executive’s base salary, and having a term not less
than ten years. If, during the term of this Agreement, the Bank adopts a plan
providing life insurance benefits to other Bank employees and the maximum
coverage under such plan exceeds the maximum permissible coverage provided
by
this Paragraph, then notwithstanding the provisions of this Paragraph, Executive
shall be entitled to participate in the Bank’s life insurance benefit plan to
the full extent that is available to other Bank employees.
8. The
Board
of Directors or a delegated committee shall review the amount of Executive’s
compensation, including his base salary, not less than annually and shall
increase such base salary as a result of such review and to provide reasonable
cost of living adjustments, all in the discretion of the Board of Directors
or
such committee and consistent with the safe and sound banking practices;
provided however that Executive’s base salary, bonuses, vacation and car
allowance shall not be less than the amounts set forth in Paragraphs 3,4, and
5
at any time during the term of this Agreement.
9. All
employee benefits provided to the Executive by the Bank incident to the
Executive’s employment shall be governed by the applicable plan documents,
summary plan descriptions or employment policies and may be modified, suspended
or revoked at any time, in accordance with the terms and provisions of the
applicable documents.
10. The
parties hereto acknowledge that the compensation set forth herein and the other
covenants and agreements of the Bank contained herein are fair and adequate
compensation for Executive’s services and for the covenants of Executive as set
forth herein.
C.
RESPONSABILITIES
11. The
Executive shall be employed as Executive Vice President and Director of Sales
and Marketing of the Bank and shall faithfully devote his best efforts and
his
primary focus to his positions with the Bank.
12. The
Executive acknowledges and agrees that the duties and responsibilities of the
Executive required by his position as Executive Vice President and Director
of
Sales and Marketing of the responsibilities imposed by the Board of Directors,
at any time, without the approval or consent of the Executive. However, these
new duties and responsibilities may not constitute immoral or unlawful acts.
In
addition, the new duties and responsibilities must be consistent with the
Executive’s role as Executive Vice President and Director of Sales and Marketing
of a financial institution.
13. The
Executive acknowledges and agrees that, during the term of this Agreement,
he
has a fiduciary duty of loyalty to the Bank, and that he will not engage in
any
activity during the term of this Agreement, which could, in any significant
way,
harm the business, business interests, or reputation of the Bank or the
reputation of the Board of Directors.
14. The
Executive shall not directly or indirectly engage in competition with the Bank
at any time during the existence of the employment relationship between the
Bank
and the Executive, and the Executive will not on his own behalf, or as another’s
agent or employee, engage in any of the same or similar duties and/or
Bank-related responsibilities required by the Executive’s position with the
Bank, other than as an employee of the Bank pursuant to this Agreement or as
specifically approved by the Board of Directors. In addition, without the prior
written consent of the Board off Directors, Executive shall not usurp for
himself any corporate opportunity available to the Bank.
D.
NONINTERFERENCE
15. Executive
acknowledges that, as part of his employment with the Bank, he will become
familiar with the salary, pay scale, capabilities, experiences, skill and
desires of the Bank’s employees. Executive agrees to maintain the
confidentiality of such information. Executive further covenants and agrees
that, for a period of one year subsequent to the termination of this Agreement,
whether such termination occurs at the insistence of the Bank or the Executive,
the Executive shall not recruit, hire, or attempt to recruit or hire, directly
or by assisting others, any other employees of the Bank, nor shall the Executive
contact or communicate with any other employees of the Bank for the purpose
of
inducing other employees to terminate their employment with the Bank. For
purposes of this covenant, “other employees” shall refer to employees who are
still actively employed by or were employed by the Bank within the prior year,
or doing business with, the Bank at the time of the attempted recruiting or
hiring.
16. In
his
position of employment, the Executive will be exposed to confidential
information and trade secrets (hereafter “Proprietary Information”) pertaining
to, or arising from, the business of the Bank and its affiliates (if any).
The
Executive hereby agrees and acknowledges that such Proprietary Information
is
unique and valuable to the Bank’s business and the Bank would suffer irreparable
injury if this information were publicly disclosed. Therefore, the Executive
agrees to keep in strict secrecy and confidence, both during and after the
period of his employment, any and all Proprietary Information which the
Executive acquires, or to which the Executive has access, during employment
by
the Bank, that has not been publicly disclosed by the Bank. The Proprietary
Information covered by this Agreement shall include, but shall not be limited
to: (i) the identities of the Bank’s existing and prospective customers or
clients, including names, addresses, credit status, and pricing levels; (ii)
the
buying and selling habits and customs of the Bank’s existing and prospective
customers or clients; (iii) financial information about the Bank; (iv) product
and systems specifications, concepts for new or improved products and other
product or systems data; (v) the identities of, and special skills possessed
by,
the Bank’s employees; (vi) the identities of and pricing information about the
Bank’s suppliers and vendors; (vii) training programs developed by the Bank;
(viii) pricing studies, information and analyses; (ix) current and prospective
products and inventories; (x) financial models, business projections and market
studies; (xi) the Bank’s financial results and business conditions; (xii)
business plans and strategies; (xiii) special processes, procedures, and
services of the Bank and its suppliers and vendors; and ()xiv) computer programs
and software developed by the Bank or its consultants. The provisions and
agreements entered into herein shall survive the term of the Employee’s
employment to the extent reasonably necessary to accomplish their purpose in
protecting the interests of the Bank in any Proprietary Information disclosed
to, or learned by, the Executive while employed.
17. The
Executive expressly represents that he has no agreements with, or obligations
to, any party which conflict, or may conflict, with the interests of the Bank
or
with the Executive’s duties as an employee of the Bank.
18. Executive
acknowledges that the special relationship of trust and confidence between
him,
the Bank, and its clients and customers creates a high risk and opportunity
for
Executive to misappropriate the relationship and goodwill existing between
the
Bank and its clients and customers. Executive further acknowledges and agrees
that it is fair and reasonable for the Bank to take steps to protect itself
from
the risk of such misappropriation. Executive further acknowledges that, at
the
outset of his employment with the Bank and throughout his employment with the
Bank, Executive will be provided with access to and informed of Proprietary
Information, which will enable him to benefit from the Bank’s goodwill and
know-how. Executive covenants and agrees that, for a period of one year
subsequent to the termination of this Agreement, whether such termination occurs
at the insistence of the Bank or the Executive, the Executive shall not attempt
to solicit, directly or by assisting others, any other customers or clients
of
the Bank for the purpose of attracting their business or to offer any product
or
service which would be in competition or that conflicts with the Bank’s business
or the business of any of its affiliates.
19. Executive
acknowledges that it would be inevitable in the performance of his duties as
a
director, officer, employee, investor, agent or consultant of any person,
association, entity, or company which competes with the Bank, or which intends
to or may compete with the Bank, to disclose and/or use Proprietary Information,
as well as to misappropriate the Bank’s goodwill and know-how, o or for the
benefit of such other person, association, entity, or company. Executive also
acknowledges that, in exchange for the execution for the non-solicitation
restriction set forth in these NONINTERFERENCE provisions, he has received
substantial, valuable consideration, including: (i) confidential trade secret
and proprietary information relating to the identity and special needs of the
Bank’s current and prospective customers, the Bank’s current and prospective
services, the Bank’s business projections and market studies, the Bank’s
business plans and strategies, the Bank’s studies and information concerning
special services unique to the Bank; (ii) employment; and (iii) compensation
and
benefits as described in this Agreement. Executive further acknowledges and
agrees that this consideration constitutes fair and adequate consideration
for
the execution of the non-solicitation restriction set forth herein.
20. In
consideration for the above-recited valuable consideration, as well as to
protect the vital interests described in these NONINTERFERENCE provisions,
the
Executive understands and agrees that during the continuation of this Agreement
for a period of one year following the termination of this agreement by either
party, for any reason (other than for termination of Executive for circumstances
described in Paragraph 2(e), below), the Executive will not become engaged
in
any way (directly or indirectly), as an individual proprietor, beneficiary,
trustee, owner, partner, stockholder, officer, director, executive, investor,
lender, sales representative, or in any other capacity, whatsoever, in any
activity or endeavor of any entity headquartered within the Michigan
cities/towns of Bloomfield, Bloomfield Hills, Beverley Hills, Birmingham,
Franklin, or Xxxxxxx Farms, which competes or conflicts with the Bank’s business
or the business of any of its affiliates (if any), as such business has been
conducted during the years of the Executive’s employment with the Bank. It is
the parties’ desire that these restrictions be enforced to the fullest extent of
the law.
21. Executive
agrees that the restriction set forth above is ancillary to an otherwise
enforceable agreement, is supported by independent valuable consideration,
and
that the limitations as to time, geographical area, and scope of activity to
be
restrained by Paragraph 20 are reasonable and acceptable, and do not impose
any
greater restraint than is reasonably necessary to protect the goodwill and
other
business interests of the Bank. This Section creates a narrowly tailored advance
approval requirement in order to avoid unfair competition and irreparable harm
to the Bank and is not intended or to be construed as a general restraint from
engaging in a lawful profession or a general covenant against competition.
Nothing herein will prohibit (i) beneficial ownership of less than 5% of the
publicly traded capital stock of a corporation listed on a national securities
exchange so long as this is not a controlling interest, or (ii) ownership of
mutual fund investments. Executive agrees that if, at some later date, a court
of competent jurisdiction determines that the non-solicitation agreement set
forth in this Section does not meet the criteria set forth by applicable law,
this Section may be reformed by the court and enforced to the maximum extent
permitted under applicable law. Executive understands that his obligations
under
this Section shall not be assignable by him.
22. Executive
acknowledges that the covenants set forth in these NONINTERFERENCE provisions
are material conditions to the Bank’s willingness to execute and deliver this
Agreement and to provide Executive the compensation benefits and other
consideration provided hereunder. The parties agree that the existence of any
claim or cause of action of Executive against the Bank, whether predicated
on
this Agreement or otherwise, will not constitute a defense to the enforcement
by
the Bank of such covenants. It is specifically acknowledged that the periods
following the termination of employment stated in Paragraphs 15 and 20, during
which the agreements and covenants of Executive made in such Paragraphs are
effective, are to be computed by excluding from such computation any time during
which Executive is in violation of any provision of Paragraph 15 or 20. In
addition, Executive’s obligations under these NONINTERFERENCE provisions shall
survive the termination of this Agreement and Executive’s employment with the
Bank. Executive’s obligations under these NONINTERFERENCE provisions are in
addition to, and not in limitation or preemption of, all other obligations
of
confidentiality which he may have to Bank under general legal or equitable
principles, or other Bank policies. In the event of an conflict between or
among
the NONINTERFERENCE provisions set forth in this Section D, the more restrictive
of the conflicting provisions shall control.
E.
REMEDIES
23. In
the
event that the Executive violates any of the provisions set forth in this
Agreement relating to NONINTERFERENCE. Executive acknowledges that the Bank
would suffer immediate and irreparable harm and would not have an adequate
remedy at law for money damages. Accordingly, Executive agrees that, without
the
necessity of proving actual damages or posting bond or other security, the
Bank
shall be entitled to temporary or permanent injunction or injunctions to prevent
breaches of such performance and to specific enforcement of such covenants
in
addition to any other remedy to which the performance and to specific
enforcement of such covenants in addition to any other remedy to which the
Bank
may be entitled, at law or in equity. In such a situation, the parties agree
that the Bank may pursue any remedy available, including declaratory relief,
concurrently or consecutively in any order as to any breach, violation, or
threatened breach or violation of any of the provisions set forth in this
Agreement relating to NONINTERFERENCE, and the pursuit of any particular remedy
or remedies shall not be deemed an election of remedies or waiver of the right
to pursue any other remedy.
F.
TERMINATION
24.
The
Board of Directors shall be entitled to terminate this Agreement, for any
reason, by providing the Executive with thirty (30) days written notice of
the
termination. However, if this Agreement is terminated by the Bank without Good
Cause, as defined in this Agreement, the Bank shall provided the Executive
with
the severance set forth in paragraph 34 of this Agreement.
25. For
purpose of this Agreement, “Good Cause” shall be defined as the occurrence of
one of the following events:
a. The
determination of the Board of Directors, in the exercise of its reasonable
judgment, that Executive has violated any provision of this Agreement or is
grossly negligent in the performance of his duties hereunder, and has failed
to
cure such violation or the effects of such gross negligence within reasonable
period after written notice to the Executive by the Bank specifying in
reasonable detail the alleged violation;
b. The
Determination of the Board of Directors, in the exercise of its reasonable
judgment, that (i) Executive has failed to follow the policies adopted by the
Board of Directors and has failed to cure such failure within a reasonable
period after written notice to the Executive by the Bank specifying in
reasonable detail the alleged failure; or (ii) Executives has engaged in such
actions or omissions that would constitute unsafe or unsound banking
practices;
c. The
Executive is convicted of a misdemeanor involving moral turpitude or a
felony;
d. The
determination of the Board of Directors, in the exercise of its reasonable
judgment, that the Executive has engaged in gross misconduct in the course
and
scope of his employment with the Bank including indecency, immorality, gross
insubordination, dishonesty, unlawful harassment, use of illegal drugs, or
fighting;
e. The
determination of the Board of Directors, in the exercise of its reasonable
judgment and in good faith, that the Executive’s job performance is
substantially unsatisfactory and that Executive has failed to cure such
performance within a reasonable period after written notice to the Executive
by
the Bank specifying in reasonable detail the nature of the unsatisfactory
performance; or
f. The
Executive is prohibited from engaging in the business of banking by any
governmental regulatory agency having jurisdiction over the Bank
Notwithstanding
anything in this Agreement to the contrary, Executive will not be in breach
of
this Agreement and his action or failure to act shall not be a basis for
termination for Good Cause if Executive’s action or failure to act would
constitute an unsafe or unsound banking practice or be reasonably expected
to
have a material adverse effect on the financial or regulatory condition of
the
Bank.
26. Executive
shall b entitled to terminate this Agreement at any time, for any reason, with
or without cause, by providing thirty (30) days written notice to the Bank.
The
effective date of such resignation shall be the 30th
calendar
day following the date the notice is given or such other later date as may
be
set forth in the notice. Upon Executive’s resignation, Executive shall be
entitled to receive any base salary which has been earned by him through the
effective date of such resignation.
27. If
Executive dies during the term of this Agreement and while in the employ of
the
Bank, this Agreement will terminate automatically, without notice, on the date
of the Executive’s date of the Executive’s death and the Bank shall have any
further obligation to Executive or his estate under this Agreement (other than
death benefits payable under any benefit plans to which Executive is a party),
except that the Bank shall pay Executive’s estate that portion of Executive’s
base salary accrued through the date on which Executive’s death occurred. To the
maximum extent, and for the term, permitted by the health benefit provisions
of
the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986, if Executive
dies during the term of this Agreement and while in the employ of the Bank,
the
Bank shall provide or maintain health insurance benefits, at the Bank’s expense,
for Executive’s spouse.
28.
The
Executive acknowledges and agrees that this Agreement will terminate
immediately, without notice, in the event that Executive becomes physically
or
mentally disabled, as defined by 29 C.F.R. §1630,2(g)(1), and cannot perform the
essential functions of his position, with or without reasonable accommodation
for the period designated by the Executive’s disability insurance after which
disability payments will begin. In the even of a termination pursuant to this
Section, the Bank shall be relieved of all its obligations under this Agreement,
except that the Bank shall pay to Executive, or his estate in the even of his
subsequent death, Executive’s base salary through the date on which such
termination shall have occurred, reduced during such period by the amount of
any
benefits received by Executive under any disability policy maintained by the
Bank.
29. Executive
acknowledges that all memoranda, notes, records, reports, manuals, books,
papers, letters, client and customer lists, contracts, software programs,
information and records, drafts of instructions, guides and manuals, and other
documentation (whether in draft or final form), and other sales or financial
information and aids relating to the Bank’s business, and any and all other
documents containing confidential information furnished to Executive by any
preventative of the Bank or otherwise acquired or developed by Executive in
connection with his duties under this Agreement (collectively, “Recipient
Materials”) shall at all times be the property of the Bank. Within three
calendar days of the termination of this Agreement, Executive shall return
to
the Bank, any Recipient Materials which are in his possession, custody or
control.
30.
The
provisions of provisions of Paragraphs 15, `6, 20-23, 29-34, 39, 42, 43 and
45
shall survive the termination of this Agreement.
G.
CHANGE IN CONTROL
31. The
parties acknowledge that the Executive has agreed to assume the position of
Executive Vice President and Director of Sales and Marketing and to enter into
this Agreement based on his confidence in the current owners of the Bank and
the
direction of the Bank provided by the current Board of Directors. Upon a “Change
of Control,” as defined below, the Executive may, at his option, notify the Bank
within sixty (60) days following such Change of Control that he intends to
terminate this Agreement based upon the Change of Control.
In
the
event that Executive is terminated by the Bank within (60) days following such
Change of Control for any reason other than for Good Cause, Executive shall
be
entitled to elect to receive as severance the lump sum amount determined
pursuant to Paragraph 32 upon written notice to the Bank, in which case the
severance provisions of Paragraph 34 shall not apply.
32. In
the
event that the Executive elects to terminate this Agreement based upon the
Change in Control, the Bank shall pay to the Executive a cash lump sum payment
equal to 199% of his Base Amount as defined in section 280G(b)(3) of the
Internal Revenue Code of 1986, as amended (“Code”) within thirty (30) days of
such notice.
In
the
even that any compensation payable under this Agreement is determined to be
a
“parachute payment” subject to the excise tax imposed by Section 4999 of the
Code or any successor provision (the “Excise Tax”), the Bank agrees to pay to
the Executive an additional sum (the “Gross UP”) in an amount such that the net
amount retained by the Executive, after receiving both the payment and the
Gross
Up and after paying: (i) any Excise Tax on the payment and the Gross Up, and
(ii) any federal, state, and local income taxes on the Gross Up, is equal to
the
amount of the payment.
For
purposes of determining the Gross Up, the Executive shall be deemed to pay
federal, state, and local income taxes at the highest marginal rate of taxation
in his filing status for the calendar year in which the payment is to be made
based upon the Executive’s domicile on the date of the even that triggers the
Excise Tax. The determination of whether such Excise Tax is payable and the
amount of such Excise Tax shall be based upon the opinion of tax counsel
selected by the Bank, subject to the reasonable approval of the Executive.
If
such opinion is not finally accepted by the Internal Revenue Service, then
appropriate adjustments shall be calculated (with additional Gross Up determined
based on the principals outlined in the previous paragraph, if applicable)
by
such tax counsel based upon the final amount of Excise Tax so determined
together with any applicable penalties and interest. The final amount shall
be
paid, if applicable, within thirty (30) days after such calculations are
completed, but in no event later than April 1st
of the
year following the event that triggers the Excise Tax. Such compensation shall
be payable in equal disbursement in accordance with the Bank’s ordinary payroll
policies and procedures.
33. As
used
in this Agreement, a “change of Control” shall be deemed to have occurred in
each of the following instances:
a.
A
reorganization, merger, consolidation or other corporate transaction involving
the Bank, in each case, with respect to which the shareholders of the Bank,
immediately prior to such transaction do not, immediately after the transaction,
own more than fifty percent (50%) of the combined voting power of the
reorganized, merged or consolidated company’s then outstanding voting
securities.
b.
The
sale, transfer or assignment of all or substantially all of the assets of the
Bank to any third party.
c.
The
acquisition by any individual, entity or “group,” within the meaning of Section
13(d)(3) or Section 14(d)(2) of the Exchange Act (a “Person”), of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
Act)
of voting securities of the Bank where such acquisition causes any such Person
to own twenty percent (20%) or more of the combined voting power of the Bank’s
then outstanding capital stock then entitled to vote generally in the election
of directors; provided however, that a Change in Control shall not be deemed
to
have occurred if a Person becomes the beneficial owner of twenty percent of
the
combined voting power of the Bank’s then outstanding capital stock solely as a
result of the repurchase of voting securities by the Bank.
d. During
any period of two consecutive years, the persons who were directors of the
Bank
immediately before the beginning of the two year period (the “incumbent
Directors”) shall cease to constitute at least a majority of the Board of
Directors; provided that any individual becoming a director subsequent to the
beginning of such two year period whose election, or nomination for election
by
the Bank’s shareholders, was approved by at least two-thirds of the directors
then comprising the Incumbent Directors shall be considered as though such
individual were an Incumbent Director unless such individual’s initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such term are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act).
Notwithstanding
anything contained herein to the contrary, if Executive’s employment is
terminated and he reasonably demonstrates that such termination was at the
request of a third party who has indicated an intention of taking steps
reasonably calculated to effect a Change in Control and who effects a Change
in
Control, or such termination otherwise occurred in connection with, or in
anticipation of, a Change in Control which actually occurs, then for all
purposes hereof, a Change in Control shall be deemed to have occurred on the
day
immediately prior to the date of such termination of his
employment.
X. XXXXXXXXX
34. Except
as
otherwise expressly provided herein, if Bank terminates Executive’s employment
for any reason other than Good Cause (as defined in this Agreement) after the
first anniversary date of the Effective Date of this Agreement, then Executive
shall be entitled to severance pay in an amount not less than the base salary
that would have been due the executive had he remained employed for six (6)
months following termination. If Bank terminates Executive’s employment for any
reason other than Good Cause (as defined in this Agreement) after the second
anniversary date of the Effect Date of this Agreement, then Executive shall
be
entitled to severance pay in an amount equal to the base salary that would
have
been due the Executive had he remained employed for one year following
termination. In the event hat the Executive is entitled to any payment under
Section G, no payment shall be due under this Section H . Any severance pay
due
to Executive pursuant to this Section H shall be paid in accordance with the
terms of normal payroll procedure of the Bank.
I. SEVERABILITY
35. If
any
term or other provision of this Agreement is held to be illegal, invalid or
unenforceable by any rule of law or public policy, (A) such term or provision
shall be fully severable and this Agreement shall be construed and enforce
as if
such illegal, invalid or unenforceable provision were not a part hereof; (B)
the
remaining provision of this Agreement shall remain in full force and effect
and
shall not be affect by such illegal, invalid or unenforceable provision or
by
its severance from this Agreement; and (C) there shall be added atomically
as a
part of this Agreement a provision as a similar in terms to such illegal,
invalid or unenforceable provision as many be possible and still be legal,
valid
and enforceable. If any provision of this Agreement.
J. WAIVER
36. The
parties acknowledge and agree that the failure of either to enforce any
provision of this Agreement shall not constitute a waiver of that particular
provision, or of any other provisions of this Agreement.
K. SUCCSSORS
AND ASSIGNS
The
Executive acknowledges and agrees that, this Agreement may be assigned by the
Bank to any successor-in-interest and shall inure to the benefit of, and be
fully enforceable by, any successor and/or assignee; and this Agreement will
be
fully binding upon, and may be enforce by the Executive against, any successor
and/or assignee of the Bank. In the event of any conflict between this Paragraph
37 and the Change in Control provisions set forth in Section G, above, the
terms
of Section G shall control.
38.
The
Executive acknowledges and agrees that his obligations, duties and
responsibilities under this Agreement are personal and shall not be assignable,
and that this Agreement shall be enforceable by the Executive only. In the
event
of the Executive’s death, this Agreement shall be enforceable by the Executive’s
estate, executors and/or legal representatives, only to the extent provided
herein.
L.
CHOICE OF LAW
39.
THIS
AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND ALL QUESTIONS
CONCERNING THE CONSTRUCTION, VALIDITY, INTERPRETATION AND PERFORMANCE OF THIS
AGREEMENT SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF MICHIGAN, WITHOUT
GIVING EFFECT TO PROVISION THEREOF REGARDING CONFLICT OF LAWS. IT IS STIPULATED
THAT MICHIGAN HAS A COMPELLING STATE INTEREST IN THE SUBJECT MATTER OF THIS
AGREEMENT, AND THAT EXECUTIVE HAS OR WILL HAVE REGULAR CONTACT WITH THE STATE
OF
MICHIGAN IN THE PERFORMANCE OF THIS AGREMENT.
M.
MODIFICATION
40.
The
parties acknowledge and agree that this Agreement and the other agreements
and
plans referenced herein constitute the complete and entire agreement between
the
parties; that each executed this Agreement based upon the express terms and
provisions set forth herein; that, in accepting employment with the Bank,
Executive has not relied on any representations, oral or written, which are
not
terms set forth in this Agreement; and that all previous agreements, either
oral
or written, shall have an effect on the terms or provisions of this Agreement;
and that all previous agreements, either oral or written, are expressly
superseded and revoked by this Agreement. Except as otherwise expressly provided
in this Agreement, no conditions, usage of trade, course of dealing or
performance, understanding or agreement purporting to modify, vary explain
or
supplement the terms or conditions of this Agreement unless hereafter made
in
writing and signed by the party to be bound. No waiver shall be deemed a
continuing waiver or a waiver of any subsequent breach or default, either of
a
similar or different nature, unless expressly so stated in writing.
41.
Except as otherwise expressly provided in this Agreement, no conditions, usage
of trade, course of dealing or performance, understanding or agreement
purporting to modify, vary, explain or supplement the terms or conditions of
this Agreement unless hereafter made (i) in writing, (ii) referencing an express
provision in this Agreement, (iii) signed by the Executive,
and (iv) approved by a disinterested majority of the Board of
Directors.
N.
IDEMNIFICATION
42.
The
Bank shall indemnify the Executive against all judgments, penalties, fines,
amounts paid in settlement and reasonable expenses (including, but not limited
to, attorneys’ fees) relating to his employment by the Bank to the fullest
extent permissible under the law, including, without limitation, federal and/or
state banking laws and regulations, the Michigan Banking Code of 1999, as
amended, the Michigan Business Corporation Act, as amended, and the Bank’s
Articles of Incorporation. To the extent permitted by law, the Bank may purchase
such indemnification insurance as the Board may from time to time
determine.
O.
ARBITRATION
43.
Any
dispute, controversy, or claim arising out of or relating to this Agreement
or
breach thereof, or arising out of or relating to this Agreement or breach
thereof, or arising out of or relating in any way to the employment of the
Executive or the termination thereof, shall be submitted to arbitration in
accordance with the Employment Dispute Arbitration Rules of the American
Arbitration Association. Judgment upon the award rendered by the arbitrator
may
be entered in any court of competent jurisdiction. In reaching his or her
decision, the arbitrator shall have no authority to ignore, change, modify,
add
to or delete from any provision of this Agreement, but instead is limited to
interpreting this Agreement. Notwithstanding the arbitration provisions set
forth in this Agreement, the Executive and the Bank acknowledge and agree that
nothing in this Agreement shall be construed to require the arbitration of
any
claim or controversy arising under the NONINTERFERENCE provisions of this
Agreement. These provisions shall be enforceable by any court of competent
jurisdiction and shall not be subject to this Paragraph of the Agreement. The
Executive and the Bank further acknowledge and agree that nothing in this
Agreement shall be construed to require arbitration of any claim for workers’
compensation or unemployment compensation.
P.
LEGAL CONSULTATION
44.
Each
party acknowledges that it has carefully read this agreement, that it has had
an
opportunity to consult with his or its attorney concerning the meaning, import
and legal significance of this Agreement, that it understands the terms of
the
Agreement, that all understandings and agreements between Executive and the
Bank
relating to the subjects covered in this Agreement are contained in it, and
that
it has entered into the Agreement voluntarily and not in reliance on any
promises or representations by the other than those contained in this
Agreement.
Q.
MISCELLANEOUS
45.
The
Executive shall make himself available, upon the request of the Bank, to testify
or otherwise assist in litigation, arbitration, or other disputes involving
the
Bank, or any of the directors, officers, employees, subsidiaries, or parent
corporations of either, at no additional cost during the term of this Agreement
and at any time following the termination of this Agreement.
46. The
Executive shall not be required to mitigate the amount of any payment provided
for in this agreement by seeking other employment or otherwise, nor shall the
amount of any payment provided for in this Agreement be reduced by any
compensation earned by the Executive as the result of employment by another
employee after the date of termination, or otherwise.
47. In
the
event either party institutes arbitration or litigation to enforce or protect
its rights under this Agreement, the prevailing party in such arbitration or
litigation shall be entitled, in addition to all other relief, to reasonable
attorney’s fees, out-of-pocket costs, disbursements, and arbitrator’s fees
relating to such arbitration or litigation.
48. This
Agreement may be executed simultaneously in two or more counterparts, each
of
which shall be denied an original, but all of which shall together constitute
one and the same Agreement.
49. The
bank
shall have no obligation to set aside, earmark or entrust any fund or money
with
which to pay its obligations under this Agreement. The Executive or any
successor-in-interest to Executive shall be and remain simply a general creditor
of the Bank in the same manner as any other creditor having a general unsecured
claim. For purposes of the Code, the Bank intends this Agreement to be unfunded,
unsecured promise to pay on the part of the Bank. For purposes of Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), the Bank intends
that this Agreement not be subject to ERISA. If it is deemed subject to ERISA,
it is intended to be an unfunded arrangement for the benefit of a select member
of management, who is a highly compensated employee of the Bank for the purpose
of qualifying this Agreement for the “top hat” plan exception under sections
201(2), 301(a)(3) and 402(a)(1) of ERISA. At no time shall the Executive have
or
be deemed to have any lien right, title or interest in or to any specific
investment or to any assets of the Bank. If the Bank elects to invest in a
life
insurance, disability, or annuity policy upon the life of the Executive, the
Executive shall assist the Bank by freely submitting to a physical examination
and supplying such additional information necessary to obtain such insurance
or
annuities.
50. When
a
reference is made in this Agreement to a Paragraph, such reference shall be
to a
Paragraph of this Agreement unless otherwise indicated. The headings contained
in this Agreement are for convenience of reference only and shall not affect
in
any way the meaning or interpretation of this Agreement. Whenever the worlds
“include”, “includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation.” The words “hereof”,
“herein” and “hereunder” and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision
in
this Agreement. Each use herein of the masculine, neuter or feminine gender
shall be deemed to include the other genders. Each use herein of the plural
shall include the singular and vice versa, in each case as the context requires
or as is otherwise appropriate. The word “or” is used in the inclusive sense.
Any agreement or instrument defined or referred to herein or in any agreement
or
instrument that is referred to herein means such agreement or instrument as
from
time to time amended, modified or supplemented, including by waiver or consent.
References to a person are also to its permitted successors or
assigns.
51. Executive
represents that his service as an employee of the Bank will not violate any
agreement: (i) he has made that prohibits him from disclosing any information
he
acquired prior to his becoming employed by the Bank; or (ii) he has made that
prohibits him from accepting employment with the Bank or that will interfere
with his compliance with the term of this Agreement. Executive further
represents that he has not previously, and will not in the future, disclose
to
Bank any proprietary information or trade secrets belonging to any previous
employer. Executive acknowledges that the Bank has instructed him not to
disclose to it any proprietary information or trade secrets belonging to any
previous employer.
R.
NOTICES
52. All
notices and other communications required or permitted to be given or delivered
hereunder or by reason of the provisions of this Agreement shall be in writing
and shall be deemed to have been properly given if (a) delivered personally,
(b)
delivered by a recognized overnight courier service, (c) sent by United States
mail, or (d) sent by facsimile transmission followed by a confirmation copy
delivered by recognized overnight courier service the next day. Such notices,
requests, consents and other communication shall be sent to the respective
parties as follows (or at such other address for a party as shall be specified
by like notice to the other party):
If
to the
Bank:
Bank
of
Birmingham
33000
Xxxxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000
Attention:
Chairman
If
to
Executive:
Xxxxxxx
X. Xxxx
550
Xxxxxx XX
Xxxxxxxxx
Xxxxx, XX 00000
53. Any
notice or other communication given pursuant to this Agreement shall be
effective (i) in the case of personal delivery, telex or facsimile transmission,
when received; (ii) in the case of mail, upon the earlier of actual receipt
or
five (5) business days after deposit with the United States Postal Service,
first class certified or registered mail, postage prepaid, return receipt
requested; and (iii) in the case of a recognized overnight courier service,
one
(1) business day after delivery to the courier service together with all
appropriate fees or charges and instructions for overnight delivery. Any and
all
notices of documents or other notices required to be delivered under the terms
of this Agreement shall be addressed to each party as follows:
[signature
page to Employment Agreement]
EXECUTED
ON THIS DATE FIRST WRITTEN ABOVE IN BIRMINGHAM,
MICHIGAN.
| EXECUTIVE | ||
| /s/ Xxxxxx X. Xxxx | /s/ Xxxxxxx X. Xxxx | |
| WITNESS | Xxxxxxx X. Xxxx | |
| BANK OF BIRMINGHAM | ||
| /s/ Xxxxxxx Xxxxxxxx | /s/ Xxxxxxx Xxxxx | |
| WITNESS | Compensation Committee Member | |
