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EXHIBIT 10.1
Employment Contract
THIS AGREEMENT, dated as of the 2nd day of October, 1998, by and among
Heartland Bancshares, Inc., a Florida corporation (the "Company"), Heartland
National Bank, a proposed national bank to be organized under the laws of the
United States (the "Bank") (the Company and the Bank are collectively referred
to herein as the "Employer"), and Xxxxx X. Xxxxxxx (the "Executive").
W I T N E S S E T H:
WHEREAS, the directors of the Company, as organizers of the Bank, are
seeking approval from the Comptroller of the Currency ("OCC") and the Federal
Deposit Insurance Corporation ("FDIC") to charter a national bank in Highlands
County, Florida; and
WHEREAS, Executive is willing to assist the directors of the Company
in the organization of the Bank and to become the President and Chief Executive
Officer of the Bank and the Company in accordance with the terms and conditions
hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual premises and
covenants herein contained, the parties hereto agree as follows:
1. CONSULTING SERVICES. From the time of preliminary approval
through such time as the Bank opens for business, Executive shall serve as
consultant to Employer for the purpose of assisting with the organization of
the Bank and the Company, and as a consultant Executive shall be deemed to be
an independent contractor. Executive shall be paid $8,333.33 per month, payable
semi-monthly, for such consulting services.
2. EMPLOYMENT. Employer employs Executive and Executive accepts
employment upon the terms and conditions set forth in this Agreement.
3. TERM. The term of employment of Executive under this
Agreement shall be the five year period commencing on the date the Bank opens
for business.
4. COMPENSATION. (a) Salary. For all services rendered by
Executive, Executive shall be paid a minimum annual base salary of $100,000.00,
payable in equal semi-monthly installments during the term of this Agreement.
Salary payments shall be subject to withholding and other applicable taxes.
Such base salary shall be increased from time to time in the sole discretion of
the Board of Directors of the Bank.
(b) Bonus. Beginning on the second year end, December
31, after the Bank's opening for business, or at any other time as determined
by the Board of Directors, and in addition to Executive's base salary,
Executive shall be eligible to receive such performance bonuses as
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determined in the discretion of the Board of Directors of the Bank. The payment
of any bonus pursuant to this Section 4(b) shall be contingent upon the
following:
(i) Prior to the granting of any bonus to Executive, the
Board of Directors of the Bank shall consider, and
document its findings in the minutes of the meeting
wherein the issue was considered, Executive's
performance in light of the status of the Bank's
internal controls, loan documentation, credit
underwriting, interest rate exposure, asset growth,
asset quality, earnings and such other performance
goals and objectives mutually agreed upon between
Executive and such Board of Directors,
(ii) The overall condition of the Bank must be
"satisfactory" in the opinion of the OCC as set
forth in the most current OCC Report of Supervisory
Activity provided in the Board of Directors of the
Bank and the Uniform Financial Institution Rating of
the Bank shall not be less than a "2"; and
(iii) The Bank shall be "well capitalized" as defined
under regulations promulgated by the OCC pursuant to
the Federal Deposit Insurance Corporation
Improvement Act of 1991.
5. TITLE AND DUTIES. Executive shall serve as Chief Executive
Officer of the Bank once the OCC has granted preliminary charter approval and a
member of the Interim Board of Directors and the initial Board of Directors of
the Bank. Executive shall run the day-to-day activities of the Bank and oversee
the Bank, within the framework of the approved annual budget, and with a sound
system of internal controls and in compliance with the policies of the Board of
Directors of the Bank, and all applicable laws and regulations. Executive shall
also serve as Chief Executive Officer of the Company and shall be nominated as
a director of the company for the term of this agreement.
6. EXPENSES. Executive may incur reasonable expenses for
promoting the business of the Bank, including expenses for entertainment,
travel, and similar items. Executive will be reimbursed for all such expenses
upon Executive's monthly presentation of an itemized account of such
expenditures.
7. VACATIONS. Executive shall be entitled each year to a
vacation in accordance with the personnel policy established by the Bank's
Board of Directors during which time Executive's compensation shall be paid in
full.
8. ADDITIONAL COMPENSATION. As additional consideration paid to
Executive, Executive shall be provided with health, hospitalization, disability
and term life insurance, and participation in the Bank's incentive compensation
plan (in the event one is adopted by the Board of Directors of the Bank). The
Company shall also grant Executive annually options to purchase 3,000 shares of
Common Stock of the Company at a purchase price of $10.00 per share pursuant to
the Company's Incentive Stock Option Plan, annually, beginning on the first
anniversary after the Bank commences business. Twenty (20%) of these options
shall vest annually on five (5) successive anniversaries after the date of the
grant. All options shall be exercisable for a period of ten (10) years.
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9. CHANGE IN CONTROL OF THE COMPANY. (a) In the event of a
"change in control" of the Company, as defined herein, Executive shall be
entitled, for a period of sixty (60) days from the date of closing of the
transaction effecting such change in control and at his election, to give
written notice to Employer of termination of this Agreement and to receive a
cash payment equal to two hundred percent (200%) times the compensation,
including bonus, if any, received by Executive in the one-year period
immediately preceding the change in control. The severance payments provided
for in this Section 9(a) shall be paid in cash, commencing not later than ten
(10) days after the date of closing of the transaction effecting the change in
control of the Company, whichever is later; provided that no severance payment
shall be made pursuant to this Section 9 if Executive shall receive a written
offer of employment from the party seeking to effect a change in control of the
Company, which offer would become effective upon the closing of the transaction
constituting a change in control providing an annual base salary of no less
than the base salary in effect at that time for the Executive.
(b) For purposes of this Section 9, "change in control"
of the Company shall mean:
(i) any transaction, whether by merger,
consolidation, asset sale, tender offer,
reverse stock split, or otherwise, which
result in the acquisition or beneficial
ownership (as such term is defined under
rules and regulations promulgated under the
Securities Exchange Act of 1934, as
amended) by any person or entity or any
group of persons or entities acting in
concert, of 50% or more of the outstanding
shares of Common Stock of the Company; or
(ii) the sale of all or substantially all of the
assets of the Company.
10. TERMINATION. (a) FOR CAUSE. This Agreement may be terminated
by the Board of Directors of the Bank without notice and without further
obligation than for monies already paid, for any of the following reasons:
(i) receipt by the Bank of written notice from
the OCC that the OCC has criticized
Executive's performance or his area of
responsibility, and has either (a) rated
the Bank a "4" or a "5" under the Uniform
Financial Rating System or (b) has
determined that the Bank is in a "troubled
condition" as defined under Section 914 of
the Financial Institutions Reform, Recovery
and Enforcement Act of 1989;
(ii) failure of Executive to follow reasonable
written instructions or policies of the
Board of Directors of the Bank;
(iii) gross negligence or willful misconduct of
Executive materially damaging to the
business of the Bank during the term of
this Agreement, or at any time while he was
employed by the Bank prior to the term of
this Agreement, if not disclosed to the
Bank prior to the commencement of the term
of this Agreement; or
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(iv) arrest for, charged in relation to, by
criminal information, indictment or
otherwise, or conviction of Executive
during the term of this Agreement of a
crime involving breach of trust or moral
turpitude.
In the event that the Bank discharges Executive
alleging "cause" under this Section 10(a) and it is subsequently determined
judicially that the termination was "without cause," then such discharge shall
be deemed a discharge without cause subject to the provisions of Section 10(b)
hereof. In the event that the Bank discharges Executive alleging "cause" under
this Section 10(a), such notice of discharge shall be accompanied by a written
and specific description of the circumstances alleging such "cause." The
termination of Executive for "cause" shall not entitle the Bank to enforcement
of the non-competition and non-solicitation covenants contained in Section 12
hereof.
(b) WITHOUT CAUSE.
(i) The Bank may, upon thirty (30) days'
written notice to Executive, terminate this
Agreement without cause at any time during
the term of this Agreement upon the
condition that Executive shall be entitled,
as liquidated damages in lieu of all other
claims, to the payment of his base salary
for a period of twelve (12) months. The
severance payments provided for in this
Section 10(b) shall commence not later than
thirty (30) days after the actual date of
termination of employment of Executive. The
termination of Executive "without cause"
shall not entitle the Bank to enforcement
of the non- competition and
non-solicitation covenants contained in
Section 12 hereof.
(ii) Executive may upon thirty (30) days'
written notice to Employer terminate this
Agreement without cause at any time during
the term of this Agreement. In the event of
termination of this Agreement by Executive,
the Bank shall have no further obligation
to Executive than for monies paid and the
Bank shall be entitled to enforcement of
the non-competition and non-solicitation
covenants contained in Section 12 hereof.
(iii) In the event this Agreement is terminated
without cause, whether by Executive or by
the Bank, any stock options or unexercised
portion thereof, granted pursuant to this
Agreement, whether or not vested on the
date of termination, may be exercised by
Executive within sixty (60) days from the
date of termination at which time all such
options shall expire.
11. DEATH OR DISABILITY. In the event of Executive's death,
Employer shall pay to Executive's designated beneficiary, or, if Executive has
failed to designate a beneficiary, to his estate, an amount equal to
Executive's base salary pursuant to Section 4 hereof through the end of the
month in which Executive's death occurred. Such compensation shall be in lieu
of any other benefits provided hereunder, except that (i) in the event of a
change in control of the Company as defined herein, Executive's designated
beneficiary or his estate, as the case may be, shall be entitled to the
benefits of Section 10(b) hereof, and (ii) any benefit payable pursuant to
Section 4 shall be prorated and made available to Executive in respect of any
period prior to his death. The Bank may maintain insurance in its behalf to
satisfy in whole or in part the obligations of this Section 11.
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In the event of Executive's disability, as hereinafter defined,
Employer shall pay to Executive the base salary then in effect through the end
of the month in which the Executive became disabled. Executive shall be deemed
disabled if, by reason of physical or mental impairment, he is incapable of
performing his duties hereunder for a period of sixty (60) consecutive days.
Any dispute regarding the existence, the extent, or the continuance of
Executive's disability shall be resolved by the determination of a duly
licensed and practicing physician selected by and mutually agreeable to both
the Board of Directors of the Bank and Executive; provided, however, if
Executive officially establishes his eligibility to receive social security
disability benefits or is deemed disabled under the terms and conditions of any
disability insurance policy carried on Executive by the Company or the Bank, he
shall be deemed to be disabled as provided herein without further proof.
Executive shall make himself available for and submit to such examinations by
said physician as may be directed from time to time by the physician. Failure
to submit to any such examination shall constitute a material breach of this
Agreement.
12. NON-COMPETITION AND NON-SOLICITATION. (a) Executive
acknowledges that he has performed services or will perform services hereunder
which directly affect Employer's business. Accordingly, the parties deem it
necessary to enter into the protective agreement set forth below, the terms and
condition of which have been negotiated by and between the parties hereto.
(b) In the event of termination of employment under this
Agreement by action of Executive pursuant to 10(b)(ii) prior to the expiration
of the term of this Agreement, Executive agrees with Employer that through the
actual date of termination of the Agreement, and for a period of twenty-four
(24) months after such termination date, Executive shall not, without the prior
written consent of Employer, within Highlands County, Florida, or any other
county wherein a branch office of Employer is located, either directly or
indirectly, serve as an executive officer of any bank, bank holding company or
other financial institution.
(c) The covenants of Executive set forth in this Section
12 are separate and independent covenants for which valuable consideration has
been paid, the receipt, adequacy and sufficiency of which are acknowledged by
Executive, and have also been made by Executive to induce Employer to enter
into this Agreement. In the event that a court of competent jurisdiction finds
that Executive has violated the provisions of this Section 12, then, as partial
relief to Employer, all unexercised options granted to Executive pursuant to
Section 8 hereof shall immediately become null and void. Further, each of the
aforesaid covenants may be availed of or relied upon by Employer in any court
of competent jurisdiction, and shall form the basis of injunctive relief and
damages including expenses of litigation (including but not limited to
reasonable attorney's fees) suffered by Employer arising out of any breach of
the aforesaid covenants by Executive. The covenants of Executive set forth in
this Section 12 are cumulative to each other and to all other covenants of
Executive in favor of Employer contained in this Agreement and shall survive
the termination of this Agreement for the purposes intended. Should any
covenant, term, or condition contained in this Section 12 become or be declared
invalid or unenforceable by a court of competent jurisdiction, then the parties
may request that such court judicially modify such unenforceable provision
consistent with the intent of this Section 12 so that it shall be enforceable
as modified, and in any event the invalidity of any provision of this Section
12 shall not affect the validity of any other provision in this Section 12 or
elsewhere in this Agreement.
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13. NOTICES. Any notice required or desired to be given under
this Agreement shall be deemed given if in writing sent by certified mail to
his residence in the case of Executive, or to its principal office in the case
of Employer.
14. WAIVER OF BREACH. The waiver by Employer of a breach of any
provision of this Agreement by Executive shall not operate or be construed as a
waiver of any subsequent breach by Executive. No waiver shall be valid unless
in writing and signed by an authorized officer of Employer.
15. ASSIGNMENT. Executive acknowledges that the services to be
rendered by him are unique and personal. Accordingly, Executive may not assign
any of his rights or delegate any of his duties or obligations under this
Agreement. The rights and obligations of Executive under this Agreement shall
inure to the benefit of and shall be binding upon the successors and assigns of
Employer.
16. GOVERNING LAW. This Agreement shall be governed and construed
in accordance with the laws of the State of Florida.
17. ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties hereto regarding employment of Executive, and
supersedes and replaces any prior agreement relating thereto. It may not be
changed orally but only by an agreement in writing signed by the party against
whom enforcement of any waiver, change, modification, extension, or discharge
is sought.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
BANK
HEARTLAND NATIONAL BANK
By: /s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx
COMPANY
HEARTLAND INVESTORS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx
EXECUTIVE
/s/ Xxxxx X. Xxxxxxx (L.S.)
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Xxxxx X. Xxxxxxx
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