EXHIBIT 10f
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement" is entered into as of July 1, 1996,
by and between COLONIAL TRUST COMPANY, an Arizona corporation with its principal
place of business in Phoenix, Arizona (the "Company"), and XXXX X. XXXXXXX, a
resident of the State of Arizona ("Xxxxxxx").
RECITALS
X. Xxxxxxx is the President and Chief Executive Officer of the Company.
X. Xxxxxxx is currently an at-will employee of the Company.
C. The Company is engaged in the following businesses: (i) the Company
serves as trustee and paying agent on bond financings for churches and other
non-profit organizations located throughout the United States; (ii) the Company
serves as trustee of self-directed individual retirement accounts for certain
bondholders or employees of non-profit organizations located throughout the
United States; and (iii) the Company serves as trustee or agent, providing
investment management, administration and custodial services for trust or
investment agency accounts, most of which accounts are located in Arizona.
D. The Company and Xxxxxxx desire to continue Xxxxxxx'x relationship
with the Company and to memorialize the terms of Xxxxxxx'x employment with the
Company.
AGREEMENT
1. EMPLOYMENT. The Company hereby continues to employ Xxxxxxx and
Xxxxxxx hereby accepts such employment upon the terms and conditions set forth
herein. Xxxxxxx shall continue to reside in Phoenix, Arizona.
2. DUTIES OF EMPLOYMENT. Xxxxxxx shall continue to serve as President
and Chief Executive Officer of the Company. In such capacities, Xxxxxxx shall
continue to perform such duties and services, consistent with Xxxxxxx'x role as
the Company's senior executive officer, as the Board of Directors may assign or
delegate to him from time to time. Xxxxxxx also currently serves as a director
of the Company; during the term of this Agreement, the Company shall nominate
Xxxxxxx for election as a director and shall use its best efforts to cause the
shareholders of the Company to re-elect Xxxxxxx as a director of the Company for
so long as Xxxxxxx remains President and Chief Executive Officer under this
Agreement. In the event that Xxxxxxx voluntarily terminates his employment with
the Company or the Company terminates Xxxxxxx'x employment with the Company
pursuant to Section 5 of this Agreement, then Xxxxxxx agrees to resign
immediately as a director of the Company.
Throughout the term of this Agreement, Xxxxxxx shall devote his entire working
time, energy, skill and best efforts to the performance of his duties hereunder
in a manner which will faithfully and diligently further the business interests
of the Company. Notwithstanding the foregoing, Xxxxxxx shall be permitted to
serve as a director of additional organizations and participate in other
activities for other groups upon the prior approval of the Board of Directors.
3. Term. This Agreement shall commence on July 1, 1996 and shall
continue in effect until June 30, 1999. The Agreement shall automatically be
extended for one year terms commencing as of July 1, 1999 and thereafter at the
end of each successive year commencing on July 1 unless either the Company or
Xxxxxxx notifies the other party in the manner provided herein of his or its
intention not to renew the Agreement at least sixty (60) days prior to the end
of the then-current term.
4. COMPENSATION AND BENEFITS. Xxxxxxx will receive the following
compensation for his services during his term of employment hereunder:
(a) Salary. Xxxxxxx shall receive a base salary of $80,000 per
year, payable in accordance with the standard payroll policies of the Company.
Additionally, Xxxxxxx shall receive an annual performance and salary review from
the Board of Directors.
(b) BONUSES. Xxxxxxx shall be entitled to receive an annual
bonus each fiscal year in which the Company generates net income (after the
payment of income taxes), calculated according to the following formula: (y)
after-tax net income per share of Common Stock, multiplied by (z) a number of
shares equal to ten percent (10%) of the Company's total issued and outstanding
Common Stock at March31, 1997. Shares of Common Stock which are issuable upon
the exercise of issued and outstanding (but unexercised) stock options as of
March 31, 1997 shall be excluded for purposes of calculating the Company's
issued and outstanding Common Stock in the foregoing formula. Such bonus, if
any, shall be paid one hundred (100) days from the end of the Company's fiscal
year. The Company and Xxxxxxx shall use their best efforts to cause such bonus
to be treated as an expense of the Company during the fiscal year in which such
bonus is earned, not the year in which such bonus is paid.
As an example of the above formula, if the Company earns $01 per share during a
particular year in which this Agreement is in effect, and the Company has
8,000,000 shares of Common Stock issued and outstanding at March 31, 1997, then
Xxxxxxx'x bonus would be $8,000: (y) $.01, multiplied by (z) 800,000(10% of the
total number of issued and outstanding shares).
(c) STOCK OPTIONS. Concurrently with the execution of this
Agreement, the Company has granted to Xxxxxxx options to purchase 300,000 shares
of the Company's Common Stock pursuant to the Company's Employee Stock Option
Plan at an exercise price of $25 per share. Options to purchase 150,000 shares
shall vest immediately. Options to purchase the remaining 150,000 shares shall
vest in three equal increments of 50,000 shares on July I, 1997, 1998 and 1999,
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respectively; the exercise price for all such options shall be $25 per share.
Notwithstanding the foregoing, however, all options which are subject to the
above vesting schedule shall vest immediately in the event that Xxxxxxx'x
employment is terminated by the Company for any reason other than a breach by
Xxxxxxx of Section 5 hereof
(d) MEDICAL INSURANCE. The Company will provide coverage for
Xxxxxxx and his dependents under the Company's health insurance policy.
(e) LIFE INSURANCE. The Company will procure and maintain in
effect a $1,000,000 term life insurance policy insuring Xxxxxxx'x life;
provided, however, if Xxxxxxx is not insurable at regular rates, the Company
will purchase a term life insurance policy only in such amount as it rnay
purchase by paying a premium equal to the amount it would have paid for a
$1,000,000 policy had Xxxxxxx been insurable at regular rates. In the event of
Xxxxxxx'x death, one-half of the face amount of the policy shall be payable to
the Company and the other half of the face amount of the policy shall be payable
to beneficiaries designated by Xxxxxxx.
(f) DISABILITY INSURANCE: DISABILITY PAYMENTS BY COMPANY. The
Company is in the process of developing a policy concerning disability insurance
coverage for its senior executives. The Company agrees to develop such a policy
within twelve (12) months of the date hereof When such a policy is developed,
the Company agrees that Xxxxxxx will be provided the same level of disability
coverage as the Company provides for its other senior executives. Until
disability insurance is provided for Xxxxxxx as described above, the Company
agrees that if Xxxxxxx becomes unable to perform his duties under this Agreement
due to partial or total disability. the Company will continue to pay Xxxxxxx'x
base salary set forth in Section 4(a) hereof at its then-current rate for a
period of twenty-six (26) weeks following such disability.
5. TERMINATION. The Company may terminate this Agreement upon the
occurrence of any of the following:
(a) The death of Xxxxxxx; or
(b) Subject to Section 4(t) above, Xxxxxxx'x inability to
perform his duties under this Agreement for a period of more than ninety (90)
consecutive days due to total or partial disability; or
(c) If Xxxxxxx fails to perform his duties to the Company
hereunder to the satisfaction of the Company's Board of Directors; commits such
acts of dishonesty, theft or fraud as would prevent the effective performance of
his duties hereunder; breaches the terms of Section 6 or 7 of this Agreement; or
is convicted of a crime which would prevent the effective performance of this
duties hereunder.
Any termination of Xxxxxxx'x employment will be effective upon Xxxxxxx'x receipt
of written notice of such termination, and such termination shall be without
prejudice to any other remedy to which the Company may be entitled either at
law, in equity or under this Agreement.
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6. CONFIDENTIALITY, All information furnished to Xxxxxxx by the
Company, learned by Xxxxxxx from the Company or developed by Xxxxxxx on behalf
of the Company or at the Company's direction or for the Company's use or
otherwise in connection with Xxxxxxx'x employment hereunder, are and shall
remain the sole and confidential property of the Company; provided, however,
that the foregoing shall not apply to any such information in the public domain
other than by reason of a breach of this Section 6. During the term of this
Agreement and at all times thereafter, Xxxxxxx shall not use for his own
personal benefit, or disclose, communicate or divulge to, or use for the direct
or indirect benefit of any person, firm, association or company other than the
Company, any information or material referred to in this Section 6 or any
confidential information regarding the business methods, business policies,
procedures, techniques, trade secrets or other knowledge or processes of or
developed by the Company or any names and addresses of customers or clients or
any other confidential information relating to past, present or prospective
business operations or activities of the Company, made known to Xxxxxxx or
learned or acquired by Xxxxxxx while in the employ of the Company.
Xxxxxxx further agrees that at the expiration of his employment for any
reason whatsoever, he shall surrender and deliver to the Company all documents,
correspondence and any other data, of any type whatsoever relating to the
business of the Company or its customers or potential customers.
7. NON-COMPETITION. During the term of his employment and for a period
of twelve (12) months following the termination of Xxxxxxx'x employment with the
Company, Xxxxxxx shall not directly or indirectly, either as an employee,
employer, consultant, agent, principal, partner, shareholder, corporate officer,
director, or in any other individual or representative capacity, engage or
participate in any business that is in competition in any manner with the
business of the Company. Notwithstanding the foregoing, however, this Section 7
shall automatically terminate and be of no further force or effect whatsoever in
the event that the Company terminates Xxxxxxx'x employment with the Company for
any reason other than a breach by Xxxxxxx of Section 5 of this Agreement.
8. INJUNCTIVE RELIEF Xxxxxxx acknowledges that the restrictions
contained in Sections 6 and 7 hereof in view of the nature of the business in
which the Company is engaged, are reasonable and necessary in order to protect
the legitimate interests of the Company, and that any violation thereof would
result in irreparable injuries to the Company, and Xxxxxxx therefore
acknowledges that, in the event of his violation of any of the restrictions set
forth in Sections 6 or 7 hereofor, the Company shall be entitled to obtain from
any court of competent jurisdiction preliminary and permanent injunctive relief
as well as any other relief to which the Company may be entitled.
9. GOVERNING LAW. This Agreement shall be interpreted and construed
under the laws of the State of Arizona, which laws shall prevail in the event of
any conflict of law. This Agreement and the obligations hereunder are made and
performable in Maricopa County, Arizona, which shall be the exclusive venue for
any litigation hereunder.
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10. MODIFICATION OF CONTRACT. No waiver or modification of this
Agreement shall be valid unless it is in writing and duly executed by both
parties.
11. JUDICIAL MODIFICATION OF AGREEMENT. If the period of time or the
area specified in Sections 6 or 7 herein should be adjudged unreasonable in any
proceeding, then the period of time shall be reduced by such number of months or
the area shall be reduced by the elimination of such portion thereof or both so
that such restrictions may be enforced in such area and for such time and is
adjudged to be reasonable. If Xxxxxxx violates any of the restrictions contained
in Sections 6 or 7 of this Agreement, then the restrictive period shall not run
in favor of Xxxxxxx from the time of the commencement of any such violation
until such time as such violation shall be cured by Xxxxxxx to the satisfaction
of the Company.
12. NOTICES. Any notice to be given hereunder by either party to the
other shall be in writing and may be transmitted by personal delivery or by
mail, registered or certified, postage prepaid with return receipt requested.
Notices shall be addressed to the parties at the following addresses:
If to the Company: Colonial Trust Company
5336N. l9thAvenue
Xxxxxxx, Xxxxxxx 00000
Attention: Chairman of the Board of Directors
If to Xxxxxxx: Xx. Xxxx X. Xxxxxxx
0000 X. Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
13. ENTIRE AGREEMENT. This Agreement contains the complete agreement
concerning the employment arrangement between the Company and Xxxxxxx, The
parties acknowledge that any statements or representations that may have been
made previously by either of them to the other are of no effect and that neither
of them has relied on such considerations in executing this Agreement.
14. ATTORNEYS' FEES, In the event of a dispute or litigation arising
hereunder, the successful party in such dispute or litigation shall be entitled
to recover its costs and reasonable attorneys' fees from the other parties to
such dispute or litigation.
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DATED as of July 1, 1996.
COLONIAL TRUST COMPANY
By /s/ Xxxx X. Xxxx /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxx
Its Chairman of the Board
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