EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into as of
December 16, 1998, by and between Success National Bank, a national banking
organization ("Employer"), and Xxxxxx X. Xxxxxx ("Employee").
WHEREAS, Employer and Employee desire to enter into an employment
agreement governed by the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the provisions and undertakings set
forth herein, the parties, intending to be legally bound, hereby agree as
follows:
1. EMPLOYMENT.
1.1 Employment. Employer hereby retains and employs, and Employee
accepts such retention and employment, to provide services hereunder as
President and Chief Executive Officer of Employer and its parent company,
Success Bancshares, Inc. ("Bancshares"). Employee shall be accountable to
Employer through the Boards of Directors of Employer and Bancshares.
1.2 Duties and Obligations. As President and Chief Executive Officer,
Employee shall perform all executive and managerial duties incumbent upon such
position. Employee will devote his full time and attention and give his best
efforts to the performance of such executive and managerial duties. It is
intended that Employee may have other business investments or directorships and
engage in civic, charitable and other such activities so long as such
activities do not interfere with his duties hereunder. Employer shall not
relocate Employee from the present three main locations of Employer in the
Chicago metropolitan area.
1.3 Proprietary Property. Employee acknowledges that in the course of
his employment with Employer, Employer will provide Employee with, or access
to, customer lists, memoranda, files, records, trade secrets and such other
proprietary information and property (collectively, the "Proprietary Property")
as is necessary or desirable to assist Employee in his duties. Employee
acknowledges that the Proprietary Property is the sole and exclusive property
of Employer and is not available to the public at large. Employee agrees that
he shall not, while in the employ of Employer or thereafter, communicate or
divulge to, or use for the benefit of himself or any other person, firm or
corporation, without the prior written consent of Employer, any information
relating to the Proprietary Property except as required by law. Upon
termination of Employee's employment with Employer, Employee shall thereupon
return all Proprietary Property in his possession or control to Employer.
2. FINANCIAL ARRANGEMENTS.
2.1 Compensation. As Employee's compensation for services provided
hereunder, Employer shall do the following:
(a) Salary. Employer shall pay Employee, pursuant to Employer's payroll
schedule, an annual salary in the amount of $187,250 during the term of this
Agreement, subject to annual review and increase, but not decrease, by the
Board of Directors of Employer.
(b) Bonus. Employer shall pay Employee a one-time bonus on or about
January 4, 1999 in the amount of $50,000 and, in addition to any bonus
permitted by Section 2.2 hereof, based upon the sole determination of
Employer's Board of Directors, may grant a bonus to Employee in any year in
which it determines that Employer's performance justifies such a bonus.
(c) Expenses. Employee shall be reimbursed on a monthly basis for all
reasonable business expenses incurred by him in the performance of his duties
hereunder, to the extent such expenses are substantiated and are consistent
with the general policies of Employer relative to expense reimbursement.
(d) Benefits. In addition to any compensation provided under this
Agreement, Employee shall be entitled to participate in and receive benefits
under any and all pension, profit sharing and other employee benefit plans,
insurance programs and other benefit programs which are, from time to time,
maintained by Employer for its senior executive officers, in accordance with
the provisions of such plans or programs as from time to time in effect,
provided, however, that Employee and his eligible dependents shall, to the
extent allowable under the policy, be covered by Employer's health insurance as
soon as possible following effectiveness of this Agreement. Employer shall pay
the cost of any health insurance for Employee and his family prior to the
effectiveness of such Employer health insurance coverage.
(e) Vacations. Employee shall be entitled to four (4) weeks paid
vacation each year during the full term of his employment.
(f) Automobile Allowance. Employee shall be entitled to the use of an
automobile and Employer shall be responsible, and shall not be entitled to
reimbursement for, any and all reasonable costs and expenses relating to the
use and maintenance of such automobile to the extent such costs and expenses
are substantiated by Employee. As of the date hereof, Employee leases an
Oldsmobile Aurora pursuant to the terms of a Vehicle Leasing Agreement dated
June 4, 1998 between Employee as Lessee or Customer and Mister Leasing
Corporation, an Illinois corporation, as Lessor, a copy of which will be
provided to Employer (the "Auto Lease"). In furtherance of its obligations
under this Section 2.1(f), so long as Employee remains in the employ of
Employer, Employer agrees to be responsible for and indemnify Employee against,
all obligations of Employee under the Auto Lease, including without limitation
all monthly lease payments as provided therein.
2.2 Incentive Bonus Arrangement. In addition to the compensation payable
to Employee pursuant to the terms of Section 2.1 above, Employee shall be
entitled to performance-based bonus payments. Within one hundred twenty (120)
days following the commencement of the term of this Agreement, Employee and the
Compensation Committee of the Board of Directors of Employer shall agree upon
an incentive program for Employee pursuant to which Employee shall be entitled
to receive annual performance-based bonuses.
2.3 Equity-Based Compensation. In addition to all other compensation
payable to Employee pursuant to this Agreement, Employee shall also be entitled
to receive the equity-based compensation described in Exhibit A attached hereto
and made a part hereof.
3. TERM AND TERMINATION.
3.1 Term. This Agreement shall be effective for a period of three (3)
years from the date hereof.
3.2 Termination. This Agreement may also be terminated on the first to
occur of any of the following events:
(a) Agreement. Written agreement by both parties to terminate this
Agreement.
(b) Negligence; Misconduct. This Agreement may be terminated by Employer
upon: (i) gross neglect of his duties hereunder by Employee, (ii) gross
misconduct which would constitute a felony under Illinois criminal law or (iii)
any intentional act by Employee constituting fraud, misappropriation, or
embezzlement. Prior to termination of this Agreement under Section 3.2(b)(i)
and 3.2(b)(ii) only, Employer shall be required to provide written notice to
Employee of any reasonable correctable act or omission complained of, giving
reasonably specific details in describing necessary corrective action, and
Employee shall be given a period of twenty (20) days in which to cure or
correct such act or omission. If such act or omission is cured or corrected,
the right of Employer to terminate this Agreement under Sections 3.2(b)(i) and
3.2(b)(ii) for such act shall be extinguished.
(c) Breach. This Agreement may be terminated by Employee in the event of
the breach of any of the material terms and conditions of this Agreement by
Employer and the failure of Employer to take reasonable corrective action to
correct such breach within twenty (20) business days after receipt of written
notice of such breach by Employee.
(d) Death or Disability. In the event Employee dies or becomes disabled,
to the extent that he is physically or mentally incapacitated for more than six
(6) months in the aggregate over a period of twenty-four (24) months so that
Employee is unable to perform his essential duties and functions hereunder,
this Agreement may be terminated by Employer upon written notice to Employee.
3.3 Effects of Termination. In the event of termination of this
Agreement pursuant to Sections 3.1, 3.2(a), 3.2(b) or 3.2(d) hereof, Employer
shall have no continuing obligation to Employee hereunder. In the event of
termination by Employee pursuant to Section 3.2(c) hereof or termination by
Employer for any reason not set forth in Section 3.1 or 3.2 hereof, Employer
shall continue to pay Employee salary, bonus, if any has been earned and is
due, and benefits for the duration of the term.
4. CHANGE OF CONTROL, SALE.
4.1 Payment Upon Termination. Upon a Change of Control (as defined
herein) of Employer or Bancshares, Employer shall pay Employee the sum of two
times Employee's base salary in one lump sum payment or, if such payment is not
permissible as a matter of law, then such other maximum payment, not to exceed
two times Employee's base salary, as is lawful; provided, however, that such
payment shall only be made if Employee is an employee of the Employer
immediately prior to such Change of Control and either (a) within three hundred
sixty (360) days following such Change of Control Employee is terminated by
Employer as an employee of the Employer for any reason or (b) within one
hundred eighty (180) days following such Change of Control Employee terminates
his employment with the Employer as a result of his determination in his
reasonable discretion that he is not comfortable continuing to work for
Employer.
4.2 Change of Control Defined. For purposes of this Agreement, a "Change
of Control" shall be deemed to have occurred upon any of the following events:
(a) The consummation of any of the following transactions: (i) a merger,
recapitalization or other business combination of Employer or Bancshares with
or into another corporation pursuant to which Employer or Bancshares,
respectively, is not the continuing or surviving corporation or pursuant to
which shares of the Common Stock of Employer or Bancshares, as the case may be,
are converted into cash, securities of another corporation or other entity or
other property, other than a transaction in which the holders of the Common
Stock immediately prior to such transaction (including any preliminary or other
transaction relating to such transaction) will continue to own at least
fifty-five (55%) percent of the total voting power of the then-outstanding
securities of the surviving or continuing corporation immediately after such
transaction or (ii) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of Employer or Bancshares.
(b) A transaction in which any person (including any "person" as defined
in Section 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), corporation or other entity (other than Employer
or Bancshares, an affiliate thereof or any profit-sharing, employee ownership
or other employee benefit or similar plan sponsored by Employer or Bancshares
or any subsidiaries thereof, or any trustee of or fiduciary with respect to any
such plan when acting in such capacity, or any group comprised solely of such
entities): shall become, through purchase or otherwise, the "beneficial owner"
(as such term is defined in Rule 13d-3 under the Exchange Act), directly or
indirectly (in one transaction or a series of related transactions), of
securities of Employer or Bancshares, as the case may be, representing
forty-five (45%) percent or more of the total voting power of the
then-outstanding securities of Employer or Bancshares, respectively, ordinarily
(and apart from the rights accruing under special circumstances) having the
right to vote in the election of the directors of Employer or Bancshares,
respectively.
(c) If, during any period of two (2) consecutive years, individuals who
at the beginning of such period constituted the entire Board and any new
director whose election by the Board or nomination for election by the
stockholders of Employer or Bancshares, as the case may be, was approved by a
vote of eighty (80%) percent of the directors then still in office who either
were directors at the beginning of the period or whose election or nomination
for election by the stockholders was previously so approved, cease for any
reason to constitute a majority thereof.
4.3 Survival. The provisions of this Section 4 shall survive the
expiration of this Agreement until such time as Employee shall no longer be an
employee of the Employer.
5. PAYMENT BY HOLDING COMPANY
In view of Employee's contribution to Bancshares, any compensation or
benefit provided for herein to Employee may, upon the approval of both the
Boards of Directors of Employer and Bancshares, be paid by Bancshares.
6. NON-SOLICITATION/NON-COMPETITION
6.1 Non-Solicitation. Employee shall not, during the term of Employee's
employment with Employer and for a period of twelve (12) months after the
termination or expiration thereof, directly or indirectly, hire, offer to hire,
divert, entice away, solicit or in any other manner persuade or attempt to
persuade ("Solicitation") any person who is, or was, at any time within the
twelve (12) months prior to such Solicitation, an officer, director, employee,
customer, supplier or shareholder of Employer or Bancshares to discontinue,
cease or alter his, her or its relationship with Employer or Bancshares.
6.2 Non-Competition. Employee shall not, during the term of Employee's
employment with Employer and for a period of six (6) months after the
termination or expiration thereof, except in the event that (a) such
termination occurs upon a Change of Control and otherwise as set forth in
Section 4.1 of this Agreement or (b) Employee is terminated by Employer as an
employee of the Employer for any reason other than one described in Sections
3.2(a), 3.2(b)(i), (ii) or (iii) or 3.2(c), directly or indirectly, within ten
(10) miles of any of the three (3) largest then-existing offices of Employer
with the exception of a downtown Chicago location: (i) engage in any business
or activity that competes with the business of Employer or Bancshares; (ii)
enter the employ of any person engaged in any business or activity that
competes with the business of Employer or Bancshares or render any services to
any person for use in competing with the business of Employer or Bancshares; or
(iii) have an interest in any person engaged in any business or activity that
competes with the business of Employer or Bancshares, directly or indirectly,
in any capacity, including, without limitation, as an individual, partner,
shareholder, officer, director, principal, agent, employee, trustee, creditor
or consultant or any other relationship or capacity.
6.3 Remedies Upon Breach. Employee acknowledges and agrees that (a)
Employer shall be irreparably injured in the event of a breach by Employee of
any of Employee's obligations under this Section 6.3; (b) monetary damages
shall not be an adequate remedy for any such breach; (c) Employer shall be
entitled to injunctive relief, in addition to any other remedy which it may
have, in the event of any such breach; and (d) the existence of any claims
which Employee may have against Employer, whether under this Agreement or
otherwise, shall not be a defense to the enforcement by Employer of any of its
rights under this Section 6.3.
6.4 Enforcement. The covenants and obligations of Employee contained in
this Section 6 shall be in addition to, and not in lieu of, any covenants and
obligations which Employee may have with respect to the subject matter hereof,
whether by contract, as a matter of law or otherwise, and such covenants and
obligations, and their enforceability, shall survive the termination of this
Agreement.
6.5 Survival. The provisions of this Section 6 shall survive: (a) with
respect to Section 6.1, until the later of twelve (12) months following the
expiration of this Agreement, or twelve (12) months following the termination
of Employee's employment with Employer; and (b) with respect to Section 6.2,
until the later of six (6) months following the expiration of this Agreement,
or six (6) months following the termination of Employee's employment with
Employer.
7. MISCELLANEOUS
7.1 Assignment. This Agreement and all rights and benefits hereunder are
personal to Employee. No rights, interests or benefits hereunder shall be
sold, transferred or assigned by Employee without the prior written consent of
Employer.
7.2 Employment Status of Employee. It is expressly acknowledged that
Employee, in the performance of his services hereunder, is an employee of
Employer. Accordingly, Employer shall deduct from the compensation paid to
Employee any sums for income tax, social security or any other withholding
taxes as are required by law.
7.3 Changes or Modifications. No change or modification of this
Agreement shall be valid unless the same shall be in writing signed by Employer
and Employee. No waiver of any provision hereof shall be valid unless in
writing and signed by the party against whom charged.
7.4 Entire Agreement. This Agreement constitutes the entire Agreement
between the parties with respect to the matters set forth herein. This
Agreement supersedes any and all other agreements between the parties with
respect to the subject matter.
7.5 Notices. Notice required herein shall be effective when delivered in
person or sent by United States Certified Mail, postage prepaid and addressed
to:
Employer: Board of Directors
Success National Bank
Xxx Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000-0000
Employee: Xxxxxx X. Xxxxxx
Success National Bank
Xxx Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000-0000.
7.6 Governing Law. This Agreement shall be interpreted, construed and
enforced in accordance with the internal laws of Illinois.
7.7 Separability. The inability or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provision were omitted.
7.8 Waiver of Breach. The waiver by either party of a breach or
violation of any provision hereof shall not operate as a waiver of any
subsequent breach of the same or any other provision hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the last date written below.
EMPLOYER
SUCCESS NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President
EMPLOYEE:
/s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
EXHIBIT A
Equity-Based Compensation
1. Eight thousand (8,000) shares of Success Bancshares, Inc. common stock
will be issued promptly, subject to the restriction that Employee shall forfeit
if Employee is not a full-time Employee of Employer because of his voluntary
termination or termination pursuant to Section 3 of this Agreement
(collectively a "Rights Termination"): all of such shares on December 31, 1999;
two-third (2/3) of such shares if Employee is not a full-time Employee of
Employer because of a Rights Termination on December 31, 2000; and one-third
(1/3) of such shares if Employee is not a full-time Employee of Employer
because of a Rights Termination on December 31, 2001.
2. Twenty-five thousand (25,000) stock options (to the extent possible,
incentive stock options) granted pursuant to the Employer's approved Stock
Option Plan. Twelve thousand five hundred (12,500) to be granted at the
closing price per share on December 16, 1998 and twelve thousand five hundred
(12,500) to be granted at the closing price per share on the date of the first
Employer Board of Directors meeting in January, 1999. 4
