EXHIBIT 10.10
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is by and between Guaranty
Bank, a Texas banking corporation (the "Bank"), and Xxxxxx X. Xxxxxxxxx, Xx., an
individual residing in Mount Pleasant, Xxxxx County, Texas (the "Employee"),
effective as of March __, 1998 (the "Effective Date").
W I T N E S S E T H:
In consideration of the mutual covenants and agreements contained in this
Agreement, the parties agree as follows:
1. Employment. On the terms and subject to the conditions of this
Agreement, the Bank hereby employs Employee, and engages the services of the
Employee to serve as President (the "Office") of the Bank, and Employee hereby
accepts employment with the Bank according to the terms set forth in this
Agreement.
2. Duties. Employee is hereby employed and shall work at the location of
the Bank or at such other place or places as may be directed by the Bank. The
Employee shall have the position (including status, offices, titles and
reporting requirements), authority, duties, and responsibilities usually
associated with the Office of a bank having assets similar in nature and value
to the assets of the Bank.
2.1 The Employee shall devote his entire time and attention during normal
working hours to the Office during the term of this Agreement for the profit and
benefit of Bank. During the term of this Agreement, the Employee shall not
directly or indirectly render any services or be engaged in any activity of a
business, commercial, or professional nature to any other person or
organization, whether for compensation or otherwise, other than Bank, without
the prior written consent of the Bank.
3. Compensation and Benefits. The compensation and other benefits payable
to Employee under this Agreement shall constitute the full consideration to be
paid to Employee for all services to be rendered by Employee for the Bank.
3.1 The Bank will pay to Employee an annual salary as determined by the
Board of Directors of the Bank which is stated on Exhibit "A" attached hereto.
The Employee's annual salary shall be payable in accordance with the Bank's
customary policies, subject to payroll and withholding deductions as may be
required by law and other deductions applied generally to employees of the Bank
for insurance or other employee benefit plans.
3.2 Employee shall be reimbursed for any and all reasonable costs and
expenses incurred by Employee in performance of his services and duties as
specified in this Agreement or incurred by Employee on behalf of, or in
furtherance of the business of, the Bank, including, but not limited to business
expenses incurred in connection with travel and entertainment; provided,
however, that Employee shall submit to the Bank supporting receipts and
information satisfactory to the Bank with respect to such reasonable costs and
expenses.
3.3 During the term of Employee's employment, he shall be entitled (i) to
receive health insurance benefits with the same coverages and deductibles as are
currently in effect with respect to Employee (subject to the availability of
such benefits at a reasonable cost), (ii) to participate in the Bank's other
benefit plans to such extent as determined by the Board of Directors of the
Bank, (iii) to participate in the Bank's other policies, including vacation and
sick leave.
4. Conflicts of Interests; Covenant Not to Compete.
4.1 Employee shall, during the term of this Agreement, devote his entire
time, attention, energies and business efforts to his duties as an employee of
the Bank and to the business of the Bank. Employee shall not, during the term
of this Agreement, directly or indirectly, for and on behalf of himself or any
person, firm, partnership, corporation or other legal entity, own, manage,
operate, control, invest in, make loans on advances to, guarantee the
obligations of or participate in the ownership or management or operations of or
be employed by or otherwise engage in the operation of any business that is in
competition in any manner whatsoever with the business of the Bank.
5. Confidential Information.
5.1 As used herein, "Confidential Information" means all technical and
business information (including financial statements and related books and
records, personnel records, customer lists, arrangements with customers and
suppliers, manuals and reports) of the Bank and its affiliates (whether such
information is owned by, licensed to or otherwise possessed by the Bank or any
affiliate), whether patentable or not, which is of a confidential, trade secret
and/or proprietary character and which is either developed by Employee (alone or
with others) or to which Employee has had access during his employment.
"Confidential Information" shall include but is not limited to information of a
technical or business nature such as ideas, discoveries, inventions,
improvements, trade secrets, know-how, manufacturing processes, specifications,
writings and other works of authorship, computer programs, financial figures and
reports, marketing plans, customer lists and data, and/or business plans or data
which relate to the actual or anticipated business of the Bank or any affiliate
or its actual or anticipated areas of research and development. "Confidential
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Information" shall also include but is not limited to confidential evaluations
of, and the confidential use or non-use by Bank or any affiliate of, technical
or business information in the public domain.
5.2 Employee shall, both during and after his employment with the Bank,
protect and maintain the confidential, trade secret and/or proprietary character
of all Confidential Information. Employee shall not, during or after
termination of his employment, directly or indirectly, use (for himself or
another) or disclose any Confidential Information, for so long as it shall
remain proprietary or protectible as confidential or trade secret information,
except as may be necessary for the performance of his duties under this
Agreement.
5.3 Employee shall deliver promptly to the Bank, at the termination of his
employment, or at any other time at the Bank's request, without retaining any
copies, all documents and other material in his possession relating, directly or
indirectly, to any Confidential Information.
5.4 Each of Employee's obligations in this Section 5 shall also apply to
the confidential, trade secret and proprietary information learned or acquired
by him during his employment from others with whom the Bank or any affiliate has
a business relationship.
6. Term and Termination.
6.1 Term. The term of this Agreement shall be for two years commencing on
the Effective Date and shall automatically be extended each day from the
Effective Date.
6.2 Termination of Agreement. Except as may otherwise be provided herein,
this Agreement may terminate prior to the end of the Term upon the occurrence
of:
(a) Thirty (30) days after written notice of termination is given by
either party to the other; or
(b) Employees's death or, at the Bank's option, upon Employee's
becoming Disabled (as defined in Section 7.3 hereof).
Any notice of termination given by Employee to the Bank under Section 6.2(a)
above shall specify whether such termination is made with or without Good
Reason-Change in Control (as defined in Section 7.5 hereof). Any notice of
termination given by the Bank to Employee under Section 6.2(a) above shall
specify whether such termination is with or without Cause (as defined in Section
7.4 hereof.
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7. Obligations of the Bank Upon Termination.
7.1 Cause and Other than for Good Reason-Change in Control. If the
Bank terminates this Agreement with Cause pursuant to Section 6.2(a) above, or
if Employee terminates this Agreement without Good Reason-Change in Control
pursuant to Section 6.2(a) hereof, this Agreement shall terminate without
further obligations to Employee, other than those obligations owing or accrued
to, vested in, or earned by Employee through the date of termination, including,
but not limited to:
(a) to the extent not theretofore paid, Employee's annual salary
in effect at the time of such termination through the date of
termination; and
(b) in the case of compensation previously deferred by Employee,
all amounts previously deferred (together with any accrued interest
thereon) and not yet paid by the Bank and any accrued vacation pay not
yet paid by the Bank; and
(c) all other amounts or benefits owing or accrued to, vested in,
earned by Employee through the date of termination under the then
existing or applicable plans, programs, arrangements, and policies of
Bank;
such obligations owing or accrued to, vested in, or earned by Employee through
the date of termination, including, but not limited to, such amounts and
benefits specified in clauses (a), (b), and (c) of this sentence, being
hereinafter collectively referred to as the "Accrued Obligations." The
aggregate amount of such obligations owing or accrued to, vested in, or earned
by Employee through the date of termination, including, but not limited to, the
Accrued Obligations, shall be paid by the Bank to Employee in cash in one lump
sum within thirty (30) days after the date of termination.
7.2 Good Reason-Change in Control; Other than for Cause Before or
After a Change in Control. If Employee terminates this Agreement with Good
Reason-Change in Control pursuant to Section 6.2(a) hereof, or if the Bank
terminates this Agreement without Cause before or after the occurrence of a
Change in Control pursuant to Section 6.2(a) hereof, the Bank shall pay to
Employee cash in one lump sum within thirty (30) days after the date of
termination the aggregate of the following amounts (the "Change in Control-Lump
Sum Payment"):
(i) to the extent not theretofore paid, Employee's annual
salary at the annual rate in effect at the time of such
termination through the date of termination; and
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(ii) to the extent not theretofore paid, any bonus through
the date of termination; and
(iii) in the case of compensation previously deferred by
Employee, all amounts previously deferred (together with any
accrued interest thereon) and not yet paid by the Bank, and any
accrued vacation pay not yet paid by the Bank; and
(iv) all other amounts or benefits owing or accrued to,
vested in, or earned by Employee through the date of termination
under the then existing or applicable plans, programs,
arrangements, and policies of the Bank; and
(v) any and all other Accrued Obligations not otherwise
described in clause (i), (ii), (iii), (iv) or (v) of this Section
7.2; and
(vi) an amount equal to two (2) times the Employee's annual
salary in effect at the time of such termination.
7.3 Death or Disabilities. If Employee's employment is terminated
under Section 6.2(b) hereof by reason of Employee's death or Disability, the
Bank shall pay to Employee's legal representatives cash in one lump sum within
thirty (30) days after the date of Employee's death or Disability the full
amount of the obligations owing or accrued to, vested in, or earned by Employee
through the date of Employee's death or disability, including, but not limited
to, the Accrued Obligations. Anything in this Agreement to the contrary
notwithstanding, the Employee's legal representatives or beneficiaries shall be
entitled to receive benefits provided under the then existing or applicable
plans, programs, or arrangements and policies of the Bank relating to death or
disability. As used herein, "Disabled" shall have the meanings as being
disabled under the Guaranty Bancshares, Inc. 1998 Stock Incentive Plan.
7.4 Cause. As used in this Agreement, the term "Cause" means (i)
willful misconduct by Employee, (ii) the gross neglect by Employee of his duties
as an employee, officer or director of the Bank which continues for more than
thirty (30) days after written notice from the Bank to Employee specifically
identifying the gross negligence of Employee and directing Employee to
discontinue same, (iii) the commission by Employee of an act, other than an act
taken in good faith within the course and scope of Employee's employment, which
is directly detrimental to the Bank and which act exposes the Bank to material
liability.
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7.5 Good Reason-Change in Control. As used in this Agreement, the
term "Good Reason-Change in Control" means after the occurrence of a Change in
Control and a determination by Employee that any one or more of the following
events has occurred:
(a) the assignment by the Bank to Employee of duties that are
inconsistent with the Office at the time of such assignment, or the removal
by the Bank from Employee of those duties usually appertaining to the
Office at the time of such removal; or
(b) a change by the Bank, without Employee's prior written consent, in
Employee's responsibilities to the Bank as such responsibilities existed at
the time of the occurrence of such Change in Control (or as such
responsibilities may thereafter exist from time to time as a result of
changes in such responsibilities made with Employee's prior written
consent); or
(c) any removal of Employee from, or any failure to elect or reelect
Employee to, the Office, except in connection with Employee's promotion,
with his prior written consent, to a higher office (if any) with the Bank;
or
(d) the Bank's direction that Employee discontinue service (or not
seek reelection or reappointment) as a director, officer or member of any
corporation or other entity of which Employee is a director, officer or
member at the time of the occurrence of such Change in Control; or
(e) the failure of the Bank to continue to provide Employee with
office space, related facilities and support personnel (including, but not
limited to, administrative and secretarial assistance) that are both
commensurate with the Office and Employee's responsibilities to and
position with the Bank at the time of the occurrence of such Change in
Control and not materially dissimilar to the office space, related
facilities and support personnel provided to other key executive officers
of the Bank; or
(f) a reduction by the Bank in the amount of Employee's minimum salary
specified in Section 2.1(a) (or as subsequently increased) and as in effect
at the time of the occurrence of such Change in Control, or a failure of
the Bank to pay such minimum annual salary to the Employee at the time and
in the manner specified in Section 3.1(a) of this Agreement; or
(g) Employee's principal office space or the related facilities or
support space or the related facilities or support personnel referred to in
paragraph (e) of this Section 7.5 cease to be located within the Bank's
principal executive offices, or for a period of more than 45
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consecutive days Employee is required by the Bank to perform a majority of
this duties outside the Bank's principal executive offices; or
(h) the relocation, without Employee's prior written consent, of the
Bank's principal executive offices to a location outside the county in
which such offices are located at the time of the occurrence of such Change
in Control; or
(i) the failure of the Bank to obtain the assumption by any successor
to the Bank of the obligations imposed upon the Bank under this Agreement,
as required by Section 14 of this Agreement; or
(j) the employment of Employee under this Agreement is terminated by
the Bank without Cause; or
(k) the Bank notifies Employee of the Bank's intention not to observe
or perform one or more of the obligations of the Bank under this Agreement;
or
(l) the Bank breaches any provision of this Agreement.
7.6 Change in Control. As used herein, the term "Change in Control"
shall mean the occurrence with respect to the Bank or Guaranty Bancshares, Inc.
(the "Parent") of any of the following events:
(a) a report on Schedule 13D is filed with the Securities and Exchange
Commission (the "SEC") pursuant to Section 13(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), disclosing that any person,
entity or group (within the meaning of Section 13(d) or 14(d) of the
Exchange Act), other than the Bank or the Parent (or one of its
subsidiaries) or any employee benefit plan sponsored by the Bank or the
Parent (or one of its subsidiaries), is the beneficial owner (as such term
is defined in Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of 20 percent or more of the outstanding shares of common stock
of the Bank or the Parent or the combined voting power of the then-
outstanding securities of the Bank or the Parent;
(b) a report is filed by the Bank or the Parent disclosing a response
to either Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Exchange Act, or to Item 1 of Form 8-K promulgated under the Exchange Act,
or to any similar reporting requirement hereafter promulgated by the SEC;
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(c) any person, entity or group (within the meaning of Section 13(d)
or 14(d) of the Exchange Act), other than the Bank or the Parent (or one of
its subsidiaries) or any employee benefit plan sponsored by the Bank or the
Parent (or one of its subsidiaries), shall purchase securities pursuant to
a tender offer or exchange offer to acquire any common stock of the Bank or
the Parent (or securities convertible into common stock) for cash,
securities or any other consideration, provided that after consummation of
the offer, the person, entity or group in question is the beneficial owner
(as such term is defined in Rule 13d-3 promulgated under the Exchange Act),
directly or indirectly, of 20 percent or more of the combined voting power
of the then-outstanding securities of the Bank or the Parent (as determined
under paragraph (d) of Rule 13d-3 promulgated under the Exchange Act, in
the case of rights to acquire common stock);
(d) the stockholders of the Bank or the Parent shall approve:
(i) any merger, consolidation, or reorganization of the Bank or
the Parent:
(A) in which the Bank or the Parent is not the continuing or
surviving corporation,
(B) pursuant to which shares of common stock of the Bank or
the Parent would be converted into cash, securities or other
property,
(C) with a corporation which prior to such merger,
consolidation, or reorganization owned 20 percent or more of the
combined voting power of the then-outstanding securities of the
Bank or the Parent, or
(D) in which the Bank or the Parent will not survive as an
independent corporation;
(ii) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all the assets of the Bank or the Parent, or
(iii) any liquidation or dissolution of the Bank or the Parent;
(e) the stockholders of the Bank or the Parent shall approve a merger,
consolidation, reorganization, recapitalization, exchange offer, purchase
of assets or other transaction after the consummation of which any person,
entity or group (as defined in accordance with Section 13(d) or 14(d) of
the Exchange Act) would own beneficially in
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excess of 50% of the outstanding shares of common stock of the Bank or the
Parent or in excess of 50% of the combined voting power of the then-
outstanding securities of the Bank or the Parent; or
(f) during a period of two consecutive years, the individuals who at
the beginning of such period constituted the Board of Directors of Bank or
the Parent cease for any reason to constitute a majority of such Board,
unless the election or nomination for election by the Bank or the Parent's
stockholders of each new director during any such two-year period was
approved by the vote by two-thirds of the directors then still in office
who were directors at the beginning of such two-year period.
8. Parachute Payments.
8.1 General. For the purposes of the determinations to be made
pursuant to Paragraph 8.2 below, capitalized terms that are not defined in this
Agreement shall have the meanings set forth in Section 280G of the Internal
Revenue Code of 1986, as amended ("Code"). A "Change in Control" of the Bank or
the Parent shall have the meaning set forth in Section 7.6 above and shall refer
to an ownership change described in Section 280G(b)(2)(A)(i) of the Code with
respect to the Bank of the Parent. "Incentive Agreements" mean this Agreement
and all stock option agreements, incentive compensation unit agreements,
supplemental pension agreements or other arrangements or agreements, whether in
existence on the date hereof or hereafter entered into by the Employee and the
Bank or the Parent that entitled the Employee to receive payments or other
property from the Bank or the Parent.
8.2 Limitation. If the Aggregate Present Value of Parachute Payments
payable to or in respect of the Employee by reason of a Change in Control of the
Bank or the Parent under all Incentive Agreements then in effect is greater than
or equal to three times the Base Amount, then the Aggregate Present Value of
Parachute Payments made to the Employee shall be limited to an amount equal to
the greater of the portion of the Parachute Payments constituting Reasonable
Compensation or three times the Base Amount less one dollar. Any amount
required to be withheld from payments made to the Employee pursuant to this
Paragraph 8.2 shall be deducted from the Change in Control-Lump Sum Payment
referred to in Section 7.2 above.
9. Notices. Any notice under this Agreement must be in writing and may
be given by certified or registered mail, postage prepaid, addressed to the
party or parties to be notified with return receipt requested, or by delivering
the notice in person. For purposes of notice, the address of Employee or any
administrator, executor or legal representative of Employee or his estate, as
the case may be, shall be the last address of the Employee on the records of the
Bank. The address of the Bank shall be its principal business address.
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10. Controlling Law. This Agreement shall be governed by the laws of the
State of Texas.
11. Entire Agreement. This Agreement contains the entire agreement of the
parties and may only be amended in writing signed by both parties; provided,
that no amendment to this Agreement shall be effective unless authorized by
resolution of the Board of Directors and signed on behalf of the Bank by a duly
authorized officer of the Bank other than Employee.
12. Remedies, Modification and Separability. Employee and the Bank agree
that Employee's breach of Sections 4 and 5 of this Agreement will result in
irreparable harm to the Bank, that no adequate remedy at law is available, and
that the Bank shall be entitled to injunctive relief; however, nothing herein
shall prevent the Bank from pursuing any other remedies at law or at equity
available to the Bank. Should a court of competent jurisdiction declare any of
the covenants set forth in Sections 4 or 5 unenforceable, the court shall be
empowered to modify or reform such covenants so as to provide relief reasonably
necessary to protect the interests of the Bank and Employee and to award
injunctive relief, or damages, or both, to which the Bank may be entitled. If
any provision of this Agreement is declared by a court of last resort to be
invalid, the Bank and Employee agree that such declaration shall not affect the
validity of the other provisions of this Agreement. If any provision of this
Agreement is capable to two constructions, one of which would render the
provision void and the other of which would render the provision valid, then the
provision shall have the construction which renders it valid.
13. Preservation of Business; Fiduciary Responsibility. Employee shall
use his best efforts to preserve the business and organization of the Bank, to
keep available to the Bank the services of its present employees and to preserve
the business relations of the Bank with suppliers, distributors, customers and
others. Employee shall not commit any act which would injure the Bank.
Employee shall observe and fulfill proper standards of fiduciary responsibility
attendant upon his Office.
14. Assignments. This Agreement is personal to Employee and without the
prior written consent of the Bank shall not be assignable by Employee other than
by will or the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by Employee's legal representatives and heirs.
This Agreement shall inure to the benefit of and be binding upon the Bank and
its successors and assigns. The Bank shall require any corporation, entity,
individual or other person who is the successor (whether direct or indirect, by
purchase, merger, consolidation, reorganization, or otherwise) to all or
substantially all of the business or assets of the Bank to expressly assume and
agree to perform, by a written agreement in form and substance satisfactory to
Employee, all of the obligations of the Bank under this Agreement. As used in
this Agreement, the term "Bank" shall mean the Bank as hereinbefore defined and
any successor to its business
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and/or assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, written agreement, or otherwise.
15. Waiver of Breach. The waiver by the Bank of a breach of any provision
of this Agreement by Employee shall not operate or be construed as a waiver by
the Bank of any subsequent breach of Employee.
16. Revocation of Previous Employment Agreements. Any and all previous
employment agreements existing between the Bank and Employee are revoked and
canceled.
17. Headings. The section headings in this Agreement are for convenience
of reference and shall not be used in the interpretation or construction of this
Agreement.
18. Attorney's Fees. In the event Bank or Employee breaches any term or
provision of this Agreement and the other party employs an attorney or attorneys
to enforce the terms of this Agreement, then the breaching or defaulting party
agrees to pay the other party the reasonable attorney's fees and costs incurred
to enforce this Agreement.
19. Execution. This Agreement may be executed in multiple counterparts
each of which shall be deemed an original and all of which shall constitute one
instrument.
Employee acknowledges that he has read this Agreement and understands that
signing this Agreement is a condition of employment.
IN WITNESS WHEREOF, this Agreement is executed as of the ____ day of
______________, 1998.
"EMPLOYEE" "BANK"
Guaranty Bank
By:
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Xxxxxx X. Xxxxxxxxx, Xx. Name:
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Title:
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Exhibit "A"
Employment Agreement By and Between
Guaranty Bank and Xxxxxx X. Xxxxxxxxx, Xx.
Calendar Year Annual Salary Bank Initials Employee Initials
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1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
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