EMPLOYMENT AGREEMENT
(Xxxxx X. Xxxxxxx)
THIS EMPLOYMENT AGREEMENT (hereinafter called the "Agreement") is entered
into as of April 1, 2003, by and between COLONIAL TRUST COMPANY, an Arizona
corporation (hereinafter called the "Company"), with its principal office
located at 0000 X. 00xx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, and Xxxxx X. Xxxxxxx,
residing at 00000 X. Xxxxxxxxxx Xxxx, Xxxxx, Xxxxxxx 00000 (hereinafter referred
to as "Xxxxxxx").
Xxxxxxx is presently employed by the Company as Chief Operating Officer and
Secretary.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the parties do hereby agree as follows:
1. Employment. The Company hereby continues to employ Xxxxxxx and Xxxxxxx
hereby accepts continued employment by the Company as Chief Operating Officer
and Secretary to perform such duties and services of a senior executive nature
as may from time to time be assigned or delegated to him by the Board of
Directors and President of the Company.
Throughout the term of this Agreement, Xxxxxxx will 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 by the Company, which
approval shall not unreasonably be withheld.
2. Term. This Agreement shall be for a term of one (1) year, commencing on
April 1, 2003, and ending on March 31, 2004, unless sooner terminated as
hereinafter provided. Unless either party elects to terminate this Agreement at
the end of the original or any renewal term by giving the other party notice of
such election at least sixty (60) days before the expiration of the then current
term, this Agreement shall be deemed to have been renewed for an additional term
of one (1) year commencing on the day after the expiration of the then current
term.
3. Compensation and Benefits.
(a) Salary. For the services rendered by Xxxxxxx to Company, Xxxxxxx
shall receive a base salary at the rate of $ 92,881.80 per year,
payable in accordance with the standard payroll practices of the
Company.
(b) Bonus. 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 seven and one-half
percent (7 1/2%) of the Company's total issued and outstanding
Common Stock at March 31, 2000. Shares of Common Stock, which are
issuable upon the exercise of issued, and outstanding (but
unexercised) stock options as of March 31, 2000 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 within ninety (90) 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 bonus is paid.
(c) Medical Insurance. The Company will provide coverage for Xxxxxxx
and his dependents under the Company's health insurance policy.
Such coverage for his dependents may be provided for by
additional based salary and then costs for such coverage deducted
from Xxxxxxx'x base salary.
(d) Life Insurance. The Company will procure and maintain in effect a
$500,000 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 policy only in such amount
as it may purchase by paying a premium equal to the amount it
would have paid for a $500,000 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 the beneficiaries designated by Xxxxxxx.
(e) Disability Insurance, Disability Payments by Company. The Company
agrees that Xxxxxxx will be provided the same level of disability
coverage as the Company provides for its other senior executives.
4. Termination of this Agreement and Xxxxxxx'x Employment.
(a) Mandatory Termination. This Agreement shall terminate upon the
expiration of the then-existing term in the event that either
party gives notice of such party's election to then terminate the
Agreement as set forth in paragraph 2 hereof. Furthermore, this
Agreement shall terminate in the event of the death of Xxxxxxx
subject to paragraph 3(e) hereof.
(b) Discretionary Termination For "Cause". The Company may terminate
this Agreement and Xxxxxxx'x employment at any time for "cause."
For purposes of this Agreement, "cause" shall mean the following:
(1) Subject to paragraph 3(f) hereof, Xxxxxxx'x inability to
perform his duties under this Agreement for a period of more
than ninety (90) consecutive days due to a total or partial
disability;
(2) If Xxxxxxx fails to perform his duties to the Company
hereunder in the unanimous opinion of the Company's Board of
Directors;
(3) Xxxxxxx commits such acts of dishonesty, theft, fraud or
misappropriation or is convicted of a crime that would, in
the opinion of the Board of Directors, prevent the effective
performance of Xxxxxxx'x duties hereunder; or
(4) Xxxxxxx breaches the terms and conditions of Section 5 of
this Agreement.
Any termination of Xxxxxxx'x employment will be effective upon Xxxxxxx'x
receipt of written notice of such termination unless otherwise provided in said
notice, 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.
(c) Termination Upon Change of Control. In the event that Xxxxxxx'x
employment is terminated upon or within two (2) years after a
change of control either by the Company for any reason other than
the reasons set forth in Paragraph 4(a), 4(b)(1), (3) or (4) or
as a result of the resignation of Xxxxxxx as a result of:
(1) a material breach by the Company of its obligations under
this Agreement;
(2) a reduction in Xxxxxxx'x base salary; or
(3) a relocation of the Company's business offices without
Xxxxxxx'x consent to a location which is outside the general
metropolitan area in which the Company was located
immediately prior to the change of control;
then the Company would pay to Xxxxxxx in consideration of such termination the
following:
(1) an amount equal to the remaining portion of the base salary
due under the term of this agreement, but not less than two
times Xxxxxxx'x annual base salary in effect either
immediately prior to the termination of employment or
immediately prior to the change of control, whichever is the
greatest; and
(2) an amount equal to the spread (ie. The excess of market
value over the exercise price) on any stock options held by
Xxxxxxx, whether or not such options were exercisable at the
date of termination. Upon the payment of such compensation,
such stock options shall be cancelled.
For purposes of this provision of this Agreement, "change of control' shall
mean:
(1) The acquisition by an individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, amended (the "Exchange
Act") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of
either the then outstanding shares of common stock of the
Company or the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally
in the election of directors;
(2) Individuals who, as of the date hereof, constitute the Board
of Directors (the "Incumbent Board") cease for any reason to
constitute at least a majority of the board; provided
however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a
vote of at least a majority of the directors the comprising
the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual
or threatened election contest with respect to the election
or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than the Board; or
(3) Approval by the shareholders of the Company of a
reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company (a "Business Combination").
(4) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company; or
(5) A majority of the Board otherwise determines that a Change
in Control shall have occurred.
5. Confidential Information, Non-Solicitation.
(a) Confidential Information, Non-Solicitation. 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, the foregoing shall not apply to any such
information in the public domain other than by reason of a breach
of this Paragraph 5. If the Company requests the return of
information or any such materials at any time during or at the
termination of Xxxxxxx'x employment, Xxxxxxx shall immediately
deliver the same to the Company. During the term of this
Agreement and at all times thereafter, Xxxxxxx shall not use for
his 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 material
referred to in this Paragraph 5 or any confidential information
regarding the business methods, business policies, procedures,
techniques, trade secretes 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 pay,
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.
(b) Non-Solicitation. During the term of this Agreement and for a
period of one (1) year after the termination of his employment
with the Company for any reason whatsoever, Xxxxxxx shall not,
directly or indirectly, solicit, induce, encourage or attempt to
influence any client, customer, employee, consultant, independent
contractor, salesman or supplier of the Company (including
without limitation any broker/dealer with whom the Company does
or has done business) to cease to do business with or to
terminate his employment with the Company and shall not utilize
for any such purpose any names and addresses of customers or
clients of the Company or any data on or relating to past,
present or prospective (at the time of termination of Xxxxxxx'x
employment) customers or clients of the Company.
6. Arbitration of Disputes. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled by
arbitration in accordance with the rules of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof.
7. Modification of Contract. No waiver or modification of this Agreement
shall be valid unless it is in writing and duly executed by both parties.
8. Severability. All agreements and covenants contained herein are
severable, and in the event any of them shall be held to be valid by any court
of competent jurisdiction, this Agreement shall be interpreted as if such
invalid agreements and covenants were not contained herein.
9. Governing Law, Venue for Arbitration. This Agreement takes effect upon
its acceptance and execution by the Company in Phoenix, Arizona, and 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 arbitration hereunder.
10. Notice. 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 to their
respective addresses hereinabove provided, or to the Company or Xxxxxxx at its
or his last known address.
11. Entire Agreement. This Agreement contains the complete agreement
between the Company and Xxxxxxx 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 one of them to the
other (other than those contained in this Agreement) are of no effect and that
neither of them has relied on such considerations in executing this Agreement.
IN WITNESS WHEREOF, the parties have executed or caused this Agreement to
be executed as of the date, month and year first above written.
COLONIAL TRUST COMPANY
BY: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
President and Chief Executive Officer
BY: /s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Chief Operating Officer and Secretary
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (the "Amendment") is entered into
this 29th day of April, 2004, by and between Colonial Trust Company, an Arizona
corporation (hereinafter called "Colonial"), and Xxxxx X. Xxxxxxx, ("Xxxxxxx").
RECITALS:
1. Xxxxxxx is presently employed by Colonial as its Chief Operating Officer
and Secretary.
2. Colonial and Xxxxxxx entered into an Employment Agreement dated April 1,
2003 (the "Employment Agreement') which governs the terms of employment by
Colonial of Xxxxxxx.
3. Colonial and Xxxxxxx now wish to amend the Employment Agreement as
hereinafter provided.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the parties do hereby amend the Employment Agreement as
follows:
1. In lieu of the bonus provided for in paragraph 3.(b) of the Employment
Agreement, Colonial will pay to Xxxxxxx upon the confirmation of the sale
of the Corporate Trust Division of Colonial and the close of the Wealth
Management Division of Colonial a bonus of $107,150.00 which shall be
payable 60% upon the close of the sale of the Corporate Trust Division and
40% upon the close of the sale of the Wealth Management Division. These
amounts will be in lieu of any bonuses due and payable under the agreement
for the fiscal year end March 31, 2004 and any subsequent year end.
2. Colonial and Xxxxxxx agree to amend paragraph 4 of the Employment Agreement
by the addition of the following:
(d) Sale of the Corporate Trust Division to First State Bank, Happy,
Texas. Notwithstanding the above, in the event that Colonial
successfully closes the sale of its Corporate Trust Division to
the First State Bank, Happy, Texas, ("First State Bank") and as a
result thereof Xxxxxxx becomes an employee of First State Bank
and in the event his employment is terminated by First State Bank
within the first year after the close of the sale of the
Corporate Trust Division of Colonial to First State Bank, then
Colonial shall pay to Xxxxxxx an amount equal to $92,882.00
(Xxxxxxx'x current annual base salary) less any amounts paid by
First State Bank to Xxxxxxx during his employment by First State
Bank. In the event of such termination and payment, such amount
shall be paid to Xxxxxxx within thirty days of Xxxxxxx'x
termination by First State Bank.
For purposes of this provision, "termination" by First State Bank
of Xxxxxxx shall mean involuntary termination by First State Bank
except for termination for cause. "Termination for cause" shall
be termination for any of the following reasons:
1. Xxxxxxx'x inability to perform his duties under the First
State Bank Employment Agreement for a period of more than
ninety (90) consecutive days due to total or partial
disability;
2. Xxxxxxx commits such acts of dishonesty, theft, fraud or
misappropriation or is convicted of a crime that would, in
the opinion of First State Bank, prevent the effective
performance of Xxxxxxx'x duties thereunder; or
3. Xxxxxxx is terminated by First State Bank as a result of a
material breach by Xxxxxxx of the terms and conditions of
his Employment Agreement with First State Bank.
Colonial and Xxxxxxx agree that the potential payment
provided for in this subparagraph (d) is in lieu of any
payment as provided for under subparagraph (c) above.
EXECUTED this 29th day of April, 2004.
COLONIAL TRUST COMPANY
BY: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx, President
BY: /s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
