EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of the ________ day of _____________________,
1997, by and among Coastal Bank Corporation (the "Company"), Coastal Bank, N.A.
(in organization), 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 Xxxxxx X. Xxxxxxx (the "Executive").
WITNESSETH:
WHEREAS, the Board of Directors of the Company, as organizers of the
Bank, are seeking approval from the Office of the Comptroller of the Currency
and the Federal Deposit Insurance Corporation to charter a national bank in
Naples, Florida; and
WHEREAS, the Company will seek approval from the Federal Reserve Bank
of Atlanta and the Federal Reserve Board to acquire the Bank and to become a
bank holding company; and
WHEREAS, Executive is willing to assist the Board of Directors of the
Company in the organization of the Bank and to become the Chief Executive
Officer of the Bank and the Company in accordance with the terms and conditions
hereinafter set forth.
NOW THEREFORE, in consideration of mutual promises and covenants
contained herein, the parties hereto agree as follows:
1. EMPLOYMENT. Employer employs Executive and Executive accepts employment upon
the terms and conditions set forth in this Agreement.
2. TERM. This Agreement shall commence on the date the Bank opens for business
(the "Anniversary Date") and shall continue in full force and effect for a
period of three (3) years thereafter, subject to earlier termination as provided
herein. At the end of this Agreement's initial three-year term and at the end of
each subsequent one-year term thereafter, if any, unless Employer gives
Executive written notice of the non-renewal of this Agreement not less than
ninety (90) days prior to the expiration date (and this Agreement is not, or has
not been, terminated sooner as provided herein), the term of this Agreement
shall be automatically extended for an additional one-year term, commencing on
the Anniversary Date.
3. TITLE AND DUTIES. Executive shall serve as President and Chief Executive
Officer of the Company and as Chief Executive Officer of the Bank. Executive
shall run the day-to-day activities of the Bank and Company and oversee the Bank
and Company, within the framework of the approved annual budget, with a sound
system of internal controls, and in compliance with the policies of the Board of
Directors of the Company and the Bank and all applicable laws and regulations.
Additionally, Executive will be subject to and comply with all employee policies
adopted by the Board of Directors of the Company and the Bank.
4. EXTENT OF SERVICES. Executive shall devote his entire time, attention and
energies to the business of Employer and shall not during the term of this
Agreement be engaged in any other business activity which requires the attention
or participation of Executive during normal business hours of Employer,
recognition being given to the fact that Executive is expected on occasion to
participate in business development after normal business hours. Prior to (a)
undertaking any outside activity for compensation, whether or not such activity
is to be performed or rendered during normal business hours or (b) accepting
appointment or election as an officer or director of any entity, whether for
profit or not-for-profit, the Executive shall obtain the prior approval of a
committee (the "Committee") appointed by the Board of Directors of the Company,
composed of all of the Non-Employee Directors of the Company, as defined in Rule
16b-3, promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"). However, Executive may invest his assets in such form or
manner as will not require his services in the operation of the affairs of the
companies in which such investments are made, except that Executive shall not
make an investment in the securities of any competing financial institution
without the express approval of the Committee. Executive shall notify the
Committee of any significant participation by him in any trade association or
similar organization.
5. COMPENSATION.
a. ANNUAL SALARY. For all services rendered by Executive, Executive
shall be paid an annual salary ("Annual Salary") of $62,500.00 from the Bank and
$62,500.00 from the Company (for a total Annual Salary of $125,000.00), subject
to adjustment as provided below, which will be paid in equal periodic
installments according to the Employer's customary payroll practices, but not
less frequently than monthly. The Annual Salary will be reviewed by the
Committee not less frequently than annually, and may be adjusted upward or
downward in the sole discretion of the Committee, but in no event will the
Annual Salary be less than a total of $125,000.00 per year.
b. INCENTIVE COMPENSATION. In addition to Executive's Annual Salary,
Executive shall be eligible to receive performance incentive compensation as set
forth in a separate Incentive Agreement.
c. STOCK OPTIONS. The Company shall grant Executive the option to
purchase shares of Common Stock of the Company as set forth in a separate Stock
Option Agreement.
d. BENEFITS. Executive will, during the term of this Agreement, be
permitted to participate in such life insurance, hospitalization, major medical,
and other employee benefit plans of Employer that may be in effect from time to
time, to the extent Executive is eligible under the terms of those plans.
e. OTHER BENEFITS. In addition to the compensation described above,
Executive shall receive the following benefits at the Bank's and/or Company's
expense during the term of this Agreement:
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i. CAR ALLOWANCE. Executive shall receive a car allowance of
$750.00 per month for the purchase or lease of an automobile for Executive's
business use in connection with his employment under this Agreement. Executive
shall maintain the automobile at his own expense. Further, Executive shall
obtain and maintain, at his own expense, liability insurance on the automobile,
including excess liability (umbrella) insurance coverage in an amount not less
than $1 million dollars per occurrence, with underlying insurance coverage as
required by such excess liability insurance policy, and Executive will furnish
proof of such insurance to Employer as requested by Employer. Other than the
foregoing car allowance, Executive shall not be compensated or reimbursed by
Employer for any expenses incurred by Executive with respect to the automobile.
ii. VACATION. Executive shall be entitled to four weeks vacation
per year and shall take vacation as required by applicable banking regulations.
iii. SICK LEAVE. Executive shall be entitled to such sick leave as
may be determined in the sole discretion of the Committee.
iv. WORKING FACILITIES. Employer shall furnish Executive with
office space, equipment, supplies and such other facilities and personnel as
Employer deems necessary or appropriate for the performance of Executive's
duties under this Agreement.
v. EXPENSES. Executive may incur reasonable and provable expenses
incurred in the discharge of the business of the Bank or the Company. Executive
will be reimbursed by Employer, as appropriate, for all such expenses upon
Executive's periodic presentation of an itemized account of such expenditures
with receipts attached, subject to the subsequent review and approval of the
Committee.
6. TERMINATION.
a. FOR CAUSE. This Agreement may be terminated by Employer without
notice and without further obligations, other than for monies already paid to
and received by Executive, for any of the following reasons:
i. failure of Executive to follow reasonable written instructions
or policies of the Board of Directors of the Company or Bank;
ii. gross negligence or willful misconduct of Executive materially
damaging to the business of the Company or the Bank during the term of this
Agreement, or at any time while Executive was employed by the Company or Bank
prior to the term of this Agreement, if not disclosed to the Company or Bank
prior to the commencement of the term of this Agreement; or
iii. conviction of Executive during the term of this Agreement of
a crime involving breach of trust or moral turpitude; or
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iv. at the request of any bank regulatory authority with
jurisdiction over the Company or Bank.
In the event that the Employer discharges Executive alleging "for
cause" under this Section 6.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 6.b. hereof. In the
event that the Employer discharges Executive alleging "for cause" under this
Section 6.a., such notice of discharge shall be accompanied by a written and
specific description of the circumstances alleging such "for cause". Any
challenge or objection to the Employer's discharge of Executive "for cause" made
by Executive in a judicial or administrative proceeding brought by Executive
against Employer must be filed by Executive with the appropriate court or agency
within six (6) months of Executive's termination.
b. WITHOUT CAUSE. This Agreement may be terminated by Employer without
cause at any time during the term of this Agreement upon thirty (30) days' prior
written notice to Executive subject to the condition that Executive shall be
entitled, as liquidated damages in lieu of all other claims, to the following
severance payment:
i. During the first twelve (12) months of the initial term of this
Agreement, Executive shall be entitled to a severance payment equal to
Executive's Annual Salary.
ii. After the first twelve (12) months to the end of the
thirty-sixth (36th) month of the initial term of this Agreement, Executive shall
be entitled to a severance payment equal to one- year's then current Annual
Salary of Executive plus an additional amount equal to one-twenty-fourth (1/24)
of the Executive's then current Annual Salary for each additional month of
service rendered by Executive after the first twelve (12) months of the term of
this Agreement.
iii. After the first 24 months of the initial three (3) year term
of this Agreement, Executive shall be entitled to a severance payment equal to
two (2) times Executive's then current Annual Salary.
iv. The maximum severance payment to which Executive shall be
entitled under this Section 6.b. shall be equal to two (2) times Executive's
then current Annual Salary.
A severance payment to Executive under this Section 6.b. shall be: (a)
in cash in a lump-sum, subject to and minus applicable withholding, (b) made not
later than ten (10) days after the date upon which the notice of termination is
received by Executive, and (c) in lieu of any other compensation required under
this Agreement. By written mutual agreement of Executive and Employer, payments
made to Executive under this Section 6.b. may be paid in installments over a
period of time.
c. CHANGE IN CONTROL OF THE COMPANY. In the event of a "change in
control" of the Company or the Bank, as defined herein, and only to the extent
permitted by applicable statutes
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and regulations, Executive shall be entitled, for a period of thirty (30) 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, as liquidated damages in lieu of all other claims, a
cash severance payment equal to two times (200%) of the Executive's Annual
Salary. The severance payments provided for in this Section 6.c. shall be: (a)
in cash in a lump-sum, subject to and minus applicable withholding, (b)
commencing not later than ten (10) days after the date of notice of termination
by Executive under this Section 6.c. or ten (10) days after the date of closing
of the transaction effecting the change in control of the Company or the Bank,
whichever is later, and (c) in lieu of any other compensation required under
this Agreement. By written mutual agreement of Executive and Employer, payments
made to Executive under this Section 6.c. may be paid in installments over a
period of time.
As used in this agreement, a "change in control of this Company or the
Bank" shall mean a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Exchange Act, whether or not the Company or the Bank in fact is
required to comply with Regulation 14A; provided that, without limitation, such
a change in control shall be deemed to have occurred if any "person" (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act in effect on the
date first written above), other than the Company or the Bank, respectively, is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company or the Bank
representing 20% or more of the combined voting power of the Company's or the
Bank's then outstanding securities.
d. BY EXECUTIVE. Executive may upon sixty (60) days' prior 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 Employer shall have no further obligation to Executive other than
for monies paid to and received by Executive.
e. DEATH. This Agreement shall terminate upon Executive's death.
f. DISABILITY. Employer may terminate this Agreement as a result of
Executive's physical or mental incapacity in accordance with Executive's
disability policy.
g. GENERAL. Upon termination of this Agreement under this Section 6,
this Agreement shall be null and void and of no further effect. Any termination
of this Agreement shall constitute a termination on the same basis as to both
the Company and the Bank.
7. DEATH. In the event of Executive's death during the term of this Agreement,
Employer shall pay to Executive's designated beneficiary, or if Executive has
failed to designate a beneficiary, to his estate, an amount equal to the
periodic salary installment that would otherwise have been payable to Executive
under Section 5.a. hereof through the end of the month in which Executive's
death occurred plus an amount equal to three-twelfths (3/12) of the Executive's
then current Annual Salary. Employer shall also continue to provide Executive's
survivors, for ninety (90)
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days following the Executive's death, the same insurance benefits that Employer
provided them prior to Executive's death
8. 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. If this Agreement is terminated as provided in Section 6(d) hereof,
Executive shall not, for a period of one year after such termination, engage
directly or indirectly in any service to or employment by a bank or banking
holding company or savings and loan or similar institution within Xxxxxxx
County, Florida.
c. The covenants of Executive set forth in this Section 8 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. 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 8 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. If
any covenant, term, or condition contained in this Section 8 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 8 so that it shall be
enforceable as modified, and in any event the invalidity of any provision of
this Section 8 shall not affect the validity of any other provision in this
Section 8 or elsewhere in this Agreement.
9. NOTICES. All notices under this Agreement must be in writing and either hand
delivered or delivered by overnight courier, facsimile transmission or mailed
through the United States Postal Service by certified or registered mail, return
receipt requested, to the residence or business office in the case of Executive,
or to its principal office in the case of Employer.
10. WAIVER OF BREACH; MODIFICATION. 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 of a breach and no
modification or amendment of this Agreement shall be valid unless it is in
writing and signed by the Executive and by a duly designated member of the
Committee on behalf of the Employer.
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11. ASSIGNMENT AND SUCCESSORS. 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 Employer under this Agreement shall
inure to the benefit of and shall be binding upon the successors and assigns of
Employer, including any successor of the Company or the Bank by reason of
dissolution, merger, consolidation, sale of assets or other reorganization of
the Company or Bank.
12. GOVERNING LAW. This Agreement shall be governed and construed in accordance
with the laws of the State of Florida.
13. HEADINGS. The headings of this Agreement are intended solely for convenience
of reference and shall be given no effect in the interpretation of this
Agreement.
14. 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.
15. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original and all of which together shall
constitute one and the same
instrument.
WHEREAS, as of the day and date first above set forth, the parties
hereto execute this Agreement.
COASTAL BANK CORPORATION XXXXXX X. XXXXXXX
By
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Title:
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COASTAL BANK
By
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Title:
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