ENTERPRISE BANK & TRUST AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT 99.2
THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT
AGREEMENT the (“Agreement”) is made by and between XXXX X. XXXXX (the
“Executive”) and ENTERPRISE BANK & TRUST, a Missouri trust corporation with
banking powers (the “Company”), on this 17th day of February, 2010 (the “Effective
Date”).
WITNESSETH:
WHEREAS, the Company is a wholly owned
subsidiary of Enterprise Financial Services Corp (“EFSC”).
WHEREAS, the Company, EFSC and Executive have
previously executed and delivered that certain Executive Employment Agreement,
effective as of October 5, 2007, as amended by that certain First Amendment to
Executive Employment Agreement between EFSC and Executive dated December 19,
2008 (as amended, the “Original Employment Agreement”).
WHEREAS, in accordance with Section 15 of the
Original Employment Agreement, the Company, EFSC and Executive desire to amend
and restate the Original Employment Agreement in its entirety as of the
Effective Date.
NOW, THEREFORE, for the reasons set forth
above, and in consideration of the mutual promises and agreements herein set
forth, the Company and Executive agree as follows:
1. Employment. Subject to the
terms and conditions set forth in this Agreement, the Company hereby employs
Executive for the Employment Term as hereafter defined.
1.1 Title and Duties. During the
Employment Term, Executive shall serve as an Executive Vice President of the
Company and, upon request, as a member of the “CEO Cabinet” management committee
of EFSC. Executive shall have such duties and responsibilities as are
customarily assigned to individuals serving in such positions and such other
duties as the Chief Executive Officer of the Company (the “CEO”) and/or the
Board of Directors of the Company (the “Board”) may from time to time specify,
to the extent that such other duties are consistent with such corporate office
and position. Executive shall further comply with all policies and procedures of
the Company generally applicable to executive employees of the Company.
Executive hereby accepts such employment and agrees to serve the Company in such
capacities during the Employment Term.
1.2 Acceptance and Devotion to
Duties. Executive hereby
accepts such employment and agrees that during the Employment Term he will
devote all of his skill, knowledge, commercial efforts and working time to the
conscientious and faithful performance of his duties and responsibilities to the
Company (except for (a) permitted vacation time and absence for sickness or
similar disability and (b) to the extent that it does not interfere with the
performance of Executive’s duties hereunder, such reasonable time as may be (i)
devoted to the fulfillment of Executive’s civic and charitable activities and
(ii) necessary from time to time for personal financial matters). Executive will
use his best good faith efforts to promote the success of the Company’s business
and will cooperate fully with the CEO and the Board in the advancement of the
best interests of the Company. If elected, Executive will agree to serve as a
director of the Company, or a director or officer of EFSC or any of their
respective Affiliates, without additional compensation.
2. Term of Employment. Except as
otherwise provided herein, the term of this Agreement shall be for a term
commencing on the Effective Date and ending upon Executive’s death or
termination of employment as hereafter provided (the “Employment Term”).
Notwithstanding the expiration of the Employment Term or any termination of
Executive’s employment with the Company, the covenants, agreements and
obligations of Executive under Sections 5, 7, 8, 9, 22, 23 and 24 shall survive the termination of and remain
in effect after the Executive’s employment with the Company.
3. Cash Compensation and
Benefits. Subject to the
provisions set forth in Section 23 and 24, the Executive shall be compensated as
follows:
3.1 Base Salary. During the
Employment Term, the Company shall pay to the Executive as compensation for the
services to be performed by the Executive a base salary of $250,000 per year
(the “Base Salary”). The Base Salary shall be payable in installments in
accordance with the Company’s normal payroll practice and shall be subject to
such ordinary employee withholdings as may be required by law. The Base Salary
may be adjusted from time to time upon the recommendation of the CEO and as
approved by the Board when appropriate, but shall not be reduced without the
consent of the Executive.
3.2 Targeted Short-Term
Incentives. In addition to
the compensation set forth elsewhere in this Section 3, for each calendar year during the Employment
Term, the Executive shall qualify for a targeted annualized bonus for each such
year (“Targeted Short-Term Incentive”). The amount of the Targeted Bonus and the
targeted financial and operating goals of the Company (“Targets”) for each
calendar year shall be set by the Company CEO, subject to the approval of the
Compensation Committee of EFSC (the “Compensation Committee”). If the targets
have been met, then Executive shall receive a Targeted Short-Term Incentive for
such preceding year. In the event that the established targets are exceeded,
then Executive shall be entitled to receive additional bonus amounts above the
Targeted Short-Term Incentive as the Company may determine in its discretion. If
the Targets have not been fully met, but minimum thresholds as may be
established by the Company have been met, then the Company’s CEO in
collaboration with the Compensation Committee may make a determination, in its
discretion, as to the extent that the Targets have been met and determine the
amount of such Targeted Short-Term Incentive to be awarded to the Executive
based proportionately upon the extent to which the Targets are determined to
have been met. Any Targeted Short-Term Incentive due pursuant to the foregoing
provisions with respect to a particular calendar year shall be paid no later
than March 15th of the calendar year immediately following the calendar year to
which the Targeted Short-Term Incentive relates. Any Targeted Short-Term
Incentive may be paid, in the discretion of the Company, in the form of cash,
stock or restricted stock units (“RSUs”) satisfying the requirements of the CPP
Guidance, as defined in Section 23 below.
3.3 Benefits.
(a) Executive shall be entitled to participate, during the Employment
Term, in all regular employee benefit and deferred compensation plans
established by the Company and in which the executives of the Company generally
participate (to the extent such participation is not restricted by the Internal
Revenue Code of 1986 (the “Code”)), including, without limitation, any savings
and profit sharing plan, 401K plan, dental and medical plans, life insurance and
disability insurance. Such participation shall be as provided in said employee
benefit plans in accordance with the terms and conditions thereof as in effect
from time to time and subject to any applicable waiting and vesting periods.
Notwithstanding a lesser coverage provided in any such life insurance plan,
Executive shall be entitled during the term of Executive’s employment with the
Company to a Company-paid life insurance benefit of not less than $1,000,000 of
term coverage.
(b) Executive shall also be entitled to twenty seven (27) days of Paid
Time Off (“PTO”) during each year of the Employment Term in accordance with the
terms of the Company’s PTO policy.
(c) Executive shall be provided use of an automobile, and the Company
shall pay for or reimburse Executive for all reasonable gasoline used for a
Company purpose, and insurance and maintenance expenses associated therewith;
provided, that Executive shall, as soon as reasonably practicable following the
end of each calendar year during the Employment Term, account to the Company for
all non-business uses of such automobile, which accounting will be reported to
the proper taxing authorities. Upon Executive’s written request given when
Executive submits such accounting, the Company will attempt to reflect such
automobile expense in Executive’s Form W-2 for the most recent year provided
such accounting is received by the Company on a sufficiently timely basis.
Executive agrees to not take any position contrary to such accounting on any
form filed with the Internal Revenue Service or any state agency established for
the collection of revenue.
3.4 Reimbursement of Expenses.
(a) The Company will provide for the payment or reimbursement of all
reasonable and necessary expenses incurred by Executive in connection with the
performance of his duties under this Agreement in accordance with the Company’s
expense reimbursement policy, as such may change from time to time.
(b) The Company shall also provide payment or reimbursement of all
country club dues at the Phoenix Country Club or such other club approved by the
Company’s CEO, including any reasonable increases in such dues; provided, that
the Company shall not pay for or reimburse any assessments, charges or other
amounts in excess of regular dues.
4. Long Term Incentives. Subject to the
provisions of Section 23 and 24, each year during the Employment Term, at
such time as grants are made under the Company’s Long Term Incentive
Compensation Plan (“LTIP”), Executive shall be entitled to receive a target
grant of equity incentives, including without limitation dollar denominated
restricted stock grants and/or grants of restricted stock units (“RSUs”). The
amount of restricted stock or RSUs awarded under such grants will be based on
and subject to the Company meeting applicable performance standards during a
performance period established by the Compensation Committee. In all respects,
the LTIP and the agreements providing for the issuance of equity incentives,
shall control the amount, manner, vesting and all other matters regarding the
long term equity incentives.
5. Termination of
Employment. Subject to the
provisions of Sections 22, 23 and 24, termination of the employment relationship
between the Company and the Executive shall be governed by this Section 5.
5.1 Termination for
Cause. The Company may terminate Executive’s
employment with the Company for reasons that constitute Cause, as hereinafter
defined (“Termination for Cause”), at any time during the term of this Agreement
by written notification to Executive, specifying in detail the basis for the
Termination for Cause.
(a) Upon Termination for Cause, Executive shall,
within thirty (30) days after such termination, be paid (in a single sum, cash
payment): (i) all accrued but unpaid Base Salary, (ii) vested stock options and
Restricted Stock, (iii) any accrued and vested benefits under any plans of the
Company in which the Executive is a participant to the full extent of the
Executive’s rights under such plans, and (iv) any appropriate business expenses
incurred by Executive reimbursable by the Company in accordance with this
Agreement, all to the date of termination (the items described in subparagraphs
(i) through (iv) in this Section
5.1(a) are hereafter collectively referred to as “Accrued Compensation”).
Accrued Compensation shall not include vested deferred compensation, if any, and
any pension plan or profit sharing plan benefits, each of which will be paid in
accordance with the terms of the applicable plan. Upon a Termination for Cause,
Executive shall not be paid any other compensation or reimbursement of any kind,
including, without limitation, Severance Compensation.
(b) As used in this Agreement, “Cause” means, and shall be considered to
exist, upon the occurrence of any of the following: (i) an order of any federal
or state regulatory authority having jurisdiction over the Company or its
Affiliates which substantially limits or materially prohibits the Executive from
serving as an officer or employee of the Company any of its Affiliates, or
substantially limits the ability of the Executive to fulfill his duties pursuant
to this Agreement; (ii) the willful failure of Executive substantially to
perform his duties hereunder (other than any such failure due to Executive’s
physical or mental illness); (iii) a willful breach by Executive of any material
provision of this Agreement or of any other written agreement with the Company
or any of its Affiliates; (iv) Executive’s commission of a crime that
constitutes a felony or other crime involving moral turpitude or criminal fraud;
(v) chemical or alcohol dependency which materially and adversely affects
Executive’s performance of his duties under this Agreement; (vi) any act of
disloyalty or breach of responsibilities to the Company or its Affiliates by the
Executive which is intended by the Executive to cause material harm to the
Company or its Affiliates; (vii) misappropriation (or attempted
misappropriation) of any of the Company or its Affiliate’s funds or property; or
(viii) Executive’s material violation of any Company policy applicable to
Executive.
If subsequent to Executive’s Termination Other Than For Cause, as
hereinafter defined, it is determined in good faith by the Company that
Executive’s employment could have been terminated for Cause due to Executive’s
material breach of items (iii) or (vi), Executive’s employment shall be deemed
to have been Termination for Cause retroactively to the date such event or
events giving rise to Cause occurred. Notwithstanding the above, Cause shall not
be deemed to exist under items (ii), (iii), (v), (vii) or (viii), unless the
Company first provides written notice to Executive of the grounds on which Cause
is asserted and a thirty (30) day opportunity to cure, if curable, following
delivery of such notice and Executive fails to remedy the event or situation on
which Cause is being asserted. For purposes hereof, an action will be considered
“willful” only if it is done intentionally, purposely or knowingly, as
distinguished from an act done carelessly, thoughtlessly, or
inadvertently.
5.2 Termination Other Than for
Cause. Notwithstanding any other provisions of this
Agreement, the Company may effect a “Termination Other Than For Cause”, as
hereinafter defined, at any time upon giving written notice to Executive of such
termination.
(a) Upon any Termination Other Than For Cause, all payments and benefits
set forth in this Section 5.2 and Section 6.2 shall be subject to and conditioned upon
Executive’s compliance with the terms, provisions and conditions contained in
this Agreement in Sections 7, 8 and 9, and shall be subject to and conditioned upon
Executive’s execution of a release and waiver, within sixty (60) days after
Executive’s Separation from Service (as defined in Section 22), of all claims with respect to Executive’s
employment against the Company, its Affiliates and their respective officers and
directors in a form reasonably satisfactory to the Company, other than rights
under this Section 5.2 and Section 6.2.
(b) Executive shall, within thirty (30) days after such Termination Other
Than For Cause, be paid (in a single sum, cash payment) all Accrued
Compensation, together with all Targeted Short-Term Incentive Compensation
accrued as of the date of such termination and computed at a performance level
equal to the applicable Target, and Severance Compensation as defined in Section 6.2.
(c) As used in this
Agreement, “Termination Other Than For Cause” means:
| (i) |
any termination
by the Company of Executive’s employment with the Company other than a
Termination for Cause (as defined in Section 5.1), a Termination by Reason of Disability
(as defined in Section 5.3), a termination on account of death (as
described in Section 5.4), a Voluntary Termination (as defined
in Section 5.5) or a Termination Upon a Change of
Control (as defined in Section 5.6); provided, that such termination
constitutes a Separation from Service (as defined in Section 22.1); or
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| (ii) |
a termination
by Executive of Executive’s employment with the Company by reason of a
Constructive Termination. As used herein, “Constructive Termination” means
the termination of Executive’s employment by the Executive by reason of
(A) the Company’s material breach of this Agreement which remains uncured
for a period of thirty (30) days following Executive’s notice of such
breach given to the Company or (B) the assignment of Executive without his
consent to a position, responsibilities or duties of a materially lesser
status or degree of responsibility than his position, responsibilities or
duties as of the Effective Date, following notice by Executive of his
refusal to consent to such position, responsibilities or duties and the
Company’s refusal to modify such position or responsibility so that it is
no longer of lesser status or degree of responsibility than his position,
responsibilities or duties as of the Effective Date, provided, in each
case, that such termination constitutes a Separation from Service (as
defined in Section 22.1). It is acknowledged that the removal
of Executive from the boards of the Company, EFSC or any of their
respective Affiliates, or as an officer position in any Affiliate of the
Company to which Executive has been elected and is serving pursuant to
Section 1.3, will not constitute a diminution in
status or duties and will not cause a Constructive Termination.
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5.3 Termination by Reason of
Disability. If, during the
term of this Agreement, the Executive, in the reasonable judgment of the
Company’s Board, (a) has failed to perform his duties under this Agreement on
account of illness or physical or mental incapacity, and (b) such illness or
incapacity continues for a period of more than ninety (90) consecutive days, or
ninety (90) days during any one hundred eighty (180) day period, the Company
shall have the right to terminate Executive’s employment hereunder by written
notification to Executive (“Termination by Reason of Disability”). Upon such
Termination by Reason of Disability, the Company shall pay (in a single sum,
cash payment) to Executive all Accrued Compensation (as defined in Section 5.1) and all Targeted
Short-Term Incentive accrued as of the date of such termination of employment
and computed at a performance level equal to the applicable Target, but
Executive shall not be paid any other compensation or reimbursement of any kind,
including without limitation, Severance Compensation.
5.4 Death. In the event of
Executive’s death during the term of this Agreement, the Executive’s employment
shall be deemed to have terminated as of the last day of the month during which
his death occurs and the Company shall pay (in a single sum, cash payment made
within thirty (30) days of the last day of the month in which the Executive
dies) to his estate or such beneficiaries as Executive may from time to time
designate, all Accrued Compensation (as defined in Section 5.1) and all Targeted
Short-Term Incentive accrued as of the date of such termination of employment
and computed at a performance level equal to the applicable Target, but
Executive’s estate, trust or beneficiary shall not be paid any other
compensation or reimbursement of any kind, including without limitation any
Severance Compensation, except in connection with any life insurance policy
maintained by the Company which names Executive’s estate or trust as
beneficiary, if any.
5.5 Voluntary
Termination. As used in this
Agreement, “Voluntary Termination” means the termination by Executive of
Executive’s employment with the Company other than by reason of a Constructive
Termination (as defined in Section 5.2(c)(ii)), Termination by Reason of Executive’s
Disability (as described in Section 5.3), or Termination by Reason of Executive’s
Death (as described in Section 5.4). In the event of a Voluntary Termination,
provided that the Executive provides the Company with at least ninety (90) days
advance notice of such termination (which notice and any requirement for service
may be waived or shortened by the Company), the Company shall, within thirty
(30) days after such termination, pay (in a single sum, cash payment) all
Accrued Compensation (as defined in Section 5.1), but no other compensation or reimbursement
of any kind, including without limitation, Severance Compensation.
5.6 Termination Upon a Change of
Control. In the event of a
Termination Upon a Change of Control, Executive shall be paid (in a single sum,
cash payment) all Accrued Compensation (as defined in Section 5.1), all Targeted Short-Term Incentive accrued
as of the date of such termination of employment and computed at a performance
level equal to the applicable Target, and the Severance Compensation as defined
in Section 6.1. As used in this Agreement, “Termination Upon
a Change of Control” means a Termination Other Than For Cause occurring within
three (3) months prior to and in contemplation of a Change of Control, or within
one (1) year following a Change of Control. As used in this Agreement, “Change
of Control” means any of the following occurrences, and shall be deemed to occur
the date on which any of the following has occurred:
(a) any Person or group (other than EFSC or any of its Affiliates, a
trustee or other fiduciary holding securities of EFSC under an employee benefit
plan of EFSC or any one or more Continuing Directors) becomes the beneficial
owner of securities of EFSC representing 50% or more of the combined voting
power of EFSC’s then-outstanding securities entitled to vote generally in the
election of directors of EFSC (the “EFSC Outstanding Voting
Securities”);
(b) any Person (other than EFSC or any of its Affiliates, or a trustee or
other fiduciary holding securities of the Company under an employee benefit plan
of the Company or any one or more Continuing Directors) becomes the beneficial
owner of 50% or more of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors of the Board of the Company (the “Company Outstanding Voting
Securities”);
(c) consummation of a reorganization, merger or consolidation (a
“Business Combination”) of EFSC, unless, in each case, following such Business
Combination (i) all or substantially all of the Persons who were the beneficial
owners, respectively, of the Company Outstanding Voting Securities or EFSC
Outstanding Voting Securities, as applicable, immediately prior to such Business
Combination beneficially own, directly or indirectly, more than a majority of
the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors of the company resulting from such
Business Combination, (ii) no Person (excluding any company resulting from such
Business Combination) beneficially owns, directly or indirectly, 50% or more of
the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors of EFSC resulting from such Business
Combination except to the extent such ownership existed prior to the Business
Combination, and (iii) at least a majority of the members of the board of EFSC
resulting from the Business Combination are Continuing Directors (as hereinafter
defined) at the time of the execution of the definitive agreement, or the action
of the Board of the Company, providing for such Business
Combination;
(d) consummation of the sale, other than in the ordinary course of
business, of more than 50% of the combined assets of EFSC and its Subsidiaries
in a transaction or series of related transactions during the course of any
twelve (12) month period; or
(e) the date on which Continuing Directors (as hereinafter defined) cease
for any reason to constitute at least a majority of the Board of EFSC.
As used in the definition of Change of Control, the definitions of the
terms “beneficial owner” and “group” shall have the meanings ascribed to those
terms in Rule 13(d)(3) under the Securities Exchange Act of 1934. As used in
this Section 5.6, the term “Continuing Directors” shall mean,
as of any date of determination, (i) any member of any of the Boards of EFSC or
the Company (the “Boards”) as of the date of this Agreement, (ii) any person who
has been a member of any of the Boards for the two (2) years immediately
preceding such date of determination, or (iii) any person who was nominated for
election or elected to any of the Boards with the affirmative vote of the
greater of (A) a majority of the Continuing Directors who were members of any of
the Boards at the time of such nomination or election or (B) at least four
Continuing Directors but excluding, for purposes of this clause (iii), 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 by or on behalf of a
Person other than any of the Boards.
5.7 Resignation Upon
Termination Upon the termination of Executive’s Employment
for any reason, Executive shall automatically and without taking any further
actions be deemed to have resigned from all offices, directorships or other
positions then held by Executive with the Company, EFSC and all of their
Affiliates. Executive shall execute any written forms submitted by the Company
confirming such resignation.
5.8 Executive’s Duty to Return
Property.
Upon the termination of
Executive’s employment hereunder for any reason, Executive or his estate shall
surrender and deliver to the Company all property of the Company or its
Affiliates in the possession or control of the Executive, including but not
limited to (a) any personal computer of the Company or its Affiliates utilized
by the Executive with the computer’s hard drive in tact, (b) any automobile
provided by the Company or its Affiliates for Executive’s use, (c) all
Confidential Information (and all tangible embodiments thereof), including,
without limitation, all correspondence, data, letters, files, contracts,
documents, mailing lists, customer lists, advertising materials, and ledgers
which are related to the business or the Company or its Affiliates, whether in
paper, electronic or digital form and in all media, and all copies of the
foregoing, and (d) all other supplies and equipment that are the property of the
Company or its Affiliates.
6. Severance
Compensation. Subject to the
provisions of Sections 22, 23 and 24, the Executive’s right to receive severance
compensation, if any, shall be governed by this Section 6.
6.1 Severance Upon Change of
Control. In the event of a
Termination Upon a Change of Control, Executive shall be paid as “Severance
Compensation” twenty-four (24) month severance pay, based on Executive’s Average
Monthly Compensation, such compensation to be paid in a single sum, cash
payment, discounted to the net present value of such payments using as a
discount rate, the prime rate as reported in the Wall Street Journal as of the
date of such termination of employment. As used herein, “Average Monthly
Compensation” means the total amount of Base Salary and Target Bonus computed as
though a performance level equal to the applicable Target had been achieved.
6.2 Termination Other Than for
Cause. In the event Executive’s employment is
terminated by reason of a Termination Other Than For Cause (which does not
constitute a Termination Upon a Change of Control), Executive shall be paid as
“Severance Compensation” twelve (12) months severance pay, based on Executive’s
Average Monthly Compensation, such compensation to be paid in a single sum, cash
payment, discounted to the net present value of such payments using as a
discount rate, the prime rate as reported in the Wall Street Journal as of the
date of such termination of employment.
6.3 Termination Upon Any Other
Event. In the event of a Voluntary Termination,
Termination for Cause, Termination by Reason of Disability or termination by
reason of Executive’s death pursuant to Section 5.4, Executive or his estate shall not be
entitled to any Severance Compensation.
6.4 Consulting
Obligations. During
any period of time during which Executive is receiving Severance Compensation
pursuant to this Agreement, Executive shall provide transition services, advice,
answers to questions (known to Executive) related to the business of the Company
or any of its Affiliates, and consultation with the Company or any successor
thereof as the result of a Change of Control to the extent that Executive’s
provision of such services would not prevent Executive’s termination of
employment from constituting a Separation from Service (as defined in
Section 22.1). It is intended that such services shall not
unreasonably interfere with Executive’s employment activities which are
permissible pursuant to this Agreement and shall be reasonably arranged to be at
times convenient for the Executive.
7. Confidentiality. Executive agrees to hold in strict
confidence and not disclose all non-public information concerning any matters
affecting or relating to the business of the Company or its Affiliates,
including, without limiting the generality of the foregoing, non-public
information concerning their manner of operation, business or other plans,
databases, marketing programs, protocols, processes, computer programs, client
or customer lists, marketing information and analyses, operating policies or
manuals or other data (in whatever form or media) concerning the Company or its
Affiliates (such information and data is collectively referred to as
(“Confidential Information”). Further, Confidential Information (as used herein)
shall also include all financial information related to any client or customer
of the Company or its Affiliates. Executive agrees that he will not, directly or
indirectly, during the course of his employment with the Company or at anytime
thereafter, use any Confidential Information for the benefit of any Person other
than the Company, or disclose or communicate any Confidential Information in any
manner whatsoever to any Person other than to the directors, officers,
employees, agents and representatives of the Company who need to know such
information, who shall be informed of the confidential nature of such
information and directed by Executive to treat such information confidentially.
Upon the Company’s request, Executive shall return all Confidential Information
without retaining any copies in electronic or other form. The above limitations
on use and disclosure of Confidential Information shall not apply to information
which Executive can demonstrate is known publicly other than through Executive
or is contained in public filings with the Securities and Exchange Commission.
Executive acknowledges that all Confidential Information is material and
confidential and gravely affects the effective and successful conduct of the
business of the Company and the Company’s goodwill, and that any breach of the
terms of this Section 7 shall be a material breach of this
Agreement.
8. Use of Proprietary
Information. Executive
recognizes that the Company possesses a proprietary interest in all of the
information described in Section 7 and has the exclusive right and privilege to
use, protect by copyright, patent or trademark, manufacture or otherwise exploit
the processes, ideas and concepts described therein to the exclusion of
Executive, except as otherwise agreed between the Company and Executive in
writing. Executive expressly agrees that any products, inventions, discoveries
or improvements made by Executive, his agents or affiliates, during the term of
this Agreement which is within the scope of Executive’s employment with the
Company, or involving the use of the Company or its Affiliates’ time, materials
or other resources shall be the property of and inure to the exclusive benefit
of the Company. Executive further agrees that any and all products, inventions,
discoveries or improvements developed by Executive (whether or not able to be
protected by copyright, patent or trademark) in the scope of his employment, or
involving the use of the Company or its Affiliates’ time, materials or other
resources, shall be promptly disclosed to the Company and shall become the
exclusive property of the Company.
9. Restrictive Covenants.
9.1 Covenant Not to
Compete. Executive
acknowledges that as a result of his employment by the Company, he has had
access to and knowledge of the Confidential Information, which the Company and
its Affiliates has the exclusive right to use or exploit. During the Employment
Term and for the longer of either (i) any period of time in which Executive is
entitled to, or does in fact, receive Severance Compensation, or (ii) a one year
period following Executive’s Termination for Cause, as the case may be,
Executive shall not, except with the prior written consent of the Company,
directly or indirectly, engage in any Competitive Activity. As used herein,
“Competitive Activity” means any investment, loan, employment, consultancy or
engagement with any Person in the business of providing banking, wealth
management or financial services within fifty (50) miles of any standard
metropolitan statistical area in which the Company or any of its Affiliates has
an office or branch. The Executive acknowledges that the restrictive covenant
described in this Section 9.1 will apply in the event the Company elects to
pay Executive Severance Compensation pursuant to Section 6.3. The Company may also elect in its discretion
to pay Severance Compensation (computed in accordance with Section 6.2)
following any termination of employment, including a Voluntary Termination,
which election shall cause Executive to be bound by this covenant not to compete
as set forth in this Section 9.1.
9.2 Non-Solicitation of
Employees. Executive
acknowledges that the relationship of the Company and its Affiliates with their
respective employees constitutes a valuable asset. During the Employment Term
and for a period of one (1) year thereafter (collectively, the “Non-Solicitation
Period”), Executive shall not, except on behalf of or with the prior written
consent of the Company, directly or indirectly, hire, employ, entice or induce,
or attempt to entice or induce, or directly or indirectly assist any Person in
which Executive is an investor, consultant or employee to hire, employ, entice
or induce, any employee of the Company or its Affiliates to leave such employ.
Further, Executive shall not directly or indirectly, and shall not be employed
or act as a consultant for any Person who employs any employee of the Company or
its Affiliates in any business that engages in any Competitive
Activity.
9.3 Non-Solicitation of Protected
Customers.
(a) As used in this Agreement, “Protected Customer” means (i) any Person
or its/his/her Affiliate for whom the Company or any of its Affiliates has
provided wealth management, investment, banking, trust, insurance or other
financial services during the Employment Term or (ii) any Person or its/his/her
Affiliate whom the Company or any of its Affiliates had made a proposal to
provide wealth management, investment, banking, trust, insurance or other
financial services at anytime within six (6) months preceding the termination of
Executive’s employment with the Company; provided, however, for purposes of
clause (ii) of this paragraph, in no event shall a Protected Customer include a
Person where the Company’s or any of its Affiliates’ only solicitation or
proposal was as part of or in connection with a large group presentation
sponsored or made by the Company or any of its Affiliates.
(b) During the Non-Solicitation Period, Executive shall not, directly or
indirectly, whether alone or in association, or combination with any other
Person, or as an officer, director, shareholder, member, manager, employee,
agent, independent contractor, consultant, advisor, joint-venturer, partner or
otherwise, and whether or not for pecuniary benefit:
| (i) |
solicit, take
away, attempt to take away, divert, or attempt to divert any Protected
Customer from the Company or its Affiliates; or
|
||
| (ii) |
induce, attempt
to induce or aid any Person in inducing any Protected Customer to cease
doing business with the Company or any of its Affiliates or in any way
interfere with the relationship between any Protected Customer and the
Company or any or its Affiliates.
|
(c) During the Non-Solicitation Period, Executive shall not be employed
by or act as a consultant for any Person which directly, or through any of its
Affiliates, solicits, takes away, attempts to take away, diverts, or attempts to
divert any Protected Customer from the Company or any of its Affiliates. Before
Executive becomes employed by or becomes a consultant for a Person during a
Non-Solicitation Period, Executive shall inform such Person of the provisions of
this Section 9 and, if within the first year following Executive’s termination
of employment with the Company, shall cause such Person to sign a document
acknowledging this provision and agreeing with the Company, on behalf of itself
and its Affiliates, to abide to the terms of such obligation to not solicit,
take away, attempt to take away, divert or attempt to divert, any Protected
Customer, and deliver such document to the Company. Provided, however, that
nothing contained in this Agreement shall prevent such Person employing
Executive from continuing to provide services to any individual or other entity
that was a customer of the Person prior to the date of the termination of
Executive’s employment with the Company.
9.4 Acknowledgement. Executive
acknowledges and agrees that each of the covenants contained in this
Section 9 is reasonable and valid in time and scope and
in all other respects, and that such covenants are valuable consideration for
the Company in entering into this Agreement. Without limiting the foregoing, the
above restrictions apply to activities within the entire United States, and
Executive acknowledges that such territorial restriction is valid and
reasonable.
9.5 Reformation. The parties
hereto agree that, in the event a court of competent jurisdiction shall
determine that the geographical or durational elements of this covenant are
unenforceable, such determination shall not render the entire covenant
unenforceable. Rather, the excessive aspects of the covenant shall be reduced to
the threshold which is enforceable, and the remaining aspects shall not be
affected thereby.
9.6 Equitable Relief. Executive
acknowledges that the extent of damages to the Company and/or its Affiliates
from a breach of Sections 7, 8 and 9 would not be readily quantifiable or
ascertainable, that monetary damages would be inadequate to make the Company and
its Affiliates whole in case of such a breach, and that there is not and would
not be an adequate remedy at law for such a breach. Therefore, Executive
specifically agrees that the Company or its Affiliates is entitled to injunctive
or other equitable relief (without any requirement to post any bond or other
security) from a breach of Sections 7, 8 and 9, and hereby waives and covenants not to
assert against a prayer for such relief that there exists an adequate remedy at
law, in monetary damages or otherwise.
10. Assignment. This Agreement
shall not be assignable by Executive and shall not be assignable by the Company
except by or to a successor entity or acquirer which acquires the assets or
stock of the Company in a transaction which constitutes a Change of
Control.
11. Entire Agreement. This Agreement
and any agreements entered into after the Effective Date under any of the
Company’s benefit plans or compensation programs as described in Sections 3 or 4 contain the complete agreement concerning the
employment arrangement between the parties, including without limitation
severance or termination pay, and shall, as of the Effective Date, supersede all
other agreements or arrangements between the parties with regard to the subject
matter hereof.
12. Binding Agreement. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns. The obligations
of the Company under this Agreement shall not be terminated by reason of any
liquidation, dissolution, bankruptcy, cessation of business or similar event
relating to the Company. This Agreement shall not be terminated by reason of any
merger, consolidation or reorganization of the Company, but shall be binding
upon and inure to the benefit of the surviving or resulting entity.
13. Modification. Subject to
Section 23.2(e), no waiver or modification of this Agreement
or of any covenant, condition, or limitation herein contained shall be valid
unless authorized by the Company’s Board and reduced to in writing and duly
executed by the party to be charged therewith and no evidence of any waiver or
modification shall be offered or received in evidence of any proceeding,
arbitration, or litigation between the parties hereto arising out of or
affecting this Agreement, or the rights or obligations of the parties
thereunder, unless such waiver or modification is in writing, duly executed as
aforesaid.
14. Severability. All agreements
and covenants contained herein are severable, and in the event any of them shall
be held to be invalid or unenforceable by any court of competent jurisdiction,
this Agreement shall be interpreted as if such invalid agreements or covenants
were not contained herein.
15. Manner of Giving
Notice. All notices,
requests and demands to or upon the respective parties hereto shall be sent by
hand, certified mail, overnight air courier service, in each case with all
applicable charges paid or otherwise provided for, addressed as follows, or to
such other address as may hereafter be designated in writing by the respective
parties hereto:
| To Company: | To Executive at his current residential | ||
| Enterprise Financial Services Corp | address on file with the Company. | ||
| 000 Xxxxx Xxxxxxx | |||
| Xxxxxxx, Xxxxxxxx 00000 | |||
| Attention: | Chief Executive Officer and | ||
| Corporate Secretary | |||
Such notices, requests and demands shall be
deemed to have been given or made on the date of delivery if delivered by hand
or by telecopy and on the next following date if sent by mail or by air courier
service.
16. Remedies. In the event of a
breach of this Agreement, the non-breaching party shall be entitled to such
legal and equitable relief as may be provided by law, and shall further be
entitled to recover all costs and expenses, including reasonable attorneys’
fees, incurred in enforcing the non-breaching party’s rights
hereunder.
17. Construction. The headings have been inserted for convenience only and shall not be
deemed to limit or otherwise affect any of the provisions of this Agreement.
Unless otherwise indicated in this Agreement, all references in this document to
“Sections” and other subdivisions are to the designated Sections and other
subdivisions of this Agreement.
18. Choice of Law. It is the
intention of the parties hereto that this Agreement and the performance
hereunder be construed in accordance with, under and pursuant to the laws of the
State of Missouri without regard to the jurisdiction in which any action or
special proceeding may be instituted.
19. Taxes. Any payments or other remuneration provided
by the Company to Executive in connection with this Agreement or Executive’s
employment by the Company or its Affiliates shall be subject to reduction,
reimbursement or payment to the Company by the Executive, for any amount of
applicable federal, state or local taxes, including but not limited to income,
employment and social insurance taxes, unemployment taxes, medical insurance
taxes, and any other withholdings required by law or authorized by
Executive.
20. Voluntary Agreement; No
Conflicts. Executive hereby
represents and warrants to the Company that he is legally free to accept and
perform his employment with the Company, that he has no obligation to any other
person or entity that would affect or conflict with any of Executive’s
obligations pursuant to such employment, and that the complete performance of
the obligations pursuant to Executive’s employment will not violate any order or
decree of any governmental or judicial body or contract by which Executive is
bound. The Company will not request or require, and Executive agrees not to use,
in the course of Executive’s employment with the Company, any information
obtained in Executive’s employment with any previous employer to the extent that
such use would violate any contract by which Executive is bound or any decision,
law, regulation, order or decree of any governmental or judicial
body.
21. Venue. In the event of
litigation arising out of or in connection with this Agreement, the parties
hereto agree to submit to the jurisdiction of Federal and state courts located
in the state of Missouri.
22. 409A. The following
provisions shall apply notwithstanding any other provisions herein to the
contrary:
22.1 Separation From
Service. Any amount that
(a) is payable upon termination of Executive’s employment with the Company under
any provision of this Agreement, and (b) is subject to the requirements of Code
Section 409A, shall not be paid unless and until the Executive has Separated
from Service. As used in this Agreement, the terms “Separated from Service” and
“Separation from Service” shall have the meaning specified in Treasury
Regulation Section 1.409A-1(h).
22.2 Required Delay. If Executive is a
“specified employee” (within the meaning of Section 409A(a)(2)(B)(i) of the
Code) of Company at the time of his termination of employment and if payment of
Severance Compensation to the Executive is on account of an “involuntary
separation from service” (as defined in Treasury Regulation Section
1.409A-1(n)), Executive shall be paid such Severance Compensation during the six
(6) month period immediately following the date of his Separation from Service
as otherwise provided under Section 6 for such six (6) month period except that the
total amount of such payments shall not exceed the lesser of the amount
specified under (a) Treasury Regulation Section 1.409A-1(9)(iii)(A)(1) or (b)
Treasury Regulation Section 1.409A-1(9)(iii)(A)(2). To the extent such amounts
otherwise payable during such six-month period exceed the amounts payable under
the immediately preceding sentence, such excess amounts shall not be paid during
such six (6) month period, but instead shall be paid in a single sum on the
first regular payroll date of Company immediately following the six (6) month
anniversary of the date of Executive’s Separation from Service. If Executive is
a specified employee and Executive’s Separation from Service is not an
involuntary separation from service as defined in Treasury Regulation Section
1.409A-1(n), then any Severance Compensation and any other amount due to
Executive under this Agreement that is subject to Code Section 409A and that
would otherwise have been paid during the six (6) month period immediately
following the date of Executive’s Separation from Service shall be paid in a
single sum on the first payroll date of Company immediately following the six
(6) month anniversary of Executive’s Separation from Service. Amounts, the
payment of which are deferred under this Section, shall be increased by interest
at the prime rate as of the date of Executive’s Separation from Service as
published in the Wall Street Journal from the date such amounts would have been
paid but for this provision and such accumulated interest shall also be paid to
the Executive on the first payroll date of Company immediately following the six
(6) month anniversary of Executive’s Separation from Service.
Notwithstanding the
provisions of this Section 22, the Company has no responsibility or
obligation to Executive with respect to any tax that may be incurred by
Executive pursuant to Code Section 409A.
23. Emergency Economic Stabilization Act
Provisions.
23.1 Acknowledgement. The Executive
acknowledges that (a) the Company is a participant in the TARP Capital Purchase
Program (the “CPP”) offered by the United States Department of the Treasury (the
“UST”) and (b) the Company and its Affiliates are required to meet certain
executive compensation and corporate governance standards under Section 111 of
the Emergency Economic Stabilization Act of 2008, as amended, including
amendments pursuant to Section 7001, et. seq., of the
American Recovery of Reinvestment Act of 2009 (“EESA”), as implemented by
guidance or regulation thereunder that has been issued and is in effect as of
the date of this Agreement or is promulgated thereafter, including without
limitation 31 C.F.R. Part 30 of the Code of Federal Regulations (such guidance
or regulation being hereinafter referred to as the “CPP Guidance”). The
Executive further acknowledges that the Company’s CPP participation may require
modification of the compensation, bonus, incentive and other benefit plans,
arrangements, policies and agreements (including so-called “golden parachute”
agreements) that the Executive has with the Company or in which the Executive
participates as they relate to the period the UST holds any equity or debt
securities of the Company acquired through the CPP.
23.2 CPP Provisions. Notwithstanding
anything contained in this Agreement to the contrary, as of the Effective Date
(or on such date thereafter as it becomes necessary pursuant to the EESA or CPP
Guidance), to the extent necessary for the Company or its Affiliates to comply
with the EESA, as implemented by the CPP Guidance, the terms and conditions of
the Executive’s employment by the Company set forth in this Agreement shall be
and hereby are subject to the following:
(a) In the event that any payment or benefit to which the Executive is or
may become entitled from the Company is a “golden parachute payment” for
purposes of Section 111(b) of the EESA and the CPP Guidance (including, without
limitation, the rules set forth in Section 30.9 Q-9 of 31 C.F.R. Part 30), the
payment of which is prohibited to be made by the Company under the EESA or the
CPP Guidance, then during the period that the UST owns any equity or debt
securities of the Company acquired through the CPP (the “Restricted Period”):
(i) the Company shall not make or provide (nor shall the Company be obligated to
make or provide) any such prohibited portion of such payment or benefit to the
Executive and (ii) the Executive shall not be entitled to receive any such
prohibited portion of such payment or benefit.
(b) Any bonus or incentive compensation paid to the Executive during the
period that the UST owns any equity or debt securities of the Company acquired
through the CPP will be subject to recovery or “clawback” by the Company or its
Affiliates (pursuant to the Company’s Capital Purchase Program Clawback Policy,
as it may be amended from time to time) if, and to the extent, the payments were
based on materially inaccurate financial statements or any other materially
inaccurate performance metric criteria, all within the meaning of Section 111(b)
of the EESA and the CPP Guidance. Executive acknowledges that he has been
provided a copy of the Clawback Policy as in effect on the Effective
Date.
(c) The maximum aggregate amount of any bonus or incentive compensation,
excluding Base Salary, and the form of payment thereof, shall be limited in
compliance with Section 111(b) of EESA and the CPP Guidance, including, without
limitation, pursuant to Section 111(b)(3)(D) of EESA. Without limiting the
foregoing, the Company may not pay or accrue any bonus, retention award or
incentive compensation during the Restricted Period, except for grants or awards
by the Company to Executive of long-term restricted stock to the extent
permitted by the EESA and the CPP Guidance.
(d) In the event that any of the Boards (or, if applicable, a
compensation committee thereof) determine that any bonus or incentive
compensation arrangement pursuant to which the Executive is or may be entitled
to a payment (including, without limitation, any compensation, bonus, incentive
and other benefit plans, arrangements, policies and agreements) encourages the
Executive to take any “unnecessary and excessive risks that threaten the value
of the TARP recipient” (within the meaning of § 30.9 Q-4 of 31 C.F.R. Part 30),
then the Boards (or, if applicable, a compensation committee thereof), on behalf
of the Company or its Affiliates, as applicable, may take such action as is
necessary to modify or amend any such bonus and/or incentive compensation
arrangements to eliminate such encouragement, and the Executive’s bonus and/or
incentive compensation will be determined pursuant to such amended
arrangements.
(e) If, in the good faith determination of the Company after consultation
with counsel of its choice, any statute or regulation promulgated before, on or
after the Effective Date imposes additional requirements or restrictions on
compensation which the Company may pay to Executive which conflict with the
provisions of this Agreement, (i) the Company shall not be required to pay or
accrue any bonus, incentive or compensation to the extent of such restriction
and this Agreement shall be deemed automatically amended to the extent of such
restriction and (ii) Executive shall execute and deliver any amendments to this
Agreement which the Company, in good faith after consultation with counsel of
its choice, deems necessary to comply with such statute or
regulation.
23.3 Waiver. In addition to
the provisions of Section 23.2
above and notwithstanding anything contained in this Agreement to the contrary,
in consideration for the benefits the Executive will receive as a result of the
Company’s participation in the CPP, the Executive hereby voluntarily waives any
claim against the United States and/or the Company or its Affiliates for any
changes to the Executive’s compensation or benefits that are required to comply
with the EESA and the CPP Guidance. The Executive expressly acknowledges that
this waiver includes all claims the Executive may have under the laws of the
United States or any state related to the requirements imposed by the
aforementioned regulation, including without limitation a claim for any
compensation or other payments the Executive would otherwise receive, any
challenge to the process by which this regulation was adopted and any tort or
constitutional claim about the effect of these regulations on the Executive’s
employment relationship with the Company.
24. Modified Code Section 280G
Carve-Back. Notwithstanding
anything contained in this Agreement to the contrary other than the provisions
of Section 23, if on an after-tax basis the aggregate
payments and benefits received pursuant to Sections 5 or 6 would be larger if the portion of such
payments and benefits constituting “parachute payments” under Code Section 280G
were reduced by the minimum amount necessary to avoid the imposition of the
excise tax under Code Section 4999, then such payments and benefits shall be
reduced by the minimum amount necessary to avoid such excise tax.
25. Certain Definitions. As used in this Agreement, the following
definitions shall apply:
“Affiliate” with respect to any person, means any other
Person that, directly or indirectly through one or more intermediaries,
Controls, is Controlled by, or is under common Control with the first Person,
including but not limited to a Subsidiary of the first Person, a Person of which
the first Person is a Subsidiary, or another Subsidiary of a Person of which the
first Person is also a Subsidiary.
“Control” with respect to any Person, means the
possession, directly or indirectly, severally or jointly, of the power to direct
or cause the direction of the management policies of such Person, whether
through the ownership of voting securities, by contract or credit arrangement,
as trustee or executor, or otherwise.
“Person” means any natural person, firm, partnership,
limited liability company, association, corporation, company, trust, business
trust, governmental authority or other entity, or any “group” within the meaning
of Section 13(d) or 14(d) of the Exchange Act or any comparable successor
provisions.
“Prime Rate” means the prime rate reported in the “Money
Rates” column or any successor column of The Wall Street Journal, currently
defined therein as the base rate on corporate loans posted by at least 75% of
the nation’s 30 largest banks. If The Wall Street Journal ceases publication of
the Prime Rate, the “Prime Rate” shall mean the “prime rate” or “base rate”
announced by the Company, or any successor thereto.
“Subsidiary” With respect to any Person, each corporation
or other Person in which the first Person owns or Controls, directly or
indirectly, capital stock or other ownership interests representing 50% or more
of the combined voting power of the outstanding voting stock or other ownership
interests of such corporation or other Person.
[Remainder of page intentionally left blank;
signature page follows.]
IN WITNESS WHEREOF, the undersigned
have executed this Agreement as of the Effective Date.
| ENTERPRISE BANK & TRUST COMPANY | ||||
| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxx X. Xxxxx | |||
| /s/ Xxxx X. Xxxxx | Title: | Chairman & CEO | ||
| Xxxx X. Xxxxx, individually | ||||
| ENTERPRISE FINANCIAL SERVICES CORP* | ||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | President & CEO | |||
* Executed and
delivered solely for purposes of complying with Section 15 of the Original
Agreement.
