EMPLOYMENT AGREEMENT
Exhibit 10.1
Execution Copy
This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of this 12th day of
June 2006 by and between STATE NATIONAL BANCSHARES, INC., a Texas corporation (together with any
successor thereto, the “Company”), and XXX X. XXXXXXX (the “Executive”).
WITNESSETH:
WHEREAS, the Executive is currently employed by the Company as its Chief Executive Officer
pursuant to an employment agreement, dated as of June 30, 1999, by and between the Executive and
the Company (as the same may be amended, the “Prior Agreement”);
WHEREAS, on the date hereof, the Company entered into an Agreement and Plan of Merger By and
Among Banco Bilbao Vizcaya Argentaria, S.A. (the “Parent”), and the Company (the “Merger
Agreement”) pursuant to which a newly-formed wholly-owned subsidiary of Parent will be merged with
and into the Company (the “Transaction”) and the Company will be the surviving corporation;
WHEREAS, the Executive and the Company acknowledge and agree that the Executive has had and
will continue to have a prominent role in the management of the business, and the development of
the goodwill, of the Company and its Subsidiaries and has established and developed and will
continue to establish and develop relations and contacts with the principal customers and suppliers
of the Company and its Subsidiaries in Texas and New Mexico, all of which constitute valuable
goodwill of, and could be used by Executive to compete unfairly with, the Company and its
Affiliates;
WHEREAS, (i) in the course of his employment with the Company, the Executive has obtained and
will continue to obtain confidential and proprietary information and trade secrets concerning the
business and operations of the Company and its Affiliates that could be used to compete unfairly
with the Company and its Affiliates; (ii) the covenants and restrictions contained in Sections 8,
9, 10 and 11 are intended to protect the legitimate interests of the Company and its Affiliates in
their respective goodwill, trade secrets and other confidential and proprietary information; and
(iii) the Executive desires to be bound by such covenants and restrictions;
WHEREAS, in connection with and subject to consummation of the Transaction, the Company
desires to continue the employment of the Executive, and the Executive desires to accept such
continued employment, in each case, on and subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and promises
contained herein and for other good and valuable consideration, the Company and the Executive
hereby agree as follows:
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1. Term. Subject to the consummation of the Transaction, the Executive shall continue
his employment with the Company pursuant to the terms and conditions of this Agreement and this
Agreement will become effective at the Effective Time (as defined in the Merger Agreement) (the
date on which the Effective Time occurs referred to herein as the “Effective Date”). Subject to
consummation of the Transaction, the Company shall employ the Executive for a one (1) year term
beginning on the Effective Date (the “Employment Term”). The Executive and the Company each hereby
acknowledge and agree that their respective rights and obligations hereunder are subject to the
consummation of the Transaction and the Prior Agreement shall remain in full force and effect until
the consummation of the Transaction and, thereafter, the Prior Agreement shall terminate in its
entirety and be of no further force or effect.
2. Position. The Executive will serve initially as the Chief Executive Officer of the
Company. During the Employment Term, the Executive will be responsible for the integration of the
business and operations of the Company with the other businesses conducted by Parent or its
Subsidiaries and the transition of the business and operations of the Company to a successor
management team and shall have such other duties an d responsibilities as are customarily assigned
to individuals serving in such position and as the Board of Directors of the Company (the “Board”)
may specify from time to time. During the Employment Term the Board may modify the Executive’s
title as appropriate to reflect the new integrated structure of the Company and the successor
management team. During the Employment Term, the Executive shall devote all of his skill,
knowledge and working time to the conscientious performance of his duties and responsibilities
hereunder, except for (i) vacation time taken in accordance with the applicable policies of the
Company and absence for sickness or similar disability and (ii) to the extent that it does not
interfere with the performance of Executive’s duties hereunder, (A) such reasonable time as may be
devoted to service on boards of directors of other corporations and entities, subject to the
provisions of Sections 8, 9, 10 and 11, and the fulfillment of civic responsibilities and (B) such
reasonable time as may be necessary from time to time for personal financial matters. During the
Employment Period, Employer shall use its reasonable best efforts to cause Executive to be
nominated and elected to serve as a member of the Board of Directors, without additional
compensation.
3. Salary. During the Employment Term, the Company will pay the Executive a base
salary of $350,000 per annum, payable in accordance with the Company’s regular payroll practices.
The Executive’s base salary will be subject to bi-annual review and the Company may, in its sole
discretion, increase, but not decrease, such amount.
4. Annual Bonus. During the Employment Term, the Company will pay the Executive an
annual bonus of $150,000, payable at the end of the Employment Term.
5. Transaction Completion Bonus. Provided the Effective Date occurs after December
31, 2006, the Company will pay to the Executive a cash
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transaction bonus of $1,500,000 on or as soon as reasonably practicable following the
Effective Date.
6. Employee Benefits. During the Employment Term, the Executive will be entitled to
participate generally in the benefit and perquisite plans and programs of the Company made
available to other executive officers of the Company (including, to the extent maintained by the
Company, life, medical, vision, dental, accidental and disability insurance plans and profit
sharing, pension, retirement, deferred compensation and savings plans) in accordance with the terms
and conditions of such plans or programs, as in effect from time to time.
7. Business Travel, Lodging, etc. The Company shall reimburse the Executive for
reasonable travel, lodging, meal and other reasonable expenses incurred by him in connection with
his performance of services hereunder upon submission of evidence, satisfactory to the Company, of
the incurrence and purpose of each such expense and otherwise in accordance with the Company’s
business travel reimbursement policy applicable to its senior executives as in effect from time to
time.
8. Unauthorized Disclosure. During the period of Executive’s employment with the
Company and the ten year period following any termination of such employment, without the prior
written consent of the Board or its authorized representative, except to the extent required by an
order of a court having jurisdiction or under subpoena from an appropriate government agency, in
which event, the Executive shall use his best efforts to consult with the Board prior to responding
to any such order or subpoena, and except as required in the performance of his duties hereunder,
the Executive shall not use or disclose any confidential or proprietary trade secrets, customer
lists, drawings, designs, information regarding product development, marketing plans, sales plans,
manufacturing plans, management organization information (including but not limited to data and
other information relating to members of the Board or the Board of Directors of any of the
Company’s Affiliates or to management of the Company or any of its Affiliates), operating policies
or manuals, business plans, financial records, packaging design or other financial, commercial,
business or technical information (a) relating to the Company or any of its Affiliates or (b) that
the Company or any of its Affiliates may receive belonging to suppliers, customers or others who do
business with the Company or any of its Affiliates (collectively, “Confidential Information”) to
any third person unless such Confidential Information has been previously disclosed to the public
or is in the public domain (other than by reason of the Executive’s breach of this Section 8).
9. Non-Competition. During the period of the Executive’s employment with the Company
and, following any termination thereof, the period ending on the third anniversary of the Effective
Date (such periods, collectively, the “Restriction Period”), the Executive shall not, directly or
indirectly, become employed by, engage in business with, serve as an agent or consultant to, or
become a partner, member, principal or stockholder (other than a holder of less than 5% of the
outstanding voting shares of any publicly held company) of, any Person that competes or has a
reasonable potential for competing with any part of the business of the Company or any of its
Subsidiaries, in
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the case of the period prior to the second anniversary of the Effective Date, anywhere in
Texas or New Mexico and, in all other cases, anywhere in Texas or New Mexico where the Company
conducts business as of the Closing Date (as defined in the Merger Agreement).
As consideration for the Executive’s agreeing to and complying with the non-competition
restrictions in this Section 9 and the non-solicitation restrictions under Section 10 and 11 of
this Agreement, and subject to the Executive’s continued compliance with all such restriction, the
Company shall (i) pay the Executive an aggregate amount of $1 million, with one-half of such amount
payable on the second anniversary of the Effective Date and the remaining one-half payable on the
third anniversary of the Effective Date and (ii) shall provide the Executive with coverage for him
and his eligible dependents under the Company’s medical and other health plans during the period
commencing on the first anniversary of the Effective Date and ending on the third anniversary of
the Effective Date, subject to timely payment by the Executive of all premiums, contributions and
other co-payments required to be paid by senior executives of the Company under the terms of such
plans as in effect from time to time.
10. Non-Solicitation of Employees. During the Restriction Period, the Executive shall
not, directly or indirectly, for his own account or for the account of any other Person, solicit
for employment, employ or otherwise interfere with the relationship of the Company or any of its
Affiliates with any natural person who is or was employed by or otherwise engaged to perform
services for the Company (other than as an employee of or consultant to any legal, accounting or
other professional service firm retained by the Company or any of its Affiliates) or any of its
Affiliates at any time during which Executive was employed by the Company pursuant to this
Agreement or, in the case of any such solicitation, employment or interference following the
Employment Term, during the six-month period preceding such solicitation, employment or
interference, other than any such solicitation or employment on behalf of the Company or any of its
Affiliates during the Executive’s employment with the Company.
11. Non-Solicitation of Customers. During the Restriction Period, the Executive shall
not, directly or indirectly, for his own account or for the account of any other Person, solicit or
otherwise attempt to establish any business relationship of a nature that is competitive with the
business or relationship of the Company or any of its Affiliates with any Person which is or was a
customer, client or distributor of the Company or any of its Affiliates at any time during which
the Executive was employed by the Company pursuant to this Agreement, other than any such
solicitation on behalf of the Company or any of its Affiliates during the Executive’s employment
with the Company.
12. Injunctive Relief with Respect to Covenants; Forum, Venue and Jurisdiction. The
Executive acknowledges and agrees that the covenants, obligations and agreements of the Executive
contained in Sections 8, 9, 10, and 11 and this Section 12 relate to special, unique and
extraordinary matters and that a violation of any of the terms of such covenants, obligations or
agreements will cause the Company irreparable injury for which adequate remedies are not available
at law. Therefore, the Executive agrees
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that the Company shall be entitled to an injunction, restraining order or such other equitable
relief (without the requirement to post bond) as a court of competent jurisdiction may deem
necessary or appropriate to restrain the Executive from committing any violation of such covenants,
obligations or agreements. These injunctive remedies are cumulative and in addition to any other
rights and remedies the Company may have.
13. Assumption of Agreement. Employer shall require any Successor thereto, by
agreement in form and substance reasonably satisfactory to the Executive, to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.
14. Entire Agreement; Termination of Prior Agreement. This Agreement constitutes the
entire agreement among the parties hereto with respect to the subject matter hereof. All prior
correspondence and proposals (including but not limited to summaries of proposed terms) and all
prior promises, representations, understandings, arrangements and agreements relating to such
subject matter (including but not limited to those made to or with the Executive by any other
Person and those contained in the Prior Agreement or any other prior employment, consulting or
similar agreement entered into by Executive and the Company or any predecessor thereto or Affiliate
thereof) are merged herein and superseded hereby.
15. Miscellaneous
(a) Binding Effect; Assignment. This Agreement shall be binding on and inure to the
benefit of the Company, and its successors and permitted assigns. This Agreement shall also be
binding on and inure to the benefit of the Executive and his heirs, executors, administrators and
legal representatives. This Agreement shall not be assignable by any party hereto without the
prior written consent of the other, except as provided pursuant to this Section 15. The Company
may effect such an assignment without prior written approval of the Executive upon the transfer of
all or substantially all of its business and/or assets (by whatever means), provided that
the Successor to the Company shall expressly assume and agree to perform this Agreement in
accordance with the provisions of Section 13.
(b) Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of Texas without reference to principles of conflicts of laws.
(c) Taxes. The Company may withhold from any payments made under this Agreement all
applicable taxes, including but not limited to income, employment and social insurance taxes, as
shall be required by law.
(d) Amendments. No provision of this Agreement may be modified, waived or discharged
unless such modification, waiver or discharge is approved by the Board or a Person authorized
thereby and is agreed to in writing by Executive. No
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waiver by any party hereto at any time of any breach by any other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No waiver of any provision of this Agreement shall be implied from any
course of dealing between or among the parties hereto or from any failure by any party hereto to
assert its rights hereunder on any occasion or series of occasions.
(e) Severability. In the event that any one or more of the provisions of this
Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall not be affected
thereby.
(f) Notices. Any notice or other communication required or permitted to be delivered
under this Amended Agreement shall be (i) in writing, (ii) delivered personally, by courier service
or by certified or registered mail, first-class postage prepaid and return receipt requested, (iii)
deemed to have been received on the date of delivery or, if so mailed, on the third business day
after the mailing thereof, and (iv) addressed as follows (or to such other address as the party
entitled to notice shall hereafter designate in accordance with the terms hereof):
| (A) | If to the Company, to it at: | ||
| Xxxxx Xxxxxxx, Esq. c/o BBVA USA, Inc. Waterway Two 00000 Xxxxxxxx Xxxxxx Xxxxx Xxxxx 000 Xxx Xxxxxxxxx, XX 00000 |
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| (C) | if to the Executive, to him at his residential address as currently on file with the Company. |
16. Certain Definitions.
“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.
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“Person”: any natural person, firm, partnership, limited liability company,
association, corporation, company, trust, business trust, governmental authority or other entity.
“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.
“Successor”: of a Person means a Person that succeeds to the first Person’s assets
and liabilities by merger, liquidation, dissolution or otherwise by operation of law, or a Person
to which all or substantially all the assets and/or business of the first Person are transferred.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the
authorization of the Board, the Company has caused this Agreement to be executed in its name on its
behalf, all as of the day and year first above written.
| STATE NATIONAL BANCSHARES, INC. |
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| By: | /s/ Xxx X. Xxxxx | |||
| Xxx X. Xxxxx | ||||
| /s/ Xxx X. Xxxxxxx | ||||
| Xxx X. Xxxxxxx | ||||
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