EXHIBIT 10.6
EMPLOYMENT AGREEMENT
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THIS AGREEMENT, dated as of the 19th day of November, 2002, by and among
SARASOTA BANCORPORATION, a Florida corporation (the "Company"), SARASOTA BANK, a
state bank chartered under the laws of Florida and a wholly-owned subsidiary of
the Company (the "Bank"), and Xxxx X. Xxxxxxxx (the "Executive").
W I T N E S S E T H:
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WHEREAS, the Company owns 100% of the outstanding stock of the Bank; and
WHEREAS, the Board of Directors of the Company and the Bank, recognizing
the experience and knowledge of Executive in the banking industry, desire to
retain the valuable services and business counsel of Executive, it being in the
best interest of the Company and the Bank to arrange terms of employment for
Executive so as to reasonably induce Executive to remain in his capacities with
the Company and the Bank for the term hereof; and
WHEREAS, Executive is willing to provide services to the Company and the
Bank in accordance with the terms and conditions hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual premises and
covenants herein contained, the parties hereto agree as follows:
1. Employment. The Company and the Bank employ the Executive and the
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Executive accepts employment upon the terms and conditions set forth
in this Agreement.
2. Term. The term of employment of Executive under this Agreement shall
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be, initially, the eighteen month period commencing on November 19,
2002 and ending on May 19, 2004.
3. Compensation.
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Base Salary. For all services rendered by the Executive, the Executive
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shall be paid a minimum annual base salary of $103,500 through December 31,
2002, payable in equal installments during the term of this Agreement in
accordance with the Bank's normal pay practices, but not less frequently than
twice per month. Salary payments shall be subject to withholding and other
applicable taxes. Beginning January 1, 2003, in January of each year during the
term of employment of Executive, the President of the Company shall consider (i)
an adjustment to Executive's minimum annual base salary, based upon such factors
as the President in her sole discretion deems appropriate given Executive's
performance of his duties hereunder during the immediately preceding calendar
year, and (ii) an annual cost of living increase commensurate with those given
other key executive officers of the Company. The increase in Executive's minimum
annual base salary, if any, pursuant to this Section 3 shall be effective as of
the lst day of January of the year in which such increase is approved by the
President of the Company. In the event that Executive's minimum annual base
salary is increased pursuant to such review by the President of the Company,
then such salary, as increased, becomes the minimum annual base salary for the
next successive year for the purposes of this Agreement. The term "Base Salary"
as used in this Agreement shall mean the minimum annual base salary of Executive
as last established by the President of the Company.
Bonus. In addition to Executive's Base Salary, beginning January 1,
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2003, for each twelve (12) month period beginning on January 1 and ending on
December 31 throughout the term of this Agreement Executive shall be entitled to
a bonus of 5% of the Bank's net operating income for such twelve (12) month
period, not to exceed 40% of Executive's Base Salary, if (i) the Bank meets or
exceeds the return on assets projected in the annual budget approved by the
Board of Directors of the Bank for such twelve (12) month period, and (ii) the
CAMELS rating of the Bank under the Uniform Financial Institution Rating System
in its last safety and soundness examination by either the Florida Department of
Banking and Finance ("DBF") or the Federal Deposit Insurance Corporation
("FDIC") is at least a "2." In the event of a "change in control" of the Company
as defined in Section 10 hereof, and in lieu of the aforementioned bonus for the
calendar year in which the change of control takes place and for which a bonus
has not yet been paid, then Executive shall be entitled to a bonus of 5% of the
Bank's net operating income through the last full month preceding the change in
control, not to exceed 40% of Executive's Base Salary, payable at the closing of
the transaction effecting such change in control. For the purposes of this
Agreement, "return on assets" shall mean the net operating income of the Bank
after taxes and bonuses, expressed as a percentage of average assets. "Net
operating income" of the Bank shall mean the net income of the Bank determined
in accordance with generally accepted accounting principles excluding
extraordinary expenses and nonrecurring items (including expenses incurred in
connection with the change in control transaction) which have been specifically
approved by the Board of Directors of the Bank. "Average assets" of the Bank
shall mean the cumulative total of average daily balances divided by the number
of days in the year.
4. Title and Duties. Executive shall serve as Executive Vice President of
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the Company and Chief Lending Officer of the Bank. Executive shall be
responsible for assisting the President and Chief Executive Officer of the
Company, supervising all lending activities of the Bank as well as other such
duties and responsibilities as may be prescribed or requested by the Board of
Directors from time to time, within the framework of the approved annual
budgets, 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.
5. Extent of Services. Executive shall devote his entire time, attention,
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and energies to the business of the Company and the Bank, 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 the Company and the Bank. 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.
6. Working Facilities. Executive shall have such assistants, perquisites,
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facilities and services as are suitable to his position and necessary for the
performance of his duties, including membership at appropriate social and dining
clubs; provided, however, that such club memberships shall be subject to the
prior approval of the Board of Directors of the Bank.
7. Vacations. Executive shall be entitled each year to a vacation of four
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(4) weeks per year during which time Executive's compensation shall be paid in
full. In addition, Executive shall be entitled to such other leaves of absence,
with or without pay, upon such terms and conditions as the Board of Directors of
the Bank, in its discretion, may provide.
8. Additional Compensation. During the term of this Agreement, the
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Company and the Bank shall furnish to Executive:
(a) Participation in all group employee benefit programs offered
to all employees of the Bank, such as group health and hospital
insurance, etc. including, but not limited to, a term life insurance
policy in an amount equal to two times Executive's Base Salary and a
disability insurance policy containing coverage terms no less
favorable than those contained in the disability policy covering
Executive currently maintained by the Bank.
(b) An automobile allowance of $500 per month. Executive shall
also be entitled to receive reimbursement from the Company for the
reasonable costs of maintenance and repair of an automobile. In
addition, the Company may, in its discretion, pay the capital cost
reduction or similar acquisition or prepayment fee associated with the
lease of an automobile if (i) in the judgment of the Company, such
payment is justified by the corresponding reduction in the monthly
lease payment of such automobile and (ii) such automobile is
registered in the name of the Company.
(c) Reimbursement of reasonable and normal deductible business
expenses, including, but not limited to, travel to and attendance at
annual and periodic meetings of trade associations, and other travel
and entertainment expenses. Said expenses shall be sufficiently
documented to comply with the policies of the Company and the Bank,
and standards for deductibility of business expenses established, from
time to time, by the Internal Revenue Service.
9. Stock Options. Executive shall be entitled to continue to receive the
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benefit of the various grants of stock options and modifications to such grants,
all as set forth in Exhibit A to this Agreement, the terms and provisions of
which are incorporated herein by this reference.
10. Change in Control of the Company. (a) In the event of a "change in
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control" of the Company, as defined herein, Executive shall be entitled, within
thirty (30) days prior to the date of closing of the transaction effecting such
change in control and at his election, to give written notice to the Company and
the Bank of termination of this Agreement and to receive a cash payment equal to
one hundred fifty percent (150%) times Executive's minimum annual base salary
then in effect as set forth in Section 3 herein. The cash payment will be paid
to Executive in one lump sum by delivery to Executive of a cashier's check or
other official Bank check not later than ten (10) days after the date of notice
of termination by the Executive delivered pursuant to this Section 10, or at the
closing of the transaction effecting the change of control of the Company,
whichever is later.
(b) The payments provided for by Section 10(a) shall be payable
by the Company and/or the Bank only to the extent that such payments
are deductible by the Company and are not rendered non-deductible by
Section 280G of the Internal Revenue Code of 1986, as amended.
(c) For purposes of this Section 10, "change in control" of the
Company shall mean:
(i) any transaction, whether by merger, consolidation, asset
sale, tender offer, reverse stock split or otherwise, which results in
the acquisition or beneficial ownership (as such term is defined under
rules and regulations promulgated under the Securities Exchange Act of
1934, as amended) by any person or entity or any group of persons or
entities acting in concert, of 25% or more of the outstanding shares
of Common Stock of the Company;
(ii) the sale of all or substantially all of the assets of the
Company;
(iii) the liquidation of the Company; or
(iv) if, during any period of two consecutive years (not
including any period prior to the execution of this Agreement),
individuals who at the beginning of such period constitute the Board
and any new director (other than a director designated by a person who
has entered into an agreement with the Company to effect a transaction
described in clause (i) or (ii) of this section) whose election by the
Board or nomination by the Company's shareholders was approved by a
vote of at least two-thirds of the directors then still in office who
either were directors at the beginning of the period or whose election
or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof.
11. Termination. (a) For Cause. This Agreement may be terminated by the
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Board of Directors of the Company and the Bank without notice and without
further obligation than for monies already paid, 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
the Bank for a period of five (5) business days after written notice
to Executive from the Board of Directors regarding such failure;
(ii) receipt by the Bank of written notice from either the DBF or
FDIC that the DBF or FDIC has criticized Executive's performance, and
has either (a) rated the Bank a "4" or a "5" under the Uniform
Financial Institution Rating System or (b) has determined that the
Bank is in a "troubled condition" as defined under Section 914 of the
Financial Institutions Reform, Recovery and Enforcement Act of 1989).
(iii) 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 he was employed by
the Company and the Bank prior to the term of this Agreement, if not
disclosed to the Company and the Bank prior to the commencement of the
term of this Agreement, which negligence or misconduct continues for a
period of five (5) business days after written notice to Executive
from the Board of Directors; or
(iv) conviction of Executive during the term of this Agreement of
a crime involving breach of trust or moral turpitude.
In the event that the Company or the Bank discharges Executive alleging
"cause" under this Section 11(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 11(b) hereof;
provided, however, that in lieu of the severance payments to Executive provided
for in Section 11(b) of this Agreement, Executive shall be entitled, as
liquidated damages in lieu of all other claims, to severance payments in an
amount equal to one-twelfth (1/12) of Executive's minimum annual base salary in
effect on the date of termination multiplied by the number of full months
Executive was employed with the Company and the Bank, beginning from February 1,
1994. In the event that the Company or the Bank discharges Executive alleging
"cause" under this Section 11(a), such notice of discharge shall be accompanied
by a written and specific description of the circumstances alleging such
"cause." The termination of Executive for "cause" shall not entitle the Company
or the Bank to enforcement of the non-competition and non-solicitation covenants
contained in Section 13 hereof.
(b) Without Cause. The Company or the Bank (subject to the approval
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of the Board of Directors of the Company) may, upon thirty (30) days'
written notice to Executive, terminate this Agreement without cause at
any time during the term of this Agreement upon the condition that
Executive shall be entitled, as liquidated damages in lieu of all
other claims, to a severance payment, in the amount of one hundred
fifty percent (150%) of Executive's Base Salary.
The termination of employment of Executive "without cause" shall not
entitle the Company or the Bank to enforcement of the non-competition and
non-solicitation covenants contained in Section 13 hereof.
(c) Negative Post-Termination Statements. In the event that Executive
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terminates his employment under this Agreement prior to the expiration
of the term of this Agreement or if Executive's employment under this
Agreement is terminated by the Company or the Bank for reasons other
than those set forth in Section 11 (a)(ii), (iii) or (iv), neither the
Company, the Bank nor Executive shall make any statement, whether
written, oral or otherwise, concerning Executive, the Company or the
Bank which may adversely affect the business or reputation of the
Company or the Bank or which may have a negative impact on the
stockholders thereof.
12. Death or Disability. In addition to the provisions for termination of
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this Agreement contained in Section 10 and 11 hereof, this Agreement shall also
be terminated by the earlier to occur of either of the following:
(a) The death of Executive: or
(b) The complete disability of Executive. "Complete disability" as
used herein shall mean the inability of Executive to perform the essential
functions of his position, with or without reasonable accommodations, as a
result of physical or mental illness, injury or incapacity for either (i)
a period of ninety (90) consecutive days, or (ii) more than one hundred
eighty (180) days in the aggregate in any twelve (12) month period during
the term hereof. Upon the occurrence of a complete disability, then
Executive acknowledges that he would be unable to perform the essential
functions of his job and the Company or the Bank may terminate Executive's
employment upon written notice to Executive. The date of complete
disability shall be the date specified by the Board of Directors of the
Company in the written notice provided to Executive by the Company.
In the event of the death or complete disability of Executive, the Company
or the Bank shall pay to Executive the compensation provided in Section 3 hereof
to the effective date of termination of this Agreement, and none of the parties
hereto shall thereafter have any further obligation hereunder except as
otherwise specifically provided herein.
13. Non-Competition and Non-Solicitation. (a) Executive acknowledges that
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he has performed services or will perform services hereunder which directly
affect the Company's and the Bank's business presently conducted within the city
and county limits of Sarasota, Sarasota County, Florida and Manatee County,
Florida. 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) In the event of termination of employment under this Agreement as
a result of Executive's resignation prior to the expiration of the term of
this Agreement or as a result of a change in control of the Company,
Executive agrees with the Company and the Bank that through the actual
date of termination of the Agreement, and for a period of one (1) year
after such termination date:
(i) Executive shall not, without the prior written consent of the
Company and the Bank, within Sarasota County, Florida or Manatee
County, Florida, either directly or indirectly, perform banking
services in the capacity of an executive officer of any bank, bank
holding company or other financial institution; provided, however,
that Executive shall not be restricted from performing non-operating
activities preparatory to the formation of a de novo bank such as site
selection, the obtaining of regulatory approvals and related
organizational activities; and
(ii) Executive shall not, without the prior written consent of
the Company and the Bank (1) furnish anyone with any list or lists of
customers of the Company or the Bank or utilize such list or
information himself; (2) furnish, use or divulge to anyone any trade
secrets or proprietary, confidential information acquired by him from
the Company or the Bank related to the Company's or the Bank's methods
of doing business; (3) contact directly or indirectly any customer of
the Company or the Bank in regard to offering or providing banking
services or related services; (4) hire for any other employer
(including himself) any employee of the Company or the Bank under
circumstances where Executive directly or indirectly causes such
employee to leave the employment of the Company or the Bank; or (5)
undertake a business opportunity that came to the attention of
Executive through his employment with the (Company or the Bank which
Executive had not previously offered in writing to the Company or the
Bank and which the Company or the Bank had rejected in writing.
(c) The covenants of Executive set forth in this Section 13 are
separate and independent covenants for which valuable consideration
has been paid, the receipt, adequacy and sufficiency of which are
hereby acknowledged by Executive, and have also been made by Executive
to induce the Company and the Bank to enter into this Agreement. Each
of the aforesaid covenants may be availed of or relied upon by the
Company and the Bank 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 the Company and the Bank arising out of any breach of the
aforesaid covenants by Executive. The covenants of Executive set forth
in this Section 13 are cumulative to each other and to all other
covenants of Executive in favor of the Company and the Bank contained
in this Agreement, and shall survive the termination of this Agreement
for the purposes intended. Should any covenant, term or condition
contained in this Section 13 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 13 so that it
shall be enforceable as modified, and in any event the invalidity of
any provision of this Section 13 shall not affect the validity of any
other provision in this Section 13 or elsewhere in this Agreement.
14. Notices. Any notice required or desired to be given under this
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Agreement shall be deemed given if in writing sent by certified mail to his
residence in the case of Executive, or to its principal office in the case of
the Company and the Bank.
15. Waiver of Breach. The waiver by the Company and the Bank of a breach of
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any provision of this Agreement by Executive shall not operate or be construed
as a waiver of any subsequent breach by Executive. No waiver shall be valid
unless in writing and signed by an authorized officer of the Company and the
Bank.
16. Assignment. Executive acknowledges that the services to be rendered by
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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 Executive under this Agreement shall inure to the
benefit of and shall be binding upon the successors and assigns of the Company
and the Bank.
17. Governing Law. This Agreement shall be governed and construed in
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accordance with the laws of the State of Florida.
18. Severability. The provisions of this Agreement shall be deemed
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severable and the unenforceability of any provision or any portion thereof shall
not affect the validity of the remainder of any such provision or the other
provisions of this Agreement.
19. Entire Agreement. This Agreement contains the entire understanding of
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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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
"COMPANY" "BANK"
SARASOTA BANCORPORATION, INC. SARASOTA BANK
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxx
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Attest: /s/ Xxxxxx X. Xxxx Attest: /s/ Xxxxxxx X. Xxxxxxx
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[CORPORATE SEAL] [BANK SEAL]
"EXECUTIVE"
By: /s/ Xxxx X. Xxxxxxxx (L.S.)
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XXXX X. XXXXXXXX
Exhibit A
o Stock Option Agreement dated June 9, 1998.
o Memorandum dated June 10, 1998 to Xxxx Xxxxxxxx from the Board of
Directors relating to the stock option grant.
o Undated memorandum to Xxxx Xxxxxxxx from the Board of Directors
referencing the June 10, 1998 memorandum from the board.
o Stock Option Agreement dated September 28, 1999.
o Board of Directors resolutions in March 2002 relating to stock
options.
o Stock Option Agreement dated May 21, 2002.
o Amendment to Stock Option Agreement dated May 21, 2002.
