EMPLOYMENT AND SUPPLEMENTAL BENEFITS AGREEMENT
EMPLOYMENT AND SUPPLEMENTAL BENEFITS AGREEMENT dated as of July 1, 2004
(the "Effective Date"), between Xxxxxxxx X. Xxxxxxx, having an office at Xxx
Xxxxxxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000 ("Xxxxxxx"), and
Intervest Bancshares Corporation, a Delaware corporation having an office at Xxx
Xxxxxxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000 (the "Corporation").
Background
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Commencing as of the Effective Date, the Corporation wishes to employ
Xxxxxxx to perform services for the Corporation in connection with the operation
of the business of the corporation, and Xxxxxxx wishes to perform such services.
W1TNESSETH, the parties hereto, in consideration of the premises, and the
mutual covenants and agreements herein contained, agree as follows:
1. Employment. The Corporation hereby employs Xxxxxxx and Xxxxxxx
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hereby accepts employment upon the terms and conditions hereinafter set forth.
2. Services.
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a. Duties. Xxxxxxx is engaged as Vice President and Secretary of
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the Corporation and, subject to the direction of the board of directors and the
Corporation's officers designated by the board of directors, Xxxxxxx shall
perform and discharge well and faithfully such duties as may be assigned or
delegated to him. Xxxxxxx shall have all requisite power and authority on
behalf of the Corporation to perform such duties, including, without limitation,
the authority to hire and fire employees and to retain the services of
independent contractors.
b. Time Devoted; Other Businesses. During the Term, Xxxxxxx shall
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devote so much of his time to the affairs of the Corporation as in his judgment
the conduct of his duties shall require. Nothing herein contained shall be
deemed to limit or preclude Xxxxxxx from engaging, directly or indirectly, in
any other business, or from directly or indirectly financing, purchasing,
acquiring, operating, leasing, holding, selling or otherwise disposing of real
property for his own account or for the account of any such other business, or
from performing services on behalf of any other corporation, partnership or
other business entity, including, but not limited to, any other business entity
with which any of the officers, directors or shareholders of the Corporation may
be affiliated, directly or indirectly. It is understood and agreed by the
Corporation that Xxxxxxx may participate in other ventures which are engaged in
the same or similar businesses as the Corporation. The Corporation shall not
have any right to participate in any such other businesses, transactions or
investments, or in any profits or income earned or derived by Xxxxxxx from the
conduct of any such businesses, transactions or investments and no compensation
or benefits derived from other activities or employment shall reduce in any way
anything due Xxxxxxx under this Agreement.
3. Compensation; Benefits.
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a. Salary. The Corporation shall pay to Xxxxxxx during the Term
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hereof, for his services to be performed pursuant hereto, a salary, which at the
inception of the Term shall be at the annual rate of $165,000 per annum, subject
to withholding for federal, state and local taxes, as required by law. Such
salary shall be increased annually, effective as of July 1 of each year, by an
amount equal to the greatest of: (1) the product obtained by multiplying the
salary for the preceding year (ending June 30) as adjusted in accordance with
this formula, by the six percent (6%), (2) the product obtained by multiplying
the salary for the preceding year (ending June 30) by that percentage which
shall be the percentage equivalent to a fraction, the numerator of which
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fraction shall be that amount, if any, by which the "Consumer Price Index" (as
hereinafter defined) as of the June 1 preceding the July 1 effective date of
such salary increase, shall exceed the Consumer Price Index as of June 1 of the
prior year, and the denominator of which fraction shall be the Consumer Price
Index as of such June 1 of the prior year; and (3) .015% of the Asset Size
Increase of the Corporation for the year ending June 30 preceding the July 1
effective date of such salary increase, provided that the Asset Size Increase
criteria shall only be applied if the Corporation had net income in such twelve
month period.
As used herein, "Consumer Price Index" shall mean the Consumer Price
Index for All Wage Earners and Clerical Workers for New York and NorthEastern
New Jersey, published by the Bureau of Labor Statistics of the United States
Department of Labor, (Base 1967 = 100). If the Consumer Price Index ceases to
use (1967 = 100) as the basis of calculation, or if the Consumer Price Index (as
herein defined) ceases to be published by the Bureau of Labor Statistics, then
the Corporation and Xxxxxxx shall substitute such index as they shall jointly
designate. As used herein, the Asset Size Increase shall be the difference
between the total assets of the Corporation on a consolidated basis, as
reflected on the balance sheet of the Corporation as of June 30 of any year, as
compared with the total assets of the Corporation on a consolidated basis, as
reflected on the balance sheet of the Corporation as of June 30 of the prior
year.
The above salary shall be payable in arrears, in accordance with the
normal payroll cycle of the Corporation (but not less frequently than
monthly),with the initial payment being due on the first payroll cycle after the
Effective Date.
In addition to the salary described above, Xxxxxxx shall be entitled
to receive such bonuses or incentive compensation as may, from time to time, be
approved by the Board of Directors in connection with his performance of his
regular, assigned duties hereunder. Xxxxxxx shall also be entitled to receive
such bonuses or incentive compensation as may, from time to time, be approved
by the Board of Directors in connection with the performance of duties or
responsibilities beyond those assigned to Xxxxxxx in the ordinary course,
including but not limited to services in connection with the raising of capital
and acquisitions.
b. Reimbursement of Expenses. During the Term, Xxxxxxx shall be
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entitled to reimbursement of all travel and other expenses incurred by him in
the performance of duties for the Corporation or any of its subsidiaries or
affiliated entities, including, without limitation, travel in connection with
attendance at conventions, trade associations and similar meetings. Travel
expenses shall include, without limitation, registration and attendance fees,
transportation, meals and lodging.
c. Office. The Corporation shall provide Xxxxxxx with an office
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at the Corporation's offices, at no cost or expense to Xxxxxxx. Such office and
the facilities of the Corporation's offices, may be utilized by Xxxxxxx at no
charge or expense to him, in connection with his duties on behalf of the
Corporation, and for all or any other purposes as Xxxxxxx may determine when not
engaged in the performance of duties on behalf of the Corporation. Following the
expiration of the Term of this Employment Agreement, the Corporation shall
continue, at no cost or expense to Xxxxxxx, and for a period of two year to
provide Xxxxxxx with the use of an office and the facilities of the
Corporation's offices.
Should the Corporation cease to maintain offices in midtown
Manhattan, City of New York, then the Corporation shall nonetheless be obligated
to pay to Xxxxxxx, an amount reasonably determined by Xxxxxxx reflecting the
cost of an office and secretarial services in the City of New York. In no event
shall Xxxxxxx be required to relocate outside of
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the City of New York, The provisions of this subparagraph (c) of paragraph 3
shall survive the expiration or termination of this Employment Agreement.
d. Vacation. Xxxxxxx shall be entitled to four (4) weeks paid
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vacation during the first two years of the Term; and five (5) weeks paid
vacation during each of the remaining years of the Term, such vacation to be
taken by Xxxxxxx at such times as he shall elect during such year. Unused
vacation, if not so taken, shall be paid to Xxxxxxx as accrued salary, in a lump
sum, upon the expiration of each annual period (July 1 to June 30).
e. Other Benefits. Xxxxxxx shall be entitled to participate in
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employee benefit plans or programs of the Corporation, if any, to the extent
that his position, tenure, salary, age, health and other qualifications make him
eligible to participate, subject to the rules and regulations applicable
thereto.
f. Death or Disability of Xxxxxxx. In the event of the death or
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disability of Xxxxxxx, the Corporation shall make the following payments:
i. In the event of the disability of Xxxxxxx, the Corporation
shall pay to Xxxxxxx, or if he shall subsequently die, to Xxxxxxx'x estate, the
Distribution Amount (as hereafter defined), at the times herein specified and
for the Distribution Term (as hereafter defined);
ii. In the event of the disability of Xxxxxxx, Xxxxxxx shall
remain entitled, during the Distribution Term, to participate in employee
benefit plans or programs of the Corporation and shall, during the Distribution
Term, continue to receive the full benefit of this Agreement (except that the
Distribution Amount shall be paid in lieu of the salary specified by Section
3(a)); and
iii. In the event of the death of Xxxxxxx, the Corporation
shall pay to Xxxxxxx'x estate, the Distribution Amount, at the times provided
for and for the Distribution Term.
The "Distribution Amount" shall be an amount equal to a
percentage of the amount which from time to time would have been paid monthly on
account of Xxxxxxx'x salary, pursuant to the terms of this Employment Agreement,
had this Employment Agreement continued in force and effect for the whole or
that portion of the balance of the stated Term constituting the Distribution
Term. The percentage shall be fifty percent (50%) in the case of disability, and
twenty five percent (25%), in the case of death. The Distribution Amount (or
the balance of any remaining Distribution Amount if monthly payments have
previously commenced due to disability) shall, in the case of death, be paid to
Xxxxxxx'x estate in a lump sum and shall, for these purposes, be calculated on
the basis of annual salary increases at the rate of six percent (6%). The
Distribution Amount shall, in the case of disability, be paid monthly during the
Distribution Term in an amount equal to fifty percent (50%) of the monthly
payment which would have been made in accordance with the terms of this
Employment Agreement, had such payments so continued. The Distribution Term
shall be that period that shall be equal to the greater of (i) three years, and
(ii) the number of months remaining in the stated Term of this Employment
Agreement. The obligation of the Corporation to pay the Distribution Amount
shall survive the expiration of the Term of this Employment Agreement.
As used herein "Disability" shall mean the inability to perform
the services called for hereunder by reason of mental or physical illness for a
continuous period of six (6) months, provided. that should any such disability
cease, Xxxxxxx may, at his election, resume the performance of duties hereunder,
in which case he shall be fully reinstated (including salary, benefits and
authority) to the position he occupied prior to the date of his cessation of
services as a result of disability.
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g. No Impairment. Nothing herein contained shall limit or impair
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the right, power and authority of the Corporation to confer upon or award to
Xxxxxxx, on account of the services performed or to be performed by Xxxxxxx on
behalf of the Corporation (whether or not pursuant to this Employment
Agreement), any bonus, stock options, warrants or any other form of benefit or
compensation.
h. Tax Payments. Annually, on or before April 15 of each year,
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the Corporation shall pay to Xxxxxxx an amount which is equal to the sum of (A)
the federal, state and local taxes that would be due in connection with the
value of any benefit or payment hereunder (other than salary or Distribution
Amounts), and (B) the federal, state and local taxes payable as a result of the
payment set forth in (A) above, in each case based upon the highest tax bracket
then applicable to individual taxpayers under federal, state and local tax laws
for the then marital status of the recipient of the amounts,
i. Legal Representative. Should Xxxxxxx have a legal
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representative appointed for any reason, such representative shall be empowered
to make any elections or decisions which Xxxxxxx may have otherwise been
permitted to make.
j. Affiliates. To the extent deemed necessary or appropriate by
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the Corporation, payments due pursuant to this Agreement may be made by the
Corporation or any of its subsidiaries and benefits prescribed hereunder may be
furnished pursuant to the plans of the Corporation or any of its subsidiaries.
4. Term. The term of this Employment Agreement (the "Term") shall
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commence on the effective date and shall expire June 30, 2014, unless terminated
by Xxxxxxx upon thirty (30) days' prior notice (in which case the respective
obligations of the parties hereunder shall terminate upon the payment of accrued
entitlements and which termination shall not include Xxxxxxx'x death or
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disability)
5. Indemnification.
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a. To the fullest extent permitted by law, the Corporation shall
indemnify and hold harmless Xxxxxxx against all losses, claims, damages or
liabilities (including legal fees, disbursements, and any other expenses
incurred in investigating or defending against any such loss, claim, damage or
liability) arising (i) by reason of any acts or omissions or any alleged acts or
omissions arising out of Xxxxxxx'x activities in connection with the conduct of
the business of the Corporation (or any of its subsidiaries or affiliated
entities), (ii) by reason of the performance by Xxxxxxx of the services to be
performed by Xxxxxxx, pursuant to the terms of this Employment Agreement, (iii)
by reason of any claim or allegation of failure to perform such services in
accordance with the terms of this Employment Agreement, or (iv) by reason of the
performance of services alleged to be beyond the scope of the authority
conferred upon Xxxxxxx pursuant to the terms of this Employment Agreement. This
indemnity shall not cover losses, claims, damages or liabilities arising under
subdivisions (i), (ii) or (iii) of the preceding sentence, in each such instance
aforesaid to the extent that such loss, claim, damage or liability results from
the gross negligence or willful misconduct of Xxxxxxx. The indemnification
provided in this section 5: (i) shall survive the expiration or earlier
termination of this Employment Agreement; (ii) shall be in addition to, and not
a limitation of any common law or contractual rights of indemnification
available to Xxxxxxx at law or in equity; and (iii) shall include all costs and
expenses of enforcing this indemnity.
b. All costs and expenses paid or incurred by Xxxxxxx in
investigating, defending or settling any claim, loss, damage or liability, that
may be subject to a right of indemnification hereunder, shall be paid by the
Corporation upon the request of Xxxxxxx.
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6. Change of Control. In the event of any sale of assets, sale of
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stock, merger, reorganization or other transaction involving the Corporation,
the successor to the Corporation shall, as a condition to the consummation of
such transaction, expressly assume and perform this Agreement.
7. Miscellaneous,
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a. Governing Law. This agreement shall be governed by, and
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construed and enforced in accordance with the laws of the State of New
b. Entire Agreement. This agreement constitutes the entire
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agreement between the parties with respect to the subject matter hereof, and
supersedes any prior agreement or understanding between them with respect to
such subject matter.
c. Arbitration. Any controversy or claim arising out of, or
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relating to this agreement, or the breach thereof, shall be settled by
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction.
d. Successors and Assigns. No party may assign, pledge or
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encumber its rights or obligations under this Agreement. This Agreement shall be
binding upon and may be enforced by the parties hereto and their legal
representatives.
e. Counterparts. This Agreement may be executed in one or more
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counterparts, all of which shall constitute one and the same instrument.
f. Headings. The section headings in this Agreement are for
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convenience of reference only, and shall not be deemed to alter or affect the
meaning or interpretation of any provisions hereof.
g. Compliance. In performing services hereunder, Xxxxxxx shall
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comply with all applicable laws and regulations that may apply to the
Corporation and its subsidiaries, including any code of ethics that may, from
time to time, be approved by the Corporation.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the date first above written.
INTERVEST BANCSHARES CORPORTION
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, President
/s/ Xxxxxxxx X. Xxxxxxx
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Xxxxxxxx X. Xxxxxxx
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