EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") dated as of March 3, 2000,
is made by and between Lehigh Acres First National Bancshares, Inc., a Florida
corporation (the "Employer" or the "Company") which is the proposed bank holding
company for Lehigh Acres First National Bank (Proposed), a proposed national
bank (the "Bank"), and Xxxxxx X. X'Xxxx, an individual resident of Florida (the
"Executive").
The Employer is in the process of organizing the Bank, and the
Executive has agreed to serve as President and Chief Executive Officer of the
Bank and the Company. Upon organization of the Bank, the Employer and the
Executive contemplate that this Agreement will be assigned by the Employer to
the Bank and that the Bank will assume the duties of the Company hereunder.
Following any such assignment, the term "Employer" as used herein from time to
time shall refer to the Bank.
The Employer recognizes that the Executive's contribution to the growth
and success of the Bank during its organization and initial years of operations
will be a significant factor in the success of the Bank. The Employer desires to
provide for the employment of the Executive in a manner which will reinforce and
encourage the dedication of the Executive to the Bank and promote the best
interests of the Bank and its shareholders. The Executive is willing to serve
the Employer on the terms and conditions herein provided. Certain terms used in
this Agreement are defined in Section 13 hereof.
In consideration of the foregoing, the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
Employment shall commence from the date Permission to Open is granted
by the Office of the Controller of the Currency. In the event the Bank as
proposed is not open by September 1, 2000, this Agreement shall be null and void
and of no effects as to the parties thereto, their promoters, organizers, and
directors.
This Agreement shall insure the benefit of and be binding upon the Bank
when formed, its successors and assigns, and any corporation with which the Bank
may merge or consolidate or to which the Bank may sell substantially all of its
business and assets, and shall insure to the benefit of and be binding on the
Executive. Since the Executive's duties and services hereunder are special,
personal and unique in nature, the Executive may not sell or otherwise assign
her rights, obligations or benefits under this agreement.
1. Employment. The Employer shall employ the Executive, and the
Executive shall serve the Employer, as President and Chief Executive Officer of
the Bank and the Company upon the terms and conditions set forth herein. The
Executive shall also serve on the Board of Directors of the Company and the Bank
and shall also serve on the Executive Committee. The Executive shall have such
authority and responsibilities consistent with her position as are set forth in
the Company's or the Bank's Bylaws or assigned by the Company's or the Bank's
Board of Directors
(the "Board") from time to time. The Executive shall devote
her full business time, attention, skill and efforts to the performance of her
duties hereunder, except during periods of illness or periods of vacation and
leaves of absence consistent with Bank policy. The Executive may devote
reasonable periods to service as a director or advisor to other organizations,
to charitable and community activities, and to managing her personal
investments, provided that such activities do not materially interfere with the
performance of her duties hereunder and are not in conflict or competitive with,
or adverse to, the interests of the Company or the Bank.
2. Term. Unless earlier terminated as provided herein, the Executive's
employment under this Agreement shall commence on the date hereof and be for a
term (the "Term") of four years. Such initial four (4) year term may be renewed
at the discretion of the Board for two (2) consecutive one year terms for an
aggregate employment period of the Executive with the Bank of six (6) years from
the date hereon. Notwithstanding the foregoing, the Term of employment hereunder
will end on the date that the Executive attains the retirement age, if any,
specified in the Bylaws of the Bank for directors of the Bank.
3. Compensation and Benefits.
(a) Executive's annual salary is $96,000.00, plus her medical
insurance premium. The Board (or an appropriate committee of the Board) shall
review the Executive's salary at least annually and may increase the Executive's
salary if it determines in its sole discretion that an increase is appropriate.
(b) Bonus Plan-Each year, as cash performance bonus, the
Executive shall be entitled to five percent (5%) of net income after taxes of
the Bank (determined by generally accepted accounting principles), up to a
maximum of twenty-five (25%) of the Executive's annual salary. Each bonus will
be awarded and payable within sixty (60) days of the end of the bank's fiscal
year provided the Bank achieves the following performance criteria: (a) return
on equity (determined by generally accepted accounting principles) in each year;
(b) loan loss reserve ratio meets or exceeds 1.1% of net loans plus any
adjustments for classified loans; (c) ratio of non-performing loans to total
loans do not exceed that of its peers as published at year end in the Uniform
Bank Performance Report; and (d) the Bank achieves a composite rating and asset
quality rating of "2" or better.
1. Year One 1/1/2000 through 12/31/2000 N/A
2. Year Two l/1/2001 through 12/31/2001............-2.5%
3. Year Three 1/1/2002 through 12/31/2002............6.0%
4. Year Four 1/1/2003 through 12/31/2003.............8.0%
The Bank may, in its discretion, award Executive a bonus at the end of
calendar year one, should they determine said bonus is appropriate.
(c) The Executive shall participate in the Bank's long-term
equity incentive program and be eligible for the grant of stock options,
restricted stock, and other awards
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thereunder or under any similar plan adopted by the Company. As soon as an
appropriate stock option plan is adopted by the Board, the Company shall grant
to the Executive an option to purchase a number of shares of Common Stock equal
to 3% of the number of shares sold in the offering. All stock options
contemplated pursuant to this Agreement are subject to the following terms;
non-transferable, shall expire within ten (10) years from the date of the grant
or upon termination (discharge) of this Agreement, subject to any and all
forfeit or exercise clause as may be required by the appropriate regulatory
authorities, shall be issued at the higher market value as of the date of the
grant or the offering price of $10.00 per share.
All options issued to the Executive shall be vested at the rate of 1/3 (33.33%)
per calendar year end after the year issued and each calendar year thereafter
until fully vested. In the event this Agreement is terminated for reasons other
than discharge, all issued options much be exercised within 90 days of
separation or said options shall expire.
At no time shall options be issued or redeemable if said Bank is under any form
of notice or directive that may be issued by the appropriate regulatory
authorities. Nothing herein shall be deemed to preclude the granting to the
Executive of warrants or options under a director option plan in addition to the
options granted hereunder.
(d) Stock Options Linked to Bank Performance. If the Bank
opens for business and the Executive is initially and continues to be employed
under the provisions of this Agreement, then the Executive will earn option
rights redeemable in shares of common stock as a percentage of the Executive's
base salary.
Provided the Bank achieves a composite rating and asset quality rating of "2 "or
better, the Executive may, at the discretion of the Board, receive each year an
option in shares of capital stock of the Bank equal to 2.5% of her base salary.
In the event of the merger, consolidation or sale of all or substantially all of
the assets of the holding company or the Bank prior to the expiration of three
(3) years from the date of this agreement, and if the Executive is still
employed by the Bank, than all stock options comtemplated by this Paragraph (d)
not yet received by the Executive shall immediately be considered earned by the
Executive, as though the required anniversary dates and performance criteria had
been attained, provided the merger, consolidation, or sale meets or exceeds one
and one-half times of the existing book value of the Bank at the date of sale.
(e) The Executive shall participate in all retirement, welfare
and other benefit plans or programs of the Employer now or hereafter applicable
generally to employees of the Employer or to a class of employees that includes
senior executives of the Employer. Such benefits under consideration may include
up to-health and dental insurance; deferred compensation plan, and an approved
paid holiday schedule.
(f) The Employer shall provide the Executive with a term life
insurance policy providing for death benefits totaling $300,000 payable to the
Executive's spouse and heirs (and may provide for additional death benefits of
up to $500,000 payable to the Employer), and the Executive shall cooperate with
the Employer in the securing and maintenance of such policy. The Employer shall
also pay for an accident liability policy on the Executive totaling $500,000 to
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protect the Employer from damages or lawsuits resulting from injuries to third
parties caused by the Executive.
(g) Beginning upon the Opening Date, the Company shall provide
Executive with a monthly automobile allowance not to exceed $650.00 per month.
The Executive will remain responsible for costs of ownership of her personal
vehicle including maintenance, repair and insurance while on bank business.
Since the Bank in that instance would assume no responsibility beyond making
available an allowance, it is the Executive's responsibility to protect against
damage to her vehicle and legal liability in such a form and amount as the
Executive deems appropriate and the Bank shall be listed as an additional
insured on the policy.
(h) The Bank shall pay directly, or reimburse the Executive
for her membership on civic and social clubs for the benefit of the Executive
and the business opportunities of the Bank; all memberships subject to approval
by the Board of Directors.
(i) The Employer shall reimburse the Executive for reasonable
travel and other business development expenses related to the Executive's duties
which are incurred and accounted for in accordance with the normal practices of
the Employer.
(j) Executive shall have the right to accrued vacation of
fifteen (15) working days each calendar year for the first year. These vacation
days shall be at full pay earned on a prorated basis for twelve (12) months of
employment. After the first year of this employment contract, subsequent years
of the contract, the Executive shall have the right to twenty (20) working days
of vacation at full pay during each calendar year. Each twenty (20) days shall
be accrued at a prorated basis over twelve (12) month of employment.
(k) Disability Insurance.. As soon as practical, the Bank
shall obtain for the benefit of the Executive an insured salary continuation
plan to provide the Executive benefit payment of up to two-thirds (2/3) of her
salary to age 65, in the event of her disability while employed by the bank.
4. Termination.
(a) The Executive's employment under this Agreement may be
terminated prior to the end of the Term only as follows:
(i) upon the death of the Executive;
(ii) upon the disability of the Executive for a
period of 180 days which, in the opinion of the Board of
Directors, renders her unable to perform the essential
functions of her job and for which reasonable accommodation
is unavailable. For purposes of this Agreement, a
"disability" is defined as a physical or mental impairment
that substantially limits one or more major life activities,
and a "reasonable accommodation" is one that does not impose
an undue hardship on the Employer;
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(iii) by the Employer for Cause upon delivery of a
Notice of Termination to the Executive;
(iv) by the Executive by Notice of Termination which
follows a Change in Control and either (i) follows the
occurrence of a Good Reason or (ii) is delivered within a
90-day period beginning on the one year anniversary of the
occurrence of a Change in Control;
(v) by the Employer if its effort to organize the
Bank is abandoned;
(vi) by the Executive effective upon the 30tth day
after delivery of a Notice of Termination; or
(vii) by the Employer effective upon the 30th day
after delivery of a Notice of Termination.
(b) If the Executive's employment is terminated because of the
Executive's death under Section 4(a)(i), the Executive's estate shall receive
any sums due her as base salary and/or reimbursement of expenses through the end
of the month during which death occurred, plus any bonus earned or accrued under
the Bonus Plan through the date of death (including any amounts awarded for
previous years but which were not yet vested) and a pro rata share of any bonus
with respect to the current fiscal year which had been earned as of the date of
the Executive's death.
(c) During the period of any incapacity leading up to the
termination of the Executive's employment under Section 4(a)(ii), the Employer
shall continue to pay the Executive her full base salary at the rate then in
effect and all perquisites and other benefits (other than any bonus) until the
Executive becomes eligible for benefits under any long-term disability plan or
insurance program maintained by the Employer, provided that the amount of any
such payments to the Executive shall be reduced by the sum of the amounts, if
any, payable to the Executive for the same period under any disability benefit
or pension plan of the Employer or any of its subsidiaries. Furthermore, the
Executive shall receive any bonus earned or accrued under the Bonus Plan through
the date of incapacity (including any amounts awarded for previous years but
which were not yet vested) and a pro rata share of any bonus with respect to the
current fiscal year which had been earned as of the date of the Executive's
incapacity.
(d) If the Executive's employment is terminated for Cause
under Section 4(a)(iii), or if the Executive resigns under Section 4(a)(vi), the
Executive shall receive any sums due her as base salary and/or reimbursement of
expenses through the date of such termination.
(e) If the Executive's employment is terminated by the
Executive pursuant to clause 4(a)( iv), in addition to other rights and remedies
available in law or equity, the Executive shall be entitled to the following:
(i) the Employer shall pay the Executive in cash
within fifteen days of the date of termination severance
compensation in an amount equal to her then current monthly base
salary multiplied by 24 , plus any bonus earned or accrued
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under the Bonus Plan through the date of termination (including
any amounts awarded for previous years but which were not yet
vested) and a pro rata share of any bonus with respect to the
current fiscal year which had been earned as of the date of
termination.
(ii) for a period of one year, the Employer shall at
its expense continue on behalf of the Executive and her
dependents and beneficiaries the life insurance, disability,
medical, dental, and hospitalization benefits provided (x) to
the Executive at any time during the 90-day period prior to the
Change in Control or at any time thereafter or (y) to other
similarly situated executives who continue in the employ of the
Employer during the Continuation Period. Such coverage and
benefits (including deductibles and costs) shall be no less
favorable to the Executive and her dependents and beneficiaries
than the most favorable of such coverages and benefits during
any of the periods referred to above. The Employer's obligation
hereunder with respect to the foregoing benefits shall be
limited to the extent that the Executive obtains any such
benefits pursuant to a subsequent employer's benefit plans, in
which case the Employer may reduce the coverage of any benefits
it is required to provide the Executive hereunder as long as the
aggregate coverages and benefits of the combined benefit plans
is no less favorable to the Executive than the coverages and
benefits required to be provided hereunder. This subsection (ii)
shall not be interpreted so as to limit any benefits to which
the Executive or her dependents or beneficiaries may be entitled
under any of the Employer's employee benefit plans, programs, or
practices following the Executive's termination of employment,
including, without limitation, retiree medical and life
insurance benefits; and
(iii) the restrictions on any outstanding incentive
awards (including restricted stock) granted to the Executive
under the Company's or the Bank's long-term equity incentive
program or any other incentive plan or arrangement shall lapse
and such awards shall become 100% vested, all stock options and
stock appreciation rights granted to the Executive shall become
immediately exercisable and shall become 100% vested, all
performance units granted to the Executive shall become 100%
vested, and the restrictive covenants contained in Section 9
shall not apply to the Executive.
(f) If the Employer terminates the Executive's employment
pursuant to clause 4(a)(vii), the Employer shall pay to the Executive severance
compensation in an amount equal to 100% of her then current monthly base salary
each month for 12 months from the date of termination, plus any bonus earned or
accrued under the Bonus Plan through the date of termination (including any
amounts awarded for previous years but which were not yet vested) and a pro rata
share of any bonus with respect to the current fiscal year which had been earned
as of the date of the Executive's termination.
(g) With the exceptions of the provisions of this Section 4,
and the express terms of any benefit plan under which the Executive is a
participant, it is agreed that, upon termination of the Executive's employment,
the Employer shall have no obligation to the Executive for, and the Executive
waives and relinquishes, any further compensation or benefits
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(exclusive of COBRA benefits). Unless otherwise stated in this Section 4, the
effect of termination on any outstanding incentive awards, stock options, stock
appreciation rights, performance units, or other incentives shall be governed by
the terms of the applicable benefit or incentive plan and/or the agreements
governing such incentives. At the time of termination of employment, the
Employer and the Executive shall enter into a mutually satisfactory form of
release acknowledging such remaining obligations and discharging both parties,
as well as the Employer's officers, directors and employees with respect to
their actions for or on behalf of the Employer, from any other claims or
obligations arising out of or in connection with the Executive's employment by
the Employer, including the circumstances of such termination.
(h) In the event that the Executive's employment is terminated
for any reason, the Executive shall tender her resignation as a director of the
Employer and effective as of the date of termination.
(i) The parties intend that the severance payments and other
compensation provided for herein are reasonable compensation for the Executive's
services to the Employer and shall not constitute "excess parachute payments"
within the meaning of Section 280G of the Internal Revenue Code of 1986 and any
regulations thereunder. In the event that the Employer's independent accountants
acting as auditors for the Employer on the date of a Change in Control determine
that the payments provided for herein constitute "excess parachute payments,"
then the compensation payable hereunder shall be increased, on a tax gross-up
basis, so as to reimburse the Executive for the tax payable by the Executive,
pursuant to Section 4999 of the Internal Revenue Code, on such "excess parachute
payments," taking into account all taxes payable by the Executive with respect
to such tax gross-up payments hereunder, so that the Executive shall be, after
payment of all taxes, in the same financial position as if no taxes under
Section 4999 had been imposed upon her.
5. Protection of Trade Secrets. The Executive agrees to maintain in
strict confidence and, except as necessary to perform her duties for the
Employer, the Executive agrees not to use or disclose any Trade Secrets of the
Employer during or after her employment. "Trade Secret" means information,
including a formula, pattern, compilation, program, device, method, technique,
process, drawing, cost data or customer list, that: (i) derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
6. Restrictive Covenants.
(a) No Solicitation of Customers. During the Executive's
employment with the Employer, and for a period of twelve months thereafter, or
during any period the Employer is paying Executive severance under Section 4 if
longer than twelve months, the Executive shall not (except on behalf of or with
the prior written consent of the Employer), either directly or indirectly, on
the Executive's own behalf or in the service or on behalf of others, (A)
solicit, divert, or appropriate to or for a Competing Business, or (B) attempt
to solicit, divert, or appropriate to or for a Competing Business, any person or
entity that is or was a customer of the
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Employer or any of its Affiliates on the date of termination and is located in
the Territory and with whom the Executive has had material contact.
(b) No Recruitment of Personnel. During the Executive's
employment with the Employer, and for a period of twelve months thereafter, or
during any period the Employer is paying Executive severance under Section 4 if
longer than twelve months, the Executive shall not, either directly or
indirectly, on the Executive's own behalf or in the service or on behalf of
others, (A) solicit, divert, or hire away, or (B) attempt to solicit, divert, or
hire away, to any Competing Business located in the Territory, any employee of
or consultant to the Employer or any of its Affiliates engaged or experienced in
the Business, regardless of whether the employee or consultant is full-time or
temporary, the employment or engagement is pursuant to written agreement, or the
employment is for a determined period or is at will.
(c) Non-Competition Agreement. During the Executive's
employment with the Employer, and for a period of twelve months thereafter, or
during any period the Employer is paying Executive severance under section 4 if
longer than twelve months, the Executive shall not (without the prior written
consent of the Employer) compete with the Employer or any of its Affiliates by,
directly or indirectly, forming, serving as an organizer, director or officer
of, or consultant to, or acquiring or maintaining more than a 1% passive
investment in, a depository financial institution or holding company therefor if
such depository institution or holding company has one or more offices or
branches located in the Territory. Notwithstanding the foregoing, the Executive
may serve as an officer of or consultant to a depository institution or holding
company therefor even though such institution operates one or more offices or
branches in the Territory, if the Executive's employment does not directly
involve, in whole or in part, the depository financial institution's or holding
company's operations in the Territory.
7. Successors; Binding Agreement. The rights and obligations of this
Agreement shall bind and inure to the benefit of the surviving corporation in
any merger or consolidation in which the Employer is a party, or any assignee of
all or substantially all of the Employer's business and properties. The
Executive's rights and obligations under this Agreement may not be assigned by
her, except that her right to receive accrued but unpaid compensation,
unreimbursed expenses and other rights, if any, provided under this Agreement
which survive termination of this Agreement shall pass after death to the
personal representatives of her estate.
8. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, addressed to the respective
addresses last given by each party to the other; provided, however, that all
notices to the Employer shall be directed to the attention of the Employer with
a copy to the Secretary of the Employer. All notices and communications shall be
deemed to have been received on the date of delivery thereof.
9. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Florida without giving
effect to the conflict of laws principles thereof. Any action brought by any
party to this Agreement shall be brought and maintained in a court of competent
jurisdiction in State of Florida.
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10. Non-Waiver. Failure of the Employer to enforce any of the
provisions of this Agreement or any rights with respect thereto shall in no way
be considered to be a waiver of such provisions or rights, or in any way affect
the validity of this Agreement.
11. Arbitration. In accepting this offer of employment, the Executive
agrees that any dispute arising out of this Agreement or out of any termination
of employment, with or without cause, said dispute shall be resolved pursuant to
mandatory arbitration at the written request of either party. This Agreement
provides such arbitration and shall be complied with and be governed by the
provisions of the Federal Arbitration Act.
12. Saving Clause. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision or clause of this Agreement, or portion thereof, shall be held by any
court or other tribunal of competent jurisdiction to be illegal, void, or
unenforceable in such jurisdiction, the remainder of such provision shall not be
thereby affected and shall be given full effect, without regard to the invalid
portion. It is the intention of the parties that, if any court construes any
provision or clause of this Agreement, or any portion thereof, to be illegal,
void, or unenforceable because of the duration of such provision or the area or
matter covered thereby, such court shall reduce the duration, area, or matter of
such provision, and, in its reduced form, such provision shall then be
enforceable and shall be enforced. The Executive and the Employer hereby agree
that they will negotiate in good faith to amend this Agreement from time to time
to modify the terms of Sections 9(a), 9(b), and 9(c), the definition of the term
"Territory," and the definition of the term "Business," to reflect changes in
the Employer's business and affairs so that the scope of the limitations placed
on the Executive's activities by Section 9 accomplishes the parties' intent in
relation to the then current facts and circumstances. Any such amendment shall
be effective only when completed in writing and signed by the Executive and the
Employer.
13. Certain Definitions.
(a) "Affiliate" shall mean any business entity controlled by,
controlling or under common control with the Employer.
(b) "Business" shall mean the operation of a depository
financial institution, including, without limitation, the solicitation and
acceptance of deposits of money and commercial paper, the solicitation and
funding of loans and the provision of other banking services, and any other
related business engaged in by the Employer or any of its Affiliates as of the
date of termination.
(c) "Cause" shall consist of any of (A) the commission by the
Executive of a willful act (including, without limitation, a dishonest or
fraudulent act) or a grossly negligent act, or the willful or grossly negligent
omission to act by the Executive, which is intended to cause, causes or is
reasonably likely to cause material harm to the Employer (including harm to its
business reputation), (B) the indictment of the Executive for the commission or
perpetration by the Executive of any felony or any crime involving dishonesty,
moral turpitude or fraud, (C) the
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material breach by the Executive of this Agreement that, if susceptible of cure,
remains uncured ten days following written notice to the Executive of such
breach, (D) the receipt of any form of notice, written or otherwise, that any
regulatory agency having jurisdiction over the Employer intends to institute any
form of formal or informal (e.g., a memorandum of understanding which relates to
the Executive's performance) regulatory action against the Executive or the
Employer or the Employer (provided that the Board of Directors determines in
good faith, with the Executive abstaining from participating in the
consideration of and vote on the matter, that the subject matter of such action
involves acts or omissions by or under the supervision of the Executive or that
termination of the Executive would materially advance the Employer's compliance
with the purpose of the action or would materially assist the Employer in
avoiding or reducing the restrictions or adverse effects to the Employer related
to the regulatory action); (E) the exhibition by the Executive of a standard of
behavior within the scope of her employment that is materially disruptive to the
orderly conduct of the Employer's business operations (including, without
limitation, substance abuse or sexual misconduct) to a level which, in the Board
of Directors' good faith and reasonable judgment, with the Executive abstaining
from participating in the consideration of and vote on the matter, is materially
detrimental to the Employer's best interest, that, if susceptible of cure
remains uncured ten days following written notice to the Executive of such
specific inappropriate behavior; or (F) the failure of the Executive to devote
her full business time and attention to her employment as provided under this
Agreement that, if susceptible of cure, remains uncured 30 days following
written notice to the Executive of such failure.
(d) "Change in Control" shall mean the occurrence during the
Term of any of the following events, unless such event is a result of a
Non-Control Transaction:
(i) The individuals who, as of the date of this
Agreement, are members of the Board of Directors of the
Employer (the "Incumbent Board") cease for any reason to
constitute at least fifty percent of the Board of Directors of
the Employer; provided, however, that if the election, or
nomination for election by the Employer's shareholders, of any
new director was approved in advance by a vote of at least
fifty percent of the Incumbent Board, such new director shall,
for purposes of this Agreement, be considered as a member of
the Incumbent Board; provided, further, that no individual
shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an
actual or threatened "Election Contest" (as described in Rule
14a-11 promulgated under the Securities Exchange Act of 1934
(the "Exchange Act"), or other actual or threatened
solicitation of proxies or consents by or on behalf of any
person other than the Board of Directors of the Employer (a
"Proxy Contest"), including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy
Contest.
(ii) An acquisition (other than directly from the
Employer) of any voting securities of the Employer (the
"Voting Securities") by any "Person" (as the term "person" is
used for purposes of Section 13(d) or 14(d) of the Exchange
Act) immediately after which such Person has "Beneficial
Ownership" (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 20% or more of the combined voting power
of the Employer's then outstanding Voting Securities;
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provided, however, that in determining whether a Change in
Control has occurred, Voting Securities which are acquired in
a Non-Control Acquisition shall not constitute an acquisition
which would cause a Change in Control.
(iii) Approval by the shareholders of the Employer
of: (i) a merger, consolidation, or reorganization involving
the Employer; (ii) a complete liquidation or dissolution of
the Employer; or (iii) an agreement for the sale or other
disposition of all or substantially all of the assets of the
Employer to any Person (other than a transfer to a
Subsidiary).
(iv) A notice of an application is filed with the
Office of Comptroller of the Currency (the "OCC") or the
Federal Reserve Board or any other bank or thrift regulatory
approval (or notice of no disapproval) is granted by the
Federal Reserve, the OCC, the Federal Deposit Insurance
Corporation, or any other regulatory authority for permission
to acquire control of the Employer or any of its banking
subsidiaries.
(e) "Competing Business" shall mean any business that, in
whole or in part, is the same or substantially the same as the Business.
(f) "Good Reason" shall mean the occurrence after a Change in
Control of any of the events or conditions described in subsections (i) through
(viii) hereof:
(i) a change in the Executive's status, title,
position or responsibilities (including reporting
responsibilities) which, in the Executive's reasonable
judgment, represents an adverse change from her status, title,
position or responsibilities as in effect at any time within
ninety days preceding the date of a Change in Control or at
any time thereafter; the assignment to the Executive of any
duties or responsibilities which, in the Executive's
reasonable judgment, are inconsistent with her status, title,
position or responsibilities as in effect at any time within
ninety days preceding the date of a Change in Control or at
any time thereafter; any removal of the Executive from or
failure to reappoint or reelect him to any of such offices or
positions, except in connection with the termination of her
employment for Disability or Cause, as a result of her death,
or by the Executive other than for Good Reason, or any other
change in condition or circumstances that in the Executive's
reasonable judgment makes it materially more difficult for the
Executive to carry out the duties and responsibilities of her
office than existed at any time within ninety days preceding
the date of Change in Control or at any time thereafter;
(ii) a reduction in the Executive's base salary or
any failure to pay the Executive any compensation or benefits
to which she is entitled within five days of the date due;
(iii) the Employer's requiring the Executive to be
based at any place outside a 30-mile radius from the executive
offices occupied by the Executive
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immediately prior to the Change in Control, except for
reasonably required travel on the Employer's business which is
not materially greater than such travel requirements prior to
the Change in Control;
(iv) the failure by the Employer to (A) continue in
effect (without reduction in benefit level and/or reward
opportunities) any material compensation or employee benefit
plan in which the Executive was participating at any time
within ninety days preceding the date of a Change in Control
or at any time thereafter, unless such plan is replaced with a
plan that provides substantially equivalent compensation or
benefits to the Executive, or (B) provide the Executive with
compensation and benefits, in the aggregate, at least equal
(in terms of benefit levels and/or reward opportunities) to
those provided for under each other employee benefit plan,
program and practice in which the Executive was participating
at any time within ninety days preceding the date of a Change
in Control or at any time thereafter;
(v) the insolvency or the filing (by any party,
including the Employer) of a petition for bankruptcy of the
Employer, which petition is not dismissed within sixty days;
(vi) any material breach by the Employer of any
material provision of this Agreement;
(vii) any purported termination of the Executive's
employment for Cause by the Employer which does not comply
with the terms of this Agreement; or
(viii) the failure of the Employer to obtain an
agreement, satisfactory to the Executive, from any successor
or assign to assume and agree to perform this Agreement, as
contemplated in Section 11 hereof.
Any event or condition described in clause (i) through (viii) above
which occurs prior to a Change in Control but which the Executive reasonably
demonstrates (A) was at the request of a third party, or (B) otherwise arose in
connection with, or in anticipation of, a Change in Control which actually
occurs, shall constitute Good Reason for purposes of this Agreement,
notwithstanding that it occurred prior to the Change in Control. The Executive's
right to terminate her employment for Good Reason shall not be affected by her
incapacity due to physical or mental illness.
(g) Non-Control Transaction" shall mean a transaction
described below:
(i) the shareholders of the Employer, immediately
before such merger, consolidation or reorganization, own,
directly or indirectly, immediately following such merger,
consolidation or reorganization, at least 50% of the combined
voting power of the outstanding voting securities of the
corporation resulting from such merger, consolidation or
reorganization (the "Surviving Corporation") in
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substantially the same proportion as their ownership of the
Voting Securities immediately before such merger,
consolidation or reorganization; and
(ii) immediately following such merger, consolidation
or reorganization, the number of directors on the board of
directors of the Surviving Corporation who were members of the
Incumbent Board shall at least equal the number of directors
who were affiliated with or appointed by the other party to
the merger, consolidation or reorganization.
(h) "Territory" shall mean a radius of thirty miles from (i)
the main office of the Employer or (ii) any branch office of the Employer.
(i) "Notice of Termination" shall mean a written notice of
termination from the Employer or the Executive which specifies an effective date
of termination, indicates the specific termination provision in this Agreement
relied upon, and sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated.
14. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof.
15. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Employer has caused this Agreement to be
executed and its seal to be affixed hereunto by its officers thereunto duly
authorized, and the Executive has signed and sealed this Agreement, effective as
of the date first above written.
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LEHIGH ACRES FIRST NATIONAL BANCSHARES, INC,
LEHIGH ACRES FIRST NATIONAL BANK
ATTEST:
By:/s/ Xxxxx X. Xxxx
-----------------------------------------
----------------------------- Title: Chairman
Witness
------------------------------
Witness EXECUTIVE
/s/ Xxxxxx X. X'Xxxx
--------------------------------------------
Xxxxxx X. X'Xxxx, proposed President/CEO
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