EMPLOYMENT AGREEMENT
This
EMPLOYMENT
AGREEMENT
(this
“Agreement”)
is
made and entered into as of this 5th day of April, 2006, by and among
Intercontinental National Bank, a national bank chartered under the laws of
the
United States (the “Bank”),
Intercontinental Bank Shares Corporation, a Texas corporation (the “Company”),
Coastal Bancshares Acquisition Corp., a Delaware corporation (“Coastal”),
and
Xxxxxxx X. Xxxxxxxx, a resident of Texas (the “Executive”).
WHEREAS,
Coastal, Coastal Merger Corp., a Texas corporation and wholly-owned subsidiary
of Coastal (“Merger
Sub”),
and
the Company, have entered into that certain Agreement and Plan of Merger, dated
as of April 5, 2006 (the “Merger
Agreement”),
pursuant to which Merger Sub will merge with and into the Company and the
separate corporate existence of Merger Sub will cease (the “Merger”);
WHEREAS,
the
Executive has considerable experience, expertise and training in management
related to banking and services offered by the Bank;
WHEREAS,
Coastal, the Bank and the Company desire and intend to cause the Executive
to be
employed as President of Coastal and as President and Chief Executive Officer
of
the Bank pursuant to the terms and conditions set forth in this Agreement;
and
WHEREAS,
Coastal, the Bank, the Company and the Executive have read and understood the
terms and provisions set forth in this Agreement, and have been afforded a
reasonable opportunity to review this Agreement with their respective legal
counsel.
NOW,
THEREFORE,
in
consideration of the mutual promises and covenants set forth in this Agreement,
Coastal, the Executive and the Bank agree as follows:
DURATION
1. This
Agreement shall continue in full force and effect for a period (the
“Term”)
beginning on the date the Merger is consummated (the “Effective
Date”),
and
will expire and terminate by its own terms on the third anniversary of the
consummation of the Merger Agreement (the “Expiration
Date”),
unless either party elects to terminate this Agreement prior to the Expiration
Date, in accordance with the TERMINATION
provisions
set forth below.
2. Coastal,
the Bank and the Executive each acknowledge and agree that, subsequent to the
Expiration Date, the parties may agree to continue the employment relationship
upon such terms as they may mutually agree. However, both parties acknowledge
and agree that, in the event they fail to agree upon terms for the continuation
of the Executive’s employment subsequent to the Expiration Date, this Agreement
shall automatically terminate on the Expiration Date without any additional
liability or obligation on the part of either party, and the Executive shall
become an employee at-will.
COMPENSATION
3. All
payments of salary and other compensation to the Executive shall be payable
in
accordance with the Bank’s ordinary payroll and other policies and
procedures.
a. For
the
Term of this Agreement, the Executive will receive a salary of $200,000 annually
(the “Base
Salary”),
payable in installments in accordance with the Bank’s payroll policies in effect
from time to time during the term of this Agreement.
b. In
addition to the Base Salary, the Executive shall receive a discretionary
employee cash bonus targeted at up to forty-five percent (45%) of the Base
Salary if all bonus targets are met in full; provided,
however,
that
the Compensation Committee of the Board of Directors of the Bank (the
“Compensation
Committee”)
shall
have the sole discretion to determine the discretionary bonus formula and when
bonuses will be paid thereunder.
c. The
Executive shall receive a fee of $25,000, payable at, and subject to, the
closing (“Closing”)
of the
Merger, for consulting services rendered prior to the Closing.
d.
(i)
The
Company shall grant to the Executive, on the Effective Date, a number of stock
options exercisable within eight (8) years from the date of the grant of such
options. Such options will enable the Executive to purchase one hundred fifty
thousand (150,000) shares of Company common stock (“Company
Stock”).
The
exercise price for such stock options shall be equal to the fair market value
of
the Company Stock on the date of such grant. Such options will vest ratably
over
a period of four (4) years and the terms of the stock option plan under which
such options are granted shall control in the event of any conflict with the
terms of this Agreement.
(ii) The
Company shall issue to the Executive, on the Effective Date fifty-five thousand
(55,000) shares of Company Stock pursuant to the terms of a Restricted Stock
Agreement substantially in the form attached hereto as Exhibit
A.
Such
agreement shall provide that such shares shall vest one-third (⅓ ) on each of
the first three years’ anniversaries from the date of grant and the terms of the
incentive plan under which such shares are issued shall control in the event
of
any conflict with the terms of this Agreement.
e. In
addition to the compensation provided in this section, during the Term of this
Agreement, the Executive shall be entitled to participate in all fringe benefit
programs and plans established by the Bank for its employees, including medical
insurance, life insurance, pension and retirement programs, vacation pay,
company-paid holidays, and other similar benefits, if any. Subject to the
provisions of Section
3(f)
below,
the Bank reserves the right to modify, amend, or eliminate any of the
Executive’s benefits without his prior approval, as long as all
similarly-situated employees are treated similarly. The Executive’s entitlement
to participate in fringe benefit programs and plans established by the Bank
shall be governed by terms and conditions set forth in such plans.
f. Both
the
Bank and the Executive acknowledge that such compensation and the other
covenants and agreements of the Bank contained herein are fair and adequate
compensation for the Executive’s services, and for the mutual promises described
below.
2
4. The
Bank
and the Executive acknowledge that, during the Term of this Agreement, the
Executive’s compensation will be subject to an annual review and annual
increase, consistent with safe and sound banking practices, and in the
discretion of the Compensation Committee.
5. The
Executive acknowledges and agrees that any employee benefits provided to the
Executive by the Bank incident to the Executive’s employment are governed by the
applicable plan documents, summary plan descriptions or employment policies,
and
may be modified, suspended or revoked at any time, in accordance with the terms
and provisions of the applicable documents.
RESPONSIBILITIES
6. The
Executive acknowledges and agrees that he shall be employed as President of
Coastal and President and Chief Executive Officer of the Bank. The Executive
covenants and agrees that he will faithfully devote his best efforts and his
full-time focus to his positions with Coastal and the Bank, except that the
Executive may serve on up to two (2) civic or charitable boards and one (1)
board outside of Coastal and its subsidiaries.
7. a.
During
the Term of this Agreement, the Executive shall serve as President of Coastal
and President and Chief Executive Officer of the Bank. During the Term of this
Agreement, subject to the supervision and control of the Board of Directors
of
Coastal and the Bank, as appropriate, the Executive shall perform the duties
and
have the powers and authority which are consistent with and generally of the
nature of the duties and the authority ordinarily and customarily delegated
and
granted to an employee in a similar position, and the Executive shall perform
such other duties and have such other powers and authority as may be prescribed
by the Board of Directors of Coastal or the Bank, as appropriate, from time
to
time. Any such other duties, powers and authority shall be consistent with
the
Executive’s position and shall not violate any federal, state or local laws or
regulations. The Executive shall comply with all policies adopted from time
to
time by Coastal or the Bank, as appropriate.
b. Notwithstanding
the provisions of Section 7(a)
above,
but subject to the provisions of Section
13,
the
duties and responsibilities of the Executive may be changed or modified from
time to time by Coastal or the Bank at the sole discretion of Coastal or the
Bank, in each case as appropriate. Upon changes or modifications to the
Executive’s
duties
and responsibilities, the Executive’s employment with Coastal and the Bank shall
continue to be governed by the terms of this Agreement.
c. The
Executive agrees to participate in business planning prior to the Closing and
a
pre-closing road show, as well as other reasonable activities related to
preparing for Closing.
8. The
Executive acknowledges and agrees that, during the Term of this Agreement,
he
has a fiduciary duty of loyalty to each of Coastal and the Bank, and that he
will not knowingly engage in any activity during the Term of this Agreement
which will or could, in any material way, harm the business, business interests,
or reputation of either Coastal or the Bank.
3
NONINTERFERENCE
9. a.
The
Executive acknowledges and agrees that he will not, at any time during the
Term
of this Agreement and for the one (1) year period following the termination
of this Agreement by Coastal, the Bank or the Executive for any reason (the
“Restrictive
Period”),
directly or indirectly, engage in competition with the Bank within the
geographic boundaries of Bexar County, Xxxxxx County, the counties contiguous
with them, and the United Mexican States and the Executive will not on his
own
behalf, or as another’s agent, employee, partner, shareholder or otherwise,
engage, within the geographic boundaries of Bexar County, Xxxxxx County, the
counties contiguous with them, and the United Mexican States in any of the
same
or similar duties and/or responsibilities required by the Executive’s positions
with Coastal or the Bank, other than as an employee of Coastal or the Bank
pursuant to this Agreement, or as specifically approved by the Board of
Directors of Coastal or the Bank. If this Agreement is terminated by Executive
within six (6) months after the Closing, for any reason, this Section
9
shall
not apply (provided, however, that if the Executive shall have terminated this
Agreement for Constructive Termination and not chosen to forego severance
pursuant to the terms of Section
17,
the
provisions of this Section
9
shall
apply).
b. The
Executive also covenants and agrees that during the Restrictive Period, the
Executive shall not: (i) recruit, hire, or attempt to recruit or hire,
directly or by assisting others, any other employees of Coastal or the Bank
(for
purposes of this covenant, “other employees” shall refer to employees who are
still actively employed by, or doing business with, Coastal or the Bank at
the
time of the attempted recruiting or hiring), nor shall the Executive contact
or
communicate with any other employees of Coastal or the Bank for the purpose
of
inducing other employees to terminate their employment with Coastal or the
Bank;
or (ii) solicit, directly or by assisting others, the banking business of
any customers of Coastal or the Bank as of the date of such
termination.
c. The
Executive acknowledges and agrees that in exchange for the execution of the
noninterference agreement set forth above, the Executive will receive
substantial, valuable consideration including: (i) confidential trade
secret and proprietary information relating to Coastal and the Bank, including,
without limitation, information relating to the identity and special needs
of
Coastal’s and the Bank’s current and prospective customers, Coastal’s and the
Bank’s current and prospective services, Coastal’s and the Bank’s business
projections and market studies, Coastal’s and the Bank’s business plans and
strategies, Coastal’s and the Bank’s studies and information concerning special
services unique to Coastal or the Bank (the “Confidential
Information”);
(ii) employment; and (iii) compensation and benefits as described in
this Agreement. The Executive acknowledges and agrees that this constitutes
fair
and adequate consideration for the execution of the noninterference agreement
set forth above.
REMEDIES
10. In
the
event that the Executive violates any of the provisions set forth in this
Agreement relating to NONINTERFERENCE,
the
Executive acknowledges and agrees that each of Coastal and/or the Bank may
suffer immediate and irreparable harm. Consequently, the Executive acknowledges
and agrees that each of Coastal and the Bank shall be entitled to immediate
injunctive relief, either by temporary or permanent injunction and without
the
necessity of posting a bond or proving actual damages, to prevent such a
violation.
4
TERMINATION
11. The
Executive acknowledges and agrees that the respective Boards of Directors of
Coastal and the Bank reserve the right to terminate this Agreement, for any
reason, by providing the Executive with written notice of the termination,
delivered in person, or by certified U.S. mail to the Executive’s last known
address reflected in the Bank’s personnel records. Such notice shall be
effective upon personal delivery or three (3) days after mailing by
certified mail. However, if the Agreement is terminated at either Coastal’s or
the Bank’s insistence without Good Cause (as defined in this Agreement), each of
Coastal and the Bank covenant and agree to provide the Executive with the
SEVERANCE
set
forth
in Section 17
of this
Agreement.
12. The
Executive acknowledges and agrees that either Coastal or the Bank may terminate
this Agreement at any time, without notice, for “Good
Cause,”
which
is defined as the following:
a. conviction
of, or a plea of nolo
contendere,
by the
Executive to a felony or to fraud, embezzlement or misappropriation of funds;
b. the
commission by the Executive of a fraudulent act or insider abuse with regard
to
Coastal or the Bank;
c. a
knowing
omission, breach of trust or fiduciary duty by the Executive;
d. substantial
and direct responsibility by the Executive for the insolvency of, the
appointment of a conservator or receiver for, or the troubled condition, as
defined by applicable regulations of the appropriate federal banking agency,
of
Coastal or the Bank;
e. a
material violation by the Executive of any applicable federal banking law or
regulation that has had a material adverse effect on Coastal or the
Bank;
f. the
Executive’s intentional violation or conspiracy to violate section 215,
656, 657, 1005, 1006, 1007, 1014, 1032, or 1344 of title 18 of the United States
Code, or section 1341 or 1343 of such title affecting a federally insured
financial institution as defined in title 18 of the United States
Code;
g. the
willful failure by the Executive to adhere to Coastal’s or the Bank’s written
policies, which causes a material monetary injury or other material harm to
either Coastal or the Bank;
h. the
willful failure by the Executive to substantially perform material stated duties
of the position with Coastal or the Bank;
i. the
removal or suspension from the performance of duties of the Executive by any
bank regulatory authority;
5
j. appointment
of a conservator or receiver for Coastal or the Bank by applicable bank
regulatory authorities as a result of the Executive’s misconduct;
k. the
declaration by federal bank regulators that Coastal or the Bank is in a
“troubled condition” as a result of the Executive’s misconduct, and while
Coastal or the Bank is in such a “troubled condition” as a result of the
Executive’s misconduct, Coastal or the Bank engages in a Change in Control
transaction; or
l. the
receipt by Coastal or the Bank of a formal written administrative action or
cease and desist order issued by a federal bank regulator, which formal action
or order resulted from the Executive’s misconduct.
Notwithstanding
the foregoing, the Executive shall not be deemed to have been terminated by
reason of violating Section 12(b),
(c),
(e),
(g),
or
(h)
until
the Executive is notified in writing by either Coastal or the Bank (or their
successor entities), as appropriate, of a determination by Coastal or the Bank
of a violation of Section 12(b),
(c),
(e),
(g),
or
(h),
specifying the particulars thereof in reasonably sufficient detail, and giving
the Executive a reasonable opportunity (of not less than thirty (30) days),
together with counsel, to explain to Coastal or the Bank, as appropriate, why
there has been no violation of Section 12(b),
(c),
(e),
(g),
or
(h),
followed by a finding by Coastal or the Bank, to be detailed in writing within
a
Notice of Termination, (1) that in the good faith opinion of Coastal or the
Bank (or their successor entities), as appropriate, the Executive has committed
an act described in Section 12(b),
(c),
(e),
(g),
or
(h)
above,
(2) specifying the particulars thereof in detail, and (3) determining
in good faith that such violation has not been corrected, or is not capable
of
correction. Nothing herein shall limit the Executive’s right to contest the
validity or propriety of any such determination.
13. Each
of
Coastal and the Bank acknowledge and agree that the Executive reserves the
right
to terminate this Agreement at any time, for any reason, with or without cause,
by providing thirty (30) days written notice, by personal delivery or
certified United States mail, to the Bank at its principal business address
of
the Executive’s intention to terminate this Agreement. Such notice shall be
effective upon personal delivery or three (3) days after mailing by certified
mail. In the event that the Executive does so because of a Constructive
Termination (as defined in this Agreement), each of Coastal and the Bank
covenant and agree to provide the Executive with the SEVERANCE
set
forth below in this Agreement. In the event that a Change of Control (as defined
below) of the Company occurs, the Executive shall have the right to terminate
this Agreement within ninety (90) days subsequent to the Change of Control
by
providing thirty (30) days written notice, by personal delivery or
certified United States mail, to the Bank at its principal business address
of
the Executive’s intention to terminate this Agreement. If the Executive
terminates this Agreement pursuant to the terms of this Section
13,
then
the provisions of Section
9
and
Section
17
shall
not apply. For purposes hereof, a “Change
of Control”
of
the
Company shall be deemed to have occurred if: (a) any person, as such term is
used in Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934,
as amended, becomes a beneficial owner (within the meaning of Rule 13d-3 under
such Act) of fifty percent (50%) or more of the Company’s outstanding common
stock; or (b) the Company is merged, consolidated, or reorganized into or with,
or sells all or substantially all of its assets to, another corporation or
other
entity, and immediately after such transaction less than fifty percent (50%)
of
the voting power of the then-outstanding securities of such corporation or
other
entity immediately after such transaction is held in the aggregate by holders
of
the Company’s common stock immediately before such transaction.
6
“Constructive
Termination”
shall
mean either Coastal or the Bank, without the prior written consent of the
Executive:
a. materially
and adversely changes the Executive’s duties, responsibilities and status with
Coastal or the Bank, as applicable, or materially and adversely changes the
Executives’ reporting responsibilities, titles or offices, or removes the
Executive from or fails to re-elect the Executive to, any of such positions,
except in connection with the Executives’ termination for “Good Cause” or
disability, or as a result of the Executive’s death; or
b. reduces
the Executive’s base compensation benefits as in effect on the Effective Date or
as the same may be increased from time to time, other than as part of a
reduction applicable generally to all or substantially all of Coastal’s or the
Bank’s executive employees, or when base compensation benefits are replaced by
other compensation or benefits of equal or greater value; or
c. acts,
or
fails to act, in a manner that adversely affects the Executive’s participation
in, or materially reduces, in the aggregate, the Executive’s benefits under,
employee benefit and compensation plans, other than as part of a reduction
applicable generally to all or substantially all of Coastal’s or the Bank’s
executive employees, or when the Executive’s benefits and/or base compensation
benefits are replaced by base compensation benefits of equal or greater
value.
Notwithstanding
the foregoing, the Executive shall not be deemed to have incurred a
“constructive termination” of employment unless the Executive first shall have
notified the Board of Directors of Coastal or the Bank, as appropriate, in
writing that the Executive has incurred a “constructive termination” of
employment, specifying the particulars thereof in reasonably sufficient detail,
and giving Coastal or the Bank, as appropriate, a reasonable opportunity (which
shall not exceed thirty (30) days), together with its counsel, to explain
to the Executive that the Executive has not incurred a “constructive
termination” of employment, such finding to be detailed to the Executive in
writing, or to cure such constructive termination.
14. The
Executive acknowledges and agrees that in the event of the Executive’s death,
this Agreement, other than as set forth below, will terminate immediately,
without notice, on the date of the Executive’s death. The Executive acknowledges
and agrees that, in the event of his death, Coastal and the Bank will pay to
the
Executive’s estate all compensation due and owing through the date of the
Executive’s death. Coastal and the Bank agree that, in the event this Agreement
is terminated as a result of the Executive’s death, Coastal and the Bank will
continue to pay the Executive’s Base Salary for one (1) year subsequent to such
termination to the Executive’s spouse, and in the event that the Executive does
not have a spouse at the time of his death, to the personal representative
of
the Executive’s and the Executive’s healthcare benefits shall continue for a
period of one (1) year subsequent to such termination, subject to the terms
and
conditions of the plans governing such healthcare benefits. In the event that
the plans governing the Executive’s healthcare benefits do not allow for the
Executive’s healthcare benefits to continue after his death, Coastal and the
Bank shall provide to the Executive’s spouse and children healthcare benefits
comparable to the healthcare benefits that the Executive had at the time of
his
death, at no cost. Coastal and the Bank may elect to pay the Base Salary in
a
lump sum.
7
15. The
Executive acknowledges and agrees that this Agreement will terminate
immediately, without notice, in the event the Executive becomes physically
or
mentally disabled, as defined by 29 C.F.R. § 1630.2(g)(1), and cannot
perform the essential functions of his position, with or without reasonable
accommodation for the period designated by the Executive’s disability insurance
after which disability payments will begin. Coastal and the Bank agree that,
in
the event this Agreement is terminated as a result of the Executive’s physical
or mental disability, as defined by 29 C.F.R. § 1630.2(g)(1), Coastal and
the Bank will continue to pay the Executive’s Base Salary for one (1) year
subsequent to such termination and the Executive’s healthcare benefits shall
continue for a period of one (1) year subsequent to such termination, subject
to
the terms and conditions of the plans governing such healthcare benefits. In
the
event that the plans governing the Executive’s healthcare benefits do not allow
for the Executive’s healthcare benefits to continue after his disability,
Coastal and the Bank shall provide healthcare benefits comparable to the
healthcare benefits that the Executive had at the time of his disability, at
no
cost. Coastal and the Bank may elect to pay the Base Salary in a lump
sum.
16. The
Executive acknowledges and agrees that in the event of termination of this
Agreement, for whatever reason, whether at the insistence of the Executive
or at
the insistence of either Coastal or the Bank, the Executive will return to
Coastal and the Bank, as appropriate, within two (2) business days of the time
when notice of termination is communicated by either party, any and all
equipment, literature, documents, data, information, order forms, memoranda,
correspondence, customer and prospective customer lists, customer’s orders,
records, cards or notes acquired, compiled or coming into the Executive’s
knowledge, possession or control in connection with his activities as an
employee of Coastal or the Bank, as well as all machines, parts, equipment
or
other materials received from Coastal or the Bank or from any of its customers,
agents or suppliers, in connection with such activities.
SEVERANCE
17. The
Executive and the Bank acknowledge and agree that, if Coastal or the Bank elect
to terminate this Agreement at any time prior to the Expiration Date for any
reason other than “Good Cause,” as defined in this Agreement, or the Executive
terminates this Agreement because of a Constructive Termination, the Executive
shall be entitled to severance pay (provided,
however,
that if
this Agreement is terminated by the Executive within six (6) months after
Closing, Executive may choose in writing to forego severance pay by giving
written notice to such effect to Coastal in the Executive’s written notice
terminating this Agreement, in which case the provisions of this Section
17
shall
not apply). Such severance pay shall be equal to the equivalent of the
Executive’s then current annual salary, less statutory payroll deductions,
payable over a twelve (12) month period in accordance with the Bank’s
ordinary payroll policies and procedures, beginning on the date that the notice
of termination becomes effective (the “Termination
Date”).
In
addition, the Executive shall be entitled to participate in the medical
insurance benefits of the Bank, effective on the Termination Date, for a period
of twelve (12) months beginning on the Termination Date. The Executive’s
entitlement to any severance pay under this Agreement is strictly contingent
on the Executive complying with the terms of the restrictive covenants set
out
in Section 9
and
Section
28
of this
Agreement, and any material breach by the Executive of the terms of the
restrictive covenants set out in Section 9
or
Section
28
shall
allow Coastal and the Bank to immediately cease payment of any installments
of
such severance pay not yet paid at the time of the breach, and Coastal and
the
Bank shall have no further obligations to the Executive. This remedy is in
addition to others available to Coastal and the Bank under law or as provided
in
this Agreement for any breach of the restrictive covenants contained herein.
Any
termination of severance pay pursuant to the above provisions shall not be
interpreted to limit or alter the scope or duration of the Executive’s
obligations pursuant to Section 9.
8
SEVERABILITY
18. The
Executive acknowledges and agrees that each covenant and/or provision of this
Agreement shall be enforceable independently of every other covenant and/or
provision. Furthermore, the Executive acknowledges and agrees that, in the
event
any covenant and/or provision of this Agreement is determined to be
unenforceable for any reason, the remaining covenants and/or provisions will
remain effective, binding and enforceable.
WAIVER
19. The
parties acknowledge and agree that the failure of either to enforce any
provision of this Agreement shall not constitute a waiver of that particular
provision, or of any other provisions of this Agreement.
SUCCESSORS
AND ASSIGNS
20. The
Executive acknowledges and agrees that this Agreement may be assigned by Coastal
or the Bank to any successor-in-interest and shall inure to the benefit of,
and
be fully enforceable by, any successor and/or assignee; and this Agreement
will
be fully binding upon, and may be enforced by the Executive against, any
successor and/or assignee of Coastal or the Bank.
21. The
Executive acknowledges and agrees that his obligations, duties and
responsibilities under this Agreement are personal and shall not be assignable,
and that this Agreement shall be enforceable by the Executive only. In the
event
of the Executive’s death, this Agreement shall be enforceable by the Executive’s
estate, executors and/or legal representatives, only to the extent provided
herein.
CHOICE
OF LAW
22. The
parties acknowledge and agree that the law of Texas will govern the validity,
interpretation and effect of this Agreement, and any other dispute relating
to,
or arising out of, the employment relationship between Coastal, the Bank and
the
Executive.
9
MODIFICATION
23. Both
parties acknowledge and agree that this Agreement and the stock option plan
and
stock grants set forth in Section 3(d)
of this
Agreement constitute the complete and entire agreement between the parties;
that
the parties have executed this Agreement based upon the express terms and
provisions set forth herein; that the parties have not relied on any
representations, oral or written, which are not set forth in this Agreement;
that no previous agreement, either oral or written, shall have any effect on
the
terms or provisions of this Agreement; and that all previous agreements, either
oral or written, are expressly superseded and revoked by this
Agreement.
24. The
parties acknowledge and agree that the covenants and/or provisions of this
Agreement may not be modified by any subsequent agreement unless the modifying
agreement; (a) is in writing; (b) contains an express provision
referencing this Agreement; (c) is signed by the Executive; and (d) is
approved by a majority of each of the respective Boards of Directors of Coastal
and the Bank.
INDEMNIFICATION
25. During
the Term of this Agreement, both Coastal and the Bank shall indemnify the
Executive against all judgments, penalties, fines, amounts paid in settlement
and reasonable expenses (including, but not limited to, attorneys’ fees)
relating to his employment by Coastal and the Bank to the fullest extent
permissible under Coastal’s or the Bank’s Articles of Incorporation, as
appropriate, and may purchase such indemnification insurance as the respective
Boards of Directors may from time to time determine.
LEGAL
CONSULTATION
26. The
Executive, Coastal and the Bank acknowledge and agree that each party has been
accorded a reasonable opportunity to review this Agreement with legal counsel
prior to executing the agreement.
NOTICES
27. Any
and
all notices of documents or other notices required to be delivered under the
terms of this Agreement shall be addressed to each party as
follows:
EXECUTIVE:
Xxxxxxx
X. Xxxxxxxx
0000
Xxxxxxxxx Xxxx.
Xxx.
000
Xxxxxx,
XX 00000
10
BANK:
Intercontinental
National Bank
000
Xxxxxxxx Xxxxx Xxxx
Xxx
Xxxxxxx, XX 00000
Attn:
Xxxx X. Xxxxxxxx
WITH
A COPY TO:
Jenkens
& Xxxxxxxxx,
a
Professional Corporation
0000
Xxxx
Xxx., Xxxxx 0000
Xxxxxx,
XX 00000
Attn:
Xxxxxxx X. Xxxxx, Esq.
Fax:
(000) 000-0000
COASTAL:
0000
Xxxx
Xxxxxxx
Xxxxxxx,
XX 00000
Attn:
Xxxx X. Xxxxxxxx
Fax:
(000) 000-0000
WITH
A COPY TO:
Jenkens
& Xxxxxxxxx,
a
Professional Corporation
0000
Xxxx
Xxx., Xxxxx 0000
Xxxxxx,
XX 00000
Attn: Xxxxxxx
X. Xxxxxxx, Esq.
Xxxxx
X.
Xxxxxxxxx, Esq.
Fax:
(000) 000-0000
CONFIDENTIALITY
28. The
Executive acknowledges that he will have access, during the course of service
to
Coastal and the Bank, to Confidential Information and products of both Coastal
and the Bank. The Executive acknowledges that all Confidential Information
provided to the Executive is provided in confidence and trust and that Coastal’s
and the Bank’s maintenance of the confidentiality of their respective
proprietary Confidential Information to the fullest extent possible is extremely
important. The Executive agrees not to use, disclose, disseminate or otherwise
make available to any third party, either directly or indirectly, any
Confidential Information at any time or in any manner, except as expressly
authorized in writing by Coastal or the Bank, as appropriate. The Executive
agrees to take all reasonable precautions to prevent inadvertent or other
disclosure, use or transfer of any of the Confidential Information. The
provisions of this Section
28
shall
survive the termination of this Agreement.
11
NO
CONFLICTS
29. The
Executive represents and warrants that he is not bound by any other agreement
with any former employer or other party that may be violated by his work for
Coastal or the Bank or by his fulfillment of his obligations
hereunder.
ARBITRATION
30. Except
where (a) legal action is required to prevent a breach of this Agreement, (b)
with respect to Coastal’s and the Bank’s remedies pursuant to Section
10,
or (c)
to enforce an arbitration award granted under this section, if this Agreement
gives rise in any way to a dispute that cannot be settled through negotiation,
any claim or dispute arising under or relating to this Agreement shall be
submitted to final and binding arbitration in San Antonio, Texas pursuant to
the
Commercial Rules of the American Arbitration Association as in effect from
time
to time. The parties agree that any party requesting arbitration of any dispute
under this section must give formal written notice of the party’s demand for
arbitration. The parties further agree that each party may be represented by
counsel in any proceeding under this section, and that all expenses and fees
incurred in connection with any proceeding under this section shall be paid
by
the non-prevailing party (as determined by the arbitrators). Each party to
this
Agreement consents, on behalf of himself or itself and his respective
successors, heirs and assigns, to such binding arbitration in accordance with
the terms of this section. The duty to arbitrate will survive the termination
of
this Agreement.
12
EXECUTED
ON THIS
5th day
of April, 2006, in San Antonio, Texas.
| “EXECUTIVE” | |||
| |
|
|
|
| /s/ | Xxxxxxx X. Xxxxxxxx | ||
| WITNESS |
Xxxxxxx X. Xxxxxxxx |
||
| BANK: | |||
| INTERCONTINENTAL NATIONAL BANK | |||
| |
|
|
|
| By: | /s/ Xxxxx X. Xxxxxx | ||
| WITNESS |
Name: Xxxxx
X. Xxxxxx
Title: Secretary
|
||
| COMPANY: | |||
|
INTERCONTINENTAL
BANK SHARES
CORPORATION
|
|||
| |
|
|
|
| By: | /s/ Xxxxx X. Xxxxxx | ||
| WITNESS |
Name: Xxxxx
X. Xxxxxx
Title: Secretary
|
||
EXHIBIT
A
Restricted
Stock Agreement
This
RESTRICTED
STOCK AGREEMENT
(“Agreement”),
is by
and between Xxxxxxx X. Xxxxxxxx residing
at ______________, _______ (the
“Recipient”),
and
Coastal Bancshares Acquisition Corp., a Delaware corporation (the “Company”),
which
parties, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, agree as follows:
1. Introduction.
The
Recipient is an employee of the Company, and the Company and the Recipient
have
entered into an employment agreement (the “Employment
Agreement”)
which
sets forth the terms and conditions of the employment relationship between
the
Company and the Employee. The Company has determined to issue shares of its
common stock, par value $.01 per share (the “Common
Stock”),
to
certain of its key employees, including the Recipient, in order to aid in
securing and retaining the employment of such employees, and to provide
additional incentive to such employees to exert their best efforts on behalf
of
the Company. Capitalized terms not otherwise defined herein shall be defined
as
set forth in the Employment Agreement.
2. Grant
of Stock.
In
accordance with and subject to the terms, conditions, and restrictions contained
in this Agreement, the Company hereby grants to the Recipient 55,000 shares
(the
“Shares”)
of the
Common Stock, effective as of ______________ (the “Date
of Grant”).
As
long as the Shares are subject to the Restrictions (as such term is defined
in
Section
5
of this
Agreement), the Shares shall be deemed to be, and are referred to in this
Agreement as “Restricted
Shares.”
3. Certificates
for Shares.
Certificates evidencing Restricted Shares shall be deposited with the Company
to
be held in escrow until such Shares are released from the Restrictions
(“Non-Restricted
Shares”)
or are
forfeited in accordance with this Agreement. The Recipient shall, simultaneously
with the execution and delivery of this Agreement, deliver to the Company a
stock power, in blank, executed by the Recipient. Upon any Restricted Shares
becoming Non-Restricted Shares, the Company shall issue and deliver to the
Recipient a stock certificate or certificates evidencing the Non-Restricted
Shares, and shall reissue a stock certificate or certificates evidencing any
remaining Restricted Shares to be held in escrow in accordance with the terms
of
this Agreement. If any Restricted Shares are forfeited, the certificate or
certificates evidencing any such Restricted Shares shall be cancelled and the
Shares represented thereby shall be returned to the Company’s
treasury.
4. Adjustments
in Restricted Shares.
In the
event of any change in the outstanding Common Stock by reason of a stock
dividend or distribution, recapitalization, merger, consolidation, split-up,
combination, exchange of shares or the like, the Company shall make equitable
adjustments in the Shares corresponding to adjustments made by the Company
in
the number and class of shares of Common Stock. Any new, additional, or
different securities to which the Recipient shall be entitled in respect of
Restricted Shares by reason of such adjustment shall be deemed to be Restricted
Shares and shall be subject to the same terms, conditions, and restrictions
as
the Restricted Shares so adjusted.
5. Restrictions.
During
applicable periods of restriction determined in accordance with Section
6
of this
Agreement, Restricted Shares and all rights with respect to such Shares, may
not
be sold, assigned, transferred, exchanged, pledged, hypothecated, or otherwise
encumbered or disposed of and shall be subject to the risk of forfeiture
contained in Section
6
of this
Agreement (such limitations on transferability and risk of forfeiture being
herein referred to as “Restrictions”),
but
the Recipient shall have all other rights of a stockholder, including, but
not
limited to, the right to vote and receive dividends on Restricted
Shares.
6. Forfeiture
of Restricted Shares.
In the
event that the Recipient’s employment with the Company terminates for Good Cause
or as a result of the termination by the Recipient for any reason other than
a
Constructive Termination, such event shall constitute an “Event
of Forfeiture”
and
all
Shares which at that time are Restricted Shares shall thereupon be forfeited
by
the Recipient to the Company without payment of any consideration by the
Company, and neither the Recipient nor any successor, heir, assign, or personal
representative of the Recipient shall have any right, title, or interest in
or
to such Restricted Shares or the certificates evidencing them.
7. Lapse
of Restrictions.
The
Restrictions on the Restricted Shares granted under this Agreement shall lapse
ratably in accordance with the following schedule: (1) thirty three and
one-third percent (33⅓%) upon the twelve-month anniversary of the Date of Grant;
(2) thirty three and one-third percent (33⅓%) upon the twenty-four-month
anniversary of the Date of Grant; and (3) thirty three and one-third percent
(33⅓%) upon the thirty-six-month anniversary of the Date of Grant. In the event
of a Change of Control the Restrictions shall lapse on all of the Restricted
Shares (if not already lapsed pursuant to the preceding sentence).
8. Withholding
Requirements.
Whenever Restrictions lapse with respect to Restricted Shares, the Company
shall
have the right to withhold from sums due to the Recipient (or to require the
Recipient to remit to the Company) an amount sufficient to satisfy any Federal,
state or local withholding tax requirements prior to delivering any certificate
evidencing such Shares.
9. Change
in Control.
Notwithstanding any other provision of this Agreement, upon any Change in
Control, as defined below, the Restrictions with respect to any Restricted
Shares shall lapse and such Restricted Shares shall become Non-Restricted Shares
upon the effective date of the Change of Control. For purposes of this
Agreement, a “Change
in Control”
of
the
Company shall be deemed to have occurred if: (a) any person, as such term is
used in Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934,
as amended, becomes a beneficial owner (within the meaning of Rule 13d-3 under
such Act) of fifty percent (50%) or more of the Company’s outstanding Common
Stock; or (b) the Company is merged, consolidated, or reorganized into or with,
or sells all or substantially all of its assets to, another corporation or
other
entity, and immediately after such transaction less than fifty percent (50%)
of
the voting power of the then-outstanding securities of such corporation or
other
entity immediately after such transaction is held in the aggregate by holders
of
the Company’s Common Stock immediately before such transaction.
2
10. Effect
of Employment.
Nothing
contained in this Agreement shall confer upon the Recipient the right to
continue in the employment of the Company or affect any right that the Company
may have to terminate the employment of the Recipient.
11. Notices.
All
notices and other communications under this Agreement shall be in writing.
Notices shall be hand delivered or sent by United States mail, postage prepaid,
certified or registered mail, return receipt requested, or by internationally
recognized courier service. Any notice so delivered or sent shall be deemed
given on the date of the receipt or first attempted delivery. Notices shall
be
sent to the following addresses:
| To the Company: | Coastal Bancshares Acquisition Corp. |
| _________________________ | |
| ___________, Texas __________ | |
| Attn: ________________________ |
| cc: | Jenkens & Xxxxxxxxx, P.C. |
| 0000 Xxxx Xxxxxx, Xxxxx 0000 | |
| Xxxxxx, Xxxxx 00000 | |
| Attn: Xxxxxxx X. Xxxxxxx, Esq. |
| To the Recipient: | _____________, _____________, _____________ |
Either party may designate a different address by giving the new address to the other party.
12. Severability.
Each
provision of this Agreement shall be interpreted in such a manner so as to
be
valid under applicable law. If any provision of this Agreement shall be invalid
under applicable law, such provision shall be ineffective to the extent of
such
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
13. Entire
Agreement.
The
parties acknowledge that there are no written or oral agreements between the
Recipient and the Company regarding the subject matter hereof other than this
Agreement. This Agreement may not be amended or supplemented except by written
instrument executed by the parties.
14. Assignment.
This
Agreement may not be assigned by the Recipient. This Agreement may not be
assigned by the Company without the prior written consent of the
Recipient.
15. Construction.
The
headings in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever required
by
the context any gender shall include any other gender, the singular shall
include the plural, and the plural shall include the singular.
16. Choice
of Law.
This
Agreement shall be governed by the laws of the State of Delaware, without
reference to the choice of law principles thereunder.
3
17. Conditions
upon Issuance.
The
Shares that have been awarded to the Recipient are not registered under the
Securities Act of 1933, as amended. Therefore, as a condition of such award,
the
Recipient makes the following representations to the Company: (a) that any
shares of Common Stock acquired by the Recipient pursuant to this Agreement
will
not be sold except pursuant to an effective registration statement under the
Securities Act of 1933, as amended, or pursuant to an exemption from
registration under such Act, and (b) that the Recipient has acquired such shares
of Common Stock for the Recipient’s own account and not with a view to the
distribution thereof.
18. Waiver.
Any
waiver of any provision of this Agreement shall be effective only if in writing,
and no waiver of any provision of this Agreement shall constitute a waiver
of
any other provision of this Agreement, nor shall such waiver constitute a waiver
of any subsequent breach of such provision.
19. Plan.
This
Agreement, and the Shares issued pursuant hereto, are governed by the terms
and
conditions of the Company's Stock Incentive Plan [Note:
The actual name of the plan will be filled in upon approval by the Company's
Board of Directors] (the
"Plan")
and
the terms of the Plan shall control in the event of any conflict with the terms
of this Agreement.
Executed
as of _______________, 2006.
*
* * *
*
4
| By: | |
| Name: | |
| Title: | |
| Signed: |
