EMPLOYMENT AGREEMENT
This
Employment Agreement dated as of January 1, 2006 is by and between Patriot
National Bank, a national banking association ("Patriot") and Xxxxxx Xxxxxxxxx
(the "Executive").
RECITALS
Patriot
desires to employ the Executive and to have the benefit of his skills and
services, and the Executive desires to be employed by Patriot on the terms
and
conditions set forth herein.
NOW,
THEREFORE, in consideration of the mutual promises, terms, covenants and
conditions set forth herein, and the performance of each, the parties, intending
legally to be bound, hereby agree as follows:
AGREEMENTS
Section
1.
Definitions.
For
purposes of this Agreement, the following terms have the meanings set forth
below:
"Board"
means
the Board of Directors of Patriot as same is constituted from time to
time.
"Business"
means
the business operations of the Residential Lending Group of Patriot National
Bank, which consists of the residential mortgage brokerage origination business
as it exists on the date hereof.
"Cause"
means
(a) the commission by the Executive of any act, on or after the date of this
Agreement, constituting, as to any cash funds or other receipts of Patriot,
or
any material property of Patriot or any other Person, (i) theft, (ii)
embezzlement, (iii) fraud, (iv) gross misconduct, (v) dishonesty or (vi) or
misappropriation of material property under applicable law; (b) the conviction
of the Executive of (i) a crime resulting in material injury to the business
or
property of Patriot or (ii) a felony; (c) the material breach by the Executive
of this Agreement, including but not limited to the failure by the Executive
to
follow all reasonable and lawful directions of the Board as to any material
matter, or the taking of any action by the Executive that would be reasonably
likely to cause material injury to Patriot or that would be in conflict with
any
material interest to Patriot within a reasonable period of time following
Executive's receipt of written notice thereof by Patriot, which notice is
sufficiently specific so as to permit Executive reasonably to cure such
misconduct; or (d) the misuse or unlawful use of drugs, alcohol or other
controlled substances in contravention of written policies of Patriot that
are
applicable to all employees of Patriot.
"Confidential
Information"
means
information that was or is used, developed or obtained by Patriot in connection
with its business, including (a) products or services, (b) fees, costs and
pricing structures, (c) analyses, (d) computer software, including operating
systems, applications and program listings, (e) flow charts, manuals and
documentation, (f) data bases, (g) accounting and business methods, (h)
inventions, devices, new developments, methods and processes, whether patentable
or unpatentable and whether or not reduced to practice, (i) other copyrightable
works, (j) all technology and trade secrets, and (k) all similar and related
information in whatever form or medium. Notwithstanding the foregoing, this
Agreement imposes no obligation upon the Executive with respect to Confidential
Information which (a) was known to the Executive before receipt from Patriot,
(b) is or becomes publicly available through no fault of the Executive, (c)
is
disclosed to the Executive by a third party without a duty of confidentiality
on
the part of the third party to Patriot, (d) is subsequently independently
developed by the Executive without a breach of this Agreement, or (e) is
required to be disclosed by the Executive in a judicial or administrative
proceeding, provided that the Executive gives Patriot reasonable advance notice
of such required disclosure so that Executive may contest the disclosure or
seek
a protective order.
"Effective
Date"
means
the date of this Agreement.
"Employment
Period"
has the
meaning set forth in Section 5 of this Agreement.
"Executive"
means
Xxxxxx Xxxxxxxxx.
"Permanent
Disability"
shall
have occurred if as a result of physical or mental incapacity, the Employee
shall have been incapable of performing Employee's duties hereunder for a period
in excess of 120 consecutive days in any 6 month period, or an aggregate of
240
days in any 12 month period.
"Person"
means
an individual, a partnership, a corporation, a limited liability company, an
association, a trust, a joint venture, an unincorporated organization and a
governmental entity or any department, agency or political subdivision
thereof.
"RLG"
means
the Residential Lending Group of Patriot.
"Reimbursable
Expenses"
has the
meaning set forth in Section 4.4 of this Agreement.
"Subsidiary"
means,
with respect to any Person, any corporation, partnership, limited liability
company, association or other business entity of which (a) if a corporation,
a
majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or a combination thereof, or (b) if a partnership,
limited liability company, association or other
2
business
entity, a majority of the partnership or other similar ownership interests
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more Subsidiaries of the Person or a combination thereof.
For
purposes of this Agreement, a Person or Persons will be deemed to have a
majority ownership interest in a partnership, limited liability company,
association or other business entity if such Person or Persons are allocated
a
majority of partnership, limited liability company, association or other
business entity gains or losses or control the managing director or member
or
general partner of such partnership, limited liability company, association
or
other business entity.
"Termination
Date"
shall
mean December 31, 2006.
Section
2.
Employment.
Patriot
hereby employs the Executive, and the Executive hereby accepts employment with
Patriot, upon the terms and conditions set forth in this Agreement, for the
Employment Period provided in Section 5.
Section3.
Position
and Duties.
3.1
Position.
The
Executive shall hold the position of Executive Vice President of Patriot
National Bank, and the title Division Sales Manager of the Residential Lending
Group of Patriot National Bank. During the Employment Period, the Executive
will
perform such reasonable executive and management duties as may, from time to
time, be determined and assigned to him by the Chairman, Chief
Executive Officer, President and/or the Management Committee of Patriot National
Bank,
which
duties shall be similar to the services the Executive rendered to RLG in the
past and shall relate primarily to the residential real estate mortgage
origination business of Patriot and its affiliates. Patriot shall not require
the Executive to relocate to any office of Patriot outside of Fairfield County,
Connecticut.
3.2
Performance
of Duties; Other Activities.
The
Executive shall devote his best efforts, attention and skills toward performing
his duties on behalf of Patriot, and his full business and professional time
to
fully and faithfully perform such duties and responsibilities to the best of
his
abilities in a diligent, trustworthy, businesslike and efficient manner. The
Executive shall do such traveling as may reasonably be required in connection
with the performance of his duties and responsibilities hereunder, provided
that
the Executive will not be assigned to regular duties such as would require
him
to relocate his permanent residence.
3.3
Reporting.
The
Executive will report to the Chairman,
Chief Executive Officer, President and/or the Management
Committee
of
Patriot National Bank.
3
Section
4.
Compensation
and Benefits.
4.1
Compensation.
The
compensation payable to the Executive by Patriot during the Employment Period
is
set forth on Schedule A hereto.
4.2
Executive
Stock Purchases and Stock Options.
The
Executive may be granted options and opportunities to purchase Patriot Common
Stock consistent with stock purchase plans and option plans provided to senior
management of Patriot and as may be awarded in the sole discretion of Patriot's
Board of Directors from time to time.
4.3
Benefits.
In
addition to the aforesaid compensation, the Executive shall be entitled to
be
included under the same rules or restrictions in any employee welfare and
retirement plan or program of Patriot generally available to its employees
and
or officers, including, without limitation, plans for hospital services, medical
services benefits, sick pay, dental and other health plans, as well as the
following benefits during the Employment Period:
|
(a)
|
four
weeks of paid vacation per year during the Employment Period;
|
|
(b)
|
five
personal/sick days per year;
|
|
(c)
|
participation
in the 401K Plan of Patriot consistent with the participation afforded
other similarly positioned Patriot
executives.
|
4.4
Expenses.
Patriot
shall reimburse the Executive for any and all reasonable expenses incurred
by
him in the course of performing his duties under this Agreement which are
consistent with Patriot's policies in effect from time to time with including
business travel, entertainment, mileage expenses and other business expenses
("Reimbursable Expenses"), subject to Patriot's requirements with respect to
reporting and documentation of expenses.
Section
5.
Employment
Period and Termination.
5.1
Employment
Period.
The
Executive's employment hereunder shall commence on the Effective Date, and,
unless renewed or modified by written agreement between Patriot and the
Executive, the Employment Period will terminate on the "Termination Date";
provided,
however, that (a) the Employment Period shall terminate prior to such date
upon
the Executive's death or Permanent Disability, and (b) the Employment Period
may
be terminated by Patriot at any time prior to such date, if such termination
shall be for Cause. The Executive and Patriot agree to begin negotiations to
renew this employment agreement by September 15, 2006 and to use their best
efforts to
4
5.2
Unjustified
Termination.
Except
as otherwise provided in Section 5.3 below, if the Employment Period shall
be
terminated by Patriot prior to the Termination Date for any reason other than
(a) for Cause, or (b) as a result of the death or Permanent Disability of the
Executive (collectively, an "Unjustified Termination"), the Executive shall,
so
long as the Executive has not breached and does not breach the provisions of
Sections 6, 7 or 8 of this Agreement, be entitled to receive during the
unexpired portion of the Employment Period (i) continuation of his compensation,
(ii) reimbursement of all Reimbursable Expenses incurred by the Executive prior
to the termination of the Employment Period, and (iii) continuation of all
medical benefits.
5.3
Justified
Termination.
If the
Employment Period shall be terminated by Patriot prior to the Termination Date
(a) for Cause, (b) as a result of the Executive's resignation, or (c) as a
result of the death or permanent disability of the Executive (collectively,
a
"Justified Termination"), the Executive shall be entitled to receive his
compensation through the date of termination and reimbursement of all
Reimbursable Expenses incurred by the Executive prior to the termination of
the
Employment Period. A termination for Cause shall become effective on the date
designated by Patriot.
5.4
Benefits.
Except
as otherwise required by law, all of the Executive's rights to fringe benefits
under this Agreement, if any, accruing after the termination of the Employment
Period as a result of a Justified Termination will cease upon such Justified
Termination.
Section
6.
Non-Solicitation
Agreement. The
Executive covenants and agrees that during the restricted period beginning
eighteen months from the Executive’s departure , the Executive will refrain from
interfering with the employment relationship between Patriot and its employees
and will not solicit any of such employees for employment by any other financial
institution or organization in the residential mortgage business.
Section
7.
Delivery
of Materials Upon Termination of Employment.
As
requested by Patriot from time to time and upon the termination of the
Executive's employment with Patriot for any reason, the Executive will promptly
deliver to Patriot all copies and embodiments, in whatever form or medium,
of
all Confidential Information in the Executive's possession or within his control
irrespective of the location or form of such material and, if requested by
Patriot, will provide Patriot with written confirmation that all such materials
have been delivered to Patriot.
5
Section
8.
Nondisclosure
and Non-use of Confidential Information.
The
Executive will not, at any time, disclose or use any Confidential Information
of
which the Executive is or becomes aware, whether or not such information is
developed by him, except to the extent that such disclosure or use is directly
related to and required by the Executive's performance of duties assigned to
the
Executive pursuant to this Agreement.
Section
9.
Affiliates;
Equitable Relief.
The
Executive acknowledges that a breach or threatened breach by him of any of
his
covenants contained in Sections 6, 7 and 8 of this Agreement could cause
irreparable harm to Patriot for which it would have no adequate remedy at law.
Accordingly, and in addition to any remedies which Patriot may have at law,
in
the event of an actual or threatened breach by the Executive of his covenants
contained in Sections 6, 7 and 8 of this Agreement, Patriot shall have the
absolute right to apply to any court of competent jurisdiction for such
injunctive or other equitable relief as such court may deem necessary or
appropriate in the circumstances.
Section
10.
No
Prior Agreements.
The
Executive hereby represents and warrants to Patriot that the execution of this
Agreement by Executive, his employment by Patriot, and the performance of his
duties hereunder will not violate or be a breach of any agreement with a former
employer, client, or any other Person. Further, Executive agrees to indemnify
and hold harmless Patriot and its officers, directors, and representatives
for
any claim, including, but not limited to, reasonable attorney's fees and
expenses of investigation, of any such third party that such third party may
now
have or may hereafter come to have against Patriot or such other persons, based
upon or arising out of any
non-competition
agreement, invention, secrecy, or other agreement between Employee and such
third party that was in existence as of the date of this Agreement. To the
extent that Employee had any oral or written employment agreement or
understanding with Patriot, this Agreement shall automatically supersede such
agreement or understanding, and upon execution of this Agreement by Employee
and
Patriot, such prior agreement or understanding automatically shall be deemed
to
have been terminated and shall be null and void.
Section
11.
Miscellaneous.
11.1
Remedies.
The
parties to this Agreement shall have all rights and remedies set forth in this
Agreement, all rights and remedies which either party has been granted at any
time under any other agreement or contract and all of the rights which either
has under any law. Both parties will be entitled to enforce such rights
specifically, without posting a bond or other security, to recover damages
by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law or available in equity.
6
11.2
Waivers
and Amendments.
The
provisions of this Agreement may be amended or waived only by a written
agreement executed and delivered by Patriot and the Executive. No other course
of dealing between the parties to this Agreement or any delay in exercising
any
rights hereunder will operate as a waiver of any rights of any such
parties.
11.3
Successors
and Assigns.
All
covenants and agreements contained in this Agreement by or on behalf of any
of
the parties hereto and their respective heirs, executors, administrators,
personal representatives, successors and assigns, whether so expressed or not;
provided that the Executive may not assign his rights or delegate his
obligations under this Agreement without the written consent of
Patriot.
11.4
Severability.
Whenever
possible, each provision of this Agreement will be interpreted in such manner
as
to be effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.
11.5
Counterparts.
This
Agreement may be executed simultaneously in two or more counterparts, any one
of
which need not contain the signatures of more than one party, but all of which
counterparts taken together will constitute one and the same
agreement.
11.6
Descriptive
Headings.
The
descriptive headings of this Agreement are inserted for convenience only and
do
not constitute a part of this Agreement.
11.7
Notices.
All
notices, demands or other communications to be given or delivered under or
by
reason of the provisions of this Agreement will be in writing and will be deemed
to have been given when delivered personally to the recipient, two business
days
after the date when sent to the recipient by certified or registered mail,
return receipt requested and postage prepaid. Such notices, demands, and other
communications will be sent to the Executive and to Patriot at the addresses
set
forth below.
If
to the
Executive:
Xxxxxx
Xxxxxxxxx
c/o
Residential Lending Group of Patriot National Bank
0000
Xxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
And
Xxxxxx
Xxxxxxxxx
0
Xxxxxxxxxx Xxxx
Xxx
Xxxxxxxxx, XX 00000
7
If
to
Patriot:
Patriot
National Bank
000
Xxxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
Attn:
Chairman
or
to
such other address or to the attention of such other Person as the recipient
party has specified by prior written notice to the sending party.
11.8
No
Third Party Beneficiary.
This
Agreement will not confer any rights or remedies upon any person other than
Patriot, the Executive and their respective heirs, executors, administrators,
personal representatives, successors and permitted assigns.
11.9
Entire
Agreement.
This
Agreement constitutes the entire agreement among the parties and supersedes
any
prior understandings, agreements or representations by or among the parties,
written or oral, that may have related in any way to the subject matter
hereof.
11.10
Construction.
The
language used in this Agreement will be deemed to be the language chosen by
the
parties to express their mutual intent, and no rule of strict construction
will
be applied against any party. Any reference to any federal, state, local or
foreign statute or law will be deemed also to refer to all rules and regulations
promulgated there under, unless the context requires otherwise. The use of
the
word "including" in this Agreement means "including without limitation" and
is
intended by the parties to be by way of example rather than
limitation.
11.11
Life
Insurance.
The
Executive agrees that Patriot shall have the right to obtain life insurance
on
the Executive's life, at the sole expense of Patriot, as the case may be, and
with Patriot as the sole beneficiary thereof. The Executive shall (a) cooperate
fully in obtaining such life insurance, (b) sign any necessary consents,
applications and other related forms or documents and (c) take any reasonably
required medical examinations.
11.12
Survival.
Sections
6, 7, 8 and 9, of this Agreement will survive and continue in full force in
accordance with their terms notwithstanding any termination of the Employment
Period.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
8
|
PATRIOT
NATIONAL BANK
|
|
|
By
: /s/ Xxxxxx Xx Xxxx
|
|
|
It’s
Chairman
|
|
| /s/ Xxxxxx Xxxxxxxxx | |
|
Xxxxxx
Xxxxxxxxx
|
9
SCHEDULE
A
2006
Compensation (January 1, 2006 - December 31, 2006)
|
1.
|
Guaranteed
Draw against commission - $180,000 paid in equal
installments.
|
|
2.
|
Commissions
- Payable at the new commission plan which becomes effective on January
1,
2006 (See attached schedule B).
|
|
3.
|
Override
(A) - 4% payable on the gross commission revenue generated by those
loan
originators which report directly
to
Marcus, payable at the end of each calendar quarter.
|
|
4.
|
Negotiated
Bonus - Marcus may receive a payment
/
bonus on commission generated by loan officers reporting to Xxxxx
Xxxxxxx
depending on Marcus’s efforts in assisting them generate earnings and the
profitability of Peter’s group. The Management Committee, at its sole
discretion, will determine the amount of override of any to be paid.
If
any amount is paid, it will be available at the same time as profit
shares
are paid out.
|
10
Schedule
B
Loan
Originator Compensation Structure
For
Loans Closed and Funded Beginning January 1 2006
|
a.
|
Commission
Payout
-
Payout percentage applies to the entire commission
(*)
|
|
Gross
Commission
|
Payout
%
|
||
|
$0
- $3,000
|
40%
|
||
|
$3,001
- $8,000
|
50%
|
||
|
$8,001
- $14,000
|
60%
|
||
|
$14,001
and over
|
70%
|
(*)
Negotiated payouts for loans placed in the Patriot portfolio that would be
difficult to place outside of the bank.
|
b.
|
Marketing
Credits
-
All uses of credits have to pre-approved by
Management.
|
|
·
|
For
every $100,000 in gross commissions, there will be $2,000 in marketing
credits available.
|
|
·
|
Marketing
credits must be used by year-end or they
expire.
|
Use
of
Credits
|
·
|
Must
be used to generate additional business for the bank
|
|
·
|
Open
Houses/Documented Business Functions, etc.
|
|
·
|
Brochures
and other advertising, etc.
|
|
c.
|
Fees
Earned by Division:
|
|
Application
Fee
|
Processing
Fee
|
|||
|
1)
First Mortgages
|
$150
|
$300
|
||
|
Piggy
Back HELOC
|
-
|
$100
|
||
|
2)
Stand Alone HELOC
|
-
|
$300
|
11
SCHEDULE
C
Xxxxxx
Xxxxxxxxx
Job
Responsibilities - 2006
Residential
Lending Division
Includes
but not limited to:
|
·
|
Maintain
high ethical standards for division
|
|
·
|
Recruit
and train loan originators
|
|
·
|
Assist
loan originators in structuring and closing deals
|
|
·
|
Manage
the resolution of any customer related issues
|
|
·
|
Grow
our revenue stream by hiring more loan originators, offering additional
types of loans (B and C, FHA, etc.)
|
|
·
|
Establish
loan origination officers in appropriate geographical locations,
while
considering the potential for possible bank branch
expansion
|
|
·
|
Encourage
loan originators to seek out commercial loans
|
|
·
|
Establish
and cultivate new investor relationships
|
|
|
|
|
·
|
Keeping
aware of new technology to support our employees and
business
|
|
·
|
Administration
and budgeting
|
12
