EXHIBIT 10.32
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the 20th
day of May, 1998 , by and between Colorado Business Bankshares, Inc., a
Colorado corporation ("Company"), and J. Xxxxx Xxxxxxxxxx ("Employee'').
WITNESSETH:
WHEREAS, Employee desires to be employed by Company or one of its
subsidiaries and the parties desire to set forth certain conditions of
Employee's employment as hereinafter set forth.
NOW, THEREFORE, the parties agree as follows:
1. EMPLOYMENT. Company hereby agrees to employ Employee, and
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Employee hereby agrees to be employed by Company, as (a) Senior Vice President
of Company's subsidiary Colorado Business Bank ("CBB"), and (b) such other
different executive capacities with the Company, CBB or any other Company
subsidiary as may be determined from time to time by the Boards of Directors of
Company, CBB or such other subsidiary.
2. RESPONSIBILITIES OF EMPLOYMENT. During the term of Employee's
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employment, Employee:
(a) shall diligently and faithfully serve Company and its subsidiaries
in such executive capacities as may be determined from time to time by the
Boards of Directors of Company and its subsidiaries, and Employee shall
devote Employee's best efforts and entire business time, services and
attention to the advancement of Company's interests;
(b) shall not, without the prior written consent of the Board of
Directors of Company, engage in any other employment or business, directly
or indirectly, as a sole proprietor, a member of a partnership or limited
liability company, as a director, officer, employee or shareholder of a
corporation not affiliated with Company, or as a consultant or otherwise,
whether for compensation or otherwise, which could reasonably be expected
to or does interfere with Employee's performance of Employee's duties
hereunder or which business is in competition in any way with the business
then being conducted by Company and its subsidiaries; provided, however,
that the provisions of this subparagraph (b) shall not be deemed to
prohibit Employee's ownership of stock in any publicly owned corporation so
long as Employee's ownership, directly and indirectly, when aggregated with
the direct and indirect ownership of all members of Employee's family, does
not exceed one percent (1%.) of the total outstanding stock of such
publicly owned corporation, measured by reference to either market value or
voting power;
(c) shall diligently and faithfully carry out the policies, programs
and directions of the Boards of Directors of Company and its subsidiaries;
(d) shall fully cooperate with such other officers of Company and its
subsidiaries as may be elected or appointed by the Boards of Directors of
Company and its subsidiaries; and
(e) shall report to the appropriate executive officer of Company.
3. COMPENSATION. Company will compensate Employee for Employee's services
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during the term of this Agreement and Employee's employment hereunder as
follows:
(a) Basic Compensation. Company shall pay to Employee as a minimum
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basic compensation the sum of Eighty Thousand Dollars ($ 80,000.00) per
year, payable in equal semi-monthly installments. Employee's basic
compensation may be increased from time to time in the sole discretion of
Company's Board of Directors.
(b) Benefits. Employee shall be entitled to participate in any and
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all other benefits from time to time afforded executive employees of
Company, including, without limitation, health, accident, hospitalization
and life insurance programs. Company shall additionally pay the monthly
(not initial or initiation) dues for Employee at community or business
related clubs or activities to be agreed upon by Employee and Company.
(c) Reimbursement of Expenses. Employee shall be entitled to
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reimbursement of ordinary and necessary out-of-pocket expenses reasonably
incurred by Employee on behalf of Company in the course of performing
Employee's duties hereunder, subject to Employee furnishing appropriate
documentation relative to such expenses in form and substance satisfactory
to Company.
(d) Vacations. Employee shall be entitled to four ( 4 ) weeks paid
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vacation each year, subject to Company's general vacation policy.
(e) Discretionary Bonus Plan. Company is in the process of
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developing a discretionary bonus plan for key executives. Employee shall be
entitled to participate in such discretionary bonus plan.
(f) Allocations. As Company and Employee intend that Employee may
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be a dual employee of Company and one or more of its subsidiaries, Company
may allocate to one or more of its subsidiaries any portion of Employee's
basic and other compensation that Company and one or more of its
subsidiaries deem to be a lawful and appropriate allocation, but no such
allocation will relieve Company of any of its obligations to Employee under
this Agreement.
4. TERM AND TERMINATION.
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(a) Term. The term of Employee's employment shall be a one (1) year term
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beginning on the date hereof. Upon expiration of the stated term of this
Agreement, Employee's employment with Company shall revert to the status of
employment at will and shall thereafter be subject to termination by either
party and at any time regardless of cause.
(b) Termination. Upon termination of this Agreement by Company, by
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Employee or upon the death or disability of Employee, the rights and obligations
of Employee shall be as follows:
(i) Termination by Employee. In the event Employee elects to
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terminate Employee's employment hereunder, this Agreement shall immediately
terminate without any further obligation on the part of Company, except
that Company shall pay to Employee such compensation pursuant to Paragraph
3 hereof as may be accrued and unpaid on the date of termination of
employment.
(ii) Termination by Company for Cause. If Employee's employment
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hereunder is terminated by Company for cause, this Agreement shall
immediately terminate without any further obligation on the part of
Company, except that Company shall pay to Employee such compensation
pursuant to Paragraph 3 hereof as may be accrued and unpaid on the date of
such termination of employment. For purposes of this Agreement, "cause"
shall mean willful failure or neglect of Employee to perform Employee's
duties as prescribed herein, the conviction of a felony, theft,
embezzlement or improper use of corporate funds by Employee, self dealing
detrimental to Company, any attempt to obtain any personal profit from any
transaction in which Company has an interest or any breach of the terms of
Paragraphs 6 or 7 of this Agreement by Employee.
(ii) Termination by Company for Other Reasons. Company shall have the
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right at any time to terminate Employee' s employment hereunder for any reason
by giving Employee written notice (which notice shall fix the date as of which
Employee's employment is to terminate) of its intention to do so. If Employee's
employment hereunder is terminated by Company other than for cause, Company
shall be obligated to pay Employee the severance benefits set forth in Paragraph
4(c) hereof.
(iii) Constructive Discharge. If Employee is ever constructively
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discharged, Employee may terminate this Agreement and Employee's employment
hereunder by delivering written notice to Company no later than thirty (30) days
before the effective date of termination. If Employee is constructively
discharged, Company shall be obligated to pay Employee the severance benefits
set forth in Paragraph 4(c) hereof. For purposes of the foregoing,
"constructive discharge" means the occurrence of any one or more of the
following: (i) Employee is removed from all of the offices described in
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Paragraph 1 hereof; (ii) Company fails to vest with or removes from Employee the
duties, responsibilities, authority or resources that Employee reasonably needs
to competently perform the duties of Employee's office; (iii) Company decreases
Employee's basic compensation or arbitrarily and capriciously decreases
Employee's bonus; or (iv) Company transfers Employee to a location outside the
Denver metropolitan area;
and in any of such events, Company fails to cure any of the above within thirty
(30) days after Employee gives Company written notice of such breach.
(v) Termination Upon Change of Control. If a Change of Control occurs,
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Employee may terminate this Agreement and Employee's employment hereunder for
any reason within two (2) years after a Change of Control occurs by delivering
written notice of termination to Company or its successor no less than thirty
(30) days before the effective date of termination (any such notice by Employee
which can be construed as a notice under either Paragraph 4 (b) (iv) or this
Paragraph 4 (b) (v) shall be deemed a notice under this Paragraph 4 (b) (v). If
Employee so terminates, Company shall be obligated to pay Employee two (2) times
the severance benefits set forth in Paragraph 4 (c) hereof, with the exception
that the Paragraph 4(c)(ii) bonus component shall be based upon a full year and
not prorated to the date of Employee's termination.
(A) A "Change of Control" will be deemed to have occurred if: a) any person (as
such term is defined in Section 13 (d) or 14 (d) of the Securities Exchange Act
of 1934, as amended (the 111934 Act") other than a person who is a shareholder
of Company as of the date of this Agreement acquires beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the 0000 Xxx) of fifty
percent (50%) or more of the combined voting power of the then outstanding
voting securities of Company; or b) the individuals who were members of
Company's Board of Directors as of the date of this Agreement (the "Current
Board Members") cease for any reason to constitute a majority of the Board of
Directors of Company or its successor; however, if the election or the
nomination for election of any new director of Company or its successor is
approved by a vote of a majority of the individuals who are Current Board
Members, such new director shall, for the purposes of this paragraph, be
considered a Current Board Member; or c) Company's stockholders approve (1) a
merger or consolidation of Company or CBB and the stockholders of Company
immediately before such merger or consolidation do not, as a result of such
merger or consolidation, own, directly or indirectly, more than fifty percent
(50%) of the combined voting power of the then outstanding voting securities of
the entity resulting from such merger or consolidation in substantially the same
proportion as their ownership of the combined voting power of the outstanding
securities of Company immediately before such merger or consolidation; or (2) a
complete liquidation or dissolution or an agreement for the sale or other
disposition of all or substantially all of the assets or stock of Company or CBB
(provided that a complete liquidation or dissolution or the sale or other
disposition of all or substantially all the assets or stock of just CBB will be
deemed a "Change of Control", only if Employee is not offered a position with
Company or one of its subsidiaries with responsibilities, although not
necessarily the same title, and reporting requirements consistent with those
responsibilities and reporting requirements set forth in Paragraph 2 hereof).
(B) Notwithstanding and in lieu of Paragraph 4(b)(v)(A), a Change of
Control will not be deemed to have occurred: a) solely because fifty percent
(50%) or more of the combined voting power of the then outstanding voting
securities of Company are acquired by (1) a trustee or other fiduciary holding
securities under one or more employee benefit plans maintained for employees of
Company and its subsidiaries, or (2) any person pursuant to the will or trust of
any existing stockholder of Company, or who is a member of the immediate family
of such stockholder, or (3) any corporation which, immediately prior to such
acquisition, is owned
directly or indirectly by the stockholders in the same proportion as their
ownership of stock immediately prior to such acquisition; or b) if Employee
agrees in writing to waive a particular Change of Control for the purposes of
this Agreement.
(vi) Termination Upon Employee's Disability. In the event
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Employee's employment is terminated by Company due to Employee's
disability, Company shall be obligated to pay Employee the severance
benefits set forth in Paragraph 4(c) hereof. For purposes of the foregoing,
"disability" shall mean Employee's inability due to illness or other
physical or mental disability to substantially perform Employee's duties as
prescribed herein for a period of sixty (60) days within any consecutive
six (6) month period, and any action to be taken hereunder based on
disability shall not be effective until the expiration of such sixty (60)
day period.
(vii) Termination Upon Employee's Death. In the event that Employee
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dies while employed by Company, then Company shall be obligated to pay
Employee's estate the severance benefits set forth in Paragraph 4(c)
hereof.
(viii) Continuing Obligations of Employee. Notwithstanding anything
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to the contrary contained herein, termination of this Agreement or
Employee's employment hereunder, for whatsoever reason or for no reason at
all, by Employee or otherwise, shall not be deemed in any way to affect
Employee's obligations under Paragraphs 6 and 7 of this Agreement, with
respect to which Employee shall remain bound.
(c) Severance Benefits. Provided Employee is in compliance with
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Paragraph 4(b)(viii) hereof, Company will pay or provide the following severance
benefits to Employee in lieu of any separation payments otherwise provided upon
termination of employment under any other severance pay or similar plan or
policy of Company:
(i) Twelve (12) consecutive monthly payments each equal to one-
twelfth (1/12th) of Employee's annual basic compensation in effect
immediately prior to Employee's termination;
(ii) Twelve (12) consecutive monthly payments each equal to one-
twelfth (1/12th) of the higher of (a) Employee's discretionary bonus for the
previous calendar year, or (b) the average of Employee's discretionary bonus
for the previous three (3) calendar years (or such fewer calendar years as
Employee has been employed), in each case prorated to the date of Employee
termination.
iii) For the twelve (12) month period following the date of
termination of Employee' s employment, Company will maintain in full force and
effect for the continued benefit of Employee each employee benefit plan in which
Employee was a participant immediately prior to the date of Employee's
termination, unless an essentially equivalent and no less favorable benefit is
provided by a subsequent employer at no additional cost to Employee. If the
terms of any employee benefit plan of Company do not permit continued
participation by Employee, then Company will arrange to provide to Employee (at
Company' s cost) a benefit substantially similar to and no less favorable than
the benefit Employee was entitled to receive
under such plan at the end of the period of coverage. (This provision
specifically is not applicable to any car, car phone, parking and club dues,
which benefits, if any, end upon Employee's date of termination of employment.)
(iv) For the twelve (12) month period following the date of termination of
Employee's employment, Company will treat Employee for all purposes as an
Employee under all of Company's retirement plans in which Employee was a
participant on the date of termination of Employee's employment or under which
Employee would become eligible during such twelve (12) month period (hereinafter
referred to collectively as the "Plan"). Benefits due to Employee under the Plan
shall be computed as if Employee had continued to be an Employee of Company for
the twelve (12) month period following termination of employment. If under the
terms of the Plan such continued coverage is not permitted, Company will pay to
Employee or Employee's estate a supplemental benefit in an amount which, when
added to the benefits that Employee is entitled to receive under the Plan, shall
equal the amount that Employee would have received under the Plan had Employee
remained an employee of Company during such twelve (12) month period.
(v) If any excise tax imposed under Internal Revenue Code Section 4999 or
any successor provision, as amended after the date hereof, is due and owing by
Employee as a result of any amount paid or payable pursuant to this Paragraph 4
(c), Company shall indemnify and hold Employee harmless against all such excise
taxes and any interest, penalties or costs with respect thereto.
(vi) Company will be obligated to make all payments that become due to
Employee under this Paragraph 4 (c) whether or not Employee obtains other
employment following termination. The payments and other benefits provided for
in this Paragraph 4 (c) are intended to supplement any compensation or other
benefits that have accrued or vested with respect to Employee or Employee's
account as of the effective date of termination.
(vii) Company may elect to defer any payments that may become due to
Employee under this Paragraph 4(c) if, at the time the payments become due,
Company, CBB or any of Company's other subsidiaries is not in compliance with
any regulatory-mandated minimum capital requirements or if making the payments
would cause Company's, CBB's or any of Company's other subsidiaries' capital to
fall below such minimum capital requirements. In this event, Company will
resume making the payments as soon as it can do so without violating such
minimum capital requirements.
5. SALE OR REORGANIZATION OF COMPANY. This Agreement shall not restrict
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the sale, transfer, consolidation, liquidation, reorganization or disposition of
the assets of Company and to the extent that the business of Company is
conducted in another form or through another entity or entities, such entity or
entities shall be obligated to fulfill Company's obligations hereunder.
6. RESTRICTIVE COVENANT. It is mutually recognized and agreed that the
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services to be rendered pursuant to this Agreement by Employee are special,
unique and of extraordinary character. Therefore, as a condition to Company's
obligations hereunder,
Employee agrees that without Company's prior written consent, during the term of
this Agreement and for a period ending on the first anniversary of the date of
termination of Employee's employment hereunder, regardless of cause, Employee
will not engage in any manner, directly or indirectly, to solicit or induce any
employee or agent of Company or any of its subsidiaries to terminate employment
with Company or any of its subsidiaries, as the case may be, or solicit or
induce any customer of Company or any of its subsidiaries to become a customer
of any person, firm, partnership, corporation, trust or other entity that owns,
controls or is a bank, savings and loan association, credit union or similar
financial institution. Furthermore, Employee will at no time during or
subsequent to the term of Employee's employment by Company make any statements
or take any actions which could reasonably be expected to damage the reputation
or business of Company. It is further recognized and agreed that irreparable
injury will result to Company, its businesses and property in the event of a
breach of this covenant by Employee, that such injury would be difficult if not
impossible to ascertain, and therefore, any remedy at law for any breach by
Employee of this covenant will be inadequate and Company shall be entitled to
temporary and permanent injunctive relief without the necessity of proving
actual damage to Company by reason of any such breach. In addition, in the event
of a breach of this covenant by Employee, Company shall also be entitled to
recover reasonable costs and attorneys' fees incurred in connection with the
enforcement of its rights hereunder. Whenever used herein, Company shall be
deemed to include any successors or any other person or entity which may
hereafter acquire the business of Company or any of its subsidiaries. The
foregoing notwithstanding, should the assets of Company be disposed of in such a
manner that no purchaser thereof has acquired a going business, then Employee
shall not be bound by the covenants expressed in this paragraph.
7. TRADE SECRETS AND CONFIDENTIAL INFORMATION. Employee hereby covenants
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and agrees that Employee will not, except as may be required in connection with
Employee's employment under this Agreement or compelled by any judicial or
administrative order, directly or indirectly, use or disclose to any other
person, firm or corporation, whether during or subsequent to the term of
Employee's employment by Company, irrespective of the time, manner or cause of
the termination of Employee's employment, any information of a proprietary
nature belonging to Company, or which could be reasonably expected to have an
adverse effect on Company, its businesses, property or financial condition,
including but not limited to records, data, documents, processes,
specifications, methods of operation, techniques and know-how, plans, policies,
customer lists, the names and addresses of suppliers or representatives,
investigations or other matters of any kind or description relating to the
products, services, suppliers, customers, sales or businesses of Company. All
records, files, documents, equipment and the like relating to Company's
businesses which Employee shall prepare, use or observe shall be and remain the
sole property of Company, and upon termination of this Agreement or Employee's
employment hereunder for any reason, Employee shall return to the possession of
Company any items of that nature and any copies thereof which Employee may have
in Employee's possession.
8. INDEMNITY.
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(a) Indemnification. Company will indemnify Employee (and, upon
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Employee's death, Employees heirs, executors and administrators) to the
fullest extent
permitted by law against all expenses, including reasonable attorneys'
fees, court and investigative costs, judgments, fines and amounts paid in
settlement (collectively, "Expenses") reasonably incurred by Employee in
connection with or arising out of any pending, threatened or completed
action, suit or proceeding in which Employee may become involved by reason
of Employee having been an officer or director of Company or any of its
subsidiaries. The indemnification rights provided for herein are not
exclusive and will supplement any rights to indemnification that Employee
may have under any applicable bylaw or charter provision of Company or any
of its subsidiaries, or any resolution of Company or any of its
subsidiaries, or any applicable statute.
(b) Advancement of Expenses. In the event that Employee becomes a
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party, or is threatened to be made a party, to any pending, threatened or
completed action, suit or proceeding for which Company or any of its
subsidiaries is permitted or required to indemnify Employee under this
Agreement, any applicable bylaw or charter provision of Company or any of
its subsidiaries, any resolution of Company or any of its subsidiaries, or
any applicable statute, Company will, to the fullest extent permitted by
law, advance all Expenses incurred by Employee in connection with the
investigation, defense, settlement or appeal of any threatened, pending or
completed action, suit or proceeding, subject to receipt by Company of a
written undertaking from Employee to reimburse Company for all Expenses
actually paid by Company to or on behalf of Employee in the event it shall
be ultimately determined that Company or any of its subsidiaries cannot
lawfully indemnify Employee for such Expenses, and to assign to Company all
rights of Employee to indemnification under any policy of directors' and
officers' liability insurance to the extent of the amount of Expenses
actually paid by Company to or on behalf of Employee.
(c) Litigation. Unless precluded by an actual or potential conflict
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of interest, Company will have the right to recommend counsel to Employee
to represent Employee in connection with any claim covered by this Section
8. Further, Employee's choice of counsel, Employee's decision to contest or
settle any such claim, and the terms and amount of the settlement of any
such claim will be subject to Company's prior reasonable approval in
writing.
9. ARBITRATION. Any disputes arising out of this Agreement or connected
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with Employee's employment shall be submitted by Employee and Company to
arbitration by the American Arbitration Association or its successor, and the
determination of the American Arbitration Association or its successor shall be
final and absolute. The arbitrator shall be governed by the duly promulgated
rules and regulations of the American Arbitration Association or its successor,
and the pertinent provisions of the laws of the State of Colorado relating to
arbitration. The decision of the arbitrator may be entered as a judgment in any
court in the State of Colorado or elsewhere. The prevailing party shall be
entitled to receive reasonable attorneys' fees incurred in connection with such
arbitration in addition to such other costs and expenses as the arbitrators may
award.
10. INTERPRETATION. This Agreement shall be construed in accordance with
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the internal laws of the State of Colorado. The titles of the paragraphs have
been inserted as a matter
of convenience of reference only and shall not be construed to control or affect
the meaning or construction of this Agreement.
11. SEVERABILITY. In the event that any portion of this Agreement is found
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to be in violation of or conflict with any federal or state law, the parties
agree that said portion shall be modified only to the extent necessary to enable
it to comply with such law.
12. ASSIGNMENT. This Agreement shall not be assignable by Employee, but
shall be binding upon and inure to the benefit of the heirs, successors and
assigns of Employee and Company.
13. NOTICES. All notices or other communications in connection with this
Agreement shall be in writing and shall be deemed to have been duly given when
delivered, sent by professional courier or mailed first class, postage prepaid
and addressed as follows:
(i) If to Company, addressed to:
Colorado Business Bankshares, Inc.
000 - 00xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
(ii) If to Employee, addressed to:
J. Xxxxx Xxxxxxxxxx
0000 X. Xxxxxx Xxx
Xxxxxx, XX 00000
or such other address or addressed to the attention of such other person or
persons as either of the parties may notify the other in accordance with the
provisions of this paragraph.
14. ENTIRE AGREEMENT. This Agreement is the entire agreement and understanding
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of the parties hereto with respect to the subject matter hereof and supersedes
any and all prior and contemporaneous negotiations, understandings and
agreements with regard to the subject matter hereof, whether oral or written.
No representation, inducement, agreement, promise or understanding altering,
modifying, taking from or adding to the terms and conditions hereof shall have
any force or effect unless the same is in writing and validly executed by the
parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COLORADOBUSINESS
BANKSHARES,
INC.
/s/ J. Xxxxx Xxxxxxxxxx By: /s/ Xxxxxx Xxxxxxx
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J. Xxxxx Xxxxxxxxxx Xxxxxx Xxxxxxx,
Chief Executive Officer
516-7632.01
