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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into this 9th day of October, 1998,
by and between LEHIGH ACRES FIRST NATIONAL BANK/LEHIGH ACRES FIRST BANCSHARES,
INC., a banking corporation proposed to be formed under the laws of the State of
Florida, represented by the undersigned formative Management Committee
(hereinafter referred to as the "Bank"), and XXXXX XXXXX (hereinafter referred
to as the "Executive").
WITNESSETH:
WHEREAS, a group of Xxx County residents has begun the process toward
incorporating and organizing the Bank to serve the Lehigh Acres Primary Service
Area, in the County of Xxx, the State of Florida;
WHEREAS, such incorporators have met and authorized a Management
Committee with the power to negotiate employment contracts for the executive
officers of the Bank;
WHEREAS, such Management Committee has met with the Executive and
reached an agreement with him, the terms of which the parties desire to commit
in writing;
NOW, THEREFORE, in consideration of the mutual covenants, herein
contained, the parties hereto do agree as follows:
A. RELATIONSHIP ESTABLISHED AND DUTIES.
1. The Bank hereby employs the Executive as Chief Execution
Officer of the Bank, to hold the title of President and Chief Executive Officer,
and to perform such services and duties as the Bank's Board of Directors may,
from time to time, designate during the term hereof. Subject to the terms and
conditions hereof, the Executive will perform such duties and exercise such
authority as are customarily performed and exercised by persons holding such
office, subject to the general direction of the Board of Directors, exercised in
good faith in accordance with the standards of reasonable business judgment.
2. The Executive shall serve on the Board of Directors of the
Bank and as a member of its Executive Committee, subject to the terms hereof.
3. The Executive accepts such employment and shall devote his
full time attention and efforts to the diligent performance of his duties
herein specified as an officer and director, and will not accept employment with
any other individual, corporation, partnership, governmental authority or other
entity, or engage in any other venture for profit (other than as a passive
investor) which the Bank may consider to be in conflict with his or its best
interest, or which may interfere in any way with the Executive's performance of
his duties hereunder.
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Lehigh Acres First National Bank and Xxxxx Xxxxx
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i. As an exception to this covenant the Executive
shall be permitted to serve on the Board of Directors of other banking
institutions, subject to Board approval, so long as those institutions shall not
have a regular business located within Xxx County, State of Florida, and as long
as such service does not interfere with said executive services to the Bank.
B. TERMS OF EMPLOYMENT.
Employment shall commence upon opening of Bank for business. The term
shall continue for five (5) consecutive years, unless such term is terminated
earlier by the Bank pursuant to the occupance of any of the following
conditions:
1. The death of the Executive;
2. The complete disability of the Executive. "Complete
disability," as used herein, shall mean the inability of the Executive, due to
illness, accident or any other physical or mental incapacity, to perform the
services provided for hereunder for an aggregate of ninety (90) days within any
period of 120 consecutive days the term hereof;
3. The discharge of the Executive by the Bank for cause.
"Cause" as used herein, shall include but not be limited to the following:
i. Unethical conduct: (a) Disclosing or misusing trade
secrets or confidential or proprietary information belonging to the Bank; (b)
selecting vendors based on non-business reasons, such as personal or former
non-business relationships; (c) promising or giving something of value to anyone
doing or seeking to do business with the Bank in order to influence them in
matters relating to Bank business; or (d) engaging in acts of dishonesty, fraud,
theft or sabotage.
ii. Violence or Other Inappropriate Behavior: (a) Threats
of any kind; (b) threatening, physically aggressive or violent behavior, such as
intimidation of or attempts to instill fear in others; (c) using any object in a
threatening or weapon-like manner; (d) insubordination or refusal to comply with
instructions or failure to perform reasonable duties which are assigned; (e)
conviction by any duly constituted law enforcement agency or authority of a
criminal offence; or (f) conduct which the Bank feels reflects adversely on the
Executive or the Bank.
Termination of the Executive's employment shall constitute a tender by
the Executive of his resignation as an officer and director of the Bank.
Such initial five (5) year terms shall be renewed automatically for two
(2) consecutive one year terms for an aggregate employment period of the
Executive with the Bank of seven (7) years from the date hereof, unless ninety
(90) days written notice is provided by either the Executive or the Bank of the
Executive's or the Bank's intention not to continue such employment relationship
for any one year extension period. If such written notice is not given by the
Executive or the Bank with respect to any one year extension period, then this
Agreement automatically shall be extended for an additional one year term.
Employment Agreement
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C. COMPENSATION.
For all services which the Executive may render to the Bank during the
term hereof, including service on the Board of Directors and Executive Committee
of the Bank, the Bank shall pay to the Executive, subject to such deductions as
may be required by law:
1. Base Salary. An annual salary of $96,000.00, payable in
equal monthly installments; merit increases may be granted in the discretion of
the Board of Directors.
2. Bonus. Each year, as cash performance bonus, the Executive
shall be entitled to five percent (5%) of net income before income taxes of the
Bank (determined by generally accepted accounting principals), up to a maximum
of fifteen percent (15%) of Executive's annual salary. Each bonus will be
awarded and payable within sixty (60) days of the end of the Bank's fiscal year
provided the Bank achieves the following performance criteria: (a) return on
assets (determined by generally accepted accounting principals) in each year;
(b) loan loss reserve ratio meets or exceeds 1.1% of net loans plus any
adjustments for classified loans; (c) ration of non-performing loans to total
loans do not exceed that of its peers as published at year end in the Uniform
Bank Performance Report; and (d) the Bank achieves a composite rating and asset
quality rating of "2" or better.
Year One - 1999 through 12/31/2000 N/A
Year Two - 1/l/2001 through 12/31/2001 .3%
Year Three - 1/l/2002 through 12/31/2002 .5%
Year Four - 1/l/2003 through 12/31/2003 .7%
Year Five - 1/l/2004 through 12/31/2004 1.0%
The Bank may, in its discretion, award Executive a bonus at
the end of calendar year one, should they determine said bonus is appropriate.
3. Life Insurance. As soon as practical, the Bank shall
establish a plan of employee group term life insurance for its employees, and
provided the Executive is a standard insurance risk, the Bank shall provide the
Executive with employee term life insurance with a minimum face amount of three
(3) times the Executive's annual salary.
4. Disability Insurance. As soon as practical, the Bank shall
obtain for the benefit of the Executive an insured salary continuation plan to
provide the Executive benefit payment of up to two-thirds (2/3) of his salary to
age 65, in the event of his disability while employed by the Bank.
5. Other Fringe Benefits. The Executive shall be entitled to
participate in the fringe benefits provided by the Bank to all employees which
shall be determined at a later date by the Board of Directors. Such benefits
under consideration may include up to - health and dental insurance; deferred
compensation plan, and an approved paid holiday schedule.
6. Dues and Subscriptions. The Bank shall pay directly, or
reimburse the Executive for his memberships in civic and social clubs for the
benefit of the Executive and the business opportunities of the Bank, all
memberships subject to approval by the Board of Directors.
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7. Business Automobile. The Bank shall provide the Executive
an automobile allowance of $800.00 per month. The allowance is provided to cover
the ownership, gas, maintenance, repair and insurance while on Bank business.
Since the Bank assumes no responsibility beyond making
available an allowance, it is the Executive's responsibility to protect against
damage to his vehicle and legal liability in such a form and amount as the
Executive deems appropriate.
It is highly recommended that the Executive consult with his
own insurance agent for coverage levels. (Note: It is possible that an
individual carrier will deny coverage due to misrepresentation regarding the
business use of an automobile. It is therefore essential that the Executive
properly informs his carrier accordingly, to ensure complete coverage.)
8. Bank Expense. The Bank shall reimburse the Executive for
his out-of-pocket business related expenses, not to exceed $1,000.00 per month,
incurred during these activities on behalf of the Bank.
9. Stock Options Linked to Bank Performance. If the Bank
opens for business and the Executive is initially and continues to be employed
under the provisions of this Agreement, then the Executive will earn option
rights redeemable in shares of common stock as a percentage of the Executive's
base salary.
Provided the Bank achieves a composite rating and asset
quality rating of "2" or better, the Executive may, at the discretion of the
Board, receive each year an option in shares of capital stock of the Bank equal
to 2.5% of his base salary.
In the event of the merger, consolidation or sale of all or
substantially all of the assets of the holding company or the Bank prior to the
expiration of five (5) years from the date of this Agreement, and if the
Executive is still employed by Bank, then all stock options contemplated by this
Paragraph 9 not yet received by Executive shall immediately be considered earned
by the Executive, as though the required anniversary dates and performance
criteria had been attained, provided the merger consolidation or sale meets or
exceeds one and one-half times of the existing book value of the Bank at date of
sale.
10. Vacations. Executive shall have the right to accrued
vacation of fifteen (15) working days each calendar year for the first year.
These vacation days shall be at full pay earned on a prorated basis for twelve
(12) months of employment. During the last four (4) years of this employment
contract, the Executive shall have the right to twenty (20) working days of
vacation at full pay during each calendar year. Each twenty (20) days shall be
accrued at a prorated basis over twelve (12) months of employment.
11. Employment Stock Option. As inducement for Executive to
forego further employment activities, other than those contemplated by this
Agreement and its attached agreement, Bank agrees to make available to Executive
option rights redeemable in common stock in the amount of 25,000 shares of the
Bank upon the issuance of stock.
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12. Conditions Regarding Stock Options. All stock options
contemplated pursuant to this Agreement are subject to the following terms;
non-transferable, shall expire within ten (10) years from the date of grant or
upon termination (discharge) of this agreement, subject to any and all forfeit
or exercise clause as may be required by the appropriate regulatory authorities,
shall be issued at the higher of the market value as of the date of grant or the
offering price of $10.00 per share.
All options issued to the Executive shall be vested at the rate of 1/3 (33.33%)
per calendar year end after the year issued and each calendar year end
thereafter until fully vested. In the event this agreement is terminated for
reasons other than discharge, all issued options must be exercised within 90
days of separation or said options shall expire.
At no time shall options be issued or redeemable if said Bank is under any form
of notice by the appropriate regulatory authorities.
D. INCAPACITY.
If the Executive should become incapacitated or unable to perform the
duties of his employment hereunder for an aggregate of ninety (90) continuous
days absence in any twelve (12) month period (hereinafter referred to as the
"Disability Period"), the Executive nevertheless shall be entitled to all
compensation and other payments provided hereunder during the Disability Period;
provided, however, that any amount paid the Executive under any disability
insurance will be subtracted from compensation payable to the Executive by the
Bank for a period of one (1) year. If the Executive is incapacitated for a
period which exceeds the one year period, the Executive shall not be entitled to
receive the compensation and other payments provided for by the Bank, other than
the compensation from the Disability Policy hereunder for any time after the end
of the one year period until commences working again for the Bank.
The Executive shall be considered to be incapacitated when he is unable
to perform the normal duties required of him hereunder.
E. TERMINATION AND SEVERANCE.
The term of this Agreement is five (5) years as above provided.
However, either party hereto may terminate this Agreement prior to the
expiration of such five years on sixty (60) days written notice to the other.
In the event of the termination of the Executive by the Bank for cause
(as defined herein), voluntary resignation or because of his death, the
compensation of the Executive shall cease on the effective date of such
termination. In the event the Executive is terminated for reasons other than the
aforementioned reasons the Executive shall be entitled to a severance
compensation equal to one years base salary payable, at the discretion of the
board, as either a lump sum distribution or in 12 monthly installments. In the
event the Executive is terminated prior to one (1) year of service, the amount
of severance will be reduced by the amount of compensation received during the
first year. Payments will be distributed over the same number of months of
service performed during the first year of service.
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F. TRADE SECRETS.
It is recognized between the Bank and the Executive that the Bank will
acquire and develop techniques, plans processes, computer programs and lists of
customers and their particular needs, situations and requirements which may
pertain to many and varied Bank related services and equipment, and related
trade secrets, know-how, research and development, which are secrecy and
confidential in character and are and will continue to be used in its business
(all hereinafter referred to as "Secret Information"). Some of such Secret
Information will be disclosed to and become known by the Executive in the course
of the proper performance of his duties hereunder.
All such Secret Information heretofore or hereafter received by the
Executive shall be kept and maintained by him as confidential and in complete
secrecy. The Executive shall not disclose at any time, either orally, or in
writing or otherwise, in any manner, directly or indirectly, to any person or
firm, except to other directors, officers, and employees of the Bank, any Secret
Information.
Upon termination of his employment hereunder, and regardless of
whether such termination is voluntary or involuntary, the Executive shall
without demand thereof, deliver to the Bank all marketing surveys, operating
manuals, price lists, memoranda, customer lists and information, and all Secret
Information and other written matter emanating from or prepared by the Bank.
G. INSURANCE.
The Bank, at its sole discretion, may apply for insurance in its own
name and for its own benefit covering the Executive for life insurance, in any
amount deemed advisable and the Executive shall have no right, title or interest
therein. The Executive shall submit to any required examination and shall
execute and assign and/or deliver such application and policies necessary to
effectuate such insurance coverage.
H. CONSTRUCTION OF AGREEMENT.
This Agreement was executed by the parties in accordance with and
shall be governed and interpreted in accordance with the laws of the State of
Florida.
I. BENEFITS AND BURDENS.
The Executive recognizes that the Bank has not yet been formed and
that he is being employed to aid the incorporators in its formation.
Accordingly, the individual incorporators, organizers, proposed directors and
officers, committee members and chairmen, and all other participants in the
venture and in the employment of the Executive shall have no liability
whatsoever to the Executive hereunder, or otherwise it being expressly
understood that the Executive is contracting with an entity yet to be formed;
and while such organizers intend to do their best to complete the Bank's
organization, there can be no guarantee or warranty that it can or will be
completed. However, in the event the organization of the Bank is completed, the
Bank hereby ramifies and formally adopts this Agreement and binds the Bank to
its provisions herein contained.
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In the event the Bank as proposed is not organized and does not open by
March 1, 1999, this Agreement shall be null and void and of no effect as to the
parties thereto, their promoters, organizers, and proposed directors.
This Agreement shall inure to the benefit of and be binding upon the
Bank when formed, its successors and assigns, and any corporation with which the
Bank may merge or consolidate or to which the Bank may sell substantially all of
its business and assets, and shall inure to the benefit of and be binding on the
Executive. Since the Executive's duties and services hereunder are special,
personal and unique in nature, the Executive may not sell or otherwise assign
his rights, obligations or benefits under this Agreement.
J. DIRECTORS COMPENSATION.
The Executive will be entitled to all benefits awarded to Board of
Directors, with the exception of compensation granted for committee meeting
participation.
K. ENTIRE AGREEMENT.
This Agreement contains the entire agreement between the parties
relating to the subject matter hereof and supersedes any previous discussions,
negotiations or agreements between the parties, whether written or oral, with
respect to the subject matter hereof. This Agreement cannot be modified, altered
or amended except by a writing, signed by both parties.
L. SEVERABILITY.
If any provision of this Agreement shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect or impair
the validity or unenforceability of the remaining provisions of this Agreement.
M. NO COMPLETE CLAUSE. The Executive covenants that he will not, for a
period of one (1) year after this Agreement is terminated, by either party, with
or without cause, engage in the business of banking with the radius of 50 miles
of Lehigh Acres, Xxx County, Florida.
For a period of one (1) year immediately following termination of
employment, the Executive may not directly or indirectly make known to any
person, firm, or corporation the names or addresses of any of the Bank's
customers or any other information pertaining to the Bank's customers.
Also for a period of one (1) year immediately following termination
of employment, the Executive may not call on, solicit, or attempt to call on,
solicit, or take away any of the Bank's customers called upon by the Executive,
or whom the Executive became acquainted with during the Executive's employment
with the Bank.
N. COMPETITION WITH BANK. The Bank respects the Executive's right to
pursue future career opportunities, and the Bank expects the Executive to
acknowledge the Bank's right to protect its interest, its customers and its
employees. Accordingly, in accepting this offer of employment, the Executive
agrees not to engage in direct competition with the Bank during the term of
employment
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without the expressed written consent of the Bank's Board of Directors. "Direct
Competition" is defined herein as designing, selling or rendering services
similar to those offered by the Bank for the Executive's personal economic
benefit or the economic benefit of any competitive bank who provides services
in any geographical area in which the Bank is engaged. This includes services
rendered as an independent contractor or consultant or as the owner or
shareholder in any other bank.
L. ARBITRATION. In accepting this offer of employment, the Executive
agrees that any dispute arising out of this agreement or out of any termination
of employment, with or without cause, said dispute shall be resolved pursuant
to mandatory arbitration at the written request of either party. This agreement
provides such arbitration shall be complied with and be governed by the
provisions of the Federal Arbitration Act.
N. GOVERNING LAW.
This Agreement shall in all respects be interpreted, construed and
governed by and in accordance with the laws of the State of Florida.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date and year first above written.
Signed, sealed and delivered
in the presence of:
Witnesses as to Bank:
LEHIGH ACRES FIRST NATIONAL BANK/
LEHIGH ACRES FIRST BANCSHARES, INC.
(Sign) /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxx
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(Print) Xxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxx
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Title: Chairman
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(Sign) /s/ Xxxxxxx Xxxxxx
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(Print) Xxxxxxx Xxxxxx
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Witnesses as to Executive:
(Sign) /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxx Xxxxx
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(Print) Xxxxx X. Xxxxxxx Xxxxx Xxxxx, proposed President/CEO
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(Sign) /s/ Xxxxxxx X. Xxxxxx
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(Print) Xxxxxxx X. Xxxxxx
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STATE OF FLORIDA }
}
COUNTY OF XXX }
SWORN TO AND SUBSCRIBED before me this 9th day of October,
1998, by Xxxxx X. Xxxx as Chairman of LEHIGH ACRES FIRST NATIONAL BANK/LEHIGH
ACRES FIRST BANCSHARES, INC., on behalf of the Bank, who is [X] personally
known to me or who has [ ] produced Florida Driver's License No.
___________________________________, as identification.
/s/ Xxxxxxx X. Xxxxxx
----------------------
NOTARY PUBLIC
[Seal] Xxxxxxx Xxxx Xxxxxx
My Commission CC746184
Expires June 1, 2002
STATE OF FLORIDA }
}
COUNTY OF XXX }
SWORN TO AND SUBSCRIBED before me this 9th day of October, 1998, by XXXXX
XXXXX, the Executive, who is [X] personally known to me or who has [ ] produced
Florida Driver's License No. __________________________, as identification.
/s/ Xxxxxxx X. Xxxxxx
----------------------
NOTARY PUBLIC
[Seal] Xxxxxxx Xxxx Xxxxxx
My Commission CC746184
Expires June 1, 2002
Employment Agreement
Lehigh Acres First National Bank and Xxxxx Xxxxx
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