1
EXHIBIT 10
EMPLOYMENT AGREEMENT
This AGREEMENT, made as of ________, 1998, between First American
National Bank, a national banking association ("FANB"), and Xxxxxx Xxxxx
("Executive").
W I T N E S S E T H:
WHEREAS, FANB is regularly engaged in the business of banking and the
providing of financial services; and
WHEREAS, effective as of the date hereof, First American Corporation
("FAC"), the sole shareholder of FANB, has acquired Peoples Bank ("Peoples");
and
WHEREAS, Executive formerly served as President, Chief Executive
Officer and as a director of Peoples and has significant experience and
expertise in the business of banking and the providing of financial services;
and
WHEREAS, FANB wishes to employ Executive upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, premises considered, in consideration of the mutual
covenants set out below, and for other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties hereto, intending
to be legally bound, agree as follows:
1. EMPLOYMENT. FANB shall employ Executive, and Executive accepts
employment with FANB, under the terms and conditions set forth in this Agreement
for the period beginning on the date hereof and ending as provided in paragraph
4 hereof (the "Employment Period"). The date on which Executive ceases to be
employed by FANB and/or its subsidiaries or affiliates (as defined below) or its
successors or assigns is referred to herein as the "Termination Date".
2. POSITION AND DUTIES.
(a) During the Employment Period, Executive shall render
such administrative, sales, marketing and other
executive services to FANB, its affiliates and its
subsidiaries as FANB's board of directors (the "Board")
or its president or his designee may from time to time
direct, including serving as the City President -
Xxxxxxx County and Houston County, Tennessee of FANB.
(b) During the Employment Period, Executive shall devote
his best efforts and his full business time and
attention to the business and affairs of FANB, its
affiliates and its subsidiaries. Executive shall
2
perform his duties and responsibilities to the best of
his abilities in a diligent, trustworthy, businesslike
and efficient manner. During the Employment Period FANB
shall provide Executive with an office located in
Dickson, Tennessee from which the majority of
Executive's duties and responsibilities will be
conducted.
(c) For purposes of this Agreement, "subsidiaries" shall
mean any corporation of which the securities having at
least 50% of the voting power in electing directors are,
at the time of determination, owned by FANB or FAC,
directly or through one or more subsidiaries. The term
"affiliate" shall mean a direct or indirect subsidiary
of either FANB or FAC. For purposes of paragraphs 4(e),
5, 6, and 7 hereof, the term "FANB" shall include any
subsidiary or affiliate of FAC.
(3) SALARY AND BENEFITS.
(a) During the Employment Period, Executive's base salary
shall be $165,000 per annum or such higher rate as may
be determined from time to time in accordance with the
policies and procedures of FANB (the "Base Salary"). The
Base Salary shall be payable in regular installments in
accordance with FANB's general payroll practices. In
addition, during the Employment Period, Executive shall
be entitled to participate in all of FANB's benefit
programs for which similarly situated employees of FANB
and its subsidiaries are generally eligible. Executive
shall also receive a bonus, payable on December 31,
1998, in an amount not to exceed $27,500 for services
rendered to FANB in 1998 and shall not be entitled to
participate in any FAC annual incentive plan in 1998;
such bonus shall be accrued by Peoples prior to the date
hereof. On or after January 1, 1999, and until the
Termination Date, Executive shall also be entitled to
participate in any FAC annual incentive plan for
similarly situated employees during the Term hereof.
(b) FANB shall reimburse Executive for all reasonable
expenses incurred by him in the course of performing his
duties under this Agreement which are consistent with
FANB's policies in effect from time to time with respect
to travel, entertainment and other business expenses,
subject to FANB's requirements with respect to reporting
and documentation of such expenses.
(c) At Closing, as that term is defined in the Agreement
and Plan of Exchange dated April 21, 1998 by and between
FAC and Peoples, Executive shall be entitled to purchase
a 1997 Lincoln ______
3
(VIN# ____________) from FANB at fair market value as
set forth by the National Auto Dealers Association.
4. TERM.
(a) The Employment Period shall end on December 31, 2000
unless renewed by mutual written agreement of the
parties hereto prior to that or any subsequent
Termination Date for an additional one year period;
provided that (i) the Employment Period shall terminate
prior to such date upon Executive's resignation, death
or permanent disability or incapacity and (ii) the
Employment Period may be terminated by FANB at any time
prior to such date for Cause (ad defined below) or
without Cause.
(b) If the Employment Period is terminated by FANB without
Cause prior to the Termination Date, Executive shall be
entitled to receive one-half of his Base Salary, as in
effect immediately prior to the Termination Date,
through, and in consideration for, the Noncompete
Period, so long as Executive has not materially breached
the provisions of this Agreement. The Base Salary
payments described in this paragraph 4(b) shall be
payable in regular installments in accordance with
FANB's general payroll practices.
(c) If the Employment Period is terminated as a result of
Executive's death or permanent disability or incapacity,
Executive or his estate shall be entitled to receive his
Base Salary, as in effect immediately prior to the
Termination Date through the Termination Date.
(d) All of Executive's rights to benefits and bonuses
hereunder (if any) accruing after the Termination Date
shall cease upon such termination.
(e) For purposes of this Agreement, "Cause" shall mean (i)
the commission of a felony or a crime involving
dishonesty or moral turpitude or the commission of any
other act involving dishonesty, disloyalty or fraud with
respect to FANB or any of its subsidiaries or
affiliates; (ii) repeated failure to follow instructions
of FANB or its policies, standards and regulations as
directed by FANB's president or his designee, (iii)
Executive has committed a violation of any laws and/or
regulations applicable to FANB and/or its affiliates;
(iv) continued failure or refusal to faithfully and
diligently perform the usual, customary duties of
Executive's employment hereunder; (v) Executive's
conducting himself in a manner that discredits FANB or
its affiliates or is detrimental to
4
the reputation, character and standing of FANB; or (vi)
any other material breach of this Agreement.
5. CONFIDENTIAL INFORMATION. The Executive acknowledges that the
information, observations and data obtained by him while employed by FANB
concerning the business or affairs of FANB, any of its affiliates or any
subsidiary ("Confidential Information") are the property of FANB or such
affiliate or subsidiary, as the case may be. Therefore, Executive agrees not to
disclose to any unauthorized person or use for Executive's own account any
Confidential Information without the prior written consent of FANB, unless and
to the extent that the aforementioned matters become generally known to and
available for use by the public other than as a result of Executive's acts or
omissions to act. Executive shall deliver to FANB at the termination of the
Employment Period, or at any other time FANB may request, all memoranda, notes,
plans, records, reports, computer tapes and software and other documents and
data (and copies thereof) relating to the Confidential Information, Work Product
or the business of FANB, any of its affiliates or any subsidiary which Executive
may then possess or have under his control.
6. INTELLECTUAL PROPERTY. Executive agrees that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports, and all similar or related information which relates to FANB's or any
of its subsidiaries' actual or anticipated business, research and development or
existing or future products or services and which are conceived, developed or
made by Executive while employed by FANB and/or its subsidiaries ("Work
Product") belong to FANB or such subsidiary. Executive will promptly disclose
such Work Product to the Board and perform all actions reasonably requested by
the Board (whether during or after the Employment Period) to establish and
confirm such ownership (including, without limitation, assignments, consents,
powers of attorney and other instruments).
7. NON-COMPETE, NON-SOLICITATION.
(a) Executive acknowledges that in the course of his
employment with FANB he has become and will become
familiar with the information concerning FANB, its
affiliates and subsidiaries and that his services have
been and will be of special, unique and extraordinary
value to FANB. Therefore, Executive agrees that, so long
as there is no default by FANB hereunder, during the
Employment Period and for twelve months thereafter (the
"Noncompete Period"), Executive shall not directly or
indirectly organize, own, manage, advise, control,
participate in, consult with, render services for, or in
any manner engage in any business competing with the
businesses of FANB or its subsidiaries or affiliates as
such businesses exist or are in the process on the date
of the termination of Executive's employment, within
Dickson or Houston Counties, Tennessee or within a
radius of 30 miles of the county lines thereof in which
FANB or its subsidiaries engage or
5
have plans to engage in such businesses. Nothing herein
shall prohibit Executive from being a passive owner of
not more than 1% of the outstanding stock of any class
of a corporation so long as Executive has no active
participation in the business of such corporation.
(b) During the Noncompete Period, Executive shall not
directly or indirectly through another entity (i) induce
or attempt to induce any employee of FANB or any
affiliate or subsidiary to leave the employ of FANB or
affiliate or subsidiary, or in any way interfere with
the relationship between FANB or any subsidiary or
affiliate and any employee thereof, (ii) hire any person
who was an employee of FANB or any subsidiary or
affiliate at any time during the Employment Period, or
(iii) induce or attempt to induce any customer,
supplier, licensee or other business relation of FANB or
any affiliate or subsidiary to cease doing business with
FANB or affiliate or subsidiary, or in any way interfere
with the relationship between any such customer,
supplier, licensee or business relation and FANB or any
affiliate or subsidiary.
8. ENFORCEMENT. If, at the time of enforcement of paragraph 5, 6 or 7
of this Agreement, a court holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that
the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area. Because
Executive's services are unique and because Executive has access to Confidential
Information and Work Product, the parties hereto agree that money damages would
be an inadequate remedy for any breach of this Agreement. Therefore, in the
event of a breach of threatened breach of this Agreement, FANB or its successors
or assigns may, in addition to other rights and remedies existing in their
favor, apply to any court of competent jurisdiction for specific performance
and/or injunctive or other relief in order to enforce, or prevent any violations
of, the provisions hereof (without posting a bond or other security).
9. EXECUTIVE REPRESENTATIONS. Executive hereby represents and warrants
to FANB that (i) the execution, delivery and performance of this Agreement by
Executive does not and will not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or decree to
which Executive is a party or by which he is bound, (ii) Executive is not a
party to or bound by an employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity and (iii) upon the
execution and delivery of this Agreement by FANB, this Agreement shall be the
valid and binding obligation of Executive, enforceable in accordance with its
terms.
10. SURVIVAL. Paragraphs 5, 6 and 7 shall survive and continue in full
force in accordance with their terms notwithstanding any termination of the
Employment Period.
6
11. NOTICES. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, or mailed by first class mail,
return receipt requested, to the recipient at the address below indicated:
Notice to Executive:
Xxxxxx Xxxxx
X.X. Xxx 000
Xxxxxxx, XX 00000
With a copy to:
Xxx Xxxxxxxx, Esq.
Bass, Xxxxx & Xxxx
Suite 0000
Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Notice to FANB:
First American National Bank
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: President
With a copy to:
Xxxx Xxxx Xxxxx, Esq.
First American National Bank
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or mailed.
12. 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 invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
13. COMPLETE AGREEMENT. This Agreement embodies the complete agreement
and understanding among the parties and supersedes and preempts any prior
7
understandings, agreements or representations by or among the parties, written
or oral, which may be related to the subject matter hereof in any way.
14. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
15. SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive, FANB and their
respective heirs, successors and assigns, except that Executive may not assign
his rights or delegate his obligations hereunder.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Tennessee, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of Tennessee or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of Tennessee. The parties
agree that the courts of Davidson County, Tennessee shall have exclusive
jurisdiction over any dispute arising hereunder.
17. AMENDMENT AND WAIVER. The provisions of this Agreement may be
amended or waived only with the prior written consent of FANB and Executive, and
no course of conduct or failure or delay in enforcing the provisions of this
Agreement shall affect the validity, binding effect or enforceability of this
Agreement.
18. DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
FIRST AMERICAN NATIONAL BANK
By:
----------------------------
Xxxx X. Xxxxxx
Title:
-------------------------
"Executive"
-------------------------------
Xxxxxx Xxxxx
