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EXHIBIT (10)-1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made by and among
WARRIOR CAPITAL CORPORATION (the "Company"), and Xxxxx X. Xxxxxx, an individual
resident of Alabama (the "Executive") as of the 1st day of November, 1997.
1. Employment. The Company shall employ the Executive, and the
Executive shall continue to serve the Company, as Chairman of the Board,
President and Chief Executive Officer and as Chairman of the Board of a bank to
be based in Birmingham which will be the Company's Birmingham bank subsidiary, a
wholly owned subsidiary of the Company, and any other position agreed upon by
the parties, upon the terms and conditions set forth herein. The Executive shall
have such authority and responsibilities consistent with his position and which
may be set forth in the Company's bylaws or assigned by the Company's Board from
time to time. The Executive shall devote his business time, attention, skill and
efforts to the performance of his duties hereunder, except during periods of
illness or periods of vacation and leaves of absence consistent with Company
policy. The Executive may devote reasonable periods of time to serve as a
director or advisor to other organizations, to charitable and community
activities and to managing his personal investments, provided that such
activities do not materially interfere with the performance of his duties
hereunder and are not in conflict or competitive with, or adverse to, the
interests of the Company.
2. Term. Unless earlier terminated as provided herein, the Executive's
employment under this Agreement shall be for a continuing term (the "Term") of
three years which shall be extended automatically (without further action of the
Company or the Executive) each day for an additional day so that the remaining
term shall continue to be three years; provided that either
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party may at any time, by written notice to the other, fix the Term to a finite
term of three years, without further automatic extension, commencing with the
date of such notice.
3. Compensation and Benefits.
(a) Executive shall receive a base salary of $150,000 per annum,
pro rated, for work done pursuant to this Agreement between the date of its
signing and December 31, 1997. The base salary shall be paid monthly. Beginning
January 1, 1998, the Company shall pay the Executive a salary at a rate of not
less than $150,000 per annum for the first full calendar year of this Agreement
(through December 31, 1998), $200,000 per annum for the second full calendar
year of this Agreement (through December 31, 1999) and $250,000 per annum for
the third full calendar year of this Agreement; provided, however, that in the
event of a Change in Control or an initial public offering by the Company, the
Executive's base salary shall be at least $250,000. The Company's Board (or its
compensation committee) shall review the Executive's salary at least annually
and may increase the Executive's base salary if it determines in its sole
discretion that an increase is appropriate. The Company or the Bank shall also
pay to the Executive Directors' fees for serving on the various Board of
Directors of the Company, the Bank or any branches of the Bank or any other
subsidiaries of the Company or the Bank.
(b) The Executive shall participate in a management incentive
program and shall receive quarterly payments of fifteen percent (15%) of his
annual base salary then in effect. The first quarterly bonus payment shall be
due March 31, 1998 for the quarter then ended. In addition, the Company's Board
of Directors shall annually consider the Executive's performance, and determine
if any additional bonus is appropriate.
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(c) If at any time during the Term, or within 90 days thereafter,
the Company completes an Initial Public Offering or if there shall occur a
Change in Control, the Executive shall be granted an option to purchase shares
of the voting common stock of the Company, which option shall be fully vested at
the date of grant. The number of shares, the purchase price of each share and
the term of the option shall be determined by the Board of Directors of the
Company. In addition, in the event the Company shall adopt a stock option plan
in the future, the Executive shall be entitled to participate in and be eligible
for the grant of stock options, restricted stock and other awards thereunder.
(d) The Executive shall participate in all retirement, welfare,
deferred compensation, life and health insurance and other benefit plans or
programs of the Company now or hereafter applicable to the Executive or
applicable generally to employees of the Company or to a class of employees that
includes senior executives of the Company upon reaching 64 years of age. Prior
to reaching age 64, the Executive may participate in all retirement, welfare,
deferred compensation, life and health insurance and other benefit plans or
programs of the Company now or hereafter applicable to the Executive or
applicable generally to employees of the Company or to a class of employees that
includes senior executives of the Company if Executive is not covered under any
similar plan or plans, the premium or provision of which are paid by third
parties. During any period during the Term that the Executive is subject to a
Disability, and during the 180 day period of physical or mental infirmity
leading up to the Executive's Disability, the amount of the Executive's
compensation provided under this Section 3 shall be reduced by the sum of the
amounts, if any, paid to the Executive for the same period under any disability
benefit or pension plan of the Company or any of its subsidiaries. The Company
shall purchase a "Key Man" life
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insurance policy in the face amount of $6,000,000 and disability insurance with
a benefit of up to a maximum of $25,000 per month, assuming Executive qualifies
for such an amount of disability insurance under such benefit programs or plans.
Upon the expiration of five years from the date hereof, Executive shall be
entitled to purchase this policy from the Company. Executive shall also be
entitled to receive up to $10,000 per annum for medical expenses not covered by
insurance.
(e) The Company shall provide to the Executive an automobile owned
or leased by the Company of a make and model appropriate to the Executive's
status or, in lieu thereof, shall provide the Executive with an annual allowance
of not less than $15,000 to partially cover the cost of the business use of an
automobile owned or leased by the Executive.
(f) The Company shall reimburse the Executive's reasonable
expenses for initiation fees, dues and capital assessments for athletic, country
and dining club memberships currently held by the Executive; provided that if
the Executive during the term of his employment with the Company ceases his
membership in any such clubs and any bonds or other capital payments made by the
Company are repaid to the Executive, the Executive shall pay over such payments
to the Company.
(g) The Company shall reimburse the Executive for travel, seminar
and other expenses related to the Executive's duties which are incurred and
accounted for in accordance with the historic practices of the Company.
(h) Executive shall be entitled to four weeks of paid vacation per
year.
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4. Termination.
(a) The Executive's employment under this Agreement may be
terminated prior to the end of the Term only as follows:
(i) upon the death of the Executive;
(ii) by the Company due to the Disability of the Executive
upon delivery of a Notice of Termination to the Executive;
(iii) by the Company for Cause upon delivery of a Notice of
Termination to the Executive; and
(iv) by the Executive for Good Reason upon delivery of a
Notice of Termination to the Company after any occurrence of a Change
in Control or in the event of a Constructive Termination.
(b) If the Executive's employment with the Company shall be
terminated during the Term (i) by reason of the Executive's death, or (ii) by
the Company for Disability or Cause, the Company shall pay to the Executive (or
in the case of his death, the Executive's estate) within fifteen days after the
Termination Date a lump sum cash payment equal to the Accrued Compensa tion and,
if such termination is other than by the Company for Cause, the Pro Rata Bonus.
(c) If the Executive's employment with the Company shall be
terminated by the Company in violation of this Agreement, by the Executive for
Good Reason or in the event of a Constructive Termination, in addition to other
rights and remedies available in law or equity, the Executive shall be entitled
to the following:
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(i) the Company shall pay the Executive in cash within
fifteen days of the Termination Date an amount equal to all Accrued
Compensation and the Pro Rata Bonus;
(ii) the Company shall pay to the Executive in cash at the
end of each of the thirty-six consecutive thirty day periods following
the Termination Date an amount equal to one-twelfth of the sum of the
Base Amount (including any increases in base salary called for by
Section 3(a) of this Agreement) plus the Bonus Amount (including any
increases in bonus amount called for by Section 3(b) of this Agreement)
plus all benefits provided in Section 3 and all Director's fees,
including retainers, to which the Executive would be entitled for the
same period, or within 30 days, at the Executive's option, a lump sum
equal to the present value of the payments due under this paragraph
(c)(ii); provided, however, that such lump sum amount shall be reduced
to its net present value assuming an interest rate equal to six percent
(6%) and 36 equal monthly payments commencing on the Termination Date;
(iii) for the period from the Termination Date through the
date that Executive attains the age of 75 (the "Continuation Period"),
the Company shall at its expense continue on behalf of the Executive
and his dependents and beneficiaries the life insurance, disability,
medical, dental and hospitalization benefits provided (x) to the
Executive at any time during the 90-day period prior to the Change in
Control or at any time thereafter or (y) to other similarly situated
executives who continue in the employ of the Company during the
Continuation Period. The
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coverage and benefits (including deductibles and costs) provided in
this Section 4(c)(iii) during the Continuation Period shall be no less
favorable to the Executive and his dependents and beneficiaries than
the most favorable of such coverages and benefits during any of the
periods referred to in clauses (x) and (y) above. The Company's
obligation hereunder with respect to the foregoing benefits shall be
limited to the extent that the Executive obtains any such benefits
pursuant to a subsequent employer's benefit plans, in which case the
Company may reduce the coverage of any benefits it is required to
provide the Executive hereunder as long as the aggregate coverages and
benefits of the combined benefit plans are no less favorable to the
Executive than the coverages and benefits required to be provided
hereunder. Further, all benefits under this subsection (iii) (other
than health insurance and other medical and hospitalization benefits
which shall continue for the entire Continuation Period) shall not be
continued longer than three years after the Termination Date, even if
the Executive has not obtained such other benefits under another
employer's benefit plan. This subsection (iii) shall not be interpreted
so as to limit any benefits to which the Executive or his dependents or
beneficiaries may be entitled under any of the Company's employee
benefit plans, programs or practices following the Executive's
termination of employment, including without limitation, retiree
medical and life insurance benefits; and
(iv) the restrictions on any outstanding incentive awards
(including stock options) granted to the Executive under any Company's
stock option plan or under any other incentive plan or arrangement
shall lapse and such incentive award shall
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become 100% vested, all stock options and stock appreciation rights
granted to the Executive shall be immediately exercisable and shall be
100% vested. The period in which Executive may exercise any option
granted shall be the full term of such option.
(d) The Executive shall not be required to mitigate the amount of
any payment provided for in this Agreement by seeking other employment or
otherwise, and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Executive in any subsequent employment
except as provided in Section 4(c)(iii).
(e) In the event that any payment or benefit (within the meaning
of Section 280 G(b)(2) of the Internal Revenue Code of 1986, as amended (the
"Code")) to the Executive (or for his benefit) paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise in connection
with, or arising out of, his relationship with the Company or a change in
ownership or effective control of the Company or of a substantial portion of its
assets (a "Payment" or "Payments"), would be subject to the excise tax imposed
by Section 4999 of the Code or if that certain Plan and Agreement of Merger
dated as of November 1, 1997 by and between Xxxxxx Acquisition Corporation,
Warrior Capital Corporation and Warrior Merger Corporation was determined not to
be a valid tax-free reorganization pursuant to Section 368 of the Code and the
Executive was found to owe tax on the Merger Consideration as defined therein,
or any interest or penalties are incurred by the Executive with respect to any
such excise or other taxes (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax" and any
other tax together with any such interest and penalties are herein referred to
as "Other Taxes"), then the Executive will be entitled to receive an additional
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payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties, other than interest
and penalties imposed by reason of the Executive's failure to file timely a tax
return or pay taxes shown due on his return, imposed with respect to such Other
Tax and the Excise Tax), including any Excise Tax or Other Tax imposed upon the
Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal
to the Excise Tax or Other Taxes imposed upon the Payments.
(f) The severance pay and benefits provided for in this Section 4
shall be in lieu of any other severance or termination pay to which the
Executive may be entitled under any Company severance or termination plan,
program, practice or arrangement. The Executive's entitlement to any other
compensation or benefits shall be determined in accordance with the Company's
employee benefit plans and other applicable programs, policies and practices
then in effect.
5. Trade Secrets. The Executive shall not, at any time, either
during the Term of his employment or after the Termination Date, if such
Termination is for cause, use or disclose any Trade Secrets of the Company,
except in fulfillment of his duties as the Executive during his employment, for
so long as the pertinent information or data remain Trade Secrets, whether or
not the Trade Secrets are in written or tangible form.
6. Successors; Binding Agreement.
(a) This Agreement shall be binding upon and shall inure to the
benefit of the Company, its Successors and Assigns and the Company shall
require any Successors and Assigns to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place.
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(b) Neither this Agreement nor any right or interest hereunder
shall be assignable or transferable by the Executive, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal personal representative.
7. Fees and Expenses. The Company shall pay all legal fees and
related expenses (including but not limited to the costs of experts, accountants
and counsel) incurred by the Executive as they become due as a result of (a) the
Executive's termination of employment (including all such fees and expenses, if
any, incurred in contesting or disputing any such termination of employment)
and (b) the Executive seeking to obtain or enforce any right or benefit provided
by this Agreement; provided, however, that the circumstances set forth in
clauses (a) and (b) occurred on or after a Change in Control.
8. Notice. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses last given by each party
to the other, provided that all notices to the Company shall be directed to the
attention of the Board of Directors with a copy to the Secretary of the Company.
All notices and communications shall be deemed to have been received on the date
of delivery thereof.
9. Settlement of Claims. The Company's obligation to make the
payments provided for in this Agreement and to otherwise perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Executive or others. The Company may,
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however, withhold from any benefits payable under this Agreement all federal,
state, city or other taxes as shall be required pursuant to any law or
governmental regulation or ruling,
10. Modification and Waiver. No provisions of this Agreement may
be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing and signed by the Executive and the Company. No waiver
by any party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
11. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Alabama
without giving effect to the conflict of laws principles thereof. Any action
brought by any party to this Agreement shall be brought and maintained in a
court of competent jurisdiction in the State of Alabama.
12. Severability. The provisions of this Agreement shall be deemed
severable, and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
13. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof.
14. Headings. The headings of Sections herein are included solely
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement.
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15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
16. Demand Registration Rights.
(a) Subject to the provisions of this Section 16(a), upon the
Executive's termination of employment, for any reason, and after the Company
completes its Initial Public Offering the Executive may request registration for
sale under the Act of all or part of the Common Stock then held by him
(excluding, for purposes of this Section 16(a), shares subject to the stock
options held by the Executive as to which the vesting provisions shall not have
lapsed). Any such request shall specify the number of shares proposed to be
registered and sold and the name of the managing underwriter of the proposed
offering (who must be acceptable to the Company in its reasonable discretion).
(b) Exceptions. The Company shall not be required to effect a
demand registration under the Act pursuant to Section 16(a) above if (i) the
aggregate market value of the shares of Common Stock proposed to be registered
does not equal or exceed $1,000,000; (ii) within twelve months prior to any such
request for registration, a registration of securities of the Company has been
effected in which the Executive had the right to participate pursuant to this
Section 16 or Section 17 hereof; (iii) the Company receives such request for
registration within 180 days preceding the anticipated effective date of a
proposed underwritten public offering of securities of the Company approved by
the Company's Board of Directors prior to the Company's receipt of such request;
or (iv) the Board of Directors of the Company reasonably determines in good
faith that effecting such a demand registration at such time would have a
material adverse effect upon
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a proposed sale of all (or substantially all) of the assets of the Company, or a
merger, reorganization, recapitalization or similar transaction materially
affecting the capital structure or equity ownership of the Company which is
actively being negotiated with another party whose identity is disclosed to the
Executive; provided, however, that the Company may only delay a demand
registration pursuant to this Section 16(b)(iv) for a period not exceeding 6
months (or until such earlier time as such transaction is consummated or no
longer proposed). The Company shall promptly notify the Executive in writing of
any decision not to effect any such request for registration pursuant to this
Section 16(b), which notice shall set forth in detail the reason for such
decision and shall include an undertaking by the Company to promptly notify the
Executive as soon as a demand registration may be effected.
(c) Reduction. If the managing underwriters advise the Company and
the Executive participating in the demand registration in writing that in their
opinion the number of shares of Common Stock held by the Executive which they
requested to be included in such registration exceeds the number which can be
sold in such offering, then the amount of such shares that may be included in
such registration shall be reduced to the number of shares that the managing
underwriters determine is marketable.
(d) Withdrawal. The Executive may withdraw at any time before a
registration state ment filed pursuant to this section is declared effective, in
which event the Company may withdraw such registration statement. If the
Company withdraws a registration statement under this Section 16(d) in respect
of a registration for which the Company would otherwise be required to pay some
expenses under Section 18(c), (d) and (e) hereof, then the Executive shall be
liable to the Company for all expenses of such registration specified in Section
18(c), (d) and (e) hereof.
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17. Piggyback Registration Rights.
(a) Rights. Subject to the provisions of this Section 17, after
the Company completes its Initial Public Offering, if the Company proposes to
make a registered public offering of any of its securities under the Act
(whether to be sold by it or by one or more third parties), other than an
offering pursuant to a demand registration under Section 16 hereof or an
offering registered on Form X-0, Xxxx X-0 or comparable forms, the Company
shall, not less than 45 days prior to the proposed filing date of the
registration form, give written notice of the proposed registration to the
Executive, and at the written request of the Executive delivered to the Company
within 15 days after the receipt of such notice, shall include in such
registration and offering, and in any underwriting of such offering, all shares
of Common Stock as may have been designated in the Executive's request.
(b) Primary Offering Reduction. If a registration in which the
Executive has the right to participate pursuant to this Section 17 is an
underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering, the Company shall include in such
registration (i) first, the securities of the Company proposed to be sold, and
(ii) second, the Common Stock owned by the Executive.
(c) Secondary Offering Reduction. If a registration in which the
Executive has the right to participate pursuant to this Section 17 is an
underwritten secondary registration, and the managing underwriters advise the
Company in writing that in their opinion the number of shares requested to be
included in such registration exceeds the number of shares which can be sold in
such offering, then the Company shall include in such offering the number of
shares of Common
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Stock owned and proposed to be sold by the Company and by any other participants
(including Executive) proposing (and entitled) to sell shares pursuant to such
registration which the underwriters advise the Company can be sold in the
offering, in proportion to the number of shares of Common Stock so requested by
each of them to be included.
18. Other Registration Issues.
(a) The Company shall have no obligation to file a registration
statement pursuant to Section 16 hereof, or to include shares of Common Stock
owned by the Executive in a registration statement pursuant to Section 17
hereof, unless and until the Executive has furnished the Company with all
information and statements about or pertaining to the Executive in such
reasonable detail as is reasonably deemed by the Company to be necessary or
appropriate with respect to the preparation of the registration statement.
Whenever any Executive has requested that any shares of Common Stock be
registered pursuant to Sections 16 or 17 hereof, subject to the provisions of
those Sections, the Company shall, as expeditiously as reasonably possible:
(i) prepare and file with the SEC a registration
statement with respect to such shares and use its best efforts to cause
such registration statement to become effective as soon as reasonably
practicable thereafter (provided that before filing a registration
statement or prospectus or any amendments or supplements thereto, the
Company shall furnish counsel for the Executive with copies of all such
documents proposed to be filed);
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for a period of not less than
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nine months or until the underwriters have completed the distribution
described in such registration statement, whichever occurs first;
(iii) furnish to the Executive such number of copies of
such registration statement, each amendment and supplement thereto, the
prospectus included in such registration statement (including each
preliminary prospectus), and such other documents as the Executive may
reasonably request;
(iv) use its best efforts to register or qualify such
shares under such other securities or Blue Sky Laws of such
jurisdictions as the Executive reasonably requests (and to maintain
such registrations and qualifications effective for a period of nine
months or until the underwriters have completed the distribution of
such shares, whichever occurs first), and to do any and all other acts
and things which may be necessary or advisable to enable the Executive
or underwriters to consummate the disposition in such jurisdictions of
such shares; provided, however, that the Company will not be required
to (a) qualify generally to do business in any jurisdiction where it
would not be required but for this Section 18(a)(iv), or (b) subject
itself to taxation in any such jurisdiction; provided, further, that,
notwithstanding anything to the contrary in this Agreement with
respect to the bearing of expenses, if any such jurisdiction shall
require that expenses incurred in connection with the qualification of
such shares in that jurisdiction be borne in part or full by the
Executive, then the Executive shall pay such expenses to the extent
required by such jurisdiction;
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(v) cause all such shares to be listed on securities
exchanges, if any, on which similar securities issued by the Company
are then listed;
(vi) provide a transfer agent and registrar for all such
shares not later than the effective date of such registration
statements;
(vii) enter into such customary agreements (including an
underwriting agreement in customary form) and take all such other
actions as the Executive and underwriters reasonably request (and
subject to approval by the Company's counsel) in order to expedite or
facilitate the disposition of such shares; and
(viii) make available for inspection by the Executive, by
any underwriter participating in any distribution pursuant to such
registration statement, and by any attorney, accountant or other agent
retained by the Executive or underwriter, or by any such underwriter,
all financial and other records, pertinent corporate documents, and
properties (other than confidential intellectual property) of the
Company; provided, however, that the Company can condition delivery of
any informaion, records or corporate documents upon the receipt from
the Executive and the underwriter and their counsel, accountants,
advisors and agents, of a confidentiality agreement in form and
substance acceptable to the Company and its counsel in the exercise of
their exclusive discretion,
(b) Holdback Agreement. In the event that the Company effects an
underwritten public offering of any of the Company's equity securities, the
Executive agrees, if requested by the managing underwriters, not to effect any
sale or distribution, including any sale pursuant to Rule 144
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under the Act, of any equity securities (except as part of such underwritten
offering) during the 180-day period commencing with the effective date of the
registration statement for such offering.
(c) Stockholder Expenses. If, pursuant to Section 16 or 17 hereof,
shares of Common Stock owned by the Executive are included in a registration
statement, then the Executive shall pay all transfer taxes, if any, relating to
the sale of his shares, the fees and expenses of his own counsel, and his pro
rata portion of any underwriting discounts, fees or commissions or the
equivalent thereof.
(d) The Company's Expenses. Except for the fees and expenses
specified in Section 18(c) hereof and except as provided in this Section 18(d),
the Company shall pay all expenses incident to the registration and to the
Company's performance of or compliance with this Agreement, including, without
limitation, all registration and filing fees, fees and expenses of compliance
with securities or Blue Sky Laws, underwriting discounts, fees and commissions
(other than the Executive's pro rata portion of any underwriting discounts or
commissions or the equivalent thereof), printing expenses, messenger and
delivery expenses, and fees and expenses of counsel for the Company and all
independent certified public accountants and other persons retained by the
Company. If the Company shall previously have paid, pursuant to this Section
18(d), the expenses of a registration, then the Executive shall pay all expenses
described in this Section 18(d) (but not expenses described in Section 18(e)
hereof).
(e) Other. With respect to any registration pursuant to Section 16
or 17 hereof, the Company shall pay its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties) and the expenses and fees for
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listing the securities to be registered on exchanges on which similar securities
issued by the Company are then listed.
(f) Indemnity. In the event that any shares of Common Stock owned
by the Executive are offered or sold by means of a registration statement
pursuant to Section 16 or 17 hereof, the Company agrees to indemnify and hold
harmless the Executive and each person, if any, who controls or may control the
Executive within the meaning of the Act (the Executive and any such other
persons being hereinafter referred to individually as an "Indemnified Person"
and collectively as "Indemnified Persons") from and against all demands, claims,
actions or causes of action, assessments, losses, damages, liabilities, costs
and expenses, including, without limitation, interest, penalties and reasonable
attorneys fees and disbursements, asserted against, resulting to, imposed upon
or incurred by such Indemnified Person, jointly or severally, directly or
indirectly (hereinafter referred to in this Section 18(f) in the singular as a
"claim" and in the plural as "claims"), based upon, arising out of or resulting
from any untrue statement or alleged untrue statement of a material fact
contained in the registration statement, any preliminary or final prospectus
contained therein, or any amendment or supplement thereto, or any document
incident to registration or qualification of any such shares, or any omission or
alleged omission to state therein a material fact necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading, or any violation by the Company of the Act of any state
securities or Blue Sky Laws, except insofar as such claim is based upon, arises
out of or results from information developed or certified by the Executive for
use in connection with the registration statement or arises out of or results
from the omission of information and known to the Executive prior to the
violation or alleged violation, provided, that the maximum amount of
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liability in respect of such indemnification shall be limited, in the case of
the Company or the Executive, respectively, to an amount equal to the net
proceeds actually received by the Company or the Executive, respectively, from
the sale of such shares effected pursuant to such registration. The Executive
agrees to indemnify and hold harmless the Company, its officers and directors,
and each person, if any, who controls or may control the Company within the
meaning of the Act (the Company, its officers and directors, and any such
persons also being hereinafter referred to individually in this context as an
"Indemnified Person" and collectively as "Indemnified Persons") from and against
all claims based upon, arising out of, or resulting from any untrue statement of
a material fact contained in the registration statement, or any omission to
state therein a material fact necessary in order to make the statement made
therein, in the light of the circumstances under which they were made, not
misleading, to the extent that such claim is based upon, arises out of, or
results from information developed or certified by the Executive for use in
connection with the registration statement or arises out of, or results from an
omission of information known to the Executive prior to the violation or alleged
violation. The indemnifications set forth herein shall be in addition to any
liability the Company or the Executive may otherwise have to the Indemnified
Persons. Promptly after actually receiving definitive notice of any claim in
respect of which an Indemnified Person may seek indemnification under this
Section 18(f), such Indemnified Person shall submit written notice thereof to
either the Company or the Executive, as the case may be (sometimes being
hereinafter referred to as an "Indemnifying Person"). The omission of the
Indemnified Person to so notify the Indemnifying Person of any such claim shall
not relieve the Indemnifying Person from any liability it may have hereunder
except to the extent that (a) such liability was caused or increased by such
omission, or (b) the ability of the
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Indemnifying Person to reduce such liability was materially adversely affected
by such omission. In addition, the omission of the Indemnified Person to notify
the Indemnifying Person of any such claim shall not relieve the Indemnifying
Person from any liability it may have otherwise than hereunder. The Indemnifying
Person shall have the right to undertake, by counsel or representatives of its
own choosing, the defense, compromise or settlement (without admitting liability
of the Indemnified Person) of any such claim asserted, such defense, compromise
or settlement to be undertaken at the expense and risk of the Indemnifying
Person, and the Indemnified Person shall have the right to engage separate
counsel, at its own expense, whom counsel for the Indemnifying Person shall keep
informed and consult with in a reasonable manner. In the event the Indemnifying
Person shall elect not to undertake such defense by its own representatives, the
Indemnifying Person shall give prompt written notice of such election to the
Indemnified Person, and the Indemnified Person shall undertake the defense,
compromise or settlement (without admitting liability of the Indemnified Person)
thereof on behalf of and for the account and risk of the Indemnifying Person by
counsel or other representatives designed by the Indemnified Person. In the
event that any claim shall arise out of a transaction or cover any period or
periods wherein the Company and the Executive shall each be liable hereunder for
part of the liability or obligation arising therefrom, then the parties shall,
each choosing its own counsel and bearing its own expenses, defend such claim,
and no settlement or compromise of such claim may be made without the joint
consent or approval of the Company and the Executive. Notwithstanding the
foregoing, no Indemnifying Person shall be obligated hereunder with respect to
amounts paid in settlement or any claim if such settlement is effected without
the consent of such Indemnifying Person (which consent shall not be unreasonably
withheld).
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19. Definitions. For purposes of this Agreement, the following
terms shall have the following meanings:
(a) "Accrued Compensation" shall mean an amount which shall
include all amounts earned or accrued through the Termination Date but not paid
as of the Termination Date including without limitation, (i) base salary, (ii)
reimbursement for reasonable and necessary expenses incurred by the Executive on
behalf of the Company during the period ending on the Termination Date, and
(iii) bonuses and incentive compensation, including stock options, (other than
the Pro Rata Bonus).
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Base Amount" shall mean the greater of the Executive's annual
base salary (i) at the rate in effect on the Termination Date or (ii) at the
highest rate in effect at any time during the ninety day period prior to the
Change in Control, and shall include all amounts of his base salary that are
deferred under the qualified and non-qualified employee benefit plans of the
Company or any other agreement or arrangement,
(d) "Bonus Amount" shall mean the greater of (i) the most recent
annual bonus paid or payable to the Executive, or, if greater, the annual bonus
paid or payable for the year ended prior to the fiscal year during which a
Change in Control occurred, (ii) the average of the annual bonuses paid or
payable during the three full fiscal years ended prior to the Termination Date
or, if greater, the three full fiscal years ended prior to the Change in Control
(or, in each case, such lesser period for which annual bonuses were paid or
payable to the Executive), or (iii) the bonuses scheduled to be paid quarterly
during the applicable year during the Term under Section 3(a).
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(e) The termination of the Executive's employment shall be for
"Cause" if it is a result of:
(i) any act that (A) constitutes, on the part of the
Executive, fraud, dishonesty gross or malfeasance of duty and (B) is
demonstrably likely to lead to material injury to the Company or
resulted or was intended to result in direct or indirect gain to or
personal enrichment of the Executive; or
(ii) the conviction (from which no appeal may be or is
timely taken) of the Executive of a felony; or
(iii) the suspension or removal of the Executive by federal
or state bank ing regulatory authorities acting under lawful authority
pursuant to provisions of federal or state law or regulation which may
be in effect from time to time;
provided, however, that in the case of clause (i) above, such conduct shall not
constitute Cause:
(x) unless (A) there shall have been delivered to the
Executive a written notice setting forth with specificity the reasons
that the Board believes the Executive's conduct constitutes the
criteria set forth in clause (i), (B) the Executive shall have been
provided the opportunity to be heard in person by the Board (with the
assistance of the Executive's counsel if the Executive so desires), and
(C) after such hearing, the termination is evidenced by a resolution
adopted in good faith by two-thirds of the members of the Board (other
than the Executive); or
(y) if such conduct (A) was believed by the Executive in
good faith to have been in or not opposed to the interests of the
Company, and (B) was not
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intended to and did not result in the direct or indirect gain to or
personal enrichment of the Executive.
(f) A "Change in Control" shall mean the occurrence during the
Term of any of the following events:
(i) An acquisition (other than directly from the Company)
of any voting securities of the Company (the "Voting Securities") by
any "Person" (as the term person is used for purposes of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934 (the "1934 Act"))
immediately after which such Person has "Beneficial Ownership" (within
the meaning of Rule 13d-3 promulgated under the 0000 Xxx) of 20% or
more of the combined voting power of the Company's then outstanding
Voting Securities; provided, however, that in determining whether a
Change in Control has occurred, Voting Securities which are acquired in
a "Non-Control Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in Control. A
"Non-Control Acquisition" shall mean an acquisition by (1) an employee
benefit plan (or a trust forming a part thereof) maintained by (x) the
Company or (y) any corporation or other Person of which a majority of
its voting power or its equity securities or equity interest is owned
directly or indirectly by the Company (a "Subsidiary"), (2) the Company
or any Subsidiary, or (3) any Person in connection with a "Non-Control
Transaction" (as hereinafter defined).
(ii) The individuals who, as of the date of this
Agreement, are members of the Board (the "Incumbent Board") cease for
any reason to constitute at least
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two-thirds of the Board; provided, however, that if the election, or
nomination for election by the Company's stockholders, of any new
director was approved by a vote of at least two-thirds of the Incumbent
Board, such new director shall, for purposes of this Agreement, be
considered as a member of the Incumbent Board; provided, further,
however, that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as a result
of either an actual or threatened "Election Contest" (as described in
Rule 14a-11 promulgated under the 0000 Xxx) or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board (a "Proxy Contest") including by reason of
any agreement intended to avoid or settle any Election Contest or Proxy
Contest; or
(iii) Approval by stockholders of the Company of:
(A) A merger, consolidation or reorganization
involving the Company, unless
(1) the stockholders of the Company, immediately
before such merger, consolidation or reorganization, own,
directly or indirectly, immediately following such merger,
consolidation or reorganization, at least two-thirds of the
combined voting power of the outstanding voting securities of
the corporation resulting from such merger or consolidation or
reorganization (the "Surviving Corporation") in substantially
the same proportion as their owner-
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ship of the Voting Securities immediately before such merger,
consolidation or reorganization, and
(2) the individuals who were members of the
Incumbent Board immediately prior to the execution of the
agreement providing for such merger, consolidation or
reorganization constitute at least two-thirds of the members
of the board of directors of the Surviving Corporation. (A
transaction described in clauses (1) and (2) shall herein be
referred to as a "Non-Control Transaction.")
(B) A complete liquidation or dissolution of the
Company; or
(C) An agreement for the sale or other disposition of
all or substantially all of the assets of the Company to any
Person (other than a transfer to a Subsidiary).
(iv) Notwithstanding anything contained in this Agreement
to the contrary, if the Executive's employment is terminated prior to
a Change in Control and the Executive reasonably demonstrates that such
termination (A) was at the request of a third party who has indicated
an intention or taken steps reasonably calculated to effect a Change in
Control and who effectuates a Change in Control (a "Third Party") or
(B) otherwise occurred in connection with, or in anticipation of, a
Change in Control which actually occurs, then for all purposes of this
Agreement, the date of a Change in Control with respect to the
Executive shall mean the date immediately prior to the date of such
termination of the Executive's employment.
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(g) "Constructive Termination" shall mean Executive's voluntary
Termination of Service within ninety (90) days following the occurrence of one
or more of the following events, except if such event is approved in writing by
Executive prior to its occurrence:
(i) A material breach of this Agreement by the Company
that is not remedied within thirty (30) business days after receiving
written notification by Executive of such failure; or
(ii) A material reduction in Executive's title or
responsibilities unless replaced with a new title or new
responsibilities of comparable stature or value to the Company within
thirty (30) business days.
(h) "Continuation Period" shall have the meaning ascribed to it in
Section 4(c)(iii).
(i) "Disability" shall mean a physical or mental infirmity which
impairs the Executive's ability to substantially perform his duties with the
Company for a period of 180 consecutive days, as determined by an independent
physician selected with the approval of both the Company and the Executive.
(j) "Effective Date" shall mean the day that the Company closes
its Initial Public Offering.
(k) "Good Reason" shall mean the occurrence after a Change in
Control of any of the events or conditions described in subsections (i) through
(viii) hereof:
(i) a change in the Executive's status, title, position
or responsibilities (including reporting responsibilities) which, in
the Executive's reasonable judgment, represents an adverse change from
his status, title, position or responsibilities as in effect at any
time within ninety days preceding the date of a Change in
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Control or at any time thereafter; the assignment to the Executive of
any duties or responsibilities which, in the Executive's reasonable
judgment, are inconsistent with his status, title, position or
responsibilities as in effect at any time within ninety days preceding
the date of a Change in Control or at any time thereafter; any removal
of the Executive from or failure to reappoint or reelect him to any of
such offices or positions, except in connection with the termination of
his employment for Disability, Cause, as a result of his death or by
the Executive other than for Good Reason, or any other change in
condition or circumstances that in the Executive's reasonable judgment
makes it materially more difficult for the Executive to carry out the
duties and responsibilities of his office than existed at any time
within ninety days preceding the date of Change in Control or at any
time thereafter;
(ii) a reduction in the Executive's base salary or any
failure to pay the Executive any compensation or benefits to which he
is entitled within five days of the date due;
(iii) the Company's requiring the Executive to be based at
any place outside a 30-mile radius from the executive offices occupied
by the Executive immediately prior to the Change in Control, except for
reasonably required travel on the Company's business which is not
materially greater than such travel requirements prior to the Change
in Control;
(iv) the failure by the Company to (A) continue in effect
(without reduction in benefit level and/or reward opportunities) any
material compensation or employee benefit plan in which the Executive
was participating at any time within
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ninety days preceding the date of a Change in Control or at any time
thereafter, unless such plan is replaced with a plan that provides
substantially equivalent compensation or benefits to the Executive or
(B) provide the Executive with compensation and benefits, in the
aggregate, at least equal (in terms of benefit levels and/or reward
opportunities) to those provided for under each other employee benefit
plan, program and practice in which the Executive was participating at
any time within ninety days preceding the date of a Change in Control
or at any time thereafter;
(v) the insolvency or the filing (by any party, including
the Company) of a petition for bankruptcy of the Company, which
petition is not dismissed within sixty days;
(vi) any material breach by the Company of any provision
of this Agreement;
(vii) any purported termination of the Executive's
employment for Cause by the Company which does not comply with the
terms of this Agreement; or
(viii) the failure of the Company to obtain an agreement,
satisfactory to the Executive, from any Successors and Assigns to
assume and agree to perform this Agreement, as contemplated in Section
6 hereof.
Any event or condition described in clause (i) through (viii) above which occurs
prior to a Change in Control but which the Executive reasonably demonstrates (A)
was at the request of a Third Party, or (B) otherwise arose in connection with,
or in anticipation of, a Change in Control which actually occurs, shall
constitute Good Reason for purposes of this Agreement, notwithstanding that
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it occurred prior to the Change in Control. The Executive's right to terminate
his employment for Good Reason shall not be affected by his incapacity due to
physical or mental illness.
(l) "Notice of Termination" shall mean a written notice of
termination from the Company or the Executive which specifies an effective date
of termination, indicates the specific termination provision in this Agreement
relied upon, and sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision of indicated.
(m) "Initial Public Offering" shall mean the closing of the first
public offering of the Company's Common Stock registered under the Act in which
aggregate proceeds to the Company, net of all underwriting discounts and
commissions and other expenses of issuance and distribution as stated in the
prospectus relating to such offering, are equal to at least Five Million Dollars
($5,000,000).
(n) "Incentive Stock Option Plan" shall mean any incentive Stock
Option Plan adopted by the Company's Board of Directors.
(o) "Pro Rata Bonus" shall mean an amount equal to the Bonus
Amount multiplied by a fraction the numerator of which is the number of days in
the applicable year through the Termination Date and the denominator of which is
365.
(p) "Successors and Assigns" shall mean a corporation or other
entity acquiring all or substantially all the assets and business of the Company
(including this Agreement), whether by operation of law or otherwise.
(q) "Termination Date" shall mean, in the case of the Executive's
death, his date of death, and in all other cases, the date specified in the
Notice of Termination.
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(r) "Trade Secrets" shall mean any information, including but not
limited to technical or non-technical data, a formula, a pattern, a compilation,
a program, a device, a method, a technique, a drawing, a process, financial
data, financial plans, product plans, information on customers, or a list of
actual or potential customers or suppliers, which: (i) derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use, and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and its seal to be affixed hereunto by its officers thereunto duly
authorized, and the Executive has signed and sealed this Agreement, effective as
of the date first above written.
WARRIOR CAPITAL CORPORATION
By /s/ Xxxxx Xxxxx
-------------------------------------
Xxxxx Xxxxx, Secretary
ATTEST:
-------------------------------------------
-------------------
Corporate Secretary
( CORPORATE SEAL )
EXECUTIVE:
Xxxxx X. Xxxxxx (L.S.)
-------------------------------
Xxxxx X. Xxxxxx
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