EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of the 1st day of January, 2004, by and among
Tarpon Coast Bancorp, Inc., a Florida corporation (the "Holding Company"),
Tarpon Coast National Bank a national bank organized under the laws of the
United States (the "Bank") (collectively referred to herein as the "Employer"),
and Xxxx X. Xxxx (the "Executive").
WITNESSETH:
WHEREAS, the Boards of Directors of the Employer desire to employ
Executive to serve as Vice Chairman of the Board & President of the Holding
Company and the Bank; and
WHEREAS, Executive is willing to become employed by the Holding Company
and the Bank as Vice Chairman and President in accordance with the terms and
conditions hereinafter set forth:
1. Employment. Employer employs Executive and Executive accepts employment
upon the terms and conditions set forth in this Agreement.
2. Term. The term of employment of Executive under this Agreement shall be
for twenty-four (24) months and commence on January 1, 2004. If this
contract is not renewed or renegotiated prior to the end of its term,
it will be treated as a termination without cause and compensated as
indicated in paragraph 11.b.
3. Compensation.
For all services rendered by Executive, Executive shall be paid a
minimum annual base salary of $182,000 per year. The minimum annual
base salary will be paid by the Bank in equal semi-monthly installments
during the term of this Agreement. Salary payments shall be subject to
withholding and other applicable taxes.
4. Title and Duties. Executive shall serve as Vice Chairman of the Board
and President of the Holding Company and of the Bank. Executive shall
run the day-to-day operating activities of the Holding Company and the
Bank and assist the Chief Executive Officer in managing the Holding
Company's and Bank's affairs; lead the Bank's efforts at community
relations and business development; coordinate all marketing efforts;
serve as internal legal counsel and human resources officer; and serve
as compliance and CRA officer.
5. Extent of Services. Executive shall devote his entire time, attention
and energies to the business of Employer and shall not during the term
of this Agreement be engaged in any other business activity which
requires the attention or participation of Executive during normal
business hours of Employer, recognition being given to the fact that
Executive is expected on occasion to participate in client development
after normal business hours. However, Executive may invest his assets
in such form or manner as will not require his services in the
operation of the affairs of the companies in which such investments are
made, except that Executive shall not make an investment in the
securities of any competing financial institution without the express
approval of the Boards of Directors of the Employer. Executive shall
notify Employer of any significant participation by him in any trade
association or similar organization.
6. Working Facilities. Executive shall receive from the Bank, such
assistants, perquisites, facilities and services as are suitable to his
position and appropriate for the performance of his duties on behalf of
such entity. In addition, the Bank shall provide Executive membership
in a country or social club (including dues, assessments and initiation
fees) of his choice and Executive shall have the option at the
termination of his employment for any reason to repurchase said
membership from the Bank.
7. Expenses. Executive may incur reasonable expenses for promoting the
business of the Bank, including expenses for entertainment, travel, and
similar items. Executive will be reimbursed by the Bank for all such
expenses upon Executive's periodic presentation of an itemized account
of such expenditures with receipts attached.
8. Vacations. Executive shall be entitled each year to five (5) weeks of
vacation time in accordance with the personnel policy established by
the Bank's Board of Directors, during which time Executive's
compensation shall be paid in full.
9. Additional Compensation. As additional consideration paid to Executive,
Executive shall be provided with and participate in all employee
benefit plans offered by the Bank to all of its employees, including
health, hospitalization, disability, life
insurance, travel insurance, bonus, retirement and savings plans. In
addition, Executive shall be provided with a term life insurance policy
of at least $200,000, which shall include an accidental death or
dismemberment provision of two times the face amount of the policy.
10. Change in Control of the Bank.
a. In the event of a "change in control" of the Employer, as
defined herein, and only to the extend permitted by applicable
statutes and regulations, Executive shall be entitled, for a
period of thirty (30) days from the date of closing of the
transaction effecting such change in control and at his
election, to give written notice to Employer of termination of
this Agreement and to receive a cash payment equal to one time
(100%) the compensation, including incentive compensation, if
any, received by Executive in the one-year period immediately
preceding the change in control. The severance payments
provided for in this Section 10.a. shall be paid in cash,
commencing not later than ten (10) days after the date of
notice of termination by Executive under this Section 10 or
ten (10) days after the date of closing of the transaction
effecting the change in control of the Employer, whichever is
later.
b. In addition, if Executive elects to terminate this Agreement
pursuant to this Section 10, Executive shall further be
entitled, in lieu of shares of Common Stock of the Holding
Company issuable upon exercise of stock options to which
Executive is entitled, an amount in cash or Common Stock of
the Holding Company or any other company into which shares of
the Holding Company are convertible (or any combination
thereof) as Executive shall in his election designate equal to
the excess of the fair market value of the Common Stock as of
the date of closing of the transaction effecting the change in
control over the per share exercise price of the options held
by Executive, times the number of shares of Common Stock
subject to such options (whether or not then fully
exercisable). The fair market value of the Common Stock shall
be equal to the higher of (i) the value as determined by the
Board of Directors of the Holding Company if there is no
organized trading market for the shares at the time such
determination is made, which per share value shall not be less
than 1.8 times the per share book value of the stock or (ii)
the closing price (or the average of the bid and asked prices
if no closing price is available) on any nationally recognized
securities exchange or association on which the Holding
Company's shares may be quoted or listed, or (iii) the highest
per share price actually paid for Common Stock of the Holding
Company in connection with any change in control of the
Employer. The severance payments provided for in this Section
10.b. shall be paid in full not later than ten (10) days after
the date of notice of termination by Executive under this
Section 10 or ten (10) days after the date of closing of the
transaction effecting the change in control of the Employer,
whichever is later.
c. Further, upon a "change in control", the Company and the Bank
shall cause the Key Man whole life insurance policy on
Executive in the face amount of $500,000, currently owned by
and maintained for the benefit of the Company and the Bank, to
be conveyed to Executive on a fully paid-up basis. The Company
and the Bank, in so doing, will relinquish any interest in
benefits under the policy. During the term of this agreement
and any extensions and renewals thereof, the Company and the
Bank shall continue to fund premiums in such amounts to ensure
the continuation of benefits under the policy. This conveyance
is not contingent upon the notice requirements set forth in
this Section 10.
d. For purposes of this Section 10, "change in control" of the
Employer shall mean:
1. any transaction, whether by merger, consolidation,
asset sale, tender offer, reverse stock split, or
otherwise, which results in the acquisition or
beneficial ownership (as such term is defined under
rules and regulations promulgated under the
Securities Exchange Act of 1934, as amended) by any
person or entity or group of persons or entities
acting in concert, of 50% or more of the outstanding
shares of Common Stock of the Employer.
2. the sale of all or substantially all of the assets of
the Employer; or
3. the liquidation of the Employer.
e. If any payments to be made under this Section 10 constitute an
"Excess Parachute Payment" as that term is defined in Section
280(g) of the Internal Revenue Code, the payments shall be
reduced to the largest amount which would not constitute an
"Excess Parachute Payment."
11. Termination.
a. For Cause. This Agreement may be terminated by the Boards of
Directors of the Employer without notice and without further
obligations other than for monies already paid, for any of the
following reasons:
i. failure of Executive to follow reasonable written
instructions or policies of the Boards of Directors
of the Employer;
ii. gross negligence or willful misconduct of Executive
materially damaging to the business of the Employer
during the term of this Agreement, or at any time
while he was employed by the Employer prior to the
term of this Agreement, if not disclosed to the
Employer prior to the commencement of the term of
this Agreement; or
iii. conviction of Executive during the term of this
Agreement of a crime involving breach of trust or
moral turpitude; or
iv. at the request of any bank regulatory authority with
jurisdiction over the Employer.
In the event that the Employer discharges
Executive alleging "cause" under this Section 11.a. and it is
subsequently determined judicially that the termination was
"without cause," then such discharge shall be deemed a
discharge without cause subject to the provisions of Section
11.b. hereof. In the event that the Employer discharges
Executive alleging "cause" under this Section 11.a, such
notice of discharge shall be accompanied by a written and
specific description of the circumstances alleging such
"cause". The termination of Executive for "cause" shall not
entitle the Employer to enforcement of the non-competition and
non-solicitation covenants contained in Section 13 hereof,
unless the employee purposely engages in conduct constituting
"cause" for the purpose of negating the non-competition
provision.
b. Without Cause.
i. Notwithstanding the provisions of Section 2 of this
Agreement, the Employer may, upon thirty (30) days'
written notice to Executive, or by the giving of a
notice under Section 2 of this Agreement terminate
this Agreement without cause at any time during the
term of this Agreement upon the condition that
Executive shall be entitled, as liquidated damages in
lieu of all other claims, to the same severance
payments as provided in Section 10 hereof; provided
that for purposes of Section 10.b., the fair market
value of Common Stock shall be determined as of the
date of notice of termination of this Agreement given
by the Employer to Executive. The severance payments
provided for in this Section 11.b. shall commence not
later than thirty (30) days after the actual date of
termination of employment of Executive.
ii. Executive may upon thirty (30) days' written notice
to Employer terminate his Agreement without cause at
any time during the term of this Agreement. In the
event of termination of this Agreement by Executive,
the Employer shall have no further obligation to
Executive than for monies paid.
12. Death or Disability.
a. In the event of Executive's death during the term of this
Agreement, Employer shall pay to Executive's designated
beneficiary, or if Executive has failed to designate a
beneficiary, to his estate, an amount equal to Executive's
base salary pursuant to Section 3 hereof through the end of
the month in which Executive's death occurred plus an amount
equal to ninety (90) days salary. Employer shall also continue
to provide Executive's survivors with any benefits it provided
Executive for such additional ninety (90) day period.
b. In the event of Executive's disability during the term of this
Agreement, Employer shall pay to Executive an amount equal to
Executive's base salary pursuant to Section 3 hereof through
the end of the month in which Executive's disability occurred
plus an amount equal to six (6) months salary. Employer shall
also continue to provide Executive with any benefits it
provided Executive prior to his disability for a period of six
(6) months following his disability and shall continue to pay
the premiums on any life and disability policies provided by
the Employer for the benefit of Executive prior to his
disability.
c. The compensation set forth in Sections a. and b. of this
Section 12 shall be in lieu of any other benefits provided
hereunder, except that (i) in the event of a change in control
of the Employer as defined herein during the ninety (90) day
or six (6) month periods described in Sections a. and b. of
this Section 12, Executive, Executive's designated beneficiary
or Executive's estate, as the case may be, shall be entitled
to the benefits of Section 10.b. hereof, and (ii) any benefit
payable pursuant to Section 3 shall be prorated and made
available to Executive or his beneficiary or estate in respect
of any period prior to his death or disability. and (iii) in
the event of Executive's disability, Employer shall continue
to pay the premiums on any life and disability policies
provided by the Employer for the benefit of Executive prior to
his disability. The Employer may maintain insurance on its
behalf to satisfy in whole or in part the obligations of this
Section 12.
d. Executive shall be deemed disabled if, by reason of physical
or mental impairment, he is incapable of performing his duties
hereunder for a period of 180 consecutive days.
13. Notices. Any notice required or desired to be given under this
Agreement shall be deemed given if in writing sent by certified mail to
his residence in the case of Executive, or to its principal office in
the case of Employer.
14. Waiver of Breach. The waiver of Employer of a breach of any provision
of this Agreement by Executive shall not operate or be construed as a
waiver of any subsequent breach by Executive. No waiver shall be valid
unless in writing and signed by an authorized officer of Employer.
15. Assignment. Executive acknowledges that the services to be rendered by
him are unique and personal. Accordingly, Executive may not assign any
of his rights or delegate any of his duties or obligations under this
Agreement. The rights and obligations of Executive under this Agreement
shall inure to the benefit of and shall be binding upon the successors
and assigns of Employer.
16. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Florida.
17. Entire Agreement. This Agreement contains the entire understanding of
the parties hereto regarding employment of Executive, and supersedes
and replaces any prior agreement relating thereto. It may not be
changed orally but only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification,
extension, or discharge is sought.
WHEREAS, as of the day and date first above set
forth, the parties hereto execute this Agreement.
TARPON COAST BANCORP, INC.
By /s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
Chairman, Compensation Committee
TARPON COAST NATIONAL BANK
By /s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
Chairman, Compensation Committee
XXXX X. XXXX
/s/ Xxxx X. Xxxx
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Executive
