EXHIBIT 99
EMPLOYMENT AGREEMENT WITH
XXXXXXX X. XXXXXX, CHIEF FINANCIAL OFFICER
Employment Agreement (this "Agreement") dated as of July 1, 1999, by and
between The First Bancshares, Inc., a Mississippi corporation (the
"Employer"), which is the bank holding company for The First National Bank
of South Mississippi, a national bank (the "Bank"), and Xxxxxxx X. Xxxxxx
(the "Executive").
WITNESSETH:
WHEREAS, the Employer presently employs the Executive as its Chief
Financial Officer ("CFO") and intends to employ the Executive as President
and COO of the Bank, and intends to assure the Executive that his
employment will be of a reasonably secure nature; and
WHEREAS, the Employer desires to provide for the continued employment of
the Executive and to make certain changes in the Executive's employment
arrangements; and
WHEREAS, the Executive desires to continue his employment by the Employer
pursuant to this Agreement; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Employer and
the Executive hereby agree as follows:
Section 1. Definitions. For the purpose of this Agreement, the terms used
as headings in this Section 1, and parenthetically defined elsewhere in
this Agreement, shall have the indicated meanings.
1.1. Adequate Justification. The occurrence of any of the following events
or conditions: (i) a material failure of the Employer to comply with the
terms of this Agreement, (ii) any relocation of the Executive outside the
Territory, as amended from time to time, that is not approved by members of
the Board of Directors who were part of the Organizing Group, (iii) after a
Change in Control, or (iv) other than as provided for herein, any
substantial diminution in the Executive's authority or the Executive's
responsibilities that is not approved by members of the Board of Directors
who were part of the Organizing Group.
1.2. Affiliate. Any business entity controlled by, controlling or under
common control with the Employer.
1.3. Board of Directors. The Board of Directors of the Employer.
1.4. Business. The operation of a depository financial institution,
including, without limitation, the solicitation and acceptance of deposits
of money and commercial paper, the solicitation and funding of loans, and
the provision of other banking services, and any other related business
engaged in by the Employer or any of its Affiliates as of the date of
termination.
1.5. Cause. As defined in Section 7.3(a)(iii).
1.6. Change in Control. The occurrence during the Term of any of the
following events
(a) The individuals who, as of the date of this Agreement, are members of
the Board of Directors (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board of Directors; provided,
however, that if the election, or nomination for election by the Employer's
shareholders, of any new director was approved in advance by a vote of at
least a majority of the Incumbent Board, such new director shall, for
purposes of this Agreement, be considered as a member of the Incumbent
Board; provided, further, 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 Securities Exchange Act of 1934 (the
"Exchange Act") or other actual or threatened solicitation of proxies or
consents by or on behalf of any person other than the Board of Directors (a
"Proxy Contest"), including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest.
(b) An acquisition (other than directly from the Employer) of any voting
securities of the Employer (the "Voting Securities") by any "Person" (as
the term "person" is used for purposes of Section 13(d) or 14(d) of the
Exchange Act) immediately after which such Person has "Beneficial
Ownership" (within the meaning of Rule 13d-3 promulgated under or the
Exchange Act) of 25 % more of the combined voting power of the Employer'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 shall not constitute an acquisition
which would cause a Change in Control.
(c) Approval by the shareholders of the Employer of: (i) a merger,
consolidation, or reorganization involving the Employer, unless such
merger, consolidation, or reorganization is a Non-Control Transaction; (ii)
a complete liquidation or dissolution of the Employer; or (iii) an
agreement for the sale or other disposition of all or substantially all of
the assets of the Employer to any Person (other than a transfer to a
Subsidiary).
(d) A notice of an application is filed with the Federal Reserve Board (the
"FRB") pursuant to Regulation "Y" of the FRB under the Change in Bank
Control Act or the Bank Holding Employer Act for permission to acquire
control of the Employer or any of its banking subsidiaries.
1.7. COBRA. Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.
1.8. Common Stock. The common stock of the Employer, par value $1.00 per
share.
1.9. Competing Business. Any business that, in whole or in part, is the
same or substantially the same as the Business.
1.10. Confidential Business Information. Any non-public information of a
competitively sensitive or personal nature, other than Trade Secrets,
acquired by the Executive, directly or indirectly, in connection with the
Executive's employment (including his employment with the Employer prior to
the date of this Agreement), including (without limitation) oral and
written information concerning the Employer or its Affiliates relating to
financial position and results of operations (revenues, margins, assets,
net income, etc.), annual and long-range business plans, marketing plans
and methods, account invoices, oral or written customer information, and
personnel information. Confidential Business Information also includes
information recorded in manuals, memoranda, projections, minutes, plans,
computer programs, and records, whether or not legended or otherwise
identified by the Bank and its Affiliates as Confidential Business
Information, as well as information which is the subject of meetings and
discussions and not so recorded; provided, however, Confidential Business
information shall not include information that was known by the Executive
prior to his employment with this Employer and which he instituted as part
of the operating procedures of the Employer. Confidential Business
Information shall not include information that was available to the Public
or the Executive on a non-confidential basis prior to its disclosure to the
Executive.
1.11. Escrow Period. N/A
1.12. IPO. The initial public offering of the Common Stock.
1.13. Non-Control Acquisition. An acquisition by (a) an employee benefit
plan (or a trust forming a part thereof) maintained by (i) the Employer or
(ii) 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 Employer (a "Subsidiary"), (b) the Employer or any
Subsidiary, or (c) any person in connection with a Non-Control Transaction.
1.14. Non-Control Transaction. A transaction described in clauses (a) and
(b) below:
(a) the shareholders of the Employer, 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, consolidation, or
reorganization (the "Surviving Corporation") in substantially the same
proportion as their ownership of the Voting Securities immediately before
such merger, consolidation, or reorganization, and
(b) 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.
1.15. Opening Date. The date of the Opening Of The First National Bank of
South Mississippi, August 5, 1996.
1.16. Organizing Group. Xxxxx Xxxxxxx Xxxxxx, E. Xxxxx Xxxxxx, Xxxx Xxxxxx,
Xxxx X. XxXxxxx, Xxxx X. Xxxxxx, Xxxxx Xxxxxx Xxxxxx, Xxx X. Xxxxxx, Xxxxxx
X. Xxxxxx, X. X. Xxxxx, Xxxxxx X. Xxxxxxxxx, and any other person the Board
of Directors may add from time prior to the opening of the Bank.
1.17. Term. As defined in Section 7.1.
1.18 Territory. A radius of 25 miles from (i) the main office of the Bank,
(ii) any branch of the bank or (iii) any office of the Employer.
1.19. Trade Secret. Any information, including, but not limited to,
technical or non-technical data, a formula, a pattern, a compilation, a
program, a plan, a device, a method, a technique, a drawing, a process,
financial data, financial plans, product plans, or a list of actual or
potential customers or suppliers, which: (a) 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 (b) is the subject of efforts that
are reasonable under the circumstances to maintain its secrecy.
Section 2. Employment.
(a) The Employer hereby employs the Executive to serve in the positions
described in Section 3 below during the Term and to perform those acts and
duties for, and to furnish services to, the Bank, the Employer, and their
Affiliates as may be designated from time to time by the Board of
Directors. The Executive hereby accepts such employment. The Executive will
have such executive or managerial duties as the Board of Directors shall
direct from time to time. In the performance of his duties hereunder, the
Executive shall comply with all laws, rules, and regulations which may be
applicable to the Employer and the Bank from time to time.
(b) The Executive shall use his best efforts to promote the interests of
the Employer, the Bank, and their Affiliates and shall devote his full
business time and attention to his employment under this Agreement. The
Executive may devote a reasonable amount of time to serve as a director or
advisor to charitable and community activities and to managing his personal
investments; provided, however, that such activities and investments 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
Employer, the Bank and their Affiliates, in the sole judgement of the Board
of Directors.
Section 3. Titles.
The Executive shall hold the title of President and Chief Operating
Officer(COO) of the Bank and the title of Executive Vice President and
Chief Financial Officer of the Employer.
Section 4. Compensation and Benefits: Disability.
4.1. Compensation. The Employer shall pay the Executive an annual base
salary at a rate of $85,000.00 per annum in accordance with the salary
practices of the Employer. The Board of Directors shall determine, in its
sole discretion, with the Executive abstaining from participating in the
consideration of and vote on the matter whether a merit salary increase is
warranted based upon the annual performance of the Bank.
4.2. Bonus. The Executive shall receive a bonus equal to the 2.5% of the
net profits after taxes of the Bank (determined in accordance with
generally accepted accounting principles) not to exceed 30% of annual base
salary. In the event that the Term is extended pursuant to Section 7.2,
the Executive shall receive an annual performance bonus of not less than
2.5% of the net profit after taxes of the Bank ( determined in accordance
with generally accepted accounting principles) not to exceed 30% of annual
base salary for each year of operations of the Bank thereafter; provided,
that the Bank has met the performance goals set forth in section 5.3(b)
hereof for such year.
4.3 OTHER BENEFITS.
(a) During the Term, the Employer shall provide the Executive with life
insurance in an amount of $250,000.00 payable to the beneficiary named by
the Executive, dental and health insurance, disability insurance providing
60% of the Executive's base salary, and such other benefits or plans as are
generally afforded other personnel of the Employer.
(b) The Employer shall pay the Executive's initiation fee ($300.00) for a
tennis membership at The Hattiesburg Country Club and monthly dues to the
Hattiesburg County Club ($110.00 at the time of this agreement).
(c) The Employer shall pay the Executive's dues to a civic club of the
Executive's choice.
(e) The Employer will provide the Executive with an automobile (with a cost
not to exceed $15,000.00) owned or leased by the Employer, of a make and
model appropriate to the Executive's status.
4.4 VACATION. The Executive may take paid vacation per year during the
term of this agreement in an amount equal to either three weeks or the
amount of vacation provided for employees with equivalent years of service
in the policies of the Employer, which ever is greater.
4.5 Severance Package. Twelve months salary for termination without cause
or non-renewal of contract.
4.6 Committees: The Executive shall serve on all committees of the board
of directors of the Bank except for the audit committee. If the loan
committee approves a loan over the objection of the Executive, the loan
committee shall take the loan to the full board of directors of the Bank
for approval. The compensation committee and the board of directors of the
Bank shall appoint the CEO, President and two senior vice-presidents of the
Bank. The board of directors of the Bank shall authorize the CEO and
President to appoint all other executive officers and to hire all other
employees of the Bank.
Section 5. Stock Options.
5.1 GRANT OF OPTIONS. The Employer hereby grants to the Executive an
option to purchase the number of shares of Common Stock up to 1.50% of the
number of shares sold in the Secondary Stock offering closed December 31,
1998 at a price equal to the public offering price in the Secondary
Offering, with no guarantees of additional options. The award agreement for
the Stock Options will provide that one-third of the Executive's options to
purchase Common Stock shall vest on each of the first three anniversaries
of the date of this Employment Agreement, but only if the Executive remains
employed by the Employer on such date and the Bank has met performance
goals set forth in Section 5.3 hereof for such year. In addition, the
award agreement will provide that (i) the options shall be subject to
immediate vesting in the event of a Change of Control pursuant to Section
5.2 hereof; (ii) all options shall be exercisable at any time during the
TEN years following their granting at a price equal to the public offering
price in the Secondary Offering (subject to antidilution adjustments in the
event of stock splits, dividends or combinations); (iii) all unexercised
options will expire 180 days after termination of employment for any
reason; and (iv) all options shall be transferable and assignable by the
Executive or by any other person entitled hereunder to exercise any such
rights on the same basis as any other option granted to other directors of
the Employer, if any.
The parties understand that the Employer may adopt an incentive stock
option plan (with customary provisions and benefits) at a meeting of the
shareholders after the effective date of this Agreement. Upon the
shareholders adoption of an incentive stock option plan, all of the
Executive's options shall be converted into incentive stock options under
the same terms as if the options had originally been incentive stock
options when granted. Provided, however, that such incentive stock option
plan shall not apply to any Stock Options granted by Sections
5.1(a)(b)or(c) which have vested in the Executive at the time any incentive
stock option plan is adopted.
5.2. Acceleration in the Event of a Change in Control. In the event of a
Change in Control, the restrictions on any outstanding incentive awards
(including restricted stock) granted to the Executive under any incentive
plan or arrangement shall lapse and such incentive award shall become 100%
vested; all stock options and stock appreciation rights granted to the
Executive shall become immediately exercisable and shall become 100%
vested; and all performance units granted to the Executive shall become
100% vested.
5.3. Performance Levels. For each twelve month period beginning on the
contract date and following each year thereafter for the term of the
contract, and as a condition to the vesting of the options in such year
(except in the event of a Change in Control), the Bank must meet the
following performance criteria:
(a) earnings for the Bank shall meet or exceed, (for Contract Year #1) 70 %
of the projections for the Fourth (4th) year of OCC Application Pro-forma,
(For Contract Year #2) 70% of the projections for the Fifth (5th) year of
OCC Application Pro-forma and (For Contract Year #3) 70% of the projections
for the Fifth (5th) year of OCC Application pro-forma; subject to
renegotiation for succeeding years thereafter; and
(b) satisfactory performance as evidenced by satisfactory XXXXX, X0X, and
EDP Ratings by the Office of the Comptroller of the Currency (OCC), with no
earnings or loan quality requirements included as bonus qualification
criteria.
The Board of Directors shall notify the Executive of any options vested
hereunder within 90 days after the end of each twelve month period.
Section 6. Expenses.
Pursuant to the Employer's customary policies in force at the time of
payment, the Executive shall be promptly reimbursed, against presentation
of vouchers or receipts therefor, for all expenses properly and reasonably
incurred by him on behalf of the Employer or its Affiliates in the
performance of his duties hereunder. In addition the Employer shall provide
the Executive reimbursement for automobile mileage incurred by use of
personal vehicles on the Employer's business and appropriately documented
at the rate authorized by the Internal Revenue Service (currently, $0.30
per mile).
Section 7. Termination.
7.1. Term. The Executive's employment hereunder shall be for a term
commencing on the date hereof and ending on the third anniversary of the
Date of the Contract (the "Term"), unless further extended or sooner
terminated as provided below.
7.2. Extension of Term. On the last day of this Agreement, the term of the
Executive's employment shall be automatically extended for one additional
three-year term without further action by the parties unless, prior to the
last day of this Agreement, either party shall serve 30 days written notice
upon the other of its intention that this Agreement shall not be so
extended; provided, that if the Employer does not renew this Agreement for
an additional three-year term pursuant to this Section 7.2, the Employer
shall pay the Executive severance compensation in an amount equal to 100%
of his then current monthly base salary each month for a period ending
twelve months from the last day of this Agreement.
7.3. Termination.
(a) Notwithstanding the provisions of Section 7.1 or Section 7.2, the
Executive's employment hereunder shall terminate upon the occurrence of any
of the following events:(i)The death of the Executive, in which event such
employment shall terminate automatically.(ii) The disability of the
Executive, which renders him unable to perform the essential functions of
his job, and for which reasonable accommodation is unavailable. For
purposes of this Agreement, a "disability" is defined as a physical or
mental impairment that substantially limits one or more major life
activities; and a "reasonable accommodation" is one that does not impose an
undue hardship on the Employer. The Executive acknowledges that the
position of COO and President is one that requires the full time and energy
of the Executive and that any accommodation on part-time employment would
pose an undue hardship on the employer. (iii) Upon the determination of
Cause for termination, in which event such employment may be terminated by
written notice at the election of the employer. For purposes of this
Agreement, "Cause" shall consist of any of (A) the commission by the
Executive of a willful act (including, without limitation, a dishonest or
fraudulent act) or a grossly negligent act, or the willful or grossly
negligent omission to act by the Executive, which is intended to cause,
causes or is reasonably likely to cause material harm to the Employer
(including harm to its business reputation), (B) the indictment of the
Executive for the commission or perpetration by the Executive of any felony
or any crime involving dishonesty, moral turpitude or fraud, (C)the
material breach by the Executive of this Agreement that, if susceptible of
cure, remains uncured 30 days following written notice to the Executive of
such breach, (D) the receipt of any form of notice, written or otherwise,
that any regulatory agency having jurisdiction over the Employer or the
Bank intends to institute any form of formal or informal regulatory action
against the Executive or the Employer or the Bank provided, that the
respective board of directors determines in good faith, with the Executive
abstaining from participating in the consideration of and vote on the
matter, that the subject matter of such action involves acts or omissions
by or under the supervision of the Executive or that termination of the
Executive would materially advance the Employer's or the Bank's compliance
with the purpose of the action or would materially assist the Employer or
the Bank in avoiding or reducing the restrictions or adverse effects to the
Employer or the Bank related to the regulatory action); (E) the Executive
exhibits a standard of behavior within the scope of his employment that is
materially disruptive to the orderly conduct of the Employer's business
operations (including, without limitation, substance abuse or sexual
misconduct) to a level which, in the Board of Directors' good faith and
reasonable judgment, with the Executive abstaining from participating in
the consideration of and vote on the matter, is materially detrimental to
the Employer's best interest, that, if susceptible of cure remains uncured
30 days following written notice to the Executive of such specific
inappropriate behavior; or (F) as provided in Section 2(b), the failure of
the Executive to devote his full business time and attention to his
employment under this Agreement that, if susceptible of cure, remains
unresolved 30 days following written notice to the Executive of such
failure.
(b) If the Executive's employment is terminated by the Employer pursuant to
Section 7.3(a)(i), the Executive's estate shall receive any sums due him as
base salary and/or reimbursement of expenses through the end of the month
during which death occurred, plus a pro rata share of any bonus under
Section 4.2 and options vested under Section 5 if otherwise payable with
respect to the fiscal year during which the Executive died which was earned
as of the date of the Executive's death as a result of the Bank achieving
the goals determined by the Board of Directors.
(c) In the event of the physical or mental incapacity (other than
incapacity caused by involuntary disability) of the Executive which, if
continued for a sufficient period, would provide the Employer with grounds
for termination of the Executive's employment under Section 7.3(a)(ii), the
Employer shall continue to pay the Executive his full base salary at the
rate then in effect under Section 4.1 and all prerequisites and other
benefits (other than any bonus under Section 4.2 and options vested under
section 5) until the Executive becomes eligible for benefits under any
long-term disability plan or insurance program maintained by the Employer.
Furthermore, the Executive shall receive his pro rata Share of any bonus
under Section 4.2 or options vested under Section 5 which was earned on the
date the Executive became disabled as a result of the Bank achieving the
goals determined by the Board of Directors. Nothing in this Section 7.3(c)
shall preclude the Employer from terminating the Executive's employment
under Section 7.3(a)(iii).
(d) If the Executive's employment is terminated for Cause pursuant to
Section 7.3(a)(iii), or if the Executive resigns without Adequate
Justification, the Executive shall receive any sums due him as base salary
and/or reimbursement of expenses through the date of such termination.
Adequate Justification shall only be deemed to have occurred if not cured
by the Employer within 30 days following receipt of written notice from the
Executive which specifies with particularity the events which constitute
such Adequate Justification.
(e) If the Employer terminates the Executive other than pursuant to clauses
(i), (ii), or (iii) of Section 7.3(a), the Employer shall pay to the
Executive severance compensation in an amount equal to 100% of his then
current monthly base salary each month for a period ending on the date
which is TWELVE months from the date of termination. If the Employer
terminates the Executive other than pursuant to clauses (i), (ii), or (iii)
of Section 7.3(a) the Employer shall also pay the Executive his pro rata
share of any bonus pursuant to Section 4.2 or options vested under Section
5 which was earned as of the date of his termination. After a Change in
Control, the Executive shall have the option of (i) automatically extending
the term of this Agreement for a term commencing on the date of the Change
in Control and ending on the third anniversary thereof and (ii) receiving,
within 15 days of the date of the Change in Control, any sums due him under
Section 4.1 and reimbursement of expenses through the date of the Change in
Control plus compensation payable in either one lump sum payment in an
amount equal to one (1) times the Executive's then current annual base
salary; or one-and-one-half (1.5) times the Executive's then current annual
base salary over a period of eighteen months. If after a Change in Control,
the Executive exercises his option to automatically extend the term of this
employment agreement or agrees to continue in the employment of the new
organization, said employment shall be continued subject to a prohibition
to the relocation of the executive outside a radius of 25 miles from the
Executive's primary residence without the written consent of the Executive.
Failure to comply with this relocation prohibition shall constitute a
material failure of the Employer to comply with the terms of this Agreement
and invoke severance package compensation as defined in Paragraph 4.5 and
render Paragraphs 8.1, 8.2, 8.3, 8.4, 8.5, 8.6, 8.7, and 8.8 to be null and
void and non-binding from that point forward.
(f) With the exceptions of (i) the provisions of Section 7.3(b), (ii) the
provisions of Section 7.3(c), (iii) the provisions of Section 7,3(d), (iv)
the provisions of Section 7.3(e), and (v) the provisions of Section 7.3(f),
and the express terms of any benefit plan under which the Executive is a
participant, it is agreed that, upon termination of the Executive's
employment, the Employer shall have no obligation to the Executive for, and
the Executive waives and relinquishes, any further compensation or benefits
(exclusive of COBRA benefits). At the time of termination of employment,
the Employer and the Executive shall enter into a mutually satisfactory
form of release acknowledging such remaining obligations and discharging
both parties, as well as the Employer's officers directors and employees
with respect to their actions for or on behalf of the Employer, from any
other claims or obligations arising out of or in connection with the
Executive's employment by the Employer, including the circumstance's of
such termination.
(g) In the event that the Executive's employment is terminated for cause
under Section 7.3(a)(iii) or the Executive is no longer a shareholder of
the Employer for any reason, the Executive shall (and does hereby) tender
his resignation as a director of the Employer and its Affiliates effective
as of the date of termination.
(h) In the event that the Employer terminates the Executive, other than
pursuant to Section 7.3(a)(iii), the Employer shall, within 10 days after
termination, offer to repurchase all of the Executive's Common Stock, at a
purchase price equal to the fair market value of the Common Stock, as
determined by the Board of Directors in good faith. In the event that the
Employer terminates the Executive pursuant to Section 7.3(a)(iii), the
Executive shall be required to sell all of his Common Stock, and he shall
be deemed to have offered such Common Stock, to the Employer at a purchase
price equal to the fair market value of the Common Stock, as determined by
the Board of Directors in good faith. In the event of any disagreement
between the Executive and the Employer regarding the fair market value of
the Common StockI the question of the fair market value of the Common Stock
shall be submitted to an impartial and reputable appraiser selected by the
mutual agreement of the Executive and the Employer or failing such
agreement, two appraisers (one of which shall be selected by the Employer
and the other by the Executive). The determination of the question of the
true market value of the Common Stock by such appraiser or appraisers shall
be final and binding on the Executive and the Employer for purposes of this
Agreement. The Employer shall pay the reasonable fees and expenses of such
appraiser or appraisers.
Section 8. Confidential Information and Related Matters.
8.1. Confidential Information.
(a) The Executive agrees to maintain in strict confidence, and not use or
disclose except pursuant to written instructions from the Employer, any
Trade Secret of the Employer and its Affiliates, for so long as the
pertinent data or information remains a Trade Secret, provided that the
obligation to protect the confidentiality of any such information or data
shall not be excused if such information or data ceases to qualify as a
Trade Secret as a result of the acts or omissions of the Executive.
(b) The Executive agrees to maintain in strict confidence and, except as
necessary to perform his duties for the Employer, not to use or disclose
any Confidential Business Information for so long as the pertinent data or
information remains Confidential Business Information.
(c ) Upon termination of employment, the Executive shall leave with the
Employer all business records, contracts, calendars, telephone lists,
rolodexes, and other materials or business records relating to the Employer
and its Affiliates, its business or customers, including all physical,
electronic, and computer copies thereof, whether or not the Executive
prepared such materials or records himself. Upon such termination, the
Executive shall retain no copies of any such materials, provided, however,
the Executive may remove and retain all personal items and materials.
(d) The Executive may disclose Trade Secrets or Confidential Business
Information pursuant to any order or legal process requiring him (in his
legal counsel's reasonable opinion) to do so; provided, however, that for a
period of two years following the date of termination of this Agreement,
the Executive shall first have notified the Employer of the request or
order to so disclose the Trade Secrets or Confidential Business Information
in sufficient time to allow the Employer to seek an appropriate protective
order.
8.2. Agreement Not to Compete. If (i) the Executive is terminated for Cause
pursuant to clauses (A), (B), (C), (D), (E) or (F) of Section 7.3(a)(iii),
then for the remaining Term, or (ii) if the Executive resigns for any
reason other than following a Change in Control or (iii) other than for a
material failure of the Employer to comply with the terms of this
Agreement, then for a period of one year following the date of resignation,
the Executive shall not (without the prior written consent of the Employer)
compete with the Employer or any of its Affiliates by, directly or
indirectly, forming, serving as an organizer, director or officer of, or
consultant to, or acquiring or maintaining more than a 1% passive
investment in, a depository financial institution or holding company
therefor if such depository institution or holding company has one or more
offices or branches located in the Territory. Notwithstanding the
foregoing, if the Executive's contract is not renewed, if the Executive is
terminated other than for Cause, as specified in Section 7.3 (a) (iii) (A),
(B), (C), (D), (E), or (F), or a Change of Control occurs, this Agreement
Not to Compete is declared to be Null and Void. Notwithstanding the
foregoing, the Executive may serve as an officer of or consultant to a
depository institution or holding company therefor even though such
institution operates one or more offices or branches in the Territory, if
the Executive's employment does not directly involve, in whole or in part,
the depository financial institution's or holding company's operations in
the Territory.
8.3 Agreement Not to Solicit Customers. If (i) the Executive is terminated
for Cause pursuant to clauses (A), (B), (C), (D), (E) or (F) of Section
7.3(a)(iii), then for the remaining Term, or (ii) if the Executive resigns
for any reason other than following a Change in Control or (iii) other than
for a material failure of the Employer to comply with the terms of this
Agreement, then for a period of one year following the date of resignation,
the Executive shall not (except on behalf of or with the prior written
consent of the employer), either directly or indirectly, on the Executive's
own behalf or in the service or on behalf of others, (i) solicit, divert,
or appropriate to or for a Competing Business, or (ii) attempt to solicit,
divert, or appropriate to or for a Competing Business, any person or entity
that was a customer of the Employer or any of its Affiliates on the date of
termination and is located in the Territory.
8.4. Agreement Not to Solicit Employees. If (i) the Executive is terminated
for Cause pursuant to clauses (A), (B), (C), (D),(E), or (F) of Section
7.3(a)(iii), then for the remaining Term, or (ii) if the Executive resigns
for any reason other than following a Change in Control or (iii) other than
for material failure of the Employer to comply with the terms of this
Agreement, then for a period of one year following the date of resignation,
the Executive will not, either directly or indirectly, on the Executive's
own behalf or in the service or on behalf of others, (i) solicit, divert,
or hire away, or (ii) attempt to solicit, divert, or hire away, to any
business located in the Territory, any employee of or consultant to the
Employer or any of its Affiliates engaged or experienced in the Business,
regardless of whether the employee or consultant is full-time or temporary,
the employment or engagement is pursuant to written agreement, or the
employment is for a determined period or is at will.
8.5. Extension of Term of Restrictions. If the Executive violates any of
the restrictions set forth in Sections 8.1 to 8.4 of this Agreement, the
duration of such restriction shall be extended by a number of days equal to
the number of days in which the Executive shall have been determined to be
or shall have admitted to being in violation of such restriction.
8.6. Remedies. The Executive acknowledges and agrees that great loss and
irreparable damage would be suffered by the Employer if the Executive
should breach or violate any of the terms or provisions of the covenants
and agreements set forth in Sections 8.1 to 8.4 of this Agreement. The
Executive further acknowledges and agrees that each of these covenants and
agreements is reasonably necessary to protect and preserve the interests of
the Employer and its Affiliates. The parties agree that money damages for
any breach of Sections 8.1 to 8.4 of this Agreement by the Executive are
impossible to measure, that the Employer is entitled to preliminary and
permanent injunctive relief in the event that the Executive violates any of
the terms or provisions of the covenants set forth in Sections 8.1 to 8.4,
and that the Executive or any of the Executive's affiliates, as the case
may be, will, to the extent permitted by law, waive in any proceeding
initiated to enforce such provisions any claim or defense that an adequate
remedy at law exists.
8.7. Severability; Reformation. The Executive acknowledges and agrees that
(i) the covenants and agreements contained in Sections 8.1 to 8.4 of this
Agreement are the essence of this Agreement; (ii) that the Executive has
received good, adequate and valuable consideration for each of these
covenants; (iii) each of these covenants is reasonable and necessary to
protect and preserve the interests and properties of the Employer and the
Business; (iv) the Employer, through its Affiliates, is and will be engaged
in and throughout the Territory in the Business; (v) a Competing Business
could be engaged in from any place in the Territory; and (vi) the Employer
has a legitimate business interest in restricting the Executive's
activities throughout the Territory. The Executive also acknowledges and
agrees that (i) irreparable loss and damage will be suffered by the
Employer should the Executive breach any of these covenants and agreements;
(ii) each of these covenants and agreements in Sections 8.1 to 8.4 is
separate, distinct and severable not only from the other covenants and
agreements but also from the remaining provisions of this Agreement; and
(iii) the unenforceability of any covenants or agreements shall not affect
the validity or enforceability of any of the other covenants or agreements
or any other provision or provisions of this Agreement. The Executive
acknowledges and agrees that if any of the provisions of Sections 8.1 to
8.4 of this Agreement shall ever be deemed to exceed the time, activity, or
geographic limitations permitted by applicable law, then such provisions
shall be and hereby are reformed to the maximum time, activity, or
geographical limitations permitted by applicable law.
8.8. Modification of Section 8 and Definitions. The Executive and the
Employer hereby agree that they will negotiate in good faith to amend this
Agreement from time to time to modify the terms of this Section 8, the
definition of the term "Territory," and the definition of the term
"Business", to reflect changes in the Employer's business and affairs so
that the scope of the limitations placed on the Executive's activities by
this Section 8 accomplishes the parties' intent in relation to the then
current facts and circumstances. Any such amendment shall be effective only
when completed in writing and signed by the Executive and the Employer.
Section 9. Key-Man Life Insurance. $500,000.00 to Benefit the Employer
Section 10. Notices. All notices and other communications provided for or
permitted hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally or sent by registered or certified mail
(return receipt requested) postage prepaid to the parties at the following
addresses (or at such other address for any party as shall be specified by
like notice, provided that notices of a change of address shall be
effective only upon receipt thereof):
(a) If to the Employer:
The First National Bank of South Mississippi
0000 X.X. Xxxxxxx 00
Xxxxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Chairman of the Board
With a copy (which shall not constitute notice) to:
Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx, L.L.P.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
If to the Executive, at the last address included on the Employer's payroll
records.
With a copy (which shall not constitute notice) to:
AULTMAN, TYNER, MCNEESE, & XXXXXX
Attn: Xxxxxx Xxxxx
000 Xxxxxxxx
Xxxxxxxxxxx, XX 00000
Section 11. Miscellaneous.
11.1. Representations and Covenants. In order to induce the Employer to
enter into this Agreement, the Executive makes the following
representations and covenants to the Employer and acknowledges that the
Employer is relying upon such representations and covenants:
(a) No restrictive covenants and/or non-compete agreements exist to which
the Executive is a party or otherwise bound which will interfere with or in
any way impede his ability to perform all of the terms and conditions of
this Agreement.
(b) The Executive, during the term of this Agreement, shall use his best
efforts to disclose to the Board of Directors by any effective method any
bona fide information known by him concerning the Bank or an Affiliate that
would have any material negative impact (in excess of $50,000) on the
Employer or an Affiliate.
11.2. Entire Agreement. This Agreement contains the entire understanding of
the parties as to the subject matter hereof and fully supersedes all prior
oral and written agreements and understandings between the parties with
respect to such subject matter.
11.3. Amendment; Waiver. This Agreement may not be amended, supplemented,
canceled or discharged, except by written instrument executed by the party
against whom enforcement is sought. No failure to exercise, and no delay in
exercising, any right, power or privilege hereunder shall operate as a
waiver thereof. No waiver of any breach of this Agreement shall be deemed
to be a waiver of any preceding or succeeding breach of this Agreement.
11.4. Binding Effect; Assignment. The Executive's rights and obligations
under this Agreement may not be assigned by him, except that his right to
receive accrued but unpaid compensation, unreimbursed expenses and other
rights, if any, provided under this Agreement which survive termination of
this Agreement shall pass after death to the personal representatives of
his estate.
11.5. Headings. The headings contained in this Agreement (except those in
Section 1) are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.
11.6. Counterparts. This Agreement may be executed in one or more copies,
each of which shall be deemed an original.
11.7. Governing Law, This Agreement has been executed and delivered in the
State of Mississippi, and its validity, interpretation, performance, and
enforcement shall be governed by the internal laws but not the conflicts of
law rules of such State.
11.8. Further Assurances. Each party agrees at any time, and from time to
time, to execute, acknowledge, deliver and perform and cause to be
executed, acknowledged, delivered and performed, all such further acts,
deeds, assignments, transfers, conveyances, powers of attorney and
assurances as may be necessary or proper to carry out the provisions and
intent of this Agreement.
11.9. Gender; Number. In this Agreement, the use of one gender (e.g., "he",
"she" and "it") shall mean each other gender; and the singular shall mean
the plural, and vice versa, all as the context may require.
11.10. Severability. The parties acknowledge that the terms of this
Agreement are fair and reasonable at the date signed by them. However, in
light of the possibility of a change of conditions or differing
interpretations by a court of what is fair and reasonable, the parties
stipulate as follows: if any one or more of the terms, provisions,
covenants or restrictions of this Agreement shall be determined by a court
of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated; further, if any one or more of the
provisions contained in this Agreement shall for any reason be determined
by a court of competent jurisdiction to be excessively broad as to
duration, geographical scope, activity or subject, it shall be construed,
by limiting or reducing it, so as to be enforceable to the extent
compatible with then applicable law.
11.11. Consents. Any consent, approval or authorizations required hereunder
shall mean the written consent, approval or authorization of the chairman
of the board of the Employer or such other officer as may be designated in
writing by the Board of Directors.
11.12. Indemnification and Expenses. Both the Employer and the Bank will
indemnify the Executive and his legal representatives to the fullest extent
permitted by the laws of the State of Mississippi or any other state where
the Employer shall be incorporated from time to time and the existing or
any future bylaws of either of the Employer or the Bank, against all costs,
charges and expenses whatsoever incurred or sustained by him or his legal
representatives in connection with any action, suit or proceeding to which
he or his legal representatives may be made a party by reason of his being
or having been a director or officer of tile Employer or the Bank (other
than an action, suit or proceeding against the Executive under this
Agreement), and the Executive shall be entitled to the protection of any
insurance policies the Employer or the Bank elect to maintain generally for
the benefit of its directors and officers. To the extent permitted by law,
the Bank and the Employer shall advance all reasonable costs, charges and
expenses incurred by the Executive in defending himself against any action
referred to in this Section 11.12.
IN WITNESS WHEREOF, the Employer 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.
THE FIRST BANCSHARES, INC.
By: Date:
______________________________ _______________
[CORPORATE SEAL]
Attest:____________________________
THE FIRST NATIONAL BANK OF SOUTH MISSISSIPPI
By: Date:
____________________________________ ___________________
[CORPORATE SEAL]
Attest:____________________________
THE EMPLOYEE:
BY: Date:
___________________________________ ___________________
ATTEST:____________________________
