AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the “Agreement”) is made and shall be effective as of the 26th day of August, 2022 (the “Effective Date”), by and among COMMUNITYBANK OF TEXAS, National Association, having a principal place of business at 0 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000 (together with its successors and assigns, the “Bank”), and Xxxxxx Xxxxxxx, an individual who resides in the State of Texas (“Employee”).
WHEREAS, Employee is currently employed by the Bank pursuant to that certain Employment Agreement dated January 4, 2016 (the “Prior Employment Agreement”);
WHEREAS, this Agreement is being entered into in connection with the Agreement and Plan of Merger, dated as of November 5, 2021 (the “Merger Agreement”), by and between CBTX, Inc. (“CBTX”) and Allegiance Bancshares, Inc., a Texas corporation (“Allegiance”); and
Article 1: Effective Date; Bank Merger
1.1 EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective at the Effective Time. If the Merger Agreement terminates for any reason without consummation of the Merger, this Agreement shall be null and void ab initio. At the Effective Time, this Agreement shall supersede and replace the Prior Employment Agreement in its entirety.
1.2 BANK MERGER. Following the completion of the Merger, the Bank will merge (the “Bank Merger”) with and into Allegiance Bank, a Texas state banking association and wholly owned subsidiary of Allegiance (“Allegiance Bank”), with Allegiance Bank as the surviving bank (the “Combined Bank”). From and after the Bank Merger, all references herein to the “Bank” shall mean the Combined Bank.
Article 2: Employment, Compensation, and Expenses
a. Salary. The Bank agrees to pay the Annual Base Salary stated on the attached Exhibit A in regular installments in accordance with the Bank’s usual payment practices.
b. Employment Benefits and Compensation Plans, Policies, and Arrangements. Employee shall be entitled to employment benefits such as but not limited to vacation, holidays, leaves of absence, health insurance, dental insurance, etc., if any, available to employees of the Bank generally, in accordance with any policies, procedures, or benefit plans adopted by the Bank from time to time during the existence of this Agreement. Moreover, Employee shall be eligible to receive such other compensation as stated on Exhibit A. Employee’s rights or those of Employee’s dependents under any such benefits or compensation policies, plans or arrangements shall be governed solely by the terms of such policies, plans, or arrangements. The Bank reserves to itself, or its designated administrators, exclusive authority and discretion to determine all issues of eligibility, interpretation and administration of each such benefit or compensation plan, policy or arrangement. The Bank’s employment benefits and compensation arrangements, and policies related thereto, are subject to termination, modification or limitation at the Bank’s sole discretion.
c. Total Compensation. Employee agrees that the compensation stated above and as stated on Exhibit A constitutes the full and exclusive monetary consideration and compensation for all services rendered under this Agreement and for all promises and obligations under this Agreement.
Article 3: Confidential Information; Post-Employment Obligations; Bank Property
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Employee also will have access to, or knowledge of, Confidential Information of third parties, such as actual and potential customers, suppliers, partners, joint venturers, investors, financing sources and the like, of the Bank Group.
Employee agrees that Employee will not, at any time during or after Employee’s employment with the Bank, make any unauthorized disclosure of any Confidential Information of the Bank Group, or make any use thereof, except in the carrying out of Employee’s employment responsibilities hereunder. Employee also agrees to preserve and protect the confidentiality of third party Confidential Information to the same extent, and on the same basis, as the Bank’s Confidential Information.
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a. engage in any business conducted by the Bank Group related to community banking and/or financial activities in which the Bank Group is doing business, has plans to engage in business, or has engaged in business in the preceding 12-month period;
b. perform any job, task, function, or responsibility that Employee has provided for the Bank Group in the preceding 12-month period; or
c. render advice or services to, or otherwise assist, any other person, association or entity in the business of “a,” or “b” above.
Employee understands that the foregoing restrictions may limit Employee’s ability to engage in certain businesses in the geographic region and during the period provided for above, but acknowledges that these restrictions are necessary to protect the Confidential Information the Bank has provided or made available to Employee.
Employee agrees that this provision defining the scope of activities constituting prohibited competition with the Bank Group is narrow and reasonable for the following reasons: (i) Employee is free to seek employment with other companies providing services that do not directly or indirectly compete with any business of the Bank Group; (ii) Employee is free to seek employment with other companies in the banking business that do not directly or indirectly compete with any business of the Bank Group; and (iii) there are many other companies in the banking business that do not directly or indirectly compete with any business of the Bank Group. Thus, this restriction on Employee’s ability to compete does not prevent Employee from using and offering the skills that Employee possessed prior to receiving Confidential Information, specialized training, and knowledge from the Bank.
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Article 4: Termination of Employment
a. “Cause” shall mean: an act or acts of dishonesty or disloyalty by Employee materially and adversely affecting the Bank or any related entity; Employee’s material breach of any of his obligations of this Agreement; Employee’s gross negligence or willful misconduct in performance of the duties and services required of him under this Agreement; or Employee’s conviction of a felony or Employee’s conviction of a misdemeanor involving moral turpitude.
b. “Good Reason” shall mean the occurrence of any of the following after the Effective Time: the assignment to Employee of any duties materially inconsistent in any respect with Employee’s position (including situs, office and title), authority, duties and responsibilities as contemplated by Section 2.2 of this Agreement, excluding any isolated, insubstantial or inadvertent action not taken in bad faith and which is remedied by the Bank promptly after notice of such action; provided, however, that a change to Employee’s duties, in order to constitute Good Reason to resign under this Section 4.2(b) must also constitute a material diminution in Employee’s authority, duties, or responsibilities; any material failure by the Bank to comply with any of the provisions of this Agreement; the Bank requiring Employee to be based at any office outside Xxxxxx County or other mutually agreed location; provided, however, that any such change in Employee’s workplace must also constitute a material change in the geographic location of Employee’s primary workplace; or any material reduction in annual salary as stated in Section 2.3 or as hereafter increased. In all events, Employee’s resignation shall not be deemed to be for Good Reason under this Section 4.2(b), unless the following conditions are met: Employee must provide notice to the Bank of the existence of the condition claimed by Employee to constitute Good Reason to resign within ninety (90) days of the initial existence of such condition; the Bank must have failed to remedy such condition within thirty (30) days following the Bank’s receipt of such notice; and Employee must separate from service with the Bank within thirty (30) days following the end of the Bank’s cure period described above.
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4.3 Notwithstanding any provisions of this Agreement to the contrary, in the event that the aggregate payments or benefits to be made or afforded pursuant to this Agreement, would be deemed to include an “excess parachute payment” under Section 280G of the Internal Revenue Code, then the severance payments under Section 4.2 shall be reduced to an amount which is One Dollar ($1.00) less than the greatest amount allowed to be paid under Section 280G without constituting an “excess parachute payment.”
4.4 This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements Section 409A of the Code (“Section 409A”) and applicable advice and regulations issued thereunder. The intent of the parties is that payments and benefits under this Agreement comply with Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance therewith. Notwithstanding anything herein to the contrary: (i) if at the time of Employee’s termination of employment with the Bank, Employee is a “specified employee” as defined in Section 409A and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A, then the Bank will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Employee) until the date that is six (6) months following Employee’s termination of employment with the Bank (or the earliest date as is permitted under Section 409A); (ii) if any other payments of money or other benefits due to Employee hereunder could cause the application of an accelerated or additional tax under Section 409A, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Board that does not cause such an accelerated or additional tax; (iii) to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, Employee shall not be considered to have terminated employment with the Bank for purposes of this Agreement and no payment shall be due to Employee under this Agreement until Employee would be considered to have incurred a “separation from service” from the Bank within the meaning of Section 409A; and (iv) each amount to be paid or benefit to be provided to Employee pursuant to this Agreement, which constitute deferred compensation subject to Section 409A, shall be construed as a separate identified payment for purposes of Section 409A. To the extent required to avoid an accelerated or additional tax under Section 409A, amounts reimbursable to Employee under this Agreement shall be paid to Employee on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in-kind benefits provided to Employee) during any one year may not effect amounts reimbursable or provided in any subsequent year; provided, however, that with respect to any reimbursements for any taxes which Employee would become entitled to under the terms of this Agreement, the payment of such reimbursements shall be made by the Bank no later than the end of the calendar year following the calendar year in which Employee remits the related taxes. The Bank shall consult with Employee in good faith regarding the implementation of the provisions of this Section 4.4; provided that neither the Bank nor any of its employees or representatives shall have any liability to Employee with respect to thereto. Whenever in this Agreement the provision of payment or benefit is conditioned on Employee’s execution and non-revocation of a waiver and release of claims, such waiver and release must be executed, and all revocation periods must have expired, within sixty (60) days after the date of termination of Employee’s employment, but the Bank may elect to commence payment at any time during such sixty (60)-day period, provided, however, to the extent that the payment or benefit is “deferred compensation” within the meaning of and subject to Section 409A, such payment shall be made in the later year if the sixty (60) day period spans two taxable years.
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Article 5: Miscellaneous
5.1 GOVERNING LAW. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas.
5.5 Employment Taxes. All payments made pursuant to this Agreement will be subject to withholding of applicable income and employment taxes.
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5.11 Whistleblower Protections and Trade Secrets. Notwithstanding anything to the contrary contained herein, nothing in this Agreement prohibits Employee from reporting possible violations of federal law or regulation to any United States governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Xxxxxxxx-Xxxxx Act of 2002, or any other whistleblower protection provisions of state or federal law or regulation (including the right to receive an award for information provided to any such government agencies). Furthermore, in accordance with 18 U.S.C. § 1833, notwithstanding anything to the contrary in this Agreement: (a) Employee shall not be in breach of this Agreement, and shall not be held criminally or civilly liable under any federal or state trade secret law (x) for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (y) for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and (b) if Employee files a lawsuit for retaliation by the Bank for reporting a suspected violation of law, Employee may disclose the trade secret to Employee’s attorney, and may use the trade secret information in the court proceeding, if Employee files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order.
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DATED: August 26, 2022 | /s/ Xxxxxx Xxxxxxx |
Xxxxxx Xxxxxxx | |
DATED: August 26, 2022 | /s/ Xxxxxx X. Xxxxxxxx |
Xxxxxx X. Xxxxxxxx | |
Chairman of the Board/Chief Executive Officer | |
CommunityBank of Texas, N.A. |
[Signature Page to Amended and Restated Employment Agreement]
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Exhibit “A” to
Amended and Restated Employment Agreement
Between CommunityBank of Texas and Xxxxxx Xxxxxxx
Employee Name: | Xxxxxx Xxxxxxx |
Term: | The period commencing effective as of immediately following the Effective Time and ending on the close of business on December 31, 2023. |
Position: | President |
Location: | Houston - Pasadena, Texas |
Annual Base Salary: | $375,000.00 subject to annual review by the Bank’s budget and compensation committee and payable in accordance with the Bank’s normal payroll practices. |
Bonus: | Participation in the Bank’s Annual Incentive Compensation Plan in which other executive officers and/or employees may participate subject to the terms of the plans. |
Equity Awards: | Employee shall be eligible to participate in the CBTX, Inc. 2022 Omnibus Incentive Plan (together with any successor equity incentive plan, the “CBTX Equity Plan”) and to receive grants of equity awards under the CBTX Equity Plan as may be approved from time to time by the Compensation Committee of the Board of Directors of CBTX in its sole discretion. |
Paid Time Off: | 33 days per calendar year. Paid time off not taken during a calendar year shall not carry over to the next year. |
Severance: |
An amount equal to the sum of (i) two (2) times Employee’s Annual Base Salary as of Employee’s date of termination and (ii) the amount equal to eighteen (18) times the monthly COBRA premium for continuation coverage under the Bank’s group health plans, based on Employee’s coverage elections under such plans as of the date of termination. Severance shall be in a lump sum in cash, less applicable withholdings and deductions.
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In addition, the Bank shall pay to Employee a prorated bonus (the “Pro Rata Bonus”) for the calendar year of termination of Employee’s employment, calculated as the cash bonus that Employee would have received for such calendar year based on actual performance (assuming for this purpose that all individual performance goals and objectives are achieved at 100%) had Employee continued in employment with the Bank, multiplied by a fraction, the numerator of which is the number of calendar days during the calendar year of termination that Employee was employed and the denominator of which is the total number of calendar days during the calendar year of termination. The Pro Rata Bonus shall be payable when annual bonuses are paid to other senior executives of the Bank, but in no event later than March 15 of the calendar year following the calendar year in which Employee’s employment with the Bank ends.
Employee shall sign (and shall not revoke) a release of claims in a form acceptable to the Bank to receive severance. | |
Geographic Region of Non-Competition:
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100 miles surrounding any facility owned or operated by any member of the Bank Group. |
Period of Unfair Competition Obligations: | During Employee’s entire period of employment and for two (2) years thereafter, except that there shall be no non-competition obligation following Employee’s date of termination for a termination by the Bank without Cause or by Employee for Good Reason (as those terms are defined in Section 4.2). |
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