EMPLOYMENT AGREEMENT
EXHIBIT
10(a)(8)
This
Employment Agreement dated as of January 1, 2007 is by and between Patriot
National Bank, a national banking association ("Patriot") and Xxxxxx Xxxxxxxxx
(the "Executive").
RECITALS
Patriot
desires to employ the Executive and to have the benefit of his skills and
services, and the Executive desires to be employed by Patriot on the terms
and
conditions set forth herein.
NOW,
THEREFORE, in consideration of the mutual promises, terms, covenants and
conditions set forth herein, and the performance of each, the parties, intending
legally to be bound, hereby agree as follows:
AGREEMENTS
Section
1. Definitions.
For
purposes of this Agreement, the following terms have the meanings set forth
below:
"Board"
means
the Board of Directors of Patriot as same is constituted from time to
time.
"Business"
means
the business generated by the fully commissioned residential lenders reporting
to Executive during the term of this Agreement, which consists primarily of
the
residential mortgage brokerage origination business as it exists on the date
hereof.
"Cause"
means
(a) the commission by the Executive of any act, on or after the date of this
Agreement, constituting, as to any cash funds or other receipts of Patriot,
or
any material property of Patriot or any other Person, (i) theft, (ii)
embezzlement, (iii) fraud, (iv) gross misconduct, (v) dishonesty or (vi) or
misappropriation of material property under applicable law; (b) the conviction
of the Executive of (i) a crime resulting in material injury to the business
or
property of Patriot or (ii) a felony; (c) the material breach by the Executive
of this Agreement, including but not limited to the failure by the Executive
to
follow all reasonable and lawful directions of the Chairman or CEO as to any
material matter, or the taking of any action by the Executive that would be
reasonably likely to cause material injury to Patriot or that would be in
conflict with any material interest to Patriot within a reasonable period of
time following Executive's receipt of written notice thereof by Patriot, which
notice is sufficiently specific so as to permit Executive reasonably to cure
such misconduct; or (d) the misuse or unlawful use of drugs, alcohol or other
controlled substances in contravention of written policies of Patriot that
are
applicable to all employees of Patriot.
"Confidential
Information"
means
information that was or is used, developed or obtained by Patriot in connection
with its business, including (a) products or services, (b) fees, costs and
pricing structures, (c) analyses, (d) computer software, including operating
systems, applications and program listings, (e) flow charts, manuals and
documentation, (f) data bases, (g) accounting and business methods, (h)
inventions, devices, new developments, methods and processes, whether patentable
or unpatentable and whether or not reduced to practice, (i) other copyrightable
works, (j) all technology and trade secrets, and (k) all similar and related
information in whatever form or medium, including customer lists.
Notwithstanding the foregoing, this Agreement imposes no obligation upon the
Executive with respect to Confidential Information which (a) was known to the
Executive before receipt from Patriot, (b) is or becomes publicly available
through no fault of the Executive, (c) is disclosed to the Executive by a third
party without a duty of confidentiality on the part of the third party to
Patriot, (d) is subsequently independently developed by the Executive without
a
breach of this Agreement, or (e) is required to be disclosed by the Executive
in
a judicial or administrative proceeding, provided that the Executive gives
Patriot reasonable advance notice of such required disclosure so that Executive
may contest the disclosure or seek a protective order.
"Effective
Date"
means
the date of this Agreement.
"Employment
Period"
has the
meaning set forth in Section 5 of this Agreement.
"Executive"
means
Xxxxxx Xxxxxxxxx.
"FCRLRE"
means
the fully commissioned residential lenders reporting directly to the
Executive.
"Permanent
Disability"
shall
have occurred if as a result of physical or mental incapacity, the Employee
shall have been incapable of performing Employee's duties hereunder for a period
in excess of 120 consecutive days in any 6 month period, or an aggregate of
240
days in any 12 month period.
"Person"
means
an individual, a partnership, a corporation, a limited liability company, an
association, a trust, a joint venture, an unincorporated organization and a
governmental entity or any department, agency or political subdivision
thereof.
"Reimbursable
Expenses"
has the
meaning set forth in Section 4.4 of this Agreement.
"Subsidiary"
means,
with respect to any Person, any corporation, partnership, limited liability
company, association or other business entity of which (a) if a corporation,
a
majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or a
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combination
thereof, or (b) if a partnership, limited liability company, association or
other business entity, a majority of the partnership or other similar ownership
interests thereof is at the time owned or controlled, directly or indirectly,
by
that Person or one or more Subsidiaries of the Person or a combination thereof.
For purposes of this Agreement, a Person or Persons will be deemed to have
a
majority ownership interest in a partnership, limited liability company,
association or other business entity if such Person or Persons are allocated
a
majority of partnership, limited liability company, association or other
business entity gains or losses or control the managing director or member
or
general partner of such partnership, limited liability company, association
or
other business entity.
"Termination
Date"
shall
mean December 31, 2007.
Section
2. Employment.
Patriot
hereby employs the Executive, and the Executive hereby accepts employment with
Patriot, upon the terms and conditions set forth in this Agreement, for the
Employment Period provided in Section 5.
Section3. Position
and Duties.
3.1 Position.
The
Executive shall hold the position of Executive Vice President of Patriot
National Bank. During the Employment Period, the Executive will perform such
reasonable executive and management duties as may, from time to time, be
determined and assigned to him by the Chairman or Chief Executive Officer of
Patriot National Bank, which duties shall be similar to the services the
Executive rendered to Patriot in the past and shall relate primarily to the
Business. Patriot shall not require the Executive to relocate to any office
of
Patriot outside of Fairfield County, Connecticut.
3.2 Performance
of Duties; Other Activities.
The
Executive shall devote his best efforts, attention and skills toward performing
his duties on behalf of Patriot, and his full business and professional time
to
fully and faithfully perform such duties and responsibilities to the best of
his
abilities in a diligent, trustworthy, businesslike and efficient manner. The
Executive shall do such traveling as may reasonably be required in connection
with the performance of his duties and responsibilities hereunder, provided
that
the Executive will not be assigned to regular duties such as would require
him
to relocate his permanent residence.
3.3 Reporting.
The
Executive will report to the Chairman or Chief Executive Officer of Patriot
National Bank.
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Section
4. Compensation
and Benefits.
4.1 Compensation.
The
compensation payable to the Executive by Patriot during the Employment Period
is
set forth on Schedule A hereto.
4.2 Executive
Stock Purchases and Stock Options.
The
Executive may be granted options and opportunities to purchase Patriot Common
Stock consistent with stock purchase plans and option plans provided to senior
management of Patriot and as may be awarded in the sole discretion of Patriot's
Board of Directors from time to time.
4.3 Benefits.
In
addition to the aforesaid compensation, the Executive shall be entitled to
be
included under the same rules or restrictions in any employee welfare and
retirement plan or program of Patriot generally available to its employees
and/or officers, including, without limitation, plans for hospital services,
medical services benefits, sick pay, dental and other health plans, as well
as
the following benefits during the Employment Period:
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(a)
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four
weeks of paid vacation per year during the Employment Period, to
be taken
consistent with the rules applicable to other Patriot executives;
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(b)
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five
personal/sick days per year, to be taken consistent with the rules
applicable to other Patriot executives;
and
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(c)
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participation
in the 401K Plan of Patriot consistent with the participation afforded
other similarly positioned Patriot
executives.
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4.4 Expenses.
Patriot
shall reimburse the Executive for any and all reasonable expenses incurred
by
him in the course of performing his duties under this Agreement which are
consistent with Patriot's policies in effect from time to time including
business travel, entertainment, mileage expenses and other business expenses
("Reimbursable Expenses"), subject to Patriot's requirements with respect to
reporting and documentation of expenses.
Section
5. Employment
Period and Termination.
5.1 Employment
Period.
The
Executive's employment hereunder shall commence on the Effective Date, and,
unless renewed or modified by written agreement between Patriot and the
Executive, the Employment Period will terminate on the "Termination Date";
provided,
however, that (a) the Employment Period shall terminate prior to such date
upon
the Executive's death or Permanent Disability, and (b) the Employment Period
may
be terminated by Patriot at any time prior to such date, if such termination
shall be for Cause. The Executive and Patriot agree to begin negotiations to
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renew
this employment agreement by September 15, 2007 and to use their best efforts
to
complete negotiations by October 15, 2007 provided, however, that neither the
Executive nor Patriot shall have any legal obligation to renew this employment
agreement.
5.2 Unjustified
Termination.
Except
as otherwise provided in Section 5.3 below, if the Employment Period shall
be
terminated by Patriot prior to the Termination Date for any reason other than
(a) for Cause, or (b) as a result of the death or Permanent Disability of the
Executive (collectively, an "Unjustified Termination"), the Executive shall,
so
long as the Executive has not breached and does not breach the provisions of
Sections 6, 7 or 8 of this Agreement, be entitled to receive during the
unexpired portion of the Employment Period (i) continuation of his compensation,
(ii) reimbursement of all Reimbursable Expenses incurred by the Executive prior
to the termination of the Employment Period, and (iii) continuation of all
medical benefits.
5.3 Justified
Termination.
If the
Employment Period shall be terminated by Patriot prior to the Termination Date
(a) for Cause, (b) as a result of the Executive's resignation, or (c) as a
result of the death or Permanent Disability of the Executive (collectively,
a
"Justified Termination"), the Executive shall be entitled to receive only his
compensation through the date of termination and reimbursement of all
Reimbursable Expenses incurred by the Executive prior to the termination of
the
Employment Period. A termination for Cause shall become effective on the date
designated by Patriot.
5.4 Benefits.
Except
as otherwise required by law, all of the Executive's rights to fringe benefits
under this Agreement, if any, that would otherwise accrue after the termination
of the Employment Period as a result of a Justified Termination will cease
upon
such Justified Termination.
Section
6. Non-Solicitation
Agreement. The
Executive covenants and agrees that during the restricted period beginning
eighteen months from the Executive’s departure, the Executive will refrain from
interfering with the employment and independent contractor relationships between
Patriot and its employees and will not solicit any of such employees or
independent contractors for employment or service by any other financial
institution or organization in the residential mortgage business.
Section
7. Delivery
of Materials Upon Termination of Employment.
As
requested by Patriot from time to time and upon the termination of the
Executive's employment with Patriot for any reason, the Executive will promptly
deliver to Patriot all copies and embodiments, paper, electronic or in whatever
form or medium, of all Confidential Information in the Executive's possession
or
within his control irrespective of the location or form of such material and,
if
requested by Patriot, will provide Patriot with written confirmation that all
such materials have been delivered to Patriot.
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Section
8. Nondisclosure
and Non-use of Confidential Information.
The
Executive will not, at any time, disclose or use any Confidential Information
of
which the Executive is or becomes aware, whether or not such information is
developed by him, except to the extent that such disclosure or use is directly
related to and required by the Executive's performance of duties assigned to
the
Executive pursuant to this Agreement.
Section
9. Affiliates;
Equitable Relief.
The
Executive acknowledges that a breach or threatened breach by him of any of
his
covenants contained in Sections 6, 7 and 8 of this Agreement could cause
irreparable harm to Patriot for which it would have no adequate remedy at law.
Accordingly, and in addition to any remedies which Patriot may have at law,
in
the event of an actual or threatened breach by the Executive of his covenants
contained in Sections 6, 7 and 8 of this Agreement, Patriot shall have the
absolute right to apply to any court of competent jurisdiction for such
injunctive or other equitable relief as such court may deem necessary or
appropriate in the circumstances.
Section
10. No
Prior Agreements.
The
Executive hereby represents and warrants to Patriot that the execution of this
Agreement by Executive, his employment by Patriot, and the performance of his
duties hereunder will not violate or be a breach of any agreement with a former
employer, client, or any other Person. Further, Executive agrees to indemnify
and hold harmless Patriot and its officers, directors, and representatives
for
any claim, including, but not limited to, reasonable attorney's fees and
expenses of investigation, of any such third party that such third party may
now
have or may hereafter come to have against Patriot or such other persons, based
upon or arising out of any
non-competition
agreement, invention, secrecy, or other agreement between Employee and such
third party that was in existence as of the date of this Agreement. To the
extent that Employee had any oral or written employment agreement or
understanding with Patriot, this Agreement shall automatically supersede such
agreement or understanding, and upon execution of this Agreement by Employee
and
Patriot, such prior agreement or understanding automatically shall be deemed
to
have been terminated and shall be null and void.
Section
11 Miscellaneous.
11.1 Remedies.
The
parties to this Agreement shall have all rights and remedies set forth in this
Agreement, all rights and remedies which either party has been granted at any
time under any other agreement or contract and all of the rights which either
has under any law. Both parties will be entitled to enforce such rights
specifically, without posting a bond or other security, to recover damages
by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law or available in equity.
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11.2 Waivers
and Amendments.
The
provisions of this Agreement may be amended or waived only by a written
agreement executed and delivered by Patriot and the Executive. No other course
of dealing between the parties to this Agreement or any delay in exercising
any
rights hereunder will operate as a waiver of any rights of any such
parties.
11.3 Successors
and Assigns.
All
covenants and agreements contained in this Agreement by or on behalf of any
of
the parties hereto and their respective heirs, executors, administrators,
personal representatives, successors and assigns, whether so expressed or not;
provided that the Executive may not assign his rights or delegate his
obligations under this Agreement without the written consent of
Patriot.
11.4 Severability.
Whenever
possible, each provision of this Agreement will be interpreted in such manner
as
to be effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.
11.5 Counterparts.
This
Agreement may be executed simultaneously in two or more counterparts, any one
of
which need not contain the signatures of more than one party, but all of which
counterparts taken together will constitute one and the same
agreement.
11.6 Descriptive
Headings.
The
descriptive headings of this Agreement are inserted for convenience only and
do
not constitute a part of this Agreement.
11.7 Notices.
All
notices, demands or other communications to be given or delivered under or
by
reason of the provisions of this Agreement will be in writing and will be deemed
to have been given when delivered personally to the recipient, two business
days
after the date when sent to the recipient by certified or registered mail,
return receipt requested and postage prepaid. Such notices, demands, and other
communications will be sent to the Executive and to Patriot at the addresses
set
forth below.
If
to the
Executive:
Xxxxxx
Xxxxxxxxx
0000
Xxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
Or
Xxxxxx
Xxxxxxxxx
0
Xxxxxxxxxx Xxxx
Xxx
Xxxxxxxxx, XX 00000
7
If
to
Patriot:
Patriot
National Bank
000
Xxxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
Attn:
Chairman
or
to
such other address or to the attention of such other Person as the recipient
party has specified by prior written notice to the sending party.
11.8 No
Third Party Beneficiary.
This
Agreement will not confer any rights or remedies upon any person other than
Patriot, the Executive and their respective heirs, executors, administrators,
personal representatives, successors and permitted assigns.
11.9 Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties and supersedes
any prior understandings, agreements or representations by or among the parties,
written or oral, that may have related in any way to the subject matter
hereof.
11.10 Construction.
The
language used in this Agreement will be deemed to be the language chosen by
the
parties to express their mutual intent, and no rule of strict construction
will
be applied against any party. Any reference to any federal, state, local or
foreign statute or law will be deemed also to refer to all rules and regulations
promulgated there under, unless the context requires otherwise. The use of
the
word "including" in this Agreement means "including without limitation" and
is
intended by the parties to be by way of example rather than
limitation.
11.11 Life
Insurance.
The
Executive agrees that Patriot shall have the right to obtain life insurance
on
the Executive's life, at the sole expense of Patriot, as the case may be, and
with Patriot as the sole beneficiary thereof. The Executive shall (a) cooperate
fully in obtaining such life insurance, (b) sign any necessary consents,
applications and other related forms or documents and (c) take any reasonably
required medical examinations.
11.12 Survival.
Sections
6, 7, 8 and 9, of this Agreement will survive and continue in full force in
accordance with their terms notwithstanding any termination of the Employment
Period.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
(signatures
appear on the following page)
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PATRIOT
NATIONAL BANK
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By:
/s/ Xxxxxx Xx Xxxx
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Xxxxxx
Xx Xxxx
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Chairman
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| /s/ Xxxxxx Xxxxxxxxx | |
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Xxxxxx
Xxxxxxxxx
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SCHEDULE
A
2007
Compensation (January 1, 2007 - December 31, 2007)
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1.
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Guaranteed
Draw against commission - $180,000 paid in equal monthly
installments.
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2.
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Commission
- Payable at the new commission plan rates which become effective
on
January 1, 2007 (See attached Schedule
B).
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3.
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Override
Commission - 4% payable on the gross commission revenue generated
by those
loan originators who report directly
to
Marcus, payable following the end of each calendar quarter. This
does not
include revenue generated per Items 5 or 6 below.
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4.
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Bonus
- Marcus may receive a payment
/
bonus on commission generated by loan originators reporting to others
depending on Marcus’s efforts in assisting them. The Management Committee,
at its sole discretion, will determine the amount of bonus, if any,
to be
paid. If any amount is paid, it will be available at the same time
as
payments are made to employees included in Patriot's profit sharing
program.
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5.
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Business
Referrals - If Marcus derives any business resulting from an internal
referral to him and/or subsequent business related to an internal
referral
to him, the commission rate for that business will be negotiated
and not
necessarily the payment percentage indicated from the attached Schedule
B.
Each transaction and the agreed commission rate for it must be approved
by
the Chairman or Chief Executive Officer in advance, and must be documented
indicating agreement by Marcus and the Chairman or Chief Executive
Officer, prior to any payment being made on such
transactions.
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6.
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Capital
Market Referrals - if Patriot derives any business from referrals
or
participations from or with any investment banking firm or other
non-traditional lenders for which Marcus or a FCRLRE is responsible,
Patriot may pay Marcus an additional commission or override . Each
such
transaction and any agreed commission or override rate for it must
be
approved by Patriot’s Management Committee in advance, and must be
documented indicating agreement by Marcus and Patriot’s Management
Committee, prior to any payment being due for such
transactions.
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Schedule
B
Loan
Originator Compensation Structure
For
Loans Closed and Funded Beginning January 1, 2007
a. Commission
Payout
- Payout
percentage applies to the entire commission (*)
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Gross
Commission
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Payout
%
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$0
- $3,000
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40%
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$3,001
- $8,000
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50%
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$8,001
- $14,000
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60%
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$14,001
and over
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70%
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(*)
Negotiated payouts for loans placed in the Patriot portfolio that would be
difficult to place outside of the bank.
b. Marketing
Credits
- All
uses of credits must be pre-approved by Management.
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·
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For
every $100,000 in gross commissions, there will be $2,000 in marketing
credits available.
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·
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Marketing
credits must be used by year-end or they
expire.
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Use
of
Credits
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·
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Must
be used to generate additional business for the
bank
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·
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Open
Houses/Documented Business Functions,
etc.
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·
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Brochures
and other advertising, etc.
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c.
Fees Earned by FCRLREs:
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Application
Fee
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Processing
Fee
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1)
First Mortgages
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$150
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$300
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Piggy
Back HELOC
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-
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$100
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2)
Stand Alone HELOC
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-
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$300
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SCHEDULE
C
Xxxxxx
Xxxxxxxxx
Job
Responsibilities - 2007
Residential
Lending Sales Management
Includes
but not limited to:
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·
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Maintain
high ethical standards for FCRLREs
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·
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Maintain
high credit quality for loans originated by FCRLREs
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·
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Recruit
and train loan originators
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·
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Assist
loan originators in structuring and closing
deals
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·
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Manage
the resolution of any customer related issues
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·
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Grow
our revenue stream by hiring more loan originators, offering additional
types
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of
loans
(B and C, FHA, etc.)
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·
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Establish
loan origination officers in appropriate geographical locations,
while
considering the potential for possible bank branch
expansion
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·
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Encourage
loan originators to seek out commercial
loans
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·
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Establish
and cultivate new investor
relationships
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·
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Keeping
aware of new technology to support our employees and business
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·
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Administration
and budgeting
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