Exhibit 10.7
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of
July 29, 2002 ("Effective Date") between MILLENNIUM BANK, a national banking
association (the "Bank"), and Xxxxx X. Xxxxx ("Executive").
RECITALS
A. Executive wishes to pursue employment by the Bank as Executive Vice
President, Credit Administration.
B. In order to provide Executive continued incentive to remain in its
services, the Bank desires to provide Executive with compensation security under
the conditions set forth in this Agreement.
C. The Bank and the Executive wish to define their relationship and ensure
continued employment on the terms and conditions of this Agreement.
AGREEMENT
The Bank and Executive hereby agree as follows:
1. PURPOSE OF AGREEMENT
The purpose of this Agreement is to define the relationship between the
Bank, as employer of Executive, and Executive, as an employee of the Bank.
2. EMPLOYMENT
During the term of this Agreement, Executive shall serve as the Executive
Vice President, Credit Administration of the Bank and perform the tasks incident
to this position. The Executive shall report to the Chief Executive Officer of
the Bank. Executive's position is full-time and Executive shall devote as much
time as may be necessary to perform Executive's duties.
3. TERM OF EMPLOYMENT
The Bank agrees to employ the Executive and the Executive hereby agrees to
serve the Bank in accordance with the terms and conditions set forth herein, for
an initial term of three (3) years commencing on the Effective Date of this
Agreement; subject, however, to earlier termination as expressly provided
herein.
The initial three (3) year term of employment shall be extended for three
(3) additional years at the end of the initial three (3) year term, and then
again after each successive term thereafter. However, either party may terminate
this Agreement at the end of the initial three (3) year term, or at the end of
any successive three (3) year terms thereafter, by giving the other party
written notice of intent not to renew, delivered at least six (6) months prior
to the end of such initial term or successive term. In the event such notice of
intent not to renew is properly delivered, this Agreement, along with all
corresponding rights, duties, and covenants, automatically shall expire at the
end of the initial term or successive term then in progress.
4. COMPENSATION
4.1 SALARY
The Bank shall pay to Executive, and Executive shall accept from the Bank,
a base annual salary for Executive's services of $110,000 payable periodically
based on the Bank's standard pay schedule, provided that the Executive has
provided service to the Bank during the specified pay period. Executive's
compensation may not be decreased at any time during this Agreement, but will be
reviewed after the first six months of the initial term. Subject to satisfactory
performance, deemed by the Bank, the base annual salary will increase to
$125,000 and thereafter may be increased at the sole discretion of the Bank.
4.2 BONUS
Executive may be entitled to receive, in addition to the annual base salary
referenced above, an annual bonus based on the satisfactory completion of annual
performance goals established for the Executive. Goals will be established by
the Bank and agreed upon by the Executive at the beginning of each fiscal year
and may include, but are not limited to, implementation of new policies and
procedures, profitability, growth, and management of departments assigned. Any
prior deficiencies noted during performance reviews, audits or examinations that
are deemed to be correctable by the Executive, must be rectified prior to the
conclusion of the next fiscal year in order for Executive to be eligible for the
subsequent year's bonus. Said bonus will be paid as soon as practical following
the close of the Bank's fiscal year, subject to adjustment, if any, based on the
audited year end financial statements.
No performance bonus otherwise in effect shall be paid if Executive is
terminated for cause or resigns prior to the end of the fiscal year.
4.3 STOCK OPTIONS
4.3 STOCK OPTIONS
Upon employment, the Bank shall grant Executive an option to purchase ten
thousand (10,000) shares of Millennium Bankshares Corporation common stock at a
strike price equal to the current market value of the common stock on the
Effective Date, which option shall be granted and fully vested on the Effective
Date. The Bank shall also grant Executive on the Effective Date, a separate
unvested option to purchase ten thousand (10,000) shares of Millennium
Bankshares Corporation common stock at a strike price equal to the current
market value of the common stock on the Effective Date. The second option shall
vest in increments of two thousand (2,000) shares for each full year of
employment over five (5) years. Vesting will occur on or about February 1st
annually following the close of the Bank's fiscal year. Options granted under
this Section 4.3 shall vest in accordance with the terms and conditions set
forth in the option agreement, and under similar terms and conditions as other
options granted by the Bank.
If Bank terminates this Agreement without cause at the end of the initial
three (3) year term, or initial successive term, then any remaining outstanding
options shall fully vest at the end of the initial term or successive term then
in progress at the time of termination. If there is a Change in Control, as
defined herein, all remaining outstanding options shall vest in accordance with
the change of control provisions in the option agreement. Notwithstanding the
above, if Bank terminates this Agreement "for cause", as defined herein, or if
Employee terminates this Agreement, then no remaining outstanding options shall
vest.
5. REIMBURSEMENT OF BUSINESS-RELATED EXPENSES INCURRED BY EXECUTIVE
The Bank shall reimburse Executive for all reasonable and necessary
expenses incurred by Executive in connection with his employment hereunder,
including reasonable expenses associated with the entertainment of clients, in
accordance with the general policy of the Bank regarding reimbursement of
Executive's expenses or pursuant to an applicable travel policy.
6. BENEFITS
Executive shall be entitled to receive such health, dental, personal
disability, life insurance and flexible time-off benefits as are provided for
other Executives of the Bank with similar duties and work requirements and as
may be authorized and adopted from time to time in the future by the Bank.
Executive shall be entitled to the number of weeks of paid time off each year as
the Bank grants to its senior executives.
Bank agrees that it shall further be responsible for the payment of any
country club membership dues, as well as any related entertainment expenses as a
result of entertaining clients, incurred by Executive during the term of this
Agreement.
7. NONDISCLOSURE
Executive agrees at all times to hold as secret and confidential (unless
disclosure is required by the Bank or would be in furtherance of Executive's
employment with the Bank or is required pursuant to court order, subpoena in a
governmental proceeding, arbitration or pursuant to other process or requirement
of law) any and all knowledge, information, developments, policies, procedures
and trade secrets, know-how and confidences of the Bank, Bank's parent or other
subsidiaries and affiliates of Bank and Bank's parent, or their business of
which he has knowledge during the Employment Period, to the extent such matters
have not previously been made public, are not thereafter made public, or do not
otherwise become available to Executive from a third party not, to Executive's
best knowledge, bound by any confidentiality agreement with the Bank
("Confidential Information"). The phrase "made public" as used in this Agreement
shall apply to matters within the domain of (a) the general public or (b) the
Bank's industry. Executive agrees not to use such knowledge for his own benefit
or for the benefit of others or, except as provided above, disclose any of such
Confidential Information without the prior written consent of the Bank, which
consent shall make express reference to this Agreement.
8. NONINTERFERENCE
Executive agrees that during the Employment Period and for a period of
twelve (12) months thereafter, he will not, except in furtherance of his
employment with the Bank or as a part of his duties as an officer of the Bank,
without the prior written consent of the Bank, directly or indirectly solicit,
induce or attempt to solicit or induce any Executive, agent or other
representative or associate of the Bank, Bank's parent or other subsidiaries and
affiliates of Bank and Bank's parent, to terminate its/his relationship with the
Bank or in any way interfere with such a relationship or a relationship between
the Bank and any of its suppliers or distributors.
9. DISCLOSURE OF PROPRIETARY INTELLECTUAL PROPERTY
Executive agrees that he will promptly disclose to the Bank any and all
improvements, discoveries, ideas, developments or inventions composing
proprietary intellectual property which may be material to the operations and
business of the Bank (the "Improvements") which Improvements are made or
conceived by Executive, acting alone or in conjunction with others, (a) during
the Employment Period, or (b) to the extent the Improvements are specifically
and directly
related to the Bank's products, services, policies and procedures within three
(3) years after the Employment Period, if such Improvement results from or was
suggested by such employment. Executive shall not disclose any such Improvement
to any person, except the Bank and shall use all reasonable efforts to provide
the Bank written disclosure of such Improvements. Each such Improvement shall be
the sole and exclusive property of and is hereby assigned to the Bank. Executive
agrees that, at the request of the Bank, Executive will execute such
applications, statements, assignments or other documents, furnish such
information and data and take all such other action (including without
limitation the giving of testimony) as the Bank may from time to time reasonably
request in order to obtain for the Bank a registration or patent in the United
States or any foreign country covering or pertaining to any such Improvement.
The Bank and Executive hereby acknowledge and agree that the obligations set
forth in this Section 10 do not apply to an Improvement for which no equipment,
supplies, facility, copyright, patent or patent application, registration,
information, or other intellectual property or trade secret information of the
Bank was used and which was developed entirely on Executive's own time, unless
(a) the Improvement relates (i) directly to the business of the Bank, or (ii) to
the Bank's actual or demonstrably anticipated research or development, or (b)
the Improvement results from any work performed by Executive for the Bank.
10. TERMINATION OF EMPLOYMENT
10.1 EVENTS OF TERMINATION
(a) Notwithstanding anything to the contrary contained herein,
this Agreement shall terminate immediately and, except for the obligations of
Executive and Bank set forth in Sections 7, 8, 9, 10 and 10.2 hereof and the
payment by the Bank of all salary, expenses or benefits which may be earned but
unpaid or un-reimbursed (as the case may be) as of the date of termination which
obligations shall survive such termination, all rights and obligations of the
Bank and Executive hereunder shall be completely null and void upon the earliest
to occur of the following:
(i) the death of Executive;
(ii) the termination of Executive's employment by the Bank "for
cause" during the term of this Agreement; or
(iii) the voluntary termination by Executive of his employment
with the Bank during the term of this Agreement pursuant to Section 10.1(b)
hereof.
As used in subsection (ii) above, a termination "for cause" shall mean the
Executive's gross negligence or willful misconduct, which is detrimental to the
best interests of the Bank's business operations. Such acts of negligence or
willful misconduct may include, but not be limited to, the diversion or
usurpation of corporate opportunities properly belonging to the Bank, deliberate
refusal to follow the instructions of the Bank, or any material breach of this
agreement during its term. For purposes of this paragraph, no act, or failure to
act, on the Executive's part shall be considered "willful" unless done, or
omitted to be done, by him not in good faith and without reasonable belief that
his act or omission was in the best interest of the Bank; provided that any act
or omission to act on the Executive's behalf in reliance upon an opinion of
counsel to the Bank or counsel to the Executive shall not be deemed willful. The
Executive shall not be deemed to have been terminated for cause unless there
shall have been delivered to him notification from the Bank finding that the
Executive was guilty of conduct which is deemed to be Cause within the meaning
of the first sentence of this paragraph and specifying the particulars thereof
in detail, after reasonable notice to the Executive and an opportunity for him,
together with his counsel, to be heard before the Bank.
10.2 EXECUTIVE'S RESPONSIBILITIES UPON TERMINATION
Following any notice of termination, Executive shall fully cooperate with
the Bank in all matters relating to the winding up of his pending work on behalf
of the Bank and to the orderly transfer of any such pending work to other
Executives of the Bank as may be designated by the Bank.
10.3 EXCESS PARACHUTE LIMITATION
If either the Bank or the Executive receives confirmation from the Bank's
independent tax counsel or its certified public accounting firm, or such other
accounting firm retained as independent certified public accountants for the
Bank (the "Tax Advisor"), that any payment by the Bank to the Executive under
this Agreement or otherwise would be considered to be an "excess parachute
payment" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended, or any successor statute then in effect (the "Code"), then the
aggregate payments by the Bank pursuant to this Agreement shall be reduced to
the highest amount that may be paid to the Executive by the Bank under this
Agreement without having any portion of any amount payable to the Executive by
the Bank or a related entity under this Agreement or otherwise treated as such
an "excess parachute payment", and, if permitted by applicable law and without
adverse tax consequence, such reduction shall be made to the last payment due
hereunder. Any payments made by the Bank to the Executive under this Agreement
which are later confirmed by the Tax Advisor to be "excess parachute payments"
shall be considered by all parties to have been a loan by the Bank to the
Executive, which loan shall be repaid by the Executive upon demand together with
interest calculated at the lowest interest rate authorized for such loans under
the Code without a requirement that further interest be imputed.
10.4 NOTICE
The term "Notice of Termination" in this Section 10 shall mean at least 60
working days' written notice of termination of Executive's employment, during
which period Executive's employment and performance of services will continue;
provided, however, that the Bank may, upon notice to Executive and without
reducing Executive's compensation during such period, excuse Executive from any
or all of his duties during such period. The effective date of the termination
of Executive's employment hereunder shall be the date on which such 60-day
period expires.
11. TERMINATION PAYMENTS
In the event of termination of the employment of Executive, all
compensation and benefits set forth in this Agreement shall terminate except as
specifically provided in this Section 11:
11.1 TERMINATION BY THE BANK
If the Bank terminates Executive's employment prior to the end of the term
of this Agreement for any reason other than those outlined in section 10 hereof,
Executive shall be entitled to receive for the current term of this Agreement
all annual base salary, in payments based on the regular Bank payment schedules,
in addition to any accrued vacation, deferred compensation (together with
accrued interest or earnings thereon, if any, payable under a deferral plan),
and immediate and full vesting of stock options granted as of the effective date
of this agreement, insofar as the Executive complies with the provisions
outlined in sections 7, 8 and 9.
11.2 TERMINATION BY EXECUTIVE
If the Executive terminates his employment prior to the end of the term of
this Agreement, Executive shall be entitled to the compensation outlined in
section 6, insofar as the Executive complies with the provisions outlined in
sections 7, 8 and 9.
11.3 EXPIRATION OF TERM
In the case of a termination of Executive's employment as a result of the
expiration of the term of this Agreement, Executive shall not be entitled to
receive any payments hereunder, except for the provisions set forth in sections
7, 8 and 9.
11.4 PAYMENT SCHEDULE
All payments under this Section 12 shall be made to Executive at the same
interval as payments of salary were made to Executive immediately prior to
termination.
12. INTEGRATION
This Agreement constitutes the entire agreement between Executive and the
Bank relating in any way to the employment of Executive by the Bank, and
supersedes all prior discussions, understandings and agreements between them
with respect thereto.
13. INVALID PROVISION
The invalidity or unenforceability of any particular provision of this
Agreement shall not affect any other provision hereof, and the Agreement shall
be construed in all other respect as if such invalid or unenforceable provisions
were omitted.
14. ATTORNEYS' FEES
In the event of a dispute arising out of the interpretation or enforcement
of this Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees and costs.
15. BINDING EFFECT
This Agreement shall be binding upon and shall inure to the benefit of the
respective parties hereto, their heirs, executors, successors and assigns.
16. GOVERNING LAW
This Agreement and the parties' performance hereunder shall be governed by
and interpreted under the laws of the Commonwealth Of Virginia. Executive agrees
to submit to the jurisdiction of the courts of the Commonwealth Of Virginia, and
that venue for any action arising out of this Agreement or the parties'
performance hereunder may be laid in the City of Richmond, Virginia.
17. AMENDMENTS
Any term of this Agreement may be amended and the observance of any term
may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the parties.
18. ASSIGNMENT
This Agreement is personal to Executive and shall not be assignable by
Executive. The Bank may assign its rights hereunder to (a) any corporation
resulting from any merger, consolidation or other reorganization to which the
Bank is a party or (b) any corporation, partnership, association or other person
to which the Bank may transfer all or substantially all of the assets and
business of the Bank existing at such time or (c) the parent of Bank. All of the
terms and provisions of this Agreement shall be binding upon and shall inure to
the benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns.
19. CONSENTS AND WAIVERS
No consent or waiver, express or implied, by any party hereto or of any
breach or default by any other party in the performance by the others of their
obligations hereunder shall be valid unless in writing, and no such consent or
waiver shall be deemed or construed to be a consent or waiver to or of any other
breach or default in the performance by such other party of the same or any
other obligations of such party hereunder. Failure on the part of any party to
complain of any act or failure to act of any other party or to declare the other
parties in default, irrespective of how long such failure continues, shall not
constitute a waiver by such party of its rights hereunder. The granting of any
consent or approval in any one instance by or on behalf of the Bank shall not be
construed to waive or limit the need for such consent or approval in any other
subsequent instance.
20. CONSTRUCTION
This Agreement has been submitted to the scrutiny of, and has been
negotiated by, all parties hereto and their counsel, and shall be given a fair
and reasonable interpretation in accordance with the terms hereof, without
consideration or weight being given to its having been drafted by any party
hereto or its counsel.
21. HEADINGS
Titles or captions of sections contained in this Agreement are inserted
only as a matter of convenience and for reference, and in no way define, limit,
extend or describe the scope of this Agreement or the intent of any provisions
hereof.
22. REMEDIES IN EQUITY
The rights and remedies of the parties hereunder shall not be mutually
exclusive, i.e., the exercise of one or more of the provisions hereof shall not
preclude the exercise of any other provisions hereof. The parties confirm that
damages at law will be an inadequate remedy for a breach or threatened breach of
this Agreement and agree that their respective rights and obligations hereunder
shall be enforceable by specific performance, injunction or other equitable
remedy as well as at law or otherwise.
MILLENNIUM BANK, N.A.
A National Banking Association
______________________________
By: Xxxxxxx X. Xxxxxxx
It Chairman, &
Chief Executive Officer
EXECUTIVE:
______________________________
Xxxxx Xxxxx
000 Xxxxxxxxxxx Xx.
Xxxxxxxxxx, XX 00000
