Exhibit 10.6
EXECUTIVE EMPLOYMENT AGREEMENT
------------------------------
This EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made and entered
into as of the 12th day of February, 2002, by and between CARDINAL FINANCIAL
CORPORATION ("Cardinal") and Xxxxx X. Xxxxxxxxx ("you" and all similar
references) (collectively, the "parties").
INTRODUCTION
------------
WHEREAS, Cardinal has previously retained you to provide services in an
executive capacity; and
WHEREAS, the parties now desire to memorialize the terms and conditions
of your continuing employment.
NOW THEREFORE, in consideration of the promises and obligations by and
between the parties under this Agreement, and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
TERMS
-----
1. Employment. By accepting employment with Cardinal, you agree:
----------
(a) to devote your professional time, best efforts, attention and
energies to Cardinal's business and to perform any and all
work assigned to you by Cardinal faithfully and at such times
and places as Cardinal designates;
(b) that your employment is terminable "at will" meaning that
either party may terminate your employment relationship with
Cardinal at any time, subject to the terms and conditions set
forth in Section 4 of this Agreement.
2. Compensation and Benefits.
-------------------------
(a) Upon the commencement of your employment, Cardinal will pay
you a base salary, less required and authorized withholding
and deductions, payable in installments in accordance with its
normal payroll practices. From time to time, Cardinal may
adjust your salary and other compensation in its discretion.
(b) During your employment, you will be eligible to receive, in
Cardinal's discretion, an annual performance bonus, stock
option grant and to participate in any employee compensation
or benefit plans (including group medical and 401(k)).
Cardinal may amend or discontinue any of its plans, programs,
policies and procedures at any time for any or no reason with
or without notice.
3. Covenants. You understand that Cardinal has invested, and will continue
---------
to invest, significant resources in your training and development. You
further understand that Cardinal's "business" includes the performance
and rendering of banking and/or financial services. Therefore, in light
of these understandings you agree to the following obligations which
are reasonably designed to protect Cardinal's legitimate business
interests without unreasonably restricting your ability to seek or
obtain employment after your employment with Cardinal terminates for
any reason.
3.1 Prohibition on Competition. During the term of this
Agreement, and for a period of six (6) months from
the date you are terminated for Cause or your
Voluntary Termination, you shall not render or
perform competing banking and/or financial services
within twenty-five (25) miles from your office or
Cardinal's corporate headquarters. This provision
shall not be construed to prevent you from obtaining
employment in the banking and/or financial services
industries provided your new endeavor does not
violate the above-stated prohibition.
3.2 Covenant Not to Solicit Clients or Prospective
Clients. During the term of this Agreement, and for a
period of six (6) months from the date you are
terminated for Cause or your Voluntary Termination,
you agree not to contact any client or prospective
client of Cardinal with whom you have had any contact
on behalf of Cardinal to perform or render banking
and/or financial services. This provision shall not
be construed to prevent you from contacting clients
with whom you have not had any contact during the
term of this Agreement.
3.3 Restriction on the Solicitation of Cardinal's
Employees. During the term of this Agreement and for
a period of six (6) months from the date of you are
terminated for Cause or your Voluntary Termination,
you agree not to attempt to induce any Cardinal
employee to terminate his or her employment, or to
seek or accept any employment with any other business
entity that performs banking and/or financial
services.
(a) For the purpose of this Agreement, "Client" means any entity
for which Cardinal has performed banking and/or financial
services within the twelve months from your termination date.
"Prospective Client" means any entity that is not a Client but
with respect to whom, within twelve (12) months from your
termination date, you conducted, prepared, submitted (or
assisted or supervised such conduct) any client development
work product or marketing efforts on behalf of Cardinal.
(b) In the event that any term set forth above (including, but not
limited to, the duration of the restraint or the geographic
scope) is deemed unreasonable by a court of competent
jurisdiction or an arbitration tribunal, the parties agree
that the unreasonable term may be modified or reduced in
accordance with the applicable law.
(c) You understand that damages Cardinal will suffer as a result
of your breach of any provision of Section 3 of this Agreement
are impossible to reasonably calculate and may irreparably
harm Cardinal. Nothing in this Agreement shall be construed to
prevent Cardinal from seeking any form of injunctive relief to
enforce any provision of this Agreement.
4. Termination of Employment Relationship. Your employment is terminable
--------------------------------------
at will. That means that your employment relationship with Cardinal may
be terminated by either party at any time, for any reason or no reason
at all, subject to the notice provision addressed below.
(a) Cardinal may terminate your employment for Cause effective
immediately upon written notice. In the event that Cardinal
terminates your employment for Cause, you will be entitled to
earned and unpaid base salary and payment for any earned and
unused vacation days through the last date of your employment.
For the purpose of this Agreement, "Cause" means any of the
following conduct by you: (i) embezzlement, misappropriation
of corporate funds or other material acts of dishonesty; (ii)
commission or conviction of any felony or entry of a plea of
guilty or nolo contendere to any felony; (iii) material
failure to adhere to Cardinal's corporate codes, policies or
procedures; (iv) insubordination or any act of gross
misconduct; or (v) of any
2
applicable regulatory authority revokes the necessary
approvals for you to serve as an Executive with Cardinal.
(b) Cardinal also may terminate your employment other than for
Cause, or for no reason, effective upon written notice or any
later date, if specified in the Notice.
(i) If Cardinal terminates you pursuant to this Section
4(b) you will be entitled to all earned and unpaid
base salary through your last day of employment,
subject to the provisions set forth in 4(b)(ii).
Furthermore, Cardinal will pay you six (6) months
salary (over the course of those six (6) months),
less required and authorized withholding and
deductions. Additionally, Cardinal will continue your
group health and dental insurance benefits over the
course of those six (6) months.
(ii) If Cardinal terminates you pursuant to Section 4(b)
within twelve (12) months after the Effective Date of
a Change in Control, Cardinal shall pay you,
exclusively and in lieu of the benefits which
otherwise would have been payable under this
Agreement, eighteen (18) months salary, in one lump
sum payment, less required and authorized
withholdings and deductions. The lump sum payment
shall be made by Cardinal within thirty (30) days
from your last day of employment. Additionally,
Cardinal will continue your group health and dental
insurance benefits over the course of those eighteen
(18) months.
(c) You may Voluntarily Terminate your employment with Cardinal
upon thirty (30) days prior written notice directed to
Cardinal's President and Chief Executive Officer ("CEO"). The
President and CEO, in his sole capacity may waive this notice
requirement.
(d) Regardless of the basis of your termination of employment, you
agree to provide all assistance requested by Cardinal in
transitioning your duties, responsibilities client and other
Cardinal relationships to other Cardinal personnel, both
during your employment and after your termination or
resignation.
5. Change in Control. Notwithstanding the terms and conditions set forth
-----------------
in Section 4 of this Agreement, in the event of a Change in Control you
may elect to Voluntarily Terminate your employment pursuant to Section
5 of this Agreement upon thirty (30) days prior written notice, if such
notice is received by Cardinal no sooner than ten (10) months after the
Effective Date of the Change of Control and no later than twelve (12)
months after the Effective Date of the Change in Control.
(a) If you voluntarily terminate your employment with Cardinal
pursuant to Section 5 of this Agreement, Cardinal shall pay
you, exclusively and in lieu of the benefits which otherwise
would have been payable under this Agreement, eighteen (18)
months salary, in one lump sum payment, less required and
authorized withholdings and deductions. The lump sum payment
shall be made by Cardinal within thirty (30) days from your
last day of employment. Additionally, Cardinal will continue
your group health and dental insurance benefits over the
course of those eighteen (18) months.
(b) For the purpose of this Agreement, "Change in Control" means a
merger or consolidation in which (i) Cardinal is a constituent
party, or (ii) a Company Subsidiary is a constituent party and
Cardinal issues shares of its capital stock pursuant to such
merger or consolidation, except any such merger or
consolidation involving Cardinal or a Company Subsidiary in
which the holders of capital stock of Cardinal immediately
prior to such merger or consolidation continue to hold
immediately following such merger or consolidation more than
fifty (50) percent by voting power of the capital stock of or
ownership interest in (A) the surviving or resulting entity or
(B) if the surviving or resulting entity is a wholly owned
subsidiary of another entity immediately following such merger
or
3
consolidation, the parent entity of such surviving or
resulting entity. "Change in Control" may also mean the sale,
in a single transaction or series of related transactions, (i)
by Cardinal of all or substantially all the assets of Cardinal
(except where such sale is to a wholly owned subsidiary of the
Company), or (ii) by the stockholders of Cardinal of more than
fifty (50) percent by voting power of the then-outstanding
capital stock of Cardinal. Finally, a "Change of Control" may
constitute the occurrence of any agreement, happening or
device, which has substantially the same effect on the control
of Cardinal as any of the foregoing.
(c) For the purpose of this Agreement, "Effective Date" means the
close of business on the date on which a "Change of Control"
occurs.
6. Assignment and Survival. The rights and obligations of Cardinal under
-----------------------
this Agreement shall inure to the benefit of, and shall be binding
upon, the successors and assigns of Cardinal. Your rights and
obligations are personal, and may not be assigned or delegated without
the Company's proper written consent. The Agreement shall continue
despite any liquidation or dissolution of Cardinal.
7. Severability. If any provision of this Agreement is held invalid or
------------
unenforceable for any reason, the invalidity shall not nullify the
validity of the remaining provisions of this Agreement. If any
provision of this Agreement is determined by a court or arbitration
tribunal to be overly broad in duration, geographical coverage or
scope, or unenforceable for any other reason, such provision will be
narrowed so that it will be enforced as much as permitted by law.
8. Choice of Law. This Agreement shall be governed by the laws of the
-------------
Commonwealth of Virginia. You and Cardinal consent to the jurisdiction
and venue of any state or federal court in the Commonwealth of Virginia
and agree that any permitted lawsuit may be brought to such courts or
other court of competent jurisdiction. Each party hereby waives,
releases and agrees not to assert, and agrees to cause its affiliates
to waive, release and not assert, any rights such party or its
affiliates may have under any foreign law or regulation that would be
inconsistent with the terms of this Agreement as governed by Virginia
law.
9. Waiver. Any party's waiver of any other party's breach of any
------
provision of this Agreement shall not waive any other right or any
future breaches of the same or any other provision. The CEO may, in his
or her sole discretion, waive in writing any provision of this
Agreement.
10. Notices. Any notices, requests, demands or other communications
-------
provided for in this Agreement shall be in writing and shall be given
either manually or by registered or certified mail. Either party may,
by written notice to the other party, change their address for receipt
of such notice.
If to the Company:
Xxxxxxx X. Xxxxxxxxx
President and CEO
Cardinal Financial Corporation
00000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
If to the Employee:
Xxxxx X. Xxxxxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
11. Entire Agreement. This Agreement is the entire agreement between you
----------------
and Cardinal regarding these matters and supersedes any verbaland
written agreements on such matters. This Agreement may be modified only
by written agreement signed by you and the CEO or his or her
4
express designee. All Section headings are for convenience only and do
not modify or restrict any of this Agreement's terms.
12. Counterparts. For convenience of the parties, this Agreement may be
------------
executed in one or more counterparts, each of which shall be deemed an
original for all purposes.
The parties state that they have read, understood and agree to be bound by this
Agreement and that they have had the opportunity to seek the advice of legal
counsel before signing it and have either sought such counsel or have
voluntarily decided not to do so:
CARDINAL FINANCIAL CORPORATION EMPLOYEE
By: /s/ Xxxxxxx X. Xxxxxxxxx /s/ Xxxxx X. Xxxxxxxxx
------------------------ ----------------------
(Signature)
Its: President and CEO Xxxxx X. Xxxxxxxxx
----------------- ------------------
(Title) (Print Employee's Full Name)
Dated: 2-12-02 Dated: 2-12-02
------- -------
5
