Re: Retention Incentive Award & Non-Competition Agreement
Exhibit 10.1
August 4, 2006
Xx. Xxxxx Xxxxxx
0000 00xx Xxxxxx
Xxxxxxx, Xxxxx 00000
0000 00xx Xxxxxx
Xxxxxxx, Xxxxx 00000
Re: Retention Incentive Award & Non-Competition Agreement
Dear Xx. Xxxxxx:
As you know, on June 12, 2006, State National Bancshares, Inc. (the “Company”) entered into an
Agreement and Plan of Merger By and Between Banco Bilbao Vizcaya Argentaria, S.A. and the Company
(the “Merger Agreement”) whereby a subsidiary of Banco Bilbao will be merged with and into the
Company (the “Merger”).
We are pleased to inform you that you have been selected to participate in the Company’s
executive retention and severance protection program, subject to the terms and conditions set forth
below. Pursuant to the program, you will have an opportunity to earn either a retention bonus
(“Retention Incentive”) or a Severance Payment (“Severance Payment”), as described below.
You acknowledge that you have had and will continue to have a prominent role in the Company in
and the development of goodwill of the Company and its subsidiaries, and that you have established
and developed and will continue to establish and develop relations and contacts with the principal
customers and suppliers of the Company and its subsidiaries in Texas and New Mexico, all of which
constitute valuable goodwill of, and could be used by you to complete fairly with, the Company and
its affiliates. Furthermore, in the course of your employment with the Company, you have obtained
and will continue to obtain confidential and proprietary information and trade secrets concerning
the business and operations of the Company and its affiliates that could be used to complete
unfairly with the Company and its affiliates. Accordingly, you agree to comply with the covenants
relating to non-competition, non-solicitation and non-disclosure contained in this letter
agreement.
RETENTION INCENTIVE AWARD OR SEVERANCE PAYMENTS ON A TERMINATION WITHOUT CAUSE
Retention Incentive. In consideration of your continued employment with the Company and your
execution and compliance with the non-competition, non-solicitation and non-disclosure restrictions
below, you are eligible to receive a Retention Incentive payment equal to $75,000. In all cases,
payment of the Retention Payments will be subject to your continued employment with the Company
until the one-year anniversary of the closing of the Merger. Provided you remain so employed, your
Retention Incentive payment will be made to you in one lump sum as soon as reasonably practicable
following the one year anniversary of the closing. In the event of your employment with the
Company terminates for any reason prior to the one year anniversary of the Merger, you will not be
entitled to payment of any portion of the Retention Incentive.
Severance Payment. In the event that your employment with the Company is terminated by the
Company without Cause (as defined below) prior to the first anniversary of the closing of the
Merger, you will be entitled to receive a Severance Payment in lieu of the Retention Incentive
Payment equal to $75,000. Payment of the Severance Payment will be
1
made in one lump sum within 30 days following your termination of employment. Such Severance
Payment shall replace and supersede in its entirety any other severance plans, policies or programs
maintained by the Company. In the event of your termination for any reason at any time after the
one year period following the closing of the merger by the Company without Cause, you will not be
entitled to any severance or other payment or benefit under this letter agreement.
NON-COMPETITION, NON-SOLICITATION & NON-DISCLOSURE RESTRICTIONS
During the period of your employment with the Company (the “Restriction Period”), you shall
not, directly or indirectly, for your own account or for the account of any other person, firm or
entity:
(i) become employed by, engage in business with, serve as an agent or consultant
to, or become a partner, member, principal or stockholder (other than a holder of
less than 5% of the outstanding voting shares of any publicly held company) of, any
person, firm or entity that competes or has a reasonable potential for competing
with any part of the business of the Company or any of its subsidiaries, anywhere
in Texas or New Mexico where the Company or any of its subsidiaries conducts
business during your employment with the Company;
(ii) solicit for employment, employ or otherwise interfere with the relationship of
the Company or any of its affiliates with any person who is or was employed by or
otherwise engaged to perform services for the Company or any of its affiliates at
any time during which you are employed by the Company; and
(iii) solicit or otherwise attempt to establish any business relationship of a
nature that is competitive with the business or relationship of the Company or any
of its affiliates with any person, firm or entity which is or was a customer,
client or distributor of the Company or any of its affiliates at any time during
which you are employed by the Company, other than any such solicitation on behalf
of the Company or any of its affiliates during your employment with the Company.
Unauthorized Disclosure. During the Restriction Period and following the term of this
Agreement, except where required by law, statute, regulation or rule of any governmental body or
agency, or pursuant to a subpoena or court order, you shall not, directly or indirectly, for your
own account or for the account of any other person, firm or entity, use or disclose any
confidential or proprietary trade secrets, customer lists, drawings, designs, information regarding
product development, marketing plans, sales plans, management organization information (including
but not limited to data and other information relating to members of the Board or the Board of
Directors of any of the Company’s affiliates or to management of the Company or any of its
affiliates), operating policies or manuals, business plans, financial records, packaging design or
other financial, commercial, business or technical information (a) relating to the Company or any
of its affiliates or (b) that the Company or any of its affiliates may receive belonging to
suppliers, customers or others who do business with the Company or any of its affiliates
(collectively, “Confidential Information”) to any third person unless such Confidential Information
has been previously disclosed to the public or is in the public domain (other than by reason of
your breach of this paragraph).
2
For purposes of this letter agreement, the term “Cause” means any one or more of the following
conduct by you: (i) dishonesty, fraud, gross negligence in the performance of your duties hereunder
or engaging in willful misconduct (ii) willful and continued failure to perform your duties
assigned to you (iii) the commission of a felony or any crime involving moral turpitude, or (iv)
any breach by you of any of the restrictive covenants in this or any other agreement between the
you and the Company; provided that (x) the Company shall have delivered written notice to
you of the Company’s intention to terminate your employment for Cause, which notice specifies the
circumstances claimed to give rise to the Company’s right to terminate your employment for Cause,
and you shall have failed to cure such circumstances (if such circumstances are reasonably
susceptible to cure) to the reasonable satisfaction of the Company within 10 days of the date of
such notice and (y) the Company delivers a notice of termination of employment to you within 10
days following your failure to cure such circumstances within the time period specified above.
* * * * * * * * * *
Your employment pursuant to this letter agreement is not a guarantee of employment. The
Company may terminate your employment with or without cause and at any time. You are an at-will
employee of the Company.
This letter agreement constitutes the entire agreement between the parties hereto with respect
to the subject matter hereof, and all promises, representations, understandings, arrangements and
prior arrangements relating to such subject matter are merged herein and superseded hereby.
This letter agreement shall be binding on and inure to the benefit of the Company and its
successors and permitted assigns. This letter agreement shall also be binding on and inure to the
benefit of you and your heirs, executors, administrators and legal representatives.
This letter agreement shall be governed by and construed in accordance with the laws of the
State of Texas without reference to principles of conflicts of laws which would require the
application of the laws of another jurisdiction.
If you are in agreement with the foregoing, please sign the enclosed copy of this letter
agreement indicated below and return a signed copy to Xxx Xxxxxxx, at 0000 Xxxxxxxxxx Xxxxx, Xxxxx
000, Xxxx Xxxxx, Xxxxx 00000 within 10 days of your receipt of this letter agreement. This letter
agreement shall become effective upon receipt by the Company of the executed copy of this letter
agreement.
| STATE NATIONAL BANCSHARES, INC. |
||||
| By: | /s/ Xxx Xxxxxxx | |||
| Xxx Xxxxxxx | ||||
| Chairman & CEO | ||||
Accepted and agreed this
17th day of August, 2006
17th day of August, 2006
/s/ Xxxxx Xxxxxx
Xx. Xxxxx Xxxxxx
0000 0xx Xxxxxx
Xxxxxxx, Xxxxx 00000
0000 0xx Xxxxxx
Xxxxxxx, Xxxxx 00000
3
August 8, 2006
Re: Amendment of the Retention Incentive Award & Non-Competition Agreement
To Whom It May Concern:
You are receiving this letter (the “Letter”) because you have been selected to participate in
State National Bancshares’ (the “Company”) executive retention and severance protection program,
the terms and conditions of which are set forth in the Retention Incentive Award & Non-Competition
Agreement (the “Agreement”), dated August 4, 2006, of which you acknowledge you are in receipt.
This Letter amends the definition of “Cause” under the Agreement.
The paragraph beginning “For purposes of this letter agreement, the term “Cause” means any one or
more of the following conduct...” is hereby amended by inserting the following at the end of the
first sentence of that paragraph:
“Notwithstanding the foregoing, the following shall not constitute “Cause”: (i) your failure
to accept a Company-requested relocation of your principal place of business to more than 50
miles from your current place of place of business, or (ii) your failure to accept a
substantial and significant diminution in compensation, job title or position from your
current compensation, job title or position.”
Accordingly, if your employment is terminated by the Company prior to the one year anniversary of
the closing of the Merger (as defined in the Agreement) pursuant to (i) or (ii) as stated above,
you will be entitled to the Severance Payment specified in the Agreement.
This Letter, together with the Agreement, shall contain the entire understanding of the parties
with respect to its subject matter. There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth herein and in the Agreement.
* * * * * * * * * *
| STATE NATIONAL BANCSHARES, INC. |
||||
| By: | /s/ Xxx Xxxxxxx | |||
| Name: | Xxx Xxxxxxx | |||
| Title: | Chairman & CEO | |||
