SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit
10(s)
SECOND
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS
SECOND AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”)
is made
effective as of the 26th day of April, 2007, by and between Xxxxxx
X.
Xxxx
(the
“Executive”)
and
Capitol
Bancorp Ltd.,
a
Michigan corporation (the “Company”).
BACKGROUND
On
March
31, 2003, the Company and the Executive entered into an Employment Agreement
dated effective March 13, 2003 which was subsequently amended on April 22,
2003
(the “Employment
Agreement”).
The
Company and the Executive now wish to amend the Employment Agreement as provided
herein.
NOW,
THEREFORE, in consideration of the foregoing and the terms and conditions set
forth below, the parties agree as follows:
TERMS
AND CONDITIONS
1. AMENDMENT
TO SECTION 2(a)(i). The first sentence of Section 2(a)(i) of the
Employment Agreement is hereby deleted in its entirety and amended to read
as
follows:
“During
the Employment Period, the Executive shall serve as the Chief Executive Officer
of the Company and shall have such duties and responsibilities as are assigned
to him by the Board.”
2. AMENDMENT
TO SECTION
2(b)(i).Section
2(b)(i) of the Employment Agreement is hereby deleted in its entirety and
amended to read as follows:
“During
the Employment Period, the Executive shall receive an annual base salary
(“Annual
Base Salary”),
which
shall be paid at a monthly rate, at least equal Nine Hundred Thousand Dollars
($900,000), which shall be paid in accordance with the Company’s normal payroll
practices for senior executives as in effect from time to time.”
3. AMENDMENT
TO SECTION 2(b)(ii). Section 2(b)(ii)
of the Employment Agreement is hereby deleted in its entirety and amended to
read as follows:
“Annual
Bonus.
In
addition to Annual Base Salary, for
each
fiscal year ending during the Employment Period, the Executive shall be eligible
for an annual cash bonus (the “Annual
Bonus”)
in an
amount specified on Exhibit A attached hereto pursuant to the terms of the
Company’s Management Incentive Plan, as amended (“MIP”)
(or any
predecessor or successor plan thereof), as determined by the Compensation
Committee of the Board, upon complete achievement of the targets set forth
on
Exhibit A attached hereto. Each such Annual Bonus shall be paid no later than
the 15th
day of
the third month of the fiscal year following the fiscal year for which the
Annual Bonus is awarded. The amount of any Annual Bonus
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which
exceeds the maximum bonus payable pursuant to the MIP in any one fiscal year,
if
any, shall be carried over (on a “first-in, first-out” basis) and added to the
Annual Bonus (if any) determined for any of the next three fiscal years, whether
or not any one or more of such fiscal years ends before or after the end of
the
Employment Period.”
4. AMENDMENT
TO SECTION 4(a)(i). Section 4(a)(i)
of the Employment Agreement is hereby deleted in its entirety and amended to
read as follows:
“(i) the
Company shall pay to the Executive, in a lump sum in cash within 75 days after
the Date of Termination, the aggregate of the following amounts:
A. the
sum
of (1) the Executive’s Annual Base Salary through the Date of Termination to the
extent not theretofore paid, (2) the product of (x) the higher of (I) the most
recent Annual Bonus (which shall not include the long-term incentive bonus
contemplated by Section 2(b)(iii)) and (II) the Annual Bonus paid or payable,
(and annualized for any fiscal year consisting of less than twelve full months
or during which the Executive was employed for less than twelve full months),
for the most recently completed fiscal year during the Employment Period, if
any
(such higher amount being referred to as the “Highest Annual Bonus”) and (y) a
fraction, the numerator of which is the number of days in the current fiscal
year through the Date of Termination, and the denominator of which is 365,
and
(3) any accrued vacation pay, in each case to the extent not theretofore paid
(the sum of the amounts described in clauses (1), (2), and (3) shall be
hereinafter referred to as the “Accrued
Obligations”);
and
B. the
amount equal to the product of (1) three times the sum of (x) the Executive’s
Annual Base Salary and (y) the Highest Annual Bonus;”
5. AMENDMENT
TO SECTION 4(d). Section 4(d) of the
Employment Agreement is hereby deleted in its entirety and amended to read
as
follows:
“Cause,
Etc.; Other than for Good Reason.
If the
Executive’s employment during the Employment Period shall be terminated for
Cause or if the Executive voluntarily terminates employment during the
Employment Period, excluding a termination for Good Reason, this Agreement
shall
terminate without further obligations to the Executive other than the obligation
to pay to the Executive (x) his Annual Base Salary through the Date of
Termination, and (y) Other Benefits, in each case to the extent theretofore
unpaid. In such case, the amounts contemplated by (x) and (y) shall be paid
to
the
Executive in a lump sum in cash within 30 days of the Date of
Termination.”
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6. AMENDMENT
TO SECTION
4(e)(i)C.
Section
4(e)(i)C. of the Employment Agreement is hereby deleted in its entirety and
amended to read as follows:
“an
amount equal to the excess of (a) the actuarial equivalent of the benefit
under
the Company’s qualified defined benefit retirement plan (the “Retirement
Plan”)
(utilizing actuarial assumptions no less favorable to the Executive than
those
in effect under the Company’s Retirement Plan immediately prior to the Effective
Date), over (b) the actuarial equivalent of the Executive’s actual benefit (paid
or payable), if any, under the Retirement Plan as of the Date of
Termination.”
7. AMENDMENT
TO EXHIBIT B.
Exhibit B of the Employment Agreement is hereby deleted in its entirety and
amended to read as Exhibit B attached hereto.
8. CONSTRUCTION.
Unless
otherwise defined herein, capitalized terms shall have the meanings set forth
in
the Employment Agreement. The terms of this Amendment amend and modify the
Employment Agreement as if fully set forth in the Employment Agreement. If
there
is any conflict between the terms, conditions and obligations of this Amendment
and the Employment Agreement, this Amendment’s terms, conditions and obligations
shall control. All other provisions of the Employment Agreement not specifically
modified by this Amendment are preserved. This Amendment may be executed
in
counterparts (including via facsimile or .pdf), each of which shall be deemed
an
original, and all of which together shall constitute one and the same
document.
SIGNATURES
ON THE FOLLOWING PAGE
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IN
WITNESS WHEREOF,
the
parties have executed this Amendment on March 14, 2007.
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THE
EXECUTIVE:
/s/
Xxxxxx X. Xxxx
XXXXXX
X. XXXX
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THE
COMPANY:
By:
/s/ Xxxxx X'Xxxxx
Name:
Xxxxx X'Xxxxx
Title:
Secretary
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SIGNATURE
PAGE TO FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
EXHIBIT
B
LONG-TERM
INCENTIVE BONUS
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I.
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RESTRICTED
STOCK/CASH:
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EXECUTIVE:
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Xxxxxx
X. Xxxx.
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COMPANY:
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PLAN:
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Capitol
Bancorp Ltd. Management Incentive Plan, Capitol Bancorp Ltd. 2003
Stock
Plan or any other plan adopted by the Company in which the Executive
may
participate.
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EFFECTIVE
DATE:
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January
1, 2007.
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TARGET
BONUS &
PERFORMANCE
GOALS:
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During
the Employment Period, for each (a) new bank or holding company
formed or
opened for business by the Company or any of its affiliated companies
(excluding the Company’s Capitol Development Companies) or (b) holding
company or separate bank directly acquired (including the acquisition
of a
controlling interest therein) by the Company or any of its affiliated
companies or banks by purchase transaction (each a “New
Affiliate”),
the Company shall promptly grant, issue and deliver to the Executive
the
following: (i) $50,000 in cash and (ii) a restricted stock award
for
shares of the Company’s common stock having a fair market value of
$100,000 (each a “Restricted
Stock Award”).
Each Restricted Stock Award shall vest in equal monthly increments
over
four (4) years and fully vest upon (1) the Executive’s death, (2) the
Executive’s Disability, (3) termination of the Executive’s employment by
the Executive for Good Reason or by the Company without Cause or
(4) a
Change of Control of the Company.
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LIMITATION:
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In
no event shall the Executive be entitled to receive any compensation
for
more than ten (10) New Affiliates in each fiscal year.
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II.
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CASH:
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EXECUTIVE:
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Xxxxxx
X. Xxxx.
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COMPANY:
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Exhibit
B - 1
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PLAN:
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Capitol
Bancorp Ltd. Management Incentive Plan, Capitol Bancorp Ltd.
2003 Stock
Plan or any other plan adopted by the Company in which the Executive
may
participate.
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TARGET
BONUS:
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Two
times (2X) the Executive’s Annual Base Salary paid to the Executive during
the 5th
year
of this Agreement.
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PERFORMANCE
GOALS:
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The
Long-Term Cash Bonus contemplated in this Exhibit B shall be
subject to
the Company’s complete achievement of the following performance
goals:
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1.
Average
Growth of the Company’s Earnings Per Share (“EPS”)
equal to or greater than 15% for the Initial Measuring Period,
provided,
however,
in determining the EPS growth rate newly affiliated institutions
which
become operative during the Initial Measuring Period shall not
be included
in the EPS computation for the first twelve (12) months of their
respective operation nor shall special charges associated with
the
acquisition of a bank, a holding company or a controlling interest
in a
bank or a holding company during the Initial Measuring Period
be included
in the EPS computation; and
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2.
Average
Growth of the Company’s total assets, as reflected on the Company’s
year-end audited financial statements for fiscal year ending
December 31,
2007, equal to or greater than 15% for the Initial Measuring
Period.
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INITIAL
MEASURING PERIOD:
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The
five year period beginning on January 1, 2003 and ending on December
31,
2007.
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VESTING
DATE:
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December
31, 2007. If the Executive is not employed on the vesting date,
the entire
cash bonus will be forfeited.
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DATE
PAID:
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No
later than March 15, 2008.
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Exhibit
B - 2
