Exhibit 10.13
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EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the
16th day of November 1997, by and between Colorado Business Bankshares of
Colorado, Inc., a Colorado corporation ("Company"), and Xxxxxx X. Xxxxx
("Employee").
WITNESSETH:
WHEREAS, Company desires Employee to become employed by Company or one of
its subsidiaries and Employee desires to become employed by Company or one of
its subsidiaries upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties agree as follows:
1. EMPLOYMENT. Company hereby agrees to employ Employee, and Employee
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hereby agrees to be employed by Company, as (a) President of the West branch of
Company's subsidiary Colorado Business Bank, N.A. (Bank"), and such other
different executive capacities with the Company, Bank or any Company subsidiary
as may be determined from time to time by the Boards of Directors of Company,
Bank or such other subsidiary.
2. RESPONSIBILITIES OF EMPLOYMENT. During the term of his employment,
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Employee:
(a) shall diligently and faithfully serve Company and its subsidiaries in
such executive capacities as may be determined from time to time by the Boards
of Directors of Company and its subsidiaries, and he shall devote his best
efforts and entire business time, services and attention to the advancement of
Company's interests;
(b) shall not, without the prior written consent of the Board of Directors
of Company, engage in any other employment or business, directly or indirectly,
as a sole proprietor, a member of a partnership or limited liability company, as
a director, officer, employee or shareholder of a corporation not affiliated
with Company, or as a consultant or otherwise, whether for compensation or
otherwise, which could reasonably be expected to or does interfere with
Employee's performance of his duties hereunder or which business is in
competition in any way with the business then being conducted by Company and its
subsidiaries; provided, however, that the provisions of this subparagraph (b)
shall not be deemed to prohibit Employee's ownership of stock in any publicly
owned corporation so long as Employee's ownership, directly and indirectly, when
aggregated with the direct and indirect ownership of all members of Employee's
family, does not exceed one percent (1%) of the total outstanding stock of such
publicly owned corporation, measured by reference to either market value or
voting power;
(c) shall diligently and faithfully carry out the policies, programs and
directions of the Boards of Directors of Company and its subsidiaries;
(d) shall fully cooperate with such other officers of Company and its
subsidiaries as may be elected or appointed by the Boards of Directors of
Company and its subsidiaries; and
(e) shall report to the President of Company.
3. COMPENSATION. Company will compensate Employee for his services during the
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term of this Agreement and his employment hereunder as follows:
(a) Basic Compensation. Company shall pay to Employee as a minimum basic
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compensation the sum of Seventy-Five Thousand Dollars ($75,000.00) per year,
payable in equal monthly installments. Employee's basic compensation may be
increased from time to time in the sole discretion of Company's Board of
Directors.
(b) Benefits. Employee shall be entitled to a monthly automobile allowance
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(amount to be agreed upon by Employee and Company's President), a cellular
phone, to be used in the course of performing his duties hereunder and shall be
entitled to participate in any and all other benefits from time to time afforded
executive employees of Company, including, without limitation, health, accident,
hospitalization and life insurance programs. Company shall additionally pay the
monthly (not initial or initiation) dues for Employee at community or business
related clubs or activities to be agreed upon by Employee and Company's
President.
(c) Reimbursement of expenses. Employee shall be entitled to reimbursement
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of ordinary and necessary out-of-pocket expenses reasonably incurred by him on
behalf of Company in the course of performing his duties hereunder, subject to
his furnishing appropriate documentation relative to such expenses in form and
substance satisfactory to Company.
(d) Vacations. Employee shall be entitled to four (4) weeks paid vacation
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each year, subject to Company's general vacation policy.
(e) Discretionary Bonus Plan. Company has a discretionary bonus plan for
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key executives. Employee shall been titled to participate in such discretionary
bonus plan.
(f) Company has an Incentive Stock Option Plan (the " Plan" ) for key
employees. Employee shall be entitled to participate in such plan.
(g) Allocations. As Company and Employee intend that Employee may he a
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dual employee of Company and one or more of its subsidiaries, Company may
allocate to one or more of its subsidiaries any portion of Employee's basic and
other compensation that Company and one or more of its subsidiaries deem to be a
lawful and appropriate allocation, but no such allocation will relieve Company
of any of its obligations to Employee under this Agreement.
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4. TERM AND TERMINATION.
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(a) Term. The term of Employee's employment shall be a one (1) year term
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beginning on the date hereof. Upon expiration of the stated term of this
Agreement, Employee's employment with Company shall revert to the status of
employment at will and shall thereafter be subject to termination by either
party and at any time regardless of cause.
(b) Termination. Upon termination of this Agreement by Company, by Employee
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or upon the death or disability of Employee, the rights and obligations of
Employee shall be as follows:
(i) Termination by Employee. In the event Employee elects to
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terminate his employment hereunder, this Agreement shall immediately
terminate without any further obligation on the part of Company, except
that Company shall pay to Employee such compensation pursuant to Paragraph
3 hereof as may be accrued and unpaid on the date of termination of
employment.
(ii) Termination by Company for Cause. if Employee's employment
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hereunder is terminated by Company for cause, this Agreement shall immediately
terminate without any further obligation on the part of Company, except that
Company shall pay to Employee such compensation pursuant to Paragraph 3 hereof
as may be accrued and unpaid on the date of such termination of employment. For
purposes of this Agreement, "cause shall mean willful failure or neglect of
Employee to perform his duties as prescribed herein, the conviction of a felony,
theft, embezzlement or improper use of corporate funds by Employee, self dealing
detrimental to Company, any attempt to obtain any personal profit from any
transaction in which Company has an interest or any breach of the terms of
Paragraphs 5 or 7 of this Agreement by Employee.
Termination by Company for Other Reasons. Company shall have the right at any
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time to terminate Employee's employment hereunder for any reason by giving him
written notice (which notice shall fix the date as of which Employee's
employment is to terminate) of its intention to do so. If Employee's employment
hereunder is terminated by Company other than for cause, Company shall be
obligated to pay Employee the severance benefits set forth in Paragraph 4(c)
hereof.
(iv) Constructive Discharge. If Employee is ever constructively discharged,
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he may terminate this Agreement and his employment hereunder by delivering
written notice to Company no later than thirty (30) days before the effective
date of termination. If Employee is constructively discharged, Company shall be
obligated to pay Employee the severance benefits set forth in Paragraph 4(c)
hereof. For purposes of the foregoing, "constructive discharge" means the
occurrence of any-one or more of the following: (i) Employee is removed from all
of the offices described in Paragraph 1 hereof; (ii) Company fails to vest with
or removes from Employee the duties, responsibilities, authority or resources
that he reasonably needs to competently perform the duties of his office; (iii)
Company decreases Employee's basic compensation or arbitrarily and capriciously
decreases Employee's bonus; or (iv) Company transfers Employee to a location
outside the Denver
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Metropoliton area; and in any of such events, Company fails to cure any of the
above within thirty (30) days after Employee gives Company written notice of
such breach.
(v) Termination Upon Change of Control. Employee may terminate this
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Agreement and his employment hereunder for any reason within two (2) years after
a Change of Control occurs by delivering written notice of termination to
Company or its successor no less than thirty (30) days before the effective date
of termination (any such notice by Employee which can be construed as a notice
under either Paragraph 4 (b) (iv) or this Paragraph 4 (b) (v)shall be deemed a
notice under this Paragraph 4b)(v). If Employee so terminates, Company shall be
obligated to pay Employee one and ninety-nine hundredths (1.99) times the
severance benefits set forth in Paragraph 4(c) hereof, with the exception that
the Paragraph 4(c) (ii) bonus component shall be based upon a full year and not
prorated to the date of Employee's termination.
(A) A "Change of Control" will be deemed to have occurred if: a) any person
(as such term is defined in Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the 111934 Act") other than a person who is a
shareholder of Company as of the date of this Agreement acquires beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the 0000 Xxx) of
fifty percent (50%) or more of the combined voting power of the then outstanding
voting securities of Company; or b) the individuals who were members of
Company's Board of Directors as of the date of this Agreement (the "Current
Board Members") cease for any reason to constitute a majority of the Board of
Directors of Company or its successor; however, it the election or the
nomination for election of any new director of Company or its successor is
approved by a vote of a majority of the individuals who are Current Board
Members, such new director shall, for the purposes of this paragraph, be
considered a Current Board Member; or c) Company's stockholders approve (1) a
merger or consolidation of Company or Bank and the stockholders of Company
immediately before such merger or consolidation do not, as a result of such
merger or consolidation, own, directly or indirectly, more than fifty percent
(50%) of the combined voting power of the then outstanding voting securities of
the entity resulting from such merger or consolidation in substantially the same
proportion as their ownership of the combined voting power of the outstanding
securities of Company immediately before such merger or consolidation; or (2,) a
complete liquidation or dissolution or an agreement for the sale or other
disposition of all or substantially all of the assets or stock of Company or
Bank (provided that a complete liquidation or dissolution or the sale or other
disposition of all or substantially all the assets or stock of just Bank will be
deemed a "Change of Control" only if Employee is not offered a position with
Company or one of its subsidiaries with responsibilities and reporting
requirements consistent with those responsibilities and reporting requirements
set forth in Paragraph 2 -hereof).
(B) Notwithstanding and in lieu of Paragraph 4(b)(v)(A), a Change of
Control will not be deemed to have occurred: a) solely because fifty percent
(50%) or more of the combined voting power of-the then outstanding voting
securities of Company are acquired by (1) a trustee or other fiduciary holding
securities under one or more employee benefit plans maintained for employees of
Company and its subsidiaries, or (2) any person pursuant to the will or trust of
any existing stockholder of Company, or who is a member of the immediate family
of such stockholder, or (3)
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any corporation which, immediately prior to such acquisition, is owned directly
or indirectly by the stockholders in the same proportion as their ownership of
stock immediately prior to such acquisition; or b) if Employee agrees in writing
to waive a particular Change of Control for the purposes of this Agreement.
(vi) Termination Upon Employee's Disability. In the event Employee's
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employment is terminated by Company due to Employee's disability, Company shall
be obligated to pay Employee the severance benefits set forth in Paragraph 4(c)
hereof. For purposes of the foregoing, "disability" shall mean Employee's
inability due to illness or other physical or mental disability to substantially
perform his duties as prescribed herein for a period of sixty (60) days within
any consecutive six (6) month period, and any action to be taken hereunder based
on disability shall not be effective until the expiration of such sixty (60) day
period.
(vii) Termination Upon Employee's Death. In the event that Employee
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dies while employed by Company, then Company shall be obligated to pay
Employee's estate the severance benefits set forth in Paragraph 4(c) hereof.
(viii) Continuing Obligations of Employee. Notwithstanding anything to
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the contrary contained herein, termination of this Agreement or Employee's
employment hereunder, for whatsoever reason or for no reason at all, by Employee
or otherwise, shall not be deemed in any way to affect Employee's obligations
under Paragraphs 6 and 7 of this Agreement, with respect to which he shall
remain bound.
(c) Severance Benefits. Provided Employee is in compliance with Paragraph
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4(B)(viii) hereof, Company will pay or provide the following severance benefits
to Employee in lieu of any separation payments otherwise provided upon
termination of employment under any other severance pay or similar plan or
policy of Company:
(i) Twelve (12) consecutive monthly payments each equal to one-
twelfth (1/12th) of Employee's annual basic compensation in effect immediately
prior to Employee's termination;
(ii) Twelve (12) consecutive monthly payments each equal to one-
twelfth (1/12th) of the higher of (A) Employee's discretionary bonus for the
previous calendar year, or (B) the average of Employee's discretionary bonus for
the previous three (3) calendar years (or such fewer calendar years as Employee
has been employed), in each case prorated to the date of Employee's termination;
(iii) For the twelve (12) month period following the date of
termination of Employee Is employment, Company will maintain in full force and
effect for the continued benefit of Employee each employee benefit plan in which
Employee was a participant immediately prior to the date of Employee's
termination, unless an essentially equivalent and no less favorable benefit is
provided by a subsequent employer at no additional cost to Employee. If the
terms of any employee benefit plan of Company do not permit continued
participation by Employee, then Company will arrange to provide to Employee (at
Company' s cost) a benefit substantially similar to and no less
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favorable than the benefit Employee was entitled to receive under such plan at
the end of the period of coverage. (This provision specifically is not
applicable to Employee's automobile and club dues, which benefits end upon
Employee's date of termination of employment.)
(iv) For the twelve (12) month period following the date of
termination of Employee's employment, Company will treat Employee for all
purposes as an Employee under all of Company's retirement plans in which
Employee was a participant on the date of termination of Employee's employment
or under which Employee would become eligible during such twelve (12) month
period (hereinafter referred to collectively as the "Plan"). Benefits due to
Employee under the Plan shall be computed as if Employee had continued to be an
Employee of Company for the twelve (12) month period following termination of
employment. If under the terms of the Plan such continued coverage is not
permitted, Company will pay to Employee or Employee Is estate a supplemental
benefit in an amount which, when added to the benefits that Employee is entitled
to receive under the Plan, shall equal the amount that Employee would have
received under the Plan had Employee remained an employee of Company during such
twelve (12) month period.
(v) If any excise tax imposed under Internal Revenue Code Section
4999 or any successor provision, as amended after the date hereof, is due and
owing by Employee as a result of any amount paid or payable pursuant to this
Paragraph 4 (c), Company shall indemnify and hold Employee harmless against all
such excise taxes and any interest, penalties or costs with respect thereto.
(vi) Company will be obligated to make all payments that become due
to Employee under this Paragraph 4(c) whether or not he obtains other employment
following termination. The payments and other benefits provided for in this
Paragraph 4(c) are intended to supplement any compensation or other benefits
that have accrued or vested with respect to Employee or his account as of the
effective date of termination.
(vii) Company may elect to defer any payments that may become due to
Employee under this Paragraph 4(c) if, at the time the payments become due,
Company, Bank or any of Company's other subsidiaries is not in compliance with
any regulatory-mandated minimum capital requirements or if making the payments
would cause Company's, Bank's or any of Company's other subsidiaries, capital to
fall below such minimum capital requirements. In this event, Company will resume
making the payments as soon as it can do so without violating such minimum
capital requirements.
5. SALE OR REORGANIZATION OF COMPANY. This Agreement shall not restrict
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the sale, transfer, consolidation, liquidation, reorganization or disposition of
the assets of Company and to the extent that the business of Company is
conducted in another form or through another entity or entities, such entity or
entities shall be obligated to fulfill Company's obligations hereunder.
6. RESTRICTIVE COVENANT. It is mutually recognized and agreed that the
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services to be rendered pursuant to this Agreement by Employee are special,
unique and of extraordinary
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character. Therefore, as a condition to Company's obligations hereunder,
Employee agrees that without Company's prior written consent, during the term of
this Agreement and for a period ending on the first anniversary of the date of
termination of his employment hereunder, regardless of cause, he will not engage
in any manner, directly or indirectly, to solicit or induce any employee or
agent of Company or any of its subsidiaries to terminate employment with Company
or any of its subsidiaries, as the case may be, or solicit or induce any
customer of Company or any of its subsidiaries to become a customer of any
person, firm, partnership, corporation, trust or other entity that owns,
controls or is a bank, savings and loan association, credit union or similar
financial institution. Furthermore, Employee will at no time during or
subsequent to the term of his employment by Company make any statements or take
any actions which could reasonably be expected to damage the reputation or
business of Company. It is further recognized and agreed that irreparable injury
will result to Company, its businesses and property in the event of a breach of
this covenant by Employee, that such injury would be difficult if not impossible
to ascertain, and therefore, any remedy at law for any breach by Employee of
this covenant will be inadequate and Company shall be entitled to temporary and
permanent injunctive relief without the necessity of proving actual damage to
Company by reason of any such breach. In addition, in the event of a breach of
this covenant by Employee, Company shall also be entitled to recover reasonable
costs and attorneys' fees incurred in connection with the enforcement of its
rights hereunder. Whenever used herein, Company shall be deemed to include any
successors or any other person or entity which may hereafter acquire the
business of Company or any of its subsidiaries. The foregoing notwithstanding,
should the assets of Company be disposed of in such a manner that no purchaser
thereof has acquired a going business, then Employee shall not be bound by the
covenants expressed in this paragraph.
7. TRADE SECRETS AND CONFIDENTIAL INFORMATION. Employee hereby covenants
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and agrees that he will not, except as may be required in connection with his
employment under this Agreement or compelled by any judicial or administrative
order, directly or indirectly, use or disclose to any other person, firm or
corporation, whether during or subsequent to the term of his employment by
Company, irrespective of the time, manner or cause of the termination of his
employment, any information of a proprietary nature belonging to Company, or
which could be reasonably expected to have an adverse effect on Company, its
businesses, property or financial condition, including but not limited to
records, data, documents, processes, specifications, methods of operation,
techniques and know-how, plans, policies, customer lists, the names and
addresses of suppliers or representatives, investigations or other matters of
any kind or description relating to the products, services, suppliers,
customers, sales or businesses of Company. All records, files, documents,
equipment and the like relating to Company's businesses which Employee shall
prepare, use or observe shall be and remain the sole property of Company, and
upon termination of this Agreement or his employment hereunder for any reason,
Employee shall return to the possession of Company any items of that nature and
any copies thereof which he may have in his possession.
8. INDEMNITY.
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(a) Indemnification. Company will indemnify Employee (and, upon his
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death, his heirs, executors and administrators) to the fullest extent permitted
by law against all expenses,
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including reasonable attorneys' fees, court and investigative costs, judgments,
fines and amounts paid in settlement (collectively, "Expenses") reasonably
incurred by him in connection with or arising out of any pending, threatened or
completed action, suit or proceeding in which he may become involved by reason
of his having been an officer or director of Company or any of its subsidiaries.
The indemnification rights provided for herein are not exclusive and will
supplement any rights to indemnification that Employee may have under any
applicable bylaw or charter provision of Company or any of its subsidiaries, or
any resolution of Company or any of its subsidiaries, or any applicable statute.
(b) Advancement of Expenses. In the event that Employee becomes a party, or
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is threatened to be made a party, to any pending, threatened or completed
action, suit or proceeding for which Company or any of its subsidiaries is
permitted or required to indemnify him under this Agreement, any applicable
bylaw or charter provision of Company or any of its subsidiaries, any resolution
of Company or any of its subsidiaries, or any applicable statute, Company will,
to the fullest extent permitted by law, advance all Expenses incurred by
Employee in connection with the investigation, defense, settlement or appeal of
any threatened, pending or completed action, suit or proceeding, subject to
receipt by Company of a written undertaking from Employee to reimburse Company
for all Expenses actually paid by Company to or on behalf of Employee in the
event it shall be ultimately determined that Company or any of its subsidiaries
cannot lawfully indemnify Employee for such Expenses, and to assign to Company
all rights of Employee to indemnification under any policy of directors' and
officers' liability insurance to the extent of the amount of Expenses actually
paid by Company to or on behalf of Employee.
(c) Litigation. Unless precluded by an actual or potential conflict of
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interest, Company will have the right to recommend counsel to Employee to
represent him in connection with any claim covered by this Section 8. Further,
Employee's choice of counsel, his decision to contest or settle any such claim,
and the terms and amount of the settlement of any such claim will be subject to
Company's prior reasonable approval in writing.
9. ARBITRATION. Any disputes arising out of this Agreement or connected
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with Employee's employment shall be submitted by Employee and Company to
arbitration by the American Arbitration Association or its successor, and the
determination of the American Arbitration Association or its successor shall be
final and absolute. The arbitrator shall be governed by the duly promulgated
rules and regulations of the American Arbitration Association or its successor,
and the pertinent provisions of the laws of the State of Colorado relating to
arbitration. The decision of the arbitrator may be entered as a judgment in any
court in the State of Colorado or elsewhere. The prevailing party shall be
entitled to receive reasonable attorneys' fees incurred in connection with such
arbitration in addition to such other costs and expenses as the arbitrators may
award.
10. INTERPRETATION. This Agreement shall be construed in accordance with
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the internal laws of the State of Colorado. The titles of the paragraphs have
been inserted as a matter
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of convenience of reference only and shall not be construed to control or affect
the meaning or construction of this Agreement.
11. SEVERABILITY. In the event that any portion of this Agreement is found
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to be in violation of or conflict with any federal or state law, the parties
agree that said portion shall be modified only to the extent necessary to enable
it to comply with such law.
12. ASSIGNMENT. This Agreement shall not be assignable by Employee, but
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shall be binding upon and inure to the benefit of the heirs, successors and
assigns of Employee and Company.
13. NOTICES. All notices or other communications in connection with this
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Agreement shall be in writing and shall be deemed to have been duly given when
delivered, sent by professional courier or mailed first class, postage prepaid
and addressed as follows:
(i) If to Company, addressed to:
Colorado Bankshares of Colorado, Inc.
000 - 00xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
(ii) If to Employee, addressed to:
Xxxxxx X. Xxxxx
00000 X. 00xx Xx.
Xxxxxxxx, XX 00000
Or such other address or addressed to the attention of such other person or
persons as either of the parties may notify the other in accordance with the
provisions of this paragraph.
14. ENTIRE AGREEMENT. This Agreement is the entire agreement and
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understanding of the parties hereto with respect to the subject matter hereof
and supersedes any and all prior and contemporaneous negotiations,
understandings and agreements within,
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COLORADO BUSINESS BANKSHARES, INC.
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx X. Xxxxx Xxxxxx Xxxxxxx
Chief Executive Officer
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