PERFORMANCE AWARD,OPTION & EMPOYMENT AGREEMENT
AGREEMENT is made this 23rd day of July, 1996 by and between Connecticut
Bank of Commerce, a corporation organized and existing under the laws of
the State of Connecticut, having its principal office and place of
business at 000 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx (the
"Corporation"), and Xxxxxx Xxxxxxx, residing at 00 Xxxxx Xxxxx,
Xxxxxxxxx Xxxx, Xxx Xxxxxx (the "Executive").
WHEREAS, the Corporation desires to retain Executive for the purposes
set hereinafter set forth ;and WHEREAS, the Executive desires to accept
such engagement upon the terms and conditions hereinafter set forth;
WHEREAS, the Executive and Corporation agree that this agreement
supersedes any previous employment correspondence.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, it is hereby agreed as follows:
1. Duties - Upon the Effective Date of this Agreement, as hereinafter
defined, the Corporation shall employ Executive. Executive shall devote
his full business time and efforts to the business of the Corporation.
Executive shall have President and Chief Executive Officer title and
responsibility, be a member of the Corporation's Board, and specifically
have executive management responsibility of the affairs of the
Corporation subject to the control of the Board. The President
and Chief Executive Officer shall have such other powers and
perform other duties as are incident to the office of the
President and Chief Executive Officer and as from time to time may be
assigned or delegated to him under the By-laws of the Corporation or by
the Board.
2. Term - The Term of this Agreement shall be for a period commencing
on the date hereof (the "Effective Date") and ending December 31, 1999.
3. Compensation - During the Term of Employment, the Employer shall
pay
to the Executive as compensation for the services to be rendered by
him hereunder the following:
(a) The Employer shall pay to the Executive a base salary of one
hundred sixty thousand dollars per year.
(b) In addition, the Executive shall receive an annual increase in
salary on each anniversary date of hire in an amount set by the Board.
(c) In addition, Corporation shall provide the Executive with an
automobile on a grossed up, after tax basis including all costs
incidental thereto, such as maintenance, repairs, and insurance. The
Corporation shall further provide
Executive with use of an apartment, bank ORE property, or
hotel accommodations, on a grossed up, after tax basis.
4. Performance Award Bonus - In addition to the base salary set forth
above, the Executive shall be entitled to the following performance
bonus to a maximum of $60,000 for the year ending December 31, 1996 and
to a maximum of 50% of base salary for each subsequent year unless
otherwise increased by the Board of Directors of the Employer. The
performance bonus for the period ending December 31, 1996 will be based
on the period beginning March 31, 1996. For subsequent years, the
performance bonus will be based on the twelve month period ending
December 31. All bonuses will be based on the following goals and
percentage of base salary:
Net Income 50% of salary for achieving budgeted net income as provided
for in Executive provided financial plan. Each percentage point over or
under plan will result in a corresponding percentage point increase or
decrease in bonus. For example, exceeding plan by two percent will
result in an additional two percent bonus allocation.
Operating Expense Reductions
5% of total operating expense reductions achieved.
Asset Quality
10% of base salary for each $500,000 reduction, or part thereof,
in NonPerforming Assets, defined as Non-accruals, OREO, and ISF loans.
Liability Mix
15% of base salary for each $500,00 increase, or part thereof,
in DDA/MMA account balances.
This performance bonus will be payable within 30 days of the year end.
Commencing on the second year of employment, employer will also pay the
pro rata share of any performance award bonus that would have
been earned had Executive been employed as of December 31, 1997,
provided the Executive has not been terminated for cause. For example,
if Executive was terminated as of August 30, 1997, Executive would be
due 8/12 of any performance award bonus based on the above goals and
the Bank's December 31,1997 performance.
5. Incentive Stock Options - The Corporation's Parent, CBC Bancorp,
Inc., will grant to the Executive on the Effective Date of the Agreement
options to purchase the Parent common stock (the "Stock Options") in
accordance with the terms and conditions of the Stock
Option Agreement (the "Stock Option Agreement"), dated of even
date hereof, by and between Parent and the Executive. The Stock
Option Agreement will provide for the
grant of Stock Options representing 5% of the issued and outstanding
shares of parent common stock on the date of grant (subject to
adjustment thereafter under certain circumstances) which Stock Options
shall vest at the rate of 1.25% of the issued and outstanding shares of
parent common stock for each year of employment of the Executive by the
Corporation. The Stock Options shall be convertible under certain
circumstances (as set forth in the Stock Option Agreement) into options
to purchase shares of common stock of the Corporation.
6. Reimbursement for Expenses - The Corporation will reimburse the
Executive for all reasonable and necessary expenses incurred by him in
carrying out his duties under this Agreement. Executive shall present
to the Corporation, upon request for reimbursement of such expenses, an
itemized account of such expenses, in such form as the Corporation shall
reasonably require.
7. Resignation - If without the prior written consent of the Executive,
the Corporation shall materially change the Executive's position from
that of President and Chief Executive Officer, by materially altering
the duties, responsibilities or authority of the Executive by demotion
from those in effect on the Effective Date, the Executive may, upon 120
days written notice, elect resign his position with the Bank. In the
event of such a resignation, the Corporation shall pay the Executive on
the effective date of such resignation: (i) a grossed up after tax lump
sum cash payment in an amount equal to 50% of the Executive's annual
salary in effect on the date of such notice, and (ii) a lump sum cash
payment in an amount equal to the Executive's annual salary in effect on
the date of such notice as computed on a daily business day basis
multiplied by the number of Executive's accrued vacation days.
8. Termination of Employment
(a) For Cause - Corporation may terminate the Executive's employment at
any time "for cause".
(b) Death or Disability - the Executives employment shall terminate in
the event of his death and may be terminated by Corporation in the event
of his physical or mental inability to perform the duties of President
and Chief Executive Officer, provided such inability shall have
continued for a period of six (6) consecutive months. In the event of
death, Executive's estate will be paid any accrued salary not paid and
death benefits routinely provided to other senior officers of the
Corporation. In the event of any disability, Executive will be provided
full compensation for six months, seventy five percent for next six
months, and fifty percent for next six months.
(c) Change of Control - Notwithstanding any other provision of this
Agreement, in the event that the Corporation shall terminate the
Executive's employment, for any reason, except "for Cause", or if the
Executive shall resign his position pursuant to the Resignation
subsection of this Agreement, at any time after a "Change in Control" of
the Corporation has occurred, as hereinafter defined, the Corporation
shall pay to the Executive on the date of such termination (i) a lump
sum cash payment in an amount equal to two times the Executive's annual
salary in effect on the date immediately preceding the date of such
"Change in Control" or on the date of termination,
whichever is greater, (ii) a lump sum cash payment in an amount equal to
the Executive's annual salary computed on a daily business day basis
times the number of accrued vacation days to the date of such
termination, and (iii) all stock options previously granted hereunder or
under separate Stock Option Agreement shall be immediately exercised.
Any and all payments made to Executive will be on a grossed up after tax
basis. For the purpose of this Section, the following definitions shall
apply: "Change of Control" means (i) any merger or consolidation of the
Corporation or Bank with or into, or any sale, lease, exchange, transfer
or other disposition of all or any substantial part of the assets of the
Corporation or Bank to voting securities of the Corporation of, any
person or group of persons acting in concert, any class of which did not
own or control 50.1% or more of voting securities of the Corporation
prior to such merger or consolidation with or sale, lease, exchange,
transfer or other disposition of all or substantially all the assets of
the Corporation or Bank,(ii) the acquisition by any person or group of
persons acting in concert of beneficial ownership of 50.1% or more of
any class of voting securities of the Corporation, or (iii) the
acquisition by any person or group of persons acting in concert,
directly or indirectly through the use of proxies or otherwise, of the
ability to elect or appoint a majority of
the Board of Directors of the Corporation. "Person" means any
individual, partnership, firm, corporation, association, trust,
unincorporated organization or other entity, as well as any group of
Persons Acting in Concert. "Group of Persons Acting in Concert" means a
group of persons who (i) knowingly participate in a joint activity or
conscious parallel action towards a common goal, whether
or not pursuant to an express agreement; or (ii) combine or pool voting
or other interests in the securities of an issuer for a common purpose
pursuant to any contract, understanding, relationship, agreement or
other arrangement, whether written or otherwise.
9. Assignments
(a) The rights and obligations of the Executive under this
Agreement are personal and may not be assigned; provided, however, that
any benefits provided to the Executive hereof shall inure to and may
thereafter be enforced by the Executive's heirs, executors,
administrators and personal representatives.
(b) This Agreement shall be binding upon, shall be assumed by and shall
inure to the benefits of Corporation's successors and assigns, whether
by reason of consolidation, merger, sale or transfer of all or
substantially all of the assets of the Corporation, or otherwise.
10. Notices - Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be mailed by
registered mail or delivered against receipt to the parties and
addresses set forth below, or to such other address as the party shall
have furnished in writing in accordance with
this paragraph. Any notice or other communication mailed by registered
mail shall be deemed given at the time of registration thereof. If to
Corporation:
Chairman of the Board
Connecticut Bank of Commerce
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
With Copy to:
Xxxxxx Xxxxxxxxx, Esq.
00 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
To the Executive:
Xxxxxx Xxxxxxx
00 Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
11. Arbitration - Any controversy or claim arising out of or relating to
this Agreement shall be settled by arbitration in accordance with the
Rules of the American Arbitration Association, and the parties hereby
consent to the jurisdiction of the Supreme Court of the State of
Connecticut, and judgment upon the award rendered in such arbitration
may be entered in any court having jurisdiction thereof.
12 Entire Agreement - This Agreement contains the entire understanding
between the parties and supersedes all prior understandings of the
parties in connection therewith. No covenant, representation or
condition not expressed in this Agreement shall affect or be effective
to interpret, change or restrict the express
provisions of this Agreements.
13. Severability - In the event that any term or condition contained in
this Agreement shall for any reason be held by a court of
competent jurisdiction to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not
affect any other term or condition of this Agreement, but
this Agreement shall be construed as if such invalid or illegal or
unenforceable term or condition had never been contained herein.
14. Governing Law - This Agreement shall be governed by and in
accordance with the laws of the State of Connecticut.
15.Modiction - This Agreement shall not be modified or amended in any
respect, except by a written instrument signed by the parties hereto.
IN WITNESS WHEREOF, Corporation has caused this Agreement to be signed
by the bank's Senior Vice President and Chief Accounting Officer,
authorized to do so by the bank's Board of Director's as reflected in
Board minutes of a meeting held, on July 23, 1996, in Westport,
Connecticut and the Executive hereunder set his hand on the day and year
first above written.
CONNECTICUT BANK OF COMMERCE
BY:/s/ Xxxxxxx Xxx Xxxxxx
ITS: Senior Vice President
XXXXXX XXXXXXX
