EMPLOYMENT AGREEMENT BY AND BETWEEN THE JACKSONVILLE BANK AND GILBERT JAMES POMAR, III
BY
AND BETWEEN
THE
JACKSONVILLE BANK
AND
XXXXXXX
XXXXX XXXXX, III
THIS
EMPLOYMENT AGREEMENT ("Agreement") by and between The Jacksonville Bank (the
"Bank") and Xxxxxxx Xxxxx Xxxxx, III ("Employee" and, together with the Bank,
the “Parties”), is dated and shall be effective this _______ day of
_______________, 2009 (the “Effective Date”). It replaces and
supersedes any and all previous agreements, written or oral, with respect to the
Employee’s employment with the Bank
RECITALS
1.
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Employment and Term. The
Bank shall employ Employee pursuant to the terms of this Agreement to
perform the services specified in Section 2 herein. The initial term of
employment shall be for a period of twelve (12) months, commencing on the
Effective Date. Upon each new day of the twelve (12) month period of
employment from the Effective Date until the Employee's 65th (sixty-fifth)
birthday, the term of this Agreement shall be automatically extended for
one (1) additional day, to be added to the end of the then-existing twelve
(12) month term. Accordingly, at all times prior to (i) the Employee's
attaining age sixty-five (65) or (ii) a Notice of Termination, as defined
in Section 9(b) (or an actual termination) the term of this Agreement
shall be twelve (12) full months. However, either Party may terminate this
Agreement by giving the other Party written notice of intent not to renew.
The automatic extensions of the term of this Agreement shall immediately
be suspended upon an employment termination by reason of death or
disability or retirement, or an employment termination made voluntarily by
the Employee (other than for Good Reason as defined in Section 9(d), or
involuntarily for Just Cause as defined in Section 9(b)). Additionally,
the Board shall, on an annual basis, review Employee's performance to
determine whether this Agreement should continue to be extended. The
Board's action will be reflected in the Board's meeting
minutes.
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In the
event the Employee gives a Notice of Termination, the term of this Agreement
shall expire upon the thirtieth (30th) day following the delivery to the Bank of
such Notice of Termination. Except as otherwise provided in the following
paragraph with respect to a voluntary termination for Good Reason, a voluntary
employment termination by the Employee shall result in the termination of the
rights and obligations of the parties under this Agreement; provided, however,
that the terms and provisions of Section 12 shall continue to
apply.
In the
event the Bank desires to involuntarily terminate the employment of Employee
(for purposes of this Agreement, a voluntary employment termination by the
Employee for Good Reason shall be treated as an involuntary termination of the
Employee's employment without Just Cause), the Bank shall deliver to the
Employee a Notice of Termination, and the following provisions shall
apply:
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(a)
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In
the event the involuntary termination is for Just Cause, this Agreement
shall terminate immediately upon delivery to the Employee of such Notice
of Termination. Such a termination for Just Cause shall result
in the termination of all rights and obligations of the Parties under this
Agreement.
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(b)
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In
the event the involuntary termination is without Just Cause, the Employee
shall be entitled to receive the severance benefits set forth in Sections
9(f) and 9(g) herein.
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2.
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Position, Responsibilities and
Duties. During the term of this Agreement, Employee
shall serve in the following capacities and shall fulfill the following
responsibilities and duties:
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(i)
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serve
as the President and Chief Executive Officer of the
Bank;
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(ii)
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perform
such executive services for the Bank as may be consistent with his titles
or be assigned to him by the Board;
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(iii)
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serve
on such committees as appointed by the Board from time to
time;
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(iv)
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keep
the other executives of the Bank and the Board informed of important
developments concerning the Bank's activities, industry developments and
regulatory initiatives affecting the
Bank;
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(v)
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maintain
adequate expense records relating to Employee's activities on behalf of
the Bank;
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(vi)
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increase
the business of the Bank;
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(vii)
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coordinate
with the Bank's other executives to the extent necessary to further the
business of the Bank, keeping in compliance with government laws and
regulations and otherwise keeping the Bank in as good a financial and
legal posture as possible; and
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(viii)
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conduct
and undertake all other activities, responsibilities, and duties normally
expected to be undertaken and accomplished by a President or Chief
Executive Officer of a financial institution similar in scope and
operation to the Bank's business.
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3.
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Compensation. During
the term of this Agreement, Employee shall be compensated as
follows:
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4.
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Payment of Business
Expenses. Employee is authorized to incur reasonable
expenses in performing his duties. The Bank will reimburse
Employee for authorized expenses, according to the Bank's established
policies, promptly after Employee's presentation of an itemized account of
such expenditures.
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5.
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Vacation and
Perquisites. Employee is entitled to four (4) weeks paid
vacation time per year on a non-cumulative basis or as increased pursuant
to the Bank's policy. The Bank shall provide Employee with a
Bank-owned automobile pursuant to Bank policy and shall pay for Employee's
membership dues in the Timuquana Country Club and The River
Club.
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6.
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Medical
Benefits. Employee is entitled to participate in all
medical and health care benefit plans through health insurance, corporate
funds, medical reimbursement plans or other plans, if any, provided, or to
be provided, by the Bank for its employees; provided that regardless of
the terms of such plans, the Bank shall pay the costs of coverage for
Employee. In addition, the Bank shall provide term life
insurance on the Employee’s life in an amount at least equal to three
times his Base Salary.
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(i)
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the
date Employee returns to full time employment in his capacity as the
Bank's President and Chief Executive
Officer;
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(ii)
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Employee's
full time employment by another
employer;
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(iii)
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three
(3) months after the date of such separation, after which Employee will be
entitled to receive benefits under any disability insurance plan provided
by the Bank; or
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(iv)
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the
date of Employee's death.
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(v)
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The
Bank may satisfy its obligations under this Section of this Agreement, at
its option, through the purchase of disability insurance. The
provisions of such policy will control the amounts paid to
Employee. Such disability insurance will be coordinated with
any disability plans made available to Employee pursuant to Section 6 of
this Agreement.
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(i)
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Employee's
full time employment by another
employer;
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(ii)
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one
(1) year after the date of such separation (with the exception of
disability insurance coverage); or
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(iii)
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the
date of Employee's death.
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(d)
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No
Reduction in Base Salary: During the period in which Employee
is disabled or subject to illness or incapacity, other than as described
in Section 7(b) herein, there shall be no reduction in Employee's Base
Salary.
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8.
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Death During
Employment. In the event of Employee's death during the
term of this Agreement, the Bank's obligation to Employee shall be limited
to the portion of Employee's compensation which would be payable up to the
first working day of the first month after Employee's death and a pro
rated portion of a bonus equal to the average bonus received by the
Employee in the two prior fiscal
years.
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9.
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Notwithstanding
anything in this Section 9(d) to the contrary, any of the above-listed events
which does not constitute a “material negative change” (as defined in Section
1.409A-1(n)(2) of the Treasury Regulations) in the Employee’s service
relationship with the Bank shall not constitute “Good Reason” for purposes of
this Agreement.
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(e)
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Change
In Control: The Bank is a wholly-owned subsidiary of
Jacksonville Bancorp, Inc. (the "Parent Company"). For purposes
of this Agreement, a Change in Control shall mean, and be deemed to have
occurred on the date of, the first to occur of any of the
following:
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(i)
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the
sale by the Parent Company of capital stock (other than an initial public
offering of stock) such that any person (as such term is used in
Rule 13d-5 of the Securities Exchange Act of 1934 (the "Exchange
Act")) or group (as defined in Sections 3(a)(9) and 13(d)(3) of the
Exchange Act) other than (1) a subsidiary of the Parent Company or any
employee benefit plan (or any related trust) of the Parent Company or
subsidiary, or (2) any current holder of five percent (5%) or more of the
Parent Company's capital stock, becomes the owner (beneficially or
otherwise) of more than fifty percent (50%) of such Parent Company's
capital stock or other securities representing fifty percent (50%) or more
of the combined voting power of outstanding voting
securities;
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(ii)
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the
replacement of more than fifty percent (50%) of the incumbent members of
the Board of Directors of the Parent Company provided, however, where the
election or nomination of such replacement directors was approved by a
majority of the incumbent members (other than in connection with an
"election contest") (as such term is used in Section 14(d) of the Exchange
Act) or proposed merger) such replacement director will be treated as an
incumbent director;
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(iii)
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the
Parent Company becomes a subsidiary of another corporation or shall have
merged into or consolidated with another corporation, or merged another
corporation into the Parent Company, on a basis whereby less than fifty
percent (50%) of the total voting power of the surviving corporation is
represented by shares held by former shareholders of the Parent Company
prior to such merger or consolidation excluding, however, a transaction
where the incumbent directors of the Parent Company constitute a majority
of the Board of Directors of the surviving corporation at the time of the
transaction and for one (1) year thereafter;
or
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(iv)
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the
Parent Company sells the capital stock of the Bank or all or substantially
all of its assets to another corporation or other entity or person not
also controlled by the shareholders of the Parent
Company.
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Notwithstanding
anything in this Section 9(e) to the contrary, an event which does not
constitute a change in the ownership, a change in the effective control, or a
change in the ownership of a substantial portion of the assets of the Bank or
the Parent Company, each as defined in Section 1.409A-3(i)(5) of the Treasury
Regulations, shall not constitute a Change in Control for purposes of this
Agreement
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(f)
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Severance
Payment:
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(i)
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if
the Employee shall terminate his employment for Good Reason as defined in
Section 9(d) herein, or if the Employee is terminated by the Bank for
other than Just Cause pursuant to Section 9(c) herein, then in lieu of any
further salary payments to the Employee for periods subsequent to the date
of termination, the Employee shall be paid, as severance, an amount equal
to Employee's annual Base Salary, plus any incentive compensation or bonus
which the Employee would have been entitled to hereunder;
or
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(ii)
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in
the event Employee's employment is terminated as a result of a Change In
Control or a Change In Control occurs within twelve (12) months before the
Employee’s involuntary termination or termination for Good Reason,
Employee shall be entitled to a severance payment equal to two and
ninety-nine hundredths (2.99) times the highest annual salary and bonus he
was paid or entitled to in the two years preceding
termination.
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Any
payment under Subsections 9(f)(i) and 9(f)(ii) shall be made in substantially
equal semi-monthly installments on the fifteenth and last days of each month
commencing on the effective date of Employee's separation from
service. Payments under Subsection 9(f)(i) shall be made over a
twelve month period and under 9(f)(ii) over a thirty-six month
period.
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9
10.
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Required Provisions by
Regulation. The Bank and Employee acknowledge that the
laws and regulations governing the Parties require that certain provisions
be provided in each employment agreement with officers and employees of
the Bank. The Parties agree to be bound by the following
provisions:
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(a)
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If
Employee is suspended from office and/or temporarily prohibited from
participating in the conduct of the Bank's affairs pursuant to notice
served under Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit
Insurance Act ("FDIA") (12 U.S.C. Section 1818[e][3] and Section
1818[g][1]), the Bank's obligations under this Agreement shall be
suspended as of the date of service, unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the
Bank may, in its discretion: (i) pay Employee all or part of the
compensation withheld while its obligations under this Agreement were
suspended, and (ii) reinstate (in whole or in part) any of its obligations
which were suspended.
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(b)
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If
Employee is removed from office and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued
under Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C. Sections
1818[e][4] and [g][1]), all obligations of the Employee and the Bank under
this Agreement shall terminate as of the effective date of the order, but
vested rights of the Employee and of the Bank, as of the date
of termination, shall not be
affected.
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(c)
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All
obligations under this Agreement may be terminated pursuant to 12 C.F.R.
Section 563.39(b)(5) (except to the extent that it is determined that
continuation of the Agreement for the continued operation of Bank is
necessary): (i) by the Director of the Office of Thrift
Supervision ("OTS"), or his/her designee, at the time the Federal Deposit
Insurance Corporation ("FDIC") enters into an agreement to provide
assistance to or on behalf of Bank under the authority contained in
Section 13(c) of the FDIA (12 U.S.C. Section 1823[c]); or (ii) by the
Director of the OTS, or his/her designee, at the time the Director or
his/her designee approves a supervisory merger to resolve problems related
to operation of Bank or when Bank is determined by the Director of the OTS
in final agency action to be in an unsafe or unsound condition, but vested
rights of the Employee and of the Bank, as of the date of termination,
shall not be affected.
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(d)
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If
Bank is in default, as defined in Section 3(x)(1) of the FDIA (12 U.S.C.
Section 1818[x][1]) to mean an adjudication or other official
determination by any court of competent jurisdiction, the appropriate
federal banking agency or other public authority pursuant to this
Agreement shall terminate as of the date of default, but vested rights of
the Employee as of the date of termination, shall not be
affected.
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(c)
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Delivery
of Notices: All notices given or required to be given herein
shall be in writing, sent by United States first-class certified or
registered mail, postage prepaid, by way of overnight carrier or by hand
delivery. If to the Employee (or to the Employee's spouse or
estate upon the Employee's death) notice shall be sent to Employee's
last-known address, and if to the Bank, notice shall be sent to the
corporate headquarters. All such notices shall be effective
when deposited in the mail if sent via first-class certified or registered
mail, or upon delivery if by hand delivery or sent via overnight
carrier. Either Party, by notice in writing, may change or
designate the place for receipt of all such
notices.
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12.
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Post-Termination
Obligations. The Bank shall pay to Employee such
compensation as is required pursuant to this Agreement; provided, however,
any such payment shall be subject to Employee's post-termination
cooperation. Such cooperation shall include the
following:
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(i)
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Employee
shall furnish such information and assistance as may be reasonably
required by the Bank in connection with any litigation or settlement of
any dispute between the Bank, a borrower and/or any other third parties
(including without limitation serving as a witness in court or other
proceedings);
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(ii)
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Employee
shall provide such information or assistance to the Bank in connection
with any regulatory examination by any state or federal regulatory agency;
and
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(iii)
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Employee
shall keep the Bank's trade secrets and other proprietary or confidential
information secret to the fullest extent practicable, subject to
compliance with all applicable
laws.
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Upon
submission of proper receipts, the Bank shall promptly reimburse Employee for
any reasonable expenses in current by Employee in complying with the provisions
of this Section. Such cooperation is to be furnished without
additional compensation during such period Employee is receiving severance
payments pursuant to this Agreement. Should such cooperation be
required during such period that Employee is not receiving severance payments
pursuant to this Agreement, the Bank shall pay Employee an hourly fee comparable
to that charged by banking industry consultants. Amounts payable to
Employee pursuant to this paragraph shall be considered “additional benefits”
for purposes of Section 9(i) above.
13.
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Attorneys’ Fees/Advanced
Costs. In the event that the Employee is terminated in a
manner which violates any provisions of this Agreement, as determined by a
court of competent jurisdiction, the Employee shall be entitled to
reimbursement for all reasonable costs, including attorneys’ fees, in
challenging such termination. Further, because of economic
disparity between the Bank and Employee, the Bank agrees to pay for
Employee's reasonable attorneys' fees and costs up to $10,000 to enforce
the terms of this Agreement or recovered damages for breach of this
agreement as follows: $5,000 at the commencement of litigation
or the mediation proceedings and an additional $5,000 six (6) months
thereafter. In the event the Employee is unsuccessful in his
claim or defense, the Employee shall reimburse the Bank for any attorneys'
fees, expenses and costs that have been advanced. If the
Employee is successful, any attorneys' fee award will be reduced by the
amount of attorney's fees and costs that have been
advanced. Such reimbursement shall be in addition to all rights
to which the Employee is otherwise entitled under this
Agreement. Amounts payable to Employee pursuant to this
paragraph shall be considered “additional benefits” for purposes of
Section 9(i) above.
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14.
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Indebtedness. If
during the term of this Agreement, Employee becomes indebted to the Bank
for any reason, the Bank may, at its election, set off and collect any
sums due Employee out of any amounts which the Bank may owe Employee from
his Base Salary or other compensation; provided, however, that the Bank
shall not reduce any post-termination amounts payable to Employee under
this Agreement that are subject to Section 409A of the Code (including any
severance pay described in Section 2(f) that is subject to Section 409A of
the Code) in offset of an Employee indebtedness to the Bank unless the
indebtedness arose in the ordinary course of the Employee’s service
relationship with the Bank, the amount of the reduction does not
exceed $5,000, and the reduction is made at the same time an in
the same amount as the debt otherwise would have been due and collected
from the Employee. Furthermore, upon the termination of this
Agreement, all sums owed by Employee shall become immediately due and
payable. Employee shall pay all expenses and attorney's fees
actually or necessarily incurred by the Bank in connection with any
collection proceeding for Employee's indebtedness to
us. Notwithstanding any of the foregoing, any indebtedness to
us secured by a mortgage on Employee's residence shall not be subject to
the foregoing provisions, and shall be governed by the loan documents
evidencing such indebtedness.
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15.
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Maintenance of Trade Secrets
and Confidential Information. Employee shall use his
best efforts and utmost diligence to guard and protect all of the Bank's
trade secrets and confidential information. Employee shall not,
either during the term or after termination of this Agreement, for
whatever reason, use, in any capacity, or divulge or disclose in any
manner, to any Person, the identity of the Bank's customers, or its
customer lists, methods of operation, marketing and promotional methods,
processes, techniques, systems, formulas, programs or other trade secrets
or confidential information relating to the Bank's
business. Upon termination of this Agreement or Employee's
employment, for any reason, Employee shall immediately return and deliver
to the Bank all records and papers and all matters of whatever nature
which bear trade secrets or confidential information relating to the
Bank.
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(b)
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Agreement
Not to Compete: Employee acknowledges that by virtue of his
employment with the Bank, Employee will acquire an intimate knowledge of
the activities and affairs of the Bank, including trade secrets and other
confidential matters. Employee, therefore, agrees that during
the term of this Agreement, and for a period of six (6) months after the
termination of his employment for any reason, Employee shall not become
employed, directly or indirectly, whether as an employee, independent
contractor, consultant, or otherwise, in the financial services industry
with any business enterprise or business entity, or person whose intent is
to organize another financial institution in Xxxxx or Clay Counties,
Florida; provided, however, that such prohibition shall be for three (3)
months if this Agreement is terminated due to a Change In
Control. Employee hereby agrees that the duration of the
anticompetitive covenant set forth herein is reasonable, and its
geographic scope is not unduly
restrictive.
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17.
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18.
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Assignment. This
Agreement shall inure to the benefit of and be binding upon the Employee,
and to the extent applicable, his heirs, assigns, executors, and personal
representatives, and to the Bank, and to the extent applicable, its
successors, and assigns, including, without limitation, any person,
partnership, or corporation which may acquire all or substantially all of
the Bank's assets and business, or with or into which the Bank may be
consolidated or merged, and this provision shall apply in the event of any
subsequent merger, consolidation, or transfer, unless such merger or
consolidation or subsequent merger or consolidation is a transaction of
the type which would result in termination under Sections 9(c) and 9(d)
herein.
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19.
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(i)
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Person"
shall mean any natural person, corporation, partnership (general or
limited), trust, association or any other business entity;
and
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(ii)
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"Attorneys
Fees" shall include the legal fees and disbursements charged by attorneys
and their related travel and lodging expenses, court costs, paralegal
fees, etc. incurred in settlement, trial, appeal or in bankruptcy
proceedings.
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(iii)
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“Code”
shall mean the Internal Revenue Code of 1986, as
amended.
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(iv)
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“Separation
from service” shall mean the Employee’s termination of employment or other
separation from service as defined in Section 1.409A-1(i) of the Treasury
Regulations, applying the default terms
thereof.
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(v)
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“Treasury
Regulations” shall mean Title 26 of the Code of Federal Regulations, as
amended from time to time.
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(d)
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(h)
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Pronouns: As
used herein, words in the singular include the plural, and the masculine
include the feminine and neuter gender, as
appropriate.
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(j)
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Code
Section 409A: With respect to any compensation promised under this
Agreement that is subject to Section 409A of the Code, this Agreement is
intended to comply with the applicable requirements of Sections 409A(a)(2)
through (4) of the Code and shall be interpreted to the extent context
reasonably permits in accordance with this intent. The parties
agree to modify this Agreement or the timing (but not the amount) of any
payment to the extent necessary to comply with Section 409A of the Code
and avoid application of any taxes, penalties, or interest
thereunder. However, in the event that any amounts payable
under this Agreement are subject to any taxes, penalties or interest under
Section 409A of the Code or otherwise, Employee shall be solely liable for
the payment thereof.
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EMPLOYEE
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THE
JACKSONVILLE BANK
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By:
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Xxxxxxx
Xxxxx Xxxxx, III, Employee
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