EXHIBIT 10.1
DRAFT ONE 3/24/2003
EXHIBIT 10.1 EMPLOYMENT AGREEMENT BETWEEN TEAM FINANCIAL, INC. AND
XXXXXX X. XXXXXXXXXX DATED JANUARY 1, 2002.
EMPLOYMENT AGREEMENT
BETWEEN
TEAM FINANCIAL, INC.
AND
XXXXXX X. XXXXXXXXXX
This Agreement is made this 1st day of January, 2003, between Team Financial,
Inc., a Kansas corporation ("COMPANY") and Xxxxxx X. Xxxxxxxxxx ("EXECUTIVE").
A. Executive is employed as Chairman and Chief Executive Officer,
has rendered valuable services to Company and has acquired an extensive
background in and knowledge of Company's business.
B. Company desires to continue the services of Executive and
Executive desires to continue to serve Company as Chairman and Chief
Executive Officer.
In consideration of the foregoing recitals and the agreements set forth
herein, Company and Executive agree as follows:
1. TERM OF AGREEMENT AND DEFINITIONS:
1.0 TERM OF AGREEMENT: Company shall employ Executive and Executive
accepts such employment for a period beginning on the date of this
Agreement and ending the 31st day of December, 2005, subject to the
terms and condition set forth herein, unless earlier termination of the
agreement shall occur in accordance with the subsequent provisions set
forth herein.
1.1 AUTOMATIC EXTENSION OF AGREEMENT TERM: Not withstanding the
foregoing, if this Agreement shall not have been terminated in
accordance with the provisions herein on or by the 31st day of December,
2005; the term of this Agreement shall be extended automatically without
further action by either party such that at every moment of time
thereafter, the term shall be one year.
Provided, however, during such period of automatic extension of the
term, this Agreement may be terminated in accordance with the
termination provisions of this Agreement as set forth in Sections 10 and
11.
1.2 DEFINITIONS: The following definitions shall be used in the
interpretation of this Agreement.
1.2.1 EMPLOYMENT ON AN ACTIVE FULL TIME BASIS means the Executive's
professional services shall be substantially devoted to Company.
Although prior approval by the Company of Executive's employment by
third parties is not required, the Company shall have the right to
review any employment of Executive by any entity and shall have the
right to require Executive to abandon any unsuitable employment as may
be determined by Company or any activities competitive with Company. The
term "active full time basis" includes the requirement that Executive
refrain from any activities which interfere with Executive's Company
duties.
1.2.2 YEAR, MONTH, WEEK AND DAY, unless otherwise provided in this
agreement, the word "year" shall be construed to mean a calendar year of
365 days, the word "month" shall be construed to mean a calendar
DRAFT ONE 3/24/2003
month, the word "week" shall be construed to mean a calendar week of 7
days, and the word "day" shall be construed to mean a period of 24 hours
running from midnight to midnight.
1.2.3 ANNUAL BASE SALARY is the sum of money regularly paid by Company
to Executive each year of the term of this Agreement pursuant to
provisions of Section 8.0 of this Agreement.
1.2.4 CUSTOMARY PAYROLL PRACTICES are those policies and procedures
routinely followed by the Company concerning the time and method of
payment of compensation to its employees as may from time to time be
adopted by the Company during course of this Agreement.
1.2.5 COMPANY POLICIES are those written policies adopted by the
Company and/or customary practices routinely followed by the Company,
which may from time to time be adopted by the Company during the course
of the Agreement. The parties acknowledge the Company may from time to
time reasonably enact new policies or alter existing policies.
1.2.6 ORGANIZATION as used herein shall be broadly defined to include
any business, civic or community group or entity.
1.2.7 WILLFUL MISCONDUCT is any act performed with a designed purpose
or intent on the part of a person to do wrong.
1.2.8 GROSS MISAPPROPRIATION OF FUNDS shall be any misappropriation of
company funds by any means which is intentional and not of an
inconsequential nature or amount.
2. ENTIRE AGREEMENT
2.0 With respect to the matters specified herein, this Agreement
contains the entire agreement between the parties and supersedes all
prior oral and written agreements, understandings and commitments
between the parties. This Agreement shall not affect the provisions of
any other compensation, retirement or other benefit programs of Company
to which Executive is a party or of which he is a beneficiary.
3. VALIDITY
3.0 In the event that any provision of this Agreement is held to be
invalid, void or unenforceable, the same shall not affect, in any
respect whatsoever, the validity of any other provision of the
Agreement.
4. PARAGRAPHS AND OTHER HEADINGS
4.0 Paragraphs and other headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement.
5. SUCCESSORS
5.0 The rights and duties of a party hereunder shall not be
assignable by that party; provided, however, that this Agreement shall
be binding upon and inure to the benefit of any successor of Company,
and any such successor shall be deemed substituted for Company under the
terms of this Agreement. The term "successor" as used herein shall
include any person, firm, corporation or other business entity which at
any time, by merger, purchase or otherwise, acquires all or
substantially all of the assets or business of Company.
6. DESIGNATION OF BENEFICIARIES
DRAFT ONE 3/24/2003
6.0 If Executive should die during the term of this Agreement, all
such sums due to Executive hereunder shall be paid as designated by
Executive on the attached Beneficiary Designation Form.
6.1 The spouse of the Executive shall join in any designation of a
beneficiary other than the spouse.
6.2 If Executive wholly fails to designate a beneficiary as provided
for in this paragraph, or if the Executive's spouse at the time of his
death shall not have joined in the designation of a beneficiary, then
the sums due Executive shall be paid to his estate.
7. DUTIES
7.0 Company employs Executive upon an active full-time basis, as
Chairman of the Board of Directors and Chief Executive Officer subject
to the order and direction of the Board of Directors ("BOARD") of
Company.
7.1 During the term of this Agreement Executive shall devote
substantially all of his time, attention, and best efforts to the
business of Company and its subsidiaries. Executive shall perform such
duties and shall exercise such power and authority as delegated by the
Board from time to time provided that such duties are commensurate with
the positions of Chairman of the Board and Chief Executive Officer.
Executive may engage in other non-business activities such as
charitable, educational, religious and similar types of activities so
long as such activities do not prevent the performance of Executive's
duties herein or conflict in any material way with the business of
Company. Notwithstanding the above, Executive shall be permitted to
serve as a Director or Trustee of other organizations, in accordance
with the policies of Company.
7.2 The duties of Chairman of the Board and Chief Executive Officer
shall be defined using a written job definition, developed by an
executive compensation committee appointed by the Board of Directors.
The Board shall consult with Executive in the development of the written
job definition. Executive and said written job definition shall be
subject to any systematic evaluation system(s) that the Board may from
time to time employ.
7.3 Executive's duties shall be performed principally at Company's
headquarters located in Paola, Kansas. During the term of the Agreement,
it is understood that Company expects to maintain its principal place of
business in Paola, Kansas. If the requirements of Company, as determined
by the Board, make it desirable to relocate the principal offices of
Company to another location during any period of employment, Executive
will be consulted in advance of any such relocation. Unless Executive
otherwise consents, the principal place of Executive's employment shall
be within a 50 mile radius of Paola, Kansas.
8. SALARY, BONUS, BENEFITS, ADDITIONAL COMPENSATION
8.0 ANNUAL BASE SALARY.
Executive shall receive an annual base salary of $216,000.00 payable
according to the customary payroll practices of Company and subject to
all required withholding taxes. The compensation committee of Board, in
its discretion, may increase this annual base salary upon relevant
circumstances. Executive will be reviewed at least annually. At least
every two years compensation committee will review Executive's annual
base salary for competitiveness and appropriateness in the industry. Any
increase in annual base salary awarded to the Executive by Company,
shall constitute a new annual base salary for the purpose of this
Agreement. To be effective such changes in the annual base salary shall
be in writing signed by the Company.
8.1 BONUS.
DRAFT ONE 3/24/2003
8.1.1 STANDARD COMPANY BONUSES. Executive shall be eligible to
receive, in addition to his salary, any contributions or sums specified
as additional compensation through any established plan or policy of
Company which is available to senior executives as compensation over and
above established salaries.
8.1.2 ANNUAL EXECUTIVE BONUS. In addition, Executive shall be entitled
to receive a yearly annual bonus. The amount of such bonus shall be
based upon criteria established by the compensation committee of Board
and may include either or both stock and cash. Provided, however, such
bonus shall not exceed fifty percent (50%) of Executive's annual base
salary in effect for the period for which the bonus is granted. During
the term of this Agreement, the yearly annual bonus shall be paid not
later than January 31 of the calendar year following annual bonus year.
8.2 BENEFITS.
8.2.0 Executive shall be entitled to receive all benefits generally
made available to executives of Company as may from time to time be in
effect.
8.2.1 Executive shall be entitled, in addition to life insurance
coverage in effect for all employees, to a life insurance policy in the
amount of $240,000.00 all premiums to be paid by Company.
8.2.2 Executive shall be entitled to participate, during the term of
the Agreement, under the terms and conditions thereof, in any group
life, medical, dental or other health and welfare plans generally
available to management personnel of Company which may be in effect from
time to time; provided that nothing herein shall require the Company to
establish or maintain such plans.
8.2.3 EXECUTIVE EXPENSES. Executive shall be entitled to reimbursement
for business expenses. Executive shall be expected to incur various
business expenses customarily incurred by persons holding like
positions, including but not limited to traveling, entertainment and
similar expenses, all of which are to be incurred by Executive for the
benefit of Company. Executive shall be subject to Company's policies
regarding the reimbursement and non-reimbursement of said expense.
Executive acknowledges that Company policies do not necessarily provide
for the reimbursement of all expenses.
8.2.4 SPECIAL EXECUTIVE ALLOWANCE. Company agrees to pay reasonable
room, board, travel, and sponsored event expenses of Executive's spouse
on three (3) business trips per year of Executive's choice.
8.2.5 ACCOUNTING. Executive shall account to Company for any
reimbursement or payment of such expenses in such a manner as Company
practices may from time to time require. Subject to Company's policy
regarding the payment of reimbursable expenses, Company shall reimburse
Executive for such expenses from time to time, at Executive's request.
8.2.6 Executive shall be entitled to reimbursement, not to exceed
$5,000.00 for the term of the agreement, for home office use, including,
but not limited to, an appropriate computer/modem installation, printer,
desk, chair, and such business related supplies as are used for
Company's business.
8.2.7 Company shall indemnify and hold Executive harmless for any
legal fees and expenses incurred by Executive in the performance of his
duties as a result of civil or criminal actions against him in
accordance with the indemnification provisions of the Articles of
Incorporation and Bylaws of Company.
8.2.8 During (i) the term of this Agreement, (ii) the twelve month
period following the termination of this Agreement as a result of death,
(iii) a two year period following the termination of this Agreement as a
result of disability, (iv) a three year period following termination of
this Agreement by Executive for material breach or good cause, and (v) a
three year period following a termination of this Agreement by Company
without cause; Company shall pay to Executive, or his estate if he be
deceased, a sum as reimbursement for reasonable out-of-pocket expenses
incurred for third-party professional financial and tax advice provided
by a licensed professional of Executive's choice, or the choice of
Executive's designated
DRAFT ONE 3/24/2003
beneficiary, or in the absence of a designated beneficiary his estate if
he be deceased. Provided, however, that in (i) above, the sum shall not
exceed fifteen percent (15%) of Executive's annual base salary for that
year; (ii) above, the sum shall not exceed twenty-five percent (25%) of
Executive's annual base salary for that year; (iii), (iv) and (v) above,
the sum shall not exceed twenty-five percent (25%), each year, of
Executive's annual base salary at the time of Executive's disability or
time of termination.
8.2.9 Executive shall be provided with a personal automobile under
arrangements equivalent to those currently in effect with respect to
other Company executives and of equivalent size and features as
presently driving.
8.3 ADDITIONAL COMPENSATION.
Executive shall be eligible to receive, in addition to his salary, any
contributions or sums specified for additional compensation through any
established plan or policy of Company which is available to senior
executives as compensation over and above established salaries,
including but not limited to stock options.
8.4 TAX LIABILITY.
Any tax liability which these benefits create for Executive will be the
sole responsibility of Executive.
9. PROTECTION OF COMPANY'S INTERESTS
9.0 During the term of this Agreement Executive shall not directly
or indirectly engage in competition with, or not own any interest in any
business which competes with, any business of Company; provided,
however, that the provisions of this Section 9 shall not prohibit his
ownership of not more than 5% of voting stock of any publicly held
corporation.
9.1 Except for actions taken in the course of his employment
hereunder, at no time shall Executive divulge, furnish or make
accessible to any person any information of a confidential or
proprietary nature obtained by him while in the employ of Company. Upon
termination of his employment by Company, Executive shall return to
Company all such information which exists in writing or other physical
form and all copies thereof in his possession or under his control.
9.2 Company, its successors and assigns, shall, in addition to
Executive's services, be entitled to receive and own all of the results
and proceeds of said services (including, without limitation, literary
material and other intellectual property) produced or created during the
term of Executive's employment hereunder. Executive will, at the request
of Company, execute such assignments, certificates or other instruments
as Company may from time to time deem necessary or desirable to
evidence, establish, maintain, protect, enforce or defend its right or
title to any such material.
10. TERMINATION BY COMPANY
10.0 Company shall have the right to terminate this Agreement under
the following circumstances:
(i) Upon the DEATH of Executive;
(ii) Upon the DISABILITY of Executive;
(iii) Upon MATERIAL BREACH or GOOD CAUSE; and
(iv) Upon WRITTEN NOTICE BY COMPANY WITHOUT CAUSE.
(v) Upon WRITTEN NOTICE BY COMPANY, during the period of
automatic extension of the term, OF COMPANY'S INTENTION
TO HAVE THIS AGREEMENT EXPIRE IN ONE YEAR.
10.1
DRAFT ONE 3/24/2003
If Executive dies before his employment with Company is
otherwise terminated, Executive's designated beneficiary, or in the absence of a
designated beneficiary, the estate of the Executive, will receive all sums due
under the Split Dollar Agreement and Deferred Compensation Agreement between
Executive and TeamBank, N. A. then in existence. In the event the total amount
paid to the beneficiaries or the estate of Executive is less than $500,000.00,
Company shall pay to the designated beneficiary of Executive, or in the absence
of a designated beneficiary, to the estate of Executive, as soon as reasonably
practical, a sum equal to the difference between the total amount paid under the
Split Dollar Agreement and $500,000.00. Under this section it is the intent of
the Company and Executive that the Executive's beneficiary, or in the absence of
a designated beneficiary, to the estate of Executive, receive in total death
benefits shall not be less than $500,000.00. Company may purchase life insurance
to cover all or any part of its obligations contained in this section. Executive
agrees to take a physical examination to facilitate the Company's purchase of
such insurance. In the event that Executive is uninsurable, Company may elect to
disperse any funds owed by Company under this section in equal monthly payments
over the remaining period of the year of Executive's death, or if less than six
(6) months, over a period of twelve (12) consecutive months. Executive's
dependents will also be entitled to:
(i) All Company insured and self insured medical and dental plans in
which Executive was participating immediately prior to termination,
provided however, that if Company so elects, or such continued
participation is not possible under the general terms and conditions of
such plans or under such policies, Company shall, in lieu of the
foregoing, arrange to have issued for the benefit of Executive's
dependents equivalent benefits (on an after-tax basis); provided,
further that, in no event shall Executive's dependents be required to
pay any premiums or other charges in an amount greater than that which
Executive would have paid in order to participate in Company's plans and
policies.
Entitlement (i) above shall be maintained in effect for the continued
benefit of Executive's dependents for a period of twelve (12) months
after the date of termination due to death.
10.2 For the purposes of this Agreement, Executive shall be deemed to
have become disabled, if, during any year of the term of this Agreement, because
of ill health, physical or mental impairment, or for other causes beyond
Executive's control, Executive shall have been continuously unable or unwilling,
or shall have failed to perform his duties under this Agreement for ninety (90)
consecutive days, or if, during any calendar year of the term of this Agreement,
Executive shall have been unable or unwilling or shall have failed to perform
his duties for a total period of one hundred eighty (180) days, irrespective of
whether or not such days are consecutive. With respect to any termination by
Company for disability, the specifics of the basis of termination shall be
communicated to Executive in writing at least thirty (30) days before the date
on which the termination is proposed to take effect. Executive shall have until
the effective date of the notice to cure or remedy such disability and or
correct the misconception of the disability. If this Agreement is terminated for
disability, any questions as to the existence of the Total and Permanent
disability of Executive as to which Executive and Company cannot agree shall be
determined in writing by a qualified independent physician mutually acceptable
to Executive and Company. If Executive and Company cannot agree as to a
qualified independent physician, each shall appoint such a physician and those
two physicians shall select a third who shall make such determination in
writing. If there is a disagreement between Executive and Company as to the
disability of Executive, the effective date of the termination will be extended
a reasonable time to allow for a determination by a physical, as described
above. Any refusal by Executive to submit to a medical examination for the
purpose of certifying disability under this section shall be deemed to
constitute conclusive evidence of Executive's disability. If Executive is
disabled before his employment with Company is otherwise terminated, Company
shall continue to pay the current annual base salary for three years to the
Executive, or if the Executive is totally incapacitated, to his appointed
guardian, at the time he is determined to be disabled. Whenever compensation is
payable to Executive hereunder, during a time when he is disabled, pursuant to
the terms of any insurance provided by Company, the compensation payable to him
hereunder shall be inclusive of any such disability insurance and shall not be
in addition thereto. If this agreement is terminated for disability Executive
shall also be entitled to:
(i) All Company insured and self insured medical and dental
plans in which Executive was participating immediately prior to
termination paid for by the company for a period of one year
provided, further that, in no event shall Executive be required
to pay any premiums or other
DRAFT ONE 3/24/2003
charges in an amount greater than that which Executive would
have paid in order to participate in Company's plans and
policies..
(ii) The group individual life insurance policies of Company
then in effect for Executive, and the life insurance contained
within section 8.2.1; provided, further that, in no event shall
Executive be required to pay any premiums or other charges in an
amount greater than that which Executive would have paid in
order to participate in Company's plans and policies.
(iii) All such Bonuses and Other Compensation as provided for
in Section 8 above, it being understood, however, that all such
payments due, if made pursuant to this clause shall be paid in
cash within thirty (30) days of the date of termination. All
stock options granted by Company to Executive under any
provision of Section 8 or granted by Company to Executive prior
to the date hereof will accelerate and become immediately
exercisable;
(iv) Company shall pay Executive a sum to pay for a Country
Club membership dues for one (1) year;
(v) Company shall transfer to Executive title of the
personal car, furnished Executive by Company, in use at the time
of the termination.
10.3 For purposes of this Agreement, material breach and good cause
shall mean willful misconduct in following the legitimate directions of
the compensation committee of the Board of Directors; commission of a
significant act of dishonesty, deceit or breach of fiduciary duty in the
performance of Executive's duties; gross misappropriation of Company
funds or property; habitual drunkenness; excessive absenteeism not
related to illness, sick leave or vacations. Provided, however,
Executive shall be entitled to notice of any acts which the Board
considers to be misconduct or excessive absenteeism as described in this
paragraph. Such notice shall include the specifics of the basis for
possible termination and shall be communicated to Executive in writing
at least thirty (30) days prior to any such intended termination. Prior
to any such termination, if requested before the effective date of the
intended termination, Executive shall be given a reasonable period of
time in which to show that he has corrected any specified deficiencies.
Upon the cure or remedy of such deficiencies, the Company shall rescind
its notice of termination. If there is any question about the effective
correction of the deficiencies, a decision will be sought from a lawyer
agreed to by Company and Executive. If the Company and Executive cannot
agree on a lawyer, each will pick a lawyer who will together pick a
lawyer who will render a decision.
If this agreement is terminated for material breach or good cause,
Executive shall be entitled to:
(i) All Company insured and self insured medical and dental
plans in which Executive was participating immediately prior to
termination; and
(ii) The group individual life insurance and disability
insurance policies of Company then in effect for Executive;
provided, however, that if Company so elects, or such continued
participation is not possible under the general terms and conditions of
such plans or under such policies, Company shall, in lieu of the
foregoing, arrange to have issued for the benefit of Executive and
Executive's dependents equivalent benefits (on an after-tax basis);
provided, further that, in no event shall Executive be required to pay
any premiums or other charges in an amount greater than that which
Executive would have paid in order to participate in Company's plans and
policies.
Entitlement of (i) and (ii) of this section shall be maintained in
effect for the continued benefit of Executive and his dependents for a
period of six (6) months after the date of termination or until the
commencements of each equivalent benefit from Executive's new employer,
but not to be provided longer than six (6) months.
10.4 Company shall be entitled to terminate this Agreement without
cause upon ninety (90) days written notice to Executive. If Company
shall so terminate this Agreement, Executive shall be entitled to:
(i) All Company insured and self insured medical and dental
plans in which Executive was participating immediately prior to
termination; and
DRAFT ONE 3/24/2003
(ii) The group individual life insurance and disability
insurance policies of Company then in effect for Executive;
provided, however, that if Company so elects, or such continued
participation is not possible under the general terms and
conditions of such plans or under such policies, Company shall,
in lieu of the foregoing, arrange to have issued for the benefit
of Executive and Executive's dependents equivalent benefits (on
an after-tax basis); provided, further that, in no event shall
Executive be required to pay any premiums or other charges in an
amount greater than that which Executive would have paid in
order to participate in Company's plans and policies.
Entitlement of (i) and (ii) of this section shall be maintained in
effect for the continued benefit of Executive and his dependents for a
period of three (3) years after the date of termination or until the
commencement of each equivalent benefit from Executive's new employer,
but not to be provided longer than three (3) years after the date of
termination.
(iii) A furnished office, equivalent to his Company office,
from which to operate for a period of one (1) year or until
Executive accepts employment with another employer, which ever
occurs first. Executive's office will be provided, at Company's
expense, with a desk; credenza; conference table; phone; access
to fax for outgoing and incoming faxes; computer, software, and
printer. All of the above will be equivalent to what Executive
was using at the time of termination.
(iv) A cash payment equal to the present value (based on a
discount rate of 8%) of Executive's annual base salary hereunder
for the remainder of the term of the Agreement, or for one (1)
year, which ever is longer, payable within thirty (30) days of
the date of such termination;
(v) All such Bonuses and Other Compensation as provided for
in Section 8 above, it being understood, however, that all such
payments due, if made pursuant to this clause shall be paid in
cash within thirty (30) days of the date of termination. All
stock options granted by Company to Executive under any
provision of Section 8 or granted by Company to Executive prior
to the date hereof will accelerate and become immediately
exercisable;
(vi) A sum as reimbursement for reasonable out-of-pocket
expenses incurred for third-party professional financial and tax
advice provided by a licensed professional of Executive's choice
for a period of three (3) years after the date of termination,
sum not to exceed, in any one year, twenty-five percent (25%)
and in the aggregate, seventy-five percent (75%) of Executive's
base salary, as provided in Section 8;
(vii) A sum as reimbursement for reasonable out-of-pocket
expenses incurred for out-placement advice and counseling
provided by a professional placement agency and/or recruiter of
Executive's choice for a period of twelve (12) months after date
of termination, sum not to exceed fifty percent (50%) of
Executive's base salary, as provided in Section 8;
(viii) Company shall pay Executive a sum to pay for a Country
Club membership dues for one (1) year;
(ix) Company shall transfer to Executive title of the
personal car, furnished Executive by Company, in use at the time
of the termination.
10.5 Company shall be entitled to terminate this Agreement during the
period of automatic extension of the term as set forth in Section 1.1,
by giving written notice to Executive of the Company's intention to have
the term of this Agreement expire one year from the date of such
notification. If Company shall so terminate this agreement, Executive
shall be entitled only to those benefits provided under existing law.
10.6 Company may purchase life insurance to cover all or any part of
its obligations contained in this paragraph and Executive agrees to take
a physical examination to facilitate the placement of such insurance. In
the event that Executive is uninsurable, Company may elect to disperse
the funds due in equal monthly payments over the remaining period of the
year due, or if less than six (6) months, over a period of twelve (12)
consecutive months.
11. TERMINATION BY EXECUTIVE
DRAFT ONE 3/24/2003
11.0 Executive shall have the right to terminate this Agreement under
the following circumstances:
(i) Upon MATERIAL BREACH or GOOD CAUSE; and
(ii) Upon WRITTEN NOTICE TO THE CHIEF EXECUTIVE OFFICER
WITHOUT CAUSE.
11.1 For purposes of this Agreement, a material breach by Company of
the terms of this Agreement shall entitle Executive, upon written notice
to the Board of Directors, to terminate his services under this
Agreement effective thirty (30) days from and after receipt of such
notice by Board. Such notice shall include a specific description of
such breach and Board shall have until the effective date of the notice
to cure or remedy such breach. Upon the cure or remedy of such breach,
Executive shall rescind his notice of termination. For purposes of this
Agreement, a termination for good cause by Executive shall be based upon
the following action by the Board: a failure, without good cause or
Executive's consent to continue Executive as Chairman and Chief
Executive Officer of Company and a director of Company; a failure,
without good cause or Executive's consent to continue to vest Executive
with the power and authority of Chairman and Chief Executive Officer of
Company; the loss, without good cause or Executive's consent, of any
significant duties or responsibilities attending such office. Provided,
however, Executive shall have the exclusive right and option to approve
any resulting salary and benefits, title, duties and responsibilities of
Executive if Company is (or substantially all of its assets are) sold to
or combined with another entity and Executive is offered continuing
employment with such entity. Upon the failure of Executive to approve
any such resulting salary and benefits, title, duties and
responsibilities he shall be deemed to have elected to terminate this
Agreement for a good cause. Upon the occurrence of any happening which
would authorize Executive to terminate his employment for good cause,
Executive shall notify Board in writing within sixty (60) days following
such occurrence or Executive shall be deemed to have waived his right to
terminate this Agreement for such occurrence. Board shall have until the
effective date of the notice to cure or remedy such good cause
occurrence. Upon the cure or remedy of such good cause occurrence,
Executive shall rescind his notice of termination. Upon termination of
employment by Executive for material breach or good cause, Executive
shall be entitled to:
(i) All company insured and self insured medical and dental
plans in which Executive was participating immediately prior to
termination; and
(ii) The group individual life insurance and disability
insurance policies of Company then in effect for Executive;
provided, however, that if Company so elects, or such continued
participation is not possible under the general terms and
conditions of such plans or under such policies, Company shall,
in lieu of the foregoing, arrange to have issued for the benefit
of Executive and Executive's dependents equivalent benefits (on
an after-tax basis); provided, further that, in no event shall
Executive be required to pay any premiums or other charges in an
amount greater than that which Executive would have paid in
order to participate in Company's plans and policies.
Entitlement of (i) and (ii) of this section shall be maintained in
effect for the continued benefit of Executive and his dependents for a
period of three (3) years after the date of termination or until the
commencement of each equivalent benefit from Executive's new employer,
but not to be provided longer than three (3) years after the date of
termination.
(iii) A furnished office, equivalent to his Company office,
from which to operate for a period of one (1) year or until
Executive accepts employment with another employer, which ever
occurs first. Executive's office will be provided, at Company
expense, with a desk; credenza; conference table; phone; access
to fax for outgoing and incoming faxes; computer, software, and
printer. All the above will be equivalent to what Executive was
using at the time of termination;
(iv) A cash payment equal to the present value (based on a
discount rate 8%) of Executive's base salary hereunder for the
remainder of the term of the Agreement, or for one (1) year,
which ever is longer, payable within thirty (30) days of the
date of such termination;
(v) All such Bonuses and Other Compensation as provided for
the Section 8 above, it being understood, however, that all such
payments due, if made pursuant to this clause shall be paid in
cash within thirty (30) days of the date of termination. All
stock options granted by Company to
DRAFT ONE 3/24/2003
Executive under any provision of Section 8 or granted by Company
to Executive prior to the date hereof will accelerate and become
immediately exercisable;
(vi) A sum as reimbursement for reasonable out-of-pocket
expenses incurred for third-party professional financial and tax
advice provided by a licensed professional of Executive's choice
for a period of three (3) years after date of termination, sum
not to exceed, in any one year, twenty five percent (25%) and in
the aggregate, seventy five percent (75%) of Executive's base
salary, as provided in Section 8;
(vii) A sum as reimbursement for reasonable out-of-pocket
expenses incurred for out-placement advice and counseling
provided by a professional placement agency and/or recruiter of
Executive's choice for a period of twelve (12) months after date
of termination, sum not to exceed fifty (50) percent of
Executive's base salary;
(viii) Company shall pay Executive a sum to pay for Country
Club membership dues for one (1) year; and
(ix) Company shall transfer to Executive title of the
personal car, furnished Executive by company, in use at the time
of the termination.
11.2 Company may purchase life insurance to cover all or any part of
its obligations contained in this paragraph and Executive agrees to take
a physical examination to facilitate the placement of such insurance. In
the event that Executive is uninsurable, Company may elect to disperse
the funds due in equal monthly payments over the remaining period of the
year due, or if less than six (6) months, over a period of twelve (12)
consecutive months.
11.3 Executive shall be entitled to terminate this Agreement without
cause upon ninety (90) days written notice to Company. If Executive
shall so terminate this Agreement, Executive shall be entitled to those
benefits provided under existing law.
11.4 If Company is (or substantially all of its assets are) sold to
or combined with another entity, Executive shall have the
exclusive right and option to approve any resulting salary,
benefits, title, duties and/or responsibilities of Executive if
the entity offers Executive continuing employment with the
entity or in the alternative Executive shall be entitled to
terminate this Agreement for good cause and shall have all of
the entitlements set forth in Section 11.1 (i) through (ix)
except the entitlement provided for in (iv) which shall be void
in these circumstances and the following shall be substituted
therefore; "(iv) A cash payment equal to the present value
(based upon a discount rate of 8%) of Executives base after-tax
salary hereunder for the remainder of the term of this
Agreement, or for three (3) years, which ever is longer, payable
within thirty days of the date of such termination." Executive
shall also be entitled to:
(i) All Company insured and self insured medical and dental
plans in which Executive was participating immediately prior to
termination; and
(ii) The group individual life insurance and disability
insurance policies of Company then in effect for Executive;
provided, however, that if Company so elects, or such continued
participation is not possible under the general terms and
conditions of such plans or under such policies, Company shall,
in lieu of the foregoing, arrange to have issued for the benefit
of Executive and Executive's dependents equivalent benefits (on
an after-tax basis); provided, further that, in no event shall
Executive be required to pay any premiums or other charges in an
amount greater than that which Executive would have paid in
order to participate in Company's plans and policies.
Entitlement of (i) and (ii) of this section shall be maintained in
effect for the continued benefit of Executive and his dependents for a
period of three (3) years after the date of termination or until the
commencement of each equivalent benefit from Executive's new employer,
but not to be provided longer than three (3) years after the date of
termination.
DRAFT ONE 3/24/2003
(iii) A furnished office, equivalent to his Company office,
from which to operate for a period of one (1) year or until
Executive accepts employment with another employer, which ever
occurs first. Executive's office will be provided, at Company's
expense, with a desk; credenza; conference table; phone; access
to fax for outgoing and incoming faxes; computer, software, and
printer. All of the above will be equivalent to what Executive
was using at the time of termination.
(iv) All such Bonuses and Other Compensation as provided for
in Section 8 above, it being understood, however, that all such
payments due, if made pursuant to this clause shall be paid in
cash within thirty (30) days of the date of termination. All
stock options granted by Company to Executive under any
provision of Section 8 or granted by Company to Executive prior
to the date hereof will accelerate and become immediately
exercisable;
(v) A sum as reimbursement for reasonable out-of-pocket
expenses incurred for third-party professional financial and tax
advice provided by a licensed professional of Executive's choice
for a period of three (3) years after the date of termination,
sum not to exceed, in any one year, twenty-five percent (25%)
and in the aggregate, seventy-five percent (75%) of Executive's
base salary, as provided in Section 8;
(vi) A sum as reimbursement for reasonable out-of-pocket
expenses incurred for out-placement advice and counseling
provided by a professional placement agency and/or recruiter of
Executive's choice for a period of twelve (12) months after date
of termination, sum not to exceed fifty percent (50%) of
Executive's base salary, as provided in Section 8;
(vii) Company shall pay Executive a sum to pay for a Country
Club membership dues for one (1) year;
(viii) Company shall transfer to Executive title of the
personal car, furnished Executive by Company, in use at the time
of the termination.
12. CONSEQUENCES OF BREACH
12.0 If this Agreement is terminated pursuant to Section 11.01
hereof, or if Company shall terminate Executive's employment under this
Agreement in any other way that is a breach of this Agreement by
Company, the following shall apply:
(i) The parties believe that because of the limitations of
Section 11 the payments to Executive do not constitute "Excess
Parachute Payments" under Section 280G of the Internal Revenue
Code of 1954, as amended (the "Code"). Notwithstanding such
belief, if any benefit under the preceding paragraph is
determined to be an "Excess Parachute Payment" Company shall pay
Executive an additional amount ("Tax Payment") such that (x) the
excess of all Excess Parachute Payments (including payments
under this sentence) over the sum of excise tax thereon under
Section 4999 of the Code and income tax thereon under Subtitle A
of the Code and under applicable state law is equal to (y) the
excess of all Excess Parachute Payments (excluding payments
under this sentence) over income tax thereon under Subtitle A of
the Code and under applicable state law.
13. MITIGATION AND OFFSET
13.0 Executive shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking employment or
otherwise, nor to offset the amount of any payment provided for in this
Agreement by amounts earned as a result of Executive's employment or
self-employment during the period he is entitled to such payment.
14. TAX "GROSS-UP" PROVISION
14.0 If any payment due Executive under this Agreement results in
Executive's liability for an excise tax ("parachute tax") under Section
49 of the Internal Revenue Code of 1986, as amended (the "Code"), the
Company will pay to Executive, after deducting any Federal, state or
local income tax imposed on the
DRAFT ONE 3/24/2003
payment, an amount sufficient to fully satisfy the "parachute tax"
liability. Such payment shall be made to Executive no later than thirty
(30) days prior to the due date of the "parachute tax".
15. REMEDIES
15.0 Company recognizes that because of Executive's special talents,
stature and opportunities in the financial services industry, in the
event of termination by Company hereunder (except under Section 10.0),
or in the event of termination by Executive under Section 11, before the
end of the agreed term, Company acknowledges and agrees that the
provisions of this Agreement regarding further payments of base salary,
bonuses and the exerciseability of stock options constitute fair and
reasonable provisions for the consequences of such termination, do not
constitute a penalty, and such payments and benefits shall not be
limited or reduced by amounts Executive might earn or be able to earn
from any other employment or ventures during the remainder of the agreed
term of this Agreement.
16. BINDING AGREEMENT
16.0 This Agreement shall be binding upon and inure to the benefit of
Executive, his heirs, distributes and assigns and company, its
successors and assigns. Executive may not, without the express written
permission of the Company, assign or pledge any rights or obligations
hereunder to any person, firm or corporation.
17. ARBITRATION
17.0 Company and Executive agree that any dispute or claim concerning
this Agreement, or the terms and conditions of employment under this
Agreement, shall be settled by arbitration. The arbitration proceedings
will be conducted under the Commercial Arbitration Rules of the American
Arbitration Association in effect at the time a demand for arbitration
under the Rules is made. The decision of the arbitrators, including
determination of the amount of any damages suffered, will be exclusive,
final and binding on Company and Executive, their heirs, executors,
administrators, successors and assigns. Each party will bear that
party's own expenses in the arbitration proceedings for arbitrators'
fees and attorney fees, for that party's witnesses, and other expenses
of presenting the case. Other arbitration costs, including
administrative fees and fees for records or transcripts, will be borne
equally by Company and Executive.
18. AMENDMENT; WAIVER
18.0 This instrument contains the entire agreement of the parties
with respect to the employment of Executive by Company and supersedes
any prior Agreement between Company and Executive (it being understood,
however, that this agreement shall not affect any stock options granted
to Executive prior to the date hereof). No amendment or modification of
this Agreement shall be valid unless evidenced by a written instrument
executed by the parties hereto. No waiver by either party of any breach
by the other party of any provision or condition of this Agreement shall
be deemed a waiver of any similar or dissimilar provision or condition
at the same or any prior or subsequent time.
19. GOVERNING LAW
19.0 This Agreement shall be governed by and construed in accordance
with the laws of the State of Kansas.
20. NOTICES
20.0 All notices which a party is required or may desire to give to
the other party under or in connection with this Agreement shall be
given in writing by addressing the same to the other party as follows:
DRAFT ONE 3/24/2003
If to Executive, to:
Xxxxxx X. Xxxxxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxx, Xxxxxx 00000
If to Company, to:
Team Financial, Inc.
Chairman of Compensation Committee
0 Xxxx Xxxxxx
Xxxxx, Xxxxxx 00000
or at such other place as may be designated in writing by like notice.
Any notice shall be deemed to have been given within forty-eight (48)
hours after being addressed as required herein and deposited,
first-class postage prepaid, in the United States mail.
IN WITNESS THEREOF, the parties have executed this agreement this ________ day
of ________________, 2003, effective as of the day and year first above written.
TEAM FINANCIAL, INC.
By:
Chairman of Compensation Committee
XXXXXX X. XXXXXXXXXX
Executive
TABLE OF CONTENTS
Section Page No.
------- --------
1. Term of Agreement and Definitions....................................................................... 1
2. Entire Agreement........................................................................................ 2
3. Validity............................................................................................... 2
4. Paragraphs and other headings............................................................................2
5. Successors...............................................................................................2
6. Designation of beneficiaries.............................................................................2
7. Duties...................................................................................................3
8. Salary, Bonus, Benefits, Additional Compensation.........................................................3
9. Protection of Company's Interests........................................................................5
10. Termination by Company...................................................................................5
DRAFT ONE 3/24/2003
11. Termination by Executive.................................................................................8
12. Consequences of Breach...................................................................................9
13. Mitigation and Offset...................................................................................10
14. Tax "Gross-Up" Provision................................................................................10
15. Remedies................................................................................................10
16. Binding Agreement.......................................................................................10
17. Arbitration.............................................................................................10
18. Amendment; Waiver.......................................................................................10
19. Governing Law...........................................................................................11
20. Notices.................................................................................................11
Signatures.......................................................................................................11
(i)
