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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of the 6thday of May 1999, by and between
First Premier Financial Corporation, a Delaware corporation (the "Company" or
"Employer") and Xxxxx X. Xxxxx (the "Executive").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company intends to seek approval
from the Board of Governors of the Federal Reserve System (the "Fed"), the
Missouri Division of Finance ("Missouri Division") and the Federal Deposit
Insurance Corporation ("FDIC") to acquire a state-chartered bank with federally
insured deposits in Jefferson City, Missouri (the "Bank") and to expand the
Company's banking business throughout Missouri; and
WHEREAS, the Board of Directors of the Company intends to approve the
sale in a firm underwritten public offering of an amount of Company common stock
requisite to expanding the Company's banking business (the "Initial Public
Offering"); and
WHEREAS, After the Closing of the Initial Public Offering, Executive is
willing to become the President of the Middle Missouri Market Area of the Bank
in accordance with the terms and conditions hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual premises and
covenants herein contained, the parties hereto agree as follows:
1. EMPLOYMENT. Employer employs Executive and Executive accepts
employment upon the terms and conditions set forth in this Agreement. Executive
acknowledges and agrees that all obligations of Employer under this Agreement
may be transferred and assigned to any wholly-owned banking subsidiary of the
Employer. Further, upon the commencement of the term of the Agreement, Executive
cancels and terminates any and all previous employment agreements entered into
with Premier Bank, Jefferson City, Missouri, and all provisions contained in any
such employment agreements are, as of the commencement of the term hereof, null
and void and of no further force or effect.
2. TERM. The term of employment of Executive under this Agreement
shall be the five year period commencing on the date of Closing of the Initial
Public Offering and ending on the last day of the sixtieth (60th) month
thereafter.
3. COMPENSATION. The Company shall pay Executive a minimum annual
base salary ("Base Salary") as computed below, payable in semi-monthly
installments beginning the first of the month immediately subsequent to the
closing of the Initial Public Offering. Salary payments shall be subject to
withholding and other applicable taxes. The Base Salary shall be $150,000
initially, and thereafter shall increase by five percent on each anniversary of
the date of the Closing of the Initial Public Offering. Immediately after the
Closing of the Initial Public Offering, the Executive
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and the Company, or a banking subsidiary of the Company that employs the
Executive (collectively referred to as the "Company"), shall use all reasonable
efforts to obtain one or more life insurance policies on the life of the
Executive designed in the aggregate to provide the Executive and his
beneficiaries the death benefits and nonqualified retirement benefits in form
and substance substantially similar to the benefits described in the Life
Insurance Endorsement Method Split Dollar Plan Agreement (the "Split Dollar
Agreement"), the Executive Supplemental Retirement Plan Agreement (the
"Retirement Plan Agreement"), and the Executive Supplemental Retirement Plan
Summary pro Forma dated March 24, 1999 (the "Summary"), attached hereto as
Exhibit "A" and made a part hereof. Notwithstanding the foregoing sentence,
however, the obligation of the Company to execute the Supplemental Retirement
Agreement, the Split Dollar Agreement and the Summary, and to pay the premium
described in the Summary, shall become effective only upon the later of the date
of Closing of the Initial Public Offering and the date that the insurance policy
or policies contemplated under the Split Dollar Agreement, the Supplemental
Retirement Agreement and the Summary are in force. It is understood and agreed
that the Company does not guaranty the amount of benefits that may be provided
by the insurance policy or policies. Moreover, in the event the Executive is
uninsurable or is rated to the extent that such rating materially affects the
earnings of the insurance policy or policies, the Executive shall instruct the
Company in writing either (i) to complete the purchase of such life insurance
policy or policies on the life of the Executive, or (ii) to use the Company's
best efforts to use a suitable surrogate insured in order to provide the
Executive the best benefits obtainable under the circumstances, for the premium
described in the Summary. When the insurance policy or insurance policies
(insuring the Executive or the surrogate, as the case may be) have been issued,
the Retirement Plan Agreement shall provide therein under the definition of
"Index" a description of the policy or policies actually obtained in the manner
provided under such definition. Executive shall also be eligible to participate
in any discretionary bonus plan or program adopted by the Board of Directors on
the same basis as other executive officers of the Company.
At the first Board of Directors meeting subsequent to the Closing of
the Initial Public Offering, Executive shall be granted warrants to purchase
40,000 shares of common stock of the Company on the same terms and conditions as
warrants granted to Founders of the Company as set forth in the Company's
Registration Statement on Form S-1 filed with the Securities and Exchange
Commission in connection with the Initial Public Offering and Executive shall be
granted options to purchase 30,000 shares of common stock of the Company. The
options shall vest on the following schedule: options to purchase 10,000 shares
shall vest and become exercisable on each of the first, second and third
anniversaries of the date of grant. All such options shall be exercisable at a
per share price equal to the per share price at which the Company sold its
shares of common stock in the Initial Public Offering, shall be exercisable in
whole or in part for a period of ten years from the date of grant and shall be
subject to such other customary terms and conditions as set forth in the option
agreement which shall be delivered to Executive by the Company as soon as
practicable after the date of grant.
4. TITLE AND DUTIES. Executive shall be President of the Middle
Missouri Market Area, shall be provided an office in Xxxxx or Xxxx County, and
shall manage the day-to-day activities of the Bank in the Middle Missouri Market
and oversee the Bank in the Middle Missouri Market within the framework of the
approved annual budget, and with the sound system of internal controls and
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in compliance with the policies of the Board of Directors of the Bank and all
applicable laws and regulations. At the first Board of Directors meeting
subsequent to the Closing of the Initial Public Offering, Executive shall be
elected as a Class III director of the Company and as a Vice President of the
Company and shall be reelected as a director so long as Executive remains
employed by the Company. Executive shall also be elected as a director of the
Bank so long as Executive remains employed by the Company.
5. EXTENT OF SERVICES. After the Closing of the Initial Public
Offering, Executive shall devote his entire time, attention and energies to the
business of Employer and shall not during the term of this Agreement be engaged
in any other business activity which requires the attention or participation of
Executive during normal business hours of Employer, recognition being given to
the fact that Executive is expected on occasion to participate in client
development after normal business hours. However, Executive may invest his
assets in such form or manner as will not require his services in the operation
of the affairs of the companies in which such investments are made. Executive
shall notify Employer of any significant participation by him in any trade
association or similar organization and the Board of Directors shall approve in
advance Executive's service as a director of any entity or organization.
Notwithstanding the foregoing, charitable activities of Executive are
encouraged.
6. WORKING FACILITIES. Executive shall have such assistants,
perquisites, facilities and services as are suitable to his position and
appropriate for the performance of his duties, including membership in a country
club and business persons' luncheon club (including dues and assessments) as
mutually agreed upon by Executive and the Company.
7. EXPENSES. Executive may incur reasonable expenses for promoting
the business of the Employer, including expenses for entertainment, travel, and
similar items. Executive will be reimbursed for all such expenses upon
Executive's periodic presentation of an itemized account of such expenditures.
8. VACATIONS. After the Closing of the Initial Public Offering,
Executive shall be entitled each year to a vacation in accordance with the
personnel policy established by the Company's Board of Directors, during which
time Executive's compensation shall be paid in full; provided, however, that
such vacation shall not be less than four weeks.
9. ADDITIONAL COMPENSATION. After the Closing of the Initial Public
Offering and as additional consideration paid to Executive, Executive shall be
provided with health, hospitalization, and disability insurance on the same
terms as executive officers of Employer and in amounts and on terms no less
favorable than that provided to Executive by Premier Bancshares, Inc., and a
minimum of $250,000 in term life insurance payable to a beneficiary designated
by Executive. In addition, after the Closing of the Initial Public Offering,
Executive shall be provided with an automobile for his use substantially similar
to that provided to Executive by Premier Bank, in accordance with the automobile
policy established by the Company's Board of Directors.
10. CHANGE IN CONTROL OF THE COMPANY. (a) After the Closing of the
Initial Public Offering in the event of a "change in control" of the Company, as
defined herein, Executive shall
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be entitled, for a period of thirty days from the date of closing of the
transaction effecting such change in control and at his election, to give
written notice to Employer of termination of this Agreement and to receive a
cash payment equal to two hundred ninety-nine percent (299%) times the
compensation, including bonus, if any, received by Executive in the one-year
period immediately preceding the change in control or which would have been
received by Executive during the one year period following the Initial Public
Offering if the change in control occurs during the first year of the term of
this Agreement. The severance payments provided for in this Section 10(a) shall
be paid in cash, not later than ten days after the date of notice of termination
by Executive under this Section 10 or ten days after the date of closing of the
transaction effecting the change in control of the Company, whichever is later.
(b) In addition, if Executive elects to terminate this Agreement
pursuant to this Section 10, Executive shall further be entitled, in lieu of
shares of Common Stock of the Company issuable upon exercise of options to which
Executive is entitled under this Agreement, an amount in cash or Common Stock of
the Company (or any combination thereof) as Executive shall in his election
designate equal to the excess of the fair market value of the Common Stock as of
the date of closing of the transaction effecting the change in control over the
per share exercise price of the options held by Executive, times the number of
shares of Common Stock subject to such options (whether or not then fully
exercisable). The fair market value of the Common Stock shall be equal to the
higher of (i) the value as determined by the Board of Directors of the Company
if there is no organized trading market for the shares at the time such
determination is made, or (ii) the closing price (or the average of the bid and
asked prices if no closing price is available) on any nationally recognized
securities exchange or association on which the Company's shares may be quoted
or listed, or (iii) the highest per share price actually paid for Common Stock
in connection with any change in control of the Company. The severance payments
provided for in this Section 10(b) shall be paid in full not later than ten (10)
days after the date of notice of termination by Executive under this Section 10
or ten (10) days after the date of closing of the transaction effecting the
change in control of the Company, whichever is later.
(c) For purposes of this Section 10, "change in control" of the
Company shall mean:
(i) any transaction, whether by merger, consolidation,
asset sale, tender offer, reverse stock split, or
otherwise, which results in the acquisition or
beneficial ownership (as such term is defined under
rules and regulations promulgated under the
Securities Exchange Act of 1934, as amended) by any
person or entity or any group of persons or entities
acting in concert, of 50% or more of the outstanding
shares of Common Stock of the Company;
(ii) the sale of all or substantially all of the assets of
the Company; or
(iii) the liquidation of the Company.
11. TERMINATION. (a) For Cause. This Agreement may be terminated by
the Board of Directors of the Company upon ten (10) days written notice to
Executive in which time Executive
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shall have the right to cure such "cause" (and thus reverse such decision to
terminate this Agreement) without further obligation than for monies already
paid, for any of the following reasons:
(i) failure of Executive in a material manner to follow
reasonable written instructions or written policies
of the Board of Directors of the Company or the Bank;
(ii) gross negligence or willful misconduct of Executive
materially damaging to the business of the Company or
Bank during the term of this Agreement, or at any
time while he was employed by the Company prior to
the term of this Agreement, if not disclosed to the
Company prior to the commencement of the term of this
Agreement; or
(iii) conviction of Executive during the term of this
Agreement of a crime involving breach of trust or
moral turpitude.
In the event that the Bank discharges Executive alleging
"cause" under this Section 11(a) and it is subsequently determined judicially
that the termination was "without cause," then such discharge shall be deemed a
discharge without cause subject to the provisions of Section 11(b) hereof. In
the event that the Bank discharges Executive alleging "cause" under this Section
11(a), such notice of discharge shall be accompanied by a written and specific
description of the circumstances alleging such "cause." The termination of
Executive for "cause" shall not entitle the Bank to enforcement of the
non-competition and non-solicitation covenants contained in Section 13 hereof.
(b) Without Cause.
(i) The Bank may, upon thirty (30) days' written notice
to Executive, terminate this Agreement without cause
at any time after the Closing of the Initial Public
Offering during the term of this Agreement upon the
condition that Executive shall be entitled, as
liquidated damages in lieu of all other claims, to 24
monthly payments of $12,500 and all of the options
referred to in Section 3 shall become immediately
exercisable on the date of termination and shall
remain exercisable for a period of 90 days following
the date of termination, at which time such options
(to the extent not previously exercised) shall
expire. The severance payments provided for in this
Section 11(b) shall commence not later than thirty
(30) days after the actual date of termination of
employment of Executive. The termination of Executive
"without cause" shall not entitle the Bank to
enforcement of the non-competition and
non-solicitation covenants contained in Section 13
hereof. Termination "without cause" shall include
termination by Executive in the event Employer fails
to perform any material provision of this Agreement
after written notice thereof from Employee and thirty
(30) days time for Employer to cure.
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(ii) Executive may upon thirty (30) days' written notice
to Employer terminate this Agreement without cause at
any time during the term of this Agreement. In the
event of termination of this Agreement by Executive,
the Bank shall have no further obligation to
Executive other than for monies paid and the Bank
shall be entitled to enforcement of the
non-competition and non-solicitation covenants
contained in Section 13 hereof.
12. Death or Disability. After the Closing of the Initial Public
Offering, in the event of Executive's death, Employer shall pay to Executive's
designated beneficiary, or, if Executive has failed to designate a beneficiary,
to his estate, an amount equal to Executive's base salary pursuant to Section 3
hereof through the end of the month in which Executive's death occurred. Such
compensation shall be in lieu of any other benefits provided hereunder, except
that (i) in the event of a change in control of the Company as defined herein,
Executive's designated beneficiary or his estate, as the case may be, shall be
entitled to the benefits of Section 10(b) hereof, and (ii) any benefit payable
pursuant to Section 3 shall be prorated and made available to Executive in
respect of any period prior to his death. The Bank may maintain insurance on its
behalf to satisfy in whole or in part the obligations of this Section 12.
After the Closing of the Initial Public Offering, in the event of
Executive's disability, as hereinafter defined, Employer shall pay to Executive
the base salary then in effect through the end of the month in which Executive
became disabled. Executive shall be deemed disabled if, by reason of physical or
mental impairment, he is incapable of performing his duties hereunder for a
period of 180 consecutive days.
13. Non-Competition and Non-Solicitation. (a) Executive acknowledges
that he has performed services or will perform services hereunder which directly
affect Employer's business. Accordingly, the parties deem it necessary to enter
into the protective agreement set forth below, the terms and condition of which
have been negotiated by and between the parties hereto.
(b) In the event of termination of employment under this
Agreement by action of Executive pursuant to 11(b)(ii) prior to the expiration
of the term of this Agreement, Executive agrees with Employer that through the
actual date of termination of the Agreement, and for a period of 12 months after
such termination date, Executive shall not, without the prior written consent of
Employer, either directly or indirectly, serve as an executive officer or
director of any bank or bank holding company (other than a banker's bank or a
holding company of a banker's bank) or as an executive officer, director,
consultant, advisor or in any other capacity to any person, firm, partnership or
corporation or any other entity which is involved in the organization of or
chartering of any bank or bank holding company, which is or intends to engage in
competition in any substantial manner with Employer in Xxxx or Xxxxx County,
Missouri.
(c) The covenants of Executive set forth in this Section 13 are
separate and independent covenants for which valuable consideration has been
paid, the receipt, adequacy and sufficiency of which are acknowledged by
Executive, and have also been made by Executive to induce Employer to enter into
this Agreement. Each of the aforesaid covenants may be availed of or relied upon
by Employer in any court of competent jurisdiction, and shall form the basis of
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injunctive relief and damages including expenses of litigation (including but
not limited to reasonable attorney's fees) suffered by Employer arising out of
any breach of the aforesaid covenants by Executive. The covenants of Executive
set forth in this Section 13 are cumulative to each other and to all other
covenants of Executive in favor of Employer contained in this Agreement and
shall survive the termination of this Agreement for the purposes intended.
Should any covenant, term, or condition contained in this Section 13 become or
be declared invalid or unenforceable by a court of competent jurisdiction, then
the parties may request that such court judicially modify such unenforceable
provision consistent with the intent of this Section 13 so that it shall be
enforceable as modified, and in any event the invalidity of any provision of
this Section 13 shall not affect the validity of any other provision in this
Section 13 or elsewhere in this Agreement.
14. Notices. Any notice required or desired to be given under this
Agreement shall be deemed given if in writing sent by certified mail to his
residence in the case of Executive, or to its principal office in the case of
Employer.
15. Waiver of Breach. The waiver by Employer of a breach of any
provision of this Agreement by Executive shall not operate or be construed as a
waiver of any subsequent breach by Executive. No waiver shall be valid unless in
writing and signed by an authorized officer of Employer.
16. Assignment. Executive acknowledges that the services to be
rendered by him are unique and personal. Accordingly, Executive may not assign
any of his rights or delegate any of his duties or obligations under this
Agreement. The rights and obligations of Executive under this Agreement shall
inure to the benefit of and shall be binding upon the successors and assigns of
Employer.
17. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Missouri.
18. Entire Agreement. This Agreement contains the entire
understanding of the parties hereto regarding employment of Executive, and
supersedes and replaces any prior agreement relating thereto. It may not be
changed orally but only by an agreement in writing signed by the party against
whom enforcement of any waiver, change, modification, extension, or discharge is
sought.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
"COMPANY"
FIRST PREMIER FINANCIAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: President and CEO
"EXECUTIVE"
/s/ Xxxxx X. Xxxxx (L.S.)
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Xxxxx X. Xxxxx
