EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made effective as of
November 9, 2004, by and between Heartland Bancshares, Inc. (the "Holding
Company"), Heartland National Bank (the "Bank"), and Xxxxx X. Xxxxxxx (the
"Executive").
WITNESSETH:
WHEREAS, the Holding Company and the Bank (collectively the "Company")
desire to retain the services of and employ the Executive, and the Executive
desires to provide services to the Company, pursuant to the terms and conditions
of this Agreement.
NOW, THEREFORE, in consideration of the promises and of the covenants and
agreements herein contained, the Company and the Executive covenant and agree as
follows:
1. Employment. Pursuant to the terms and conditions of this Agreement, the
Company agrees to employ the Executive and the Executive agrees to render
services to the Company as set forth herein, all effective as of the date set
forth above. This Agreement supercedes any prior employment agreement entered
into between the Company and the Executive prior to the date hereof, and any
such prior employment agreement is hereby terminated.
2. Position and Duties: Records. During the term of this Agreement, the
Executive shall serve as President and Chief Executive Officer of the Holding
Company and the Bank, and shall undertake such duties, consistent with such
titles, as may be assigned to him from time to time by the Boards of Directors
of the Holding Company and the Bank (collectively referred to as the "Board"),
including management of all Company personnel, serving on Board committees as
appointed from time to time by the Board, keeping the Board informed of industry
and regulatory developments regarding the Company, coordinating with Company
personnel and third-parties to the extent necessary to further the profitability
and business of the Company, and assisting in keeping the Company in compliance
with applicable laws and regulations. During the term of this Agreement, the
Executive also shall serve as a director of the Holding Company and the Bank. In
performing his duties pursuant to this Agreement, the Executive shall devote his
full business time, energy, skill and best efforts to promote the Company and
its business and affairs; provided that, subject to Sections 10, 12 and 13 of
this Agreement, the Executive shall have the right to manage and pursue personal
and family interests, and make passive investments in securities, real estate,
and other assets, and also to participate in charitable and community activities
and organizations, so long as such activities do not adversely affect the
performance by Executive of his duties and obligations to the Company. Upon
termination of the Executive's employment for any reason, he shall resign as a
director of the Holding Company and the Bank. All files, records, documents,
manuals, books, forms, reports, memoranda, studies, data, calculations,
recordings or correspondence, in whatever form they may exist, and all copies,
abstracts and summaries of the foregoing, and all physical items related to the
business of the Company, its affiliates and their respective directors and
officers, whether of a public nature or not, and whether prepared by Executive
or not, are and shall remain the exclusive property of the
Company, and shall not be removed from their premises, except as required in the
course of providing the services pursuant to this Agreement, without the prior
written consent of the Company. Such items shall be promptly returned by the
Executive on the termination of this Agreement or at any earlier time upon the
request of the Company.
3. Term. The term of employment pursuant to this Agreement shall be for a period
of three years, commencing with the date set forth in Section 1 and expiring
(unless sooner terminated as otherwise provided in this Agreement or unless
otherwise renewed or extended as set forth herein) on the third anniversary of
this Agreement, which date, including any earlier date of termination or any
extended expiration date, shall be referred to as the "Expiration Date".
Subject to the provisions of Section 8 of this Agreement, the term of this
Agreement and the employment of the Executive by the Company hereunder shall be
deemed automatically renewed for successive periods of three years on each
anniversary date of this Agreement, until the Executive receives written notice
from the Company that the term of this Agreement will not be automatically
renewed. In the event of the Executive's receipt of such notice from the Company
that the term of this Agreement will not be renewed, the term of this Agreement
shall end on the anniversary of this Agreement occurring three years after the
anniversary date first occurring after the date such notice is given. As an
illustration of the foregoing, if such notice were given by the Company to the
Executive on a date in 2005 before the first anniversary date of this Agreement,
then term of this Agreement would end on the anniversary date of this Agreement
in 2008. If notice were given by the Company to the Executive on a date in 2005
after the first anniversary date of this Agreement, then the term of this
Agreement would end on the anniversary date in 2009. After termination of the
employment of the Executive for any reason whatsoever, the Executive shall
continue to be subject to the provisions of Sections 10 through 21, inclusive,
of this Agreement; provided, however, that the Executive shall be subject to the
provisions of Sections 12 and 13 only where the employment of the Executive is
terminated pursuant to Sections 8(a) or (c).
4. Compensation. During the term of this Agreement, the Company shall pay or
provide to the Executive as compensation for the services of the Executive set
forth in Section 2 hereof:
(a) A base annual salary of $137,500.00 during the first year of
this Agreement, such base annual salary to be subject to increase on January 1
of each year thereafter (commencing with January 1, 2005) as the Board in its
discretion shall determine. The foregoing base salary shall be payable in such
periodic installments consistent with other employees of the Bank.
(b) Such incentive bonuses as determined by the Board from time to
time.
5. Benefits and Insurance. The Bank shall provide to the Executive such medical,
health, and life insurance as well as any other benefits as the Board shall
determine from time to time. At a minimum, the Executive shall be entitled to
(i) participate in all employee benefit plans offered to the Bank's employees
generally, and (ii) life insurance coverage (payable to such beneficiary as the
Executive may designate from time to time). The Executive also shall be
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entitled to participate in any group disability plan maintained by the Bank, if
any, with the Bank paying to the Executive his base annual salary during any
waiting period imposed by such plan for the receipt of disability benefits
thereunder. The Bank also shall provide to the Executive salary continuation
benefits upon such terms and conditions as may be mutually agreed upon by the
Executive and the Bank.
6. Vacation. The Executive may take up to four weeks of vacation time at such
periods during each year as the Board and the Executive shall determine from
time to time. The Executive shall be entitled to full compensation during such
vacation periods.
7. Reimbursement of Expenses. The Bank shall reimburse the Executive for
reasonable expenses incurred in connection with his employment hereunder subject
to guidelines issued from time to time by the Board and upon submission of
documentation in conformity with applicable requirements of federal income tax
laws and regulations supporting reimbursement of such expenses.
8. Termination. The employment of the Executive may be terminated as follows:
(a) By the Company, by action taken by its Board, at any time and
immediately upon written notice to the Executive if said termination is for
Cause. In the notice of termination furnished to the Executive under this
Section 8(a), the reason or reasons for said termination shall be given and, if
no reason or reasons are given for said termination, said termination shall be
deemed to be without Cause and therefore termination pursuant to Section 8(f).
Any one or more of the following conditions shall be deemed to be grounds for
termination of the employment of the Executive for Cause under this Section
8(a):
(i) If the Executive shall fail or refuse to comply with the
obligations required of him as set forth in this Agreement or comply with the
policies of the Company established by the Board from time to time; provided,
however, that for the first such failure or refusal, the Executive shall be
given written warning (providing at least a 10 day period for an opportunity to
cure), and the second failure or refusal shall be grounds for termination for
Cause;
(ii) If the Executive shall have engaged in conduct involving
fraud, deceit, personal dishonesty, or breach of fiduciary duty;
(iii) If the Executive shall have violated any banking law or
regulation, memorandum of understanding, cease and desist order, or other
agreement with any banking agency having jurisdiction over the Company which, in
the judgment of the Board, has adversely affected, or may adversely affect, the
business or reputation of the Company as determined by the Board;
(iv) If the Executive shall have become subject to continuing
intemperance in the use of alcohol or drugs which has adversely affected, or may
adversely affect, the business or reputation of the Company as determined by the
Board;
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(v) If the Executive shall have filed, or had filed against
him, any petition under the federal bankruptcy laws or any state insolvency
laws; or
(vi) If any banking authority having supervisory jurisdiction
over the Holding Company or the Bank initiates any proceedings for removal of
the Executive.
In the event of termination for Cause, the Company shall pay
the Executive only salary and vacation amounts accrued and unpaid as of the
effective date of termination.
(b) By the Executive upon the lapse of 30 days following written
notice by the Executive to the Company of termination of his employment
hereunder for Good Reason (as defined below), which notice shall reasonably
describe the Good Reason for which the Executive's employment is being
terminated; provided, however, that if the Good Reason specified in such notice
is such that there is a reasonable prospect that it can be cured with diligent
effort within 30 days, the Company shall have the opportunity to cure such Good
Reason, for a period not to exceed 30 days from the date of such notice, and the
Executive's employment shall continue in effect during such time so long as the
Company makes diligent efforts during such time to cure such Good Reason. If
such Good Reason shall be cured by the Company during such time, the Executive's
employment and the obligations of the Company hereunder shall not terminate as a
result of the notice which has been given with respect to such Good Reason. Cure
of any Good Reason with or without notice from the Executive shall not relieve
the Company from any obligations to the Executive under this Agreement or
otherwise and shall not affect the Executive's rights upon the reoccurrence of
the same, or the occurrence of any other, Good Reason. For purposes of this
Agreement, the term "Good Reason" shall mean (i) any material breach by the
Company of any provision of this Agreement, or (ii) any significant reduction
(not pertaining to job performance issues), in the duties, responsibilities,
authority or title of the Executive as an officer of the Company.
If the Executive's employment is terminated by the Executive for
Good Reason, the Company shall for a period of one year thereafter, (i) continue
to pay to the Executive the base annual salary in effect under Section 4(a) on
the date of said termination (or, if greater, the highest annual salary in
effect for the Executive within the 36 month period prior to said termination)
plus an annual amount equal to any bonus paid by the Company to the Executive
during the 12 month period prior to said termination, such salary and bonus to
be payable in such periodic installments (and not as a lump sum payment)
consistent with the payroll periods for the Company's payments to its other
employees, and (ii) reimburse the Executive for COBRA payments made by the
Executive to continue his health insurance coverage during such one-year period.
(c) By the Executive upon the lapse of 45 days following written
notice by the Executive to the Company of his resignation from the Company for
other than Good Reason; provided, however, that the Company, in its discretion,
may cause such termination to be effective at any time during such 45-day
period. If the Executive's employment is terminated
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because of the Executive's resignation, the Company shall be obligated to pay to
the Executive any salary and vacation amounts accrued and unpaid as of the
effective date of such resignation.
(d) If the Executive's employment is terminated by the death of the
Executive, this Agreement shall automatically terminate, and the Company shall
be obligated to pay to the Executive's estate any salary, vacation, and bonus
amounts accrued and unpaid at the date of death. If the Executive is disabled
(as such term is defined in the disability insurance plan maintained by the
Company), then the Company shall have the right to terminate the Executive's
employment, in which case the Company shall be obligated to pay to the Executive
(i) any salary, vacation and bonus amounts accrued and unpaid at the date of
such termination of employment, and (ii) continued salary payments (not to
exceed 30 days) until the Executive is eligible to receive payments under the
Company's disability insurance plan.
(e) By the Company or the Executive upon the closing of a Change of
Control, in which event the Executive shall be entitled to receive
simultaneously with such closing in a lump sum payment, an amount equal to two
times the then base annual salary received by the Executive during the three
year period prior to such termination. Any termination by the Executive pursuant
to this Section 8(e) shall be in lieu of any other termination benefits that the
Executive would have otherwise received under any other provision of this
Section 8. For purposes of this Agreement, a Change of Control shall mean a
merger in which the Holding Company is not the surviving entity, the acquisition
of the Bank by means of a merger, consolidation or purchase of 80% or more of
its outstanding shares, or the acquisition by any individual or group of
beneficial ownership of more than 50% of the outstanding shares of Holding
Company common stock. The term "group" and the concept of beneficial ownership
shall have such meanings ascribed thereto as set forth in the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and the regulations and rules
thereunder.
(f) By the Company, by action taken by its Board, at any time if
said termination is without Cause. If the Executive's employment is terminated
by the Company without Cause, the Company shall for a period of one year
thereafter, (i) continue to pay to the Executive the base annual salary in
effect under Section 4(a) on the date of said termination (or, if greater, the
highest annual salary in effect for the Executive within the 36 month period
prior to said termination) plus an annual amount equal to any bonus paid by the
Company to the Executive during the 12 month period prior to said termination,
such salary and bonus to be payable in such periodic installments (and not as a
lump sum payment) consistent with the payroll periods for the Company's payments
to its other employees, and (ii) reimburse the Executive for COBRA payments made
by the Executive to continue his health insurance coverage during such one-year
period.
(g) Excise Tax. In the event that any consideration or other amount
paid or payable to Executive hereunder as well as any other agreements between
the Executive and the Company constitutes or is deemed to be an "excess
parachute payment" within the meaning of Section 280G(b) of the Internal Revenue
Code of 1986 (or any other amended or successor provision) that is subject to
the tax imposed pursuant to Section 4999 of the Internal Revenue Code of 1986
(or any other amended or successor provisions) ("Excise Tax"), the Company shall
pay to Executive an amount ("Gross-Up Amount") that, after reduction of the
amount of such Gross-Up Amount for all federal, state and local tax to which the
Gross-Up Amount is subject
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(including the Excise Tax to which the Gross-Up Amount is subject) is equal to
the amount of the Excise Tax to which such amount constituting an excess
parachute payment is subject. For purposes of determining the amount of any
Gross-Up Amount, Executive shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation in the calendar year in which
the Gross-Up Amount is to be made and state and local income taxes at the
highest marginal rate of taxation in the state and locality of residence of
Employee on the date the excess parachute payment is made, net of the maximum
reduction in federal income taxes that could be obtained from the deduction of
such state and local taxes.
9. Notice. All notices permitted or required to be given to either party under
this Agreement shall be in writing and shall be deemed to have been given (a) in
the case of delivery, when addressed to the other party as set forth at the end
of this Agreement and delivered to said address, (b) in the case of mailing,
three days after the same has been mailed by certified mail, return receipt
requested, and deposited postage prepaid in the U.S. Mails, addressed to the
other party at the address as set forth at the end of this Agreement, and (c) in
any other case, when actually received by the other party. Either party may
change the address at which said notice is to be given by delivering notice of
such to the other party to this Agreement in the manner set forth herein.
10. Confidential Matters. The Executive is aware and acknowledges that the
Executive shall have access to confidential information by virtue of his
employment. The Executive agrees that, during the period of time the Executive
is retained to provide services to the Company, and thereafter subsequent to the
termination of Executive's services to the Company for any reason whatsoever,
the Executive will not release or divulge any confidential information
whatsoever relating to the Company or its business, to any other person or
entity without the prior written consent of the Company. Confidential
information does not include information that is available to the public or
which becomes available to the public other than through a breach of this
Agreement on the part of the Executive. Also, the Executive shall not be
precluded from disclosing confidential information in furtherance of the
performance of his services to the Company or to the extent required by any
legal proceeding.
11. Injunction Without Bond. In the event there is a breach or threatened breach
by the Executive of the provisions of Sections 10, 12, or 13, the Company shall
be entitled to an injunction without bond to restrain such breach or threatened
breach, and the prevailing party in any such proceeding will be entitled to
reimbursement for all costs and expenses, including reasonable attorneys' fees
in connection therewith. Nothing herein shall be construed as prohibiting the
Company from pursuing such other remedies available to it for any such breach or
threatened breach including recovery of damages from the Executive.
12. Noncompetition. The Executive agrees that during the period of time the
Executive is retained to provide services to the Company, and thereafter for a
period of one year subsequent to the termination of Executive's services to the
Company for any reason whatsoever (but only in the case where the employment of
the Executive is terminated pursuant to Sections 8(a) or (c)), Executive will
not enter the employ of, or have any interest in, directly or indirectly (either
as executive, partner, director, officer, consultant, principal, agent or
employee), any
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other bank or financial institution or any entity which either accepts deposits
or makes loans (whether presently existing or subsequently established) and
which has an office located within a radius of 50 miles of any office of the
Bank (a "Competitive Activity"); provided, however, that the foregoing shall not
preclude any ownership by the Executive of an amount not to exceed 5% of the
equity securities of any entity which is subject to the periodic reporting
requirements of the 1934 Act and the shares of Company common stock owned by the
Executive at the time of termination of employment.
13. Nonsolicitation; Noninterference; Nondisparagement. The Executive agrees
that during the period of time the Executive is retained to provide services to
the Company, and thereafter for a period of one year subsequent to the
termination of Executive's services to the Company for any reason whatsoever,
(but only in the case where the employment of the Executive is terminated
pursuant to Sections 8(a) or (c)), the Executive will not (a) solicit for
employment by Executive, or anyone else, or employ any employee of the Company
or any person who was an employee of the Company within 12 months prior to such
solicitation of employment; (b) induce, or attempt to induce, any employee of
the Company to terminate such employee's employment; (c) induce, or attempt to
induce, anyone having a business relationship with the Company to terminate or
curtail such relationship or, on behalf of himself or anyone else, to compete
with the Company; or (d) permit anyone controlled by the Executive, or any
person acting on behalf of the Executive or anyone controlled by, an employee of
the Executive to do any of the foregoing. The Executive also agrees that during
the term of this Agreement and thereafter, the Executive will not disparage,
denigrate or comment negatively upon, either orally or in writing, the Company,
any of its affiliates, or any of their respective officers or directors, to or
in the presence of any person or entity, unless compelled to act by subpoena or
other legal mandate.
14. Remedies. The Executive agrees that the restrictions set forth in this
Agreement are fair and reasonable. The covenants set forth in this Agreement are
not dependent covenants and any claim against the Company, whether arising out
of this Agreement or any other agreement or contract between the Company and
Executive, shall not be a defense to a claim against Executive for a breach or
alleged breach of any of the covenants of Executive contained in this Agreement.
It is expressly understood by and between the parties hereto that the covenants
contained in this Agreement shall be deemed to be a series of separate
covenants. The Executive understands and agrees that if any of the separate
covenants are judicially held invalid or unenforceable, such holding shall not
release him from his obligations under the remaining covenants of this
Agreement. If in any judicial proceedings, a court shall refuse to enforce any
or all of the separate covenants because taken together they are more extensive
(whether as to geographic area, duration, scope of business or otherwise) than
necessary to protect the business and goodwill of the Bank, it is expressly
understood and agreed between the parties hereto that those separate covenants
which, if eliminated or restricted, would permit the remaining separate
covenants or the restricted separate covenant to be enforced in such proceeding
shall, for the purposes of such proceeding, be eliminated from the provisions of
this Agreement or restriction, as the case may be.
15. Invalid Provision. In the event any provision should be or become invalid or
unenforceable, such facts shall not affect the validity and enforceability of
any other provision of
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this Agreement. Similarly, if the scope of any restriction or covenant contained
herein should be or become too broad or extensive to permit enforcement thereof
to its full extent, then any such restriction or covenant shall be enforced to
the maximum extent permitted by law, and Executive hereby consents and agrees
that the scope of any such restriction or covenant may be modified accordingly
in any judicial proceeding brought to enforce such restriction or covenant.
16. Governing Law. This Agreement shall be construed in accordance with and
shall be governed by the laws of the State of Florida.
17. Arbitration. Except for injunctive relief as provided in Section 11 above,
all disputes between the parties hereto concerning the performance, breach,
construction or interpretation of this Agreement, or in any manner arising out
of this Agreement, shall be submitted to binding arbitration in accordance with
the rules of the American Arbitration Association, which arbitration shall be
carried out in the manner set forth below:
(a) Within fifteen (15) days after written notice by one party to
the other party of its demand for arbitration, which demand shall set forth the
name and address of its designated arbitrator, the other party shall select its
designated arbitrator and so notify the demanding party. Within fifteen (15)
days thereafter, the two arbitrators so selected shall select the third
arbitrator. The dispute shall be heard by the arbitrators within sixty (60) days
after selection of the third arbitrator. The decision of any two arbitrators
shall be binding upon the parties. Should any party or arbitrator fail to make a
selection, the American Arbitration Association shall designate such arbitrator
upon the application of either party. The decision of the arbitrators shall be
final and binding upon the Company, its successors and assigns, and upon
Executive, his successors and representatives, as the case may be.
(b) Unless the Parties agree otherwise, the arbitration proceedings
shall take place in the city where the headquarters of the Holding Company is
located. The judgment and determination of such proceedings shall be binding on
all parties thereto. Judgment upon any award rendered by the arbitrators may be
entered into any court having competent jurisdiction without any right of
appeal.
(c) Each party shall bear its or his own expenses of arbitration,
and the expenses of the arbitrators and the arbitration proceeding shall be
shared equally. However, if in the opinion of a majority of the arbitrators, any
claim or defense was unreasonable, the arbitrators may assess, as part of their
award, all or any part of the arbitration expenses of the other party (including
reasonable attorneys' fees) and of the arbitrators and the arbitration
proceeding against the party raising such unreasonable claim or defense.
18. Binding Effect. This Agreement shall be binding on and inure to the benefit
of the parties hereto and their respective successors and legal representatives
and beneficiaries.
19. Effect on Other Agreements. This Agreement and the termination thereof shall
not affect any other agreement between the Executive and the Company, and the
receipt by the Executive of benefits thereunder.
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20. Miscellaneous. The rights and duties of the parties hereunder are personal
and may not be assigned or delegated without the prior written consent of the
other party to this Agreement. The captions used herein are solely for the
convenience of the parties and are not used in construing this Agreement. Time
is of the essence of this Agreement and the performance by each party of its or
his duties and obligations hereunder.
21. Complete Agreement. This Agreement constitutes the complete agreement
between the parties hereto with respect to the subject matter hereof and
incorporates all prior discussions, agreements and representations made in
regard to the matters set forth herein. This Agreement may not be amended,
modified or changed except by a writing signed by the party to be charged by
said amendment, change or modification.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
HEARTLAND BANCSHARES, INC. HEARTLAND NATIONAL BANK
Xxxxxx X. Xxxxx Xxxxxx X. Xxxxx
---------------------------- -----------------------------
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxx
------------------------ -----------------------------
Chairman of the Board Chairman of the Board
"EXECUTIVE"
/s/ Xxxxx X. Xxxxxxx
-----------------------------
Xxxxx X. Xxxxxxx, individually
Address: 000 Xxxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxx 00000
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