EMPLOYMENT AGREEMENT (this Agreement)
dated this 16th day of January, 2007, by and between TRINITY
CAPITAL CORPORATION, a New Mexico corporation (Trinity), LOS ALAMOS NATIONAL BANK, a national banking
association (LANB), TITLE
GUARANTY & INSURANCE COMPANY, a New Mexico corporation (Title Guaranty), each with their principal
offices in Los Alamos, New Mexico (collectively, the Companies), and STEVE W. WELLS (Wells).
the Companies believe it is in their best interests that Wells continue to be
employed by the Companies on the terms and conditions contained herein, and
Wells is willing to be so employed.
THEREFORE, in consideration of the mutual covenants, promise and agreements
contained herein, and good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
1. Positions. Subject to the terms and conditions herein,
LANB agrees to employ Wells as President and Wells agrees to serve the
Companies in such capacity, and/or in such other capacities as Trinity and
Wells may agree upon, on the terms set out in this Agreement.
and Responsibilities. Wells shall
have all the duties, responsibilities and authority normally performed by the
president and shall render services consistent with such positions on the terms
set forth herein. Wells shall report to
the Chief Executive Officer of Trinity (the CEO). Wells shall have such other executive and
managerial powers and duties with respect to Trinity and its subsidiaries as
may reasonably be assigned to him by the CEO.
3. Directorship. Wells shall serve on the Board of directors
of Trinity, LANB and Title Guaranty during the term of this Agreement, subject
to election by the Companies shareholders.
of time and Effort. Wells agrees to
devote all of his business time, attention, skill and efforts to the Companies,
subject to periods of vacation and sick leave to which he is entitled, and
shall not engage in activities that substantially interfere with such
performance. Wells shall avoid all
actual or potential conflicts of interest or the appearance of a conflict of
interest and any outside activities that would leave him unable to fulfill his
job duties. Nothing in the foregoing
shall prohibit Wells from serving on the BOARD of directors for other
non-profit, governmental or for-profit entities; provided, no violation of this
provision shall occur as a result. Wells
may retain director fees or other compensation received for such service.
B. Term. The term of
this Agreement shall be for three (3) years from the Effective Date (the Initial Term). The
term, including any extensions thereof, shall extend for one (1) additional
year on the first and each subsequent anniversary of the Effective Date (Renewal Term), unless earlier terminated pursuant to Section D herein.
Salary. Trinity shall pay Wells a
base salary of $241,084.30 per year (Base Salary),
payable in accordance with Trinitys policies relating to salaried
employees. Based upon an evaluation of
Wells and the Companies performance conducted no less frequently than once
annually by the CEO, Wells Base Salary may be adjusted at such rate and at
such times as may be fixed by the CEO in his or her sole discretion.
2. Bonus. Wells may be granted a bonus at the end of
each fiscal year as determined at the sole discretion of the CEO (Bonus). The CEO may
establish target or performance-based criteria for the Bonus at his or her sole
Compensation and Deferred compensation.
Wells shall be eligible to participate in the Trinitys 1998 Option
Plan, the Trinity Capital Corporation 2005 Stock Incentive Compensation Plan,
the Trinity Capital Corporation 2005 Deferred Compensation Plan and any other
plan adopted by Trinity. Stock Incentive
grants may be awarded at the sole discretion of the Board. Participation in the Trinitys Deferred
Compensation Plan is permitted pursuant to the limitations established by the
Board from time to time.
Benefits. Wells shall be entitled to
participate on the same basis as all other employees in each fringe, welfare,
401(k) savings plan, pension benefit and incentive program adopted from time to
time by Trinity for the benefit of all employees. In addition, Wells shall be entitled to the
a. Vacation and Sabbatical.
Wells shall receive three (3) weeks paid vacation annually, and two (2)
weeks of paid sick leave annually and shall be entitled to the same sabbatical
benefits as all other employees of Trinity.
b. Insurance. Wells
shall be covered under any life insurance, salary continuation and long-term
disability insurance programs, in accordance with their terms and required
premiums, as in effect for employees of Trinity from time to time.
c. Expenses. The
Companies, as applicable, shall reimburse, upon submission of appropriate
receipts and supporting documentation, the actual, reasonable and customary
expenses of Wells pursuant to the Companies current policies and practices.
Wells agrees to make restitution or repay Trinity for any compensation as
required by Securities laws or any other applicable statutes.
of Termination. Notice of Termination shall mean a notice in accordance
with this Section D of an intention to terminate
Wells employment that shall state the specific termination provision in this
Agreement upon which the terminating party relies.
of Termination. Date of Termination shall mean:
Wells employment is terminated because of death, the date of Wells death; or
the Agreement is terminated by Notice of Non-Renewal, the date on which
the Agreement terminates by expiration of the Initial or Renewal Term; or
Wells employment is terminated for any other reason, the date specified in the
Notice of Termination, which shall not be a date prior to the date such Notice
of Termination is given or the expiration of any required notice period.
For Cause. Trinity may terminate
Wells employment under this Agreement for Cause (as defined here) at any time,
upon the good faith determination of the existence of Cause as defined herein,
in which event the rights of Wells to continued employment under this Agreement
shall thereupon cease immediately.
Following termination for Cause, Trinity shall pay Wells any earned and
unpaid Base Salary and vacation pay earned as of the Date of Termination, and
shall have no further obligations to Wells under this Agreement.
shall exist if Wells:
on a willful and continuing basis, to devote his full business time to the
Companies business affairs (other than due to illness, incapacity or vacation)
or to otherwise willfully fail to perform his duties; or
convicted of a felony or a crime involving dishonesty or breach of trust; or
in an act of fraud, embezzlement or theft (regardless of whether a criminal
conviction is obtained) or engages in willful misconduct involving activities
related to or connected with the any one of the Companies; or
an unauthorized disclosure of confidential information that results in
significant injury to any one of the Companies or misappropriates or
intentionally materially damages property or business of the Companies; or
in a material violation of this Agreement or any other agreement with any one
of the Companies; or
in a material breach of Trinitys Code of Business Conduct and Business Ethics
or any other policies, rules or regulations promulgated by or imposed upon any
one of the Companies; or
the subject of state or federal regulatory action or is the substantial
causative factor in regulatory action against Trinity or its subsidiaries.
determination of the appropriateness, in the sole discretion of the CEO, Wells
may be granted a thirty (30) day period in which to cure failures or events
constituting Cause under subsections 3 a.i., a.v., or a.vi. Should the failures or events be rectified to
the satisfaction of the CEO within the cure period, the CEO may continue Wells
employment under the terms and conditions of this Agreement.
Other than For Cause. Trinity may
terminate Wells employment under this Agreement without Cause at any time upon
sixty (60) days prior written notice.
Upon termination without Cause, Trinity shall pay Wells an amount equal
to his annual Base Salary in one lump sum within thirty (30) days of
termination of employment. In addition,
Trinity shall pay Wells any earned and unpaid Base Salary and vacation pay
earned as of the Date of Termination, and shall have no further obligations to
Wells under this Agreement.
Termination by Wells. Wells may
terminate his employment upon sixty (60) days prior written notice to
Trinity. Upon Wells voluntary
termination of employment, other than pursuant to Section 6 hereof, Trinity
shall pay Wells any earned and unpaid Base Salary and vacation pay earned as of
the Date of Termination, and shall have no further obligations to Wells under
Following Change of Control. If
Wells employment is terminated by Trinity, or any successor of Trinity,
without Cause within twelve (12) months following a Change of Control or if
Wells elects to terminate his employment following a Detrimental within
twenty-four (24) months following a
Change of Control and a Detrimental Change in Duties, Trinity or its successor,
as applicable, shall pay to Wells, within thirty (30) days of termination, a
lump sum amount equal to eighteen (18) months Base Salary (as in effect as of
the Date of Termination).
Change in Duties is defined as (A) without Wells written consent, a
significant and material reduction in duties, titles, working conditions or
responsibilities solely caused by a Change of Control; (B) changes in reporting
relationship such that
Wells is no
longer directly reporting to the CEO; or (C) a material breach of this
Agreement by Trinity, or its successor, as applicable.
of Control is defined as the occurrence of any of the following:
consummation of the acquisition by any person (as such term is defined in
Section 13(d) or 14(d)(2) of the Exchange Act) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent
(50%) or more of the combined voting power of the then outstanding voting
securities of Trinity;
individuals who, as of the Effective Date, are members of the Board (the Continuing Directors) cease for any reason to constitute a
majority of the Board, unless the election, or nomination for election by the
stockholders of Trinity, of any new director was approved by a vote of a
majority of the Continuing Directors, and such new director shall, for purposes
of this Agreement, be considered as a Continuing Director; or
by Trinity of: (I) a merger or
consolidation if the stockholders of Trinity, immediately before such merger or
consolidation, do not, as a result of such merger or consolidation, own,
directly or indirectly, more than fifty percent (50%) of the combined voting
power of the then outstanding voting securities of the entity resulting from
such merger or consolidation; or (II) a complete liquidation or dissolution or
an agreement for the sale or other disposition of two-thirds or more of
the consolidated assets of Trinity.
Notwithstanding the foregoing, a Change of Control shall not be deemed
to occur solely because (x) fifty percent (50%) or more of the combined voting
power of the then outstanding securities of Trinity is acquired by a trustee or
other fiduciary holding securities under one or more employee benefit plans
maintained for employees of the Trinity or its Affiliates; or (y) the transaction
is a merger or consolidation effected to implement a recapitalization of
Trinity in which no person, as defined above, acquires more than fifty
percent (50%) of the combined voting power of Trinitys then-outstanding
b. Cure Period. Wells
shall provide Trinity, or its successor, as applicable, with advance written
notice of his intention to terminate his employment pursuant to a Detrimental
Change in Duties specifying the condition
Detrimental Change in Duties and Trinity, or is successor, as applicable, shall
have ten (10) days to cure the specified condition.
c. Tax Limitations. If
it is determined that any payment or distribution from Trinity, any Affiliate
(as defined below), or trusts established by the Trinity or by any Affiliate to
or for the benefit of Wells (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, and with a payment
including, without limitation, the vesting or payment of non-cash benefits or property)
(a Payment) would be nondeductible by
Trinity or its successor, as applicable, for Federal income tax purposes
because of Section 280G of the Code, or any successor provision, then the
aggregate present value of amounts payable or distributable to or for the
benefit of Wells pursuant to this Agreement (Agreement
Payments) shall be reduced (but not below zero) to the Reduced
Amount. For purposes of this section, the Reduced
Amount shall be an amount expressed in present value which
maximizes the aggregate present value of Agreement Payments without causing any
Payment to be nondeductible because of said Section 280G of the Code. The
determination to be made hereunder shall be made within twenty (20) days after
the date of termination by the accounting firm for Trinity (the Accounting Firm), which shall provide detailed calculations
thereof to Trinity and to Wells, provided, however,
that Wells shall elect which and how much of the Agreement Payments shall be
reduced consistent with such calculations. The determination to be made
by the Accounting Firm shall be binding upon Trinity and Wells. For purposes of this Agreement, Trinitys Affiliates include each company,
corporation, partnership, bank, savings bank, savings and loan association,
credit union or other financial institution, directly or indirectly, which is
controlled by, controls, or is under common control with, Trinity (specifically
including the Companies), and control means (x) the ownership of 51% or
more of the voting securities or other voting interest or other equity interest
of any corporation, partnership, joint venture or other business entity, or
(y) the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such corporation,
partnership, joint venture or other business entity.
by Reason of Wells Disability or Death.
Wells employment may be terminated upon the event of his death or the
good faith determination of the CEO of his Disability as defined herein.
is defined as: (i) Wells is permanently
and totally disabled if he is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than twelve (12) months; (ii)
Wells limitation due to sickness or injury, in performance of the material and
substantive duties of his position for a period of six (6) consecutive
(iii) Wells is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of at least twelve (12) consecutive months, receiving
income replacement benefits for a period of not less than three (3) months
under an accident and health plan covering employees.
for Non-Renewal of the Agreement.
Should Trinity determine not to renew this Agreement following the Initial
Term or any applicable Renewal Term, Wells employment shall terminate on the
last date of the then-current Term. In
order to terminate through non-renewal, Trinity must serve notice upon Wells
not later than ninety (90) days prior to the end of the then-current
Term. No amounts shall be made upon
termination due to non-renewal of this Agreement, provided, however, that if a
Change of Control shall occur within six (6) months of the termination due of
non-renewal of the Agreement then Trinity, or is successor as applicable, shall
pay Wells such amounts as are payable pursuant to a Termination due to Change
of Control as provided in Section D.6.
at the time of any payment hereunder: (a) Wells is considered to be a specified
employee as that term is or may be, defined under Section 409A(a)(2)(B) of the
Internal Revenue Code of 1986, as amended (the Code);
and (b) such payment is required to be treated as deferred compensation
under Section 409A of the Code, then no such payment may be made before the
date which is six (6) months after the date of separation from service.
of Employment Claims. Wells agrees,
as a condition to receipt of the payments and benefits provided in Section D, that he will execute a comprehensive release,
releasing any and all claims arising out of his employment (other than
enforcement of this Agreement and his rights under any of Trinitys incentive
compensation and employee benefit plans and programs to which he is entitled
under this Agreement) upon termination from the Companies for any reason.
Services. Subsequent to Wells
termination of employment for reasons other than for Cause, death or
disability, beginning thirty (30) days thereafter and as a precondition to entitlement
to receive amounts as provided in Section D herein, Wells shall keep himself at
all times reasonably available for a period of twelve (12) months to render
such services of any advisory or consultative nature as the CEO shall
reasonably require. Trinity shall not be
entitled to call upon Wells for more than one-hundred (100) hours in such
twelve (12) month period.
Confidentiality and Non-Competition.
in Conformance with the Code of Conduct.
At all times during the Term of this Agreement, Wells shall engage in
behavior consistent with Trinitys then-current Code of Conduct and shall not
engage in any activities that may disparage
or any employee or director of Trinity or its Affiliates. Wells agrees to avoid any situation which may
cause a conflict of interest or which could appear to cause a conflict of
interest. Wells further agrees to notify
the CEO of any potential relationships in which he may have a conflict of interest
so that appropriate measures may be taken to ensure all transactions are
conducted at an arms length. Wells
agrees that the duty to refrain from any conduct disparaging to Trinity and its
Affiliates, and its and their employees or directors shall survive the
termination of this Agreement for any reason.
2. Confidentiality. Wells acknowledges that Trinity and its
Affiliates possess substantial confidential information which is proprietary to
Trinity and its Affiliates and the confidentiality and exclusive use of which
by Trinity and its Affiliates is essential to the continuing success of Trinity
and Wells services for the Companies will bring him into close contact with
additional confidential information which has not been made know to the
public. In order to induce Trinity to
enter into this Agreement, Wells hereby covenants and agrees to promptly
deliver to Trinity upon termination of his employment, or at any time Trinity
may so request, all memoranda, notes, lists (including customer lists),
records, reports manuals, drawings, and other documents (and all copies
thereof) relating to the Companies business and all property associated
therewith which he may then possess or which are then under his control. This provision shall survive the termination
of this Agreement for any reason.
and Non-Solicitation. In
consideration for this Agreement, Wells agrees that during the Term of this
Agreement and for a period of twelve (12) months following his termination of
employment for any reason, whether such termination is during the term of this
Agreement or after the termination or expiration of this Agreement:
will not approach clients, customers or contacts of the Companies or other
persons or entities introduced to Wells in his capacity as a representative of
the Companies for the purposes of doing business with such persons or entities
and will not interfere with the business relationship between the Companies and
such persons and/or entities;
expressly consented to by Trinity in writing, Wells shall not assume employment
with or provide services, directly or indirectly, as a director, consultant or
otherwise for any competitor of the Companies within any county in which any
one of the Companies conducts business,
or engage, whether as a principal, partner, licensor or otherwise, in any
business which is in direct or indirect competition with the business of the
Companies; provided, however, that nothing contained in this subsection (b)
shall be deemed to prohibit Wells from acquiring, solely as an investment,
shares of capital stock of any corporation the shares of the same class of
which corporation are traded on the national securities exchange or in the
over-the-counter market so long as he does not acquire
indirect ownership of one percent (1%) or more of any class of capital stock of
said corporation; and
expressly consented to by Trinity in writing, Wells will not seek directly or
indirectly, or offer alternative employment or other inducement whatsoever, in
order to solicit the services of any employee of the Companies employed as of
the date of termination of his employment or this Agreement for any reason, or
employed at any time during the twelve (12) months preceding such termination.
4. Severability. The provisions provided in Section E.3 shall be separate and severable and enforceable
independently of each other and independent of any other provision of this
Agreement. The provisions contained in Section E.3 are considered reasonable by the
parties and consideration for such covenants is hereby acknowledged, but, in
the event that any such provision should be found to be void under the laws of
the State of New Mexico but would be valid if some portion thereof were removed
or the area of applicability were reduced, such provisions shall apply with
such modification as may be imposed by a court of competent jurisdiction in
order to make them valid and enforceable.
Enforcement. Wells recognizes that
irreparable injury will result to the Trinity in the event of a breach by him
of any of the covenants and agreements contained herein, and he agrees that, in
the event of any such breach, Trinity shall be entitled, in addition to any
other remedies (including, but not limited to, the recovery of monetary
damages) available to them or any of them, to obtain an injunction to restrain
the continuation or repetition of such breach or a similar breach by Wells.
G. Indemnification. Wells shall be indemnified by Trinity in
accordance with, and to the fullest extent authorized by, the New Mexico
Business Corporation Act, as the same now exists or may be hereafter amended.
Resolution. Any controversy or claim
arising out of or relating to this Agreement that cannot be settled through
good faith negotiations between the parties shall be settled by arbitration
conducted by JAMS and judgment upon the award rendered by the arbitrator(s) may
be entered in any court having jurisdiction thereof.
15 days after the commencement of arbitration, each party shall select one
person to act as arbitrator and the two selected shall select a third
arbitrator within ten days of their appointment. If the arbitrators selected by the parties
are unable or fail to agree upon the third arbitrator, the third arbitrator
shall be selected by agreement of the parties or JAMS. Prior to the commencement of hearings, all
arbitrators appointed shall provide an oath or undertaking of impartiality.
arbitration proceedings shall be conducted before the third arbitrator to be
selected using the method outlined above.
In the event that any partys claim exceeds $1 million, exclusive of
interest and attorneys fees, the dispute shall be heard and determined by
place of arbitration shall be Los Alamos, New Mexico.
provided in Section F herein, Trinity may
apply to the arbitrator or the Court seeking injunctive relief until the
arbitration award is rendered or the controversy is otherwise resolved. Either party also may, without waiving any
remedy under this Agreement, seek from any court having jurisdiction any
interim or provisional relief that is necessary to protect the rights or
property of that party, pending the establishment of the arbitral tribunal (or
pending the arbitral tribunals determination of the merits of the
arbitration award shall be in writing, shall be signed by the arbitrator (or a
majority of the arbitrators as applicable) and shall include a statement
setting forth the reasons for the disposition of any claim. The award shall include a breakdown as to
arbitrators will have no authority to award punitive or other damages not
measured by the prevailing partys actual damages, except as may be required by
shall pay all fees for the arbitration, but each party shall be responsible for
its attorneys fees unless an award of attorneys fees is granted by the
as may be required by law, neither party nor the arbitrator(s) may disclose the
existence, content, or results of any arbitration hereunder without the prior
written consent of both parties.
1. Notices. Any notice to be given under this Agreement
to Wells may be served by being personally delivered or by being sent by
Certified Mail, Return Receipt Requested, at Wells usual or last known
address; and any notice to Trinity may be served by being personally delivered
to the CEO of Trinity or being
sent by Certified Mail, Return Receipt Requested, to Trinitys registered
office and to the attention of the CEO. Any notice provided by mail shall be deemed
to have been served three days following the date of mailing.
Law. This Agreement and the legal
relations thus created between the parties hereto shall be governed by and
construed under and in accordance with the laws of the State of New Mexico,
without regard to its conflicts of law principles.
of Prior Agreements. This Agreement
sets forth the entire agreement between the parties and fully terminates and
supersedes any and all prior agreements and understandings between the parties
with respect to Wells employment and compensation by the Companies, including
but not limited to, the Employment Agreement dated March 24, 1998 between Los
Alamos National Bank and Steve W. Wells.
4. Severability. In the event that a court of competent
jurisdiction determines that any portion of this Agreement is in violation of
any statute or public policy, only the portions of this Agreement that violate
such statute or public policy shall be stricken. All portions of this Agreement that do not
violate any statute or public policy shall continue in full force and
effect. Furthermore, any court order striking
any portion of this Agreement shall modify the stricken terms as little as
possible to give as much effect as possible to the intentions of the parties
under this Agreement.
5. Survival. Certain of the provisions of this Agreement
shall survive the termination of this Agreement for any reason. Those provisions include, but are not limited
to Sections D.11, E, F and H.
6. Assignment. This Agreement is personal in its nature and
neither of the parties hereto shall, without the consent of the other, assign
or transfer this Agreement or any rights or obligations hereunder; provided
that, in the event of a merger, consolidation, transfer or sale of all or
substantially all of the assets of Trinity with or to any other individual or
entity or any similar event, Trinity may, subject to the provisions hereof,
assign or transfer this Agreement and it shall be binding and inure to the
benefit of such successor and such successor shall discharge and perform all
the promises, covenants, duties and obligations of Trinity hereunder.
Waiver. Failure to insist on strict
compliance with any of the terms, covenants or conditions hereof, shall not be
deemed a waiver of such term, covenant or condition, nor shall any waiver or
relinquishment of, or failure to insist upon strict compliance with, any right
or power hereunder at any one or more times be deemed a waiver or
relinquishment of such right or power at any other time or times. This Agreement shall not be modified in any
respect except by a writing executed by each party hereto.
8. Headings. Section headings in the Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
9. Counterparts. This Agreement may be executed in
counterparts (including counterparts delivered by facsimile), each of which shall
be deemed an original, but all of which taken together shall constitute one and
the same instrument.
Ambiguity. Each party acknowledges
that it has had the opportunity to be represented by counsel in connection with
this Agreement. Any rule of law or any
legal decision that would require interpretation of any claimed ambiguities
against the party that drafted it has no application and is expressly waived.
IN WITNESS WHEREOF, Trinity has caused this
Agreement to be executed by its duly authorized officer and Steve W. Wells has
hereunto signed this Agreement on the date first above written.