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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of the 16th day of July, 1998, by and between
Missouri Holdings, Inc., a Delaware corporation (the "Company" or "Employer")
and Xxxxxxx X. Xxxxxx (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
Comptroller of the Currency ("OCC") and the Federal Deposit Insurance
Corporation ("FDIC") to acquire a bank with federally insured deposits in St.
Louis, 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, Executive is willing to assist the directors of the Company in
the acquisition of the Bank and subsequent public offering and to become the
President and Chief Executive Officer of the Bank and the Company 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.
2. TERM. The term of employment of Executive under this Agreement
shall be the three year period commencing on July 16, 1998 and ending on July
15, 2001.
3. COMPENSATION. (a) Prior to Closing of the Initial Public
Offering. The Company shall pay Executive a minimum annual base salary of
$250,000, payable in semi-monthly installments from the date of this Agreement
until the closing of the Initial Public Offering. Salary payments shall be
subject to withholding and other applicable taxes. As an additional inducement
to Executive to accept employment with the Company, the Company agrees to pay
Executive a signing bonus in the amount of $300,000, such payment to be made in
a manner including, but not limited to, installment payments or in connection
with a deferred compensation arrangement to be mutually agreed to by the Company
and the Executive as soon as practicable after the execution of this Agreement.
Upon execution of this Agreement and for a period of thirty days
thereafter, Executive shall be granted the right to acquire 250,000 shares of
Common Stock of the Company on the same basis
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as other organizers of the Company and at a per share price of fair market value
determined in good faith by the Board of Directors of the Company. These 250,000
shares shall have the same registration rights, if any, held by the existing
shareholders of the Company. As soon as practicable after the payment by
Executive of the purchase price for such Common Stock the Company shall deliver
a certificate or certificates representing those shares to Executive.
The Company represents and warrants that it currently has 100,000
shares of common stock and 99,900 shares of preferred stock issued and
outstanding, and total equity in excess of $1 million and no debt other than
trade accounts payable.
Except as provided in Section 7 and Section 11(a) below, no additional
compensation or benefits will be provided to Executive prior to the closing of
the Initial Public Offering.
(b) After the Closing of the Initial Public Offering. The Company
shall pay Executive a minimum annual base salary of $250,000, 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.
At the first Board of Directors meeting subsequent to the closing of
the Initial Public Offering the Company shall issue a warrant to Executive
providing for the purchase of 250,000 shares of the Company's Common Stock 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. Such warrant 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 warrant agreement which shall be delivered to Executive by the Company as
soon as practicable after the date of grant. Upon the written request of
Executive, the Company shall, at no cost to Executive, effect the registration
under the securities laws of any or all of the shares of the Company's Common
Stock acquired upon exercise of the warrant; provided, however, that the Company
shall not be required to effect such registration prior to the date three years
from the date of this Agreement. Further, if the Company at any time proposes
for any reason to register securities under the securities laws, it shall
provide Executive with 20 days' written notice of such proposed registration
and, upon the written request of Executive, shall, at no cost to Executive,
effect the registration of any or all of the shares of the Company's Common
Stock acquired upon exercise of the warrant. All such registration rights of
Executive with respect to the shares underlying the warrant shall terminate upon
the termination of the warrant.
4. TITLE AND DUTIES. Prior to the Closing of the Initial Public
Offering Executive shall serve as President and Chief Executive Officer of the
Company and shall be nominated as a director of the Company for the term of this
Agreement. Executive shall run the day-to-day activities of the Company and
oversee the Company, within the framework of the approved annual budget, and
with a sound system of internal controls and in compliance with the policies of
the Board of Directors of the Company, and all applicable laws and regulations.
After the Closing of the Initial Public offering Executive shall also
be elected President, Chief Executive Officer and a Director of the Bank and
shall run the day-to-day activities of the
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Bank and oversee the Bank within the framework of the approved annual budget,
and with the sound system of internal controls and in compliance with the
policies of the Board of Directors of the Bank and all applicable laws and
regulations.
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. After the Closing of the Initial Public
Offering 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 the Bellreve Country Club and the St. Louis
Club (including dues and assessments).
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.
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, disability and a minimum of $
350,000 in term life insurance. In addition, after the Closing of the Initial
Public Offering Executive shall be provided with an automobile for his use or an
automobile allowance, 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 be entitled, for a period of thirty (30) 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. The severance
payments provided for in this Section 10(a) shall be paid in cash, commencing
not later than ten (10) days after the date of notice of
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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.
(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 warrants to
which Executive is entitled under this Agreement, to 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 warrants held by Executive,
times the number of shares of Common Stock subject to such warrants (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 Failure to Close the Initial Public
Offering. If during the period beginning one (1) year from the date hereof, or
such longer period as mutually agreed upon by the Executive and the Board of
Directors of the Company, the Board of Directors of the Company determines in
its sole discretion that the Company is unable to close the Initial Public
Offering then this Agreement may be terminated by the Board of Directors of the
Company without notice upon the condition that Executive shall be entitled, as
liquidated damages in lieu of all other claims, to be paid the sum of $250,000,
which payment shall be subject to withholding and other applicable taxes and
shall be made simultaneously with such termination of this Agreement.
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(b) For Cause. This Agreement may be terminated
by the Board of Directors of the Company without notice and without further
obligation than for monies already paid, for any of the following reasons:
(i) failure of Executive to follow reasonable written
instructions or policies of the Board of Directors of
the Company or the Bank;
(ii) receipt by the Company or the Bank of written notice
from any bank regulatory agency having jurisdiction
over the Company or the Bank that such agency has
criticized Executive's performance or his area of
responsibility and has either (A) rated the Company
or the Bank a "4" or a "5" under the Uniform
Financial Institution Rating System or (B) has
determined that the Bank is in a "troubled condition"
as defined under Section 914 of the Financial
Institutions Reform, Recovery and Enforcement Act of
1989;
(iii) 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
(iv) 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(b) 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(c) hereof. In
the event that the Bank discharges Executive alleging "cause" under this Section
11(b), 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.
(c) 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
the same severance payments as provided in Section 10
hereof; provided that for purposes of Section 10(b),
the fair market value of Common Stock shall be
determined as of the date of notice of termination of
this Agreement given by the Bank to Executive. The
severance payments provided for in this Section 11(c)
shall commence not later than thirty (30) days after
the actual
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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.
(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(b) 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(b) 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(c)(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 twelve (12)
months after such termination date, Executive shall not, without the prior
written consent of Employer, within St. Louis County, Missouri either directly
or indirectly, serve as an executive officer of any bank or bank holding
company.
(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
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or relied upon by Employer in any court of competent jurisdiction, and shall
form the basis of 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"
MISSOURI HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Vice President
"EXECUTIVE"
/s/ Xxxxxxx X. Xxxxxx (L.S.)
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Xxxxxxx X. Xxxxxx
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