EMPLOYMENT AGREEMENT
THIS AGREEMENT is between American Bancshares, Inc. ("ABI"), a Florida
corporation, and Xxxxx X. Xxxx ("the Employee"), an individual.
WHEREAS, the Employee is currently serving both as interim President of
ABI, and as interim President of American Bank, an ABI subsidiary, and as
interim President of Freedom Finance Company, also an ABI subsidiary; and
WHEREAS, the Board of Directors of ABI, following careful consideration
of the Employee's performance in recent months as interim President, which has
been entirely satisfactory to the Board, and in order to reward the Employee's
distinguished service in the past, to ensure that the Employee's compensation
and benefits will be competitive with other successful banking corporations, and
to encourage the Employee's full attention and dedication to ABI and American
Bank in the event of a threatened Change of Control, as defined more
specifically in this contract, promoted the Employee from the position of
interim President into the position of President, and this Agreement will set
forth the terms and conditions of his employment in this new position;
NOW THEREFORE, in consideration of the continued employment of the
Employee by ABI, and of the mutual promises made herein, and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties agree as follows:
1. Employment. This is an employment contract. Through execution of
this contract, ABI offers continued employment, and the Employee accepts that
offer. The revised terms and conditions of the Employee's employment
relationship will be set forth in this Agreement.
2. Duties. The Employee shall be employed as President of ABI, as
President of American Bank, and as President of Freedom Finance Company. In
addition, if ABI forms or acquires other subsidiaries, the Employee may be asked
to assume management responsibility of or within those corporations, as well as
within Freedom Finance Company, another ABI subsidiary. Put in general terms,
the Employee will be expected to perform such executive duties and
responsibilities as are commensurate with his status as ABI President, and as
may be assigned by ABI's Board of Directors, in its sole discretion.
3. Term of Agreement. The term of this Agreement is three years. Unless
either ABI or the Employee gives written notice of non-renewal at least sixty
(60) days prior to the first Anniversary Date of this Agreement, the contract
term shall automatically be renewed, as of that Anniversary Date, for an
additional one year period. Automatic renewal shall take place at each
subsequent Anniversary Date where there is no written notice of non-renewal
provided within sixty (60) days of the Anniversary Date. In other words, it is
the intent of the parties to create a "rolling" term for this Agreement.
Notwithstanding the foregoing, in the event of a Change in Control, this
paragraph shall become inoperative, and the term of the Agreement shall be
determined in accordance with the paragraph governing Change in Control.
Furthermore, this Agreement can be terminated prior to the end of the contract
term as provided by paragraph 6.
4. Compensation.
a. Salary. The Employee's salary shall be ONE HUNDRED SEVENTY
FIVE THOUSAND DOLLARS ($175,000) per year, payable to the Employee in accordance
with ABI's normal payroll periods. Because the Employee is jointly employed by
ABI and its subsidiary corporations, and may be involved in the management of
other ABI subsidiaries in the future, the Employee's salary may be paid in part
by ABI subsidiary corporations where the Employee serves as an executive, and as
a joint employee, of those corporations. The total amount of the Employee's
salary may not be decreased by ABI. However, it may be increased, in ABI's
complete discretion.
b. Incentive Compensation. In addition to salary, the Employee
shall be entitled to earn incentive compensation, the amount of which, as set
forth below, shall be payable annually upon the later of receipt by American
Bank of the Bank's year-end financial statements, as audited by the Bank's
certified public accountants or May 1. The amount of incentive compensation for
which the Employee may be eligible shall be based on the Bank's return on
average assets ("ROAA") and calculated using the following formula: The
incentive compensation shall be an amount equal to ten percent (10%) multiplied
by the Employee's salary if the Bank's actual annual ROAA equals or exceeds the
projected annual ROAA as set forth in the Bank's annual budget; provided,
however, at the discretion of the Bank, the incentive compensation may be any
amount less than 10% multiplied by the Employee's salary if the Bank's actual
annual ROAA is less than the projected annual ROAA as set forth in the Bank's
final budget; further provided, at the discretion of the Bank, the incentive
compensation may be any amount more than 10% multiplied by the Employee's salary
if the Bank's actual annual ROAA substantially exceeds the projected annual ROAA
as set forth in the Bank's final budget.
c. Memberships. ABI shall pay the cost of such Employee
memberships as may be approved by theABI Board of Directors.
d. 401(k) Plan. The Employee is currently eligible for a
401(k) plan. He shall receive such contributions to his account in that plan, or
into his account in any other 401(k) plan subsequently created by ABI as may be
approved pursuant to the terms of such plans.
e. Options. The Employee is eligible to participate in the
American Bancshares Incentive Stock Option Plan (ISOP) to the extent recommended
by the Executive Committee and approved by the Board of Directors.
f. Group Insurance. The Employee shall be entitled to group
insurance benefits in accordance with the terms of group insurance plans
maintained by ABI or any of its subsidiaries.
g. Expenses. ABI agrees to pay all ordinary and necessary
business expenses incurred by the Employee, including but not limited to
reasonable business travel expenses, and expenses associated with attendance at
seminars, speeches, meetings, and associations, provided that the Employee must
comply with any ABI or Bank policies on expense reimbursement.
h. Vacation. The Employee shall be entitled to four (4) weeks
vacation benefits.
i. Automobile Allowance. The Employee shall receive an
automobile allowance of SEVEN HUNDRED DOLLARS ($700.00) per month, and mileage
reimbursement as provided by the policies of American Bank (this includes
reimbursement of mileage for travel out of Manatee County on ABI or Bank
business).
5. Time Devoted to Employment. The Employee shall devote all of his
business time, attention and energies to the business affairs of ABI and its
subsidiaries, and shall not, while employed by ABI, be engaged in any other
business activity, whether or not such business activity is pursued for gain,
profit or other pecuniary advantage; however, this shall not be construed as
preventing the Employee from investing personal assets in such form or manner as
will not require any services on the part of the Employee.
6. Termination of Agreement.
a. Termination by the Employee. The Employee may
terminate this Agreement, with or without cause, by giving ABI thirty (30) days
written notice of resignation. The Employee may be released at any time by
ABI, without any severance pay obligation, after he submits his resignation.
b. Termination by the Bank for Cause. ABI may terminate the
Employee's employment, and this Agreement, for "just cause," by giving the
Employee thirty (30) days written notice of discharge for "just cause," or
paying the Employee his salary for the thirty (30) day notice period in lieu of
giving notice. The Employee shall not be entitled to any severance pay if he is
discharged for "just cause." The term "just cause," as used in this Agreement,
includes, but is not limited to, the following:
1. The Employee's refusal or willful failure to
perform duties appropriately assigned by
ABI's President or Board of Directors,
unless the Employee is unable to perform
such duties due to a disability amounting to
a "serious health condition" as defined in
the federal Family and Medical Leave Act;
2. The Employee's inability to perform duties
appropriately assigned by ABI's President or
Board of Directors due to physical or mental
disability, but only after all family leave
available to the Employee under the federal
Family and Medical Leave Act, and all short
term and long term disability leave provided
by any applicable ABI or ABI subsidiary
Employee Handbook, has been exhausted;
3. An act or omission by the Employee which, if
it occurred, would be either a felony under
Florida law, or a misdemeanor involving
moral turpitude under Florida law,
regardless of whether or not the Employee is
prosecuted for this crime, and if
prosecuted, regardless of the eventual
disposition of the case;
4. A serious act of misconduct in connection
with work by the Employee, dishonesty in
connection with ABI or subsidiary business,
misrepresentations of Directors, breach of
the Employee's duty of loyalty to ABI or
subsidiaries, or any related corporations,
through appropriation or attempted
appropriation of corporate opportunities for
the Employee's own advantage, or through
other conflicts of interest where the
Employee acts for the Employee's own
personal benefit, instead of for the
benefit of American Bank, ABI or other ABI
subsidiaries (it is the express intention of
the parties that concerns relating to the
competence of the Employee, or the
Employee's job performance, are not
"misconduct" as defined in this
sub-paragraph); and
5. A prior breach of this Agreement by the Employee.
c. Termination by the Bank Without Cause. ABI may terminate
this Agreement without cause, and may discharge the Employee, by giving thirty
(30) days written notice of termination to the Employee, or by giving the
Employee one month's pay in lieu of written notice. If the Employee is
terminated by ABI without cause, he shall be paid three (3) month's severance
pay. This severance pay shall be paid at regular payroll intervals, although ABI
shall have the option of offering the Employee a lump sum payment in lieu of
installment payments. A month of "severance pay," as used in this paragraph, and
elsewhere in this Agreement, includes a monthly pro rata portion of the
Employee's annual salary; "severance pay" does not include any bonus or
incentive compensation provided by this Agreement or otherwise awarded by
practice or custom, nor does it include the value of any fringe benefits of
employment whatsoever (e.g., group insurance, automobile allowance, the value of
options, vacations or memberships, or any contributions made in the past by ABI
to the Employee's account in 401(k) or other defined contribution plans). Taxes
shall be withheld from severance pay as required by law.
d. Termination of this Agreement due to a Change in Control.
Notwithstanding any other provision of this Agreement, upon the occurrence of a
Change in Control, the Employee shall have the right, in the Employee's sole
discretion, to terminate the Employee's employment with ABI, as of the date of
the Change of Control, and for a period of one year following the date of the
Change of Control, and receive certain severance pay. If the Employee exercises
this right to terminate employment with ABI within thirty (30) days of the date
of the Change of Control, then the Employee shall be paid, either in a lump sum
or at regular payroll intervals at the option of ABI, thirty-six (36) month's of
severance pay. If the Employee exercises this right to terminate employment with
ABI after thirty (30) days of the date of the Change of Control, but within one
year of the date of the Change of Control, then the Employee shall be paid,
either in a lump sum or at regular payroll intervals at the option of the Bank,
thirty-six (36) month's of severance pay, less an amount equivalent to the
salary earned from the date of the Change of Control to the date of termination
of employment. If the Employee resigns more than one year after a Change of
Control, he shall not be entitled to any severance pay pursuant to this
paragraph. For the purposes of this Agreement, a Change of Control shall be
deemed to have occurred on the earliest of the following dates:
1. The date on which any entity or person shall
have become the beneficial owner of, or
shall have obtained voting control over, 25%
or more of the outstanding common shares of
ABI, or of the outstanding voting control of
ABI;
2. The date the shareholders of ABI approve a
definitive agreement (a) to merge continuing
or surviving corporation or pursuant to
which any common shares of corporation,
other than a merger of ABI in which holders
of ABI common shares immediately prior to
the merger have the same proportionate
ownership of common shares of the surviving
corporation immediately after the merger as
immediately before, or (b) to sell or
otherwise dispose of substantially all the
assets of ABI; or
3. The date there shall have been a change in a
majority of the Board of Directors of ABI
within a twelve month period unless the
nomination for election by ABI's
shareholders of each new director was
approved by the vote of two-thirds of the
directors then still in office who were in
office at the beginning of the twelve month
period.
As used in this Change of Control paragraph, paragraph 6(c) of this Agreement,
the term "person" shall mean any individual, corporation, partnership, group,
association, or other person, as such term is defined in Section 13(d)(3) or
Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), other than ABI, a subsidiary of ABI or any employee benefit
plan(s) sponsored or maintained by ABI or any subsidiary of ABI, and the term
"beneficial owner," shall have the meaning given the term in Rule 13d-3 under
the Exchange Act.
e. Termination of this Agreement due to Death of the Employee.
This Agreement shall be terminated by the death of the Employee as of the date
of death. No severance pay shall be due in the event of termination of this
Agreement by death.
7. Protective Covenant relating to Protected Information.
a. Definition of Protected Information. The term "Protected
Information" shall include any and all information and materials, in whatever
form, whether or not reduced to writing and whether or not registerable,
recordable or otherwise protected under applicable patent, copyright, trade
secret or other form of intellectual property law, that the Employee receives,
receives access to, conceives or develops, in whole or in part, directly or
indirectly, in connection with rendition of services to ABI or any of its
subsidiaries, or through the use of any of ABI's facilities or resources, or
through the use of the facilities or resources of any of ABI's subsidiaries, and
regardless of how such information is communicated, disclosed, created or
discovered, including both trade secrets and "know-how." Protected information
shall include, but shall not be limited to, the following:
1. Marketing plans, techniques and
arrangements, customer lists, cost
comparables, prospect lists (including
prospects and non-prospects, and ratings of
potential), pricing data, and other
materials or information relating to ABI's
business, or the businesses of ABI's
subsidiaries, and the manner in which ABI
and its subsidiaries do business;
2. Application, operating system, database,
communication and other computer software,
whether now or hereafter existing, developed
for use on any operating system, all
modifications, enhancements and versions and
all options available with respect thereto,
all future products developed or derived
therefrom, and all source and object codes,
algorithms, and any related documentation or
manuals;
3. Financial information of ABI and its
subsidiaries, including information relating
to profits and losses;
4. Any information or materials received by ABI
or its subsidiaries from third parties in
confidence or subject to non-disclosure or
similar covenants; and
5. Any notes, tapes, reference items, sketches,
drawings, memoranda, compilations, studies,
summaries and other material relating to
Protected Information, however documented.
Notwithstanding the foregoing, Protected Information shall not include the
following:
1. Public information, but only information
that becomes publicly available or made
available to the Employee by unaffiliated
third parties without breach of (a) this
Agreement, (b) any other agreement or
instrument to which ABI or its subsidiaries
is a party or a beneficiary, or (c) any duty
owed to ABI or its subsidiaries by the
Employee or any third party, whether by
contractual, legal, fiduciary or other
obligation; and
2. Information previously known to the
Employee, but only information that (a) was
known to the Employee prior to the
Employee's employment by American Bank, (b)
the prior knowledge of which is evidenced by
written and dated documentary proof, (c) was
not at the time of acquiring such
information, subject to any duty owed by ABI
or its subsidiaries to any third party
disclosing such information to the Employee,
whether by contractual, legal, fiduciary or
other obligation, and (d) Employee has
disclosed such prior knowledge of which to
American Bank either prior to the Employee's
employment, or, if the Employee becomes
aware of (through disclosure to ABI or its
subsidiaries) any aspect of the Protected
Information of which the Employee had
personal knowledge or possession after
employment, or the effective date of this
Agreement, promptly upon becoming aware of
such aspect.
b. Covenants relating to Protected Information. The Employee
covenants and agrees to keep all Protected Information confidential for the
benefit of ABI and its subsidiaries, and as part of that obligation, shall not
at any time, during or following employment, directly or indirectly, disclose,
divulge, reveal, report, publish, transfer or use any Protected Information. The
Employee further covenants and agrees not to record, copy, adapt or distribute
any Protected Information without the consent of ABI or its subsidiaries. These
covenants and promises shall not apply to any conduct for which ABI or its
subsidiaries has given prior written consent, or if the conduct is a disclosure
directly pursuant to a valid and existing order of court or other governmental
body or agency within the United States, provided, however, that (1) the
Employee shall first have given prompt notice to ABI or its subsidiaries of any
such possible or prospective order; (2) ABI or its subsidiaries shall have been
afforded a reasonable opportunity to prevent or limit any such disclosure; and
(3) the Employee shall use best efforts to obtain reasonable assurances that
confidential treatment will be accorded to any Protected Information so
disclosed. Both parties further agree that the employment relationship between
the Employee and American Bank is a confidential relationship, and that as a
consequence of the existence of this relationship, the Employee has a duty
neither to use nor disclose Protected Information independent of any of the
protective covenants set forth in this sub-paragraph.
8. Indemnity and Litigation involving the Employee.
a. Indemnity. ABI agrees to indemnify and hold the Employee
harmless from any actions, lawsuits, liabilities, claims, or demands (including
the costs, expenses, and attorney's fees associated with defense of same) that
are brought against the Employee personally for injuries to persons or damage to
property resulting from the Employee's acts or omissions in the course and scope
of employment with ABI. No right or claim for indemnity shall accrue under this
Agreement until after the underlying claim on which indemnity is based is
settled or finally adjudicated; thus, no claim for indemnity may be made in the
same lawsuit in which the underlying claim is litigated. Notwithstanding the
foregoing, ABI may, in its complete discretion, pay the Employee's attorney's
fees and litigation expenses incurred in defending a claim brought personally
against the Employee (1) where the Employee is accused of wrongdoing in the
course and scope of employment with ABI, and (2) where the Employee agrees to
reimburse ABI at the conclusion of such suit if there is a final determination
by a judge or jury (a) that the Employee committed the alleged wrongful acts,
and (b) that such acts were malicious, willful, or in reckless disregard of the
rights of third parties. Where fees are paid pursuant to this provision,
separate counsel will be retained for the Employee in the event a conflict of
interest requires same.
b. Litigation where the Employee is a Witness. Even if
employment with ABI or its subsidiaries has terminated at the time litigation is
brought where the Employee may be a witness, the Employee agrees, at the request
of ABI, to give truthful testimony in court at any trial, or at deposition,
where the Employee is accused of wrongdoing, or where the Employee otherwise has
relevant knowledge relating to the case, regardless of whether travel to trial
is required, although any deposition of the Employee will be scheduled at a
location convenient for the Employee, in accordance with federal and/or state
rules of civil procedure governing litigation. The Employee further agrees to
provide information to and otherwise cooperate with counsel for ABI in defending
any action, lawsuit, liability, claim or demand where the Employee has knowledge
of the claims, or is accused of wrongdoing. ABI agrees to pay the Employee the
statutory witness fee and travel expenses required by federal or state law in
the event testimony at deposition or at trial is required; otherwise, if
employment has terminated, the Employee shall not be compensated for lost time
or unpaid expenses.
9. Waiver of Jury Trial; Attorney's Fees. The parties both waive any
right to trial by jury in any action brought under this Agreement, specifically
including actions to enforce or interpret the protective covenant set forth in
paragraph 7 of the Agreement. In the event of litigation between the Employee
and ABI, of any kind whatsoever, regardless of whether it involves this
Agreement, or otherwise, the prevailing party shall be entitled to the award of
a reasonable attorney's fee, an award of costs of action, and recovery of any
litigation expenses reasonably incurred by counsel.
10. Notices. In the case of any notice required or permitted to be
given to the Employee under this Agreement, the date of notice shall be the date
it is given or delivered in person, or mailed by U.S. Certified Mail, Return
Receipt Requested, to the last known address of the Employee. In the case of any
notice required or permitted to be given to ABI under this Agreement, the date
of notice shall be the date it is given or delivered in person to ABI
President's business office, or mailed by U.S. Certified Mail, Return Receipt
Requested, to the President of ABI.
11. Binding Effect. The rights and obligations of ABI under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of ABI, subject to the Change of Control sub-paragraph. This
paragraph expressly authorizes enforcement of the covenants in paragraph 7 by
the successors or assigns of ABI. The rights of the Employee provided by this
Agreement may not be assigned to any other person.
12. Governing Law. This Agreement shall be construed in accordance with
the law of the State of Florida, to the extent that state law, as opposed to
federal law, may be applicable in its construction.
13. Entire Agreement; Changes to Agreement; Originals. This Agreement
is the only Agreement between the parties, and supersedes any prior oral or
written contracts or agreements between ABI and the Employee. This Agreement may
not be amended except in writing signed by the party to the Agreement against
whom the change is being asserted. This Agreement may be executed in two or more
copies, each of which shall be deemed an original, and it shall not be necessary
in making proof of this Agreement or its terms to produce or account for more
than one of such copies.
IN WITNESS WHEREOF, the parties have executed this Agreement, under
seal, on the dates set forth beneath their signatures.
By: __________________________ (Seal) By: ____________________________
Xxxxx X. Xxxx American Bancshares, Inc.
Date: _______________ Date: _____________
Witness: __________________________________
