EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into on MARCH 31 ,
1998 by and between Pelican National Bank (hereinafter referred to as "Bank"),
and Xxxxxxx X. Xxxxxx (hereinafter referred to as "Executive").
W I T N E S S E T H
WHEREAS, PN Holdings, Inc. (hereinafter referred to as "Bancorp") is a
holding company which owns the Bank.
WHEREAS, in order to insure the successful management of Bank, Bank
desires to avail itself of the experience, skills, abilities and knowledge of
Executive; and
WHEREAS, both Bank and Executive desire to embody the terms and
conditions of Executive's employment in this written agreement which supersedes
all prior agreements, whether written or oral; and
WHEREAS, the employment, the duration thereof, the compensation to be
paid to Executive, and other terms and conditions of employment provided in this
Agreement were duly fixed, stated, approved and authorized for and on behalf of
Bank, by action of its Board of Directors.
NOW, THEREFORE, in consideration of the mutual covenants, terms and
conditions hereinafter set forth, the sufficiency of which is acknowledged, the
parties hereto covenant and agree as follows:
1. TERM
Effective March __, 1998, the Bank agrees to employ Executive as
President and Chief Executive Officer of Bank, and Executive hereby accepts
employment with the Bank ("Commencement Date") and shall continue for a period
of five (5) years from and after the Commencement Date. This period of
employment shall be referred to herein as "the Term". The Bank agrees to give
the Executive notice three (3) months prior to the end of the Term if it does
not intend to extend or enter into a new Agreement with the Executive.
2. DUTIES
2.1 Generally. Executive shall serve as President and Chief
Executive Officer of Bank, subject to the powers by law vested in the Board of
Directors of the Bank, and in Bank's shareholders. Executive shall also serve as
a member of the Board of Directors of the Bank. During the Term of this
Agreement, Executive shall perform his duties faithfully, diligently and to the
best of his ability, consistent with the highest and best standards of the
banking industry and in compliance with all applicable laws and Bank's Articles
of Association and Bylaws.
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2.2 Performance. Except as provided in Paragraph 6.1 herein,
Executive's employment after Commencement Date shall devote substantially his
full energies, interest, abilities and productive time to the business of Bank.
Executive shall at all times loyally and conscientiously perform all of these
duties and obligations hereunder and shall at all times strictly adhere to and
obey, and instruct and require all those working under and with his strictly to
adhere and obey, all applicable federal and state laws, statutes, rules and
regulations to the end that Bank shall at all times be in full compliance with
such laws, statues, rules and regulations.
3. COMPENSATION
3.1 Operating Period. During the Term, Executive shall receive
an annual salary in the amount of One Hundred and Twenty Thousand Dollars
($120,000.00) payable in accordance with the normal payroll periods at Bank. The
Executive's annual salary shall be increased (but not decreased) during each
year of the Term of this Agreement solely in the discretion of the Board of
Directors of the Bank. The Executive shall not be paid any further compensation
for serving as a Director of the Bank or on committees of the Board of Directors
of the Bank.
3.2 Bonus. In addition to the annual salary set forth in
Section 3.1 hereof, during the Term, Executive may receive such bonuses, if any,
as the Board of Directors of the Bank, in its sole discretion, may determine.
4. EXECUTIVE BENEFITS
4.1 Group Medical Benefits. The Bank shall provide the
Executive, at the Bank's expense, group medical benefits to the same extent that
such benefits are available to other employees of the Bank. The Bank shall
provide the Executive, at the Bank's expense, with dental benefits and benefits
for all family members living at home. Health benefits for children of the
Executive, currently in college, shall be made available at the Executive's
expense.
4.2 The Bank shall provide the Executive, at the Bank's
expense, with a $250,000 term life insurance policy.
4.3 Business Expense. Executive shall be entitled to
reimbursement by the Bank for any ordinary and necessary business expenses
incurred by Executive in the performance of Executive's duties and in acting for
the Bank during the Term, which type of expenditures shall be determined by the
Board of Directors of the Bank, provided that:
(a) Each such expenditure is of a nature qualifying it as a
proper deduction on the federal and state income tax returns of the Bank as a
business expense and not as deductible compensation to Executive; and
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(b) Executive furnishes to the Bank adequate records and
other documentary evidence required by federal and state statutes and
regulations issued by the appropriate taxing authorities for the substantiation
of such expenditures as deductible business expenses of the Bank and not as
deductible compensation to Executive.
(c) Such expenses shall not exceed the sum of Fifteen
Hundred Dollars ($1,500.00) per month during the Term of this Agreement.
4.3 Automobile. Executive shall receive an automobile
allowance in the sum of Five Hundred Dollars ($500.00) per month.
4.4 Vacation. Executive shall be entitled to a vacation and
personal days in each year during the Term, which vacation and personal days
shall be 15 business days during each year of the Term of this Agreement. Any
vacation time and personal days not used during any year of the Term may be
accrued for use in future years.
4.5 Sick Leave and Retirement Benefits. Executive shall be
entitled to participate in all Bank sick leave and retirement policies and plans
if otherwise eligible.
4.6 Moving Expenses. The Bank will reimburse the Executive for
moving expenses up to $7,000 upon completion of the Executive's move to Naples,
Florida. In addition, the Bank will pay for two trips for the Executive's wife
to Naples, Florida to find a residence for the Executive and his family.
5. PROPERTY RIGHTS
5.1 Trade Secrets. During the Term, Executive may have access
to and become acquainted with various trade secrets which are owned by the
Bancorp and the Bank and which may regularly be used in the operation of the
Bank. Executive shall not disclose any such trade secrets, directly or
indirectly, or use them in any way, during the Term or at any time thereafter,
except as required pursuant to the provisions of this Agreement. All such trade
secrets, including, but not by way of limitation, any and all files, records,
documents, specifications, equipment, customer lists and similar items relating
to the business of the Bancorp and the Bank, whether prepared by Executive or
otherwise coming into Executive's possession, shall remain the exclusive
property of the Bancorp and the Bank and shall not be removed from the premises
of the Bancorp and the Bank under any circumstances whatsoever without the prior
written consent of the applicable Board.
5.2 Other Property. Upon termination of this Agreement,
Executive shall immediately deliver to the applicable Board any and all property
in Executive's possession or under Executive's control belonging to the Bancorp
and the Bank, in good condition, ordinary wear and tear and damage by any cause
beyond Executive's reasonable control excepted.
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6. ADDITIONAL OBLIGATIONS
6.1 Covenant Not to Compete. During the Term of this Agreement
and upon the expiration of any payments under Section 7 of this Agreement and
for a period of one year thereafter, Executive shall not, directly or
indirectly, either as an employee, employer, consultant, agent, principal,
partner, stockholder, corporate officer of director, or in any other individual
or representative capacity, engage or participate in any business or activity
that is in any way in competition in any manner whatsoever with the business of
the Bancorp and the Bank in Xxxxxxx County, Florida.
7. TERMINATION.
Pursuant to the provisions of 12 U.S.C. Section 24 and any and all
other provisions of this Agreement to the contrary notwithstanding, Executive's
employment hereunder may be terminated:
7.1 Without Cause. In the sole and absolute discretion of the
Board of Directors of the Bank may, without cause, terminate Executive's
employment; provided, however, that if such termination occurs during the Term,
and is for any cause other than as described in Sections 7.2, 7.3, 7.4, 7.5, 7.6
or 7.7 hereof, Executive shall receive a severance payment in the amount of 25%
of the Executive's base salary then in effect under Section 3.1 of this
Agreement. In addition, the Bank agrees to repurchase or arrange for the sale of
any Common Stock owned by the Executive at the book value thereof as of the
nearest quarter after termination pursuant to this Article 7.
7.2 Death or Disability. Upon Executive's death or medical or
legal disability to continue his duties hereunder, this Agreement shall
automatically and without notice terminate as of the date of such death or
disability.
7.3 Termination for Cause. (a) The Board of Directors of the
Bank may for cause terminate Executive's employment at any time during the Term
of this Agreement. In such event, all of Executive's rights under this Agreement
shall terminate and Executive shall have no right to receive compensation or
other benefits for any period after the effective date of such termination for
cause. Termination for cause shall be defined as your personal dishonesty,
willful misconduct, breach of fiduciary duty involving personal profit,
continuing intentional or habitual failure to perform stated duties, violation
of any law (other than minor traffic violations or similar misdemeanor
offenses), rule or regulation adopted by the Office of the Comptroller of the
Currency, Federal Deposit Insurance Corporation or other regulatory agency with
jurisdiction over the Bank, any judgment, ruling or decree by any court of
competent jurisdiction or administrative body that precludes or impairs
Executive's ability to perform the services contemplated by this Agreement or
any material breach by Executive of any provision of this Agreement.
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7.3 (b) The Board of Directors of the Bank shall provide the
Executive with written notice and the reasons for any termination for cause,
which termination shall be effective in accordance with Section 10.1 of this
Agreement, provided, however, if the reason for termination for cause involves
continuing intentional or habitual failure to perform stated duties or the
violation of any law, rule or regulation adopted by the Office of the
Comptroller of the Currency, the Federal Deposit Insurance Corporation or other
regulatory agencies with jurisdiction over the Bank, where such regulatory
authority provides, in writing, for an opportunity to cure or any material
breach by Executive. The Executive shall have a period of thirty (30) days from
the date of such notice to cure such breach provided, further, that the
determination of whether or not such breach has been cured shall be the sole
determination of a majority of the members of the Board of Directors of the
Bank, excluding the Executive, and such determination shall be binding upon the
Executive.
7.4 Compliance with Law and Regulation. Executive and the Bank
expressly acknowledge and agree that any payments made to Executive pursuant to
this Agreement or otherwise are subject to and conditioned upon compliance with
12 U.S.C. Section 1828(k) and any regulations promulgated thereunder.
7.5 Suspension and Removal Orders. If Executive is suspended
and/or temporarily prohibited from participating in the conduct of the Bank's
affairs by notice served under Section 8(e)(3) or 8(g)(1) of the Federal Deposit
Insurance Act (12 U.S.C. Section 1818(e)(3) and (g)(1)), the Bank's obligations
under this Agreement shall be suspended as of the date of service, unless stayed
by appropriate proceedings. If the charges in the notice are dismissed, the Bank
may in its discretion: (i) pay Executive's all or part of the compensation
withheld while its obligations under this Agreement were suspended; and (ii)
reinstate (in whole or in part) any of its obligations which were suspended. If
Executive is removed and/or permanently prohibited from participating in the
conduct of the Bank's affairs by an order issued under Section 8(e)(4) or
8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. Section 1818(e)(4) or
(g)(1)), all obligations of the Bank under this Agreement shall terminate as of
the effective date of the order, but vested rights of the parties shall not be
affected.
7.6 Termination by Default. If the Bank is in default (as
defined in Section 3(x)(1) of the Federal Deposit Insurance Act (12 U.S.C.
Section 1813(x)(1)), all obligations under this Agreement shall terminate as of
the date of default, but vested rights of the parties shall not be affected.
7.7 Supervisory Assistance or Merger. All obligations under
this Agreement shall be terminated, except to the extent that it is determined
that continuation of the Agreement is necessary for the continued operation of
the Bank: (i) by the Director of the Office of the Comptroller of the Currency
(the "Director") or his or her designee, at the time that the Federal Deposit
Insurance Corporation enters into an agreement to provide assistance to or on
behalf of the Bank under the authority contained in Section 13(c) of the Federal
Deposit Insurance Act (12 U.S.C. Section 1823(c)); or (ii) by the Director or
his or her
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designee, at the time that the Director or his or her designee approves a
supervisory merger to resolve problems related to the operation of the Bank or
when the Bank is in an unsafe or unsound condition. All rights of the parties
that have already vested, however, shall not be affected by such action.
7.8 General Release of Claims. As a material inducement to the
Bank to enter into this Agreement including payment of severance pay as stated
in Section 7.1, the Executive hereby irrevocably and unconditionally releases,
acquits, and forever discharges the Bancorp and the Bank and each of its owners,
shareholders, predecessors, successors, assigns, agents, directors, officers,
employees, representatives, attorneys, divisions, subsidiaries, affiliates (and
agents, directors, officers, employees, representatives and attorneys of such
divisions, subsidiaries and affiliates), and all persons acting by, through,
under or in concert with any of them (collectively "Releasees"), or any of them,
from any and all complaints, claims, liabilities, obligations, promises,
agreements, controversies, damages, costs, losses, debts and expenses (including
attorney's fees and costs actually incurred), of any nature whatsoever, ("Claim"
or "Claims"), which Executive now has, owns, or holds, or claims to have, own or
hold, or which Employee at any time heretofore had, owned, or held, or claimed
to have, own, or hold, or which Employee at any time hereinafter may have, own,
or hold, or claim to have, own, or hold, against each or any of the Releasees.
8. STOCK OPTIONS.
The Bancorp has determined to implement a stock option plan to
cover Directors, Officers and employees of the Bancorp and its subsidiaries,
including the Bank.
(a) The Bank hereby agrees to grant Executive a bonus of 5,000
incentive stock options to buy shares of Common Stock of the Bancorp at a price
of $15 per share, if both the Bank's Return on Equity ("XXX") is in excess of 2%
and the Bank's Return on Assets ("ROA") is in excess of 0.35% at the end of the
Bank's second year of operations in accordance with the bank's business plan. If
the Bank's earnings meet the test set forth in the previous sentence, the
Executive will receive options to purchase an additional 5,000 shares per year
in each of the third, fourth and fifth years of the Executive's employment by
the Bank. The options shall vest in accordance with the Bancorp's Stock Option
and Incentive Plan over a five year period.
(b) The Bank hereby agrees to grant Executive an additional bonus
for superior performance of up to a maximum of options to purchase an additional
5,000 shares of Common Stock of the Bancorp, in the discretion of the Board in
each year in which both the Bank's XXX is in excess of 13.5% and the Bank's ROA
is in excess of 1.10%. This bonus will be applicable for years three through
six. These options shall vest in accordance with the Bancorp's Stock Option and
Incentive Plan over a five year period.
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9. MISCELLANEOUS.
9.1 Ratification. This Agreement is subject to ratification by
the Board of Directors of the Bank and the Office of the Comptroller of the
Currency (the "OCC") and, if not ratified by the Board of Directors of the Bank
and by the OCC by June 1, 1998 shall be void and of no further force and effect
and the Bank shall have no further obligations to the Executive other than to
pay the compensation provided for under Section 3.1 of this Agreement for the
period the Executive actually works for the Bank.
9.2 Notice. Any and all notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered personally or forty-eight (48) hours after being mailed, certified or
registered mail, return receipt requested, postage prepaid, to the addresses set
forth above or to such addresses as may from time to time be designated in
writing.
9.3 Time. Time is of the essence of this Agreement with respect
to each and every provision of this Agreement in which time is a factor.
9.4 Entire Agreement. This Agreement sets forth the entire
agreement between Executive and the Bank pertaining to the subject matter
hereof, fully supersedes any and all prior agreements or understandings between
Executive and any other persons on behalf of the Bank pertaining to the subject
matter hereof and no change in modification of or addition, amendment or
supplement to this Agreement shall be valid unless set forth is writing and
signed and dated by Executive and the Bank.
9.5 Further Assurances. Executive and the Bank, without the
necessity of any further consideration, agree to execute and deliver such other
documents and take such other action as may be necessary to consummate more
effectively the purposes and subject matter of this Agreement.
9.6 Applicable Law. The existence, validity, construction and
operational effect of this Agreement, any and all of these covenants,
agreements, representations, warranties, terms and conditions and the rights and
obligations of Executive and the Bank hereunder shall be determined in
accordance with the regulations of the Comptroller provided, however, that any
provision of this Agreement which may be prohibited by law or otherwise held
invalid shall be ineffective only to the extent of such prohibition or
invalidity and shall not invalidate or otherwise render ineffective any or all
of the remaining provisions of this Agreement.
9.7 Controversy. In the event of any controversy, claim, or
dispute between Executive, Bancorp and the Bank arising out of or relating to
this Agreement, the prevailing party shall be entitled to recover as costs from
the non-prevailing party reasonable expenses, including, but not by way of
limitation, attorneys' fees and accountant's fees.
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9.8 Arbitration. Any dispute regarding any aspect of this
Agreement, including but not limited to its formation, performance or breach
("arbitrable dispute") , shall be submitted to arbitration in Xxxxxxx County,
Florida, before a single experienced employment arbitrator licensed to practice
law in Florida and selected in accordance with the Employment Dispute Resolution
Rules of the American Arbitration Association, as the exclusive forum for
resolving such claims or dispute. The arbitrator shall not have authority to
modify or change the Agreement in any respect. The prevailing party in any such
arbitration shall be awarded its costs, expenses, and actual attorneys' fees
incurred in connection with the arbitration. The Bank and Executive shall each
be responsible for payment of one-half the amount of the arbitrator's fee(s).
The arbitrator's decision and/or award will be fully enforceable and subject to
an entry of judgment by the appropriate Court of the State of Florida for the
County of Xxxxxxx. Should any part to this Agreement hereafter institute any
legal action or administrative proceeding against the other with respect to any
Claim waived by this Agreement or pursue any arbitrable dispute by any method
other than arbitration, the responding party shall recover from the initiating
party all damages, costs, expenses, and attorneys' fees incurred as a result of
such action.
9.9 Headings and Gender. The section headings used in this
Agreement are intended solely for the convenience of reference and shall not in
any way or manner amplify, limit, modify or otherwise be used in the
interpretation of any of the provisions of this Agreement and the masculine,
feminine or neuter gender and the singular or plural number shall be deemed to
include the others whenever the context so indicates or requires.
9.10 Successors. The covenants, agreements, representations,
warranties, terms and conditions contained in this Agreement shall be binding
upon and insure to the benefit of the successors and assigns of Executive and
the Bank; provided, however, that Executive may not assign any or all of his
rights or duties hereunder except upon the prior written consent of the Board in
its sole and absolute discretion.
DATED: MARCH 31 , 1998
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PELICAN NATIONAL BANK
By:/s/ XXXXXXX X. XXXXXXX
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DATED: MARCH 31 , 1998
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/s/ XXXXXXX X. XXXXXX
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XXXXXXX X. XXXXXX
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