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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of the 1st day of January, 1998, by and among
SARASOTA BANCORPORATION, a Florida corporation (the "Company"), SARASOTA BANK,
a state bank chartered under the laws of Florida and a wholly-owned subsidiary
of the Company (the "Bank"), and Xxxxxxxxx X. Xxxxxxxx (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company owns 100% of the outstanding stock of the Bank;
and
WHEREAS, the Board of Directors of the Company and the Bank,
recognizing the experience and knowledge of Executive in the banking industry,
desire to retain the valuable services and business counsel of Executive, it
being in the best interest of the Company and the Bank to arrange terms of
employment for Executive so as to reasonably induce Executive to remain in her
capacities with the Company and the Bank for the term hereof; and
WHEREAS, Executive is willing to provide services to the Company and
the Bank 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. The Company and the Bank employ the Executive
and the 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, initially, the five year period commencing on January 1,
1998 and ending on December 31, 2002. At December 31, 2002 and December 31st of
each succeeding calendar year in which this Agreement is in effect, the term of
employment under this Agreement may be extended, by mutual agreement of the
parties hereto, to December 31st of the next calendar year thereafter.
3. COMPENSATION.
Base Salary. For all services rendered by the Executive, the
Executive shall be paid a minimum annual base salary of $120,000, payable in
equal installments during the term of this Agreement in accordance with the
Bank's normal pay practices, but not less frequently than twice per month.
Salary payments shall be subject to withholding and other applicable taxes. In
January of each year during the term of employment of Executive, the Board of
Directors of the Company shall consider (i) an adjustment to Executive's
minimum annual base salary, based upon such factors as the Board of Directors
in its sole discretion deems appropriate given Executive's performance of her
duties hereunder during the immediately preceding calendar year, and (ii) an
annual cost of living increase commensurate with those given other key
executive officers of the Company. The increase in Executive's minimum annual
base salary, if any, pursuant to this Section 3 shall be effective as of the
1st day of January of the
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year in which such increase is approved by the Board of Directors of the
Company. In the event that Executive's minimum annual base salary is increased
pursuant to such review by the Board of Directors of the Company, then such
salary, as increased, becomes the minimum annual base salary for the next
successive year for the purposes of this Agreement. The term "Base Salary" as
used in this Agreement shall mean the minimum annual base salary of Executive
as last established by the Board of Directors of the Company.
Bonus. In addition to Executive's Base Salary, beginning
January 1, 1998, for each twelve (12) month period beginning on January 1 and
ending on December 31 throughout the term of this Agreement, including any
extension thereof, Executive shall be entitled to a bonus of 5% of the Bank's
net operating income for such twelve (12) month period, not to exceed 25% of
Executive's Base Salary, if (i) the Bank meets or exceeds the return on assets
projected in the annual budget approved by the Board of Directors of the Bank
for such twelve (12) month period and (ii) the CAMELS rating of the Bank under
the Uniform Financial Institution Rating System in its last safety and
soundness examination by either the Florida Department of Banking and Finance
("DBF") or the Federal Deposit Insurance Corporation ("FDIC") is at least a
"2." For the purposes of this Agreement, "return on assets" shall mean the net
operating income of the Bank after taxes and bonuses, expressed as a percentage
of average assets. "Net operating income" of the Bank shall mean the net income
of the Bank determined in accordance with generally accepted accounting
principles excluding extraordinary expenses and nonrecurring items which have
been specifically approved by the Board of Directors of the Bank. "Average
assets" of the Bank shall mean the cumulative total of average daily balances
divided by the number of days in the year.
4. TITLE AND DUTIES. Executive shall serve as President, Chief
Executive Officer and Chairman of the Board of Directors and a Director of the
Company and the Bank. Executive shall run the day-to-day activities of the
Company and the Bank, within the framework of the approved annual budgets, with
a sound system of internal controls, and in compliance with the policies of the
Board of Directors of the Company and the Bank and all applicable laws and
regulations.
5. EXTENT OF SERVICES. Executive shall devote her entire time,
attention, and energies to the business of the Company and the Bank, 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 the Company and the Bank. However, Executive may invest her
assets in such form or manner as will not require her services in the operation
of the affairs of the companies in which such investments are made.
6. WORKING FACILITIES. Executive shall have such assistants,
perquisites, facilities and services as are suitable to her position and
necessary for the performance of her duties, including membership at
appropriate social and dining clubs; provided, however, that such club
memberships shall be subject to the prior approval of the Board of Directors of
the Bank.
7. VACATIONS. Executive shall be entitled each year to a
vacation of four (4) weeks per year in accordance with the policy established
by the Company's and the Bank's Board of Directors, during which time
Executive's compensation shall be paid in full. In addition, Executive shall be
entitled to
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such other leaves of absence, with or without pay, upon such terms and
conditions as the Board of Directors of the Bank, in its discretion, may
provide.
8. ADDITIONAL COMPENSATION. During the term of this Agreement,
the Company and the Bank shall furnish to Executive:
(a) Participation in all group employee benefit programs
offered to all employees of the Bank, such as group health and hospital
insurance, etc. including, but not limited to, a term life insurance policy in
an amount equal to two times Executive's Base Salary and a disability insurance
policy containing coverage terms no less favorable than those contained in the
disability policy covering Executive currently maintained by the Bank.
(b) An automobile allowance of $600 per month. Executive
shall also be entitled to receive reimbursement from the Company for the
reasonable costs of maintenance and repair of an automobile. In addition, the
Company may, in its discretion, pay the capital cost reduction or similar
acquisition or prepayment fee associated with the lease of an automobile if (i)
in the judgment of the Company, such payment is justified by the corresponding
reduction in the monthly lease payment of such automobile and (ii) such
automobile is registered in the name of the Company.
(c) Reimbursement of reasonable and normal deductible
business expenses, including, but not limited to, travel to and attendance at
annual and periodic meetings of trade associations, and other travel and
entertainment expenses. Said expenses shall be sufficiently documented to
comply with the policies of the Company and the Bank, and standards for
deductibility of business expenses established, from time to time, by the
Internal Revenue Service.
9. STOCK OPTIONS. In addition to the compensation set forth in
Sections 3 and 8 of this Agreement, as incentive for the successful management
of the Company and the Bank by Executive, the Company hereby (i) extends the
exercise period of the options to purchase 23,575 shares of the common stock of
the Company, $.01 par value ("Company Common Stock"), granted to Executive
pursuant to that certain employment agreement by and between the Company and
Executive dated April 29, 1991, until December 31, 2002, at an exercise price
of $10.00 per share, and (ii) grants to Executive on December 31, 1998 and
December 31st of each of the succeeding three years, provided this Agreement is
then in effect and provided Executive earns a bonus pursuant to Section 3 of
this Agreement for the preceding twelve month period, incentive stock options
("Incentive Options") to purchase 3,285 shares of Company Common Stock
(totaling Incentive Options to purchase an aggregate of 13,140 shares of
Company Common Stock if all Incentive Options contemplated to be granted herein
are granted to Executive), pursuant to the terms of the Company's 1998 Stock
Option Plan; provided, however, in the event of a change in control of the
Company as defined in Section 10 of this Agreement, all of the Incentive
Options contemplated to be granted herein shall be automatically granted to
Executive and shall become immediately exercisable.
10. CHANGE IN CONTROL OF THE COMPANY. (a) In the event of a
"change in control" of the Company, as defined herein, Executive shall be
entitled, within thirty (30) days from the date of closing of the transaction
effecting such change in control and at her election, to give written notice to
the Company and the Bank of termination of this Agreement and to receive a cash
payment equal to two hundred
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ninety-nine percent (299%) times Executive's minimum annual base salary then in
effect as set forth in Section 3 herein. The cash payment will be paid to
Executive in one lump sum by delivery to Executive of a cashier's check or
other official Bank check not later than ten (10) days after the date of notice
of termination by the Executive delivered pursuant to this Section 10, or ten
(10) days after the date of closing of the transaction effecting the change of
control of the Company, whichever is later.
(b) The payments provided for by Section 10(a) shall be
payable by the Company and/or the Bank only to the extent that (i) such
payments are deductible by the Company and are not rendered non-deductible by
Section 280G of the Internal Revenue Code of 1986, as amended, and (ii) such
payments would not cause the Bank to fail to meet any applicable regulatory
capital requirements.
(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 CAUSE. This Agreement may be
terminated by the Board of Directors of the Company and the Bank 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 Bank of written notice from
either the DFB or FDIC that the DBF or FDIC
has criticized Executive's performance, and
has either (a) rated 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 the Bank during
the term of this Agreement, or at any time
while she was employed by the Company and
the Bank prior to the term of this
Agreement, if not disclosed to the Company
and the Bank prior to the commencement of
the term of this Agreement; or
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(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 Company or the Bank discharges Executive
alleging "cause" under this Section 11(a) 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(b)
hereof; provided, however, that in lieu of the severance payments to Executive
provided for in Section 11(b) of this Agreement, Executive shall be entitled,
as liquidated damages in lieu of all other claims, to severance payments in an
amount equal to one-twelfth (1/12) of Executive's minimum annual base salary
then in effect multiplied by the number of full months Executive has been
employed with the Company and the Bank, beginning from September 15, 1992, the
date the Bank opened for business. In the event that the Company or the Bank
discharges Executive alleging "cause" under this Section 11(a), 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 Company or the Bank to enforcement of the non-competition
and non-solicitation covenants contained in Section 13 hereof.
(b) WITHOUT CAUSE. The Company or the Bank (subject to
the approval of the Board of Directors of the Company) may, upon thirty (30)
days' written notice to Executive, terminate this Agreement without cause at
any time during the term of this Agreement upon the condition that Executive
shall be entitled, as liquidated damages in lieu of all other claims, to
severance payments, to be made in equal monthly installments the amount of
which shall be calculated by dividing the severance payment amount as indicated
below by the number of full months remaining of the term of this Agreement and
rounding such quotient to the nearest whole dollar, as follows: in the event
that this Agreement is terminated by the Company during the period of time from
January 1, 1998 to December 31, 1998 Executive shall be entitled to the payment
of $750,000. In the event that this Agreement is terminated by the Company
during the period from January 1, 1999 to December 31, 1999 Executive shall be
entitled to the payment of $500,000. In the event that this Agreement is
terminated by the Company during the period of January 1, 2000 to December 31,
2000 Executive shall be entitled to the payment of $300,000. In the event that
this Agreement is terminated by the Company during the period from January 1,
2001 until December 31, 2001 Executive shall be entitled to the payment of
$150,000. In the event that this Agreement is terminated by the Company from
the of January 1, 2002 to December 31, 2002 Executive shall be entitled to the
payment of $50,000.
The termination of employment of Executive "without cause" shall not
entitle the Company or the Bank to enforcement of the non-competition and
non-solicitation covenants contained in Section 13 hereof.
(c) NEGATIVE POST-TERMINATION STATEMENTS. In the event
that Executive terminates her employment under this Agreement prior to the
expiration of the term of this Agreement or if Executive's employment under
this Agreement is terminated by the Company or the Bank for reasons other than
those set forth in Section 11(a)(ii), (iii) or (iv), neither the Company, the
Bank nor Executive shall make any statement, whether written, oral or
otherwise, concerning Executive, the Company or the Bank which may adversely
affect the business or reputation of the Company or the Bank or which may have
a negative impact on the stockholders thereof.
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12. DEATH OR DISABILITY. In addition to the provisions for
termination of this Agreement contained in Section 10 and 11 hereof, this
Agreement shall also be terminated by the earlier to occur of either of the
following:
(a) The death of Executive; or
(b) The complete disability of Executive. "Complete
disability" as used herein shall mean the inability of Executive, due to
illness, accident, or any other physical or mental incapacity, to perform the
services provided for hereunder for an aggregate of ninety (90) days within any
period of 120 consecutive days during the term hereof.
In the event of the death or complete disability of Executive, the
Company or the Bank shall pay to Executive the compensation provided in Section
3 hereof to the effective date of termination of this Agreement, and none of
the parties hereto shall thereafter have any further obligation hereunder
except as otherwise specifically provided herein.
13. NON-COMPETITION AND NON-SOLICITATION. (a) Executive
acknowledges that she has performed services or will perform services hereunder
which directly affect the Company's and the Bank's business presently conducted
within the city and county limits of Sarasota, Sarasota County, Florida.
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 prior to the expiration of the term of this
Agreement or as a result of a change in control of the Company, Executive
agrees with the Company and the Bank that through the actual date of
termination of the Agreement, and for a period of one (1) year after such
termination date:
(i) Executive shall not, without the prior
written consent of the Company and the
Bank, within any county or city in which
any subsidiary bank of the Company has an
office, either directly or indirectly,
perform banking services in the capacity of
an executive officer of any bank, bank
holding company or other financial
institution; provided, however, that
Executive shall not be restricted from
performing non-operating activities
preparatory to the formation of a de novo
bank such as site selection, the obtaining
of regulatory approvals and related
organizational activities; and
(ii) Executive shall not, without the prior
written consent of the Company and the Bank
(1) furnish anyone with any list or lists
of customers of the Company or the Bank or
utilize such list or information herself;
(2) furnish, use or divulge to anyone any
trade secrets or proprietary, confidential
information acquired by her from the
Company or the Bank related to the
Company's or the Bank's methods of doing
business; (3) contact directly or
indirectly any customer of the Company or
the Bank in regard to offering or providing
banking services or related services;
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(4) hire for any other employer (including
herself) any employee of the Company or the
Bank under circumstances where Executive
directly or indirectly causes such employee
to leave the employment of the Company or
the Bank; or (5) undertake a business
opportunity that came to the attention of
Executive through her employment with the
Company or the Bank which Executive had not
previously offered in writing to the
Company or the Bank and which the Company
or the Bank had rejected in writing.
(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 the Company and the
Bank to enter into this Agreement. Each of the aforesaid covenants may be
availed of or relied upon by the Company and the Bank 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 the Company and the Bank 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 the Company and the Bank 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 her
residence in the case of Executive, or to its principal office in the case of
the Company and the Bank.
15. WAIVER OF BREACH. The waiver by the Company and the Bank 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 the Company and
the Bank.
16. ASSIGNMENT. Executive acknowledges that the services to be
rendered by her are unique and personal. Accordingly, Executive may not assign
any of her rights or delegate any of her 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
the Company and the Bank.
17. GOVERNING LAW. This Agreement shall be governed and construed
in accordance with the laws of the State of Florida.
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18. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the unenforceability of any provision or any portion thereof
shall not affect the validity of the remainder of any such provision or the
other provisions of this Agreement.
19. 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
"COMPANY" "BANK"
SARASOTA BANCORPORATION SARASOTA BANK
By: By:
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Attest: Attest:
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[CORPORATE SEAL] [BANK SEAL]
"EXECUTIVE"
By:
-------------------------- (L.S.)
Xxxxxxxxx X. Xxxxxxxx
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