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EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of the date below written by
and between The Banc Corporation (the "Holding Company"), a Delaware
corporation, and Xxxxx XxXxxx ("Xx. XxXxxx"), an individual resident of Panama
City Beach, Florida.
WITNESSETH:
WHEREAS, the Holding Company is the sole shareholder of Emerald Coast
Bank (the "Bank"); and
WHEREAS, the Bank shall conduct all of the business of the Holding
Company in the State of Florida; and
WHEREAS, the Holding Company and the Bank desire to secure the services
of Xx. XxXxxx pursuant to the terms of this Agreement; and
WHEREAS, Xx. XxXxxx desires to serve the Holding Company and the Bank
pursuant to the terms of this Agreement;
NOW THEREFORE, for and in consideration of the above premises and the
mutual covenants and agreements hereinafter set forth, the receipt and
sufficiency of which are hereby acknowledged and accepted, the parties hereto
agree as follows:
1. Employment. The Holding Company hereby agrees to cause the Bank to
employ Xx. XxXxxx and Xx. XxXxxx hereby accepts employment to serve as Chairman
of the Board and Chief Executive Officer of the Bank and the Holding Company
hereby employs Xx. XxXxxx as Vice Chairman of the Holding Company, all upon the
terms and conditions set forth in this Agreement.
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2. Chairman of the Board and Chief Executive Officer of the Bank.
a. Term. Xx. XxXxxx'x employment hereunder as Chairman of the
Board and Chief Executive Officer of the Bank shall begin on the date
hereof. The term of Xx. XxXxxx'x employment shall continue for a period
of three (3) years from such date (the "Term"), subject to earlier
termination pursuant to Section 6 below and subject to extension as
follows: At the end of each calendar day during the initial three-year
term or any extension of this Agreement, the Term shall automatically
be extended for an additional calendar day, unless either party gives
written notice to the other of intent not to extend this Agreement
thereafter, in which event this Agreement shall terminate on the third
anniversary following such notice.
b. Duties and Responsibilities. As Chairman of the Board and
Chief Executive Officer, Xx. XxXxxx (i) shall faithfully perform such
executive services and duties as are reasonably necessary to conduct
the business of the Bank, subject to the direction of policies
established by the Board of Directors of the Bank (the "Bank Board");
(ii) shall devote his time, attention and energies on a full-time basis
as is reasonably required in the performance of his duties hereunder,
including any duties he may hereafter become obligated to perform as an
officer or a member of the Board of Directors of the Holding Company;
provided, however, that with approval of the Bank Board, from time to
time Xx. XxXxxx may serve, or continue to serve, on the boards of
directors of, and hold any other offices or positions in, companies or
organizations, which, in such Board's judgment, will not present any
material conflict of interest with the Holding Company or any of its
subsidiaries or affiliates or divisions, or unfavorably affect the
performance of Xx. XxXxxx'x duties pursuant to this Agreement, or will
not
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violate any applicable statute or regulation; (iii) shall assume,
perform and discharge such duties and responsibilities assigned to him
by the Bank; (iv) shall not, without the prior written consent of the
Bank Board, engage in any other profit-making activities, except for
passive investments which shall consume only a nominal amount of his
time.
c. Authority. As Chairman of the Board and Chief Executive
Officer of the Bank, Xx. XxXxxx shall report and be responsible only to
the Bank Board. Subject to the direction of the Board of Directors of
the Bank, Xx. XxXxxx shall have full management discretion with regard
to the operations of the Bank, including by way of illustration and
without limitation, authority to hire, compensate and terminate all
other employees of the Bank.
d. Directorships. The Holding Company shall cause Xx. XxXxxx
to be elected to the Board of Directors of the Holding Company and the
Bank. The Holding Company shall also cause Xx. XxXxxx to be elected as
Vice Chairman of the Board of Directors of the Holding Company, with
reporting authority to the Chairman of the Board of the Holding Company
and to the Holding Company Board of Directors.
e. Compensation.
(i) Remuneration. The Bank and the Holding Company
shall pay Xx. XxXxxx an aggregate annual remuneration of not
less than Two Hundred Thirty-five Thousand Dollars
($235,000.00) per year, payable $60,000 by the Holding Company
and $175,000 by the Bank, commencing as of the effective date
of this Agreement, payable to Xx. XxXxxx in such installments
as salary payments are customarily made to executives of the
Bank. Xx. XxXxxx shall also be entitled to an annual incentive
bonus payable by the Bank of not less than the
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sum of $25,000 ("Bonus Payments") provided certain agreed upon
financial targets are met. Xx. XxXxxx'x salary shall be
subject to periodic review by the Bank Board, which review
shall be consistent with the Holding Company's policies
regarding salary increases for executives of subsidiaries
serving in positions comparable to that of Xx. XxXxxx and
shall take into account Xx. XxXxxx'x level of responsibility
and job performance. Xx. XxXxxx'x base salary shall not be
subject to any decreases.
(ii) Discretionary Compensation. Xx. XxXxxx shall be
entitled to such discretionary compensation, stock options,
and deferred compensation, if any, as may be made available
from time to time to executives of the Bank or of the Holding
Company serving in positions comparable to that of Xx. XxXxxx,
all as may be declared or authorized from time to time by the
Board of the Bank or of the Holding Company.
(iii) Payment of Club Fees, Etc. The Holding Company
shall pay Xx. XxXxxx such additional amounts as may be
necessary to reimburse him for such reasonable club initiation
fees and dues as are approved by the Bank.
(iv) Participation in Benefit Plans. Xx. XxXxxx
shall be entitled to participate in any and all health,
disability, bonus, retirement, stock option or stock purchase
plan and any other present or future employee benefit plan or
program as may be made available from time to time to
executives of subsidiaries of the Holding Company.
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f. Vacation. Xx. XxXxxx shall be entitled to three (3) weeks
of vacation with pay (or such greater amount of time as may be approved
from time to time by the Bank Board) during each calendar year.
g. Reimbursement of Expenses and Automobile. The Bank shall
pay or reimburse Xx. XxXxxx for all reasonable travel and other
expenses incurred by Xx. XxXxxx in the performance of his obligations
under this Agreement. The Bank shall provide Xx. XxXxxx an automobile
for his use.
h. Life Insurance. The Holding Company shall pay or provide
for the payment of the premiums on that certain life insurance policy
owned by Xx. XxXxxx on Xx. XxXxxx'x life which is in effect on the date
hereof and which had a face amount of ________________ ________________
($__________) as of the date of this Agreement.
3. Benefits Payable Upon Disability or Death.
a. Disability Benefits. In the event of the Disability (as
hereinafter defined) of Xx. XxXxxx during the term of this Agreement,
the Bank shall pay Xx. XxXxxx a monthly disability benefit based upon
his monthly salary at the time he became disabled until the earlier of
the date Xx. XxXxxx is no longer subject to a disability or until he
attains age sixty-five (65), and shall continue to pay or provide for
the payment of the premiums on that certain life insurance policy as
provided in Section 2(h) hereof for the period described in this
Section 3(a).
As used in this Agreement, the term "disability" shall mean
the complete inability of Xx. XxXxxx to perform his duties under this
Agreement as determined by an independent physician selected with the
approval of the Bank and Xx. XxXxxx, unless otherwise defined in any
disability insurance policy maintained on Xx. XxXxxx.
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b. Services During Disability. During the period during which
Xx. XxXxxx is entitled to receive payments under Section 3(a), Xx.
XxXxxx shall, to the extent that he is physically and mentally able to
do so, furnish information and assistance to the Bank, and, in
addition, upon reasonable request in writing on behalf of the Bank
Board, or an executive officer designated by such Board, from time to
time, make himself available to the Bank to undertake reasonable
assignments consistent with the dignity, importance, and scope of his
prior position and his physical and mental health. During such period
of service, Xx. XxXxxx shall be responsible and report to, and be
subject to the supervision of, the Bank Board or an executive officer
designated by the Bank Board, as to the method and manner in which he
shall perform such assignments, subject always to the provisions of
this Section 3(b), and shall keep such Board, or such executive
officer, appropriately informed of his progress in each such
assignment.
4. Restriction on Competition and Nonsolicitation of Employees
a. Restriction on Competition. Xx. XxXxxx agrees that during
his employment as Chairman of the Board and Chief Executive Officer, he
shall not, without the prior written consent of the Bank Board, either
directly or indirectly, for himself, as a consultant to, or as a
management, supervisory or executive employee of any bank or bank
holding company, perform services or furnish advice related to the
business of banking to any unaffiliated third party.
b. Nonsolicitation of Employees. Xx. XxXxxx agrees that during
his employment as Chairman of the Board and Chief Executive Officer, he
shall not, either directly or indirectly, alone or in any capacity,
attempt to solicit or induce any person
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employed by the Holding Company or the Bank to leave such employment
for the benefit of any unaffiliated third party.
5. Restriction on Competition and Nonsolicitation of Employees
after Termination of Employment.
a. Upon termination of Xx. XxXxxx'x employment hereunder for
Cause (as defined below) during the term of this Agreement, or upon Xx.
XxXxxx'x resignation, Xx. XxXxxx shall not directly or indirectly,
within any county in which the Holding Company is doing business at the
time of termination or resignation, become employed or associated as an
officer, director, consultant or in any other capacity, in any business
which is in competition with the Bank, nor will Xx. XxXxxx, directly or
indirectly, render any services to or solicit the business of any
person or entity to which the Bank rendered service during his
employment under this Agreement, nor will Xx. XxXxxx, directly or
indirectly, employ or seek to employ any person who is employed by the
Holding Company or any of its subsidiaries (including the Bank), nor
shall Xx. XxXxxx induce any such person to leave employment with the
Holding Company or the Bank. This covenant shall be binding upon Xx.
XxXxxx for a period of one (1) year from the date of the termination of
his employment for Cause, or the date of Xx. XxXxxx'x resignation,
whichever is the case. For the purpose of this Agreement, the following
businesses shall be considered as being businesses in competition with
the Holding Company:
(i) any state or federally chartered bank or savings and
loan association (whether stock or mutual);
(ii) any industrial bank or savings bank;
(iii) any credit union;
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(iv) any bank holding company; or
(v) any branch or subsidiary of any of the foregoing.
b. Xx. XxXxxx, the Bank and the Holding Company have entered
into this Agreement in good faith in connection with the acquisition of
the Bank by the Holding Company, believing the same to be valid and
enforceable. Xx. XxXxxx acknowledges (i) that the rights and privileges
granted to the Bank and the Holding Company in this Agreement are of a
special and unique character which gives them a peculiar value, the
loss of which may not be reasonably or adequately compensated for by
damages in an action at law, and (ii) that a breach thereof by Xx.
XxXxxx will cause the Bank and the Holding Company great and
irreparable injury and damage.
Accordingly, Xx. XxXxxx hereby agrees that the Bank and the
Holding Company shall be entitled to remedies of injunction, specific
performance and other equitable relief to prevent or cure a breach of
the agreements contained in this Agreement. This provision shall not be
construed as a waiver of any other rights or remedies the Bank or the
Holding Company may have for damages or otherwise.
c. In the event any provision or portion of this Agreement is
deemed to be invalid or unenforceable, in whole or in part, for any
reason, the remainder thereof shall not be invalidated or rendered
unenforceable or otherwise adversely affected. Without limiting the
generality of the foregoing, if the provisions of the preceding
paragraphs of this Section 5 shall be deemed to create a restriction
which is unreasonable as to duration or geographical area, any or all,
the parties agree that the provisions of this Agreement shall be
enforceable for such duration and in such geographical area as any
court of competent jurisdiction may determine to be reasonable.
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6. Termination of Employment as Chairman of the Board and Chief
Executive Officer.
a. Resignation.
(i) Xx. XxXxxx may resign his employment hereunder as
Chairman of the Board and Chief Executive Officer without
"Good Reason" at any time during the term of this Agreement by
giving written notice to the Bank Board and the Chairman of
the Holding Company Board, in which event neither the Bank nor
the Holding Company shall have any further obligation to Xx.
XxXxxx.
(ii) Xx. XxXxxx may resign his employment hereunder
as Chairman of the Board and Chief Executive Officer with
"Good Reason" at any time during the term of this Agreement.
As used herein, "Good Reason" shall mean a material breach of
this Agreement by the Bank or the Holding Company (including
any material diminution in compensation or responsibilities),
in which event the Bank shall be required to continue to meet
its obligation to Xx. XxXxxx under Section 2 for a period of
three (3) years from the effective date of the termination.
b. Termination.
(i) The Holding Company may terminate, without cause,
Xx. XxXxxx'x employment hereunder as Chairman of the Board and
Chief Executive Officer at any time during the term of this
Agreement by giving written notice to Xx. XxXxxx, in which
event the Holding Company and the Bank shall be required to
continue to meet its obligations to Xx. XxXxxx under Section 2
hereof for a period of three (3) years following the delivery
of the notice.
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(ii) The Holding Company may terminate Xx. XxXxxx'x
employment hereunder as Chairman of the Board and Chief
Executive Officer with "Cause" at any time during this
Agreement. As used herein, the termination of Xx. XxXxxx'x
employment for "Cause" shall include termination because of
Xx. XxXxxx'x personal dishonesty; act(s) of moral turpitude;
gross negligence; willful misconduct with respect to his
duties hereunder; willful violation of any law, rule, or
regulation which, in the reasonable opinion of the Board of
Directors of the Bank, would materially impair Xx. XxXxxx'x
ability to perform his duties under this Agreement or would
have a material adverse effect on the business of the Holding
Company or the Bank; material breach of any provision of this
Agreement; or Xx. XxXxxx'x removal and permanent prohibition
from participating in the conduct of the affairs of the Bank
by an order issued by any governmental agency having
jurisdiction over the Bank.
c. Further Obligations. Upon resignation by Xx. XxXxxx
pursuant to Section 6(a)(i), and upon termination of Xx. XxXxxx for
Cause pursuant to Section 6(b)(ii) of this Agreement, the Bank and
Holding Company shall have no further obligation to Xx. XxXxxx or his
personal representative, except for (i) compensation accrued hereunder
and unpaid at the effective date of such termination, (ii) any accrued
deferred compensation benefits to which Xx. XxXxxx would have been
entitled upon such termination if this Agreement had never existed.
Upon the resignation or termination of by Xx. XxXxxx from his position
as Chairman of the Board and Chief Executive Officer of the Bank,
pursuant to this Section 6, Xx. Xxxxxx'x service as Vice Chairman of
the Holding Company shall also cease.
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7. Change in Control.
a. Upon occurrence of a Change in Control, the Bank shall pay
to Xx. XxXxxx as xxxxxxxxx pay and liquidated damages an amount equal
to Average Monthly Compensation (as hereinafter defined) for a period
of thirty-six (36) consecutive months, and shall continue to provide to
Xx. XxXxxx during such period the benefits specified in Section 2, in
addition to any benefits or continuation coverage mandated by law. Such
amounts shall be paid at the same frequency as Xx. XxXxxx'x then base
salary is paid. As used herein, the term "Average Monthly Compensation"
shall mean the quotient determined by dividing by twelve (12) the
highest aggregate annual compensation (i.e., base salary and bonus)
received by the Executive during the preceding three (3) consecutive
twelve-month periods during which the Executive has been employed by
the Bank.
Notwithstanding any other provisions to this Agreement, if the
aggregate of the payments provided for in this Agreement and the other
payments and benefits which Xx. XxXxxx has the right to receive from
the Bank (the "Total Payments") would constitute a "parachute payment,"
as defined in Section 280G(b)(2) of the Internal Revenue Code, Xx.
XxXxxx shall receive the Total Payments unless the (a) after-tax amount
that would be retained by Xx. XxXxxx (after taking into account all
federal, state and local income taxes payable by Xx. XxXxxx and the
amount of any excise taxes payable by Xx. XxXxxx under Code Section
4999 that would be payable by Xx. XxXxxx (the "Excise Taxes") ) if he
were to receive the Total Payments has a lesser aggregate value than
(b) the after-tax amount that would be retained by Xx. XxXxxx (after
taking into account all federal, state and local income taxes payable
by Xx. XxXxxx) if he were
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to receive the Total Payments reduced to the largest amount as would
result in no portion of the Total Payments being subject to any Excise
Taxes (the "Reduced Payments"), in which case Xx. XxXxxx shall be
entitled only to the Reduced Payments. If Xx. XxXxxx is to receive the
Reduced Payments, he shall be entitled to determine which of the Total
Payments, and the relative portions of each, are to be reduced.
b. As used herein, a "Change in Control" shall mean any
one of the following events:
1. the acquisition by any person or persons acting in
concert of the then outstanding voting securities of the
Holding Company or the Bank, if, after the transaction, the
acquiring person (or persons) owns, controls or holds with
power to vote twenty-five percent (25%) or more of any class
of voting securities of the Holding Company or the Bank or
such other transaction as may be described under 12 C.F.R.
Section 225.41(b)(1) or any successor thereto;
2. within any twelve (12) month period (beginning on
or after the Effective Date), the persons who were directors
of the Holding Company or the Bank immediately before the
beginning of such twelve (12) month period (the "Incumbent
Directors") shall cease to constitute at least a majority of
such Board of Directors; provided, that any director who was
not a Director as of the Effective Date shall be deemed to be
an Incumbent Director if that Director was elected to such
Board of Directors by, or on the recommendation of, or with
the approval of, at least two-thirds (2/3) of the Directors
who then qualified as Incumbent Directors; and provided
further, that no Director whose initial assumption of office
is in connection with an actual or threatened election contest
(as such terms
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are used in Rule 14a-11 of Regulation 14A promulgated under
the Securities Exchange Act of 1934) relating to the election
of Directors shall be deemed to be an Incumbent Director;
3. the approval by the stockholders of the Holding
Company or the Bank of a reorganization, merger or
consolidation, with respect to which persons who were the
stockholders of the Holding Company or the Bank immediately
prior to such reorganization, merger or consolidation do not,
immediately thereafter, own more than fifty percent (50%) of
the combined voting power entitled to vote in the election of
Directors of the reorganized, merged or consolidated company's
then outstanding voting securities; or
4. the sale, transfer or assignment of all or
substantially all of the assets of the Holding Company or the
Bank to any third party.
"Change in Control" shall not include The Bank Corporation's
or the Bank's acquisition of Commerce Bank of Alabama, First Citizens
Bancorp, City National Corporation or Commercial Bancshares of Roanoke,
Inc.
8. Covenants.
The covenants of Xx. XxXxxx set forth in Sections 4 and 5 above are of
the essence of this Agreement. Each of such covenants shall be deemed and shall
be construed as a separate and independent covenant, and should any party or
provision of any of such covenants be declared invalid by a court of competent
jurisdiction, such invalidity shall in no way render invalid or unenforceable
any other part or provision thereof or any separate covenant of Xx. XxXxxx not
declared invalid. The covenants in Sections 4 and 5 above shall terminate upon a
Change in Control.
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9. Notices.
Any notice required or permitted to be given to Xx. XxXxxx pursuant to
this Agreement shall be sufficiently given if sent by first-class mail to Xx.
XxXxxx'x home address, 0000 Xxx Xxxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxxx 00000, or if
hand-delivered to Xx. XxXxxx. Any notice required or permitted to be given to
the Holding Company pursuant to this Agreement shall be sufficiently given if
sent to the Bank by first-class mail to its main office or if hand-delivered to
the President, with a copy to the Holding Company, Attention: Chairman of the
Board.
10. Miscellaneous.
a. Assignment. The assignment by Xx. XxXxxx of this Agreement
or any interest herein, or of any money due or to become due by reason
of the terms hereof, without the prior written consent of the Holding
Company or the Bank, shall be void. The rights and obligations of the
Holding Company and the Bank hereunder shall inure to the benefit of
and shall be binding upon the successors and assigns of the Holding
Company and the Bank. The Bank is not a party to this Agreement;
however, the Holding Company shall use its best efforts to cause the
Bank to fulfill its obligations hereunder. If the Bank shall fail to
perform any obligation hereunder, the Holding Company shall be
responsible for the performance or payment of any such obligation of
the Bank.
b. Entire Agreement. This Agreement embodies the entire
agreement of the parties hereto relating to the subject matter hereof.
No amendment or modification of this Agreement shall be valid or
binding upon the Holding Company or the Bank unless made in writing and
signed by a duly authorized officer of the Holding Company and the
Bank,
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nor shall any amendment or modification of this Agreement be valid or
binding upon Xx. XxXxxx unless made in writing and signed by him.
c. Waiver. The waiver by one party of a breach of any
provision(s) of this Agreement by the other party shall not operate or
be construed as a waiver of any subsequent breach of the same or any
other provision by the other party.
d. Application of Florida Law. This Agreement shall be
construed in accordance with the laws of the State of Florida.
e. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
have affixed their seals hereto this 12th day of February, 1999.
THE BANC CORPORATION
By: /s/ Xxxxx X. Xxxxxx
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Title: Chairman and Chief Executive Officer
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Attest:
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[CORPORATE SEAL]
/s/ Xxxxx XxXxxx (Seal)
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XXXXX XxXXXX
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