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EXHIBIT 10.1
SOUTHEAST COMMERCE HOLDING COMPANY
000 XXXXXXXX XXXXXXX, XXXXX 000
XXXXXXX, XXXXXXX 00000
Xxxxx X. Xxxxxxxx, III
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Dear Xxx:
We are pleased to propose this LETTER OF AGREEMENT (this "Agreement")
dated as of November 18, 1997, to be entered into between Southeast Commerce
Holding Company, a Georgia corporation (the "Employer" or the "Company") which
is the proposed thrift holding company for Commerce Bank (Proposed), a proposed
thrift (the "Thrift"), and Xxxxx X. Xxxxxxxx, III, an individual resident of
Georgia (the "Executive").
The Employer is in the process of organizing the Thrift, and the
Executive has agreed to serve as President and Chief Executive Officer of the
Thrift. Upon organization of the Thrift, the Employer and the Executive
contemplate that this Agreement will be assigned by the Employer to the Thrift
and that the Thrift will assume the duties of the Company hereunder (except
pursuant to Section 3). Following such assignment, the term "Employer" as used
herein from time to time shall refer to the Thrift.
The Employer recognizes that the Executive's contribution to the growth
and success of the Thrift during its organization and initial years of
operations will be a significant factor in the success of the Thrift. The
Employer desires to provide for the employment of the Executive in a manner
which will reinforce and encourage the dedication of the Executive to the Thrift
and promote the best interests of the Thrift and its shareholders. The Executive
is willing to serve the Employer (and, after assignment of this Agreement, the
Thrift) on the terms and conditions herein provided. Certain terms used in this
Agreement are defined in Section 14 hereof.
In consideration of the foregoing, the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Employment. The Employer shall employ the Executive, and the
Executive shall serve the Employer, as President and Chief Executive Officer of
the Thrift upon the terms and conditions set forth herein. The Executive shall
have such authority and responsibilities consistent with his position as are set
forth in the Company's or the Thrift's Bylaws or assigned by the Company's or
the Thrift's Board of Directors (the "Board") from time to time. The Executive
shall devote his full business time, attention, skill and efforts to the
performance of his duties hereunder, except during periods of illness or periods
of vacation and leaves of absence consistent with Thrift policy. The Executive
may devote reasonable periods to service as a director or advisor to other
organizations, to charitable and community activities, and to managing his
personal investments, provided that such activities do not materially interfere
with the performance of his duties hereunder and are not in conflict or
competitive with, or adverse to, the interests of the Company or the Thrift.
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2. Term. Unless earlier terminated as provided herein, the Executive's
employment under this Agreement shall commence on the date hereof and be for a
term (the "Term") of three years, with an annual review of Executive's
performance and written approval by the Board for renewal, which may be extended
for additional time periods by mutual agreement of the Executive and the
Employer.
3. Compensation and Benefits.
(a) The Employer shall pay the Executive a salary at a rate of not less
than $110,000 per annum in accordance with the salary payment practices of the
Employer. The Executive shall also receive a $15,000 cash bonus on the opening
date of the Thrift.
(b) The Executive shall participate in any retirement, welfare,
deferred compensation, life and health insurance, and other benefit plans or
programs of the Employer now or hereafter applicable to the Executive or
applicable generally to employees of the Employer.
(c) On the date of the closing of the stock offering for the initial
capitalization of the Thrift, or as soon thereafter as an appropriate stock
option plan is adopted by the Board, the Company shall grant to the Executive an
option to purchase 10,000 shares of Common Stock. The option will be represented
by a separate stock option agreement which will provide that the option will
vest over a three-year period (4,000 shares on the first anniversary of the
opening date of the Thrift and 3,000 shares on the second and third anniversary,
so long as the Executive is still employed by the Employer on each anniversary).
(c) However, the option agreement will also provide that if the Executive's
employment is terminated for any reason other than for Cause, then the options
will vest in full immediately upon such termination.
(d) Beginning on the date of this Agreement, the Company shall provide
the Executive with a monthly automobile allowance not to exceed $600 per month.
In addition, the Employer shall pay the dues pertaining to the Executive's
membership in an area country club in an amount to be agreed upon by the
parties.
(e) Beginning on the date of this Agreement, the Employer shall
reimburse the Executive for reasonable travel and other expenses related to the
Executive's duties which are incurred and accounted for in accordance with the
normal practices of the Employer.
4. Termination.
(a) Notwithstanding the Term of this Agreement, the Employer has the
right to terminate this Agreement at any time in accordance with this Section 4.
(b) If the Employer terminates the Executive's employment under this
Agreement prior to the end of the Term for any reason other than Cause, the
Employer shall pay to the Executive severance compensation in an amount equal to
100% of his then current monthly base salary each month for twelve months from
the date of termination, plus any bonus earned or accrued through the date of
termination. The Employer may terminate this Agreement at any time, but any
termination by the Employer other than termination for Cause shall not prejudice
the Executive's right to compensation or other benefits under this Agreement.
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(c) If the Executive's employment is terminated because of the
Executive's death, the Executive's estate shall receive any sums due him as base
salary and/or reimbursement of expenses through the end of the month during
which death occurred, plus any bonus earned or accrued under the through the
date of death.
(d) If the Executive's employment is terminated for Cause, or if the
Executive resigns, the Executive shall receive any sums due him as base salary
and/or reimbursement of expenses through the date of such termination. The
Executive shall have no right to receive compensation or other benefits for any
period after termination for Cause. For purposes of this Agreement, termination
for Cause shall include termination because of the Executive's personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties, willful violation
of any law, rule, or regulation (other than traffic violations or similar
offenses) or final cease-and-desist order, or material breach of any provision
of this Agreement.
(e) If the Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Employer's affairs by a notice served under
section 8(e)(3) or (g)(1) of Federal Deposit Insurance Act (12 U.S.C. 1818
(e)(3) and (g)(1)), the Employer'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 Employer may in its discretion (i)
pay the Executive all or part of the compensation withheld while the obligations
under this Agreement were suspended and (ii) reinstate (in whole or in part) any
of such obligations which were suspended.
(f) If the Executive is removed and/or permanently prohibited from
participating in the conduct of the Employer's affairs by an order issued under
section 8 (e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818
(e)(4) or (g)(1)), all obligations of the Executive under this Agreement shall
terminate as of the effective date of the order, but any vested rights of the
parties hereto shall not be affected.
(g) If the Employer is in default (as defined in section 3(x)(1) of the
Federal Deposit Insurance Act), all obligations under this Agreement shall
terminate as of the date of default, but this paragraph (4)(g) shall not affect
any vested rights of the parties hereto.
(h) All obligations under this Agreement shall be terminated, except to
the extent determined that continuation of this Agreement is necessary of the
continued operation of the Employer, in the following cases:
(i) By the Director of the Office of Thrift Supervision (the
"Director") or his or her designee, at the time the Federal Deposit
Insurance Corporation enters into an agreement to provide assistance to
or on behalf of the Employer under the authority contained in 13(c) of
the Federal Deposit Insurance Act; or
(ii) By the Director or his or her designee, at the time the
Director or his or her designee approves a supervisory merger to
resolve problems related to operation of the Employer or when the
Employer is determined by the Director to be in an unsafe or unsound
condition.
(i) With the exceptions of the provisions of this Section 4, and the
express terms of any benefit plan under which the Executive is a participant, it
is agreed that, upon termination of the
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Executive's employment, the Employer shall have no obligation to the Executive
for, and the Executive waives and relinquishes, any further compensation or
benefits (exclusive of COBRA benefits). At the time of termination of
employment, the Employer and the Executive shall enter into a mutually
satisfactory form of release acknowledging such remaining obligations and
discharging both parties, as well as the Employer's officers, directors and
employees with respect to their actions for or on behalf of the Employer, from
any other claims or obligations arising out of or in connection with the
Executive's employment by the Employer, including the circumstances of such
termination.
(j) In the event that the Executive's employment is terminated for any
reason, the Executive shall (and does hereby) tender his resignation as a
director of the Employer and effective as of the date of termination.
(k) Any payments made to the Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with 12 U.S.C.
Section 1828(k) and any regulations promulgated thereunder.
5. Protection of Trade Secrets. The Executive agrees to maintain in
strict confidence and, except as necessary to perform his duties for the
Employer, the Executive agrees not to use or disclose any Trade Secrets of the
Employer during or after his employment. As provided by Georgia statutes, "Trade
Secret" means information, including a formula, pattern, compilation, program,
device, method, technique, process, drawing, cost data or customer list, that:
(i) derives economic value, actual or potential, from not being generally known
to, and not being readily ascertainable by proper means by, other persons who
can obtain economic value from its disclosure or use; and (ii) is the subject of
efforts that are reasonable under the circumstances to maintain its secrecy.
6. Protection of Other Confidential Information. In addition, the
Executive agrees to maintain in strict confidence and, except as necessary to
perform his duties for the Employer, not to use or disclose any Confidential
Business Information of the Employer during his employment and for a period of
24 months following termination of the Executive's employment. "Confidential
Business Information" shall mean any internal, non-public information (other
than Trade Secrets already addressed above) concerning the Employer's financial
position and results of operations (including revenues, assets, net income,
etc.); annual and long-range business plans; product or service plans; marketing
plans and methods; training, educational and administrative manuals; customer
and supplier information and purchase histories; and employee lists. The
provisions of Sections 5 and 6 above shall also apply to protect Trade Secrets
and Confidential Business Information of third parties provided to the Employer
under an obligation of secrecy.
7. Return of Materials. The Executive shall surrender to the Employer,
promptly upon its request and in any event upon termination of the Executive's
employment, all media, documents, notebooks, computer programs, handbooks, data
files, models, samples, price lists, drawings, customer lists, prospect data, or
other material of any nature whatsoever (in tangible or electronic form) in the
Executive's possession or control, including all copies thereof, relating to the
Employer, its business, or its customers. Upon the request of the Employer,
employee shall certify in writing compliance with the foregoing requirement.
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8. Restrictive Covenants.
(a) No Solicitation of Customers. During the Executive's employment
with the Employer and for a period of 12 months thereafter, the Executive shall
not (except on behalf of or with the prior written consent of the Employer),
either directly or indirectly, on the Executive's own behalf or in the service
or on behalf of others, (A) solicit, divert, or appropriate to or for a
Competing Business, or (B) attempt to solicit, divert, or appropriate to or for
a Competing Business, any person or entity that was a customer of the Employer
or any of its Affiliates on the date of termination and is located in the
Territory and with whom the Executive has had material contact.
(b) No Recruitment of Personnel. During the Executive's employment with
the Employer and for a period of 12 months thereafter, the Executive shall not,
either directly or indirectly, on the Executive's own behalf or in the service
or on behalf of others, (A) solicit, divert, or hire away, or (B) attempt to
solicit, divert, or hire away, to any Competing Business located in the
Territory, any employee of or consultant to the Employer or any of its
Affiliates engaged or experienced in the Business, regardless of whether the
employee or consultant is full-time or temporary, the employment or engagement
is pursuant to written agreement, or the employment is for a determined period
or is at will.
(c) Non-Competition Agreement. During the Executive's employment with
the Employer and for a period of 12 months thereafter, the Executive shall not
(without the prior written consent of the Employer) compete with the Employer or
any of its Affiliates by, directly or indirectly, forming, serving as an
organizer, director or officer of, or consultant to, or acquiring or maintaining
more than a 1% passive investment in, a depository financial institution or
holding company therefor if such depository institution or holding company has
one or more offices or branches located in the Territory. Notwithstanding the
foregoing, the Executive may serve as an officer of or consultant to a
depository institution or holding company therefor even though such institution
operates one or more offices or branches in the Territory, if the Executive's
employment does not directly involve, in whole or in part, the depository
financial institution's or holding company's operations in the Territory.
9. Independent Provisions. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision or clause of this Agreement, or portion thereof, shall be held by any
court or other tribunal of competent jurisdiction to be illegal, void, or
unenforceable in such jurisdiction, the remainder of such provision shall not be
thereby affected and shall be given full effect, without regard to the invalid
portion. It is the intention of the parties that, if any court construes any
provision or clause of this Agreement, or any portion thereof, to be illegal,
void, or unenforceable because of the duration of such provision or the area or
matter covered thereby, such court shall reduce the duration, area, or matter of
such provision, and, in its reduced form, such provision shall then be
enforceable and shall be enforced. The Executive and the Employer hereby agree
that they will negotiate in good faith to amend this Agreement from time to time
to modify the terms of Sections 8(a), 8(b), and 8(c), the definition of the term
"Territory," and the definition of the term "Business," to reflect changes in
the Employer's business and affairs so that the scope of the limitations placed
on the Executive's activities by Section 8 accomplishes the parties' intent in
relation to the then current facts and circumstances. Any such amendment shall
be effective only when completed in writing and signed by the Executive and the
Employer.
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10. Successors; Binding Agreement. The rights and obligations of this
Agreement shall bind and inure to the benefit of the surviving corporation in
any merger or consolidation in which the Employer is a party, or any assignee of
all or substantially all of the Employer's business and properties. The
Executive's rights and obligations under this Agreement may not be assigned by
him, except that his right to receive accrued but unpaid compensation,
unreimbursed expenses and other rights, if any, provided under this Agreement
which survive termination of this Agreement shall pass after death to the
personal representatives of his estate.
11. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, addressed to the respective
addresses last given by each party to the other; provided, however, that all
notices to the Employer shall be directed to the attention of the Employer with
a copy to the Secretary of the Employer. All notices and communications shall be
deemed to have been received on the date of delivery thereof.
12. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Georgia without giving
effect to the conflict of laws principles thereof. Any action brought by any
party to this Agreement shall be brought and maintained in a court of competent
jurisdiction in State of Georgia.
13. Enforcement. The Executive agrees that in the event of any breach
or threatened breach by the Executive of any covenant contained in Section 8(a),
8(b), or 8(c) hereof, the resulting injuries to the Employer would be difficult
or impossible to estimate accurately, even though irreparable injury or damages
would certainly result. Accordingly, an award of legal damages, if without other
relief, would be inadequate to protect the Employer. The Executive, therefore,
agrees that in the event of any such breach, the Employer shall be entitled to
obtain from a court of competent jurisdiction an injunction to restrain the
breach or anticipated breach of any such covenant, and to obtain any other
available legal, equitable, statutory, or contractual relief. Should the
Employer have cause to seek such relief, no bond shall be required from the
Employer, and the Executive shall pay all attorney's fees and court costs which
the Employer may incur to the extent the Employer prevails in its enforcement
action.
14. Certain Definitions.
(a) "Affiliate" shall mean any business entity controlled by,
controlling or under common control with the Employer.
(b) "Business" shall mean the operation of a depository financial
institution, including, without limitation, the solicitation and acceptance of
deposits of money and commercial paper, the solicitation and funding of loans
and the provision of other banking services, and any other related business
engaged in by the Employer or any of its Affiliates as of the date of
termination.
(c) "Competing Business" shall mean any business that, in whole or in
part, is the same or substantially the same as the Business.
(d) "Territory" shall mean a radius of ten miles from (i) the main
office of the Employer or (ii) any branch office of the Employer.
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15. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof. Failure of the Employer to enforce
any of the provisions of this Agreement or any rights with respect thereto shall
in no way be considered to be a waiver of such provisions or rights, or in any
way affect the validity of this Agreement.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
17. No Conflict with Laws. In the event there are any discrepancies
herein with any federal law or regulation, the federal law or regulation shall
control.
IN WITNESS WHEREOF, the Employer has caused this Agreement to be
executed and its seal to be affixed hereunto by its officers thereunto duly
authorized, and the Executive has signed and sealed this Agreement, effective as
of the date first above written.
SOUTHEAST COMMERCE HOLDING COMPANY
ATTEST:
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxxxx
--------------------------- ----------------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Title: Chief Executive Officer
(CORPORATE SEAL)
EXECUTIVE
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx, III
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