Exhibit 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated this 24th day of March, 1998, effective as of
January 1, 1998, by and between TRINITY CAPITAL CORPORATION ("TRINITY"), LOS
ALAMOS NATIONAL BANK ("Bank"), both New Mexico corporations with their principal
offices in Los Alamos, New Mexico (collectively, the "Companies"), and ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇ ("▇▇▇▇▇") (all collectively referred to herein as the "Parties").
WHEREAS, the companies believe it is in their best interests that ▇▇▇▇▇
continue to be employed by the companies on the terms and conditions contained
herein, and ▇▇▇▇▇ is willing to be so employed;
NOW, THEREFORE, in consideration of the mutual covenants, promises and
agreements contained herein, the Parties hereto agree as follows:
1. EMPLOYMENT TERMS & POSITION. The Companies hereby employ ▇▇▇▇▇ in an
executive capacity and as a full-time employee of Los Alamos National
Bank for the period beginning January 1, 1998, and ending December 31,
2002, (the "Term of Employment"). The Term of Employment shall
automatically be extended without further action of the Parties as of
January 1, 2003, for successive annual periods unless either Trinity
or ▇▇▇▇▇ serves written notice upon the other of its or his intention
that the Term of Employment shall terminate at December 31, 2002, or,
if applicable, at any successive annual anniversary thereof. To be
effective to cancel the automatic extension of the Term of Employment,
such notice must be served at least 60 days or more prior to the
intended effective date of termination of the Term
1
of Employment. Notice given less than 60 days prior to the intended
effective date of termination of the Term of Employment shall be
deemed effective as of the next annual anniversary date. During the
period of his employment, except for illness, reasonable vacation
periods, and reasonable leaves of absence, ▇▇▇▇▇ shall devote all his
business time, attention, skill and efforts to the faithful
performance of his duties.
Initially, ▇▇▇▇▇ shall serve as the President of Trinity and the
Chairman of the Board of Bank and, in such capacity, shall be each
Company's Chief Executive Officer. During his employment by the
Companies, ▇▇▇▇▇ shall have such other duties and responsibilities of
an executive nature as may be established from time to time by the
Companies' Boards of Directors, and he shall report to the Board of
Directors of each respective Company. The Parties further agree that
the failure to appoint ▇▇▇▇▇ to the office designated above in this
Section 1 or material changes by the Company in ▇▇▇▇▇'▇ function,
duties, or responsibilities that would cause ▇▇▇▇▇'▇ position with the
Companies to become of substantially less dignity, responsibility,
importance or scope than the positions designated in Section 1 above
may be deemed by ▇▇▇▇▇ a termination without Cause under Section 3
below.
2. SALARY. Los Alamos National Bank shall pay ▇▇▇▇▇ an Initial "Salary"
at the rate of $200,000,000 per annum commencing January 1, 1998,
payable in accordance with the payroll practices of Los Alamos
National Bank. Based upon an evaluation of ▇▇▇▇▇'▇ performance each
year, by the Board of Directors of Los Alamos National Bank, ▇▇▇▇▇'▇
Salary may be adjusted annually effective each January 1, at
2
such rate as may, from time to time, be fixed by said Board,
determined in accordance with the then existing and customary
personnel compensation practices of Los Alamos National Bank.
3. TERMINATION OF EMPLOYMENT AND SEVERANCE PAY. Solely in the event that
the Companies terminate ▇▇▇▇▇'▇ employment without Cause prior to
December 31, 2002, or the later extended Term of Employment under this
Agreement, at a time when he is fully willing and able to perform his
duties as an employee of the Companies (and in no other circumstances,
e.g., ▇▇▇▇▇'▇ voluntary termination, disability, or death), Trinity
shall, subject to the limitation at Section 6(d) hereof, be required
to pay to ▇▇▇▇▇, as "▇▇▇▇▇▇▇▇▇ Pay", an amount equal to his Salary for
12 months at the rate then in effect pursuant to Section 2 above.
However, nothing contained herein shall be construed to require the
Companies to Continue to employ ▇▇▇▇▇ for any particular period of
time, and the Companies shall be entitled to terminate ▇▇▇▇▇'▇
employment at any time with or without Cause, subject to the provision
of the immediately preceding sentence and Sections 7 and 8 hereof, if
applicable.
If ▇▇▇▇▇'▇ employment is terminated without Cause as stated
above, ▇▇▇▇▇ would have two years from the date of his termination to
exercise all grants of stock options which have been granted him under
the 1998 Stock Option Plan.
▇▇▇▇▇ shall have the right to terminate his employment upon 60
days' written notice to the Companies.
3
"Cause," for the purpose of this Section, shall mean the
occurrence of any of the following events:
(a) Performance by ▇▇▇▇▇ of illegal or fraudulent acts,
criminal conduct or willful misconduct relating to the
activities of the Companies;
(b) Performance by ▇▇▇▇▇ of any criminal acts involving
moral turpitude having a material adverse effect upon the
Companies, including, without limitation, upon its
profitability, reputation, or goodwill;
(c) Willful or grossly negligent failure by ▇▇▇▇▇ to perform
his duties in a manner which he knows, or has reason to
know, to be in the Companies' best interest;
(d) Violation by ▇▇▇▇▇ of any of the covenants and
agreements contained in Section 6 hereof;
(e) Any other material breach of Employee's obligations
hereunder which he fails to cure within 30 days after
receiving written notice thereof.
4. FRINGE BENEFITS. ▇▇▇▇▇ shall be entitled, during his employment by the
Companies, to receive and participate in employee benefits available
to other senior management employees.
5. ADDITIONAL COMPENSATION. In addition to the Salary provided for in
Section 2 hereof, ▇▇▇▇▇ shall be entitled to the following as
additional compensation
4
for services rendered as an executive employee pursuant to the terms
of this Agreement:
(a) NON-STATUTORY STOCK OPTIONS. So long as ▇▇▇▇▇ is
employed by the Companies, he shall be eligible to receive,
solely at the discretion of the Board of Directors of
Trinity, Non-statutory (or non-qualified) Stock Options
("NSO's") for shares of common stock of Trinity (the
"Shares"). Such NSO's shall vest and become exercisable in
accordance with, and subject to, all the terms and
restrictions of the Companies' 1998 Stock Option Plan, a
copy of which is attached hereto and incorporated herein as
Exhibit A.
The Board of Directors of Trinity shall determine annually
the number of shares, if any, to be granted to ▇▇▇▇▇ under
the 1998 Stock Option Plan, based upon ▇▇▇▇▇'▇ performance.
In the event that a change is the controlling interests in
Trinity occurs, as defined in Section 8, then ▇▇▇▇▇ shall be
entitled to a vested grant of options in the amount of 7,000
shares for each full year remaining under this contract.
(b) OTHER COMPENSATION. The Board of Directors of Trinity
may provide other compensation to ▇▇▇▇▇ in the form of
performance or target bonuses or deferred compensation plans
in the future if, in the discretion of the Board, additional
Compensation is warranted and in the best interest of the
Companies.
5
6. CONFLICT OF INTEREST. ▇▇▇▇▇ acknowledges that: (i) the principal
business of the Companies is the banking business but that the
Companies or their subsidiaries or affiliates may conduct other
business (all such businesses conducted from time to time are
sometimes hereinafter referred to collectively as the "Business");
(ii) the Business of the Companies is regional in scope; (iii) the
Companies possess substantial confidential information which is
proprietary to the Companies and the confidentiality and exclusive use
of which by the Companies is essential to the continuing success of
the Companies, including, but not limited to, information of the kinds
described in the immediately following paragraph; and (iv) ▇▇▇▇▇'▇
services for the Companies will bring him into close contact with
additional confidential information which has not been made known to
the public. In order to induce the Companies to enter into this
Agreement, ▇▇▇▇▇ hereby covenants and agrees as follows:
(a) ▇▇▇▇▇ shall deliver promptly to the Companies on the
termination of his employment, or at any time the Companies
may so request, all memoranda, notes, lists (including
customer lists), records, reports, manuals, drawing,
blueprints and other documents (and all copies thereof)
relating to the Business and all property associated
therewith which he may then possess or which are then under
his control.
(b) During his employment by the Companies and for a period
of one year thereafter if ▇▇▇▇▇ is terminated for Cause,
▇▇▇▇▇ shall not, in any state or jurisdiction in which the
Companies have conducted
6
within the previous two years any aspect of the Business,
directly or indirectly, (i) enter the employ of, or render
any services (with or without compensation) to, any person,
joint venture, partnership, firm or corporation engaged in
any business competitive with the Business in the Geographic
Area; or (ii) engage in the Business (except for the
Companies) for his own account in the Geographic Area; or
(iii) become interested in any such enterprise, directly or
indirectly, as an individual, partner, shareholder,
director, officer, principal, agent, employee, trustee,
consultant or in any other capacity; provided, however, that
nothing contained in this paragraph (b) shall be deemed to
prohibit ▇▇▇▇▇ from acquiring, solely as an investment,
shares of capital stock of any corporation the shares of the
same class of which corporation are traded on the national
securities exchange or in the over-the-counter market so
long as he does not acquire direct or indirect ownership of
one percent (1%) or more of any class of capital stock of
said corporation.
(c) During his employment by the companies (however and
whenever terminated) and for a period of one year
thereafter, ▇▇▇▇▇ shall not, directly or indirectly, (i)
hire, solicit, or encourage to leave the employment of the
Companies, or any of their subsidiaries or affiliates, any
employee of the Companies or any of its subsidiaries or
affiliates; or (ii) hire any such employee who has left the
7
employment of the Companies or any of their subsidiaries or
affiliates within one year of the termination of such
employee's employment with the Companies or any of their
subsidiaries or affiliates.
(d) Subsequent to ▇▇▇▇▇'▇ termination of employment,
beginning 30 days thereafter and as a precondition to
entitlement to receive Severance Pay as provided at Section
3, ▇▇▇▇▇ shall keep himself at all times reasonably
available for a period of twelve months to render such
services of any advisory or consultative nature as the
Boards of Directors of the Companies shall reasonably
required, under the then existing circumstances. In calling
upon ▇▇▇▇▇ for such services, the Companies shall recognize
that such demands shall only be made when in the best
interests of the Companies. Further, in order not to unduly
inconvenience ▇▇▇▇▇ or make unreasonable demands as to the
time, place or duration of such consultation, as well as in
recognition of the great potential value of such
consultation, the Company shall not be entitled to call upon
▇▇▇▇▇ for more than 100 hours in such twelve-month period.
7. TERMINATION OF EMPLOYMENT. In the event the Companies terminate
▇▇▇▇▇'▇ employment for Cause, the Companies shall have no further
obligations to ▇▇▇▇▇ under this Agreement.
8
8. CHANGE IN CONTROL. In the event that controlling interest in Trinity
changes as a result of a sale, merger, acquisition, or otherwise, and
in the event that the Companies thereafter wish to terminate ▇▇▇▇▇'▇
employment or otherwise change the terms of this Agreement in a manner
which would be detrimental to ▇▇▇▇▇, then ▇▇▇▇▇ shall be entitled to a
payment, in addition to Severance Pay in Section 3 above, of any
amount equal to his Salary for 18 months at the rate then in effect
pursuant to Section 2 above as compensation. A change of controlling
interest would be determined to be detrimental to ▇▇▇▇▇ if his
function, duties or responsibilities were changed in such a manner as
to cause his position with the Companies to become of substantially
less dignity, responsibility, importance or scope than the position
designated in Section 1 above. Notwithstanding the above, compensation
under this Section 8 shall not exceed that amount which can be paid
without causing an "Excess Parachute Payment" under Section 280G of
the Internal Revenue Code.
9. EQUITABLE ENFORCEMENT. ▇▇▇▇▇ recognizes that irreparable injury will
result to the Companies and their subsidiaries and affiliates and
their respective assets and Businesses in the event of a breach by him
of any of the convenants and agreements contained in Section 6 hereof,
and he agrees that, in the event of any such breach, the Companies and
their subsidiaries and affiliates shall be entitled, in addition to
any other remedies (including, but not limited to, the recovery of
monetary damages) available to them or any of them, to obtain an
injunction to restrain the continuation or repetition of such breach
or a similar breach by ▇▇▇▇▇.
9
10. ENTIRE AGREEMENT. This Agreement shall comprise the entire agreement
between the Parties hereto relating to ▇▇▇▇▇'▇ employment with the
Companies and hereby supersedes and revokes any and all other
employment agreements, whether written or oral, between the parties
hereto. No variation or modification hereof shall be deemed valid
unless contained in a writing signed by each of the Parties hereto. No
variation or modification hereof shall be deemed valid unless
contained in a writing signed by each of the Parties hereto, which
writing shall make express reference to this Agreement. No waiver of
any breach of any covenant, agreement, or duty shall be held or
construed as a waiver of any other breach of the same or any other
convenant, agreement or duty. If any provision or portion of this
Agreement shall to any extent be held invalid or unenforceable in any
circumstances, the remainder of this Agreement and the application of
such portion or provision to another extent or in other circumstances
shall be valid and enforceable to the fullest extent permitted by law.
The parties intend this Agreement to be valid and enforced as written.
However, if any provision, or any part thereof, is held to be invalid
or unenforceable because of the scope or duration of or the subject
matter or geographic area covered by such provision, the Companies and
▇▇▇▇▇ agree that the court making such determination shall have the
power to reduce the scope, duration, subject matter and/or
geographical area of such provision in order to make such provision
enforceable to the fullest extent permitted by law, and/or to delete
specific words and phrases, and in its reduced form such provision
shall then be enforceable and shall be enforced.
10
11. BINDING ON SUCCESSOR - ANTI-ASSIGNMENT. This Agreement shall inure to
the benefit of and be binding, to the extent permitted by law, upon
▇▇▇▇▇ and the Companies' successors and assigns. Nothing contained in
this Agreement shall be construed, however, as authorizing ▇▇▇▇▇ to
assign this Agreement without the Companies' prior written consent.
12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the law of the State of New Mexico, where it has been
executed and delivered and where the Companies have their
headquarters.
IN WITNESS WHEREOF, the Parties hereto have executed these presents as of
the day and year first above written, the execution hereof on behalf of the
Companies being made by duly authorized persons.
TRINITY CAPITAL CORPORATION
By
----------------------------
Title
----------------------------
LOS ALAMOS NATIONAL BANK
By
----------------------------
11
Title
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
12