EXHIBIT 10.9

 

EMPLOYMENT AGREEMENT

 

This employment agreement (“Agreement”) is dated as of October 27, 2004, and is entered into by and among John Perkins (“Employee”) and Guaranty Bank and Trust Company, a Colorado state-chartered bank (“Employer”). As an inducement to render services and superior performance, Employee and Employer agree as follows:

 

1. Employment. During the term of this Agreement, Employee agrees to devote his best efforts to the business of Employer, and shall perform his duties in a diligent, trustworthy, and business-like manner, all for the purpose of advancing the business of Employer.

 

2. Title; Duties. During the term of this Agreement, Employee shall serve as Executive Vice President, Loans of Employer. The duties of Employee shall be those duties which are appropriate (including appropriate authority and responsibilities) to Employee’s position with Employer and to which Employer and Employee may hereafter mutually agree in writing. Employee’s duties may, subject to the provisions of Section 9(d), from time to time, be changed or modified at the discretion of the Board, subject to the terms of this Agreement.

 

3. Salary and Benefits.

 

(a) Base Salary. Employer shall, during the Term of Employment, pay Employee an annual base salary of $250,000. Such salary shall be paid in accordance with Employer’s payroll practices as in effect from time to time less applicable withholding and salary deductions. Employee’s base salary shall be reviewed at least annually in accordance with Employer’s salary review process as in effect from time to time, provided, however, that Employee’s base salary shall not be decreased during the Term of Employment if Employee continues to serve as Executive Vice President, Loans during the Term of Employment.

 

(b) Bonus. Subject to the terms of this Agreement and Employer’s annual bonus program as in effect from time to time, Employee shall be eligible to receive an annual bonus for each year during the term of this Agreement as shall be determined by the Board, including a prorated bonus for any partial year of employment during such term.

 

(c) Reimbursement of Business Expenses. Employer shall reimburse Employee for all out-of-pocket business expenses incurred by Employee in the course of his duties, in accordance with, Employer’s policies as in effect from time to time. Employee shall be required to submit to Employer appropriate documentation supporting such out-of-pocket business expenses as a prerequisite to reimbursement in accordance with such policies.

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(d) Employee Benefits. Employee shall be eligible to participate in the employee benefit plans, programs, policies and arrangements generally available to employees of Employer and to receive the other perquisites provided to senior executive officers of Employer, in each case in accordance with the terms and conditions of such plans, programs, policies, arrangements and other perquisites as in effect from time to time.

 

(e) Benefits Not in Lieu of Compensation. No benefit or perquisite provided to Employee shall be deemed to be in lieu of base salary or other compensation.

 

4. Term of Agreement.

 

(a) General. This Agreement is being entered into in connection with the Agreement and Plan of Merger, dated August 31, 2004, by and between Centennial Bank Holdings, Inc., Newco Front Range, Inc. and Guaranty Corporation (the “Merger Agreement”). Employee’s employment under this Agreement shall commence on the date the merger contemplated by the Merger Agreement becomes effective (the “Effective Date”) and shall continue in effect until the first anniversary of the Effective Date (the “Term of Employment”); provided, however, that if the Merger Agreement terminates for any reason before the merger occurs, all of the provisions of this Agreement will terminate and there will be no liability of any kind under this Agreement. Commencing on the first anniversary of the Effective Date and on each anniversary thereafter, the Term of Employment shall automatically be extended for one year terms unless either the Employer or the Employee shall give the other party not less than 30 days prior written notice of the intention to not extend this Agreement (a “Non-Renewal Notice”).

 

(b) Effect of non-renewal. In the event a Notice of Non-Renewal is given by Employer and the parties do not enter into a new employment agreement, then Employer shall elect, in its sole discretion, on or before the last day of the Term of Employment, one of the following, and the Employee agrees to be bound by such election:

 

(i) payment to Employee of the amount specified in Section 6(a)(i), in which case Employee remains subject to the provisions of Sections 8(a) and 8(b); or

 

(ii) waiver of the application of the provisions of Sections 8(a) and 8(b) to Employee, in which case Employee shall not be entitled to any further payment hereunder.

 

5. General Termination Provisions. If either Employer or Employee terminates this Agreement under the provisions of this Section 5, Employer will be liable to Employee for all payments (if any) as described in Section 5, as follows:

 

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(a) Termination by Employer. Employer may terminate Employee’s employment under this Section 5 only upon the occurrence of one or more of the following events and under the conditions described below.

 

(i) Disability. If, during the Term of Employment, Employee’s employment terminates due to Disability, Employer shall pay Employee his base salary at the rate then in effect through the then remaining Term of Employment. For each year thereafter, Employer shall pay to Employee until his death, an amount equal to 50% of the base salary paid to Employee during the twelve (12) month period prior to the date of such termination of employment. All amounts payable under this Section 5(a) shall be paid in semi-monthly installments, less applicable withholdings for income taxes and employment taxes. In addition, to the extent not theretofore paid or provided, Employer shall pay or provide any other accrued amounts or benefits required to be paid or provided under any plan, program, policy or arrangement through the date of termination of employment (such other amounts and benefits shall be hereinafter referred to as the “Other Benefits”). Employer’s obligation to make the payments to Employee as described in this Section 5(a)(i) is contingent upon Employee’s execution of a Waiver and Release of Claims, a form of which is attached to this Agreement as Annex A.

 

(ii) Termination for Cause. Employer may terminate Employee’s employment for Cause and, upon such termination, Employer shall have no further obligation to make payments under this Agreement, except for paying amounts that have already become payable as of the date of such termination, but have not yet been paid and paying or providing the Other Benefits.

 

(b) Termination by Employee. Employee may terminate his employment at any time during the Term of Employment, upon sixty (60) days prior written notice. If Employee terminates his employment other than for Good Reason, Employer shall have no further obligation to make payments under this Agreement, except for paying amounts that have already become payable as of the date of such termination, but have not yet been paid and paying or providing the Other Benefits. Employee may terminate his employment for Good Reason under the provisions of Section 6.

 

(c) Employer’s obligation to make any payment to Employee as described in this Section 5 is contingent upon Employee’s execution of a Waiver and Release of Claims, a form of which is attached to this Agreement as Annex A.

 

6. Special Termination Provisions. (a) If, during the Term of Employment, Employer terminates Employee’s employment other than for Cause or due to Disability or Employee terminates his employment for Good Reason, then Employer shall:

 

(i) pay to the Employee in one lump sum within five (5) days of such termination, an amount in cash equal to two (2) times the Employee’s Base Salary pursuant to Section 3(a);

 

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(ii) for 24 months following the date of such termination, continue to provide medical and dental benefits to the Employee, his spouse and his eligible dependants on the same basis as such benefits are then currently provided to such Employee (the “Medical Benefits”); provided that such benefits shall be secondary to any other coverage obtained by the Employee; provided, however, that if the Company’s welfare plans do not permit such coverage, the Company will provide the Employee the Medical Benefits with the same tax effect; and

 

(iii) To the extent not theretofore paid or provided, pay or provide any Other Benefits (as defined in Section 5(a)(i) above) through the date of termination of employment.

 

(b) Employer’s obligation to make any payments to Employee as described in this Section 6 is contingent upon Employee’s execution of a Waiver and Release of Claims, a form of which is attached to this Agreement as Annex A. Except as described in this Section 6, Employee shall not be eligible to receive any other severance benefits under any severance or termination plan, program, policy or arrangement maintained by Employer or its affiliates.

 

7. Excess Payments. Notwithstanding any provision of this Agreement to the contrary, in the event any payments or non-cash benefits that Employee is entitled to receive (whether pursuant to the terms of this Agreement or otherwise (the “Payments”)) would be subject to the excise tax (the “Excise Tax”) under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), then the amounts payable to Employee under this Agreement shall be reduced, but not below zero, to the maximum amount as will result in no portion of the Payments being subject to such excise tax (the “Safe Harbor Cap”). For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable to Employee under this Agreement (and no other Payments) shall be reduced, unless consented to by Employee.

 

8. Covenants Not to Compete or Solicit Employer Clients and Employees; Confidential Information.

 

(a) Non-Compete. During Employee’s employment with Employer, and for a two (2) year period after the date Employee’s employment is terminated in accordance with Section 5 hereof or a one year period after the date Employee’s employment is terminated in accordance with Section 6 hereof (collectively, the “Restricted Period”), Employee shall not directly or indirectly (without the prior written consent of Employer) associate (including as a director, officer, employee, partner, consultant, agent or advisor) with a Competitive Enterprise in a Restricted Territory and in connection with Employee’s association engage, or directly or indirectly manage or supervise personnel engaged, in any activity:

 

(i) that is substantially related to any activity that Employee was engaged in with Employer during the 12 months prior to the date of termination of Employee’s employment,

 

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(ii) that is substantially related to any activity for which Employee had direct or indirect managerial or supervisory responsibility with Employer during the 12 months prior to the date of termination of Employee’s employment, or

 

(iii) that calls for the application of specialized knowledge or skills substantially related to those used by Employee in his activities with Employer during the 12 months prior to the date of termination of Employee’s employment.

 

For purposes of this Agreement, “Competitive Enterprise” means any business enterprise that either (A) engages in any activity closely associated with commercial banking or the operation of an institution, the deposits of which are insured by the Federal Deposit Insurance Corporation, in a Restricted Territory, or (B) holds a 25% or greater equity, voting or profit participation interest in any enterprise that engages in such a competitive activity, and “Restricted Territory” means the geographic area of the State of Colorado extending from the continental divide to the eastern State boundary.

 

For the purposes of this Agreement, Employee acknowledges that Employee is part of “executive and management personnel” of Employer within the meaning of C.R.S. § 8-2-113(2).

 

(b) Non-Solicitation. During the Restricted Period, Employee shall not, in any manner, directly or indirectly (without the prior written consent of Employer): (i) Solicit any Client to transact business with a Competitive Enterprise in a Restricted Territory or to reduce or refrain from doing any business with Employer, (ii) transact business with any Client that would cause Employee to be a Competitive Enterprise in a Restricted Territory, (iii) interfere with or damage any relationship between Employer and a Client or (iv) Solicit anyone who is then an employee of Employer (or who was an employee of Employer within the prior 12 months) to resign from Employer or to apply for or accept employment with any other business or enterprise.

 

For purposes of this Agreement, a “Client” means any client or prospective client of Employer to whom Employee provided services, or for whom Employee transacted business, or whose identity became known to Employee in connection with his relationship with or employment by Employer, and “Solicit” means any direct or indirect communication of any kind, regardless of who initiates it, that in any way invites, advises, encourages or requests any person to take or refrain from taking any action.

 

(c) Confidential Information. Employee hereby acknowledges that, as an employee of Employer, he will be making use of, acquiring and adding to confidential information of a special and unique nature and value relating to Employer and its strategic plans, operations, financial condition and performance and such confidential information constitutes trade secrets of Employer. Employee further recognizes and acknowledges that all confidential information is the exclusive property of Employer, is material and confidential, and is critical to the successful conduct of the

 

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business of Employer. Accordingly, Employee hereby covenants and agrees that he will use confidential information for the benefit of Employer only and shall not at any time, directly or indirectly, during the Term of Employment and thereafter divulge, reveal or communicate any confidential information to any person, firm, corporation or entity whatsoever, or use any confidential information for his own benefit or for the benefit of others. Notwithstanding the foregoing, Employee shall be authorized to disclose confidential informat