Exhibit 10.1
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT
AGREEMENT (the “Agreement”), dated as of the 26th day
of August, 2009 (the “Effective Date”), is by and
between American Patriot Bank, a Tennessee state-banking
corporation (the “Bank”), and John Donald Belew (the
“Executive”).
WHEREAS, the Bank is a wholly owned subsidiary of
American Patriot Financial Group, Inc., a Tennessee corporation
(the “Company”); and
WHEREAS , the Bank desires to employ the Executive and
to enter into this Agreement embodying the terms and conditions of
such employment; and
WHEREAS , the Executive desires to accept such
employment and enter into this Agreement setting forth the terms
and conditions of the employment relationship of the Executive with
the Company.
NOW,
THEREFORE , in
consideration of the mutual covenants and promises contained
herein, and for other good and valuable consideration, and
intending to be legally bound hereby, the parties agree as
follows:
1.
Employment . The Bank hereby employs the
Executive and the Executive hereby accepts employment with the
Bank, upon the terms and subject to the conditions set forth
herein.
2.
Term . Subject to termination as stated in
Section 8, Executive shall be employed by the Bank for a period
commencing on the Effective Date, and shall have a term of three
hundred sixty five (365) days thereafter (the
“Term”). The Term shall automatically be
extended for additional one year periods (each, a “Renewal
Term”) each on the terms and conditions provided herein,
unless either party shall give the other party no less than ninety
(90) days’ written notice prior to the expiration of the Term
or Renewal Term, as applicable. On the date on which the
Company receives the approval of the Federal Reserve Bank of
Atlanta for the hiring of Executive as an executive officer of the
Company or the date after which the Federal Reserve Bank of Atlanta
may no longer object to the appointment of the Executive as an
executive officer of the Company, the Company shall execute an
addendum to this Agreement and the Executive shall be appointed as
the Chief Executive Officer of the Company.
(a)
Chief Executive Officer . During the Term, the
Executive shall serve as Chief Executive Officer of the Bank
performing duties commensurate with the position and such
additional duties as the Bank’s Board of Directors or a
committee thereof (collectively referred to as the
“Board”) shall determine. Executive agrees
to abide by all by-laws, policies, practices, procedures or rules
of the Company and the Bank. The Executive shall
primarily perform his duties under this Agreement at the
Bank’s offices in Greeneville, Tennessee.
(b)
Full-Time Employment . During the Term, the
Executive shall devote substantially all of Executive’s
business time, and shall devote Executive’s personal best
efforts, to the performance of Executive’s duties hereunder
in accordance with the Company’s and the Bank’s
by-laws, policies, practices, procedures or rules in effect from
time to time, and will not engage or serve in any other business,
profession or occupation for compensation or otherwise which would,
directly or indirectly, materially conflict or materially interfere
with the services rendered by Executive hereunder, without the
prior written consent of the Company and the Bank; provided
, however , that it shall not be a violation of this
Agreement for the Executive with the approval of the Company and
the Bank to (a) devote reasonable periods of time to charitable and
community activities and industry or professional activities,
and/or (b) manage personal investments, so long as such activities
do not materially conflict or materially interfere with the
performance of the Executive’s responsibilities under this
Agreement.
4.
Base Salary . The Executive’s initial base
salary as of the Employment Date is $150,000, payable in
substantially equal periodic payments in accordance with the
Bank’s regular payroll practices. The Executive shall be
entitled to such increases in the Executive’s base salary, if
any, as may be determined from time to time in the sole discretion
of the Board. The Base Salary rate at which the Executive is being
compensated on the Date of Termination (as defined below) shall be
the Base Salary rate used in determining all severance amounts, if
any, payable to the Executive hereunder.
5.
Bonus Plan . Executive shall be eligible to
participate in such bonus plans, if any, as shall be determined by
the Board, and shall be paid in accordance with the terms and
conditions of any bonus plan established for the Bank for which the
Executive is eligible to participate (“Bonus Plan”);
provided, however, that in addition to such Bonus Plan the
Executive shall have the opportunity to earn those amounts set
forth in Schedule A attached hereto upon the achievement of
those metrics specified in Schedule A attached
hereto. Notwithstanding any provision to the contrary
herein, in any Bonus Plan, Company or Bank incentive or other
compensation plan or any award agreement, in addition to other
remedies described in this Agreement, if at any time the Executive
breaches any provisions of this Agreement or otherwise engages in
activity or conduct that constitutes Cause (as defined below), the
Company and the Bank may each rescind any bonus payments, cash
settlement of awards granted under any Bonus Plan, Company or Bank
incentive plan or other incentive payments received by the
Executive within one (1) year of the date of Executive’s
breach or the discovery by the Company or the Bank of
Cause. In the event of any such rescission, Executive
shall return to the Company or the Bank, as applicable, the amount
(before taxes) of any bonus or incentive compensation. The payment
shall be made in such manner and on such terms and conditions as
may be required by the Company or the Bank, as the case may be.
Each of the Company and the Bank shall be entitled to set off
against the amount of any such payment any amounts otherwise owed
to the Executive by the Company or the Bank. In
addition, upon demand by the Company or the Bank, the Executive
agrees to return to the Company or the Bank, as applicable, all or
a portion of any compensation, including, without limitation, any
bonus awards and incentive plan award payouts, paid to the
Executive based upon financial information or performance metrics
later found to be materially inaccurate. The amount to be recovered
shall be equal to the excess of the pre-tax amount paid out over
the pre-tax amount that would have been paid out had such financial
information or performance metric been fairly stated at the time
the payout was made.
6.
Employee Benefits . During the Term, Executive
shall be entitled to participate in the Bank’s employee
benefit plans as in effect from time to time (collectively
“Employee Benefits”), on the same basis and terms as
those benefits are generally made available to other employees of
the Bank; provided, that the Bank shall pay all monthly premium
payments for the health insurance component of the Employee
Benefits for Executive and his spouse. Notwithstanding anything to
the contrary, during the Term, Executive shall be entitled to the
use of a Bank-owned automobile, cell phone and personal digital
assistant, all fully paid for and provided by the
Bank. Executive shall be entitled to four weeks of paid
vacation during the Term. Nothing herein contained shall
be construed as requiring either the Company or the Bank to
establish or continue any particular benefit plan in the discharge
of the Bank’s obligations under this Agreement.
7.
Expenses and Perquisites .
(a)
Expenses . During the Term, reasonable and
necessary business expenses incurred by Executive in the
performance of Executive’s duties hereunder shall be
reimbursed by the Bank in accordance with Bank policies then in
effect.
(b)
Relocation Expenses . The Bank shall reimburse
the Executive for his reasonable and documented household moving
expenses incurred in relocating to Greeneville, Tennessee;
provided, however, that the Bank’s obligations under this
Section 7(b) shall not collectively exceed $10,000.
(c)
409A and Reimbursements . Notwithstanding
anything herein to the contrary, to the extent that any
reimbursement of expenses, any fringe benefit (including any
benefit described in Section 6, if applicable) or other, similar
plan or arrangement in which the Executive participates during the
term of the Executive’s employment under this Agreement or
thereafter provides for a “deferral of compensation”
within the meaning of Section 409A of the Internal Revenue Code, as
amended (the “IRC”) and Section 1.409A-1(d) of the
related Treasury Regulations, (i) the amount eligible for
reimbursement or payment under such plan or arrangement in one
calendar year may not affect the amount eligible for reimbursement
or payment in any other calendar year (except that a plan providing
medical or health benefits may impose a generally applicable limit
on the amount that may be reimbursed or paid); (ii) subject to any
shorter time periods provided herein or the applicable plans or
arrangements, any reimbursement or payment of an expense under such
plan or arrangement must be made on or before the last day of the
calendar year following the calendar year in which the expense was
incurred; and (iii) the right to reimbursement or payment is not
subject to liquidation or exchange for another benefit.
8.
Termination of Agreement . The Executive’s
employment under this Agreement shall not be terminated except as
set forth in this Section 8 or upon the expiration of the
Term. Any reference to the date of delivery of a notice
of termination or resignation by either the Bank or the Executive
in this Section shall constitute the “Date of
Termination,” unless otherwise set forth herein.
(a)
By Mutual Consent . The Executive’s
employment pursuant to this Agreement may be terminated at any time
by the mutual written agreement of the Bank and the Executive upon
such terms as are agreed upon between the parties.
(b)
Death . If Executive dies during the Term or any
Renewal Term of this Agreement, his employment shall automatically
terminate and the Bank shall pay his Base Salary due through the
date of his death. The accrued Base Salary shall be paid
within thirty (30) days of the Executive’s death (with the
payment date determined by the Bank in its sole discretion). All
outstanding stock options, restricted stock, restricted stock units
and any other unvested equity incentives held by the Executive as
of his Date of Termination shall vest and/or remain exercisable for
their stated terms solely in accordance with the terms of the stock
option agreements, restricted stock agreements or other award
agreements to which the Company and the Executive are parties at
the time of his death. Neither the Bank nor the Company
shall then have any further obligations to the Executive or any
representative of his estate or his heirs.
(c)
Disability . The Executive’s employment may
be terminated by written notice by either party to the other party,
when the Executive suffers a physical or mental disability
entitling the Executive to long-term disability benefits under the
Bank’s long-term disability plan, if any, or in the absence
of a Bank long-term disability plan, the Executive is determined to
be disabled in accordance with Section 409A(a)(2)(C) of the
IRC.
If the Executive’s employment is
terminated under this Section 8(c), the Executive shall be entitled
to receive all Base Salary and benefits due to the Executive
through the Date of Termination. The accrued Base Salary shall be
paid within thirty (30) days of the Executive’s Date of
Termination (with the payment date determined by the Company or the
Bank in its sole discretion). Furthermore, all
outstanding stock options, restricted stock, restricted stock units
and any other unvested equity incentives held by the Executive as
of Date of Termination shall vest and/or remain exercisable for
their stated terms solely in accordance with the terms of the stock
option agreements, restricted stock agreements or other award
agreements to which the Company and the Executive are parties on
the Date of Termination.
(d)
By the Company for Cause . The Executive’s
employment may be terminated immediately by the Board by written
notice to the Executive specifying the event(s) relied upon for
such termination upon the occurrence of any of the following events
(each of which shall constitute “Cause” for
termination):
(i) the
continued failure by the Executive to substantially perform his
duties (other than as a result of total or partial incapacity due
to physical or mental illness) after written notice and failure to
cure within ten (10) days;
(ii)
engaging in misconduct which is materially
injurious to the Company or the Bank, monetarily or
otherwise;
(iii)
engaging in an act
constituting a felony, a misdemeanor involving the Company or any
subsidiary or affiliate of the Company, including the Bank, or a
misdemeanor that results in material and demonstrable harm to the
business reputation of the Company or the Bank;
(iv) engaging
in fraud, misappropriation, dishonesty, embezzlement or similar
conduct by the Executive;
(v) engaging
in conduct that brings the Company or the Bank or any subsidiary or
affiliate of the Company or the Bank into public disgrace or
disrepute;
(vi) the
breach by the Executive of any of his obligations under this
Agreement or any other material agreement between the Company or
the Bank, or any subsidiary or affiliate thereof, and the
Executive; or
(vii) willful
malfeasance, willful misconduct, or gross negligence in performing
Company or Bank policies or procedures after written notice and
failure to cure within ten (10) days.
If the Executive’s employment is
terminated under this Section 8(d), the Executive shall be entitled
to receive all Base Salary and benefits to be paid or provided to
the Executive under this Agreement through the Date of
Termination. The accrued Base Salary shall be paid
within thirty (30) days of the Executive’s Date of
Termination (with the payment date determined by the Company or the
Bank in its sole discretion). All outstanding stock
options, restricted stock, restricted stock units and any other
vested equity incentives held by the Executive as of the Date of
Termination shall remain exercisable solely in accordance with the
terms of the stock option agreements, restricted stock agreements
or other award agreements to which the Company and the Executive
are parties on the Date of Termination. All unvested
equity incentives shall terminate on the Date of Termination for
Cause and Executive shall have no further rights with respect
thereto.
(e)
By the Company Without Cause . The
Executive’s employment may be terminated by the Board at any
time without Cause by delivery of a written notice of termination
to the Executive. If the Executive’s employment is terminated
under this Section 8(e), the Executive shall be entitled to receive
on the 60 th
day following his Date of
Termination unless the Company or the Bank is prohibited from
paying such amounts to the Executive under applicable state or
federal banking regulations:
(i) all
Base Salary and benefits due to the Executive through the Date of
Termination; and
(ii) subject
to continued compliance by the Executive with the previous of
Section 12 of this Agreement, an amount equal to the portion of
Executive’s Base Salary that would have been payable to the
Executive for the ninety (90) day-period following the Date of
Termination payable in equal installments following such 60-day
period in accordance with the Company’s and the Bank’s
normal payroll process.
Furthermore, all outstanding stock options,
restricted stock, restricted stock units and any other unvested
equity incentives held by the Executive as of the Date of
Termination shall vest and/or remain exercisable for their stated
terms solely in accordance with the terms of the stock option
agreements, restricted stock agreements or other award agreements
to which the Company and the Executive are parties on the Date of
Termination.
Notwithstanding the foregoing, if the Executive
fails to execute, or timely revokes, a full and complete release of
claims (the “Release”) in favor of the Company, the
Bank and all affiliates, subsidiaries, agents, employees and
directors of the Company and the Bank and any affiliate or
subsidiary of the Company or the Bank (the “Released
Parties”), then the Executive shall forfeit his right to
receive any payment under Section 8(e)(i) or (ii) above.
(f)
By the Executive for Good Reason . The
Executive’s employment may be terminated by the Executive
b
