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Exhibit 10.1
EMPLOYMENT AND NON-COMPETITION
AGREEMENT
THIS
EMPLOYMENT AND NON-COMPETITION AGREEMENT (this " Agreement
"), made and entered into this ___day of
, 2007, between CapitalSouth Bank, an Alabama banking corporation
(" Employer "), and Mr. Bill Marsh (the "
Executive ").
W I T N E
S S E T H :
WHEREAS,
CapitalSouth Bancorp, a Delaware corporation and a registered bank
holding company (" CapitalSouth "), and Monticello
Bancshares, Inc., a Florida corporation (" Monticello "),
have executed an Agreement and Plan of Merger (the " Merger
Agreement "), joined in by Mr. Jake Bowen, a resident of
Duval County, Florida, pursuant to which Monticello will be merged
into CapitalSouth (the " Merger "), and it is contemplated,
but not required, that, in the sole discretion of CapitalSouth and
in connection with the consummation of the Merger Agreement and
pursuant to the terms of a certain Bank Merger Agreement (the "
Bank Merger Agreement "), Monticello Bank, a federal savings
bank (" Monticello Bank "), will be merged with and into
CapitalSouth Bank, an Alabama banking corporation ("
CapitalSouth Bank ");
WHEREAS,
the Executive is currently employed by Monticello and Monticello
Bank as President;
WHEREAS,
pursuant to Section 5.15 of the Merger Agreement, following
the Effective Time of the Merger as that term is defined in the
Merger Agreement (the " Effective Time "), Employer desires
to retain the services of the Executive and the Executive desires
to be employed by Employer for the term of this Agreement and upon
the terms and conditions hereinafter described;
WHEREAS,
it is a condition precedent to the Merger that the Executive
execute this Agreement; and
WHEREAS,
the parties intend and desire that this Agreement supersede and
replace in all respects the Existing Agreement and any and all
other employment and change of control agreements or arrangements
between the Executive and Monticello and Monticello Bank.
NOW,
THEREFORE, in consideration of the promises, mutual covenants set
forth in this Agreement, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, do hereby agree as
follows:
SECTION 1: EMPLOYMENT OF EXECUTIVE; DUTIES AND
RESPONSIBILITIES
1.1 Employment of Executive
. Employer shall employ the Executive, and the Executive shall
provide services to Employer subject to the terms and conditions of
this Agreement.
1.2 Term of Agreement . The
term of this Agreement and the commencement of employment of the
Executive by Employer shall begin on the Closing Date, as that term
is
defined in the Merger Agreement (the " Closing Date "),
and this Agreement and the obligations of Employer hereunder (but
not in derogation of the continuing obligations of Executive
hereunder) shall terminate on the last day of the 18
th calendar month
following the Closing Date (the " Original Agreement Term ")
unless employment of the Executive is sooner terminated pursuant to
the provisions of Section 3 hereof (the " Agreement
Term ").
1.3 Offices and Positions of
Executive . During the Agreement Term, except as otherwise
mutually agreed by Employer and the Executive and subject to
Section 3 hereof, the Executive shall serve as a senior
regional executive in the Jacksonville, Florida Market of Employer,
or in such other executive capacity in the Jacksonville, Florida
Market of Employer for which Executive is suited by background and
training, as Employer, in Employer’s sole discretion, deems
appropriate.
1.4 Duties and
Responsibilities . During the Agreement Term, the Executive
shall perform such duties and responsibilities as the management of
Employer shall assign to the Executive from time to time and which
can reasonably be expected to be performed by a person serving in a
similar position. The Executive agrees to devote such of his full
business time and energy to the business of Employer as is needed
and shall perform his duties in a trustworthy and business-like
manner, all for the purposes of advancing the interests of
Employer. The Executive shall report to the Chief Executive Officer
of Employer or his designee.
SECTION 2: COMPENSATION; REIMBURSEMENT; AND BENEFITS
2.1 Base Salary . During
the Agreement Term, Employer shall pay to the Executive an
aggregate annual base salary (the " Base Salary ") at a rate
of $140,300 per annum, which shall not be reduced at any time
during the term of the Agreement Term. The Executive’s Base
Salary shall be subject to annual review in accordance with the
existing procedures of Employer.
2.2 Payment of Base Salary
. Employer shall pay the Base Salary due the Executive in
accordance with the policy of Employer as in effect from time to
time for the payment of salaries.
2.3 Other Benefits . The
Executive shall be entitled to participate on the same basis as
other similarly situated personnel of CapitalSouth and its
affiliates and subsidiaries in all incentive and benefit programs
or arrangements, including cash bonus and stock programs, made
available by CapitalSouth and its affiliates and subsidiaries to
such employees; provided that it is understood that the foregoing
does not include any automobile or club dues allowance. For
purposes of such benefit programs or arrangements, the Executive
shall be credited for the Executive’s prior service with
Monticello and Monticello Bank in accordance with Section 6.3
of the Merger Agreement, and for purposes of such incentive
programs or arrangements (including stock programs), the Executive
shall be credited for all of the Executive’s prior service
with Monticello and Monticello Bank. The Executive shall be subject
to the appropriate performance bonus programs in which other
similarly situated personnel of CapitalSouth and its affiliates and
subsidiaries participate. As of the date of this Agreement, such
appropriate performance bonus program is the Executive Incentive
Plan.
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2.4 Business Expenses .
Employer shall reimburse the Executive for all reasonable expenses
incurred by him in accordance with the standard policies and
procedures of Employer in the course of rendering his services
pursuant to this Agreement; provided , however , that
the Executive shall promptly submit such reasonable documentation
as may be requested by Employer to verify such expenditures.
2.5 Vacation . The
Executive shall be afforded vacation in accordance with and under
the same terms and conditions as are applicable to similarly
situated personnel of Employer and its affiliates. The Executive
shall take into consideration the needs of Employer in setting his
vacation schedule.
SECTION 3: TERMINATION OF EMPLOYMENT
3.1 Termination of Agreement
Term . The Agreement Term may be terminated in the following
manner:
(a)
Termination on Death or Disability . The Agreement Term
shall automatically terminate upon the death or Disability of the
Executive. The term " Disability " shall mean the
Executive’s physical or mental incapacity, as certified by a
physician, that renders him incapable of performing the essential
functions of the duties required of him by this Agreement for six
(6) months, even with reasonable accommodation.
(b)
Termination upon Notice . The Agreement may be terminated by
the Executive upon thirty (30) days’ written notice to
Employer. The Agreement may be terminated by Employer for any other
reason other than for " Cause " (as defined in
Section 3.1(d) hereof), upon notice and continued payment of
salary to the Executive.
(c)
Resignation for Good Reason . The Executive may resign from
employment with Employer and terminate the Agreement Term for good
reason, other than after the occurrence of circumstances
constituting Cause (as defined in Section 3.1(d) below), upon
the occurrence of any of the following conditions (" Good
Reason "): (i) Employer reduces the Executive’s then
present Base Salary during the Agreement Term; (ii) Employer
requires the Executive’s relocation to an office outside
Duval, Clay, Nassau or St. Johns counties, Florida; or
(iii) the assignment to the Executive of any duties
inconsistent with Executive’s position as a senior regional
executive of the Employer. In any such case, the Executive’s
resignation for Good Reason shall be effective by delivering to
Employer, within thirty (30) days after the occurrence of one
of the conditions described above is known to the Executive, a
written notice specifying a date for termination of the
Executive’s employment which is not less than thirty
(30) days after the date of the notice, provided, that the
Executive cannot cure such "Good Reason," to the satisfaction of
the Executive, during the thirty (30) day period, stating that
the Executive is resigning for Good Reason as contemplated by this
Section 3.1(c), and setting forth in reasonable detail the
facts and circumstances claimed to provide a basis for the
Executive’s resignation for Good Reason hereunder.
(d)
Termination For Cause . The Agreement Term may be terminated
by Employer for " Cause " at any time during the Agreement
Term upon fifteen (15) days’ written notice to the
Executive, which notice shall state the facts constituting such
"Cause," provided,
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that the Executive cannot cure such "Cause," to the satisfaction
of CapitalSouth, during the fifteen (15) day period. For the
purpose of this Section 3.1(d), the term "Cause" shall mean
(i) willful misconduct or gross malfeasance, or an act or acts of
gross negligence in the course of employment; (ii) the
Executive’s commission, conviction, admission or confession
of any felony or crime of moral turpitude; (iii) willful
violation of any law, rule, regulation (other than traffic
violations or similar offenses) or final cease-and-desist order,
(iv) 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. Section 1818(e)(4) or
(g)(1)); or (v) the existence of a substantial and objective
act of misfeasance or nonfeasance by the Executive which is plainly
sufficient, under sound banking principles (as recognized by the
Alabama State Banking Department, the Federal Deposit Insurance
Corporation, or any other appropriate bank regulatory authority to
the extent said agencies would no longer approve the Executive to
hold a comparable executive position), to conclude that the
Executive is unfit to continue in the capacities stated in this
Agreement. Employer shall have the power to temporarily suspend
Executive, with pay, from duty if there is reasonable evidence of
the possibility of Cause until Cause is either proved or disproved;
if disproved, full reinstatement will immediately be effected.
3.2 Consequences of
Termination .
(a)
For Cause; Death or Disability; Without Good Reason . In the
event Executive’s employment is terminated (i) by
Employer for Cause under Section 3.1(d) hereof, (ii) as a
result of the Executive’s death or Disability under
Section 3.1(a) hereof, or (iii) by the Executive under
Section 3.1(b) hereof, Employer shall be under no further
obligation to make payments or provide benefits to the Executive,
except for Base Salary earned but unpaid at the time of such
termination, payment for accrued vacation, reimbursable expenses
incurred by but not yet reimbursed to the Executive at the time of
such termination, any earned but unpaid incentive awards due to the
Executive, vested accrued retirement benefits, group health and any
other benefits coverage that is required to be continued by
applicable law.
(b)
Other than for Cause; Resignation for Good Reason . In the
event the Executive’s employment is terminated by Employer
other than for Cause under Section 3.1(d) hereof or the
Executive resigns for Good Reason under Section 3.1(c) hereof,
Employer shall pay to the Executive an amount equal to the product
of $140,300 (or Executive’s then present salary, if it is
different) multiplied by a fraction, the denominator of which is
365 and the numerator of which is the number of days remaining in
the Original Agreement Term, and shall be paid semi-monthly during
the remainder of what would have been the Original Agreement Term,
beginning on the next normal semi-monthly payroll of Employer
following separation from service.
(c)
Obligation of Employer to Make the Payments Under
Section 3.2(b) Hereof . Compliance by the Executive with
Section 4 hereof is a condition precedent to Employer’s
obligation to make, or to continue t
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