EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Employment Agreement") is made and entered
into, subject to the provisions of Paragraph 36, as of this 24th day of January,
1996, by and between BEAL BANK, SSB, a Texas corporation (hereafter the "Bank")
and DAVID C. MEEK, a resident of Texas (hereafter the "Executive").
WHEREAS, the Executive has considerable experience, expertise, and training
in management related to lending and services offered by the Bank; and
WHEREAS, the Bank desires and intends to employ the Executive as President
and Chief Executive Officer of the Bank pursuant to the terms and conditions set
forth in this Employment Agreement, and the Executive desires to accept such
employment pursuant to the terms and conditions set forth in this Employment
Agreement; and
WHEREAS, both the Bank and the Executive have read and understood the terms
and provisions set forth in this Employment Agreement, and have been afforded a
reasonable opportunity to review this Employment Agreement with their respective
legal counsel.
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth in this Employment Agreement, the Executive and the Bank agree as follows:
DURATION
1. This Employment Agreement shall continue in full force and effect for
three (3) years, commencing on January 24, 1996 ("Hire Date"), and will expire
and terminate by its own terms on December 31, 1998, unless either party elects
to terminate this Employment Agreement prior to December 31, 1998, in accordance
with the TERMINATION provisions set forth below at Paragraphs 15-21.
2. Both the Bank and the Executive acknowledge and agree that, subsequent
to the expiration date, the parties may agree to continue the employment
relationship under such terms as they may mutually agree upon. However, both
parties acknowledge and agree that, in the event they fail to agree upon terms
for the continuation of the Executive's employment subsequent to the expiration
date, the employment of the Executive shall automatically terminate on the
expiration date without any additional liability or obligation on the part of
either party except as otherwise specified in Paragraph 21.
COMPENSATION
3. During the first year of this Employment Agreement, the Bank shall
compensate the Executive on a salary basis at the bi-weekly rate of $7,692.30
($200,000 annually), payable in accordance with the Bank's ordinary payroll
policies and procedures. During the
second year of this Employment Agreement, the Executive will receive a five
percent (5%) increase in salary, effective as of January 1, 1997. During the
third and final year of the term of this Employment Agreement, the Executive
will receive another five percent (5%) increase over his salary for the
preceding year, such increase to be effective as of January 1, 1998.
Both the Bank and the Executive acknowledge that such compensation and the
other covenants and agreements of the Bank contained herein are fair and
adequate compensation for the Executive's services, and for the mutual promises
described below.
4. The Bank and the Executive acknowledge and agree that the Bank shall
reimburse the Executive for all reasonable expenses, including, but not limited
to travel expenses, lodging expenses, meals and entertainment expenses, that the
Executive may incur in the performance of his duties and obligations under this
Employment Agreement. PROVIDED, HOWEVER, that the Executive shall be required
to submit receipts of other acceptable documentation to verify such expenses
prior to any reimbursements.
5. The Bank and the Executive acknowledge and agree that at the end of
each complete calendar quarter (first quarter to be pro-rated), of the
Executive's service pursuant to the terms of this Executive Agreement, the
Executive shall receive bonus compensation, payable 30 days after conclusion of
such quarter ("Bonus"). The Bonus shall be equal to two percent (2%) of the
amount by which the Bank's consolidated quarterly net after tax income, as
reflected on the Bank's Consolidated Report of Condition and Report of Income
("Call Report") filed with the Bank's regulatory authorities ("Quarter's
Income"), exceeds a twenty percent (20%) annualized return on the Bank's
consolidated equity at the end of the preceding quarter ("20% ROE"). The term
"Equity", for purposes of the Bonus calculation shall consist of the Bank's
common stock (and includes any amounts eligible for capital purposes), surplus
and undivided profits accounts, plus any dividends or distributions paid during
such quarter, without giving effect to adjustments required under F.A.S.B. 115,
as reflected on such Call Report. PROVIDED, HOWEVER, that if a consolidated net
loss, or if less that 20% ROE, has been reported on the Call Report by the Bank
in any prior quarter of the Executive's employment, no Bonus shall be payable
until and unless any loss is made up and a Quarter's Income, plus the Quarter's
Income from any prior quarter in which no Bonus was earned exceeds 20% ROE.
6. The Executive acknowledges and agrees that, at the discretion of the
Bank, certain employee benefits may be provided to the Executive incident to the
Executive's employment with the Bank. The Executive acknowledges and agrees
that any employee benefits provided to the Executive by the Bank incident to the
Executive's employment are governed by the applicable plan documents, summary
plan descriptions or employment policies, and may be modified, suspended or
revoked at any time, in accordance with the terms and provisions of the
applicable documents. In addition to the salary specified above, the Bank shall
also provide, as partial consideration for this employment agreement, the
standard benefits given to all senior level Bank employees plus four (4) weeks
of vacation per year, which vacation shall accrue at the rate of one week
vacation per three months of employment, or portion thereof upon Termination,
and the Executive may carry forward up to two weeks of unused vacation per year.
7. The Executive acknowledges and agrees that he shall be employed as
President and Chief Executive Officer of the Bank. The Executive covenants and
agrees that he will devote his best efforts and substantially all his working
time to this position with the Bank and its subsidiaries.
8. The Executive acknowledges and agrees that the duties and
responsibilities of the Executive required by his position as President and
Chief Executive Officer of the Bank are wholly within the discretion of the
Board of Directors of the Bank, and may be modified, or new duties and
responsibilities imposed by the Board of Directors of the Bank, at any time,
without the approval or consent of the Executive. However, these duties and
responsibilities may not constitute immoral or unlawful acts or require that the
Executive violate any regulation or directive of a governmental body. In
addition, all duties and responsibilities must be consistent with the
Executive's role as President and Chief Executive Officer.
9. The Executive acknowledges and agrees that, during the term of this
Agreement, he has a fiduciary duty of loyalty to the Bank, and that he will not
engage in any activity during the term of this Agreement, which will or could,
in any significant way, harm the business, business interests, or reputation of
the Bank.
10. The Executive acknowledges and agrees that he will not directly or
indirectly engage in competition with the Bank at any time during the existence
of the employment relationship between the Bank and the Executive, and the
Executive will not on his own behalf, or as another's agent, employee, partner,
shareholder or otherwise, engage in any of the same or similar duties and/or
responsibilities required by the Executive's position with the Bank, other than
as an employee of the Bank pursuant to this Employment Agreement.
NON-DISCLOSURE
11. The Executive acknowledges and agrees that certain information
concerning the Bank's services, techniques, pricing, business projections,
business plans and strategies, marketing plans, techniques, assets, customer
contracts, customer needs, and prospective customers is highly sensitive and
confidential, and has been obtained only through the significant effort and
expense to the Bank; and that, as a result, the Executive must agree to treat
this information as highly confidential trade secret information at all times
during the existence of the employment relationship between the Bank and the
Executive, and after the termination of the employment relationship. The Bank
acknowledges and agrees that the Executive brings to the Bank over twenty years
of experience in services, pricing techniques, business projections, business
plans and strategies, marketing plans, techniques, assets, and customer contacts
previously obtained by the Executive.
12. The Executive acknowledges and agrees that, subsequent to the
execution of this Employment Agreement, the Executive will have access to
certain confidential and highly sensitive information relating to the Bank
incident to his employment by the Bank, including, but not limited to,
information pertaining to: (i) the identity of the Bank's customers and customer
prospects; (ii) the special needs of the Bank's customers; (iii) confidential
market studies, information, and analyses; (iv) current and prospective
services; (v) business projections; (vi) business plans and strategies; (vii)
financial statements and information; and (viii) special services of the Bank.
The Executive acknowledges and agrees that this information, if disclosed, could
place the Bank at a competitive disadvantage. Consequently, the Executive
acknowledges and agrees not to disclose such information to any person who is
not then a current employee of the Bank at any time prior to, or subsequent to,
the termination of his employment without the express, written consent of the
Bank. Notwithstanding anything in this Agreement to the contrary or seemingly
inconsistent herewith, the parties agree that all information referred to in
Paragraphs 11 and 12 shall not be deemed trade secrets or confidential
information of the Bank if such information is already available to the
competitors of the Bank.
NON-INTERFERENCE
13. The Executive covenants and agrees that, for a period of thirty-six
(36) months subsequent to the termination of his employment, whether such
termination occurs at the insistence of the Bank or the Executive, the Executive
shall not recruit, hire, or attempt to recruit or hire, directly or by assisting
others, any other employees of the Bank, nor shall the Executive contact or
communicate with any other employees of the Bank for the purpose of inducing
other employees to terminate their employment with the Bank. For purposes of
this covenant, "other employees" shall refer to employees who are still actively
employed by, or doing business with, the Bank at the time of the attempted
recruiting or hiring.
REMEDIES
14. In the event that the Executive violates any of the provisions set
forth in this Employment Agreement relating to NON-DISCLOSURE or NON-
INTERFERENCE, the Executive acknowledges and agrees that the Bank may suffer
immediate and irreparable harm. Consequently, the Executive and the Bank
acknowledge and agree that the Bank shall be entitled to immediate injunctive
relief, either by temporary or permanent injunction, to prevent or cure such a
violation.
TERMINATION
15. The Executive acknowledges and agrees that the Board of Directors of
the Bank reserves the right to terminate his EMPLOYMENT, without cause, for any
reason, by providing the Executive written notice of the termination, delivered
in person, or by certified U.S. mail to the Executive's last known address
reflected in the Bank's personnel records. Such notice shall be effective upon
personal delivery or three days after mailing by certified
mail. However, if the Executive's employment is terminated at the Bank's
insistence without "good cause" as defined below in Paragraph 17, the Bank
covenants and agrees to provide the Executive with the SEVERANCE set forth
below at Paragraph 22.
16. The Executive acknowledges and agrees that the Bank may terminate this
Employment Agreement at any time, without notice, for any "good cause" defined
as the following:
a. In the event the Executive violates any material provision of
this Employment Agreement or is grossly negligent, and fails to
cure such violation or the effects of such gross negligence
within thirty (30) days after written notice to the Executive by
the Board specifying in reasonable detail the alleged violation
or gross negligence;
b. In the event the Executive is convicted of a felony, or a
misdemeanor involving moral turpitude; or
c. In the event the Executive engages in gross misconduct in the
course and scope of his employment with the Bank, including
indecency, immorality, material insubordination, dishonesty,
unlawful harassment, use of illegal drugs, or fighting.
The Executive acknowledges and agrees that in the event of the
Executive's termination for cause, he shall be entitled to salary and earned
benefits in accordance with Paragraphs 3 and 6 through the date of termination.
17. The Bank acknowledges and agrees that the Executive reserves the right
to terminate this Employment Agreement at any time, for any reason, with or
without cause, by providing thirty (30) days written notice, by personal
delivery or certified United States mail, to the Bank at its principal business
address of the Executive's intention to terminate this Employment Agreement.
Such notice shall be effective upon personal delivery or three (3) days after
mailing by certified mail.
18. The Executive acknowledges and agrees that in the event of the
Executive's death, this Employment Agreement will terminate immediately, without
notice, on the date of the Executive's death. The Bank acknowledges and agrees
that, in the event of the Executive's
death, the Bank will pay to the Executive's estate all salary, additional bonus
compensation, unused or accrued vacation pay, and other earned benefits in
accordance with Paragraphs 3, 5 and 7 through the date of termination.
19. The Executive acknowledges and agrees that his employment may be
terminated with thirty (30) days prior written notice in the event the Executive
becomes physically or mentally disabled and cannot perform the essential
functions of his position for sixty (60) consecutive days, with or without
reasonable accommodations. The Bank agrees to pay the Executive all salary,
additional bonuses compensation, unused or accrued vacation pay and all
other earned benefits in accordance with Paragraphs 3, 5 and 6 through the
date of termination.
20. The Executive acknowledges and agrees that in the event of termination
of his employment, for whatever reason, whether at the insistence of the
Executive or at the insistence of the Bank, the Executive will return to the
Bank within seventy-two (72) hours of the time when notice of termination is
communicated by either party, any and all equipment, literature, documents,
data, information, order forms, memoranda, correspondence, customer and
prospective customer lists, customer's orders, records, cards or notes acquired,
compiled or coming into the Executive's knowledge, possession or control in
connection with his activities as an employee of the Bank, as well as all
machines, parts, equipment, or other materials received from the Bank or from
any of its customers, agents, or suppliers, in connection with such activities.
21. All accrued amounts that are due and payable pursuant to the terms of
this Employment Agreement shall continue to be due and owing until they are paid
in full and such obligation shall survive any termination of this Executive
Agreement.
SEVERANCE
22. The Executive and the Bank acknowledge and agree that, if the Bank
elects to terminate Executive's employment at any time prior to December 31,
1998, for any reason other than "good cause" as defined in Paragraph 16, the
Executive shall also be entitled to receive severance pay in addition to the
amounts of salary, earned bonus compensation, accrued vacation, and earned
benefits through the date of termination in accordance with Paragraph 3, 5 and
6. Such severance pay shall be as follows:
a. During the first two years of the agreement $150,000 less
statutory payroll deductions payable within thirty (30) days
following the date that the notice of termination becomes
effective.
b. During the third year of employment the lesser of $150,000 or the
remaining prorated salary benefits (including bonus) and prorated
accrued vacation for the third year, less statutory payroll
deductions, payable within thirty (30) days following the date
that the notice of termination becomes effective or thirty (30)
days after any bonus is calculated with respect to bonus
payments.
SEVERABILITY
23. The Executive and the Bank acknowledges and agree that each covenant
and/or provision of this Employment Agreement shall be enforceable independently
of every other covenant and/or provision. Furthermore, the Executive and the
Bank acknowledge and agree
that, in the event any covenant and/or provision of this Employment Agreement is
determined to be unenforceable for any reason, the remaining covenants and/or
provisions will remain effective, binding, and enforceable.
WAIVER
24. The parties acknowledge and agree that the failure of either to
enforce any provision of this Employment Agreement shall not constitute a waiver
of that particular provision, or of any other provisions of this Employment
Agreement.
25. The Executive acknowledges and agrees that this Employment Agreement
may be assigned by the Bank to any successor-in-interest and shall inure to the
benefit of, and be fully enforceable by, any successor and/or assignee; and this
Employment Agreement will be fully binding upon, and may be enforced by the
Executive against, any successor and/or assignee of the Bank.
26. The Executive acknowledges and agrees that his obligations, duties and
responsibilities under this Employment Agreement are personal and shall not be
assignable, and that this Employment Agreement shall be enforceable by only the
Executive or his estate. In the event of the Executive's death, this Employment
Agreement shall be enforceable by the Executive's estate, executors, and/or
legal representatives.
CHOICE OF LAW
27. Both parties acknowledge and agree that the law of Texas will govern
the validity, interpretation, and effect of this Employment Agreement, and any
other dispute relating to, or arising out of, the employment relationship
between the Bank and the Executive.
ARBITRATION
28. The Executive and the Bank acknowledge and agree that any claim or
controversy arising out of or relating to this Employment Agreement, or the
breach of this Employment Agreement, or any other dispute arising out of or
relating to the employment of the Executive by the Bank, shall be settled by
final and binding arbitration in the city of Dallas, Texas in accordance with
the Employment Arbitration Rules of the American Arbitration Association in
effect on the date the claim or controversy arises. The Executive and the Bank
further acknowledge and agree that either party must request arbitration of any
claims controversy within sixty (60) days of the date the claim or controversy
arises by giving written notice of the party's request for arbitration by
certified U.S. mail or personal delivery addressed to the Bank's principal
business address or to the Executive's last known address reflected in the
Bank's personnel records. Notice shall be effective upon delivery or mailing.
Failure to give notice of any claim or controversy within sixty (60) days shall
constitute a waiver of the claim or controversy.
29. All claims or controversies subject to arbitration shall be submitted
to arbitration within three (3) months from the date the written notice of a
request for arbitration is effective. All claims or controversies shall be
resolved by a panel of three (3) arbitrators who are licensed to practice law in
the State of Texas and who are experienced in the arbitration of labor and
employment disputes. These arbitrators shall be selected in accordance with the
Rules of the American Arbitration Association in effect at the time the claim or
controversy arises. Either party may request the arbitration proceeding be
stenographically recorded by a Certified Shorthand Reporter. The arbitrators
shall issue a written decision with respect to all claims or controversies
within thirty (30) days from the date the claims or controversies are submitted
to arbitration. The Executive and the Bank acknowledge and agree that each
party will bear fifty percent (50%) of the actual cost of the arbitration
proceeding (exclusive of each party's own legal fees).
30. The Bank and the Executive acknowledge and agree that the arbitration
provisions in Paragraphs 28 and 29 may be specifically enforced by either party,
and submission to arbitration proceedings compelled, by any court or competent
jurisdiction. The Bank and the Executive further acknowledge and agree that the
decision of arbitrators may be specifically enforced by either party in any
court of competent jurisdiction.
31. Notwithstanding the arbitration provisions set forth at Paragraphs 28-
30, the Executive and the Bank acknowledge and agree that nothing in this
Employment Agreement shall be construed to require the arbitration of any claim
or controversy arising under the NON-DISCLOSURE, and NON-INTERFERENCE provisions
set forth at Paragraphs 11-14 of this Agreement. These provisions shall be
enforceable by any court of competent jurisdiction and shall not be subject to
ARBITRATION pursuant to Paragraphs 28-30. The Executive and the Bank further
acknowledge and agree that nothing in this Employment Agreement shall be
construed to require arbitration of any claim for worker's compensation or
unemployment compensation.
MODIFICATION
32. Both parties acknowledge and agree that this Employment Agreement
constitutes the complete and entire agreement between the parties; that the
parties have executed this Employment Agreement based upon the express terms and
provisions set forth herein; that the parties have not relied on any
representatives, oral or written, which are not set forth in this Employment
Agreement; that no previous agreement, either oral or written, shall have any
effect on the terms or provisions of this Employment Agreement; and that all
previous agreements, either oral or written, are expressly superseded and
revoked by this Employment Agreement.
33. Both parties acknowledge and agree that the covenants and/or
provisions of this Employment Agreement may not be modified by any subsequent
agreement unless the modifying agreement: (i) is in writing; (ii) contains an
express provision referencing this Employment Agreement; (iii) is signed by the
Executive; and (iv) is approved by the Board of Directors of the Bank.
INDEMNIFICATION
34. During the term of this Employment Agreement, the Bank shall indemnify
and agree to hold the Executive harmless from and against any and all
liabilities, losses, costs, damages, obligations, and expenses (including
attorney's fees) resulting from the fact that the Executive was an officer,
director, or employee of the Bank in accordance with and to the fullest extent
permissible under the law, including, without limitation, the Texas Savings Bank
Act and Article 2.02-1 of the Texas Business Corporation Act, and may purchase
such indemnification insurance as the Board of Directors may from time to time
determine.
LEGAL CONSULTATION
35. The Executive and the Bank acknowledge and agree that both parties
have been accorded a reasonable opportunity to review this Employment Agreement
with legal counsel prior to executing the agreement.
EFFECTIVE DATE
36. Subject to the approval and ratification by the Bank's Board of
Directors, this Agreement shall be effective January 24, 1996 (the "Effective
Date").
NOTICES
37. Any and all notices of documents or other notices required to be
delivered under the terms of this Employment Agreement shall be addressed to
each party as follows:
BANK:
15770 N. Dallas Parkway
Suite 300, LB #66
Dallas, Texas 75248-6617
Fax: (214) 866-8420
EXECUTIVE:
15725 Havenrock Circle
Dallas, Texas 75248
Fax: (214) 788-2337
EXECUTED ON THIS 24TH DAY OF JANUARY, 1996, AT DALLAS, TEXAS, but to be
effective as of January 24, 1996, but only after approval of the Board of
Directors of the Bank.
BEAL BANK, SSB
By: /s/ D. Andrew Beal
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D. Andrew Beal
Chairman of the Board
EXECUTIVE:
By: /s/ David C. Meek
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David C. Meek