Exhibit 10.12
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EMPLOYMENT AGREEMENT
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This Employment Agreement (this "Agreement") is effective November 30, 1997
(the "Effective Date"), by and between First American Bank, an Alabama banking
corporation ("Bank"), and Alabama National BanCorporation, a Delaware
corporation ("ANB"; hereinafter together with the Bank collectively referred to
as "Employer"); and Dan M. David ("Executive").
Recitals
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WHEREAS, the Bank is a wholly-owned subsidiary of First American Bancorp
("FAB");
WHEREAS, pursuant to that certain Agreement and Plan of Merger dated July 24,
1997 between FAB and ANB (the "Merger Agreement"), the parties have agreed that
FAB shall merge with and into ANB, and the Bank shall become a wholly-owned
subsidiary of ANB; and
WHEREAS, Executive has been and continues to serve as the Chairman and Chief
Executive Officer of the Bank and, as a condition to the consummation of the
transactions provided for in the Merger Agreement, Executive and Employer have
agreed to enter into this Agreement;
Agreement
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NOW THEREFORE, in consideration of the mutual recitals and covenants contained
herein, the parties hereby agree as follows:
1. EMPLOYMENT. Employer agrees to employ Executive and Executive agrees to
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be employed by Employer, subject to the terms and provisions of this Agreement.
2. TERM. The employment of Executive by Employer as provided in Section 1
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will be for a period of five (5) years commencing on the Effective Date, unless
earlier terminated in accordance with the provisions of Section 9 hereof;
provided, however, that the obligations and rights set forth in Sections 7, 8
and 9 hereof shall survive termination of this Agreement (except, under certain
specified circumstances set forth in Section 9 (e) hereof, the obligations and
rights set forth in Section 8 shall expire upon termination).
3. DUTIES; EXTENT OF SERVICES. Executive shall perform for Employer all
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duties incident to the position of Chairman and Chief Executive Officer of the
Bank, under the direction of the board of directors of Bank or its designee. At
the next meeting of the board of directors of ANB immediately subsequent to the
Effective Time of the Merger, Executive shall be elected to serve as its Vice-
Chairman, and thereafter for the remaining term of this
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Agreement, at each annual meeting of the ANB Board, he shall be nominated to
serve as its Vice-Chairman. In addition, Executive shall engage in such other
services for Bank or its affiliated companies as Employer from time to time
shall direct. The precise services of Executive and the title of Executive's
position may be extended, curtailed or modified by Employer from time to time
without affecting the enforceability of the terms of this Agreement. Executive
shall use his best efforts in, and devote his entire time, attention, and
energy, to Employer's business and, except as previously disclosed to Employer,
shall not during the term hereof serve as an officer or director of any business
enterprise other than the Bank, ANB or an Affiliate thereof. Nothing contained
herein is intended to prohibit Executive from spending a reasonable amount of
time managing his personal investments and discharging his civic
responsibilities and other permitted activities as long as such activities do
not interfere with his duties and obligations under this Agreement.
4. COMPENSATION.
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(a) During the term of this Agreement, Executive's total annual cash
compensation shall be an amount not less than One Hundred Eighty-Six
Thousand Dollars ($186,000). During the term of this Agreement, Executive
may also receive other cash or non-cash compensation (including without
limitation merit increases or participation in any incentive compensation
plans adopted by Employer) as may be granted by ANB's Board of Directors,
in its sole discretion.
(b) Bank shall continue to provide Executive with an automobile owned or
leased by Bank, which automobile shall be comparable to the present automobile
provided by Bank to Executive.
(c) Executive shall be entitled to vacation days, paid holidays and sick days
as provided in Bank's Personnel Policy.
(d) Currently, Bank maintains a term life insurance policy (the "Policy") on
Executive with a face value of $1,000,000. During the term of this
Agreement, Employer shall continue in force for Executive's benefit the
Policy.
5. COMPLIANCE WITH RULES AND POLICIES. Executive shall comply with all of
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the rules, regulations, and policies of Employer now or hereinafter in effect.
He shall promptly and faithfully do and perform any and all other duties and
responsibilities which he may, from time to time, be directed to do by the board
of directors of Bank or the board of directors of ANB or their respective
designee.
6. REPRESENTATION OF EXECUTIVE. Except as previously disclosed to Employer,
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Executive represents to Employer that he is not subject to any rule, regulation
or agreement, including without limitation, any noncompete agreement, that
purports to, or which reasonably could, be expected to limit, restrict or
interfere with Executive's ability to engage in the activities provided for in
this Agreement.
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7. DISCLOSURE OF INFORMATION. Executive acknowledges that any documents and
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information, whether written or not, that comes into Executive's possession or
knowledge during Executive's course of employment with Employer which is not or
has not become part of the public domain, including, without limitation the
financial and business conditions, goals and operations of customers of Bank,
ANB or any of their respective affiliates or subsidiaries as the same may exist
from time to time (collectively, "Confidential Information"), are valuable,
special and unique assets of Employer's business. Executive will not, during or
after the term of this Agreement, (i) disclose any written Confidential
Information to any person, firm, corporation, association, or other entity not
employed by or affiliated with Employer for any reason or purpose whatsoever, or
(ii) use any written Confidential Information for any reason other than to
further the business of Employer. Executive agrees to return any written
Confidential Information, and all copies thereof, upon the termination of
Executive's employment (whether hereunder or otherwise). In the event of a
breach or threatened breach by Executive of the provisions of this Section 7, in
addition to all other remedies available to Employer, Employer shall be entitled
to an injunction restraining Executive from disclosing any written Confidential
Information or from rendering any services to any person, firm, corporation,
association or other entity to whom any written Confidential Information has
been disclosed or is threatened to be disclosed. Executive further agrees that
he will not divulge to any person, firm, corporation, association, or other
entity not employed by or affiliated with Employer, any of Employer's business
methods, sales, services, or techniques, regardless of whether the same is
written or not.
8. COMPETITION.
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(a) Except as specifically provided otherwise in this Agreement, during the
period of his employment by Employer and for a period of two (2) years after
such employment (whether such employment shall have ended by reason of the
expiration or termination of this Agreement or otherwise), Executive will not,
individually or as an employee, agent, officer, director or shareholder of or
otherwise through any corporation or other business organization, directly or
indirectly, (i) carry on or engage in a similar business or solicit or do
similar business with any customer of Bank or ANB or any of their respective
subsidiaries or affiliates in any territory in which Bank or ANB or any of their
respective subsidiaries or affiliates is conducting business; or (ii) solicit
any employee of Bank or ANB or any of their subsidiaries or affiliates to leave
his or her employment with Bank or ANB or any of their subsidiaries or
affiliates for any reason without the prior written consent of Employer;
provided, however, notwithstanding anything to the contrary contained herein, if
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Executive's employment by Employer is terminated for any reason, this covenant
not to compete is not intended to prohibit Executive from serving as an
employee/officer of certain small loan finance companies in which Executive
currently maintains an ownership interest or any similar companies in which he
may in the future purchase an ownership interest, as long as such small loan
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finance or similar companies are not otherwise engaged in the business of
banking.
(b) Executive represents that his experience and capabilities are such that
the provisions of this Section 8 will not prevent him from earning a livelihood.
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(c) If Executive violates the provisions of Section 8(a) above, the period
during which the covenants set forth therein shall apply shall be extended one
(1) day for each day in which a violation of such covenants occurs; and if suit
be brought to enforce such covenants and one or more violations by Executive be
established, then Employer and Bank shall be entitled to an injunction
restraining Executive from further violations for a period of two (2) years from
the date of the final decree, less only such number of days that Executive shall
have not violated such covenants. The purpose of this provision is to prevent
Executive from profiting from his own wrong if he violates such covenants.
9. TERMINATION.
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(a) Employer shall be obligated to comply with all provisions of this
Agreement and may terminate Executive only For Cause. "For Cause" shall mean (i)
abuse of or addiction to intoxicating drugs (including alcohol); (ii) any act on
the part of Executive which constitutes fraud, willful malfeasance of duty or
conduct grossly inappropriate to Executive's office and is demonstrably likely
to lead to material injury to Bank, ANB or a successor or affiliate of Bank or
ANB; (iii) a felony conviction of Executive; or (iv) the suspension or removal
of Executive by federal or state banking regulatory authorities; provided, that
"For Cause" shall not include Executive's medical disability. In addition, the
services of Executive and the obligations of Employer under this Agreement may
be terminated For Cause by Employer due to the death of Executive.
(b) If Employer terminates Executive's employment hereunder "For Cause" prior
to November 30, 2002, all rights and obligations specified in Section 8 shall
survive any such termination and Executive shall not be entitled to any further
compensation from Employer.
(c) If for any reason during the term of this Agreement Executive desires to
cease working for Employer, Executive shall notify Employer of such desire
and Employer may choose, in its sole discretion, one of the following
alternatives:
(i) (A) the employment relationship between Employer and Executive shall
immediately terminate, (B) all rights and obligations specified in Section
8 shall survive any such termination and (C) Executive shall not be
entitled to any further compensation from Employer.
(ii) (A) the employment relationship between Employer and Executive shall
continue for the term of this Agreement, (B) Executive shall continue to
receive the minimum cash compensation provided for in Section 4(a), (C)
Employer shall continue to maintain the Policy described in Section 4(d)
and health insurance comparable to that maintained by Employer on behalf of
Executive prior to such termination through the fifth anniversary of this
Agreement and (D) all rights and obligations specified in Section 8 shall
survive any such termination, which for purposes hereof shall mean that the
noncompete covenant provided for therein shall continue through the seventh
anniversary of the date of this Agreement.
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(d) If Employer terminates Executive other than "For Cause", (i) Executive
shall continue to receive the minimum cash compensation provided for in Section
4(a), (ii) Employer shall continue to maintain the Policy described in Section
4(d) and health insurance comparable to that maintained by Employer on behalf of
Executive prior to such termination through the fifth anniversary of this
Agreement, and (iii) all rights and obligations specified in Section 8 shall
survive any such termination, which for purposes hereof shall mean that the
noncompete covenant provided for therein shall continue through the seventh
anniversary of the date of this Agreement.
(e) Notwithstanding anything to the contrary contained herein, upon the
occurrence of a "Change in Control", all rights and obligations specified in
Section 8 (but not Section 4) shall terminate immediately. For purposes of this
Section 9(e), "Change of Control" shall mean the occurrence during the term of
this Agreement of any of the following events: (i) a merger, consolidation or
other corporate reorganization of ANB in which ANB does not survive; (i) a
merger, consolidation or other corporate reorganization of the Bank, in which
the Bank does not survive, excluding any such merger, consolidation or
reorganization involving the Bank in which ANB remains the ultimate parent of
the resulting entity; (iii) the acquisition of beneficial ownership by one
person or a related group of persons of greater than fifty percent (50%) of the
outstanding voting stock or assets of ANB, excluding the existing related group
of stockholders that includes certain of ANB's current officers and directors
and the one family that on the date hereof owns greater than 10% of the voting
stock; or (iv) individuals who currently constitute the directors of ANB, or who
become directors of ANB upon nomination or election by the directors of ANB,
other than through an actual or threatened stockholder election contest, cease
for any reason to constitute a majority of the directors of ANB.
(f) Notwithstanding anything to the contrary contained herein, the noncompete
covenant contained in Section 8 hereof shall not extend beyond the seventh
anniversary of the execution of this Agreement.
(g) The provisions of Section 7 shall survive regardless of any termination
of Executive's employment hereunder, whether voluntary or involuntary.
10. NOTICE. For the purposes of this Agreement, notices and demands shall be
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deemed given when mailed by United States mail, addressed in the case of Bank to
First American Bank, 251 Johnston Street S.E., Post Office 2203, Decatur,
Alabama 35609-2203, Attention: Chairman of the Board of Directors, with a copy
to ANB at Alabama National BanCorporation, 1927 First Avenue North, Birmingham,
Alabama 35203, Attention: Chief Executive Officer; or in the case of Executive,
to 251 Johnston Street, S.E., Decatur, Alabama 35609-2203.
11. MISCELLANEOUS. No provision of this Agreement may be modified, waived or
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discharged unless such modification, waiver or discharge is agreed to in
writing. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws
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of the State of Alabama. This Agreement supersedes and cancels any prior
employment agreement or understanding entered into between Executive and Bank or
Executive and FAB.
12. VALIDITY. The invalidity of any provision or provisions of this
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Agreement shall not affect any other provision of this Agreement, which shall
remain in full force and effect, nor shall the invalidity of a portion of any
provision of this Agreement affect the balance of such provision.
13. DEFAULT.
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(a) If Executive breaches or violates any of the covenants, conditions, or
terms of this Agreement on his part to be performed, Employer shall have
the right, without notice to Executive, to obtain a writ of injunction
against him restraining him from violating any such covenant, condition, or
term, such notice being hereby expressly waived by Executive.
(b) Additionally, in the event of any conduct by Executive violating any
provision of this Agreement, Employer shall be entitled, if it so elects,
to institute and prosecute proceedings in any court of competent
jurisdiction, either at law or in equity, to obtain damages for such
conduct, to enforce specific performance of such provision or to obtain any
other relief or any combination of the foregoing that Employer may elect to
pursue.
14. PARTIES. This Agreement shall be binding upon and shall inure to the
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benefit of any successors or assigns to Bank or ANB. Executive may not assign
any of his rights or delegate any of his duties or obligations under this
Agreement or any portion hereof.
15. DEFINITIONS. Any capitalized terms not otherwise defined herein shall
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have the meanings ascribed to them in the Merger Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
Executive and by a duly authorized officer of each of Bank and ANB as of the
date first above written.
Witnesses: "EXECUTIVE":
/s/ James R. Thompson, III /s/ Dan M. David
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Dan M. David
/s/ Alfred E. Cheatham, Jr.
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"BANK":
Attest: First American Bank
By: /s/ Jon H. Moores By: /s/ Dan M. David
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Its: Secretary Its: Chairman of the Board of Directors
[Corporate Seal]
"ANB":
Attest: Alabama National BanCorporation
By: /s/ Kimberly Moore By: /s/ John H. Holcomb, III
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Its: Secretary Its: Chief Executive Officer
[Corporate Seal]
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