Exhibit 10(D)
EMPLOYMENT AGREEMENT
This Employment Agreement is made on August 2, 1995, between Capital
Directions, Inc. ("CDI"), Mason State Bank ("Bank"), and Timothy Gaylord
("Gaylord").
WHEREAS, CDI desires to employ Gaylord, and
WHEREAS, Gaylord desires to be employed by CDI, and
THEREFORE, CDI and Gaylord hereby enter into this Employment Agreement
("Agreement") on the following terms and conditions.
1. a. CDI owns all the voting common stock of the Bank. CDI
agrees to employ Gaylord as its President and Chief Executive
Officer for a term of 2 years, effective as of October 1,
1995. Bank agrees to employ Gaylord as its President and Chief
Executive Officer for a term of 2 years, effective as of
October 1, 1995. This agreement will automatically renew for
subsequent 1 year periods, unless any party gives the other
parties written notice at least 90 days before the end of the
period of the intention not to renew the Agreement. Thus, if
either CDI or the Bank or Gaylord gives such notice, this
Agreement shall not be automatically renewed. In the event
that the Bank or CDI gives such notice, Gaylord shall be paid
a severance payment an amount equal to 6 months salary upon
expiration of the Agreement. It is specifically understood
that in the event of Gaylord's solely initiated termination,
no severance payment shall be due to Gaylord as described
above.
b. Gaylord shall be an employee and officer of CDI and CDI may
direct Gaylord to perform duties as President and Chief
Executive Officer of one or more of its subsidiary
corporations, including Bank. The Executive's activities as
President and Chief Executive Officer of Bank shall in no way
affect the enforceability of this Agreement and shall in no
way diminish Gaylord's status as an employee of CDI or his
right to compensation under this Agreement.
2. Bank, CDI, and Gaylord enter into this Agreement for the
purpose of establishing Gaylord's salary and benefits, and to
provide for Gaylord's income in the event that Bank or CDI is
acquired by a bank holding company, financial institution, or
a group of individuals acquiring majority control as defined
by the federal Change in Bank Control Act. Acquisition or
control of either CDI or the Bank shall hereinafter be
referred to as acquisition or control of the Bank.
3. In the event the Bank is acquired or control of the Bank is
acquired, as referred to hereinbefore, the following shall
take effect:
A. In the event of an involuntary termination or
reduction in status and compensation in connection
with a change of control of the Bank, all rights
under the Bank's Incentive Stock Options Plan become
immediately vested and exercisable.
B. In the event Gaylord is dismissed without cause or if
his status and compensation are reduced without cause
by the acquiring bank holding
company, financial institution or control group after
acquisition or change in control but within 1 year of
said acquisition or change in control, Gaylord shall
be paid outright or in installments, at his option,
an amount equal to his annual salary.
C. In the event Gaylord voluntarily terminates his
employment with CDI and/or Bank after its acquisition
or change in control referred to hereinbefore, then
there shall be no obligation for payment of any
amount under the terms of this Agreement. Said
voluntary termination shall terminate all of the
obligations and liabilities of the Bank, CDI, and any
acquiring organization or control group under this
Agreement.
D. In the event Gaylord's compensation (including salary
and benefits) title and level of responsibility are,
without cause, in any way reduced, then Gaylord shall
have the election to effect the salary payout
provided by Section 3.B. A reduction in Gaylord's
compensation, including salary and benefits, or his
title and level of responsibility, without cause,
shall be considered the same as a dismissal of
Gaylord as provided for in Section 3.B.
4. It is further agreed between the parties that Gaylord's annual
salary shall be directly related to the Board of Director's
reasonable and good faith determination of the value of his
services to the Bank.
A. Gaylord's annual salary rate for 1995 shall be
$85,000. Any salary adjustments will become effective
and payable as of October 1, 1995.
B. Gaylord shall receive the following fringe benefits:
Gaylord is entitled to all employee benefits provided
for executive level employees as listed in the
Capital Directions, Inc. and its Subsidiaries
Administrative Regulations and Personnel Handbook. In
addition, Gaylord will receive a fully paid club
membership and dues, stock options, and bonuses as
granted by the Board of Directors.
Changes may be made to the salary and fringe benefits
herein set forth and such changes shall be set forth
in Attachment A. When Attachment A has been signed by
the Chairmen of the Boards of both CDI and the Bank
and the Executive, that salary and fringe benefits
shall be effective.
C. Gaylord agrees to fulfill the assigned
responsibilities of President and Chief Executive
Officer and to work diligently on behalf of Bank to
achieve the goals and objectives set forth by the
Bank's Board of Directors.
5. In the event of any violation by Gaylord of any terms of this
Agreement, or if there is cause for termination of Gaylord,
Gaylord's employment may be terminated immediately, without
notice, at any time, and with compensation only to the date of
the termination of Gaylord. "Cause" for termination shall
include the following events, but this list is simply some
examples and is not all-inclusive:
1. repeated unsatisfactory performance or repeated
uncooperative conduct;
2. the death of Gaylord;
3. the disability of Gaylord rendering him unable to
perform the services required under the Agreement for
a period of 90 days within any 120-day period;
4. known substance abuse by Gaylord;
5. felony conviction or plea (of nolo contendere or
otherwise) of Gaylord, if the felony involves moral
turpitude;
6. misdemeanor conviction or plea (of nolo contendere or
otherwise) of Gaylord, if the misdemeanor involves
moral turpitude;
7. Gaylord's repeated unprofessional, irresponsible, or
disruptive language or conduct in the performance of
his duties;
8. Gaylord's dishonesty, breach of professional or
corporate ethics, or criticism by a regulatory agency
involving a serious violation of law or regulations;
9. for Gaylord's failure to meet the goals and
objectives which shall be established by the Boards
of CDI and the Bank from time to time; or
10. Gaylord's substantial breach of any significant term
of this Agreement, including, but not limited to,
continued unsatisfactory job performance.
If criminal charges as described above in subsections (5) and (6) are
made against Gaylord, the Bank shall have the discretion to suspend
Gaylord for any period of time, except that the suspension shall end if
charges do not result in a conviction or a plea (either of guilty or
nolo contendere) of either the original charge or of any lesser charge.
If a regulatory agency criticizes Gaylord for serious regulatory
violations, the Bank shall have the discretion to suspend Gaylord for
any period of time, except that if the alleged violations are resolved
in his favor, the suspension shall end. A suspension, pursuant to items
(5), (6), or (8), above, would entail the cessation of the performance
of duties and all compensation.
The Chairman of the Board of the Bank shall retain the power and
authority to suspend Gaylord based on his determination that one of the
events described above has occurred.
Termination of this Agreement shall not relieve Gaylord of his
responsibilities to complete any records, cooperate with the Bank and
CDI on any litigation, claims, or investigations, and otherwise fulfill
all responsibilities under this Agreement which should have been
rendered prior to early termination.
6.
a. All parties specifically and knowingly waive their
rights to a jury trial. Any dispute or controversy
concerning the termination of employment or the
reduction of compensation, title, or level of
responsibility between Gaylord and CDI or the Bank
shall be resolved by arbitration under the laws of
the State of Michigan. Venue for any arbitration will
be Ingham County.
b. The arbitration proceeding shall be conducted under
the Employment Dispute Resolution Rules of the
American Arbitration Association in effect at the
time a demand for arbitration of the dispute is made.
The decision and award of the arbitrator made under
the AAA rules shall be exclusive, final, and binding
on all parties, their heirs, representatives,
successors, and assigns. Judgment upon the award
rendered by the arbitrator may be rendered in any
circuit court having jurisdiction of the matter. In
the event Gaylord, CDI, or the Bank shall require
equitable relief prior to the selection of any
arbitrator to resolve the dispute, either party may
seek temporary equitable relief from any court having
jurisdiction of the dispute, subject to any final
relief awarded by the arbitrator.
c. Limited civil discovery shall be permitted for the
production of documents and the taking of
depositions, provided, however, that no party is
permitted to take the deposition of more than three
witnesses except by agreement of the other party or
upon order of the arbitrator pursuant to the motion
of a party. Subject to the foregoing limitations,
discovery shall be conducted in accordance with the
Federal Rules of Civil Procedure with any enforcement
issues resolved by the arbitrator.
d. The arbitration and all proceedings, discovery, and
any award of the arbitrator, is confidential. Neither
the parties nor the arbitrator shall disclose any
information gained during the course of the
arbitration to any person or entity who is not a
party to the arbitration unless permitted by law.
Attendance at the arbitration shall be limited to the
parties and those called as witnesses.
7. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when
delivered or mailed by United States registered mail, return
receipt requested, postage prepaid, as follows:
If to CDI and the Bank: Mr. Douglas W. Dancer
Chairman of the Boards of:
a. Capital Directions, Inc. and
b. Mason State Bank
322 S. Jefferson St., Box 130
Mason, MI 48854
If to Gaylord: Mr. Timothy Gaylord
1066 Killdeer Dr.
Mason, MI 48854
or such other address as either party may have furnished to
the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon
receipt.
8. No provisions of this Agreement may be modified, waived, or
discharged unless such waiver, modification or discharge is
agreed to in writing signed by Gaylord, CDI and the Bank. No
waiver by any party hereto at any time of any breach by
another party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other
party shall be deemed a waiver of similarly or dissimilar
provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject
matter hereof have been made by either party which are not set
forth expressly in this Agreement. This Agreement shall be
governed by and construed in accordance with the laws of the
State of Michigan.
9. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in
full force and effect.
10. CDI agrees that the services Gaylord performs for any of its
subsidiaries, including the Bank, ultimately redound to the
benefit of CDI. Accordingly,
CDI agrees that insofar as the Bank, for any reason
whatsoever, is unable to perform any obligations assumed
hereunder, CDI shall fully and timely perform the same.
11. In consideration of the payment of severance as provided in
Paragraph 1.A., for a period of one (1) year after Gaylord's
last day of employment, Gaylord agrees to not provide
financial services or otherwise compete with the business of
CDI and the Bank in the City of Mason and a three (3) mile
radius. This prohibition includes services whether as an
employee, independent contractor, officer, director,
consultant, partner, or other affiliation.
12. Confidential Information
a. In connection with Gaylord's employment with the Bank
and CDI, Gaylord will have access to information or
materials that are considered trade secret,
confidential and/or proprietary ("Information").
Information includes, but is not limited to,
compilations of data, strategic plans, sales and
marketing plans, customer and supplier information,
financial information, and proposed agreements, and
applies to such Information whether communicated
orally, in writing, electronically, or by any other
means.
b. Information created by Gaylord during Gaylord's
employment with the Bank and CDI that relates to the
business of the Bank or CDI (or prospective business
opportunities), or uses the Bank and/or CDI
information, or is created with Bank or CDI resources
(including staff, premises, and equipment), belongs
to the Bank and/or CDI. This Information includes
copyrightable works of original authorship (including
but not limited to reports, analyses, and
compilations, business plans, new product plans),
ideas, inventions (whether patentable or not),
knowhow, processes, trademarks and other intellectual
property. All works of original authorship created
during Gaylord's employment with the Bank and CDI are
"works for hire" as that term is used in connection
with the U.S. Copyright Act. Gaylord hereby assigns
to the Bank and CDI all rights, title, and interest
in work product, including copyrights, patents, trade
secrets, trademarks, and knowhow.
c. Gaylord shall use Information only for the benefit of
the Bank and CDI and not for Gaylord's own benefit.
Gaylord shall not disclose Information to third
parties, and shall not take Information or Bank
and/or CDI materials upon termination of Gaylord's
employment.
d. Information will be used only by the Bank and CDI
staff who have a need to access it in order to do
their jobs, shall be maintained in secure physical
locations, shall not be disclosed to any other
company or person except in connection with Bank or
CDI business activities.
e. The confidentiality provisions of this Agreement
survive termination of the employment relationship
with the Bank and CDI and shall survive for so long a
period of time as the Information (including
Proprietary Materials) is maintained by the Bank
and/or CDI as confidential.
13. Nonsolicitation of Bank and CDI Employees and Customers
a. During the term of Gaylord's employment and for a
period of one (1) year after Gaylord's last day of
employment, Gaylord agrees not to solicit for hire,
any then-current Bank or CDI employees, or to contact
them for the purpose of inducing them to leave the
Bank and/or CDI.
b. During the term of Gaylord's employment and for a
period of one (1) year after Gaylord's last day of
employment, Gaylord agrees not to contact any
then-current Bank or CDI customers for the purpose of
inducing them to leave the Bank and CDI or to
discourage them from doing business with the Bank or
CDI. Gaylord agrees that, for such time period,
Gaylord will not provide financial services to any
person or business customer who was a customer of the
Bank or CDI at the time of Gaylord's departure from
the Bank or CDI.
IN WITNESS WHEREOF, the parties have executed this Agreement, effective
as of October 1, 1995.
MASON STATE BANK CAPITAL DIRECTIONS, INC.
("Bank") ("CDI")
By: /s/ Douglas W. Dancer By: /s/ Douglas W. Dancer
-------------------------- ------------------------
Douglas W. Dancer Douglas W. Dancer
Chairman of the Board Chairman of the Board
("Gaylord")
/s/ Timothy Gaylord
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Timothy Gaylord, Individually