EX-10.1 7 a2108511zex-10_1.txt EX-10.1 Exhibit 10.1 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT dated this 24th day of March, 1998, effective as of January 1, 1998, by and between TRINITY CAPITAL CORPORATION ("TRINITY"), LOS ALAMOS NATIONAL BANK ("Bank"), both New Mexico corporations with their principal offices in Los Alamos, New Mexico (collectively, the "Companies"), and WILLIAM C. ENLOE ("Enloe") (all collectively referred to herein as the "Parties"). WHEREAS, the companies believe it is in their best interests that Enloe continue to be employed by the companies on the terms and conditions contained herein, and Enloe is willing to be so employed; NOW, THEREFORE, in consideration of the mutual covenants, promises and agreements contained herein, the Parties hereto agree as follows: 1. EMPLOYMENT TERMS & POSITION. The Companies hereby employ Enloe in an executive capacity and as a full-time employee of Los Alamos National Bank for the period beginning January 1, 1998, and ending December 31, 2002, (the "Term of Employment"). The Term of Employment shall automatically be extended without further action of the Parties as of January 1, 2003, for successive annual periods unless either Trinity or Enloe serves written notice upon the other of its or his intention that the Term of Employment shall terminate at December 31, 2002, or, if applicable, at any successive annual anniversary thereof. To be effective to cancel the automatic extension of the Term of Employment, such notice must be served at least 60 days or more prior to the intended effective date of termination of the Term 1 of Employment. Notice given less than 60 days prior to the intended effective date of termination of the Term of Employment shall be deemed effective as of the next annual anniversary date. During the period of his employment, except for illness, reasonable vacation periods, and reasonable leaves of absence, Enloe shall devote all his business time, attention, skill and efforts to the faithful performance of his duties. Initially, Enloe shall serve as the President of Trinity and the Chairman of the Board of Bank and, in such capacity, shall be each Company's Chief Executive Officer. During his employment by the Companies, Enloe shall have such other duties and responsibilities of an executive nature as may be established from time to time by the Companies' Boards of Directors, and he shall report to the Board of Directors of each respective Company. The Parties further agree that the failure to appoint Enloe to the office designated above in this Section 1 or material changes by the Company in Enloe's function, duties, or responsibilities that would cause Enloe's position with the Companies to become of substantially less dignity, responsibility, importance or scope than the positions designated in Section 1 above may be deemed by Enloe a termination without Cause under Section 3 below. 2. SALARY. Los Alamos National Bank shall pay Enloe an Initial "Salary" at the rate of $200,000,000 per annum commencing January 1, 1998, payable in accordance with the payroll practices of Los Alamos National Bank. Based upon an evaluation of Enloe's performance each year, by the Board of Directors of Los Alamos National Bank, Enloe's Salary may be adjusted annually effective each January 1, at 2 such rate as may, from time to time, be fixed by said Board, determined in accordance with the then existing and customary personnel compensation practices of Los Alamos National Bank. 3. TERMINATION OF EMPLOYMENT AND SEVERANCE PAY. Solely in the event that the Companies terminate Enloe's employment without Cause prior to December 31, 2002, or the later extended Term of Employment under this Agreement, at a time when he is fully willing and able to perform his duties as an employee of the Companies (and in no other circumstances, e.g., Enloe's voluntary termination, disability, or death), Trinity shall, subject to the limitation at Section 6(d) hereof, be required to pay to Enloe, as "Severance Pay", an amount equal to his Salary for 12 months at the rate then in effect pursuant to Section 2 above. However, nothing contained herein shall be construed to require the Companies to Continue to employ Enloe for any particular period of time, and the Companies shall be entitled to terminate Enloe's employment at any time with or without Cause, subject to the provision of the immediately preceding sentence and Sections 7 and 8 hereof, if applicable. If Enloe's employment is terminated without Cause as stated above, Enloe would have two years from the date of his termination to exercise all grants of stock options which have been granted him under the 1998 Stock Option Plan. Enloe shall have the right to terminate his employment upon 60 days' written notice to the Companies. 3 "Cause," for the purpose of this Section, shall mean the occurrence of any of the following events: (a) Performance by Enloe of illegal or fraudulent acts, criminal conduct or willful misconduct relating to the activities of the Companies; (b) Performance by Enloe of any criminal acts involving moral turpitude having a material adverse effect upon the Companies, including, without limitation, upon its profitability, reputation, or goodwill; (c) Willful or grossly negligent failure by Enloe to perform his duties in a manner which he knows, or has reason to know, to be in the Companies' best interest; (d) Violation by Enloe of any of the covenants and agreements contained in Section 6 hereof; (e) Any other material breach of Employee's obligations hereunder which he fails to cure within 30 days after receiving written notice thereof. 4. FRINGE BENEFITS. Enloe shall be entitled, during his employment by the Companies, to receive and participate in employee benefits available to other senior management employees. 5. ADDITIONAL COMPENSATION. In addition to the Salary provided for in Section 2 hereof, Enloe shall be entitled to the following as additional compensation 4 for services rendered as an executive employee pursuant to the terms of this Agreement: (a) NON-STATUTORY STOCK OPTIONS. So long as Enloe is employed by the Companies, he shall be eligible to receive, solely at the discretion of the Board of Directors of Trinity, Non-statutory (or non-qualified) Stock Options ("NSO's") for shares of common stock of Trinity (the "Shares"). Such NSO's shall vest and become exercisable in accordance with, and subject to, all the terms and restrictions of the Companies' 1998 Stock Option Plan, a copy of which is attached hereto and incorporated herein as Exhibit A. The Board of Directors of Trinity shall determine annually the number of shares, if any, to be granted to Enloe under the 1998 Stock Option Plan, based upon Enloe's performance. In the event that a change is the controlling interests in Trinity occurs, as defined in Section 8, then Enloe shall be entitled to a vested grant of options in the amount of 7,000 shares for each full year remaining under this contract. (b) OTHER COMPENSATION. The Board of Directors of Trinity may provide other compensation to Enloe in the form of performance or target bonuses or deferred compensation plans in the future if, in the discretion of the Board, additional Compensation is warranted and in the best interest of the Companies. 5 6. CONFLICT OF INTEREST. Enloe acknowledges that: (i) the principal business of the Companies is the banking business but that the Companies or their subsidiaries or affiliates may conduct other business (all such businesses conducted from time to time are sometimes hereinafter referred to collectively as the "Business"); (ii) the Business of the Companies is regional in scope; (iii) the Companies possess substantial confidential information which is proprietary to the Companies and the confidentiality and exclusive use of which by the Companies is essential to the continuing success of the Companies, including, but not limited to, information of the kinds described in the immediately following paragraph; and (iv) Enloe's services for the Companies will bring him into close contact with additional confidential information which has not been made known to the public. In order to induce the Companies to enter into this Agreement, Enloe hereby covenants and agrees as follows: (a) Enloe shall deliver promptly to the Companies on the termination of his employment, or at any time the Companies may so request, all memoranda, notes, lists (including customer lists), records, reports, manuals, drawing, blueprints and other documents (and all copies thereof) relating to the Business and all property associated therewith which he may then possess or which are then under his control. (b) During his employment by the Companies and for a period of one year thereafter if Enloe is terminated for Cause, Enloe shall not, in any state or jurisdiction in which the Companies have conducted 6 within the previous two years any aspect of the Business, directly or indirectly, (i) enter the employ of, or render any services (with or without compensation) to, any person, joint venture, partnership, firm or corporation engaged in any business competitive with the Business in the Geographic Area; or (ii) engage in the Business (except for the Companies) for his own account in the Geographic Area; or (iii) become interested in any such enterprise, directly or indirectly, as an individual, partner, shareholder, director, officer, principal, agent, employee, trustee, consultant or in any other capacity; provided, however, that nothing contained in this paragraph (b) shall be deemed to prohibit Enloe from acquiring, solely as an investment, shares of capital stock of any corporation the shares of the same class of which corporation are traded on the national securities exchange or in the over-the-counter market so long as he does not acquire direct or indirect ownership of one percent (1%) or more of any class of capital stock of said corporation. (c) During his employment by the companies (however and whenever terminated) and for a period of one year thereafter, Enloe shall not, directly or indirectly, (i) hire, solicit, or encourage to leave the employment of the Companies, or any of their subsidiaries or affiliates, any employee of the Companies or any of its subsidiaries or affiliates; or (ii) hire any such employee who has left the 7 employment of the Companies or any of their subsidiaries or affiliates within one year of the termination of such employee's employment with the Companies or any of their subsidiaries or affiliates. (d) Subsequent to Enloe's termination of employment, beginning 30 days thereafter and as a precondition to entitlement to receive Severance Pay as provided at Section 3, Enloe shall keep himself at all times reasonably available for a period of twelve months to render such services of any advisory or consultative nature as the Boards of Directors of the Companies shall reasonably required, under the then existing circumstances. In calling upon Enloe for such services, the Companies shall recognize that such demands shall only be made when in the best interests of the Companies. Further, in order not to unduly inconvenience Enloe or make unreasonable demands as to the time, place or duration of such consultation, as well as in recognition of the great potential value of such consultation, the Company shall not be entitled to call upon Enloe for more than 100 hours in such twelve-month period. 7. TERMINATION OF EMPLOYMENT. In the event the Companies terminate Enloe's employment for Cause, the Companies shall have no further obligations to Enloe under this Agreement. 8 8. CHANGE IN CONTROL. In the event that controlling interest in Trinity changes as a result of a sale, merger, acquisition, or otherwise, and in the event that the Companies thereafter wish to terminate Enloe's employment or otherwise change the terms of this Agreement in a manner which would be detrimental to Enloe, then Enloe shall be entitled to a payment, in addition to Severance Pay in Section 3 above, of any amount equal to his Salary for 18 months at the rate then in effect pursuant to Section 2 above as compensation. A change of controlling interest would be determined to be detrimental to Enloe if his function, duties or responsibilities were changed in such a manner as to cause his position with the Companies to become of substantially less dignity, responsibility, importance or scope than the position designated in Section 1 above. Notwithstanding the above, compensation under this Section 8 shall not exceed that amount which can be paid without causing an "Excess Parachute Payment" under Section 280G of the Internal Revenue Code. 9. EQUITABLE ENFORCEMENT. Enloe recognizes that irreparable injury will result to the Companies and their subsidiaries and affiliates and their respective assets and Businesses in the event of a breach by him of any of the convenants and agreements contained in Section 6 hereof, and he agrees that, in the event of any such breach, the Companies and their subsidiaries and affiliates shall be entitled, in addition to any other remedies (including, but not limited to, the recovery of monetary damages) available to them or any of them, to obtain an injunction to restrain the continuation or repetition of such breach or a similar breach by Enloe. 9 10. ENTIRE AGREEMENT. This Agreement shall comprise the entire agreement between the Parties hereto relating to Enloe's employment with the Companies and hereby supersedes and revokes any and all other employment agreements, whether written or oral, between the parties hereto. No variation or modification hereof shall be deemed valid unless contained in a writing signed by each of the Parties hereto. No variation or modification hereof shall be deemed valid unless contained in a writing signed by each of the Parties hereto, which writing shall make express reference to this Agreement. No waiver of any breach of any covenant, agreement, or duty shall be held or construed as a waiver of any other breach of the same or any other convenant, agreement or duty. If any provision or portion of this Agreement shall to any extent be held invalid or unenforceable in any circumstances, the remainder of this Agreement and the application of such portion or provision to another extent or in other circumstances shall be valid and enforceable to the fullest extent permitted by law. The parties intend this Agreement to be valid and enforced as written. However, if any provision, or any part thereof, is held to be invalid or unenforceable because of the scope or duration of or the subject matter or geographic area covered by such provision, the Companies and Enloe agree that the court making such determination shall have the power to reduce the scope, duration, subject matter and/or geographical area of such provision in order to make such provision enforceable to the fullest extent permitted by law, and/or to delete specific words and phrases, and in its reduced form such provision shall then be enforceable and shall be enforced. 10 11. BINDING ON SUCCESSOR - ANTI-ASSIGNMENT. This Agreement shall inure to the benefit of and be binding, to the extent permitted by law, upon Enloe and the Companies' successors and assigns. Nothing contained in this Agreement shall be construed, however, as authorizing Enloe to assign this Agreement without the Companies' prior written consent. 12. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the law of the State of New Mexico, where it has been executed and delivered and where the Companies have their headquarters. IN WITNESS WHEREOF, the Parties hereto have executed these presents as of the day and year first above written, the execution hereof on behalf of the Companies being made by duly authorized persons. TRINITY CAPITAL CORPORATION By ---------------------------- Title ---------------------------- LOS ALAMOS NATIONAL BANK By ---------------------------- 11 Title ---------------------------- William C. Enloe 12