Document:

Exhibit 10.1

Employment Agreement

This Employment Agreement (this “Agreement”) is entered into effective as of this 18th day of September, 2014, by and between CenterState Banks, Inc., a Florida corporation (the “Corporation”), and Daniel E. Bockhorst (the “Executive”).

Whereas, the Executive is the Chief Risk Officer of the Corporation and Executive Vice President of CenterState Bank of Florida, N.A., a national banking association and wholly-owned subsidiary of the Corporation (the “Bank”), possessing unique skills, knowledge, and experience relating to the Corporation’s business, and the Executive has made and is expected to continue to make major contributions to the profitability, growth, and financial strength to the Corporation and affiliates.

Now Therefore, in consideration of these premises, the mutual covenants contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows.

Article 1
Employment

1.1Employment.  The Corporation hereby employs the Executive to serve as Chief Risk Officer of the Corporation and Executive Vice President of the Bank according to the terms and conditions of this Agreement and for the period stated in section 1.2.  The Executive shall serve under the direction of the Chairman, President, and Chief Executive Officer of the Corporation and the Bank and the Corporation’s and the Bank’s boards of directors and in accordance with the Corporation’s and the Bank’s Bylaws and in accordance with the Corporation’s Articles of Incorporation and the Bank’s Articles of Association, as amended or restated from time to time.  The Executive shall serve the Corporation and the Bank faithfully, diligently, competently, and to the best of the Executive’s ability.  The Executive shall exclusively devote full working time, energy, and attention to the business of the Corporation and the Bank and to the promotion of the Corporation’s and the Bank’s interests throughout the term of this Agreement.  Without the written consent of the Corporation, the Executive shall not render services to or for any person, firm, bank, or other entity or organization in exchange for compensation, regardless of the form in which the compensation is paid and regardless of whether it is paid directly or indirectly to the Executive.  Nothing in this section 1.1 shall prevent the Executive from managing personal investments and affairs, provided that doing so does not interfere with the proper performance of the Executive’s duties and responsibilities under this Agreement.

1.2Term.  The initial term of employment shall be a period of three years, commencing on the effective date set forth above.  On the first anniversary of the effective date set forth above and on each anniversary thereafter, the Executive’s employment shall be extended automatically for one additional year unless the Corporation’s board of directors determines that the term shall not be extended.  If the board of directors determines not to extend the term, it shall promptly notify the Executive in writing.  If the board decides not to extend the term of employment, this Agreement shall nevertheless remain in force until the employment term expires.  The board’s decision not to extend the term of employment shall not – by itself – give the Executive any rights under this Agreement to claim an adverse change in position, compensation, or circumstances or otherwise to claim entitlement to severance benefits under Articles 4 or 5 of this Agreement.  References herein to the term of employment mean the initial term, as the same may be extended.

Article 2
Compensation

2.1Base Salary.  In consideration of the Executive’s performance of the obligations under this Agreement, the Corporation shall pay or cause to be paid to the Executive a salary at the annual rate of not less than $220,000 payable in installments in accordance with the Corporation’s regular pay practices.  The Executive’s salary shall be reviewed annually by the Corporation’s board of directors or by the board committee having jurisdiction over executive compensation.  In the discretion of the board or the committee having jurisdiction over executive compensation (x) the Executive’s salary may be increased to account for increases in the cost of living, but cost-of-living increases, if any, shall not occur more frequently than annually, and (y) the Executive’s salary also may be increased beyond the amount necessary to account for cost of living increases.  However, the Executive’s salary shall not be reduced.  The Executive’s salary, as the same may be increased from time to time, is referred to in this Agreement as the “Base Salary.”

2.2Benefit Plans and Perquisites.  (a)  Benefit plans.  The Executive shall be entitled throughout the term of this Agreement to participate in any and all officer or employee compensation and benefit plans of the Corporation and the Bank in effect from time to time, including without limitation plans providing pension, medical, dental, disability, and group life benefits, including the Corporation’s or the Bank’s 401(k) Plan, and to receive any and all other fringe benefits provided from time to time, provided that the Executive satisfies the eligibility requirements for any such plans or benefits.

 

 

(b)Reimbursement of business expenses.  Subject to guidelines issued from time to time by the Corporation and upon submission of documentation to support expense reimbursement in conformity with applicable requirements of federal income tax laws and regulations, the Executive shall be entitled to reimbursement for all reasonable business expenses incurred performing the obligations under this Agreement, including but not limited to all reasonable business travel and entertainment expenses incurred while acting at the request of or in the service of the Corporation and the Bank; and reasonable expenses for attendance at annual and other periodic meetings of trade associations.

(c)Vacation.  The Executive shall be entitled to paid annual vacation and sick leave in accordance with the policies established from time to time by the Corporation.

Article 3
Employment Termination

3.1Termination Because of Death or Disability.  (a)  Death.  The Executive’s employment shall terminate automatically at the Executive’s death.  If the Executive dies in active service to the Corporation, the Executive’s estate shall receive any sums due to the Executive as Base Salary and reimbursement of expenses through the end of the month in which death occurred, any bonus or Incentive Compensation earned through the date of death, including any unvested amounts awarded for previous years, and for twelve months after the Executive’s death the Corporation shall provide without cost to the Executive’s family continuing health care coverage under COBRA substantially identical to that provided for the Executive before death.

(b)Disability.  By delivery of written notice 30 days in advance to the Executive, the Corporation may terminate the Executive’s employment if the Executive is disabled.  For purposes of this Agreement the Executive shall be considered “disabled” if an independent physician selected by the Corporation and reasonably acceptable to the Executive or the Executive’s legal representative determines that, because of illness or accident, the Executive is unable to perform the Executive’s duties and will be unable to perform the Executive’s duties for a period of 90 consecutive days, and the Insurance Company that is providing the Executive’s disability insurance coverage concurs that the Executive is considered “disabled” pursuant to the terms and conditions of the insurance policy(s) in place contemplated in section 2.2 (a).  The Executive shall not be considered disabled, however, if the Executive returns to work on a full-time basis within 30 days after the Corporation gives notice of termination due to disability.  If the Executive’s employment terminates because of disability, the Executive shall receive the Base Salary earned through the date on which termination became effective, any reimbursement of expenses incurred through the date of termination, any unpaid bonus or Incentive Compensation earned through the date of termination, including any unvested amounts awarded for previous years,  any payments the Executive is eligible to receive under any disability insurance program in which the Executive participates, and such other benefits to which the Executive may be entitled under the Corporation’s and Bank’s benefit plans, policies, and agreements, or the provisions of this Agreement.

3.2Involuntary Termination with Cause.  The Corporation may terminate the Executive’s employment with Cause.  If the Executive’s employment terminates with Cause, the Executive shall receive the Base Salary through the date on which termination becomes effective and reimbursement of expenses to which the Executive is entitled when termination becomes effective.  The Executive shall not be deemed to have been terminated with Cause under this Agreement unless and until there is delivered to the Executive a copy of a resolution adopted at a meeting of the board of directors called and held for the purpose, which resolution shall (x) contain findings that in the board’s good faith opinion the Executive has committed an act constituting Cause, and (y) specify the particulars thereof.  For purposes of this Agreement “Cause” means any of the following –

	
(a)
	
gross negligence or gross neglect of duties to the Corporation or the Bank,

	
(b)
	
conviction of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executive’s employment with the Corporation or the Bank, or

	
(c)
	
fraud, disloyalty, dishonesty, or willful violation of any law or significant Corporation or Bank policy committed in connection with the Executive’s employment and resulting in a material adverse effect on the Corporation or the Bank.

3.3Involuntary Termination Without Cause and Voluntary Termination with Good Reason.  With written notice to the Executive 90 days in advance, the Corporation may terminate the Executive’s employment without Cause.  Termination shall take effect at the end of the 90-day period.  With advance written notice to the Corporation as provided in clause (y), the Executive may terminate employment with Good Reason.  If the Executive’s employment terminates involuntarily without Cause or voluntarily but with Good Reason, the Executive shall be entitled to receive the Base Salary earned through the date of termination, any reimbursement of expenses incurred through the date of termination, any unpaid bonus earned through the date of termination, including any unvested amounts awarded for previous years, and such other benefits to which the Executive may be entitled under the 

 

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Corporation’s and the Bank’s benefit plans, policies, and agreements, or the provisions of this Agreement.  In addition, the Executive shall be entitled to the benefits specified in Article 4 of this Agreement.  For purposes of this Agreement a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if the conditions of the safe-harbor definition of good reason contained in Internal Revenue Code section 409A are satisfied, as the same may be amended from time to time.  References in this Agreement to Internal Revenue Code section 409A include rules, regulations, and guidance of general application issued by the Department of the Treasury under section 409A.  For purposes of clarification and without intending to affect the foregoing reference to section 409A for the definition of Good Reason, as of the Employment Date the safe-harbor definition of separation from service for good reason in Rule 1.409A-1(n)(2)(ii) would provide as follows –

(x)a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if any of the following occur without the Executive’s advance written consent, and the term Good Reason shall mean the occurrence of any of the following without the Executive’s advance written consent –

	
1)
	
a diminution of the Executive’s Base Salary,

	
2)
	
a material diminution of the Executive’s authority, duties, or responsibilities,

	
3)
	
a material diminution in the authority, duties, or responsibilities of the supervisor to whom the Executive is required to report,

	
4)
	
a material diminution in the budget (if any) over which the Executive retains authority,

	
5)
	
a material change in the geographic location at which the Executive must perform services for the Corporation or the Bank, or

	
6)
	
any other action or inaction that constitutes a material breach by the Corporation of this Agreement.

(y)the Executive must give notice to the Corporation of the existence of one or more of the conditions described in clause (x) within 90 days after the initial existence of the condition, and the Corporation shall have 30 days thereafter to remedy the condition.  In addition, the Executive’s voluntary termination because of the existence of one or more of the conditions described in clause (x) must occur within 24 months after the initial existence of the condition.

3.4Voluntary Termination by the Executive Without Good Reason.  If the Executive terminates employment voluntarily but without Good Reason, the Executive shall receive the Base Salary earned through the date of termination and any reimbursement of expenses incurred through the date of termination.

3.5Termination Generally.  If at employment termination the Executive is serving as a director of the Corporation and/or the Bank, the Executive shall be deemed to have resigned as a director effective immediately after termination, regardless of whether the Executive submits a formal, written resignation as director.  All files, records, documents, manuals, books, forms, reports, memoranda, studies, data, calculations, recordings or correspondence, in whatever form they may exist, and all copies, abstracts and summaries of the foregoing, and all physical items related to the business of the Corporation and the Bank, their affiliates, and their respective directors and officers, whether of a public nature or not, and whether prepared by Executive or not, are and at employment termination shall remain the exclusive property of the Corporation and the Bank, and without the Corporation’s or the Bank’s advance written consent shall not be removed from their premises except as required in the course of providing services under this Agreement, and at termination shall be promptly returned by the Executive to the Corporation and the Bank.

Article 4
Severance Compensation

4.1Cash Severance after Termination Without Cause or Termination with Good Reason.  If the Executive’s employment terminates involuntarily but without Cause or voluntarily but with Good Reason, on the first day of the seventh month after the month in which the Executive’s employment terminates the Corporation shall pay to the Executive in a single lump sum cash without discount for the time value of money in an amount equal to one times the highest annual compensation as reported on the Executive’s Form W-2 over the three-year period immediately preceding the year in which the employment of the Executive terminates.  The Corporation and the Executive acknowledge and agree that the compensation and benefits under this section 4.1 shall not be payable if, on the date of termination, compensation and benefits are payable or shall have been paid to the Executive under Article 5 of this Agreement.

4.2Post-Termination Insurance Coverage.  (a) Subject to section 4.2(b), if the Executive’s employment terminates involuntarily but without Cause or voluntarily but with Good Reason, the Corporation shall continue or cause to be continued at the 

 

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Corporation’s expense and on behalf of the Executive and the Executive’s dependents and beneficiaries medical and dental insurance coverage as in effect during and in accordance with the same schedule prevailing in the 12 months preceding the date of the Executive’s termination.  The medical and dental insurance benefits provided by this section 4.2(a) shall be reduced if the Executive obtains medical or dental insurance benefits through another entity, or eliminated entirely if the other entity’s insurance benefits are equivalent or superior to the benefits provided under this section 4.2(a).  If the insurance benefits are reduced, they shall be reduced by an amount such that the Executive’s aggregate insurance benefits for the period specified in this section 4.2(a) are equivalent to the benefits to which the Executive would have been entitled had the Executive not obtained medical or dental insurance benefits through another entity.  The medical and dental insurance coverage shall continue until the first to occur of (w) the Executive’s return to employment with the Corporation or another entity providing equivalent or superior insurance benefits, (x) the Executive’s attainment of age 65, (y) the Executive’s death, or (z) the end of the term remaining under this Agreement when the Executive’s employment terminates.  This section 4.2 shall not be interpreted to limit any benefits to which the Executive or the Executive’s dependents or beneficiaries may be entitled under any of the Corporation’s employee benefit plans, agreements, programs, or practices after the Executive’s employment termination, including without limitation retiree medical benefits.

(b)If (x) under the terms of the applicable policy or policies for the insurance benefits specified in section 4.2(a) it is not possible to continue the Executive’s coverage or (y) when employment termination occurs the Executive is a specified employee within the meaning of section 409A of the Internal Revenue Code of 1986, if any of the continued insurance benefits specified in section 4.2(a) would be considered deferred compensation under section 409A, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) is not available for that particular insurance benefit, instead of continued insurance coverage under section 4.2(a) the Corporation shall pay to the Executive in a single lump sum an amount in cash equal to the present value of the Corporation’s projected cost to maintain that particular insurance benefit had the Executive’s employment not terminated, assuming continued coverage for the lesser of the number of months remaining in the term of this Agreement or the number of months until the Executive attains age 65.  The lump-sum payment shall be made 30 days after employment termination or, if section 4.2(b) applies and a six-month delay is required under Internal Revenue Code section 409A, on the first day of the seventh month after the month in which the Executive’s employment terminates.

4.3Release.  The Executive shall be entitled to no compensation or other benefits under this Article 4 unless (x) within 90 days after the Executive’s employment termination the Executive shall have entered into a release in form satisfactory to the Executive, the Corporation and the Bank acknowledging the Corporation’s and the Executive’s remaining obligations and discharging both parties, as well as the Corporation’s and Bank’s officers, directors, and employees for their actions for or on behalf of the Corporation, from any other claims or obligations arising out of the Executive’s employment by the Corporation and the Bank, including the circumstances of the Executive’s employment termination, and (y) within that 90-day period the release shall have become irrevocable, final, and binding on the Executive under all applicable law, with expiration of all applicable revocation periods.  If the final day of the 90-day period for execution and finality of a liability release occurs in the taxable year after the year in which the Executive’s employment termination occurs, the benefits to the Executive under this Article 4 shall be payable in the taxable year in which the 90-day period ends and shall not be paid in the taxable year in which employment termination occurs.  Nothing in this section 4.3 is intended to abrogate the Executive’s review and revocation rights under the Older Workers’ Benefit Protection Act that may be included in any such release, and the 90-day period shall be extended if necessary to permit Executive to exercise such rights.  The non-compete and other covenants contained in Article 7 of this Agreement are not contingent on the Executive entering into a release under this section 4.3 and shall be effective regardless of whether the Executive enters into the release.

Article 5
Change in Control

5.1Change in Control Benefits.  If (i) a Change in Control occurs after the Employment Date and during the term of this Agreement, and (ii) within 12 months following such Change in Control, either the Corporation terminates the Executive’s employment without Cause or the Executive terminates the Executive’s employment with Good Reason, then the Corporation shall promptly make or cause to be made a lump-sum payment to the Executive in an amount in cash equal to two times the highest annual compensation as reported on the Executive’s Form W-2 over the three-year period immediately preceding the year in which the Change in Control occurs (the “Change in Control Payment”).  The Change in Control Payment payable to the Executive hereunder shall not be reduced to account for the time value of money or discounted to present value.  If the Executive receives a Change in Control Payment under this section 5.1 the Executive shall not be entitled to any additional severance benefits under section 4.1 of this Agreement after employment termination.  The Executive shall be entitled to benefits under this section 5.1 on no more than one occasion during the term of this Agreement.

5.2Change in Control Defined.  For purposes of this Agreement “Change in Control” means a change in control as defined in Internal Revenue Code section 409A, as the same may be amended from time to time.  For purposes of clarification and 

 

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without intending to affect the foregoing reference to section 409A for the definition of Change in Control, as of the Employment Date a Change in Control as defined in Rule 1.409A-3(i)(5) would provide as follows –

(a)Change in ownership: a change in ownership of the Corporation occurs on the date any one person or group accumulates ownership of Corporation stock constituting more than 50% of the total fair market value or total voting power of Corporation stock, or

(b)Change in effective control: (x) any one person or more than one person acting as a group acquires within a 12-month period ownership of Corporation stock possessing 30% or more of the total voting power of Corporation stock, or (y) a majority of the Corporation’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed in advance by a majority of the Corporation’s board of directors, or

(c)Change in ownership of a substantial portion of assets: a change in ownership of a substantial portion of the Corporation’s assets occurs if in a 12-month period any one person or more than one person acting as a group acquires from the Corporation assets having a total gross fair market value equal to or exceeding 40% of the total gross fair market value of all of the Corporation’s assets immediately before the acquisition or acquisitions.  For this purpose, gross fair market value means the value of the Corporation’s assets, or the value of the assets being disposed of, determined without regard to any liabilities associated with the assets.

Article 6
Confidentiality and Creative Work

6.1Non-disclosure.  The Executive covenants and agrees not to reveal to any person, firm, or Corporation any confidential information of any nature concerning the Corporation, the Bank, their respective business, or anything connected therewith.  As used in this Article 6, the term “confidential information” means all of the Corporation’s and the Bank’s and their affiliates’ confidential and proprietary information and trade secrets in existence on the date hereof or existing at any time during the term of this Agreement, including but not limited to –

(a)the whole or any portion or phase of any business plans, financial information, purchasing data, supplier data, accounting data, or other financial information,

(b)the whole or any portion or phase of any research and development information, design procedures, algorithms or processes, or other technical information,

(c)the whole or any portion or phase of any marketing or sales information, sales records, customer lists, customer information, employee lists, employee information, financial products and services, financial products and services pricing, financial information and projections, or other sales information, and

(d)trade secrets, as defined from time to time by the laws of the State of Florida.

However, confidential information excludes information that – as of the date hereof or at any time after the date hereof – is published or disseminated without obligation of confidence or that becomes a part of the public domain (x) by or through action of the Corporation, or (y) otherwise than by or at the direction of the Executive.  This section 6.1 does not prohibit disclosure required by an order of a court having jurisdiction or a subpoena from an appropriate governmental agency or disclosure made by the Executive in the ordinary course of business and within the scope of the Executive’s authority.

6.2Return of Materials.  The Executive agrees to deliver or return to the Corporation and the Bank upon termination, upon expiration of this Agreement, or as soon thereafter as possible, all written information and any other similar items furnished by the Corporation and the Bank or prepared by the Executive in connection with the Executive’s services hereunder.  The Executive will retain no copies thereof after termination of this Agreement or termination of the Executive’s employment.

6.3Creative Work.  The Executive agrees that all creative work and work product, including but not limited to all technology, business management tools, processes, software, patents, trademarks, and copyrights developed by the Executive during the term of this Agreement, regardless of when or where such work or work product was produced, constitutes work made for hire, all rights of which are owned by the Corporation and the Bank.  The Executive hereby assigns to the Corporation and the Bank all rights, title, and interest, whether by way of copyrights, trade secret, trademark, patent, or otherwise, in all such work or work product, regardless of whether the same is subject to protection by patent, trademark, or copyright laws.  This section 6.3 shall not be construed 

 

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to require assignment to the Corporation and the Bank of the Executive’s right, title, and interest in creative work and work product, including but not limited to inventions, patents, trademarks, and copyrights, developed by the Executive entirely on the Executive’s own time and without using the Corporation’s or the Bank’s equipment, supplies, facilities, or trade secrets unless the creative work or work product (x) relates to the Corporation’s or the Bank’s business or actual or demonstrably anticipated research or development or (y) results from any work performed by the Executive for the Corporation or the Bank.  However, to enable the Corporation and the Bank to determine the rights of the Corporation and the Bank and the Executive in any creative work and work product developed by the Executive that the Executive considers nonassignable under this section 6.3, including but not limited to inventions, patents, trademarks, and copyrights, the Executive shall during the term of this Agreement timely report to the Corporation and the Bank all such creative work and work product.

6.4Injunctive Relief.  The Executive hereby acknowledges that the enforcement of this Article 6 is necessary to ensure the preservation, protection, and continuity of the business, trade secrets, and goodwill of the Corporation and the Bank, and that the restrictions set forth in Article 6 are reasonable in terms of time, scope, territory, and in all other respects.  The Executive acknowledges that it is impossible to measure in money the damages that will accrue to the Corporation and the Bank if the Executive fails to observe the obligations imposed by Article 6.  Accordingly, if the Corporation and the Bank institutes an action to enforce the provisions hereof, the Executive hereby waives the claim or defense that an adequate remedy at law is available to the Corporation and the Bank and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists.  If there is a breach or threatened breach by the Executive of the provisions of Article 6, the Corporation and the Bank shall be entitled to an injunction without bond to restrain the breach or threatened breach, and the prevailing party in any the proceeding shall be entitled to reimbursement for all costs and expenses, including reasonable attorneys’ fees.  The existence of any claim or cause of action by the Executive against the Corporation or the Bank shall not constitute and shall not be asserted as a defense by the Executive to enforcement of Article 6.

6.5Affiliates’ Confidential Information is Covered.  For purposes of this Agreement the term “affiliate” includes the Corporation and any entity that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with the Corporation or the Bank.

6.6Survival of Obligations.  The Executive’s obligations under Article 6 shall survive employment termination regardless of the manner in which termination occurs and shall be binding upon the Executive’s heirs, executors, and administrators.

Article 7
Competition After Employment Termination

7.1Restrictions on the Executive’s Post-Employment Activities.  The restrictions in this Article 7 have been negotiated, presented to and accepted by the Executive contemporaneous with the offer and acceptance by the Executive of this Agreement.  The Corporation’s decision to enter into this Agreement is conditioned upon the Executive’s agreement to be bound by the restrictions contained in this Article 7.  This Article 7 shall be void if a Change in Control occurs before the Executive’s employment termination.  For purposes of this Article 7 the term “Corporation” includes not only the Corporation but also the Bank.

(a)Promise of no solicitation.  The Executive promises and agrees that during the Restricted Period (as defined below) the Executive shall:

1.not directly or indirectly solicit or attempt to solicit any Customer (as defined below) to accept or purchase Financial Products or Services (as defined below) of the same nature, kind, or variety as provided to the Customer by the Corporation during the two years immediately before the Executive’s employment termination with the Corporation,

2.not directly or indirectly influence or attempt to influence any Customer, joint venturer, or other business partner of the Corporation to alter that person or entity’s business relationship with the Corporation in any respect, and

3.not accept the Financial Products or Services business of any Customer or provide Financial Products or Services to any Customer on behalf of anyone other than the Corporation.

(b)Promise of no competition.  Except where the employment of the Executive is terminated pursuant to section 3.3 of this Agreement, the Executive promises and agrees that during the Restricted Period the Executive shall not become employed by or serve as a director, partner, consultant, agent, or owner of 5% or more of the outstanding stock of or contractor to any entity providing Financial Products or Services that (x) is located in or conducts business in the Restricted Territory, or (y) has its main office or the main office of its parent entity (if any) located in Alabama or Georgia.

 

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(c)Promise of no raiding/hiring.  The Executive promises and agrees that during the Restricted Period the Executive shall not solicit or attempt to solicit and shall not encourage or induce in any way any employee, joint venturer, or business partner of the Corporation to terminate an employment or contractual relationship with the Corporation.  The Executive agrees that the Executive shall not hire any person employed by Corporation during the two-year period before the Executive’s employment termination with the Corporation or any person employed by the Corporation during the Restricted Period.

(d)Promise of no disparagement.  The Executive promises and agrees that during the Restricted Period the Executive shall not cause statements to be made (whether written or oral) that reflect negatively on the business reputation of the Corporation.  The Corporation likewise promises and agrees that during the Restricted Period the Corporation shall not cause statements to be made (whether written or oral) that reflect negatively on the reputation of the Executive.  Nothing herein is intended to restrict the Executive or the Corporation from testifying truthfully in response to any lawfully served subpoena or other legal process.

(e)Acknowledgment.  The Executive and the Corporation acknowledge and agree that the provisions of this Article 7 have been negotiated and carefully determined to be reasonable and necessary for the protection of legitimate business interests of the Corporation.  Both parties agree that a violation of Article 7 is likely to cause immediate and irreparable harm that will give rise to the need for court ordered injunctive relief.  In the event of a breach or threatened breach by the Executive of any provision of this Agreement, the Corporation shall be entitled to obtain an injunction without bond restraining the Executive from violating the terms of this Agreement and to institute an action against the Executive to recover damages from the Employee for such breach.  These remedies for default or breach are in addition to any other remedy or form of redress provided under Florida law.  The parties acknowledge that the provisions of this Article 7 survive termination of the employment relationship, but the provisions of this Article 7 shall be null and void if a Change in Control occurs before employment termination.  The parties agree that if any of the provisions of this Article 7 are deemed unenforceable by a court of competent jurisdiction, that such provisions may be stricken as independent clauses by the court in order to enforce the remaining territory restrictions and that the intent of the parties is to afford the broadest restriction on post-employment activities as set forth in this Agreement.  Without limiting the generality of the foregoing, without limiting the remedies available to the Corporation for violation of this Agreement, and without constituting an election of remedies, if the Executive violates any of the terms of Article 7 the Executive shall forfeit on the Executive’s own behalf and that of beneficiary(ies) any rights to and interest in any severance or other benefits under this Agreement or other contract the Executive has with the Corporation or the Corporation.

(f)Definitions:  1.“Restricted Period” as used herein means the 24-month period immediately after the Executive’s termination and/or separation of employment with the Corporation, regardless of the reason for termination and/or separation.  The Restricted Period shall be extended in an amount equal to any time period during which a violation of Article 7 of this Agreement is proven.

2.“Restricted Territory” as used herein means Indian River County and contiguous counties in Florida.

3.“Customer” as used herein means any individual, joint venturer, entity of any sort, or other business partner of the Corporation, with, for or to whom the Corporation has provided Financial Products or Services during the last two years of the Executive’s employment with the Corporation; or any individual, joint venturer, entity of any sort, or business partner whom the Corporation has identified as a prospective customer of Financial Products or Services within the last two years of the Executive’s employment with the Corporation.

4.“Financial Products or Services” as used herein means any product or service that a financial institution or a financial holding company could offer by engaging in any activity that is financial in nature or incidental to such a financial activity under section 4(k) of the Bank Holding Company Act of 1956 and that is offered by the Corporation or an affiliate on the date of the Executive’s employment termination, including but not limited to banking activities and activities that are closely related and a proper incident to banking, or other products or services of the type of which the Executive was involved during the Executive’s employment with the Corporation.

Article 8
Miscellaneous

8.1Successors and Assigns.  (a)  This Agreement is binding on successors.  This Agreement shall be binding upon the Corporation and any successor to the Corporation, including any persons acquiring directly or indirectly all or substantially all of the business or assets of the Corporation by purchase, merger, consolidation, reorganization, or otherwise.  But this Agreement and the Corporation’s obligations under this Agreement are not otherwise assignable, transferable, or delegable by the Corporation.  By agreement in form and substance satisfactory to the Executive, the Corporation shall require any successor to all or substantially all of 

 

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the business or assets of the Corporation expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Corporation would be required to perform had no succession occurred.

(b)This Agreement is enforceable by the Executive’s heirs.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, and legatees.

(c)This Agreement is personal in nature and is not assignable.  This Agreement is personal in nature.  Without written consent of the other parties, no party shall assign, transfer, or delegate this Agreement or any rights or obligations under this Agreement except as expressly provided herein.  Without limiting the generality or effect of the foregoing, the Executive’s right to receive payments hereunder is not assignable or transferable, whether by pledge, creation of a security interest, or otherwise, except for a transfer by the Executive’s will or by the laws of descent and distribution.  If the Executive attempts an assignment or transfer that is contrary to this section 8.1, the Corporation shall have no liability to pay any amount to the assignee or transferee.

8.2Governing Law, Jurisdiction and Forum.  This Agreement shall be construed under and governed by the internal laws of the State of Florida, without giving effect to any conflict of laws provision or rule (whether of the State of Florida or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida.  By entering into this Agreement, the Executive acknowledges that the Executive is subject to the jurisdiction of both the federal and state courts in the State of Florida.  Any actions or proceedings instituted under this Agreement shall be brought and tried solely in courts located in Polk County, Florida or in the federal court having jurisdiction in Winter Haven, Florida.  The Executive expressly waives the right to have any such actions or proceedings brought or tried elsewhere.

8.3Entire Agreement.  This Agreement sets forth the entire agreement of the parties concerning the employment of the Executive.  Any oral or written statements, representations, agreements, or understandings made or entered into prior to or contemporaneously with the execution of this Agreement are hereby rescinded, revoked, and rendered null and void.  This Agreement supersedes in its entirety the July 26, 2012 Change in Control and Severance Agreement between the Corporation and the Executive, which shall be of no further force or effect.

8.4Notices.  Any notice under this Agreement shall be deemed to have been effectively made or given if in writing and personally delivered, delivered by mail properly addressed in a sealed envelope, postage prepaid by certified or registered mail, delivered by a reputable overnight delivery service, or sent by facsimile.  Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the most current address of the Executive in the personnel records of the Corporation at the time of the delivery of such notice, and properly addressed to the Corporation if addressed to CenterState Corporations, Inc., 42745 U.S. Highway 27, Davenport, Florida 33837, Attention: Corporate Secretary.

8.5Severability.  If there is a conflict between any provision of this Agreement and any statute, regulation, or judicial precedent, the latter shall prevail, but the affected provisions of this Agreement shall be curtailed and limited solely to the extent necessary to bring them within the requirements of law.  If any provision of this Agreement is held by a court of competent jurisdiction to be indefinite, invalid, void or voidable, or otherwise unenforceable, the remainder of this Agreement shall continue in full force and effect unless that would clearly be contrary to the intentions of the parties or would result in an injustice.

8.6Captions and Counterparts.  The captions in this Agreement are solely for convenience.  The captions do not define, limit, or describe the scope or intent of this Agreement.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

8.7Amendment and Waiver.  This Agreement may not be amended, released, discharged, abandoned, changed, or modified except by an instrument in writing signed by each of the parties hereto.  The failure of any party hereto to enforce at any time any of the provisions of this Agreement shall not be construed to be a waiver of any such provision or affect the validity of this Agreement or any part thereof or the right of any party thereafter to enforce each and every such provision.  No waiver or any breach of this Agreement shall be held to be a waiver of any other or subsequent breach.

8.8FDIC Part 359 Limitations.  Despite any contrary provision within this Agreement, any payments made to the Executive under this Agreement, or otherwise, shall be subject to compliance with 12 U.S.C. 1828 and FDIC Regulation 12 CFR Part 359, Golden Parachute Indemnification Payments, and any other regulations or guidance promulgated thereunder.

8.9Consultation with Counsel and Interpretation of this Agreement.  The Executive has had the assistance of counsel of the Executive’s choosing in the negotiation of this Agreement or the Executive has chosen not to have the assistance of 

 

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counsel.  Both parties hereto having participated in the negotiation and drafting of this Agreement, they hereby agree that there shall not be strict interpretation against either party in any review of this Agreement in which interpretation of the Agreement is an issue.

8.10Compliance with Internal Revenue Code Section 409A.  The Corporation and the Executive intend that their exercise of authority or discretion under this Agreement shall comply with section 409A of the Internal Revenue Code of 1986.  If when the Executive’s employment terminates the Executive is a specified employee, as defined in section 409A of the Internal Revenue Code of 1986, and if any payments under this Agreement, including Articles 4 or 5, will result in additional tax or interest to the Executive because of section 409A, then despite any provision of this Agreement to the contrary the Executive shall not be entitled to the payments until the earliest of (x) the date that is at least six months after termination of the Executive’s employment for reasons other than the Executive’s death, (y) the date of the Executive’s death, or (z) any earlier date that does not result in additional tax or interest to the Executive under section 409A.  As promptly as possible after the end of the period during which payments are delayed under this provision, the entire amount of the delayed payments shall be paid to the Executive in a single lump sum.  If any provision of this Agreement does not satisfy the requirements of section 409A, the provision shall be applied in a manner consistent with those requirements despite any contrary provision of this Agreement.  If any provision of this Agreement would subject the Executive to additional tax or interest under section 409A, the Corporation shall reform the provision.  However, the Corporation shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the Executive to additional tax or interest, and the Corporation shall not be required to incur any additional compensation expense as a result of the reformed provision.  References in this Agreement to section 409A of the Internal Revenue Code of 1986 include rules, regulations, and guidance of general application issued by the Department of the Treasury under Internal Revenue Code section 409A.

 

 

 

 

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In Witness Whereof, the parties have executed this Employment Agreement as of the date first written above.

 

	
Executive
	
 
	
CenterState Banks, Inc.

	
/s/ Daniel E. Bockhorst
	
 
	
 

By:
	
/s/ John C. Corbett

	
Daniel E. Bockhorst
	
 
	
 
	
John C. Corbett

	
 
	
 
	
 
	
Executive Vice President

 

 

10Exhibit 10.4

 

2014 OMNIBUS INCENTIVE PLAN

 

FOR VERITEX HOLDINGS, INC.

 

1.                                           Purpose and Effect Date.

 

(a)                                      Purpose. The 2014 Omnibus Incentive Plan for Veritex Holdings, Inc. has two complementary purposes: (i) to attract and retain outstanding individuals to serve as officers, employees, directors and service providers; and (ii) to increase shareholder value. This Plan will provide participants incentives to increase shareholder value by offering the opportunity to acquire shares of the Company’s common stock, or receive monetary payments, on the potentially favorable terms and this Plan provides. In addition, the Plan is intended to advance the Company’s growth and success and to advance its interests by attracting and retaining well-qualified Non-Employee Directors upon whose judgment the Company is largely dependent for the successful conduct of its operations and by providing such individuals with incentives to put forth maximum efforts for the long-term success of the Company’s business.

 

(b)                                      Effective Date. This Plan will become effective on the date this Plan is adopted by the Board of Directors (the “Board”) of the Company (the “Effective Date”), and, subject to Section 3 herein, Awards may be granted under this Plan on and after, the Effective Date.

 

2.                                           Definitions. Capitalized terms used in this Plan have the meanings given below.  Additional defined terms are set forth in other sections of this Plan.

 

(a)                                      “Applicable Laws” mean the requirements relating to the administration of equity-based awards under U.S. and state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or jurisdiction where Awards are, or will be, granted under the Plan.

 

(b)                                      “Award” means a grant of Options, Stock Appreciation Rights, Performance Shares, Performance Units, Restricted Stock, Restricted Stock Units, Cash-based Awards, or any other type of award permitted under the Plan.

 

(c)                                       “Change in Control” except as may otherwise be provided in an Option agreement, or other applicable agreement, means the occurrence of any of the following:

 

(i)                                          The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if the Company’s shareholders immediately prior to such merger, consolidation or reorganization cease to directly or indirectly own immediately after such merger, consolidation or reorganization at least a majority of the combined voting power of the continuing or surviving entity’s securities outstanding immediately after such merger, consolidation or other reorganization.

 

(ii)                                       The consummation of the sale, transfer or other disposition of all or substantially all of the Company’s assets (other than (x) to a corporation or other entity of which at least a majority of its combined voting power is owned directly or

 

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indirectly by the Company, (y) to a corporation or other entity owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of the common stock of the consolidation or corporate reorganization which does not result in a Change in Control as defined herein;

 

(iii)                               A change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purpose of this clause, if any person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same person will not be considered a Change in Control;

 

(iv)                              The consummation of any transaction as a result of which any person becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing at least fifty percent (50%) of the total voting power represented by the Company’s then outstanding voting securities. For purposes of this paragraph (iv), the term “person” shall have the same meaning as when used in sections 13(d) and 14(d) of the Exchange Act but shall exclude:

 

(1)                                      a trustee or other fiduciary holding securities under an employee benefit plan of the Company or an affiliate of the Company;

 

(2)                                      a corporation or other entity owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of the common stock of the Company;

 

(3)                                      the Company; and

 

(4)                                      a corporation or other entity of which at least a majority of its combined voting power is owned directly or indirectly by the Company; or

 

(v)                                 A complete winding up, liquidation or dissolution of the Company.

 

A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transactions

 

(d)                                      “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a specific provision of the Code includes any successor provision and the regulations promulgated under such provision.

 

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(e)                                       “Commission” means the United States Securities and Exchange Commission or any successor agency.

 

(f)                                        “Committee” means the Compensation Committee of the Board (or a successor committee with the same or similar authority), or such other committee of the Board as designated or authorized by the Board to administer the Plan. Unless otherwise determined by the Board, the Committee shall be composed of no fewer than two directors, each of whom is an Outside Director provided that if no such committee shall be in existence at any time, the functions of the Committee shall be carried out by the Board.

 

(g)                                       “Company” means Veritex Holdings, Inc., a Texas corporation, or any successor thereto.

 

(h)                                      “Director” means a member of the Board, and “Non-Employee Director” means a Director who is not also an officer or an employee of the Company or an Affiliate.

 

(i)                                          “Exchange Act” means the Securities Exchange Act of 1934, as amended. Any reference to a specific provision of the Exchange Act includes any successor provision and the regulations and rules promulgated under such provision.

 

(j)                                         “Fair Market Value” means (i) if the stock is listed on a securities exchange, the closing sales price on the principal such exchange on such date or, in the absence of reported sales on such date, the closing sales price on the immediately preceding date on which sales were reported, or (ii) if the stock is not listed on a securities exchange, a value that will be determined by such other method as the Committee determines in good faith to be reasonable and in compliance with Internal Revenue Code (“Code”) Section 409A.

 

(k)                                      “Option” means the right, granted to a Participant pursuant to this Plan, to purchase Shares at a stated price for a specified period of time.

 

(l)                                          “Outside Director” means a Director (i) other than an executive officer or employee of the Company or any other individual having a relationship which, in the opinion of the Board would interfere with the exercise of independent judgment in carrying out the responsibilities of a Director; (ii) who is not a current employee, is not a former employee who receives compensation for prior services in the current year, and has not been an officer of the Company; (iii) who did not directly or indirectly receive any compensation from the Company during the current year, other than director fees; and (iv) who did not receive more than de minimis compensation from the Company during the prior year, other than director fees.

 

The following persons shall not be considered independent:

 

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A.                      A Director who is, or at any time during the past three years was, employed by the Company;

 

B.                      A Director who accepted or who has a Family Member (as that term is defined in NASDAQ Listing Rule 5605 (a)(2)) who accepted any compensation from the Company in excess of $100,000 during any period of twelve consecutive months within the three years preceding the determination of independence, other than the following:

 

(i)  more than de minimis compensation for a Board or Board committee service;

 

(ii)  compensation paid to a Family Member who is an employee (other than an executive officer) of the Company; or

 

(iii)  benefits under a tax-qualified retirement plan, or non-discretionary compensation.

 

It is intended that Outside Directors shall qualify within the meaning of Rule 16 b-3 and, if the Company is subject to Code Section 162(m), an “outside director” within the meaning of Code Section 162(m)(4)(C).

 

(m)                                  “Participant” means an individual selected by the Committee to receive an Award.

 

(n)                                      “Performance Awards” means a Performance Share and Performance Unit, and any Award of Restricted Stock, or Restricted Stock Units payment or vesting of which is contingent on the attainment of one or more Performance Goals.

 

(o)                                      “Person” has the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof.

 

(p)                                      “Plan” means this 2014 Omnibus Incentive Plan of Veritex Holdings, Inc. as may be amended from time to time.

 

(q)                                      “Restriction Period” means the length of time established relative to an Award during which the Participant cannot sell, assign, transfer, pledge or otherwise encumber the Stock or Stock Units subject to such Award and at the end of which the Participant obtains an unrestricted right to such Stock or Stock Units.

 

(r)                                         “Restricted Stock” means a Share that is subject to a risk of forfeiture and a Restriction Period.

 

(s)                                        “Restricted Stock Unit” or “RSU” means the right to receive a payment equal to the Fair Market Value of one Share that is subject to a risk of forfeiture and a Restriction Period.

 

(t)                                         “Share” means a share of Stock.

 

(u)                                      “Stock” means the Common Stock of the Company, par value of $0.01 per share.

 

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(v)                                      “Stock Appreciation Right” or “SAR” means the right to receive a payment equal to the appreciation of the Fair Market Value of a Share during a specified period of time.

 

(w)                                    “Stock Unit” means a right to receive a payment equal to the Fair Market Value of one Share.

 

(x)                                      “Subsidiary” means any corporation, limited liability company or other limited liability entity in an unbroken chain of entities beginning with the Company if each of the entities (other than the last entity in the chain) owns the stock or equity interest possessing more than fifty percent (50%) of the total combined voting power of all classes of stock or other equity interests in one of the other entities in the chain.

 

(y)                                      “Year of Service” means a year of service as that term is defined in Section 1.143 of the Veritex Community Bank Employee Stock Ownership Plan.

 

3.                                           Shareholder Approval. No Awards may be granted under the Plan until the Plan has been disclosed to, and approved by, a majority of the Company’s shareholders. The Plan will be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted by the Board. Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.

 

4.                                           Eligibility. The persons eligible to receive Awards under the Plan shall be designated as Participants by the Committee.

 

5.                                           Administration.

 

(a)                                 The Plan shall be administered by the Committee as designated by the Company’s Board of Directors (the “Board”) that shall have the full power and authority to (i) designate Participants; (ii) determine the types of Awards to be granted under the Plan; (iii) determine the number of Shares to be covered by each award; (iv) determine the terms and conditions of any award; (v) amend the terms and conditions of any award; (vi) determine whether, to what extent, and under what circumstances Awards may be exercised in cash, Shares, other securities, other Awards or other property, cancelled forfeited or suspended; (vii) establish, amend, suspend or waive rules and appoint such individuals as it shall deem appropriate for the proper administration of the Plan; (viii) to approve forms of Award Agreements for use under the Plan; (ix) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator will determine; (x) to construe and interpret the terms of the plan and Awards granted pursuant to the Plan; (xi) to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations established for the purpose of satisfying applicable foreign laws, for

 

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qualifying for favorable tax treatment under applicable foreign laws or facilitating compliance with foreign laws; sub-plans may be created for any of these purposes; and (xii) make any other determination and take any other action that the Board deems necessary for the administration of the Plan.

 

(b)                                 The Committee will consist of two or more persons each of whom will be an Outside Director.

 

(c)                                  The terms of the Plan outlined below apply to all Awards granted under the Plan, unless otherwise stipulated in an Award’s individual grant agreement, provided however, in the event of a conflict between the terms of the Plan and the terms of an individual grant agreement, the individual grant agreement shall control.

 

6.                                           Indemnification. The Company will indemnify and hold harmless each member of the Board and the Committee, and each officer or member of any other committee to whom a delegation under this Plan has been made, as to any acts or omissions with respect to this Plan or any Award to the maximum extent that the law and the Company’s certificate of incorporation and bylaws permit.

 

7.                                           Shares Available for Awards. The aggregate number of Shares that are available for grant under the Plan shall be one million (1,000,000) Shares.

 

8.                                           Limitation on Awards. The maximum aggregate number of Shares subject to Awards granted under the Plan in any 12-month period to any one Participant shall be 500,000. The maximum aggregate cash Award that may be paid under the Plan to any one Participant in any fiscal year shall be $1,000,000.

 

9.                                           Accounting for Awards. If an Award entitles Participant to receive or purchase Shares, the number of Shares covered by such Award, or to which such Award relates, shall be counted on the date of the grant of such Award against the aggregate number of Shares available for grant under the Plan. Any Shares subject to an Award that terminates or is forfeited or cancelled shall become available again for grant under the Plan. Shares withheld as full or partial payment to the Company for the purchase or exercise price relating to an Award, or to satisfy tax withholding obligations, shall again be available for grant under the Plan.

 

10.                                    Adjustments. In the event of a recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, disposition, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company or other similar corporate transaction or event affects the Shares such that an adjustment is necessary in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Board shall (as deemed appropriate) adjust (i) the number and type of Shares subject to, or that may become subject to, outstanding Awards; (ii) the purchase price or exercise price with respect to the Award;

 

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or (iii) any other limitations contained within the Plan. Notwithstanding the foregoing, the Committee shall not make any adjustments to outstanding Options or Stock Appreciation Rights that would constitute a modification, extension, or substitution of such rights under Treas. Reg. Section 1.409A-1(b)(5)(v) that would be treated as the grant of a new stock right or change in the form of payment for purposes of Code Section 409A.

 

11.                               Award Types.

 

(a)         Stock Options

 

Exercise Price - The exercise price applicable to an Option shall not be less than 100% of the Fair Market Value of a Share on the date of grant,

 

Stock Option Term - Options will remain exercisable for no longer than 10 years from the date of grant.

 

Time and Manner of Exercise - Unless otherwise provided in an Option agreement, payment of the exercise price of an Option may be made in whole or in part, in the form of (i) cash or cash equivalents, (ii) delivery of previously-acquired Shares based on the Fair Market Value of the Shares on the date the Option is exercised, (iii) withholding of Shares from the Option based on the Fair Market Value of the Shares on the date the Option is exercised, (iv) broker-assisted market sales, or (iv) any other cashless exercise arrangement.

 

(b)                                 Stock Appreciation Rights

 

Exercise Value - The excess of (i) the Fair Market Value of one Share on the date of exercise over the grant price of the SAR — with the grant price not being less than 100% of the Fair Market Value of a Share on the date of grant.

 

SAR Term - SARs will remain exercisable for no longer than 10 years from the date of grant.

 

Form of Payment - SARs may be settled in cash or Stock as specified in the applicable grant agreement.

 

(c)                                  Restricted Stock and RSUs

 

Dividend and Voting Rights - Participants who receive Shares of restricted Stock and/or RSUs shall not be entitled to receive any cash or Stock dividends paid to or made with respect to such Shares and shall not have the right to vote the Shares until such Shares have vested.

 

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Form of Payment - RSUs may be settled in cash or Stock as specified in the applicable grant agreement.

 

Code Section 409A — All RSUs must be settled or paid before the 15th day of the third month following the end of the Participant’s (or the Company’s, if later) taxable year in which the RSU vests.

 

(d)                                 Cash-based Awards

 

Performance Period - The applicable Performance Period shall be determined by the Committee and provided in the Participants’ grant agreements or other relevant documentation.

 

Payout Opportunities - The Committee shall approve a threshold, target, and maximum Awards payout opportunity for each Participant for the fiscal year. In no event shall the Awards payout opportunity exceed $1,000,000.

 

Payment of Cash-based Awards- Cash-based Awards must be payable solely as a result of the Company’s performance during the Performance Period and as determined after the end of the Performance Period.

 

Code Section 409A — All Cash-based Awards must be settled or paid before the 15th day of the third month following the end of the Participant’s (or the Company’s, if later) taxable year in which the Cash-based Award vests.

 

(e)                                  Performance-based Awards - Any award granted under the Plan may be subject to the Performance Goals.

 

Code Section 162(m) -Any award agreement under which Performance-based Awards are granted to a Participant who is, or is expected to become, a “covered employee” (as defined in Code Section 162(m)(3) shall contain the provisions necessary for the Performance-based Awards to be “qualified performance-based compensation” under Code Section 162(m).

 

Performance Period (herein so called) - The applicable Performance Period shall be determined by the Committee provided in the Participants’ grant agreements.

 

Performance Goals (herein so called) - Performance Goals applicable to Awards granted to Participants who are, or are expected to become, “covered employees” must be objective (in accordance with Code Section 162(m)) and approved and adopted by the Committee not later than the earlier of (i) 90 days after the commencement of the Performance Period and (ii) the time when 25 percent of the Performance Period has elapsed.

 

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Performance Goals shall consist of any of the following: growth in interest income and expense; net-income; net interest margin; efficiency ratio; reduction in non-accrual loans and non-interest expense; growth in non-interest income and ratios to earnings assets; net revenue growth and ratio to earning assets; capital ratios; asset or liability interest rate sensitivity and gap; effective tax rate; deposit growth and composition; liquidity management; securities portfolio (value, yield, spread, maturity, or duration); earning asset growth and composition (loans, securities); non-interest income (e.g., fees, premiums and commissions, loans, wealth management, treasury management, insurance, funds management); overhead ratios, productivity ratios; credit quality measures; return on assets; return on equity; economic value of equity; compliance and regulatory ratings; internal controls; enterprise risk measures (e.g., interest rate, loan concentrations, portfolio composition, credit quality, operational measures, compliance ratings, balance sheet, liquidity, insurance); volume in production or loans; cash flow; cost; revenues; sales; ratio of debt to debt plus equity; net borrowing, credit quality or debt ratings; profit before tax; economic profit; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; gross margin; profit margin; earnings per Share; operating earnings; capital expenditures; expenses or expense levels; economic value added; ratio of operating earnings to capital spending or any other operating ratios; free cash flow; net profit; net sales; net asset value per Share; the accomplishment of mergers, acquisitions, dispositions, public offerings or similar extraordinary business transactions; sales growth; price of the Company’s common shares; return on investment; return on assets, equity or stockholders’ equity; market share; inventory levels, inventory turn or shrinkage; customer satisfaction; or total return to stockholders.

 

The Performance Goals shall be computed in accordance with generally accepted accounting principles or under a methodology established by the Committee in accordance with Code Section 162(m).

 

Discretion - The Committee may not, in any event, increase the amount of compensation payable to a Participant upon the attainment of a Performance Goal.

 

Payment/Settlement - Performance-based Awards will be paid or settled only upon the attainment of the Performance Goals specified in a Participant’s grant agreement, and, in the case of Participants who are “covered employees,” no Performance-based Awards will be paid or

 

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settled until after the Committee has certified, in writing, that the Performance Goals have been satisfied.

 

Code Section 409A — All Performance-based Awards must be settled or paid before the 15th day of the third month following the end of the Participant’s (or the Company’s, if later) taxable year in which the Performance-based Award vests.

 

(f)                                   Other Requirements

 

Consideration for Awards - Awards may be granted for no cash consideration or for any cash or other consideration as determined by the Board or required by applicable law.

 

Vesting - Awards shall vest according to the vesting schedule provided within the applicable Award agreement. In addition, any unvested Awards may, at the discretion of the Committee, become fully vested upon the earlier of the occurrence of a termination of employment due to the Participant’s death, disability, Change in Control of the Company or (in the case of Participants who are not, and are not expected to become, “covered employees”) retirement after attaining the age of 65 with 10 Years of Service. In the case of a “covered employee” Participant who retires, Performance-based Awards granted to the Participant will only vest and be paid if the Committee certifies in writing that applicable Performance Goals have been met.

 

Forfeiture - Upon a Participant’s termination of employment other than in the case of the Participant’s death, disability, a Change in Control of the Company, or retirement (except in the case of “covered employee” Participants) after attaining the age of 65 with 10 Years of Service during the applicable vesting period, all unvested Awards held by the Participant shall be forfeited.

 

Clawback Policy — Notwithstanding any other provision of this Agreement to the contrary, any Award received by the Participant, issued hereunder, and/or any amount received with respect to any sale of any such Shares, shall be subject to potential cancellation, recoupment, rescission, payback or other action in accordance with the terms of the Company’s Clawback Policy, as it may be amended from time to time (the “Policy”). The Participant agrees and consents to the Company’s application, implementation and enforcement of (a) the Policy or any similar policy established by the Company that may apply to the Participant and (b) any provision of applicable law relating to cancellation, rescission, payback or recoupment of compensation, and expressly agrees that the Company may take such actions as are necessary to effectuate the Policy, any similar policy (as applicable to the Participant) or applicable law without further consent or

 

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action being required by the Participant. To the extent that the terms of this Agreement and the Policy or any similar policy conflict, then the terms of such policy shall prevail.

 

(g)                                  Tax Withholding The Company or the Committee may take such action as appropriate to ensure all applicable federal, state, or local payroll, withholding, income or other taxes (that are the responsibility of the Participant) are withheld and collected from the Participant. The Participant shall make appropriate arrangements for the payment to the Company of all amounts which the Company is required to withhold in connection with the vesting, exercise, purchase, or distribution of an award. Such arrangements may include making cash payments, transferring vested Shares to the Company, electing to have Shares withheld from the award that is vesting or being exercised or settled, or electing to have taxes withheld from other wages.

 

(h)                                 Prohibition on Re-pricing - No Stock Option or SAR may be amended to reduce its initial exercise or grant price without the approval of the Board.

 

(i)                                     Rights as Shareholders - Except with respect to vested Shares, or as otherwise provided in a grant agreement, a Participant shall not have any rights and privileges of a shareholder of the Company.

 

(j)                                    Award Agreement - No Participant will have rights under an Award granted to such Participant unless and until an Award agreement shall have been duly executed on behalf of the Company and, if requested by the Company, signed by the Participant.

 

(k)                                 Fractional Shares - No fractional Shares shall be granted or delivered pursuant to the Plan or any Award. In the event an Award would result in a fractional Share, the number of Shares will be rounded down and the value of the fractional Share shall be paid to the Participant in cash.

 

12.                                    No Effect on Employment or Service. Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing the Participant’s relationship with the Company, nor will they interfere in any way with the Participant’s right to terminate such relationship at any time, with or without cause, to the extent permitted by Applicable Laws.

 

13.                                    Date of Grant. The date of grant of an Award will be, for all purposes, the date on which the Committee makes the determination granting such Award, or such other later date as is determined by the Committee: Notice of the determination will be provided to each Participant within a reasonable time after the date of such grant.

 

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14.                                    Amendment and Termination of the Plan.

 

(a)                                      Amendment and Termination. The Committee may at any time amend, alter, suspend or terminate the Plan.

 

(b)                                      Stockholder Approval. The Company will obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.

 

(c)                                       Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Committee, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan will not affect the Committee’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.

 

15.                                    Conditions for Issuance of Shares. Shares will not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance.

 

16.                                    Transferability of Awards. Unless determined otherwise by the Committee, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant. If the Committee makes an Award transferable, the Award agreement will obtain such additional terms and conditions as the Committee deems appropriate.

 

17.                               Dissolution or Liquidation; Merger or Change in Control.

 

(a)                                 Dissolution or Liquidation. In the event of the proposed winding up, dissolution or liquidation of the Company, the Committee will notify each Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Award will terminate immediately prior to the consummation of such proposed action.

 

(b)                                 Change in Control. In the event of a merger or Change in Control, each outstanding Award will be treated as the Committee determines, including, without limitation, that each Award be assumed, cancelled or an equivalent option or right substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. The Committee will not be required to treat all Awards similarly in the transaction.

 

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Except as set forth in an Award agreement, in the event that the successor corporation does not assume or substitute for the Award, the Participant will fully vest in and have the right to exercise all of his or her outstanding Options and Stock Appreciation Rights, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock and Restricted Stock Units will lapse, and, with respect to Awards with performance-based vesting, all Performance Goals or other vesting criteria will be deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met. In addition, if an Option or Stock Appreciation Right is not assumed or substituted in the event of a Change in Control, the Committee will notify the Participant in writing or electronically that the Option or Stock Appreciation Right will be exercisable for a period of time determined by the Committee in its sole discretion, and the Option or Stock Appreciation Right will terminate upon the expiration of such period.

 

For the purpose of this subsection (c), an Award will be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) received in the Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if the holders were offered a choice consideration, the type consideration chosen by the holders of a majority of outstanding Shares); provided; however, that if such consideration received in the Change in Control is not solely common stock of the successor corporation or its Parent, the Committee may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of an Option or Stock Appreciation Right or upon the payout of a Restricted Stock Unit, Performance Unit or Performance Share, for each Share subject to such Award, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the Change in Control.

 

Notwithstanding anything in this Section 18(c) to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more Performance Goals will not be considered assumed if the Company or its successor modifies any of such Performance Goals without the Participant’s consent; provided, however, a modification to such Performance Goals only to reflect the successor corporation’s post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption.

 

18.                               Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which requisite authority will not have been obtained.

 

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19.                               Governing Law. The Plan and all Awards hereunder shall be construed in accordance with and governed by the laws of the State of Texas, but without regard to its conflict of law provisions.

 

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