Employment Agreement For Chief Executive Officer

EMPLOYMENT AGREEMENT


FOR


CHIEF EXECUTIVE OFFICER


THIS AGREEMENT, dated as of the 18th day of March, 1999, by and among Citizens Bancshares of Southwest Florida, Inc., a Florida corporation (the "Employer"), Citizens National Bank of Southwest Florida (Proposed), a proposed national bank to be organized under the laws of the United States (the "Bank") (the Employer and the Bank are collectively referred to herein as the "Employer"), and Michael L. McMullen, ("Executive").


W I T N E S S E T H:


WHEREAS, the directors of the Employer, as organizers of the Bank, are seeking approval from the Comptroller of the Currency ("OCC") and the Federal Deposit Insurance Corporation ("FDIC") to charter a national bank in Collier County, Florida; and


WHEREAS, as of the date of this Agreement the Employer has obtained preliminary approval from the OCC and is currently seeking approval from the FDIC;


WHEREAS, Executive is willing to assist the directors of the Employer in the organization of the Bank and to become the Chief Executive Officer of the Bank and the Employer in accordance with the terms and conditions hereinafter set forth;


NOW, THEREFORE, for and in consideration of the mutual premises and covenants herein contained, the parties hereto agree as follows:


1. EMPLOYMENT. Employer employs Executive and Executive accepts employment upon the terms and conditions set forth in this Agreement.


2. TERM. Unless earlier terminated under the provisions of this Agreement the term of employment of Executive under this Agreement shall be the three-year period


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commencing on February 28, 1999 ("Commencement Date"), and ending on February 28, 2002.


3. COMPENSATION. For all services to be rendered by Executive during the term of this Agreement, Employer agrees to pay Executive in accordance with the terms outlined in Exhibit "A" net of applicable withholdings.


4. TITLE AND DUTIES. Executive shall serve as Chief Executive Officer of the Bank commencing on the Commencement Date. Executive's duties are described on attached Exhibit "B".


5. EXTENT OF SERVICES. Commencing on the Commencement Date, Executive shall devote his full business time, attention and energies to the business of Employer and shall not during the term of this Agreement be engaged in any other career which requires the attention or participation of Executive during normal business hours of Employer, recognition being given to the fact that Executive is expected on occasion to participate in client development after normal business hours. However, Executive may invest his assets in such form or manner as Executive so desires, so long as such investments do not require his services during normal business hours in the operation of the affairs of the companies in which such investments are made. Executive shall notify Employer of any significant participation by him in any trade association or similar organization.


6. EXPENSES. Executive may incur reasonable expenses for promoting the business of the Bank, including expenses for entertainment, travel, and similar items. Executive will be reimbursed for all such expenses upon Executive's periodic presentation of an itemized account of such expenditures. Executive's reimbursable expenses are further detailed on Exhibit "A".


7. VACATIONS. Executive shall be entitled each year to a vacation in accordance with the personnel policy established by the Bank's Board of Directors, during which


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time Executive's compensation shall be paid in full. Executive's vacation allowance is further detailed on Exhibit "A".


8. EXECUTIVE BENEFITS. Without limiting or reducing any of the Executive's rights and benefits available to Executive as an employee under state and/or federal law, so long as Executive is employed, Executive will be entitled to participate in the employee benefit programs offered to Employer's employees and covering the Executive's employment and duties including, without limitation, those rights and benefits described in Exhibit "A" of this Agreement.


9. CONFIDENTIALITY. In Executive's position as an employee of Employer, Executive has had and will have access to confidential information, trade secrets and other proprietary information of vital importance to Employer and has and will also develop relationships with customers, employees and others who deal with Employer which are of value to Employer. Employer requires as a condition to Executive's employment with Employer that Executive agrees to certain restrictions as set forth below on Executive's use of the proprietary information and valuable relationships developed during Executive's employment with Employer. In consideration of the terms and conditions contained herein, the parties hereby agree as follows:


9.1 Employer and Executive mutually agree and acknowledge that Employer may entrust Executive with highly sensitive confidential, restricted and proprietary information concerning various Business Opportunities (as hereinafter defined), customer lists, and personnel matters. Executive acknowledges that during Executive's employment by the Employer, he shall bear a responsibility to Employer to protect such information from use or disclosure that is not necessary for the performance of Executive's duties hereunder, as an essential incident of Executive's employment with Employer.


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9.2 For the purposes of this Section, the following definitions shall apply.


9.2.1 "TRADE SECRET" shall mean the identity of customers of Employer, the whole or any portion or phase of any scientific or technical information, design, process, procedure, formula or improvement that is valuable and secret (in the sense that it is not generally known to competitors of Employer) and which is defined as a "trade secret" under Florida law.


9.2.2 "CONFIDENTIAL INFORMATION" shall mean any data or information, other than Trade Secrets, which is material to Employer and not generally known by the public. Confidential Information shall include, but not be limited to, Business Opportunities of Employer (as hereunder defined), the details of this Agreement, Employer's business plans and financial statements and projections, and the costs of the services Employer may offer or provide to the customers they serve, to the extent such information is material to Employer and not generally known by the public.


9.2.3 "BUSINESS OPPORTUNITIES" shall mean any specialized information or plans of Employer concerning the provision of financial services to the public, together with all related information concerning the specifics of any contemplated financial services regardless of whether Employer has contacted or communicated with such target person or business.


9.2.4 Notwithstanding the definitions of Trade Secrets, Confidential Information, and Business Opportunities set forth above, Trade Secrets, Confidential Information, Business Opportunities and the information generally subject to this Paragraph 9 and its subparts shall not include any information:


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(i) that is or becomes generally known to the public;


(ii) that is already known by Executive or is developed by Executive after termination of employment through entirely independent efforts;


(iii) that Executive obtains from an independent source having a bona fide right to use and disclose such information;


(iv) that is required to be disclosed by law, except to the extent eligible for special treatment under an appropriate protective order; or


(v) that Employer's Board of Directors approves for release.


9.3 Executive shall not, without the prior approval of Employer's Board, during his employment with Employer and for a period of one (1) year from the last day of his providing full services under his employment with the Employer use or disclose, to any unauthorized person who is not an employee of Employer, any Trade Secrets and/or Confidential Information of Employer, its subsidiaries or affiliates, or of any other person or entity making Trade Secrets and/or Confidential Information available for Employer's use unless said Trade Secrets and/or Confidential Information ceases to be a Trade Secret and/or unless the Employer ceases to do business in Collier County, Florida, in which case these restrictions on disclosure and use shall not apply.


10. OBSERVANCE OF SECURITY MEASURES. During Executive's employment with Employer, Executive is required to observe all security measures adopted to protect Trade Secrets, Confidential Information, and Business Opportunity of Employer.


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11. CHANGE IN CONTROL OF THE EMPLOYER.


11.1 In the event of a "change in control" of the Employer, as defined hereinafter, Executive shall be entitled at any time up to thirty (30) days prior to the date of closing of the transaction (the "Election Date") which will affect such change in control (the "Change-in-Control Date") and at his election, to give written notice to Employer of termination of this Agreement, and Executive shall be paid, in addition to all accrued but unpaid Base Salary (which is to be paid as earned) and Performance Bonuses (which are to be paid as provided in this Agreement), a lump sum cash payment in the amount stated in Paragraph J of Exhibit "A" (the "Change-in-Control Payment"). The Change-in-Control payment provided for in this Section 11.1 shall be unconditional and without setoff of any kind and paid in cash, not later than ten (10) days after the date of notice of termination by Executive under this Section 11.1 or on the Change-in-Control Date, whichever is later provided; however, that such Change-in-Control Payment shall in no event be paid later than ninety (90) days from the date of the notice of termination by Executive. Additionally, the Change-in-Control Payment shall be made to Executive as a condition precedent to the closing of the transaction which will effect the change in control, and prior to the Change-in-Control Date Employer shall notify representatives of the acquiring or successor entity, as the case may be, of Executive's rights and Employer's obligations under this Agreement, including without limitation this paragraph, and without effecting Employer's obligations to pay Executive hereunder, any such acquiring or successor entity shall become obligated to forthwith pay to Executive for such part of the Change-in-Control Payment as has not been paid by the Employer as of the Change-in-Control Date.


11.2 In addition to the foregoing and notwithstanding any provision to the contrary or otherwise in this Agreement, in the event of a change in control of Employer (as defined hereinafter), all options and other stock rights of the Executive, whether under this Agreement or otherwise (including, but not limited to the accrual of stock options not yet issued


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to Executive, but to which Executive is entitled), shall be automatically and without further documentation immediately vest in executive, and Executive shall have the immediate and unfettered right to take any and all actions as Executive shall deem appropriate with regard to said options and/or rights, including without limitation the immediate right to receive unissued, but accrued stock options, exercise stock options and/or transfer or sell stock. Employer shall take all actions necessary to promptly issue any stock options not already issued.


11.3 If Executive elects to terminate this Agreement pursuant to this Section 11, then Executive shall further be entitled, in lieu of the receipt of shares of Common Stock of the Employer issuable upon exercise of Executive's stock options, whether such options arose under this Agreement or otherwise, to receive from Employer an amount in cash or Common Stock of the Employer (or any combination thereof) as Executive shall in his sole discretion designate (hereinafter "like-kind election") equal to the excess of the fair market value (hereinafter defined) as of the Change-in-Control Date of each share of Common Stock over the exercise price(s) of each share represented by Executive's options, times the number of shares of Common Stock represented by such options. The "fair market value" of each share of the Common Stock shall be equal to the higher of (i) the value as determined by the Board of Directors of the Employer if there is no organized trading market for the shares at the time such determination is made, or (ii) the closing price per share as of the date of the like-kind election (or the average of the bid and asked prices if no closing price is available) on any nationally recognized securities exchange or association on which the Employer's shares may be quoted or listed, or (iii) the highest per share price actually paid for Common Stock in connection with any change in control of the Empl ...