SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

Exhibit 10(s)

 

THIS SECOND AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”) is made effective as of the 26th day of April, 2007, by and between Joseph D. Reid (the “Executive”) and Capitol Bancorp Ltd., a Michigan corporation (the “Company”).

On March 31, 2003, the Company and the Executive entered into an Employment Agreement dated effective March 13, 2003 which was subsequently amended on April 22, 2003 (the “Employment Agreement”). The Company and the Executive now wish to amend the Employment Agreement as provided herein.

NOW, THEREFORE, in consideration of the foregoing and the terms and conditions set forth below, the parties agree as follows:

 

1.    AMENDMENT TO SECTION 2(a)(i). The first sentence of Section 2(a)(i) of the Employment Agreement is hereby deleted in its entirety and amended to read as follows:

“During the Employment Period, the Executive shall serve as the Chief Executive Officer of the Company and shall have such duties and responsibilities as are assigned to him by the Board.”

2.    AMENDMENT TO SECTION 2(b)(i).Section 2(b)(i) of the Employment Agreement is hereby deleted in its entirety and amended to read as follows:

“During the Employment Period, the Executive shall receive an annual base salary (“Annual Base Salary”), which shall be paid at a monthly rate, at least equal Nine Hundred Thousand Dollars ($900,000), which shall be paid in accordance with the Company’s normal payroll practices for senior executives as in effect from time to time.”

3.    AMENDMENT TO SECTION 2(b)(ii). Section 2(b)(ii) of the Employment Agreement is hereby deleted in its entirety and amended to read as follows:

“Annual Bonus. In addition to Annual Base Salary, for each fiscal year ending during the Employment Period, the Executive shall be eligible for an annual cash bonus (the “Annual Bonus”) in an amount specified on Exhibit A attached hereto pursuant to the terms of the Company’s Management Incentive Plan, as amended (“MIP”) (or any predecessor or successor plan thereof), as determined by the Compensation Committee of the Board, upon complete achievement of the targets set forth on Exhibit A attached hereto. Each such Annual Bonus shall be paid no later than the 15^th day of the third month of the fiscal year following the fiscal year for which the Annual Bonus is awarded. The amount of any Annual Bonus

 

 

which exceeds the maximum bonus payable pursuant to the MIP in any one fiscal year, if any, shall be carried over (on a “first-in, first-out” basis) and added to the Annual Bonus (if any) determined for any of the next three fiscal years, whether or not any one or more of such fiscal years ends before or after the end of the Employment Period.”

 

4.    AMENDMENT TO SECTION 4(a)(i). Section 4(a)(i) of the Employment Agreement is hereby deleted in its entirety and amended to read as follows:

“(i)     the Company shall pay to the Executive, in a lump sum in cash within 75 days after the Date of Termination, the aggregate of the following amounts:

 

    A.     the sum of (1) the Executive’s Annual Base Salary through the Date of Termination to the extent not theretofore paid, (2) the product of (x) the higher of (I) the most recent Annual Bonus (which shall not include the long-term incentive bonus contemplated by Section 2(b)(iii)) and (II) the Annual Bonus paid or payable, (and annualized for any fiscal year consisting of less than twelve full months or during which the Executive was employed for less than twelve full months), for the most recently completed fiscal year during the Employment Period, if any (such higher amount being referred to as the “Highest Annual Bonus”) and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365, and (3) any accrued vacation pay, in each case to the extent not theretofore paid (the sum of the amounts described in clauses (1), (2), and (3) shall be hereinafter referred to as the “Accrued Obligations”); and

 

   B.     the amount equal to the product of (1) three times the sum of (x) the Executive’s Annual Base Salary and (y) the Highest Annual Bonus;”

 

5.    AMENDMENT TO SECTION 4(d). Section 4(d) of the Employment Agreement is hereby deleted in its entirety and amended to read as follows:

“Cause, Etc.; Other than for Good Reason. If the Executive’s employment during the Employment Period shall be terminated for Cause or if the Executive voluntarily terminates employment during the Employment Period, excluding a termination for Good Reason, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive (x) his Annual Base Salary through the Date of Termination, and (y) Other Benefits, in each case to the extent theretofore unpaid. In such case, the amounts contemplated by (x) and (y) shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination.”

 

 

IN WITNESS WHEREOF, the parties have executed this Amendment on March 14, 2007.

 

THE EXECUTIVE:       /s/ Joseph D. Reid                 JOSEPH D. REID

THE COMPANY:   CAPITOL BANCORP LTD.   By:       /s/ David O'Leary                 Name:  David O'Leary Title:    Secretary