EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into as
of May __, 1999, by and between Success National Bank, a national banking
organization ("Employer"), and Xxxxx Xxxx ("Employee").
WHEREAS, Employer and Employee desire to enter into an employment
agreement governed by the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the provisions and undertakings set
forth herein, the parties, intending to be legally bound, hereby agree as
follows:
1. EMPLOYMENT.
1.1 Employment. Employer hereby retains and employs, and Employee
accepts such retention and employment, to provide services hereunder as Senior
Vice President-Chief Credit Officer. Employee shall be accountable to
Employer through its Chief Executive Officer and Board of Directors.
1.2 Duties and Obligations. As Senior Vice President-Chief Credit
Officer, Employee shall perform all executive and managerial duties incumbent
upon such position. Employee will devote his full time and attention and give
his best efforts to the performance of such executive and managerial duties.
It is intended that Employee may have other business investments or
directorships and engage in civic, charitable and other such activities so
long as such activities do not interfere with his duties hereunder. Employer
shall not relocate Employee to a location more than 40 miles from the
Employer's Lincolnshire location.
1.3 Proprietary Property. Employee acknowledges that in the course of
his employment with Employer, Employer will provide Employee with, or access
to, customer lists, memoranda, files, records, trade secrets and such other
proprietary information and property (collectively, the "Proprietary
Property") as is necessary or desirable to assist Employee in his duties.
Employee acknowledges that the Proprietary Property is the sole and exclusive
property of Employer and is not available to the public at large. Employee
agrees that he shall not, while in the employ of Employer or thereafter,
communicate or divulge to, or use for the benefit of himself or any other
person, firm or corporation, without the prior written consent of Employer,
any information relating to the Proprietary Property. Upon termination of
Employee's employment with Employer, Employee shall thereupon return all
Proprietary Property in his possession or control to Employer.
2. FINANCIAL ARRANGEMENTS.
2.1 Compensation. As Employee's compensation for services provided
hereunder, Employer shall do the following:
(a) Salary. Employer shall pay Employee, pursuant to Employer's payroll
schedule, an annual salary in the amount of $120,000 during the term of this
Agreement, subject to annual review and increase, but not decrease, by the
Board of Directors of Employer.
(b) Bonus. Employer, based upon the sole determination of Employer's
Board of Directors, may grant a bonus to Employee in any year in which it
determines that Employer's performance justifies such a bonus. Employee shall
participate in an executive officer bonus plan adopted by Employer.
(c) Expenses. Employee shall be reimbursed on a monthly basis for all
reasonable business expenses incurred by him in the performance of his duties
hereunder, to the extent such expenses are substantiated and are consistent
with the general policies of Employer relative to expense reimbursement.
(d) Benefits. In addition to any compensation provided under this
Agreement, Employee shall be entitled to participate in and receive benefits
under any and all pension, profit sharing and other employee benefit plans,
insurance programs and other benefit programs which are, from time to time,
maintained by Employer for its senior executive officers, in accordance with
the provisions of such plans or programs as from time to time in effect.
(e) Incentive Stock Option. Employer shall grant to Employee an
incentive stock option to purchase five thousand (5,000) shares of Employee's
Common Stock on the usual terms and conditions provided with respect to grants
pursuant to Employees Stock Option Plan. The price per share for such option
shall be at the closing price on the date of Employee's next meeting of its
Board of Directors.
(f) Vacations. Employee shall be entitled to four (4) weeks paid
vacation.
3. TERM AND TERMINATION.
3.1 Term. This Agreement shall be effective for a period of three (3)
years from the date hereof.
3.2 Termination. This Agreement may also be terminated on the first to
occur of any of the following events:
(a) Agreement. Written agreement by both parties to terminate this
Agreement.
(b) Negligence; Misconduct. (i) substantial neglect of his duties
hereunder by Employee, (ii) gross misconduct or (iii) any intentional act by
Employee constituting fraud, misappropriation, embezzlement, dishonesty or
similar act which is injurious to Employer. Prior to termination of this
Agreement under Section 3.2(b)(i) and 3.2(b)(ii) only, Employer shall be
required to provide written notice to Employee of the act or omission
complained of, giving reasonably specific details in describing necessary
corrective action, and Employee shall be given a period of twenty (20) days in
which to cure or correct such act or omission. If such act or omission is
cured or corrected, the right of Employer to terminate this Agreement under
Sections 3.2(b)(i) and 3.2(b)(ii) shall be extinguished.
(c) Breach. Excluding actions or events which may cause termination of
this Agreement as provided in Section 3.2(b), in the event of the breach of
any of the terms and conditions of this Agreement by either party and the
failure of the breaching party to correct such breach within ten (10) business
days after receipt of written notice of such breach by the breaching party,
such other party may terminate this Agreement immediately upon written notice
of such termination to the breaching party.
(d) Death or Disability. In the event Employee dies or becomes
disabled, to the extent that he is physically or materially incapacitated for
more than six (6) months in the aggregate over a period of twenty-four (24)
months so that Employee is unable to perform his essential duties and
functions hereunder, this Agreement may be terminated by Employer upon written
notice to Employee.
3.3 Effects of Termination. In the event of termination of this
Agreement pursuant to Sections 3.1, 3.2(a), 3.2(b) or 3.2(d) hereof or
termination by Employer pursuant to Section 3.2(c) hereof, Employer shall have
no continuing obligation to Employee hereunder. In the event of termination
by Employee pursuant to Section 3.2(c) hereof or termination by Employer for
any reason not set forth in Section 3.1 or 3.2 hereof, Employer shall continue
to pay Employee salary, bonus, if any is due, and benefits for the duration of
the term.
4. CHANGE OF CONTROL, SALE.
4.1 Payment Upon Termination. Upon a Change of Control or an
Announcement (as each is defined herein) of Employer or Bancshares, Employer
shall pay Employee the sum of one times Employee's base salary in one lump sum
payment or, if such payment is not permissible as a matter of law, then such
other maximum payment, not to exceed one times Employee's base salary, as is
lawful; provided, however, that such payment shall only be made if Employee is
an employee of the Employer immediately prior to the public announcement of a
definitive event which will cause such Change of Control ("Announcement") and
either: (a) within three hundred sixty (360) days following such Announcement,
Employee is terminated by Employer as an employee of the Employer for any
reason; or (b) within one hundred eighty (180) days following such Change of
Control, Employee terminates his employment with the Employer as a result of
his reasonable determination that he is not comfortable continuing to work for
Employer.
4.2 Change of Control Defined. For purposes of this Agreement, a
"Change of Control" shall be deemed to have occurred upon any of the following
events:
(a) The consummation of any of the following transactions: (i) a
merger, recapitalization or other business combination of Employer or
Bancshares with or into another corporation pursuant to which Employer or
Bancshares, respectively, is not the continuing or surviving corporation or
pursuant to which shares of the Common Stock of Employer or Bancshares, as the
case may be, are converted into cash, securities of another corporation or
other entity or other property, other than a transaction in which the holders
of the Common Stock immediately prior to such transaction (including any
preliminary or other transaction relating to such transaction) will continue
to own at least fifty (50%) percent of the total voting power of the then-
outstanding securities of the surviving or continuing corporation immediately
after such transaction or (ii) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all, or substantially
all, of the assets of Employer or Bancshares.
(b) A transaction in which any person (including any "person" as defined
in Section 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), corporation or other entity (other than
Employer or Bancshares, an affiliate thereof or any profit-sharing, employee
ownership or other employee benefit or similar plan sponsored by Employer or
Bancshares or any subsidiaries thereof, or any trustee of or fiduciary with
respect to any such plan when acting in such capacity, or any group comprised
solely of such entities): shall become, through purchase or otherwise, the
"beneficial owner" (as such term is defined in Rule 13d-3 under the Exchange
Act), directly or indirectly (in one transaction or a series of related
transactions), of securities of Employer or Bancshares, as the case may be,
representing fifty (50%) percent or more of the total voting power of the
then-outstanding securities of Employer or Bancshares, respectively,
ordinarily (and apart from the rights accruing under special circumstances)
having the right to vote in the election of the directors of Employer or
Bancshares, respectively.
(c) If, during any period of two (2) consecutive years, individuals who
at the beginning of such period constituted the entire Board and any new
director whose election by the Board or nomination for election by the
stockholders of Employer or Bancshares, as the case may be, was approved by a
vote of eighty (80%) percent of the directors then still in office who either
were directors at the beginning of the period or whose election or nomination
for election by the stockholders was previously so approved, cease for any
reason to constitute a majority thereof.
4.3 Survival. The provisions of this Section 4 shall survive the
expiration of this Agreement until such time as Employee shall no longer be an
employee of the Employer.
5. PAYMENT BY HOLDING COMPANY
In view of Employee's contribution to Bancshares, any compensation or
benefit provided for herein to Employee may, upon the approval of both the
Boards of Directors of Employer and Bancshares, be paid by Bancshares.
6. NON-SOLICITATION/NON-COMPETITION
6.1 Non-Solicitation. Employee shall not, during the term of Employee's
employment with Employer and for a period of six (6) months after the
termination or expiration thereof, directly or indirectly, hire, offer to hire,
divert, entice away, solicit or in any other manner persuade or attempt to
persuade ("Solicitation") any person who is, or was, at any time within the
twelve (12) months prior to such Solicitation, an officer, director, employee,
agent, lessor, lessee, licensor, licensee, customer, prospective customer,
supplier or shareholder or prospective shareholder of Employer or Bancshares to
discontinue, cease or alter his, her or its relationship with Employer or
Bancshares.
6.2 Non-Competition. Employee shall not, during the term of Employee's
employment with Employer and for a period of six (6) months after the
termination or expiration thereof, except in the event that (a) such
termination occurs upon a Change of Control and otherwise as set forth in
Section 4.1 of this Agreement or (b) Employee is terminated by Employer as an
employee of the Employer for any reason other than one described in Sections
3.2(a), 3.2(b)(i), (ii) or (iii) or 3.2(c), directly or indirectly, within
five (5) miles of the three (3) largest then-existing offices of Employer: (i)
engage in any business or activity that competes with the business of Employer
or Bancshares; (ii) enter the employ of any person engaged in any business or
activity that competes with the business of Employer or Bancshares or render
any services to any person for use in competing with the business of Employer
or Bancshares; or (iii) have an interest in any person engaged in any business
or activity that competes with the business of Employer or Bancshares, directly
or indirectly, in any capacity, including, without limitation, as an
individual, partner, shareholder, officer, director, principal, agent,
employee, trustee, creditor or consultant or any other relationship or
capacity.
6.3 Remedies Upon Breach. Employee acknowledges and agrees that (a)
Employer shall be irreparably injured in the event of a breach by Employee of
any of Employee's obligations under this Section 6.3; (b) monetary damages
shall not be an adequate remedy for any such breach; (c) Employer shall be
entitled to injunctive relief, in addition to any other remedy which it may
have, in the event of any such breach; and (d) the existence of any claims
which Employee may have against Employer, whether under this Agreement or
otherwise, shall not be a defense to the enforcement by Employer of any of its
rights under this Section 6.3.
6.4 Enforcement. The covenants and obligations of Employee contained in
this Section 6 shall be in addition to, and not in lieu of, any covenants and
obligations which Employee may have with respect to the subject matter hereof,
whether by contract, as a matter of law or otherwise, and such covenants and
obligations, and their enforceability, shall survive the termination of this
Agreement.
6.5 Survival. The provisions of this Section 6 shall survive until the
later of (a) six (6) months following the expiration of this Agreement and (b)
six (6) months following the termination of Employee's employment with
Employer.
7. MISCELLANEOUS
7.1 Assignment. This Agreement and all rights and benefits hereunder
are personal to Employee and to Employer. Accordingly, no rights, interests
or benefits hereunder shall be sold, transferred or assigned without the prior
written consent of the other party.
7.2 Employment Status of Employee. It is expressly acknowledged that
Employee, in the performance of his services hereunder, is an employee of
Employer. Accordingly, Employer shall deduct from the compensation paid to
Employee any sums for income tax, social security or any other withholding
taxes as are required by law.
7.3 Changes or Modifications. No change or modification of this
Agreement shall be valid unless the same shall be in writing signed by
Employer and Employee. No waiver of any provision hereof shall be valid
unless in writing and signed by the party against whom charged.
7.4 Entire Agreement. This Agreement constitutes the entire Agreement
between the parties with respect to the matters set forth herein. This
Agreement supersedes any and all other agreements between the parties with
respect to the subject matter.
7.5 Notices. Notice required herein shall be effective when delivered
in person or sent by United States Certified Mail, postage prepaid and
addressed to:
Employer: Board of Directors
Success National Bank
Xxx Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000-0000
Employee: Xxxxx Xxxx
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000-0000
7.6 Governing Law. This Agreement shall be interpreted, construed and
enforced in accordance with the internal laws of Illinois.
7.7 Separability. The inability or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provision were omitted.
7.8 Waiver of Breach. The waiver by either party of a breach or
violation of any provision hereof shall not operate as a waiver of any
subsequent breach of the same or any other provision hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the last date written below.
EMPLOYER
SUCCESS NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and CEO
EMPLOYEE:
/s/ Xxxxx Xxxx
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Name: Xxxxx Xxxx
