EMPLOYMENT AGREEMENT
This Agreement, is made and dated as of April 17, 1997, by and between
PEOPLES BANK & TRUST COMPANY, an Indiana bank and trust company ("Employer"),
and XXXXXX X. XXXXXXX, a resident of Indiana ("Employee").
W I T N E S S E T H
WHEREAS, Employee has been employed by Employer as an executive officer
and has made valuable contributions to the profitability and financial strength
of Employer;
WHEREAS, Employer desires to encourage Employee to continue to make
valuable contributions to Employer's business operations and not to seek or
accept employment elsewhere;
WHEREAS, Employee desires to be assured of a secure minimum
compensation from Employer for his services over a defined term;
WHEREAS, Employer desires to assure the continued services of Employee
on behalf of Employer on an objective and impartial basis and without
distraction or conflict of interest in the event of an attempt by any person to
obtain control of Employer;
WHEREAS, Employer recognizes that when faced with a proposal for a
change of control of Employer, Employee will have a significant role in helping
the Board of Directors assess the options and advising the Board of Directors on
what is in the best interests of Employer and its shareholders, and it is
necessary for Employee to be able to provide this advice and counsel without
being influenced by the uncertainties of his own situation;
WHEREAS, Employer desires to provide fair and reasonable benefits to
Employee on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, Employer desires reasonable protection of its confidential
business and customer information which it has developed over the years at
substantial expense and assurance that Employee will not compete with Employer
for a reasonable period of time after termination of his employment with
Employer, except as otherwise provided herein.
NOW, THEREFORE, in consideration of these premises, the mutual
covenants and undertakings herein contained and the continued employment of
Employee by Employer as its President and Chief Operating Officer, Employer and
Employee, each intending to be legally bound, covenant and agree as follows:
1. Upon the terms and subject to the conditions set forth in this
Agreement, Employer employs Employee as Employer's President and Chief Operating
Officer, and Employee accepts such employment.
2. Employee agrees to serve as Employer's President and Chief Operating
Officer and to perform such duties in that office as may be prescribed by the
Employer's Bylaws and as may
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reasonably be assigned to him by Employer's Chief Executive Officer and those
generally associated with the office held by Employee as determined by the Chief
Executive Officer from time to time. Employer shall not, without the written
consent of Employee, relocate or transfer Employee to a location more than 30
miles from his current employment location. While employed by Employer, Employee
shall devote substantially all his business time and efforts to Employer's
business and the business of its parent and subsidiaries.
3. The term of this Agreement shall be for an initial term of three
(3) years commencing on the April 17, 1997 (the "Effective Date"), and
terminating April 17, 2000; provided, however, that such term shall be extended
for an additional year on each annual anniversary of the Effective Date, unless
either party thereto gives written notice to the other party not to so extend
within the period of ninety (90) days prior to an anniversary, in which case no
further extension shall occur and the term of this Agreement shall end two years
subsequent to the annual anniversary immediately following the date on which the
notice not to extend for an additional year is given (such term, including any
extension thereof shall herein be referred to as the "Term").
4. Employee shall receive an annual salary of $185,000 ("Base
Compensation"), payable at regular intervals in accordance with Employer's
normal payroll practices now or hereafter in effect. Employer may consider and
declare from time to time increases in the salary it pays Employee and thereby
increase his Base Compensation.
5. So long as Employee is employed by Employer pursuant to this
Agreement, he shall be included as a participant in all present and future
employee benefit, retirement, and compensation plans generally available to
employees of Employer, consistent with his Base Compensation and his position as
President and Chief Operating Officer of Employer, including, without
limitation, any 401(k) plan, stock incentive plan, employee stock purchase plan,
executive bonus plan, and group life insurance plans.
6. So long as Employee is employed by Employer pursuant to this
Agreement, Employee shall receive reimbursement from Employer for all reasonable
business expenses incurred in the course of his employment by Employer, upon
submission to Employer of written vouchers and statements for reimbursement. So
long as Employee is employed by Employer pursuant to the terms of this
Agreement, Employer shall continue in effect vacation policies applicable to
Employee no less favorable from his point of view than those written vacation
policies in effect on the date hereof. So long as Employee is employed by
Employer pursuant to this Agreement, Employee shall be entitled to office space
and working conditions no less favorable than were in effect for him on the date
hereof.
7. Employee's employment with Employer may be terminated prior to the
expiration of the Term as follows:
(A) The Employer may immediately upon written notice terminate
Employee for cause. "Cause" shall be defined as (i) personal
dishonesty, (ii) willful misconduct, (iii) breach of fiduciary
duty involving personal profit, (iv) intentional failure to
perform stated duties, (v) conviction of a violation of any
law, rule, or regulation (other than traffic
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violations or similar offenses) or cease-and-desist order,
(vi) moral turpitude reflecting adversely on the reputation of
the Employer, or (vii) any material breach of any term,
condition or covenant of this Agreement. The Employer shall
have no further liability to Employee under this Agreement for
any period subsequent to the termination for Cause.
(B) Either party may terminate this Agreement during the Term
without Cause, upon sixty (60) days prior written notice to
the other party. If the Employer terminates the Employee
without Cause (as defined above), or if Employee terminates
his employment for Good Reason (as defined below), except as
provided in Section 7(C) below:
(i) Compensation provided for herein (including Base
Compensation) shall continue to be paid, and Employee
shall continue to participate in the employee
benefit, retirement, and compensation plans and other
perquisites as provided in Sections 5 and 6 hereof,
through the date of termination specified in the
notice of termination; and any benefits payable under
insurance, health, retirement and bonus plans as a
result of Employee's participation in such plans
through such date shall be paid when due under those
plans;
(ii) In addition, the Employer shall pay the Employee a
lump sum severance payment equal to Employee's Base
Compensation for the immediately preceding calendar
year; and
(iii) In addition, for one (1) year following termination,
Employer will maintain in full force and effect for
the continued benefit of Employee and his dependents
each employee medical and life benefit plan (as such
term is defined in the Employee Retirement Income
Security Act of 1974, as amended) in which Employee
was entitled to participate immediately prior to the
date of his termination, unless an essentially
equivalent benefit is provided by another source. If
the terms of any employee medical and life benefit
plan of Employer or applicable laws do not permit
continued participation by Employee, Employer will
arrange to provide to Employee a benefit
substantially similar to, and no less favorable than,
the benefit he was entitled to receive under such
plan at the end of the period of coverage. The right
of Employee to continued coverage under the health
and medical insurance plans of Employer pursuant to
Section 4980B of the Internal Revenue Code of 1986,
as amended (the "Code") shall commence upon the
expiration of such period. Notwithstanding the
foregoing, Employer shall not be obligated to
continue life insurance benefits if the insurer does
not consent to such continuation and no disability
insurance benefit shall continue past Employee's date
of termination of employment.
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For purposes of this Agreement, "Good Reason" for Employee to terminate his
employment with Employer means: (i) a substantial reduction in Employee's
responsibility and authority over the management and affairs of Employer without
Employee's consent or; (ii) any material breach of any term, condition or
covenant of Employer under this Agreement; or (iii) the requirement that the
Employee move his personal residence, or perform his principal executive
functions, more than 30 miles from his primary office as of the later of the
Effective Date and the most recent voluntary relocation by the Employee.
(C) If, following a Change of Control, Employer terminates
Employee without Cause (as defined above) or Employee
terminates his employment with Employer for Good Reason (as
defined above) in lieu of any payments or coverage provided
under Section 7(B) above,
(i) Compensation provided for herein (including Base
Compensation) shall continue to be paid, and Employee
shall continue to participate in the employee
benefit, retirement, and compensation plans and other
perquisites as provided in Sections 5 and 6 hereof,
through the date of termination specified in the
notice of termination; and any benefits payable under
insurance, health, retirement and bonus plans as a
result of Employee's participation in such plans
through such date shall be paid when due under those
plans;
(ii) In addition, the Employer shall pay the Employee a
severance payment equal to 299% of the Employee's
Average Annual Compensation. Such severance payment
shall be due and payable on the date fifteen calendar
days following the date on which Employee's
employment terminates under this Section 7(C),
unless, prior to the date 90 days before the date on
which a Change of Control occurs, Employee files with
the Secretary of Employer a duly executed irrevocable
written election to defer such payment, specifying
the date or dates on which such payment (or
installments in the aggregate equal to such payment)
shall be made; provided, that no such deferral
election shall provide for any payment later than 10
years after termination of employment. Such deferred
payment obligation shall bear interest from the date
on which it would otherwise be payable until the date
paid at 6% per year. For purposes of figuring the
severance payment, Employee's "Average Annual
Compensation" shall equal the average annual
compensation, including bonuses and taxable fringe
benefits, which was paid by the Employer and
includible in the gross income of the Employee for
the five most recent taxable years ending, or such
portion of the five year period during which Employee
performed services for the Employer, before the
Change of Control. Anything in this Agreement to the
contrary notwithstanding, in the event that the
Employer's independent public accountants determine
that any payment by the Employer to or for the
benefit of the Employee,
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whether paid or payable pursuant to the terms of this
Agreement, would be non-deductible by the Employer
for federal income tax purposes because of Section
280G of the Code, then the amount payable to or for
the benefit of the Employee pursuant to this
Agreement shall be reduced (but not below zero) to
the Reduced Amount. For purposes of this Section
7(C), the "Reduced Amount" shall be the amount which
maximizes the amount payable without causing any
portion of the payment to be non-deductible by the
Employer because of Section 280G of the Code; and
(iii) In addition, for one (1) year following termination,
Employer will maintain in full force and effect for
the continued benefit of Employee and his dependents
each employee medical and life benefit plan (as such
term is defined in the Employee Retirement Income
Security Act of 1974, as amended) in which Employee
was entitled to participate immediately prior to the
date of his termination, unless an essentially
equivalent benefit is provided by another source. If
the terms of any employee medical and life benefit
plan of Employer or applicable laws do not permit
continued participation by Employee, Employer will
arrange to provide to Employee a benefit
substantially similar to, and no less favorable than,
the benefit he was entitled to receive under such
plan at the end of the period of coverage. The right
of Employee to continued coverage under the health
and medical insurance plans of Employer pursuant to
Section 4980B of the Code shall commence upon the
expiration of such period. Notwithstanding the
foregoing, Employer shall not be obligated to
continue life insurance benefits if the insurer does
not consent to such continuation and no disability
insurance benefit shall continue past Employee's date
of termination of employment.
For purposes of this Agreement, a "Change of Control" shall mean the
occurrence of any of the following: (i) the sale, lease, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the assets of the
Company and its Subsidiaries taken as a whole to any "person" (as such term is
used in Section 13(d)(3) of the Exchange Act) (ii) the adoption of a plan
relating to the liquidation or dissolution of the Company, (iii) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" (as defined above),
other than Xxxxxxx X. "Mac" XxXxxxxxx, or his spouse or lineal descendants,
becomes the beneficial owner" (as such term is defined in Rule 13d-3 and Rule
13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the
voting stock of the Company or (iv) the first day on which a majority of the
members of the Board of Directors of the Company are not Continuing Directors.
"Continuing Directors" means, as of any date of determination, any member of the
Board of Directors of the Company who (i) was a member of such Board of
Directors January 24, 1996 or (ii) was nominated for election or elected to such
Board of Directors with the approval of a majority of the Continuing Directors
who were members of such Board at the time of such nomination.
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(D) Employee's employment with Employer shall terminate in the
event of Employee's death or disability. For purposes hereof,
"disability" shall be defined as Employee's inability by
reason of illness or other physical or mental incapacity to
perform the duties required by his employment for any
consecutive sixty (60) day period, provided that notice of any
termination by Employer because of Employee's "disability"
shall have been given to Employee prior to the full resumption
by him of the performance of such duties.
8. In order to induce Employer to enter into this Agreement, Employee
hereby agrees as follows:
(A) Unless otherwise required to do so by law, including the order
of a court or governmental agency, Employee shall not divulge
or furnish any trade secrets (as defined in IND. CODEss.
24-2-3-2) of Employer or any confidential information acquired
by him while employed by Employer concerning the policies,
plans, procedures or customers of Employer to any person, firm
or corporation, other than Employer or upon its written
request, or use any such trade secrets or confidential
information directly or indirectly for Employee's own benefit
or for the benefit of any person, firm or corporation other
than Employer, since such trade secrets and confidential
information are confidential and shall at all times remain the
property of Employer.
(B) For a period of one (1) year after termination of Employee's
employment with Employer for any reason, Employee shall not
(a) compete, directly or indirectly, with the business of
Employer as conducted during the term of this Agreement (which
business shall include the financial services industry), or
have any interest (including any interest or association,
including but not limited to, that of owner, part owner,
partner, shareholder, director, officer, employee, agent,
consultant, lender or advisor) in any person, firm or entity
which competes with Employer and has offices physically
located in the Indianapolis metropolitan statistical area
(each such person, firm or entity is referred to as
"Competitor"); (b) solicit or accept business for or on behalf
of any Competitor; or (c) solicit, induce or persuade, or
attempt to solicit, induce or persuade, any person to work for
or provide services to or provide financial assistance to, any
Competitor. Nothing contained in this Section 8(B) shall be
deemed to prevent or limit the Employee's right either to be a
mere customer of any Competitor, or to invest in the capital
stock or other securities of any business solely as a passive
or minority investor, provided that his holdings do not exceed
five percent (5%) of the issued and outstanding capital stock
of such business.
(C) If Employee's employment by Employer is terminated for any
reason, Employee will turn over immediately thereafter to
Employer all business correspondence, letters, papers,
reports, customers' lists, financial statements, records,
drawings, credit reports or other confidential information or
documents of Employer or its affiliates in the possession or
control of Employee, all of which writings are and will
continue to be the sole and exclusive property of Employer or
its affiliates.
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(D) Employee acknowledges that the covenants of this Section 8 are
reasonable in scope and duration and reasonably necessary and
appropriate to protect the goodwill and other appropriate
interests of Employer following Employee's termination and
that any violation of such covenants by Employee would result
in irreparable harm to Employer, for which any remedy at law
would be inadequate. In addition to any other remedy to which
it may be entitled, Employer shall be entitled to equitable
relief, including specific performance, for any violation of
Section 8.
9. Any termination of Employee's employment with Employer as
contemplated by section 7 hereof, except in the circumstances of Employee's
death, shall be communicated by written "Notice of Termination" by the
terminating party to the other party hereto. Any "Notice of Termination"
pursuant to section 7 based on Cause, Good Reason on following a Change of
Control shall set forth in reasonable detail the facts and circumstances claimed
to provide a basis for such termination.
10. If a dispute arises regarding the termination of Employee pursuant
to Section 7 hereof or as to the interpretation or enforcement of this
Agreement, said dispute shall be resolved by binding arbitration in
Indianapolis, Indiana determined in accordance with the rules of the American
Arbitration Association. Notwithstanding the foregoing, Employer shall be
entitled to seek any remedy in a proceeding at law or in equity in any court
having jurisdiction for any breach of Section 8. If said dispute arises, whether
instituted by formal legal proceedings or otherwise, including any action that
the Employee takes to defend against any action taken by the Employer, the
Employee shall be reimbursed for all costs and expenses, including reasonable
attorneys' fees, arising from such dispute, proceedings or actions, provided
that the Employee obtains either a written settlement or a final judgment by a
court of competent jurisdiction substantially in his favor. Such reimbursement
shall be paid within ten days of Employee's furnishing to the Employer written
evidence, which may be in the form, among other things, of a canceled check or
receipt, of any costs or expenses incurred by the Employee.
11. Should Employee die after termination of his employment with
Employer while any amounts are payable to him hereunder, this Agreement shall
inure to the benefit of and be enforceable by Employee's executors,
administrators, heirs, distributees, devisees and legatees and all amounts
payable hereunder shall be paid in accordance with the terms of this Agreement
to Employee's devisee, legatee or other designee or, if there is no such
designee, to his estate.
12. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been given when delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Employee: Xxxxxx X. Xxxxxxx
======================
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If to Employer: Chairman of the Board of Directors
Peoples Bank & Trust Company
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
or to such address as either party hereto may have furnished to the other party
in writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
13. The validity, interpretation, and performance of this Agreement
shall be governed by the laws of the State of Indiana.
14. Employer shall require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business or assets of Employer, by agreement in form and substance
reasonably satisfactory to Employee to expressly assume and agree to perform
this Agreement in the same manner and same extent that Employer would be
required to perform it if no such succession had taken place. Failure of
Employer to obtain such agreement prior to the effectiveness of any such
succession shall be deemed a termination pursuant to Section 7(C). As used in
this Agreement, "Employer" shall mean Employer as hereinbefore defined and any
successor to its business or assets as aforesaid.
15. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by Employee and Employer. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of dissimilar provisions or conditions at the same or any prior
subsequent time. No agreements or representation, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.
16. The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect. This
is the entire agreement between Employer and Employee concerning the subject
matter hereof and all prior agreements, written or oral, are superseded.
17. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same agreement.
18. This Agreement is personal in nature and neither party hereto
shall, without consent of the other, assign or transfer this Agreement or any
rights or obligations hereunder except as provided in section 11 and section 14
above. Without limiting the foregoing, Employee's right to receive compensation
hereunder shall not be assignable or transferable, whether by pledge, creation
of a security interest or otherwise, other than a transfer by his will or by the
laws of descent or distribution as set forth in section 11 hereof, and in the
event of any attempted assignment or transfer contrary to this paragraph,
Employer shall have no liability to pay any amounts so attempted to be assigned
or transferred.
[signature page follows]
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IN WITNESS WHEREOF, the parties have caused the Agreement to be
executed as of the date first written above.
"Employer"
PEOPLES BANK & TRUST COMPANY
By: /s/ Xxxxxxx X. XxXxxxxxx
-------------------------------
Xxxxxxx X. XxXxxxxxx
Chief Executive Officer
"Employee"
/s/ Xxxxxx X. Xxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxx
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