M&I Xxxxxxxx & Xxxxxx Bank
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
June 17, 2002
Xx. Xxxxxx X. Xxxx
Mississippi Valley Bancshares, Inc.
00000 Xxxxxxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Dear Drew:
The purpose of this letter (the "Letter Agreement") is to set forth our
agreement regarding your employment by M&I Xxxxxxxx & Xxxxxx Bank or an
affiliate thereof (jointly, the "Bank"). This Letter Agreement shall be null and
void and of no further effect if the merger of Mississippi Valley Bancshares,
Inc. ("MVB") with and into Xxxxxxxx & Ilsley Corporation ("M&I") (the "Merger")
does not occur.
1. Term and Duties. The term of your employment under this Letter Agreement
will begin on the date the Merger occurs (the "Effective Time") and will end on
December 31, 2004, unless terminated earlier pursuant to Paragraph 6 hereof (the
"Term"). You will not be entitled to any severance payments upon the termination
of the Term, except as provided in Paragraph 7 hereof. Excluding any periods of
vacation and sick leave to which you are entitled, you shall devote
substantially all of your business time, efforts and skills to the business and
affairs of the Bank. Your duties shall be to assist the Bank in developing and
maintaining employee, customer and community relationships and facilitating the
integration of MVB with M&I.
2. Cash Compensation. Your annualized base salary will be $311,000 ("Base
Salary") or $11,961.54 for every bi-weekly period. In addition, you will receive
an annual incentive for the 2002, 2003 and 2004 calendar years of $200,000 per
annum, payable in the January immediately succeeding each calendar year. All
such amounts are stated prior to applicable federal and state income and
employment tax withholding.
3. Other Benefits. During the Term, you will be entitled to participate in
the welfare benefit plans and qualified retirement plans of the Bank or its
parent, M&I, on the same terms and conditions as other full-time, active
employees, subject to meeting the eligibility criteria therefore, but will not
be eligible to participate in the Bank's short or long-term disability income
plans because of the continuance of payments provided in Paragraphs 4 and 7(c)
hereof. You will be entitled to take a reasonable amount of vacation time
consistent with your position and tenure with the Bank, taking into account
prior service credit. In addition, you will be entitled to continued use of the
automobile, owned by MVB and used by you as of June 1, 2002, for the
Term, with the Bank paying the same classes of expenses it paid prior to the
Effective Time. At the end of the Term, the automobile will be transferred to
you at no cost unless your employment is terminated for Cause. However, the fair
market value of the car at the date of transfer will be compensation to you for
income tax purposes and will be subject to income and employment tax
withholding. Except in the case of termination of your employment for Cause or
your voluntary termination of employment without Good Reason prior to December
31, 2004, the Bank will continue to pay dues for the clubs, to which you
belonged as of June 1, 2002, until the earlier of (a) your 65th birthday or (b)
your death or Disability. Except in the case of termination of your employment
for Cause or your voluntary termination of employment without Good Reason prior
to December 31, 2004, the Bank will provide you with an office in the Bank's
main location in the St. Louis area until the earlier of (a) December 31, 2009
or (b) your death or Disability. The Bank will also provide to you (but not to
any spouse you may marry after the date of this Letter Agreement) medical and
dental insurance on the same basis as full-time active employees of M&I at no
cost to you under the group health insurance plan available to full-time
employees of M&I until age 65. Thereafter, you will be eligible to participate
in M&I's Medicare supplement insurance plan. This plan requires that you enroll
in Medicare Parts A and B, any additional Medicare programs which become
available (like prescription drug coverage), and any successors thereto, at your
own expense. The M&I supplement insurance for any year will be subsidized by the
Company on the same basis as other eligible employees retiring on December 31,
2004 under the Company's general retiree medical program, or you will receive a
greater subsidy to the extent any current executive officer receives such
greater subsidy.
4. Additional Payments. Starting with the month after your employment
terminates for any reason other than death, you will receive $2,000 per month
until the month in which you attain age 65 in full satisfaction of the
obligation of Southwest Bank of St. Louis ("SW Bank") to you under that
Consulting Agreement dated January 18, 1996 (the "Consulting Agreement"). This
amount is stated prior to any reduction for required federal or state income or
employment tax withholding. Payments of such amounts are conditioned on (a) you
executing after termination of employment within the stated period a release, in
the form attached hereto as Exhibit A, and not revoking such release during the
applicable rescission period and (b) you entering into an agreement with SW Bank
prior to the Effective Time canceling the Consulting Agreement. Payments under
this paragraph will not qualify as compensation for purposes of any qualified or
nonqualified retirement or welfare benefit plans or programs of M&I.
5. Noncompete Agreement. In consideration for the compensation and benefits
provided to you pursuant to this Letter Agreement, you agree to sign
contemporaneously herewith an agreement governing confidentiality,
nonsolicitation of employees, customers and prospective customers and
noncompetition (the "Noncompete Agreement"). The length of the nonsolicitation
and noncompetition agreements shall be while you are employed by the Bank and
for the three-year period subsequent to your termination of employment. This
Letter Agreement will be null and void and of no further effect if you do not
sign the Noncompete Agreement.
6. Termination of Employment. During the Term, your employment hereunder
may be terminated under any of the following circumstances:
(a) Death or Disability. Your employment shall terminate automatically upon
your death or Disability. "Disability" means your inability to perform the
essential functions of your job, with or without reasonable accommodation, for
90 consecutive days or 120 days in any one-year period as determined by a
mutually agreed upon physician in the St. Louis area.
(b) Termination by Bank. The Bank may terminate your employment for Cause
or without Cause. For purposes of this Agreement, "Cause" means (i) an act or
acts of personal dishonesty taken by you and intended to result in your
substantial personal enrichment at the expense of the Bank or (ii) the willful
commission by you of a criminal or other act that causes or will likely cause
substantial economic or reputational damage to the Bank or which results in you
being unavailable to render services to the Bank.
(c) Voluntary Termination by You. You may voluntarily terminate your
employment with the Bank at any time for Good Reason or without Good Reason.
"Good Reason" means (i) a material breach of the Bank's obligations under this
Letter Agreement, or (ii) a request by the Bank or any of its affiliates that
you relocate more than 30 miles from the your current work location on the date
of the Merger, and which relocation you refuse.
7. Obligations Upon Termination.
(a) Termination by the Bank for Cause; Voluntary Termination by You Without
Good Reason. If your employment with the Bank is terminated by the Bank for
Cause, or voluntarily by you without Good Reason, the Bank will pay and/or
provide you with the following: (i) your Base Salary through the date your
employment terminates (the "Termination Date") in a lump sum within thirty days
after the Termination Date, and (ii) all benefits to which you are entitled
under any benefit plans or programs of the Bank in accordance with the terms of
such plans through the Termination Date.
(b) Termination by Reason of Death. If your employment with the Bank is
terminated during the Term by reason of your death, the Bank will pay and/or
provide your legal representative, as the case may be, with the following: (i)
your Base Salary as then in effect through the Termination Date in a lump sum
within thirty days after the Termination Date, (ii) an annual incentive for the
period ending with the Termination Date equal to the product of $200,000 times a
fraction, the numerator of which shall equal the number of days during such
fiscal year preceding the Termination Date, and the denominator of which shall
equal three hundred sixty-five (365) and (iii) all benefits to which you are
entitled under any benefit plans or programs of the Bank in accordance with the
terms of such plans or programs through the Termination Date.
(c) Termination by the Bank Without Cause, Termination by You for Good
Reason or Termination for Disability. If the Bank terminates your employment
without Cause, you voluntarily terminate your employment for Good Reason, or
your employment terminates because of Disability, the Bank will pay and/or
provide you or your legal representative (in the case of your Disability and you
are unable to consent)
with the following after compliance with subparagraph (d) hereof: (i) Base
Salary continuation and payment of the annual incentive until December 31, 2004
(including an incentive for the 2004 calendar year) and (ii) all benefits to
which you are entitled under (a) any benefit plans or programs of the Bank in
accordance with the terms of such plans other than the short and long-term
disability income plans, participation in which you have waived, and (b) this
Letter Agreement.
(d) Release of Claims. Notwithstanding the foregoing, the Bank will not pay
to you, and you will not have any right to receive any payments described in
subparagraphs (b) and (c), above, or any benefits described in Paragraph 3,
above, for the period after the Term, unless and until you or your legal
representative (in the case of your death or Disability if you are unable to
consent) executes, and there shall be effective following any statutory period
for revocation, a release, in a form attached hereto as Exhibit A. To meet the
requirements of this subparagraph, the release cannot be signed until after the
Term.
(e) Withholding and Other Issues. Payments to be made to you under this
Paragraph 7 will be reduced by any applicable income or employment taxes which
are required to be withheld under applicable law, and all amounts are stated
before any such deduction. Furthermore, none of the payments under subparagraphs
(b) and (c) hereof shall be included as compensation for purposes of any
qualified or nonqualified retirement or welfare benefit plans or programs of the
Bank or M&I. All payments under this Letter Agreement are in lieu of any
severance you may otherwise be entitled to under any plan or program of the
Bank, M&I or MVB and any accrued but unpaid vacation pay as of the date of your
termination of employment.
8. M & I Board Service. Promptly after the Merger, M&I will take such
action as may be reasonably necessary to expand its Board of Directors by one
seat and to have you appointed to the Board with a term expiring at M&I's 2005
Annual Meeting of Shareholders. During the period of your employment with the
Bank, consistent with other employee/directors of M&I, you will not receive
additional compensation for Board service. Compensation as an outside member of
the Board will begin following your retirement as an employee.
9. Miscellaneous. This Letter Agreement supersedes all prior agreements and
understandings concerning the matters addressed herein other than (a) the
Noncompete Agreement and (b) a separate agreement entered into on this date
regarding enhancement of your nonqualified pension benefits. This Letter
Agreement and its interpretation shall be governed and construed in accordance
with the laws of the State of Missouri, without regard to its principles of
conflicts of laws, and shall be binding upon the parties hereto and their
respective successors and assigns. This Letter Agreement can only be amended
with the written consent of you and the Bank. This Letter Agreement may be
executed in counterparts, both of which, when taken together, shall constitute
one and the same agreement.
If you agree with the terms of this Letter Agreement, please sign the
Noncompete Agreement and in the space provided below.
Yours very truly,
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Chief Executive Officer
I hereby consent to the terms contained in this Letter Agreement and agree
to be bound by them.
/s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
June 24, 2002
--------------------------------------
Date
Exhibit A
COMPLETE AND PERMANENT RELEASE
In order to receive certain enumerated benefits under the letter agreement
between M&I Xxxxxxxx & Xxxxxx Bank and me dated June 17, 2002 (the "Letter
Agreement"), I must sign and return this Release to the director of human
resources at M&I, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000. I must do
so within twenty-one (21) calendar days after my termination of employment (or
by any later date as may be specified by Xxxxxxxx & Ilsley Corporation ("M&I")).
1. General Release of Claims.
I hereby release M&I from, and covenant not to xxx M&I with respect to, any
and all claims I have against M&I.
2. Claims to Which Release Applies.
This release applies both to claims which are now known or are later
discovered. However, this release does not apply to any claims that may arise
after the date I execute the release. Nor does this release apply to any claims
which may not be released under applicable law.
3. Claims Released Include Age Discrimination and Employment Claims
The claims released include, but are not limited to, (1) claims arising
under the Age Discrimination in Employment Act as amended (29 U.S.C. Section 621
et seq.), (2) claims arising out of or relating in any way to my employment with
M&I or the conclusion of that employment and (3) claims arising under any other
federal, state or local law, regulation, ordinance or order that regulates the
employment relationship and/or employee benefits.
4. Release Covers Claims Against Related Parties.
For purposes of this release, the term "M&I" includes Xxxxxxxx & Ilsley
Corporation, Mississippi Valley Bancshares, Inc., and any of its present, former
and future owners, parents, affiliates and subsidiaries, and its and their
directors, officers, shareholders, employees, agents, servants, representatives,
predecessors, successors, and assigns. Therefore, the claims released include
claims I have against any such persons or entities.
5. The Terms "Claims" and "Release" are Construed Broadly.
As used in this release, the term "claims" shall be construed broadly and
shall be read to include, for example, the terms "rights", "causes of action
(whether arising in law or equity)", "damages", "demands", "obligations",
"grievances" and "liabilities" of any kind or character.
Similarly, the term "release" shall be construed broadly and shall be read to
include, for example, the terms "discharge" and "waive".
6. Release Binding on Employee and Related Parties.
This release shall be binding upon me and my agents, attorneys,
personal representatives, executors, administrators, heirs, beneficiaries,
successors, and assigns.
7. Additional Consideration.
I have executed this release in consideration for benefits under the Letter
Agreement. I acknowledge that these benefits represent consideration in addition
to anything of value that I am otherwise entitled to receive from M&I and that
they are sufficient to support this release.
8. All Representations in Documents.
In entering into this release I acknowledge that I have not relied on any
verbal or written representations by any M&I representative other than those
explicitly set forth in this release.
9. Opportunity to Consider this Release; Consultation with Attorney.
I have read this release and fully understand its terms. I have been
offered at least 21 days to consider its terms. I have been (and am again
hereby) advised in writing to consult with an attorney before signing this
release.
10. Voluntary Agreement.
I have entered into this release knowingly and voluntarily and understand
that its terms are binding on me.
11. Partial Invalidity of Release.
If any part of this release is held to be unenforceable, invalid or void,
then the balance of this release shall nonetheless remain in full force and
effect to the extent permitted by law.
12. Headings.
The headings and subheadings in this release are inserted for convenience
and reference only and are not to be used in construing the release.
13. Applicable Law.
Missouri law will apply in connection with any dispute or proceeding
concerning this release.
14. Suit in Violation of this Release--Loss of Benefits and Payment of
Costs.
If I bring an action against M&I in violation of this release or if I bring
an action asking that the release be declared invalid or unenforceable, I agree
that prior to the commencement of such an action I will tender back to M&I all
payments which I have received as consideration for this release. If my action
is unsuccessful I further agree that I will pay all costs, expenses and
reasonable attorneys' fees incurred by M&I in its successful defense against the
action. I acknowledge and understand that all remaining benefits to be provided
to me as consideration for this release will permanently cease as of the date
such action is instituted. However, the previous three sentences shall not be
applicable if I bring an action challenging the validity of this release under
the Age Discrimination in Employment Act (which I may do without penalty under
this release).
15. 7 Day Revocation Period.
I understand that I have a period of seven (7) calendar days following the
date I deliver a signed copy of this release to Human Resources to revoke this
release by giving written notice to that manager. This release will be binding
and effective upon the expiration of this 7-day period if I do not revoke, but
not before.
EXECUTED THIS _____________ DAY OF ______________________, 200___.
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Employee's Signature
