Contract
Exhibit 10.6
2008 Amendment to
Employment Agreement
Employment Agreement
This Amendment (this “Amendment”), is made and entered into as of December 31, 2008
by and between Centrue Financial Corporation, Inc., a Delaware corporation (the
"Employer”), and Xxxxxxx X. Xxxxx (the “Executive”).
A. The Executive serves as Chief Credit Officer of Employer, and its wholly-owned subsidiary,
Centrue Bank (the “Bank”).
B. The Employer and the Executive have previously entered into an employment agreement dated
January 31, 2007 (the “Agreement”) and wish to amend the Agreement to satisfy the requirements of
Section 409A of the Internal Revenue Code and to eliminate provisions of the Agreement that pertain
only to compensation or benefits that have already been paid.
C. Except as otherwise provided in this Amendment, the Agreement shall continue in full force and
effect.
NOW, THEREFORE, in consideration of the premises and of the covenants herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
Employer and the Executive agree as follows:
1. Section 1 of the Agreement is hereby amended to provide as follows:
Section 1. Term. The term of this Agreement and the Executive’s employment hereunder
shall be for a term of one year commencing on the Effective Date (the “Term”), and may, in the
discretion of the Employer’s board of directors, be extended for one (1) or more additional
years by resolution of the board of directors prior to the first anniversary of the Effective
Date and each anniversary thereafter. The Term of the Agreement is extended for a period of 11
months beginning February 1, 2009 and ending December 31, 2009, upon execution of this document
by both parties.
2. Section 3(a) of the Agreement is hereby amended to provide as follows:
(a) Base Compensation. Effective January 1, 2009, the Executive shall receive an
aggregate annual minimum Base Salary of $141,750 payable in installments in accordance with the
regular payroll schedule of the Bank (“Base Salary”). Such Base Salary shall be subject to
review annually commencing in 2009 and shall be maintained or increased during the term of this
Agreement in accordance with the Employer’s established management compensation policies and
plans.
3. Section 3(c) of the Agreement is amended to provide as follows:
(c) Reimbursement of Expenses. The Executive shall be reimbursed, upon submission
of appropriate vouchers and supporting documentation, for all travel, entertainment and other
out-of-pocket expenses reasonably and necessarily incurred by the Executive in the performance
of his duties hereunder and shall be entitled to attend seminars,
conferences and meetings
relating to the business of the Employer consistent with the Employer’s or the Bank’s
established policies in that regard. Reimbursement under this section will be paid no later
than March 15 of the calendar year following the calendar year in which the expenses were
incurred.
4. Section 3(g) of the Agreement is deleted in its entirety.
5. Section 5(c)(i) of the Agreement is amended to provide as follows:
(i) In the event of the termination of this Agreement by the Employer prior to the last day
of the Term for any reason other than a termination in accordance with the provisions of Section
5(e) (Termination for Cause), then notwithstanding any mitigation of damages by the Executive,
the Employer shall pay the Executive a sum equal to one-half (1/2) the Executive’s Annual
Compensation. In addition, in the event Executive elects continuation coverage under the health
insurance programs maintained by the Employer, pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”), the Employer shall reimburse an amount equal to the
premiums payable by the Executive; provided, however, that the continued payment of these
amounts by the Employer shall not offset or diminish any compensation or benefits accrued as of
the date of termination. The term “Annual Compensation” shall mean the Executive’s then current
Base Salary and the Executive’s performance bonus for the most recently completed annual
performance period (including prior payments made under the incentive plans of Employer).
6. Section 5(c)(ii) of the Agreement is amended to provide as follows:
(ii) Payment to the Executive will be made on a monthly basis over the six (6) month period
immediately following the Executive’s termination of employment. In no event shall any
severance payable in monthly installments be made after the last day of the second calendar year
following the year in which the Executive’s employment terminates. The amount of severance
payable in monthly installments shall not exceed the amount eligible for exemption as separation
pay under Treas. Reg. § 1.409A-1(b)(9) and to the extent Executive is entitled to severance
payments in excess of such amount, the Employer shall pay Executive the excess amount on or
before March 15 of the calendar year following the year in which Executive’s employment
terminates. Payment of the amounts due under Section 5(c)(i) shall not be reduced in the event
the Executive obtains other employment following termination of employment by the Employer.
7. Section 5(d)(i) of the Agreement is amended to provide as follows:
(i) a material reduction in the Executive’s then current Base Salary;
8. The final paragraph of Section 5(d) is amended to provide as follows:
Upon the occurrence of any event referenced in (i) through (vi) above, Executive shall, within
ninety (90) of such occurrence, provide Employer notice of the existence of the condition. Upon
receiving notice, Employer shall have no more than thirty (30) days to remedy the condition.
Executive shall have two years from the date of the initial existence of one of the above events
to terminate his employment under this section. The Executive’s
2
right to terminate employment
due to a Constructive Discharge shall not be affected by incapacities due to mental or physical
illness and the Executive’s continued employment or lack of notice hereunder shall not
constitute consent to, or a waiver of rights with respect to, any event or condition
constituting a Constructive Discharge.
9. The following paragraph is added to Section 5(h)(ii) to provide as follows:
Notwithstanding the definition of Change of Control set forth above, to the extent that any
payments under this Agreement are deemed to be deferred compensation as such term is defined by
Section 409A of the Internal Revenue Code of 1986 (the “Code”), a Change of Control shall not
have occurred unless the event constitutes a “change in control event” as such term is defined
by Section
409A of the Internal Revenue Code of 1986 (the “Code”) and the regulations promulgated
thereunder.
10. The first sentence of Section 5(h)(iii) is amended to provide as follows:
It is the intention of the Employer and the Executive that no portion of any payment under this
Agreement, or payments to or for the benefit of the Executive under any other agreement or plan,
be deemed to be an “Excess Parachute Payment” as defined in Section 280G of the Code.
11. Section 10(i) of the Agreement is amended to provide as follows:
(i) Internal
Revenue Code Section 409A. Notwithstanding anything contained herein to the
contrary, if at the time of a termination of employment, (i) Employee is a “specified employee”
as defined in Code Section 409A, and the regulations and guidance thereunder in effect at the
time of such termination (“409A”), and, (ii) any of the payments or benefits provided hereunder
may constitute “deferred compensation” under 409A, then, and only to the extent required by such
provisions, the date of payment of such payments or benefits otherwise provided shall be delayed
for a period of up to six (6) months following the date of termination. The parties intend,
however, that this Agreement shall be exempt from the 409A as either a separation pay
arrangement or a short term deferral of compensation.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
| Centrue Financial Corporation, Inc. | Xxxxxxx X. Xxxxx | |||||
By:
|
/s/Xxxxxxx X. Xxxxxxx | /s/Xxxxxxx X. Xxxxx | ||||
| Its: EVP/Head of HR & Corporate Communications | ||||||
3
