EMPLOYMENT AGREEMENT
Exhibit
10.1
This
Employment Agreement (the "Agreement") is made and entered into this 24th day of
February, 2009, by and between First Mid-Illinois Bancshares, Inc. ("the
Company"), a corporation with its principal place of business located in
Mattoon, Illinois, and Xxxx X. XxXxx (“Manager”).
In
consideration of the promises and mutual covenants and agreements contained
herein, the parties hereto acknowledge and agree as follows:
ARTICLE
ONE
TERM AND NATURE OF
AGREEMENT
1.01 Term of
Agreement. The term of this Agreement shall commence as of
February 24, 2009 and shall continue for until February 29,
2012. Thereafter, unless Manager’s employment with the Company has
been previously terminated, Manager shall continue his employment with the
Company on an at will basis and, except as provided in Articles Five, Six and
Seven, this Agreement shall terminate unless extended by mutual written
agreement.
1.02 Employment. The
Company agrees to employ Manager and Manager accepts such employment by the
Company on the terms and conditions herein set forth. The duties of Manager
shall be determined by the Company’s Chief Executive Officer and shall adhere to
the policies and procedures of the Company and shall follow the supervision and
direction of the Chief Executive Officer or his designee in the performance of
such duties. During the term of his employment, Manager agrees to
devote his full working time, attention and energies to the diligent and
satisfactory performance of his duties hereunder. Manager shall not,
while he is employed by the Company, engage in any activity which would (a)
interfere with, or have an adverse effect on, the reputation, goodwill or any
business relationship of the Company or any of its subsidiaries; (b) result in
economic harm to the Company or any of its subsidiaries; or (c) result in a
breach of Section Six of the Agreement.
ARTICLE
TWO
COMPENSATION AND
BENEFITS
While
Manager is employed with the Company during the term of this Agreement, the
Company shall provide Manager with the following compensation and
benefits:
2.01 Base
Salary. The Company shall pay Manager an annual base salary of
$160,000 per fiscal year, payable in accordance with the Company’s customary
payroll practices for management employees. The Chief Executive
Officer or his designee may review and adjust Manager's base salary from year to
year; provided, however, that during the term of Manager's employment, the
Company shall not decrease Manager's base salary.
2.02 Incentive Compensation
Plan. Manager shall continue to participate in the First
Mid-Illinois Bancshares, Inc. Incentive Compensation Plan in accordance with the
terms and conditions of such Plan. Pursuant to the Plan, Manager
shall have an opportunity to receive incentive compensation of up to a maximum
of 35% of Manager's annual base salary. The Chief Executive Office or
his designee may review and adjust the maximum percentage from year to year,
provided, however, that during the term of manager’s employment, the Company
shall not decrease this percentage. The incentive compensation
payable for a particular fiscal year will be based upon the attainment of the
performance goals in effect under the Plan for such year and will be paid in
accordance with the terms of the Plan and at the sole discretion of the
Board.
2.03 Deferred Compensation
Plan. Manager shall be eligible to participate in the
First Mid-Illinois Bancshares, Inc. Deferred Compensation Plan in accordance
with the terms and conditions of such Plan.
2.04 Vacation. Manager
shall be entitled to three (3) weeks of paid vacation each year during the term
of this Agreement.
2.05 Other
Benefits. Manager shall be eligible (to the extent he
qualifies) to participate in any other retirement, health, accident and
disability insurance, or similar employee benefit plans as may be maintained
from time to time by the Company for its other management employees subject to
and on a consistent basis with the terms, conditions and overall administration
of such plans.
2.06 Business
Expenses. Manager shall be entitled to reimbursement by the
Company for all reasonable expenses actually and necessarily incurred by him on
its behalf in the course of his employment hereunder and in accordance with
expense reimbursement plans and policies of the Company from time to time in
effect for management employees.
2.07 Withholding. All
salary, incentive compensation and other benefits provided to Manager pursuant
to this Agreement shall be subject to withholding for federal, state or local
taxes, amounts withheld under applicable employee benefit plans, policies or
programs, and any other amounts that may be required to be withheld by law,
judicial order or otherwise or by agreement with, or consent of,
Manager.
ARTICLE
THREE
DEATH OF
MANAGER
This
Agreement shall terminate prior to the end of the term described in Section 1.01
upon Manager’s termination of employment with the Company due to his
death. Upon Manager’s termination due to death, the Company shall pay
Manager’s estate the amount of Manager’s base salary plus his accrued but unused
vacation time earned through the date of such death and any incentive
compensation earned for the preceding fiscal year that is not yet paid as of the
date of such death.
ARTICLE
FOUR
TERMINATION OF
EMPLOYMENT
Manager’s
employment with the Company may be terminated by Manager or by the Company at
any time for any reason. Upon Manager’s termination of employment
prior to the end of the term of the Agreement, the Company shall pay Manager as
follows:
4.01 Termination by the Company
for Other than Cause. If the Company terminates Manager’s
employment for any reason other than Cause, the Company shall pay Manager the
following:
(a) An amount
equal to Manager’s monthly base salary in effect at the time of such termination
of employment for a period of twelve (12) months thereafter. Such
amount shall be paid to Manager periodically in accordance with the Company’s
customary payroll practices for management employees.
(b) The base
salary and accrued but unused paid vacation time earned through the date of
termination and any incentive compensation earned for the preceding fiscal year
that is not yet paid.
(c) Continued
coverage for Manager and/or Manager’s family under the Company’s health plan
pursuant to Title I, Part 6 of the Employee Retirement Income Security Act of
1974 (“COBRA”) and for such purpose the date of Manager’s termination of
employment shall be considered the date of the “qualifying event” as such term
is defined by COBRA. During the period beginning on the date of such
termination and ending at the end of the period described in Section 4.01(a),
Manager shall be charged for such coverage in the amount that he would have paid
for such coverage had he remained employed by the Company, and for the duration
of the COBRA period, Manager shall be charged for such coverage in accordance
with the provisions of COBRA.
For
purposes of this Agreement, “Cause” shall mean Manager’s (i) conviction in a
court of law of (or entering a plea of guilty or no contest to) any crime or
offense involving fraud, dishonesty or breach of trust or involving a felony;
(ii) performance of any act which, if known to the customers, clients,
stockholders or regulators of the Company, would materially and adversely impact
the business of the Company; (iii) act or omission that causes a
regulatory body with jurisdiction over the Company to demand,
request, or recommend that Manager be suspended or removed from any position in
which Manager serves with the Company; (iv) substantial nonperformance of any of
his obligations under this Agreement; (v) misappropriation of or
intentional material damage to the property or business of the Company or any
affiliate; or (vi) breach of Article Five or Six of this Agreement.
4.02 Termination Following a
Change in Control. Notwithstanding Section 4.01, if, following
a Change in Control, and prior to the end of the term of this Agreement,
Manager’s employment is terminated by the Company (or any successor thereto) for
any reason other than Cause, or if Manager terminates his employment because of
a decrease in his then current base salary or a substantial diminution in his
position and responsibilities, the Company (or any successor thereto) shall pay
Manager the following:
(a) An amount
equal to Manager’s monthly base salary in effect at the time of such termination
for a period of twelve (12) months thereafter. Such amount shall be
paid in accordance with the Company’s customary payroll practices for management
employees.
(b) An amount
equal to the incentive compensation earned by or paid to Manager for the fiscal
year immediately preceding the year in which Manager’s termination of employment
occurs. Such amount shall be paid to Manager in a lump sum as soon as
practicable after the date of his termination.
(c) The base
salary and accrued but unused paid vacation time earned through the date of
termination and any incentive compensation earned for the preceding fiscal year
that is not yet paid.
(d) Continued
coverage for Manager and/or Manager’s family under the Company’s health plan
pursuant to Title I, Part 6 of the Employee Retirement Income Security Act of
1974 (“COBRA”) and for such purpose the date of Manager’s termination of
employment shall be considered the date of the “qualifying event” as such term
is defined by COBRA. During the period beginning on the date of such
termination and ending at the end of the period described in Section 4.02(a),
Manager shall be charged for such coverage in the amount that he would have paid
for such coverage had he remained employed by the Company, and for the duration
of the COBRA period, Manager shall be charged for such coverage in accordance
with the provisions of COBRA.
For
purposes of this Agreement, “Change in Control” shall have the meaning as set
forth in the First Mid-Illinois Bancshares, Inc. 1997 Stock Incentive Plan (or
successor stock incentive plan maintained by the Company).
4.03 Other Termination of
Employment. If, prior to the end of the term of this
Agreement, the Company terminates Manager’s employment for Cause, or if Manager
terminates his employment for any reason other than as described in Section 4.02
above, the Company shall pay Manager the base salary and accrued but unused paid
vacation time earned through the date of such termination and any incentive
compensation earned for the preceding fiscal year that is not yet
paid.
4.04 Key Employee
Status. If at the time of such termination of employment
Manager is a “Key Employee” as defined in Section 416(i) of the Internal Revenue
Code (without reference to paragraph 5 thereof), and the amounts payable to
Manager pursuant to Article Four are subject to Section 409A of the Internal
Revenue Code, payment of such amounts shall not commence until six months
following Manager’s termination of employment, with the first payment to include
the payments that otherwise would have been made during such six-month
period.
ARTICLE
FIVE
CONFIDENTIAL
INFORMATION
5.01 Non-Disclosure of
Confidential Information. During his employment with the Company, and
after his termination of such employment with the Company, Manager shall not, in
any form or manner, directly or indirectly, use, divulge, disclose or
communicate to any person, entity, firm, corporation or any other third party,
any Confidential Information, except as required in the performance of Manager’s
duties hereunder, as required by law or as necessary in conjunction with legal
proceedings.
5.02 Definition of Confidential
Information. For the purposes of this Agreement, the term
"Confidential Information" shall mean any and all information either developed
by Manager during his employment with the Company and used by the Company or its
affiliates or developed by or for the Company or its affiliates of which Manager
gained knowledge by reason of his employment with the Company that is not
readily available in or known to the general public or the industry in which the
Company or any affiliate is or becomes engaged. Such Confidential
Information shall include, but shall not be limited to, any technical or
non-technical data, formulae, compilations, programs, devices, methods,
techniques, procedures, manuals, financial data, business plans, lists of actual
or potential customers, lists of employees and any information regarding the
Company's or any affiliate’s products, marketing or database. The
Company and Manager acknowledge and agree that such Confidential Information is
extremely valuable to the Company and may constitute trade secret information
under applicable law. In the event that any part of the Confidential
Information becomes generally known to the public through legitimate origins
(other than by the breach of this Agreement by Manager or by other
misappropriation of the Confidential Information), that part of the Confidential
Information shall no longer be deemed Confidential Information for the purposes
of this Agreement, but Manager shall continue to be bound by the terms of this
Agreement as to all other Confidential Information.
5.03 Delivery upon
Termination. Upon termination of Manager's employment with the
Company for any reason, Manager shall promptly deliver to the Company all
correspondence, files, manuals, letters, notes, notebooks, reports, programs,
plans, proposals, financial documents, and any other documents or data
concerning the Company's or any affiliate’s customers, database, business plan,
marketing strategies, processes or other materials which contain Confidential
Information, together with all other property of the Company or any affiliate in
Manager's possession, custody or control.
ARTICLE
SIX
NON-COMPETE AND
NON-SOLICITATION COVENANTS
6.01 Covenant Not to
Compete. During the term of this Agreement and for a period of
one (1) year following the later of the termination of Manager's employment for
any reason or the last day of the term of the Agreement, Manager shall not, on
behalf of himself or on behalf of another person, corporation, partnership,
trust or other entity, within the counties of Coles, Xxxxxxxx, Xxxxxxx,
Cumberland, Effingham, Champaign, XxXxxx, Xxxxxxxxx, Madison, Macon, Bond or
Xxxxx, Illinois, or any other county in which the Company or any affiliate
conducts business:
(a) Directly
or indirectly own, manage, operate, control, participate in the ownership,
management, operation or control of, be connected with or have any financial
interest in, or serve as an officer, employee, advisor, consultant, agent or
otherwise to any person, firm, partnership, corporation, trust or other entity
which owns or operates a business similar to that of the Company or its
affiliates.
(b) Solicit
for sale, represent, and/or sell Competing Products to any person or entity who
or which was the Company’s customer or client during the last year of Manager's
employment. "Competing Products," for purposes of this Agreement, means products
or services which are similar to, compete with, or can be used for the same
purposes as products or services sold or offered for sale by the Company or any
affiliate or which were in development by the Company or any affiliate within
the last year of Manager's employment.
6.02 Covenant Not to
Solicit. For a period of one year following the later of the
termination of Manager’s employment for any reason or the last day of the term
of this Agreement, Manager shall not:
(a) Attempt
in any manner to solicit from any client or customer business of the type
performed by the Company or any affiliate or persuade any client or customer of
the Company or any affiliate to cease to do such business or to reduce the
amount of such business which any such client or customer has customarily done
or contemplates doing with the Company or any affiliate, whether or not the
relationship between the Company or affiliate and such client or customer was
originally established in whole or in part through Manager’s
efforts.
(b) Render
any services of the type rendered by the Company or any affiliate for any client
or customer of the Company.
(c) Solicit
or encourage, or assist any other person to solicit or encourage, any employees,
agents or representatives of the Company or an affiliate to terminate or alter
their relationship with the Company or any affiliate.
(d) Do or
cause to be done, directly or indirectly, any acts which may impair the
relationship between the Company or any affiliate with their respective clients,
customers or employees.
ARTICLE
SEVEN
REMEDIES
Manager
acknowledges that compliance with the provisions of Articles Five and Six herein
is necessary to protect the business, goodwill and proprietary information of
the Company and that a breach of these covenants will irreparably and
continually damage the Company for which money damages may be
inadequate. Consequently, Manager agrees that, in the event that he
breaches or threatens to breach any of these provisions, the Company shall be
entitled to both (a) a temporary, preliminary or permanent injunction in order
to prevent the continuation of such harm; and (b) money damages insofar as they
can be determined. In addition, the Company will cease payment of all
compensation and benefits under Articles Three and Four hereof. In
the event that any of the provisions, covenants, warranties or agreements in
this Agreement are held to be in any respect an unreasonable restriction
upon Manager or are otherwise invalid, for whatsoever cause, then the
court so holding shall reduce, and is so authorized to reduce, the territory to
which it pertains and/or the period of time in which it operates, or the scope
of activity to which it pertains or effect any other change to the extent
necessary to render any of the restrictions of this Agreement
enforceable.
ARTICLE
EIGHT
MISCELLANEOUS
8.01 Successors and
Assignability.
(a) No rights
or obligations of the Company under this Agreement may be assigned or
transferred except that the Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.
(b) No rights
or obligations of Manager under this Agreement may be assigned or transferred by
Manager other than his rights to payments or benefits hereunder which may be
transferred only by will or the laws of descent and distribution.
8.02 Entire
Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and may not be
modified except in writing by the parties hereto. Furthermore, the
parties hereto specifically agree that all prior agreements, whether written or
oral, relating to Manager's employment by the Company shall be of no further
force or effect from and after the date hereof.
8.03 Severability. If
any phrase, clause or provision of this Agreement is deemed invalid or
unenforceable, such phrase, clause or provision shall be deemed severed from
this Agreement, but will not affect any other provisions of this Agreement,
which shall otherwise remain in full force and effect. If any
restriction or limitation in this Agreement is deemed to be unreasonable,
onerous or unduly restrictive, it shall not be stricken in its entirety and held
totally void and unenforceable, but shall be deemed rewritten and shall remain
effective to the maximum extent permissible within reasonable
bounds.
8.04 Controlling Law and
Jurisdiction. This Agreement shall be governed by and
interpreted and construed according to the laws of the State of
Illinois. The parties hereby consent to the jurisdiction of the state
and federal courts in the State of Illinois in the event that any disputes arise
under this Agreement.
8.05 Notices. All notices,
requests, demands and other communications under this Agreement shall be in
writing and shall be deemed to have been duly given (a) on the date of service
if served personally on the party to whom notice is to be given; (b) on the day
after delivery to an overnight courier service; (c) on the day of transmission
if sent via facsimile to the facsimile number given below; or (d) on the third
day after mailing, if mailed to the party to whom notice is to be given, by
first class mail, registered or certified, postage prepaid and properly
addressed, to the party as follows:
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If
to Manager:
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Xxxx
X. XxXxx
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000 Xxxx
Xxxxxxx, XX 00000
If to the
Company: First
Mid-Illinois Bancshares, Inc.
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0000
Xxxxxxxxxx Xxxxxx
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Xxxxxxx,
Xxxxxxxx 00000
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Facsimile: 000-000-0000
Attention: Chairman and Chief Executive Officer
Any party may change its address for
the purpose of this Section by giving the other party written notice of its new
address in the manner set forth above.
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date first written
above.
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FIRST
MID-ILLINOIS BANCSHARES, INC.
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By: /s/
Xxxxxxx X. Xxxxxxx
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Title:
Chairman of the Board
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MANAGER:
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/s/
Xxxx X. XxXxx
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