EMPLOYMENT AGREEMENT
Exhibit
10.2
This
Employment Agreement (the "Agreement") is made and entered into this
1st
day of
May, 2007, by and between First Mid-Illinois Bancshares, Inc. ("the Company"),
a
corporation with its principal place of business located in Mattoon, Illinois,
and Xxxxxxx X. Xxxxxx (“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 May 1, 2007 and shall continue
for
three (3) years, until April 30, 2010. 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 as Executive Vice President 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 $137,000 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 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 twenty-four (24) months thereafter. Such amount shall be paid
in
accordance with the Company’s customary payroll practices for
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,
Christian, 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:
If
to
Manager: Xxxxxxx
X. Xxxxxx
00
Xxxxxxxxx Xxxxx
Xxxxxxx,
XX 00000
If
to the
Company: First
Mid-Illinois Bancshares, Inc.
0000
Xxxxxxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxxx 00000
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.
|
|
By:
/s/ Xxxxxxx X. Xxxxxxx
|
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Title:
Chairman and Chief Executive
Officer
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MANAGER:
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/s/
Xxxxxxx X. Xxxxxx
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