Exhibit 10.1
EMPLOYMENT AGREEMENT
This Agreement, duly made and entered into this 30th day of September,
2004, by and between the Bank of Evansville, an Indiana banking organization
(hereinafter referred to as the "Company") and Xxxxxx X. Xxxxxxxxx (hereinafter
referred to as the "Employee").
WITNESSETH, THAT:
For and in consideration of the mutual promises, covenants and agreements
herein contained and agreed to be kept and performed by the parties hereto, the
parties hereto do hereby mutually agree and understand as follows:
1. Employment. The Company hereby employs the Employee and the Employee
hereby accepts employment upon the terms and conditions hereinafter set forth.
2. Term. Subject to the provisions for termination as hereinafter
provided, the term of this Agreement shall be for a period commencing upon
October 1, 2004, and terminating on August 31, 2009, both dates inclusive. The
period until June 1, 2006 of the term of this Agreement shall be referred to as
the "Initial Term". The remainder of the term of this Agreement shall be
referred to as the "Advisory Term".
3. Duties.
(a) Initial Term. During the Initial Term, the Employee is engaged as
the Chief Executive Officer of the Company, and his duties shall
include, but not be limited to the following:
(i) Directing the day to day activities of the Company in
accordance with the policies and objectives established by the
Board of Directors of the Company;
(ii) Developing policies and an organization for the Company which
will insure that full advantage is taken of the long range
potential of the Company;
(iii) Development of business and loan opportunities for the
Company;
(iv) Performing all things reasonably necessary or desirable to
promote the business of the Company, and performing such other
duties as the Board of Directors of the Company may prescribe;
and
(v) Performing all of the duties contained in (i) through (iv)
above in his capacity as the President of American Community
Bancorp,
Inc., an Indiana corporation (hereinafter referred to as the
"Parent").
(b) Advisory Term. During the Advisory Term, the Employee is engaged as
a consultant and advisor of the Company (and is not to be an officer
of the Company or the Parent) and his duties shall include but not
be limited to the following:
(i) Promoting the public and investment community viewpoint and
perspective of the Company and the Parent;
(ii) Advising the Board of Directors of the Company and the Parent
regarding the activities of the Company and/or the Parent;
(iii) Providing services to the Company and/or the Parent as
requested by the Company not less than ten (10) days per
calendar month and one thousand (1000) hours per calendar year
(or part thereof on a prorated basis); and
(iv) Reporting regularly to the Board of Directors of the Company
and the Parent.
During the Advisory Term, Employee shall have no day-to-day
administrative or management duties or responsibilities, except as
specifically requested by the Board of Directors.
(c) General Employment Duties. The Employee agrees to perform his
services honestly and conscientiously and to conduct himself in a
manner which will enhance the reputation, goodwill, and business of
the Company and the Parent. The Employee further agrees not to
conduct himself in such a manner as will operate adversely on the
reputation and goodwill of the Company or the Parent. The Employee,
if elected by the stockholders of the Company and/or Parent, shall
serve as a member of the Board of Directors of the Company and/or
the Parent, as applicable, at no additional compensation to that
expressly provided for herein.
4. Extent of Services. During the Initial Term the Employee shall devote
his entire time, and energies to the business of the Company as provided herein,
and shall not during the term of this Agreement be engaged in any other business
activity whether or not such business activity is pursued for gain, profit, or
other pecuniary advantage without the written consent of the Board of Directors;
provided, however, that nothing herein contained shall be construed as
preventing the Employee from investing his assets in such form or manner as will
not require any services on the part of the Employee in the operation of the
affairs of the entities in which such investments are made so long as such
investments are not in entities with businesses similar to the type of business
conducted by the Company.
5. Compensation. As the entire compensation for all services rendered by
the Employee hereunder, the Employee shall be paid the following:
(a) During the Initial Term of this Agreement, Employee shall be paid or
receive a base salary at the rate of One Hundred Fifty-Seven
Thousand Five Hundred Dollars ($157,500) per annum (the "Base
Salary"), payable in equal installments corresponding with the
normal salaried payroll dates of the Company.
(b) During the Advisory Term of this Agreement, Employee's Base Salary
shall be reduced and paid at the rate of Seventy-Eight Thousand
Seven Hundred Fifty Dollars ($78,750) per annum, payable in equal
installments corresponding with the normal salaried payroll dates of
the Company.
(c) During each calendar year of the term of this Agreement (commencing
with 2004), the Company or the Parent, as appropriate, shall grant
to the Employee an option to purchase not less than five thousand
(5,000) shares of the stock of the Parent, with a strike price equal
to the fair market value on the date of the grant of the respective
option and in accordance with the applicable employee stock option
plan. The options to be granted pursuant to this paragraph shall not
be granted until December 31 of each applicable calendar year
beginning with December 31, 2004. In the event Employee's employment
pursuant to the terms of this Agreement terminates for any reason
prior to December 31 of any applicable calendar year, then Employee
shall not receive a grant of any stock options for that particular
calendar year or any subsequent calendar year. All of Employee's
rights to receive grants of stock options shall terminate
immediately upon termination of employment with the Company.
(d) During the Initial Terms and the Advisory Term, Employee may be paid
such additional bonuses and other compensation as shall be
determined in the sole discretion of the Board of Directors of the
Company.
6. Expenses and Benefits. The Company shall pay and provide Employee with
the following additional benefits:
(a) The Company shall pay and provide Employee with individual health
insurance;
(b) The Company shall own or lease a vehicle for Employee's business usage
not exceeding twenty thousand (20,000) miles per year (commencing on
September 1, 2004). The Company shall pay and provide gasoline for the
business usage of the employee. Employee shall timely report to the
Company on not less often than a monthly basis the personal vehicle usage
for such vehicle obtained by the Employee, which shall be reimbursed or
paid to the Company on not less than an
annual basis at the then current standard mileage rate amount approved by
the Department of Treasury, Internal Revenue Service, for reimbursement.
Employee shall obtain and maintain liability insurance coverage and shall
name the Company as an additional insured party.
(c) The Company shall provide Employee with a social membership at Rolling
Hills Country Club or Evansville County Club or a membership at the
Evansville Kennel Club and shall pay or reimburse Employee for dues and
business usage expenses.
(d) The Company shall reimburse Employee, in accordance with policies
adopted by the Board of Directors from time to time with respect to its
officer employees generally, for all reasonable expenses incurred by him
in connection with promoting the business of the Company, including
expenses for entertainment, travel, and similar items, upon presentation
by the Employee of itemized accounts of such expenditures, supported by
receipts and vouchers, and upon approval of such expenditures by the Board
of Directors of the Company;
(e) The Employee shall receive such other benefits and perquisites which
are designated by the Board of Directors of the Company from time to time
for its salaried employees generally and which are applicable to its
executive officers, including specifically, but not limited to, disability
insurance and 401k Plan contributions;
7. Vacations. The Employee shall be entitled each year during the Initial
Term of this Agreement to a vacation of three (3) calendar weeks during which
time his compensation shall be paid in full. The time or times of such vacation
shall be as mutually agreed upon between the Employee and the Company. Unused
days of vacation may not, however, carry over from one year to another, and
Employee shall not be entitled to receive additional compensation from the
Company on the account of any failure by the Employee to take the vacation
provided for hereunder. The Employee shall not be entitled to any paid vacation
after the Initial Term.
8. Life Insurance. The Company shall have the right to obtain life
insurance on the life of the Employee with a death benefit and beneficiary as
designated by the Company. Employee shall cooperate with the Company, life
insurance agents and underwriters and their respective employees and agents.
9. Litigation and Controversies. In the event that the Company and/or
Parent is involved in any claim, action, suit or proceeding, whether actual or
threatened, and whether civil, criminal, administrative, investigative or in
connection with an appeal relating thereto (except a claim, action, suit or
proceeding between Employee and Company and/or Parent), the Employee shall in
all reasonable respects cooperate fully with the Company and/or Parent, both
during and after the expiration of the term of this Agreement, and the Company
and/or Parent shall bear all costs and expenses incurred in connection
therewith. The Board of Directors, within its sole discretion, may determine
whether or not any litigation or dispute shall be prosecuted, defended,
compromised or settled, and the terms and conditions of any compromise or
settlement, and whether or not legal expenses, including attorney's fees, shall
be incurred.
10. Termination. Notwithstanding anything contained herein to the
contrary, the Company, in Company's sole discretion, may elect to terminate this
Agreement and the Employee's employment hereunder upon the occurrence of any of
the following events:
(a) Without cause, by the Company by the giving of thirty (30) days
prior written notice to the Employee;
(b) By mutual agreement in writing between the Company and the Employee;
(c) Upon the death of the Employee;
(d) Upon written notice to Employee by Company, if Employee has failed
to render the services to be provided hereunder for a period
aggregating ninety (90) work days in any calendar year for reasons
including, but not limited to, illness, physical or mental
disability of Employee, or other incapacity of Employee; provided,
however, that the Company shall not take any action, and this
subparagraph shall not be deemed to authorize the Company to take
any action, that would be violative of the Americans with
Disabilities Act of 1990, as subsequently amended, and any other
applicable federal, state, and local laws, regulations, and
ordinances;
(e) With cause, and upon written notice thereof at any time by the
Company, for (i) substantial violations of the Company's internal
policies, rules or regulations; (ii) actions reasonably expected to
have an adverse effect on the business of the Company or damage the
Company reputation; (iii) breach of Employee's common law duty of
loyalty to the Company; (iv) reporting to work in an impaired
condition; (v) drug or substance abuse by Employee; (vi) engaging in
any act of discrimination or sexual harassment (vii) personal
dishonesty; (viii) gross incompetence; (ix) willful misconduct; (x)
breach of fiduciary duty involving personal profit; (xi) intentional
failure to perform stated duties; (xii) willful violation of any
law, rule or regulation (other than traffic infractions or similar
minor offenses) or cease and desist order; or (xiii) material breach
of any provision of this Agreement;
(f) Upon the voluntary or involuntary dissolution of the Company,
adjudication of bankruptcy of the Company, the appointment of
receiver or trustee for all or a substantial portion of the assets
of the Company, or an assignment by the Company of all or a
substantial portion of its assets for the benefit of creditors;
(g) Notice is received by the Company stating that (i) the Board of
Governors of the Federal Reserve System (the "FRS"), or the Indiana
Department of Financial Institutions (the "IDF"), as applicable, has
entered into an agreement with the Federal Deposit Insurance
Corporation to provide assistance to or on behalf of the Company
under the authority contained in Section 13(c) of the Federal
Deposit Insurance Act; or (ii) the FRS, or the Indiana Department of
Financial Institutions (the "IDF"), as applicable, or its designee
anticipates taking possession and closing the Company for purposes
of liquidation.
Upon request by the Company, Employee agrees to assist with the orderly
transition of Employee's position and duties to another employee upon
termination of this Agreement. With respect to payments to be made upon and
after termination of this Agreement, the parties agree that should this
Agreement be terminated by reason of the occurrence of paragraph 10 (a) of this
Agreement, Employee shall continue to receive through the remainder of the five
(5) year term of this Agreement, (i) the Base Salary as set forth in section
5(a) or 5(b) hereof, as applicable, (ii) an allowance of Five Hundred Dollars
($500) per month for vehicle expenses, and (iii) health insurance reimbursement
or payment comparable to the coverage previously provided to the Employee by the
Company, but no other compensation or benefits shall be due or payable. Should
this Agreement be terminated by reason of the occurrence of any of the matters
referred to in section 10(b), 10(c), 10(d), 10(e), 10(f) or 10(g) of this
Agreement, then Employee's Base salary shall be pro-rated and paid to the
effective date of such termination but no other compensation or benefits shall
be due or payable to Employee.
11. Trade Secrets. Employee recognizes and acknowledges that, as a result
of his employment with the Company, he has access to certain trade secrets of
the Company and the Parent, including specifically, but not limited to, methods,
and procedures utilized by Company and Parent, practices and procedures utilized
by Company and Parent in managing and operating their business, names and
address of customers, customer accounts and all other information contained in
the files and records of the Company and the Parent, all of which information is
the property of the Company and Parent and is confidential information and are
trade secrets of the Company and Parent. All such information shall be treated
as confidential information and trade secrets by Employee and used by Employee
only under and pursuant to his employment with the Company under this Agreement.
If Employee's employment is terminated for any reason (whether with or without
cause or whether by Company or Employee), Employee shall immediately return to
Company and Parent all property, and all other material information, documents
and things in Employee's possession or control which relate in any way to the
business, operations, affairs or customers of the Company and Parent, without
retaining any copy or summary thereof, all of which are and shall continue to be
the sole and exclusive property of the Company and Parent. Employee agrees that
he will not, during or after the term of his employment, or after the
termination of this Agreement for any reason, disclose said confidential
information and trade secrets to any person, firm, corporation, or other entity
for any reason or purpose whatsoever, or use the same in any other business
whatsoever. In the event of violation or threatened violation
of this provision by Employee, the Company may, in addition to any other
remedies provided by law, obtain specific enforcement of this provision by means
of an ex parte court order enjoining and restraining Employee from committing or
continuing to commit any such violation. Further, in the event of such breach or
threatened breach, Employee promises and agrees to reimburse the Company for all
costs, expenses and attorneys' fees incurred in the enforcement of its rights
hereunder. Nothing herein contained shall be construed as prohibiting the
Company from pursuing any other remedies available to it for such breach or
threat of breach, including the recovery of damages from Employee.
12. Restrictive Covenant. During the term of Employee's employment
pursuant to this Agreement, and any subsequent period of time during which the
Employee is receiving compensation from the Company, and for a period of one (1)
year thereafter, Employee shall not, directly or indirectly:
(a) Solicit, take away, hire, employ or endeavor to employ, any person
who is then an employee or independent contractor of the Company or
Parent or who was an employee or independent contractor of the
Company or Parent during the term of this Agreement; or
(b) Initiate solicitation in any manner (for the purpose of diverting
business or customers of the Bank), seek to obtain or service, or
accept any business which is similar to and competitive with the
business of the Company from any party which is a customer of
Company at the time of Employee's termination of employment. For
purposes of this restriction, the term "customer" shall mean a
person or entity who is a customer of the Company at the time of
Employee's termination of employment or with whom the Employee had
direct contact on behalf of the Company at any time during the
period of Employee's employment with the Company; or
(c) Initiate solicitation in any manner (for the purpose of diverting
business or customers of the Bank), seek to obtain or service, or
accept any business which is similar to and competitive with the
business of the Company from any party which is a prospective
customer of Company at the time of Employee's termination of
employment. For purposes of this restriction, the term "prospective
customer" shall mean a person or entity who was the direct target of
sales or marketing activity by the Employee or whom the Employee
knew was a target of the Company during the one (1) year period
preceding the Employee's termination of employment, or in the event
Employee has been employed by the Company less than one (1) year at
the time of termination, during the period of Employee's employment
with the Company; or
(d) Divert, request, suggest or advise any customers or suppliers of
Company to terminate, reduce, limit or change their business or
relationship with Company; or
(e) Lend money, guarantee loans, make gifts of money or other property,
or otherwise lend financial or other assistance in any form to any
person, firm, association, partnership, venture, corporation or
other business entity which will use said money, loans, or other
property to engage in the retail banking business, which includes
accepting deposits or making loans (hereinafter the "Banking
Industry"), within fifty (50) miles of Vanderburgh County, Indiana,
(hereinafter the "Geographic Territory"); or
(f) Provide services or perform as an employee, agent, solicitor,
salesman, manager, consultant or serve as an officer or director for
any other person, corporation, or other entity engaged in the
Banking Industry within the Geographic Territory, or in any capacity
wherein Employee would become involved, directly or indirectly, with
any person, corporation or entity competitive with the Company; or
(g) Divulge to anyone except the Company or its representatives any
information known to Employee regarding the Company's "know-how",
trade information, trade secrets, inventions, customer lists, client
records, information relating to customers or customer requirements,
management policies, or other information regarding the affairs of
the Company, which comes to Employee's attention by reason of this
Agreement.
Employee shall promptly advise Company, in writing, of his employment or
affiliation, during the term of the restrictions contained in this paragraph 12,
with any other person, firm, association, partnership, venture, corporation, or
other business entity engaged in the Banking Industry.
13. Reasonableness of Limitations. The parties hereto stipulate and agree
that the restrictions imposed by paragraph 12 are not in restraint of trade and
are reasonable in terms of time, space and the types of activity and conduct
proscribed and prohibited hereby. In the event, however, that a court of
competent jurisdiction should determine that any of said restrictions are
unreasonable, then Employee agrees, that in order to carry out the intent of
Employee and Company, the limitations that the court determines would be
reasonable will be fully binding upon Employee.
14. Enforcement of Covenant. Employee acknowledges that a violation of the
covenant in paragraph 12 will cause irreparable injury to Company. In the event
of the violation or threatened violation of said paragraph 12, the Company may,
in addition to any other legal or equitable rights that it may have, obtain
specific enforcement of paragraph 12 by means of an a court order enjoining and
restraining Employee from committing or continuing to commit any such violation.
Further, in the event of such breach or threatened breach, Employee promises and
agrees to reimburse Company for all costs, expenses and attorneys fees incurred
in the enforcement of Company's rights hereunder provided a breach or threatened
breach by the Employee shall have occurred. Nothing contained herein shall be
construed as prohibiting Company from pursuing any other remedy available to it
for such breach or threatened breach, including recovery of
damages from Employee. The one (1) year restriction under paragraph 12 shall be
extended for any period of time during which Employee is in violation of any
provision of paragraph 12.
15. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if given in writing either personally or by
certified mail, return receipt requested, to the last known address of the
Employee, if notice is to be given to him, or to the principal office of the
Company, if notice is to be given to it.
16. Entire Agreement. This Agreement represents the entire contract of
employment between the Company and the Employee, and there is no statement,
promise, agreement or obligation in existence which may conflict with the terms
of this Agreement or may modify, enlarge or invalidate this Agreement or any
provisions hereof. This Agreement may not be changed orally but only by an
Agreement in writing signed by both of the parties hereto.
17. Severability. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect other provisions hereof, and this
Agreement shall be construed as if such invalid or unenforceable provisions were
omitted.
18. Construction. This Agreement shall be construed in its entirety
according to its plain meaning and shall not be construed against the party who
provided or drafted it.
19. Waiver of Breach. The waiver by Company of a breach of any provision
of this Agreement by Employee shall not operate or be construed as a waiver of
any subsequent breach by Employee.
20. Governing Law and Venue. This Agreement shall be construed and
governed in accordance with the laws of the State of Indiana. The parties hereby
stipulate that venue of any action brought in respect of the interpretation
hereof or the rights of the parties hereunder, both during the term of this
Agreement or subsequent to any termination hereof, shall be placed in any state
court of general jurisdiction in Vanderburgh County, Indiana.
21. Assignment. This Agreement is personal to Employee and Employee shall
not assign his rights or delegate his duties hereunder without the prior express
written consent of Company. The rights and obligations of Company under this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of Company.
22. Change of Control Benefit. Upon a Change of Control, as hereinafter
defined, the Company and its success in interest shall continue to pay to the
Employee and the Company and its successor in interest shall be obligated to
satisfy the obligations set forth herein.
For purposes of this Agreement, the term "Change of Control" means:
(a) A change in the ownership of the capital stock of the Company, whereby
another Company, person, or group acting in concert (hereinafter this
Agreement shall collectively refer to any combination of these three
[another Company, person, or group acting in concert] as a "Person") as
described in Section 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), acquires, directly or indirectly, beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of a number of shares of capital stock of the Company which
constitutes fifty percent (50%) or more of the combined voting power of
the Company's then outstanding capital stock then entitled to vote
generally in the election of directors; or
(b) The persons who were members of the Board of Directors of the Company
immediately prior to a tender offer, exchange offer, contested election or
any combination of the foregoing, cease to constitute a majority of the
Board of Directors; or
(c) The adoption by the Board of Directors of the Company of a merger,
consolidation or reorganization plan involving the Company in which the
Company is not the surviving entity, or a sale of all or substantially all
of the assets of the Company. For purposes of this Agreement, a sale of
all or substantially all of the assets of the Company shall be deemed to
occur if any Person acquires (or during the 12-month period ending on the
date of the most recent acquisition by such Person, has acquired) gross
assets of the Company that have an aggregate fair market value equal to
fifty percent (50%) or more of the fair market value of all of the
respective gross assets of the Company immediately prior to such
acquisition or acquisitions; or
(d) A tender offer or exchange offer is made by any Person which results
in such Person beneficially owning (within the meaning of Rule 13d-3
promulgated under the Exchange Act) either fifty percent (50%) or more of
the Company's outstanding shares of Common Stock or shares of capital
stock having fifty percent (50%) or more the combined voting power of the
Company's then outstanding capital stock (other than an offer made by the
Company), and sufficient shares are acquired under the offer to cause such
person to own fifty percent (50%) or more of the voting power; or
(e) Any other transactions or series of related transactions occurring
which have substantially the same effect as the transactions specified in
any of the preceding clauses of this Section 22.
Notwithstanding the above, certain transfers are permitted within Section
318 of the Code and such transfers shall not be deemed a Change of Control
under this Section 22.
IN WITNESS WHEREOF, the parties have caused the execution of this
Agreement the day and year first hereinabove set forth.
BANK OF EVANSVILLE
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------
Chairman
"Company"
ATTEST:
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
---------------------------
Xxxxxxx X. Xxxxxxx, Xx., Secretary
/s/ Xxxxxx X. Xxxxxxxxx
-----------------------
Xxxxxx X. Xxxxxxxxx
"Employee"
