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EXHIBIT 10.4
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement"),
entered into this 16th day of March, 1998, and effective as of the 11th day of
August, 1997, by and between Blue River Bancshares, Inc., an Indiana corporation
("Employer"), and Xxxxxx X. Xxxx, a resident of Shelby County, Indiana
("Employee"), being parties to a certain Employment Agreement dated August 11,
1997 (the "Prior Agreement"), agree to amend and restate the Prior Agreement in
its entirety to read as follows:
WITNESSETH
WHEREAS, Employer desires to encourage Employee to make valuable
contributions to Employer's business operations and not to seek or accept
employment elsewhere;
WHEREAS, Employee desires to be assured of a secure minimum
compensation from Employer for his services over a defined term;
WHEREAS, Employer desires to assure the continued services of employee
on behalf of Employer on an objective and impartial basis and without
distraction or conflict of interest in the event of an attempt by any person to
obtain control of Employer;
WHEREAS, Employer recognizes that when faced with a proposal for a
change of control of Employer, Employee will have a significant role in helping
the Board of Directors assess the options and advising the Board of Directors on
what is in the best interests of Employer and its shareholders, and it is
necessary for Employee to be able to provide this advice and counsel without
being influenced by the uncertainties of his own situation;
WHEREAS, Employer desires to provide fair and reasonable benefits to
Employee on the terms and subject to the conditions set forth in this Agreement;
and
WHEREAS, Employer desires reasonable protection of its confidential
business and customer information which it will develop over the years at
substantial expense and assurance that Employee will not compete with Employer
for a reasonable period of time after termination of his employment with
Employer, except as otherwise provided herein.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants and undertakings herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Employer and Employee, each intending to be legally bound, covenant and agree as
follows:
1. Upon the terms and subject to the conditions set forth in this
Agreement, Employer employs Employee as Employer's President and Chief Executive
Officer, and Employee accepts such employment.
2. Employee agrees to serve as Employer's President and Chief
Executive Officer and to perform such duties in that office as may reasonably
be assigned to him by Employer's Board of
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Directors; provided, however that such duties shall be performed in or from the
principal executive offices of Employer, currently located in Shelbyville,
Indiana, and shall be of the character as those generally associated with the
office of President and Chief Executive Officer. Employee shall not be required
to be absent from the location of the principal executive offices of employer on
travel status or otherwise more than 45 days in any calendar year. Employer
shall not, without the written consent of Employee, relocate or transfer
Employee to a location more than 30 miles from his principal residence. Although
while employed by Employer, Employee shall devote substantially all his business
time and efforts to Employer's business and shall not engage in any other
related business, Employee may use his discretion in fixing his hours and
schedule of work consistent with the proper discharge of his duties. Employer
shall nominate the Employee to successive terms as a member of Employer's Board
of Directors and shall use its best efforts to elect and re-elect Employee as a
member of such Board.
3. The term of this Agreement shall begin on August 11 1997 (the
"Effective Date") and shall end on the date which is three years following such
date; provided, however, that such term shall be extended automatically for an
additional year on each anniversary of the Effective Date, unless either party
hereto gives written notice to the other party not to so extend prior to an
anniversary, in which case no further automatic extension shall occur and the
term of this Agreement shall end two years subsequent to the anniversary as of
which the notice not to extend for an additional year is given (such term,
including any extension thereof shall herein be referred to as the "Term").
Notwithstanding the foregoing, this Agreement shall automatically terminate (and
the Term of this Agreement shall thereupon end) without notice when Employee
attains 65 years of age.
4. Employee shall receive an annual minimum salary of $110,000.00
("Base Compensation") payable at regular intervals in accordance with Employer's
normal payroll practices in effect from time to time Employer may consider and
declare from time to time increases in the salary it pays Employee and thereby
increases in his Base Compensation. After a Change in Control, Employer shall
consider and declare such salary increases based upon the following standards:
Inflation;
Adjustments to the salaries of other senior management
personnel; and
Past performance of Employee and the contribution which
Employee makes to the business and profits of Employer during
the Term.
Any and all increases in Employee's salary pursuant to this section shall cause
the level of Base Compensation to be increased by the amount of each such
increase for purposes of this Agreement. The increased level of Base
Compensation as provided in this section shall become the level of Base
Compensation for the remainder of the Term of this Agreement until there is a
further increase in Base Compensation as provided herein. Employee shall not
receive directors fees for his services as a director of Employer or any of the
Employer's subsidiaries, and any committees of the Boards of Directors.
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5. During the term of this Agreement, Employee shall be entitled
to participate in or receive benefits under (i) any life, health,
hospitalization, medical, dental, disability or other insurance policy or plan,
(ii) pension, retirement or employee stock ownership plan, (iii) bonus or
profit-sharing plan or program, (iv) deferred compensation plan or arrangement,
and (v) any other employee benefit plan, program or arrangement, made available
by Employer on the date of this Agreement and from time to time in the future
to Employer's directors, officers and employees on a basis consistent with the
terms, conditions and overall administration of the foregoing plans, programs
or arrangements and with respect to which Employee is otherwise eligible to
participate or receive benefits. Employee shall be entitled to a Country Club
membership and a car allowance.
6. (a) So long as Employee is employed by Employer pursuant to
this Agreement, Employee shall receive reimbursement from Employer for all
reasonable business expenses incurred in the course of his employment by
Employer, upon submission to Employer of written vouchers and statements for
reimbursement. Employee shall attend, at his discretion, those professional
meetings, conventions, and/or similar functions that he deems appropriate and
useful for purposes of keeping abreast of current developments in the industry
and/or promoting the interests of Employer.
(b) So long as Employee is employed by Employer pursuant to
this Agreement, Employee shall be entitled to office space and working
conditions consistent with his position as President and Chief Executive
Officer. During the term of this Agreement, Employee shall be entitled to five
(5) weeks per calendar year of paid vacation, which shall be utilized at such
times when his absence will not materially impair Employer's normal business
functions. Any unused vacation time in any calendar year may be carried over
and must be used prior to March 31 of the succeeding calendar year. If any
unused vacation time is not used by March 31 of the succeeding calendar year,
such unused vacation time shall lapse, and Employee shall not be entitled to
any additional compensation for any such unused and lapsed vacation time. In
addition to the vacation described above, Employee also shall be entitled to
all paid holidays customarily given by Employer to its officers.
(c) During the Term, Employer shall provide Employee with an
automobile (the size, make and model which is mutually agreeable to Employer
and Employee) for use in performing his duties under this Agreement. Such
automobile shall be replaced no less frequently than intervals of every three
(3) years during the Term, and all replacement automobiles shall be of
comparable size, make and model to that of the initial automobile agreed to by
Employer and Employee. All maintenance, repairs, insurance, fuel, taxes and
license plate fees on such automobile shall be paid by Employer. Employee's use
of the automobile will be consistent with applicable requirements and
limitations under the Internal Revenue Code of 1986, as amended (the "Code").
(d) During the Term, Employee shall be provided with a family
membership at the Elks Country Club, and all membership fees, dues and
assessments shall be paid by Employer so long as Employee utilizes such
membership primarily in furtherance of his duties under this Agreement.
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7. Subject to the respective continuing obligations of the
parties, including but not limited to those set forth in subsections 9(A),
9(B), 9(C), and (D) hereof, Employee's employment by Employer may be terminated
prior to the expiration of the Term of this Agreement as follows:
(A) Employer, by action of its Board of Directors and upon written
notice to Employee, may terminate Employee's employment with
Employer immediately for cause. For purposes of this
subsection 7(A), "cause" shall be defined as (i) personal
dishonesty, (ii) incompetence, (iii) willful misconduct, (iv)
breach of fiduciary duty involving personal profit, (v)
intentional failure to perform stated duties, (vi) willful
violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease-and-desist
order, or (vii) any material breach of any term, condition or
covenant of this Agreement.
(B) Employer, by action of its Board of Directors, may terminate
Employee's employment with Employer without cause at any time;
provided, however, that the "date of termination" for purposes
of determining benefits payable to Employee under subsection
8(B) hereof shall be the date which is 30 days after Employee
receives written notice of such termination.
(C) Employee, by written notice to Employer, may terminate his
employment with Employer immediately for cause. For purposes
of this subsection 7(C), "cause" shall be defined as (i) any
action by Employer's Board of Directors to remove the Employee
as President and Chief Executive Officer of Employer, except
where the Employer's Board of Directors properly acts to
remove Employee from such office for "cause" as defined in
subsection 7(A) hereof, (ii) any action by Employer's Board of
Directors to materially limit, increase, or modify Employee's
duties and/or authority as President and Chief Executive
Officer of Employer (including his authority, subject to
corporate controls no more restrictive than those in effect on
the date hereof, to hire and discharge employees who are not
bona fide officers of Employer), (iii) any failure of Employer
to obtain the assumption of the obligation to perform this
Agreement by any successor, as contemplated in section 18
hereof; or (iv) any intentional breach by Employer of a term,
condition or covenant of this Agreement.
(D) Employee, upon sixty (60) days written notice to Employer, may
terminate his employment with Employer without cause.
(E) Employee's employment with Employer shall terminate in the
event of Employee's death or disability. For purposes hereof,
"disability" shall be defined as Employee's inability by
reason of illness or other physical or mental incapacity to
perform the duties required by his employment for any
consecutive One Hundred Eighty (180) day period, provided that
notice of any termination by Employer because of Employee's
"disability" shall have been given to Employee prior to the
full resumption by him of the performance of such duties.
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8. In the event of termination of Employee's employment with
Employer pursuant to section 7 hereof, compensation shall continue to be paid
by Employer to Employee as follows:
(A) In the event of termination pursuant to subsection 7(A) or
7(D), compensation provided for herein (including Base
Compensation) shall continue to be paid, and Employee shall
continue to participate in the employee benefit, retirement,
and compensation plans and other perquisites as provided in
sections 5 and 6 hereof, through the date of termination
specified in the notice of termination. Any benefits payable
under insurance, health, retirement and bonus plans as a
result of Employee's participation in such plans through such
date shall be paid when due under those plans. The date of
termination specified in any notice of termination pursuant to
subsection 7(A) shall be no later than the last business day
of the month in which such notice is provided to Employee.
(B) In the event of termination pursuant to subsection 7(B) or
7(C), compensation provided for herein (including Base
Compensation) shall continue to be paid, and Employee shall
continue to participate in the employee benefit, retirement,
and compensation plans and other perquisites as provided in
sections 5 and 6 hereof, through the date of termination
specified in the notice of termination. Any benefits payable
under insurance, health, retirement and bonus plans as a
result of Employee's participation in such plans through such
date shall be paid when due under those plans. In addition,
Employee shall be entitled to continue to receive from
Employer at his Base Compensation at the rates in effect at
the time of termination (1) for three additional 12-month
periods (or such shorter period as shall constitute the
remaining Term of the Agreement) if the termination follows a
Change of Control or (2) for two additional 12-month periods
(or such shorter period as shall constitute the remaining Term
of the Agreement) if the termination does not follow a Change
of Control. In addition, during such periods, Employer will
maintain in full force and effect for the continued benefit of
Employee each employee welfare benefit plan (as such term is
defined in the Employee Retirement Income Security Act of
1974, as amended) in which Employee was entitled to
participate immediately prior to the date of his termination,
unless an essentially equivalent and no less favorable benefit
is provided by a subsequent employer of Employee. If the terms
of any employee welfare benefit plan of Employer do not permit
continued participation by Employee, Employer will arrange to
provide to Employee a benefit substantially similar to, and no
less favorable than, the benefit he was entitled to receive
under such plan at the end of the period of coverage. For
purposes of this Agreement, a "Change of Control" shall mean a
change in control not approved in advance by the Board of
Directors of a nature which would be required to be reported
in response to Item 5(f) of Schedule 14A promulgated under the
Securities Exchange Act of 1934, as amended, or any merger
tender offer, consolidation or sale of substantially all of
the assets of Employer, or related series of such events, as a
result of which: (i) shareholders of Employer immediately
prior to such event hold less than 50% of the outstanding
voting securities of Employer or its survivor or successor
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immediately after such event; or (ii) persons holding less
than 20% of such securities before such event own more than
50% of such securities after such event; or (iii) persons
constituting a majority of the board of Directors were not
directors of Employer for at least 24 preceding months.
(C) In the event of termination pursuant to subsection 7(E),
compensation provided for herein (including Base Compensation)
shall continue to be paid, and Employee shall continue to
participate in the employee benefit, retirement, and
compensation plans and other perquisites as provided in
sections 5 and 6 hereof, (i) in the event of Employee's death,
through the date of death, or (ii) in the event of Employee's
disability, through the date of proper notice of disability as
required by subsection 7(E). Any benefits payable under
insurance, health, retirement and bonus plans as a result of
Employer's participation in such plans through such date shall
be paid when due under those plans.
(D) Employer will permit Employee or his personal representative(s) or
heirs, during a period of three months following Employee's termination of
employment (as specified in the notice of termination) by Employer for the
reasons set forth in subsections 7(B) or (C), if such termination follows a
Change of Control, to require Employer, upon written request, to purchase all
outstanding stock options previously granted to Employee under any Employer
stock option plan then in effect whether or not such options are then
exercisable or have terminated at a cash purchase price equal to the amount by
which the aggregate "fair market value" of the shares subject to such options on
the date of termination specified in the notice of termination exceeds the
aggregate option price for such shares. For purposes of this Section 8(D), "fair
market value" shall mean between the reported closing bid and ask prices for the
shares of common stock of the Company as quoted by the North American Securities
Dealer Automated Quotation System ("NASDAQ"). If the common stock of the
Employer is not quoted on NASDAQ, the fair market value shall be determined by
the Compensation Committee of the Board based upon quotations of the entities
which make a market in the Company's stock. In the event no entities make a
market in the Company's stock, "fair market value" shall mean the amount agreed
upon by the Employee and the Company. If the Employee and the Company are unable
to reach an agreement regarding the fair market value of the stock within ten
(10) days of the date of termination specified in the notice of termination,
then the Employee and the Company shall each select an appraisal firm and the
two firms shall determine the fair market value of the Employee's stock. If the
two appraisal firms cannot agree upon the value within thirty (30) days of their
appointment, they shall appoint a third appraiser, the decision of a majority of
the three (3) appraisers shall be final and binding on the Employee and the
Company; provided, however, the Employee may elect, by notifying the Company
within thirty (30) days after the date of termination specified in the notice of
termination, to have the following definition of "fair market value" apply for
purposes of this Section 8(D): the per share book value of the Company's stock,
calculated in accordance with generally accepted accounting principles as of the
last day of the month coinciding with or immediately preceding the date of
termination as specified in the notice of termination. The costs of any
appraisals shall be paid one-half by the Employer and one-half by the Employee
or his personal representative(s) or heirs, as the case may be.
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9. In order to induce Employer to enter into this Agreement,
Employee hereby agrees as follows:
(A) While Employee is employed by Employer and for a period of
three years after termination of such employment for reasons
other than those set forth in subsections 7(B) or (C) of this
Agreement, Employee shall not divulge or furnish any trade
secrets (as defined in IND. CODEss.24-2-3-2) of Employer or
any confidential information acquired by him while employed by
Employer concerning the policies, plans, procedures or
customers of employer to any person, firm or corporation,
other than Employer or upon its written request, or use any
such trade secret or confidential information directly or
indirectly for Employee's own benefit or for the benefit of
any person, firm or corporation other than Employer, since
such trade secrets and confidential information are
confidential and shall at all times remain the property of
Employer.
(B) For a period of three years after termination of Employee's
employment by Employer for reasons other than those set forth
in subsections 7(B) or (C) of this Agreement, Employee shall
not directly or indirectly provide banking or bank-related
services to or solicit the banking or bank-related business of
any customer of Employer at the time of such provision of
services or solicitation which Employee served either alone or
with others while employed by Employer in any city, town,
borough, township, village or other place in which Employee
performed services for Employer while employed by it, or
assist any actual or potential competitor of Employer to
provide banking or bank-related services to or solicit any
such customer's banking or bank- related business in any such
place.
(C) While Employee is employed by Employer and for a period of one
year after termination of Employee's employment by Employer
for reasons other than those set forth in subsections 7(B) or
(C) of this Agreement, Employee shall not, directly or
indirectly, as principal, agent, or trustee, or through the
agency of any corporation, partnership, trade association,
agent or agency, engage in any banking or bank- related
business or venture which competes with the business of
Employer as conducted during Employee's employment by Employer
within a radius of fifty (50) miles of Employer's main office.
(D) If Employee's employment by Employer is terminated for reasons
other than those set forth in subsections 7(B) or (C) of this
Agreement, Employee will turn over immediately thereafter to
Employer all business correspondence, letters, papers,
reports, customers' lists, financial statements, credit
reports or other confidential information or documents of
Employer or its affiliates in the possession or control of
Employee, all of which writings are and will continue to be
the sole and exclusive property of Employer or its affiliates.
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If Employee's employment by Employer is terminated during the Term of this
Agreement for reasons set forth in subsections 7(B) or (C) or this Agreement,
Employee shall have no obligations to Employer with respect to trade secrets,
confidential information or noncompetition under this section 9.
10. Any termination of Employee's employment with Employer as
contemplated by section 7 hereof, except in the circumstances of Employee's
death, shall be communicated by written "Notice of Termination" by the
terminating party to the other party hereto. Any "Notice of Termination"
pursuant to subsections 7(A), 7(C) or 7(E) shall indicate the specific
provisions of this Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for such
termination.
11. If Employee is suspended and/or temporarily prohibited from
participating in the conduct of Employer's or any affiliates' affairs by a
notice served under section 8(e)(3) or (g)(1) of the Federal Deposit Insurance
Act (12 U.S.C. ss. 1818(e)(3) and (g)(1)), Employer's obligations under this
Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, Employer
shall (i) pay employee all or part of the compensation withheld while its
obligations under this Agreement were suspended and (ii) reinstate (in whole or
in part) any of its obligations which were suspended.
12. If Employee is removed and/or permanently prohibited from
participating in the conduct of Employer's or any affiliates' affairs by an
order issued under section 8(e)(4) or (g)(1) of the Federal Deposit Insurance
Act (12 U.S.C. ss. 1818(e)(4) or (g)(1)), all obligations of Employer under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the parties to the Agreement shall not be affected. If Employer is in
default (as defined in section 3(x)(1) of the Federal Deposit Insurance Act),
all obligations under this Agreement shall terminate as of the date of default,
but this provision shall not affect any vested rights of Employer or Employee.
13. All obligations under this Agreement may be terminated except
to the extent determined that the continuation of the Agreement is necessary
for the continued operation of Employer by order of any state or federal
banking regulatory with agency supervision of the Employer or any of its
affiliates, unless stayed by appropriate proceedings.
14. If a dispute arises regarding the termination of Employee
pursuant to section 7 hereof or as to the interpretation or enforcement of this
Agreement and Employee obtains a final judgment in his favor in a court
of competent jurisdiction or his claim is settled by Employer prior to the
rendering of a judgment by such a court, all reasonable legal fees and expenses
incurred by Employee is contesting or disputing any such termination or seeking
to obtain or enforce any right or benefit provided for in this Agreement or
otherwise pursuing his claim shall be paid by Employer, to the extent permitted
by law.
15. Should Employee die after termination of his employment with
Employer while any amounts are payable to him hereunder, this Agreement shall
inure to the benefit of and be
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enforceable by Employee's executors, administrators, heirs, distributees,
devisees and legatees and all amounts payable hereunder shall be paid in
accordance with the terms of this Agreement to Employee's devisee, legatee or
other designee or, if there is no such designee, to his estate.
16. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been given when delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Employee: Xx. Xxxxxx X. Xxxx
000 Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
If to Employer: Blue River Bancshares, Inc.
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
or to such other address as either party hereto may have furnished to the other
party in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
17. The validity, interpretation, and performance of this
Agreement shall be governed by the laws of the State of Indiana.
18. Employer shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of Employer, by agreement in form
and in substance satisfactory to Employee to expressly assume and agree
to perform this Agreement in the same manner and same extent that Employer
would be required to perform it if no such succession had taken place. Failure
of Employer to obtain such agreement prior to the effectiveness of any such
succession shall be a material intentional breach of this Agreement and shall
entitle Employee to terminate his employment with Employer pursuant to
subsection 7(C) hereof. As used in this Agreement, "Employer" shall mean
Employer as hereinbefore defined and any successor to its business or assets as
aforesaid.
19. No provision of this agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by Employee and Employer. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a wavier of dissimilar provisions or conditions at the same or any prior
subsequent time. No agreements or representation, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.
20. The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement which shall remain in full force and effect.
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21. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same agreement.
22. This Agreement is personal in nature and neither party hereto
shall, without consent of the other, assign or transfer this Agreement or any
rights or obligations hereunder except as provided in section 15 and section 18
above. Without limiting the foregoing, Employee's right to receive compensation
hereunder shall not be assignable or transferable, whether by pledge, creation
of a security interest or otherwise, other than a transfer by his will or by the
laws of descent or distribution as set forth in section 14 hereof, and in the
event of any attempted assignment or transfer contrary to this paragraph,
Employer shall have no liability to pay any amounts so attempted to be assigned
or transferred. This Agreement shall be assigned to a yet-to-be formed
subsidiary of the Company, if and when the Company commences operations of a
financial institution through such subsidiary. The Company shall guarantee
obligations of such subsidiary hereunder.
23. Anything in this Agreement to the contrary notwithstanding
in the event Employer's independent public accountants determine that any
payment by Employer to or for the benefit of Employee, whether paid or
payable pursuant to the terms of this Agreement, would be non-deductible by
employer for federal income tax purposes because of Section 280G of the Code,
then the amount payable to or for the benefit of Employee pursuant to the
Agreement shall be reduced (but not below zero) to the Reduced Amount. For
purposes of this Section 23, the "Reduced Amount" shall be the amount which
maximizes the amount payable without causing the payment to be non-deductible
by Employer because of Section 280G of the Code.
* * * * * *
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IN WITNESS WHEREOF, the parties have caused the Agreement to be
executed and delivered as of the 11th day of August, 1997.
BLUE RIVER BANCSHARES, INC.
By:/s/XXXXXX X. XXXX
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Xxxxxx X. Xxxx, Chairman
"Employer"
/s/XXXXXX X. XXXX
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Xxxxxx X. Xxxx
"Employee"
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