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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
AGREEMENT effective as of August 1, 1998, by and between F & M
Bancorporation, Inc., (hereafter referred to as "F & M"), and Xxxx X. Xxxxxxx,
of Kaukauna, Wisconsin (hereinafter referred to as "Employee"), witnesseth:
WHEREAS, Employee serves as F & M's President and CEO and F & M desires
to retain Employee in that position and to encourage his continued employment,
the parties desire by this Agreement to encourage Employee's continued
employment by F & M and to provide an incentive to Employee to remain in that
position.
NOW, THEREFORE, in consideration of the promises and covenants
contained herein, the parties mutually agree as follows:
1. Employment. F & M hereby employs Employee and Employee hereby
accepts such employment, upon the terms and conditions hereinafter set forth.
2. Duties and Responsibilities. During the term of this Agreement,
Employee shall act as President and Chief Executive Officer of F & M and shall
continue to engage in those activities and perform those services as may be
assigned to him by the Board of Directors, including, but not be limited to the
following: the day to day operations of F & M and its subsidiaries and for the
general supervision of the various departments and vice-presidents of F & M. In
addition, Employee hereby agrees to perform such other duties for F & M and
F & M's subsidiaries and divisions as may be assigned to him by the Board of
Directors of F & M. With regard to all duties and responsibilities provided for
in this paragraph, Employee shall devote his full time and best efforts to this
employment and to the success of F & M.
3. Scope of Authority. The Employee agrees to act in accordance with
the scope of authority previously delegated to him and as may be delegated to
him from time to time by F & M and pursuant to this Agreement in accordance
with the policies, procedures and authorizations given by F & M. The Employee
will observe and abide by any limitation placed upon such authority from time
to time by F & M. No latitude, indulgence, or forbearance granted by F & M to
the Employee shall be deemed a relinquishment of its right to direct his
activities or a waiver of their rights to require performance and fulfillment
of the duties and responsibilities of his employment and this Agreement.
4. Term. The term of Employee's employment under this Agreement shall
begin on February 1, 1998 and shall continue for a period of thirty-six (36)
full calendar months thereafter. Commencing on each subsequent February 1 (the
"Anniversary Date"), and continuing on each Anniversary Date thereafter, the
term of the Agreement shall renew for an additional year such that the
remaining term of the Agreement shall be three (3) years. This Agreement may be
terminated by either party by giving written notice that it will terminate
twenty-four (24) months from the next Anniversary Date. During the term of this
Agreement, the Board of Directors of F & M may
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conduct periodic comprehensive performance evaluations and review of the
Employee for purposes of determining compensation and other business related
purposes.
5. Compensation. During the first twelve months of the term of this
Agreement, F & M shall pay to the Employee a base annual salary of Two Hundred
Twenty-five Thousand and 00/100 Dollars ($225,000.00). This salary shall be
prorated for any partial years based on actual time worked in such partial
year. This salary may be adjusted at such intervals and in an amount to be
determined by F & M, consistent with adjustments received by other employees of
F & M and duties of Employee's position, based on, among other things, the
performance of the Employee, the performance of F & M and its subsidiaries,
competitive practices and economic conditions provided, however that such
salary shall not be reduced below its current level. The parties agree to
consider these factors and to endeavor in good faith to adjust Employee's
compensation to an appropriate level considering the salary for comparable
positions and Employee's performance. Employee will also be eligible to
participate in bonus, stock option or incentive plans of F & M for his
position, as may be established and modified from time to time by F & M.
6. Benefits. F & M will offer Employee the employee benefits, including
major medical and hospitalization insurance, disability benefits, life
insurance, vacation, severance pay and retirement benefits at levels
substantially equal to the levels currently provided by F & M to its executive
officers.
7. Expenses. The Employee may incur reasonable expenses for promoting
the F & M's business, including expenses for entertainment, travel, and similar
items. F & M will reimburse the Employee in accordance with F & M's policies
and procedures for all such expenses upon the Employee's periodic presentation
of an itemized account of such expenditures.
8. Extent of Services. The Employee shall devote his entire time,
attention and energies to the business of F & M and shall not during the term
of this Agreement be engaged in any other business activity, without the
written consent of F & M, whether or not such business activity is pursued for
gain, profit or other pecuniary advantage. This shall not be construed as
preventing the Employee from (a) serving charitable, civic or religious
organizations in a volunteer capacity which does not interfere with his ability
to perform his duties for F & M or create a conflict of interest with F & M,
(b) investing his assets in such a manner as will not require any services on
the part of the Employee in the operation of the affairs of the companies if
such investments are made, or (c) engaging in such other activities which are
expressly approved in advance by F & M's Board of Directors.
9. Years of Service. F & M agrees to count all prior years of service
of Employee to F & M Bank-Northeast and its predecessors as years of service
for eligibility purposes under the terms of such plan to the full extent
permitted by law and the terms of the plan. For purposes of vacation
eligibility, Employee shall be deemed to have eleven (11) years of service with
F & M as of January 1, 1998.
10. Termination. Employee's employment hereunder during the Term may be
terminated, subject to payment of the compensation and other benefits described
below, upon the occurrence of any of the events described below. In case of
such termination, the date on which Employee ceases to be employed under this
Agreement, after giving effect to any prior notice requirement set forth below,
is referred to as the "Termination Date."
(a) Death; Disability; Retirement. Employee's employment hereunder
shall terminate upon his death or Disability or retirement.
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As used in this Agreement, "Disability" shall mean Employee's
inability, as a result of physical or mental incapacity, to substantially
perform his duties with F & M for a period of one hundred eighty (180)
consecutive days. Any question as to the existence of Employee's Disability
upon which Employee and F & M cannot agree shall be determined by a qualified
independent physician mutually agreeable to Employee and F & M or, if the
parties are unable to agree upon a physician within ten (10) days after notice
from either to the other suggesting a physician, by a physician designated by
the then president of the medical society for Outagamie County, Wisconsin, upon
the request of either party. The costs of any such medical examination shall be
shared equally by F & M and Employee.
(b) Termination of Employee for Cause. F & M may terminate Employee's
employment under this Agreement for Cause (as hereinafter defined) at any time
and thereafter F & M's obligations pursuant to paragraphs 5 and 6 of this
Agreement shall cease and terminate. Notwithstanding anything to the contrary
contained in this Agreement, if Employee's employment is terminated for Cause,
Employee shall receive all compensation and other benefits to which he was
entitled under paragraphs 5 and 6 only through the Termination Date, and, shall
receive all accrued benefits available to him under F & M's benefit plans as in
effect on and effective through the Termination Date in accordance with their
terms.
As used herein, "Cause" shall mean (i) any willful act by Employee
which is fraudulent or illegal and which is materially injurious to F & M or
any of F & M's subsidiaries, monetarily or otherwise, (ii) the continued
failure by Employee to substantially perform his duties with F & M as may be
assigned to him from time to time or his obligations under this Agreement
(other than any such failure resulting from Employee's incapacity due to
Disability), or to follow the policies and procedures of F & M, (iii) the
dishonesty, fraud, or other conduct which constitutes a crime (except for
traffic or other violations which result in civil forfeitures) under laws,
statutes, regulations, rulings, administrative code, policy or procedure of the
State of Wisconsin or any local subdivision thereof or the United States of
America or of any administrative agency of the State of Wisconsin or any
subdivision thereof or of the United States of America, or (iv) "Misconduct" as
set forth in Wis. Stats. Section 108.04(5), the Wisconsin Unemployment
Compensation Law and the decisions thereunder.
Termination may be without notice for violations of subparts 10(b)(i),
(iii) or (iv). In the event of a proposed termination for the reasons set forth
in the subpart (ii) of subparagraph 10(b), the Employee shall be entitled to
written notice and thirty (30) days opportunity to explain and cure such breach
or failure to the satisfaction of F & M. If Employee has explained and/or cured
such breach or failure within such thirty (30) day period, the notice of
termination shall be rescinded and Employee shall remain employed hereunder,
subject to such further terms or conditions as the parties may establish by
mutual agreement.
(c) Voluntary Termination by Employee. Employee may voluntarily
terminate his employment under this Agreement at any time by giving at least
thirty (30) days and no more than ninety (90) days prior written notice to
F & M. In such event, Employee shall receive all compensation and other benefits
to which he was entitled under paragraphs 5 and 6 in the amount and at the times
provided in paragraph 5 through the date of voluntary termination set forth in
the Employee's notice and, in addition, shall receive all other benefits
available to him under F & M's benefit plans as in effect on the Termination
Date in accordance with their terms through such voluntary termination date.
F & M may elect not to use the services of Employee after notice of voluntary
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termination is given, but such election by F & M shall not relieve F & M of the
obligation to pay Employee in accordance with paragraphs 5 and 6 during such
notice period.
(d) Termination by F & M Without Cause. F & M may terminate this
Agreement without cause, provided F & M agrees to pay the Employee the
compensation and benefits (at the intervals paid to all other employees) as set
forth below. In effect, F & M may elect not to use the services of Employee
during the term of this Agreement, provided F & M pays the compensation and
provides the benefits hereunder. Employee acknowledges F & M's right to
terminate without cause and agrees that if such termination occurs that
Employee's sole and exclusive claim against F & M or its subsidiaries or their
respective officers, directors, employees or agents shall be for the payment of
the unpaid compensation and benefits under this Agreement as follows:
(i) In lieu of any further salary payments, severance pay
[including but not limited to any benefits under the Restated F & M
Bancorporation, Inc. Executive Severance Plan (the "Severance Plan")], or other
cash compensation to Employee, Employee will be paid his then current base
annual salary for a period of twenty-four (24) months from the date of F & M's
notice of termination in equal installments on F & M's regular payroll dates.
Such installment payments shall be reduced by fifty percent (50%) in the event
the Employee obtains comparable employment following the Termination Date of his
employment with F & M or its successor.
(ii) In addition, Employee shall continue to participate for
twenty-four (24) months following the Termination Date in F & M's group health
insurance plan provided the Employee (1) makes timely payment of the Employee's
portion of the premium to F & M or its successor for its employees, and (2) is
not eligible to participate in another employer-sponsored group health
insurance program. No cash payment will be made in lieu of this participation
if Employee elects not to receive this benefit. Employee shall not be eligible
for other benefits that Employee was receiving or was entitled to receive
immediately prior to the Termination Date, including, but not limited to paid
holiday or vacation benefits, other group insurance benefits, retirement
benefits or any other fringe benefits. The actual Termination Date shall be
used for purposes of determining the exercise date and/or expiration of any
outstanding stock options, not withstanding any continued payments received by
Employee after the Termination Date.
(iii) The payments under subparts (i) and (ii) shall be in lieu
of any other payments, claims or damages or other obligations by F & M to
Employee. F & M shall not be obligated for any bonus, incentive plan, stock
option or other payment or benefit for the year in which notice is given or
any subsequent year. As a condition of receiving the consideration described
in subparts (i) and (ii) above, Employee shall be required to sign F & M's
standard release as then utilized in connection with the Severance Plan.
(e) Termination Due to Change in Control. This subparagraph shall
apply to a Change in Control involving F & M or any successor to F & M.
(i) If Employee's employment is terminated within three (3)
months prior to the first public announcement of a transaction which would be
deemed a Change in Control transaction or within twelve (12) months following
the closing of a Change in Control transaction (which period shall be referred
to as the "Change in Control Window"), Employee shall be entitled to the
compensation and benefits described in this subparagraph (e), provided, however,
that during the Change in Control Window if Employee's employment is terminated
pursuant to subparagraphs 10(a), (b) or (c), Employee shall only be entitled to
the compensation and
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benefits set forth in subparagraphs 10(a), (b), or (c) as applicable, and
further provided that during the Change in Control Window, F & M may not
terminate the Employee under subparagraph 10(d).
(ii) Employee will be deemed to be entitled to the compensation
and benefits under this subparagraph 10(e) if any of the following occur:
(1) The termination of Employee by F & M or its successor of
Employee's employment during the Change in Control Window, except for a
termination pursuant to subparagraphs 10(a), (b), or (c).
(2) If Employee resigns within six (6) months after a
material change in Employee's function, duties, responsibilities or compensation
which occurs during the Change in Control Window and which causes Employee's
position to become one of lesser responsibility, importance or scope.
(3) If within three (3) months prior to a Change in Control,
Employee is removed from or is not reelected or reappointed to the offices of
President and CEO and Employee elects to resign within ten (10) days of such
change.
(4) If Employee's position is eliminated during the Change
in Control Window, and F & M or its successor does not, within thirty (30) days
after the elimination occurs, offer Employee a position with substantially
equivalent or greater functions, duties, responsibilities or compensation than
those provided to Employee under this Agreement.
(5) Regardless of the nature of the position, if Employee is
required to work at a location which is outside the State of Wisconsin and
Employee elects not to accept such position and resigns within ten (10) days
after the position is offered.
(6) The termination of this Agreement during the Change in
Control Window, except for a termination pursuant to subparagraphs 10(a), (b) or
(c), if Employee resigns within ten (10) days after he receives notice of the
termination of this Agreement.
(iii) If Employee is entitled to compensation and benefits under this
subparagraph (e), such compensation and benefits shall be payable as follows:
(1) Under subsections (e)(ii)(1), as of the date of
termination.
(2) Under subsections (e)(ii)(2), (3), (5) or (6), as of the
effective date of the Employee's resignation.
(3) Under subsection (e)(ii)(4), as of the expiration of
such thirty (30) day period.
(iv) A "Change in Control" of F & M shall occur as of the Closing
Date of one transaction or a series of transactions which result in the
acquisition of F & M: (1) by any person or group of persons acting in concert
who acquire beneficial ownership, directly or indirectly, of securities of F & M
representing 25% or more of the combined voting power of its then outstanding
securities; (2) through a combination (by merger, share exchange,
consolidation, or otherwise) with another entity and as a result of such
combination less than 50% of the outstanding voting securities of the surviving
or resulting corporation are owned in the aggregate by the former shareholders
of F & M; (3) through the sale, lease, or other transfer of all or
substantially all of its properties or assets not in the ordinary course of
business to another person or entity.
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(v) Under this subparagraph 10(e), Employee shall, at his option,
receive either a lump sum severance payment, or a series of installment
severance payments for a period of thirty-six (36) months commencing as of the
date set forth in subpart 10(e)(iii). The total payment in either case shall be
cash in an amount equal to 2.99 times the Employee's current annual base salary,
discounted to its present value in the case of a lump sum payment at a discount
rate equal to the imputed interest rate under the Internal Revenue Code for a
three (3) year term. If Employee elects to receive installment payments,
Employee shall receive the same amount as would be provided by a lump sum
payment, but payment shall be made in equal installments for a period of three
(3) years, commencing on the Termination Date, on the same dates as F & M's
regular payroll payments are made.
In addition, Employee shall continue to participate for twenty-four (24)
months following the Termination Date in F & M's group health insurance plan
provided the Employee (1) makes timely payment of the Employee's portion of the
premium to F & M or its successor for its employees, and (2) is not eligible to
participate in another employer-sponsored group health insurance program. No
cash payment will be made in lieu of this participation if Employee elects not
to receive this benefit. Employee shall not be eligible for other benefits that
Employee was receiving or was entitled to receive immediately prior to the
Termination Date, including, but not limited to paid holiday or vacation
benefits, other group insurance benefits, retirement benefits or any other
fringe benefits. The actual Termination Date shall be used for purposes of
determining the exercise deadline and/or expiration of any outstanding stock
options, notwithstanding any continued payments received by Employee after the
Termination Date.
The payments under subparagraph 10(e) shall be in lieu of any other
payments, claims or damages or other obligations by F & M to Employee. F & M
shall not be obligated for any bonus, incentive plan, stock option or other
payment or benefit for the year in which notice is given or any subsequent
year. As a condition of receiving the consideration described in subparagraph
10(e) above, Employee shall be required to sign F & M's standard release as
then utilized in connection with the Severance Plan.
Employee's death after a termination under subpart 10(e)(ii) shall not
affect F & M's or its successor's payment obligations under this subparagraph
10(e) and the compensation and benefits provided hereunder shall be in addition
to any and all other rights of Employee under any retirement plans or deferred
compensation agreements.
Regardless of any provision in this Agreement, neither F & M nor its
successor shall be required to compensate Employee according to the terms of
this Agreement if the compensation is prohibited or limited by a federal or
state bank regulatory agency acting under applicable federal or state law or
regulation, but shall compensate Employee according to the terms of the
Agreement to the extent compensation is not prohibited or limited by a federal
or state bank regulatory agency acting under applicable federal or state law or
regulation.
(vi) If the compensation and benefits payable to Employee under this
subparagraph 10(e) ("Change in Control Benefits"), or any other payments or
benefits received or to be received by Employee from F & M or its successor
(whether payable pursuant to the terms of this Agreement, any other plan,
agreement or arrangement with F & M, successor or any corporation affiliated
with F & M or its successor ("Affiliate") within the meaning of Section 1504 of
the Internal Revenue Code, as amended (the "Code"), in the opinion of tax
counsel selected by F & M's or successor's independent auditors and acceptable
to Employee constitute "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and the present value of such "parachute
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payments" equals or exceeds three times the average of the annual compensation
payable to Employee by F & M or its successor (or an Affiliate), and includable
in Employee's gross income for federal income tax purposes for the five (5)
calendar years preceding the year in which a change in ownership or control
of F & M occurred (the "Base Amount"), such Change in Control Benefits shall
be reduced, in a manner determined by Employee, to an amount, the present value
of which (when combined with the present value of any other payments or
benefits otherwise received or to be received by Employee from F & M or its
successor (or an Affiliate) that are deemed "parachute payments") is
equal to 2.99 times the Base Amount, notwithstanding any other provision to the
contrary in this Agreement. The Change in Control Benefits shall not be reduced
if (1) Employee shall have effectively waived his receipt or enjoyment of any
such payment or benefit which triggered the applicability of this subpart
10(e)(vi), or (2) in the opinion of such tax counsel, the Change in Control
Benefits (in full amount or partially reduced, as the case may be) plus all
other payments or benefits which constitute "parachute payments" within the
meaning of Section 280G(b)(2) of the Code are reasonable compensation for
services actually rendered, within the meaning of Section 280G(b)(4) of the
Code, and such payments are deductible by F & M or its successor. The Base
Amount shall include every type and form of compensation includable in
Employee's gross income in respect of his employment by F & M or its successor
(or an Affiliate), except to the extent otherwise provided in temporary or
final regulations promulgated under Section 280G of the Code. For purposes of
this subpart 10(e)(vi), a "change in ownership or control" shall have the
meaning set forth in Section 280G(b) of the Code and any temporary or final
regulations promulgated thereunder. The present value of any non-cash benefit
or any deferred cash payment shall be determined by the Employers' independent
auditors in accordance with the principles of Sections 280G(b)(3) and (4) of
the Code.
In the event that Section 280G, or any successor statute is repealed,
this subparagraph 10(vi) shall cease to be effective on the effective date of
such repeal. The parties to this Agreement recognize that final regulations
under Section 280G of the Code may affect the amounts that may be paid under
this Agreement and agree that, upon issuance of such final regulations, this
Agreement may be modified as in good faith deemed necessary in light of the
provisions of such regulations to achieve the purposes of this Agreement, and
that consent to such modifications shall not be unreasonably withheld.
11. Waiver of Breach. The waiver by F & M of a breach of any provision of
this Agreement by the Employee shall not operate or be construed as a waiver of
any subsequent breach of the same or any other provision of this Agreement by
the Employee.
12. Assignment. The rights and obligations of F & M under this Agreement
may be assigned to any other subsidiary of F & M by a separate instrument
evidencing such assignment, provided, however, that no such assignment may be
made without Employee's prior written consent if the assignment is to be made to
a subsidiary which has its main office located outside a thirty (30) mile radius
of Kaukauna, Wisconsin. However, assignment by F & M shall not relieve it of the
responsibility to perform the duties of this Agreement. Employee may not assign
this Agreement.
13. Noncompete Agreement. Employee shall sign the Noncompete Agreement
attached hereto as Exhibit A.
14. Paragraph Headings. Paragraph headings are inserted primarily for
convenience, and if they conflict with the text in the construction of this
Agreement, the text shall control.
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15. Applicable Law. This Agreement shall be governed by the laws of the
State of Wisconsin.
16. Entire Agreement. This Agreement contains the entire agreement
between the parties. No representations, promises, understandings or agreements
exist except as expressly set forth herein. This Agreement supersedes all prior
representations, promises, understandings or agreements. This Agreement may only
be amended by a written amendment signed by both parties.
17. Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
beneficiaries, successors and assigns, specifically including any successor to
the F & M, whether arising by merger, consolidation or otherwise.
18. Pooling Accounting. In the event this Agreement disqualifies a
proposed Change in Control from treatment as a "Pooling of Interests" under
generally accepted accounting practices, the parties agree to act in good faith
to modify this Agreement to comply with such rules and provide to the fullest
extent its anticipated benefits to Employee and F & M.
F & M BANCORPORATION, INC.
By:___/s/ Xxxx X. Janssen___________________
Xxxx X. Xxxxxxx, Chairman of the Board
EMPLOYEE:
___/s/ Xxxx X. Johnson______________________
Xxxx X. Xxxxxxx
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