EXHIBIT 10.9
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement (this "Agreement"), is made and entered into
as of the ______ day of _______, 2000, (the "Effective Date") by and between
FIRST NATIONAL BANCORP, Inc., an Illinois corporation (the "Employer"), and
____________ (the "Executive").
RECITALS
A. The Executive is currently serving as ____________ of First
National Bank of Joliet (the "Bank") and has served in such
capacity for the past several years.
B. The Employer owns all of the issued and outstanding capital
stock of the Bank.
C. The Employer desires to continue to employ the Executive, as
an officer of the Bank and the Executive is willing to
continue such employment.
D. In addition, the Employer recognizes that circumstances may
arise in which a change of control of the Employer through
acquisition or otherwise may occur thereby causing uncertainty
of employment without regard to the competence or past
contributions of the Executive, which uncertainty may result
in the loss of valuable services of the Executive, and the
Employer and the Executive wish to provide reasonable security
to the Executive against changes in the employment
relationship in the event of any such change of control.
NOW, THEREFORE, in consideration of the promises and of the
covenants and agreements hereinafter contained, it is covenanted and agreed
by and between the parties hereto as follows:
AGREEMENTS
1. TERM AND TERMINATION.
(a) BASIC TERM. The term of this Agreement shall be for one
(1) year commencing as of the Effective Date, and shall automatically extend
for one (1) additional year commencing on each anniversary of the Effective
Date. This Agreement may be terminated by either party effective as of the
last day of the then current one (1) year period by written notice to that
effect delivered to the other not less than sixty (60) days prior to the
anniversary of such Effective Date.
(b) TERMINATION UPON CHANGE OF CONTROL.
(i) In the event of a Change of Control
(as defined below) of the Employer and the termination of the Executive's
employment under either A or B below, the Executive shall be entitled to a lump
sum payment equal to three (3) times his
1
base salary (base salary for purposes of this agreement is defined as the
average of Form W-2, box 5 wages for the five (5) years preceding the year in
which the change of control occurs). Payments under this paragraph shall be
subject to the limits of subparagraph (b)(iv) of this Section. The following
shall constitute termination under this paragraph:
A. The Executive terminates his employment by a written notice
to that effect delivered to the Board within one hundred
and eighty (180) days after the Change of Control.
B. The employment of the Executive is terminated by the
Employer, or its successor, either in contemplation of, or
within sixty (60) days after, the Change of Control.
(ii) The Executive shall also be entitled to participate
in, and be covered under, the health insurance plan of the
Employer, or its successor(s), until such time as the
Executive becomes eligible for Medicare, provided the
Executive pays one hundred percent (100%) of the group plan
premium cost incurred by the Employer (or its successors)
for the coverage level selected by the Executive.
(iii) For purposes of this paragraph, the term "Change of
Control" shall mean the following:
A. The consummation of the acquisition by any person
(as such term is defined in Section 13(d) or 14(d)
of the Securities Exchange Act of 1934, as amended
(the "1934 Act") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the
0000 Xxx) of thirty-three percent (33%) or more of
the combined voting power of the then outstanding
voting securities: or
B. The individuals who, as of the date hereof, are
members of the Board cease for any reason to
constitute a majority of the Board, unless the
election, or nomination for election by the
stockholders, of any new director was approved by
a vote of a majority of the Board, and such new
director shall, for purposes of this Agreement, be
considered as a member of the Board: or
C. The consumation of: (1) a merger or consolidation
if the stockholders immediately before such merger
or consolidation do not, as a result of such
merger or consolidation, own, directly or
indirectly, more than sixty-seven percent (67%) of
the combined voting power of the then outstanding
voting securities of the entity resulting from
such merger or consolidation in substantially the
same proportion as their ownership of the combined
voting power of the voting securities outstanding
immediately before such
2
merger or consolidation: or (2) a complete
liquidation or dissolution or an agreement or the
sale or other disposition of all or substantially
all of the assets of the entity.
D. Notwithstanding the foregoing, a Change of Control
shall not be deemed to occur solely because
thirty-three percent (33%) or more of the combined
voting power of the then outstanding securities is
acquired by: (1) a trustee or other fiduciary
holding securities under one or more employee
benefit plans maintained for employees of the
entity: or (2) any corporation which, immediately
prior to such acquisition, is owned directly or
indirectly by the stockholders in the same
proportion as their ownership of stock immediately
prior to such acquisition.
(iv) It is the intention of the Employer and the
Executive that no portion of any payment under this Agreement, or payments to
or for the benefit of the Executive under any other agreement or plan, be
deemed to be an "Excess Parachute Payment" as defined in Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), or its successors. It
is agreed that the present value of and payments to or for the benefit of the
Executive in the nature of compensation, receipt of which is contingent on
the Change of Control of the Employer, and to which Section 280 G of the Code
applies (in the aggregate "Total Payments") shall not exceed an amount equal
to one dollar less than the maximum amount which the Employer may pay without
loss of deduction under Section 280 G (a) of the Code. Present value for
purposes of this Agreement shall be calculated in accordance with Section 280
G(9d)(4) of the Code. Within sixty (60) days following the earlier of (A) the
giving of the notice of termination or (B) the giving of notice by the
Employer to the Executive of its belief that there is a payment or benefit
due the Executive which will result in an excess parachute payment as defined
in section 280G of the Code, the Executive and the Employer, at the
Employer's expense, shall obtain the opinion of such legal counsel and
certified public accountants as the Executive may choose (notwithstanding the
fact that such persons have acted or may also be acting as the legal counsel
or certified public accountants for the Employer), which opinions need not be
unqualified, which sets forth (A) the amount of the base Period Income of the
Executive,(B) the present value of Total Payments and (C) the amount and
present value of any excess parachute payments. In the event that such
opinions determine that there would be an excess parachute payment, the
payment hereunder or any other payment determined by such counsel to be
includable in Total Payments shall be modified, reduced, or eliminated as
specified by the Executive in writing delivered to the Employer within thirty
(30) days of his receipt of such opinions or, if the Executive fails to so
notify the Employer, then as the Employer shall reasonably determine, so that
under the bases of calculation set forth in such opinions there will be no
excess parachute payment. The provisions of the subparagraph, including the
calculations, notices and opinions provided for herein shall be based upon
the conclusive presumption that the compensation and benefits earned by the
Executive pursuant to the Employer's compensation programs which would have
paid in any event, are reasonable
3
compensation for services rendered, even though the timing of such payment is
triggered by the Change of Control; provided, however, that in the event such
legal counsel so requests in connection with opinion required by this
subparagraph, the Executive and the Employer shall obtain, at the Employer's
expense, and the legal counsel may rely on in providing the opinion, the
advice of a firm of recognized executive compensation consultants as to the
reasonableness of any item of compensation to be received by the Executive.
In the event that the provision of Sections 280 G and 4999 of the Code are
repealed without succession, this subparagraph shall be of no further force
or effect.
(c) TERMINATION FOR CAUSE. This Agreement may be terminated for
cause as hereinafter defined. "Cause" shall mean: (i) the Executive's death
or his permanent disability, which shall mean the Executive's inability, as a
result of physical or mental incapacity, substantially to perform his duties
hereunder for a period of six (6) consecutive months; (ii) a material
violation by the Executive of any applicable material law or regulation
respecting the business of the Employer; or (iii) the Executive being found
guilty of a felony, and act of dishonesty in connection with the performance
of his duties as an officer of the Employer, or an act which disqualifies the
Executive from serving as an officer or director of the Employer. The
executive shall be entitled to at least thirty (30) days' prior written
notice of the Employer's intention to terminate this Agreement for any cause
(except the Executive's death) specifying the grounds for such termination,
and a reasonable opportunity to cure any conduct or act, if curable, alleged
as grounds for such termination, and a reasonable opportunity to present to
the board his position regarding any dispute relating to the existence of
such cause.
(d) REGULATORY SUSPENSION AND TERMINATION.
(i) If the Executive is suspended from office and/or
temporarily prohibited from participating in the conduct of the Employer's
affairs by a notice served under Section 8(e)(3) (12 U.S.C. 1818(e)(3)) or
8(g) (12 U.S.C. 1818(g)) of the Federal Deposit Insurance Act, as amended,
the 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, the Employer may in its discretion (A) pay the
Executive all or part of the compensation withheld while their Agreement
obligations were suspended and (B) reinstate (in whole or in part) any of the
obligations which were suspended.
(ii) If the Executive is removed and/or permanently prohibited
from participating in the conduct of the Employer's affairs by an order
issued under section 8(e) (12 U.S.C. 1818(e)) or 8(g) (12 U.S.C. 1818(g)) of
the Federal Deposit Insurance Act, as amended, all obligations of the
Employer under this Agreement shall terminate as of the effective date of the
order, but vested rights of the contracting parties shall not be affected.
(iii) If the Employer is in default as defined in Section 3(x)
(12 U.S. C. 1813(x)(1)) of the Federal Deposit Insurance Act, as amended, all
obligations of the
4
Employer under this agreement shall terminate as of the date of default, but
this paragraph shall not affect any vested rights of the contracting parties.
(iv) All obligations of the Employer under this agreement
shall be terminated, except to the extent determined that continuation of
this Agreement is necessary for the continued operation of the institution by
the Federal Deposit Insurance Corporation (the "FDIC"), at the time the FDIC
enters into an agreement to provide assistance to or on behalf of the
Employer under the authority contained in Section 13(c) (12 U.S.C. 1823(c))
of the Federal Deposit Insurance Act, as amended, or when the Employer is
determined by the FDIC to be in an unsafe or unsound condition. Any rights of
the parties that have already vested, however, shall not be affected by such
action.
(v) Any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with Section 18(k) (12 U.S.C. 1828(k)) of the Federal Deposit Insurance Act,
as amended, and any regulations promulgated thereunder.
2. WITHHOLDING. The Employer shall be entitled to withhold from
amounts payable to the Executive hereunder, any federal, state or local
withholding or other taxes or charges which it is from time to time required
to withhold. The Employer shall be entitled to rely upon the opinion of its
legal counsel with regard to any question concerning the amount or
requirement of any such withholding.
3. INTERCORPORATE TRANSFERS. If the Executive shall be voluntarily
transferred to an affiliate of the Employer, such transfer shall not be
deemed to terminate or modify this Agreement and the employing corporation to
which the Executive shall have been transferred shall, for all purposes of
this Agreement, be construed as standing in the same place and stead as the
Employer as of the date of such transfer. For purposes hereof, and affiliate
of the Employer shall mean any corporation directly or indirectly
controlling, controlled by, or under common control with the Employer.
4. INTEREST IN ASSETS. Neither the Executive nor his estate shall
acquire hereunder any rights in funds or assets of the Employer, otherwise
than by and through the actual payment of amounts payable hereunder; nor
shall the Executive or his estate have any power to transfer assign,
anticipate, hypothecate or otherwise encumber in advance any of said
payments; not shall any of such payments be subject to seizure for the
payment of any debt, judgement, alimony, separate maintenance or be
transferable by operation of law in the event of bankruptcy, insolvency or
otherwise of the Executive.
5. NOT AN EMPLOYMENT AGREEMENT. Nothing in this Agreement shall
give the Executive any rights (or impose any obligations) to continued
employment by the Employer or successor of the Employer, nor shall it give
the Employer any rights (or impose any obligations) for the continued
performance of duties by the Executive for the Employer or successor of the
Employer.
5
6. GENERAL PROVISIONS.
(a) SUCCESSORS; ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the Executive, the Employer and his and its
respective personal representatives, successors and assigns, and any
successor or assign of the Employer shall be deemed the "Employer" hereunder.
The Employer shall require any successor to all or substantially all of the
business and/or assets of the Employer, whether directly or indirectly, by
purchase, merger, consolidation, acquisition of stock, or otherwise, by an
agreement in form and substance satisfactory to the Executive, expressly to
assume and agree to perform this agreement in the same manner and to the same
extent as the Employer would be required to perform if no such succession had
taken place.
(b) ENTIRE AGREEMENT; MODIFICATIONS. This Agreement constitutes
the entire agreement between the parties respecting the subject matter
hereof, and supersedes all prior negotiations, undertakings, agreements and
arrangements with respect thereto, whether written or oral. Except as
otherwise explicitly provided herein, the Agreement may not be amended or
modified except by written agreement signed by the Executive and the Employer.
(c) ENFORCEMENT AND GOVERNING LAW. The provisions should be
declared invalid or unenforceable by a court of competent jurisdiction, the
validity and enforceability of the remaining provisions shall not be affected
thereby. This Agreement shall be construed and the legal relations of the
parties hereto shall be determined in accordance with the laws of the state
of Illinois without reference to the law regarding conflicts of law.
(d) ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators sitting in a location selected
by the Executive within fifty (50) miles from the location of the Employer,
in accordance with the rules of the American Arbitration Association then in
effect. Judgement may be entered on the arbitrator's award in any court
having jurisdiction.
(e) LEGAL FEES. All reasonable legal fees paid or incurred by
the prevailing party pursuant to any dispute or question of interpretation
relating to this Agreement shall be paid or reimbursed by the losing party if
the prevailing party is successful on the merits pursuant to a legal
judgement, arbitration or settlement.
(f) WAIVER. No waiver by either party at any time of any breach
by the other party of, or compliance with, any condition or provision of this
Agreement to be performed by the other party, shall be deemed a waiver of any
similar or dissimilar provisions or conditions at the same time or any prior
or subsequent time.
(g) NOTICES. Notices pursuant to this Agreement shall be in
writing and shall be deemed given when received; and, if mailed shall be
mailed by United States registered or certified mail, return receipt
requested, postage prepaid; and if to the Employer, addressed to the
principal headquarters of the Employer, attention: Chairman or, if to the
Executive, to the
6
address set forth below the Executive's signature on this Agreement or to
such other address as the party to be notified shall have given to the other.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
FIRST NATIONAL OF JOLIET EXECUTIVE
------------------------------------
Employee name & signature
FIRST NATIONAL BANCORP, INC. AS EMPLOYER
------------------------------------
Xxxxx X. Xxxxxxx, Chairman
------------------------------------
Xxxxxx X. X'Xxxxxxx, Secretary
7
