Exhibit 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated this ______ day of _________ 2001, between
First BancTrust Corporation, a Delaware chartered corporation (the
"Corporation"), First Bank & Trust, S. B., an Illinois chartered savings bank
(the "Bank"), and Xxxxx X. Xxxxxx (the "Executive").
WITNESSETH
WHEREAS, the Executive is presently an officer of the Bank (the
"Employer"); and
WHEREAS, the Employer desires to be ensured of the Executive's
continued active participation in the business of the Employer; and
WHEREAS, in order to induce the Executive to serve in the employ of the
Employer and in consideration of the Executive's agreeing to serve in the employ
of the Employer, the parties desire to specify the terms under which Executive
shall be employed and the severance benefits which shall be due the Executive by
the Employer in the event that his employment with the Employer is terminated
under specified circumstances;
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein contained, and upon the other terms and conditions hereinafter
provided, the parties hereby agree as follows:
1. DEFINITIONS. The following words and terms shall have the meanings
set forth below for the purposes of this Agreement:
(a) AVERAGE ANNUAL COMPENSATION. The Executive's "Average Annual
Compensation" for purposes of this Agreement shall be deemed to mean the average
level of compensation paid to the Executive by the Employer or any subsidiary
thereof during the most recent five taxable years preceding the Date of
Termination and which was either (i) included in the Executive's gross income
for tax purposes, including but not limited to Base Salary, bonuses and amounts
taxable to the Executive under any qualified or non-qualified employee benefit
plans of the Employer, or (ii) deferred at the election of the Executive.
(b) BASE SALARY. "Base Salary" shall have the meaning set forth in
Section 3(a) hereof.
(c) CAUSE. Termination of the Executive's employment for "Cause" shall
mean termination because of personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final
cease-and-desist order or material breach of any provision of this Agreement.
(d) CHANGE IN CONTROL OF THE CORPORATION. "Change in Control of the
Corporation" shall mean a change in control of a nature that would be required
to be reported in response to Item 1(a) of Form 8-K or Item 6(e) of Schedule 14A
of Regulation 14A pursuant to the Securities Exchange Act of 1934, as amended
("Exchange Act"), or any successor thereto, whether or not any class of
securities of the Corporation is registered under the Exchange Act; provided
that, without limitation, such a change in control shall be deemed to have
occurred if (i) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Corporation representing 20% or more of the combined voting power of the
Corporation's then outstanding securities; or (ii) during any period of three
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Corporation cease for any reason to constitute at
least a majority thereof unless the election, or the nomination for election by
stockholders, of each new director was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of the
period.
(e) CODE. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(f) DATE OF TERMINATION. "Date of Termination" shall mean (i) if the
Executive's employment is terminated for Cause or for Disability, the date
specified in the Notice of Termination, and (ii) if the Executive's employment
is terminated for any other reason, the date on which a Notice of Termination is
given or as specified in such Notice.
(g) DISABILITY. Termination by the Employer of the Executive's
employment based on "Disability" shall mean termination because of any physical
or mental impairment which qualifies the Executive for disability benefits under
the applicable long-term disability plan maintained by the Employer or any
subsidiary or, if no such plan applies, which would qualify the Executive for
disability benefits under the Federal Social Security System.
(h) GOOD REASON. Termination by the Executive of the Executive's
employment for "Good Reason" shall mean termination by the Executive within
twenty-four (24) months following a Change in Control of the Corporation based
on:
(i) Without the Executive's express written consent, the
failure to elect or to re-elect or to appoint or to
re-appoint the Executive to the offices of President
and Chief Executive Officer of the Employer or a
material adverse change made by the Employer in the
Executive's functions, duties or responsibilities as
President and Chief Executive Officer of the
Employer;
(ii) Without the Executive's express written consent, a
material reduction by either of the Employer in the
Executive's Base Salary as the same may be increased
from time to time or, except to the extent permitted
by Section 3(b) hereof, a material reduction in the
package of fringe benefits provided to the Executive,
taken as a whole;
2
(iii) Without the Executive's express written consent, the
Employer requires the Executive to work in an office
which is more than 30 miles from where the Employer's
principal executive office is located, except for
required travel on business of the Employer to an
extent substantially consistent with the Executive's
present business travel obligations;
(iv) Any purported termination of the Executive's
employment for Cause, Disability or Retirement which
is not effected pursuant to a Notice of Termination
satisfying the requirements of paragraph (j) below;
or
(v) The failure by the Employer to obtain the assumption
of and agreement to perform this Agreement by any
successor as contemplated in Section 9 hereof.
(i) IRS. IRS shall mean the Internal Revenue Service.
(j) NOTICE OF TERMINATION. Any purported termination of the Executive's
employment by the Employer for any reason, including without limitation for
Cause, Disability or Retirement, or by the Executive for any reason, including
without limitation for Good Reason, shall be communicated by written "Notice of
Termination" to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated, (iii)
specifies a Date of Termination, which shall be not less than thirty (30) nor
more than ninety (90) days after such Notice of Termination is given, except in
the case of the Employer's termination of Executive's employment for Cause,
which shall be effective immediately; and (iv) is given in the manner specified
in Section 10 hereof.
(k) RETIREMENT. "Retirement" shall mean voluntary termination by the
Executive in accordance with the Employer's retirement policies, including early
retirement, generally applicable to the Employer's salaried employees.
2. TERM OF EMPLOYMENT.
(a) The Employer hereby employs the Executive as President and Chief
Executive Officer, and the Executive hereby accepts said employment and agrees
to render such services to the Employer on the terms and conditions set forth in
this Agreement. The term of this Agreement shall be a period of two years
commencing as of the date hereof (the "Commencement Date"), subject to earlier
termination as provided herein. Beginning on the day which is one year
subsequent to the Commencement Date, and on each annual anniversary thereafter,
the term of this Agreement shall be extended for a period of one year in
addition to the then-remaining term, provided that the Employer has not given
notice to the Executive in writing at least 60 days prior to such day that the
term of the Agreement shall not be extended further. Reference herein to the
term of this Agreement
3
shall refer to both such initial term and such extended terms. The Board of
Directors of the Employer shall review on a periodic basis (and no less
frequently than annually) whether to permit further extensions of the term of
this Agreement. As part of such review, the Board of Directors shall consider
all relevant factors, including the Executive's performance hereunder, and shall
either expressly approve further extensions of the time of this Agreement or
decide to provide notice to the contrary. Effective upon the Commencement Date,
any and all prior agreements with the Employer shall terminate, with no
obligations to the Executive thereunder on the part of the Employer.
(b) During the term of this Agreement, the Executive shall perform such
executive services for the Employer as may be consistent with his titles and
from time to time assigned to him by the Employer's Board of Directors.
3. COMPENSATION AND BENEFITS.
(a) The Employer shall compensate and pay the Executive for his
services during the term of this Agreement at a minimum base salary of
$_____________ per year ("Base Salary"), which may be increased from time to
time in such amounts as may be determined by the Board of Directors of the
Employer and may not be decreased without the Executive's express written
consent. In addition to his Base Salary, the Executive shall be entitled to
receive during the term of this Agreement such bonus payments as may be
determined by the Board of Directors of the Employer.
(b) During the term of this Agreement, the Executive shall be entitled
to participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing, management recognition, stock option, employee
stock ownership, or other plans, benefits and privileges given to employees and
executives of the Employer, to the extent commensurate with his then duties and
responsibilities, as fixed by the Board of Directors of the Employer. The
Employer shall not make any changes in such plans, benefits or privileges which
would adversely affect the Executive's rights or benefits thereunder, unless
such change occurs pursuant to a program applicable to all executive officers of
the Employer and does not result in a proportionately greater adverse change in
the rights of or benefits to the Executive as compared with any other executive
officer of the Employer. Nothing paid to the Executive under any plan or
arrangement presently in effect or made available in the future shall be deemed
to be in lieu of the salary payable to the Executive pursuant to Section 3(a)
hereof.
(c) During the term of this Agreement, the Executive shall be entitled
to paid annual vacation in accordance with the policies as established from time
to time by the Board of Directors of the Employer. The Executive shall not be
entitled to receive any additional compensation from the Employer for failure to
take a vacation, nor shall the Executive be able to accumulate unused vacation
time from one year to the next, except to the extent authorized by the Board of
Directors of the Employer.
(d) In the event the Executive's employment is terminated due to
Disability or Retirement, the Employer shall provide continued life, medical,
dental and disability coverage
4
substantially identical to the coverage maintained by the Employer for the
Executive immediately prior to his termination. Such coverage shall cease
upon the expiration of the remaining term of this Agreement.
4. EXPENSES. The Employer shall reimburse the Executive or otherwise
provide for or pay for all reasonable expenses incurred by the Executive in
furtherance of or in connection with the business of the Employer, including,
but not by way of limitation, automobile expenses and other traveling expenses,
and all reasonable entertainment expenses (whether incurred at the Executive's
residence, while traveling or otherwise), subject to such reasonable
documentation and other limitations as may be established by the Board of
Directors of the Employer. If such expenses are paid in the first instance by
the Executive, the Employer shall reimburse the Executive therefor.
5. TERMINATION.
(a) The Employer shall have the right, at any time upon prior Notice of
Termination, to terminate the Executive's employment hereunder for any reason,
including without limitation termination for Cause, Disability or Retirement,
and the Executive shall have the right, upon prior Notice of Termination, to
terminate his employment hereunder for any reason.
(b) In the event that (i) the Executive's employment is terminated by
the Employer for Cause or (ii) the Executive terminates his employment hereunder
other than for Disability, Retirement, death or Good Reason, the Executive shall
have no right pursuant to this Agreement to compensation or other benefits for
any period after the applicable Date of Termination.
(c) In the event that the Executive's employment is terminated as a
result of Disability, Retirement or the Executive's death during the term of
this Agreement, the Executive shall have no right pursuant to this Agreement to
compensation or other benefits for any period after the applicable Date of
Termination, except as provided for in Section 3(d) hereof.
(d) In the event that (i) the Executive's employment is terminated by
the Employer for other than Cause, Disability, Retirement or the Executive's
death or (ii) such employment is terminated by the Executive (a) due to a
material breach of this Agreement by the Employer, which breach has not been
cured within fifteen (15) days after a written notice of non-compliance has been
given by the Executive to the Employer, or (b) for Good Reason, then the
Employer shall, subject to the provisions of Section 6 hereof, if applicable
(A) pay to the Executive, in either thirty-six (36) equal
monthly installments beginning with the first business day of the month
following the Date of Termination or in a lump sum within five business
days of the Date of Termination (at the Executive's election), a cash
severance amount equal to three (3) times that portion of the
Executive's Average Annual Compensation paid by the Employer, and
5
(B) maintain and provide for a period ending at the earlier of
(i) the expiration of the remaining term of employment pursuant hereto
prior to the Notice of Termination or (ii) the date of the Executive's
full-time employment by another employer (provided that the Executive
is entitled under the terms of such employment to benefits
substantially similar to those described in this subparagraph (B)), at
no cost to the Executive, the Executive's continued participation in
all group insurance, life insurance, health and accident insurance,
disability insurance and other employee benefit plans, programs and
arrangements offered by the Employer in which the Executive was
entitled to participate immediately prior to the Date of Termination
(excluding (x) stock option and restricted stock plans of the Employer,
(y) bonuses and other items of cash compensation included in Average
Annual Compensation and (z) other benefits, or portions thereof,
included in Average Annual Compensation), provided that in the event
that the Executive's participation in any plan, program or arrangement
as provided in this subparagraph (B) is barred, or during such period
any such plan, program or arrangement is discontinued or the benefits
thereunder are materially reduced, the Employer shall arrange to
provide the Executive with benefits substantially similar to those
which the Executive was entitled to receive under such plans, programs
and arrangements immediately prior to the Date of Termination.
6. LIMITATION OF BENEFITS UNDER CERTAIN CIRCUMSTANCES. If the payments
and benefits pursuant to Section 5 hereof, either alone or together with other
payments and benefits which the Executive has the right to receive from the
Employer, would constitute a "parachute payment" under Section 280G of the Code,
the payments and benefits payable by the Employer pursuant to Section 5 hereof
shall be reduced, in the manner determined by the Executive, by the amount, if
any, which is the minimum necessary to result in no portion of the payments and
benefits payable by the Employer under Section 5 being non-deductible to the
Employer pursuant to Section 280G of the Code and subject to the excise tax
imposed under Section 4999 of the Code. The parties hereto agree that the
present value of the payments and benefits payable pursuant to this Agreement to
the Executive upon termination shall be limited to three times the Executive's
Average Annual Compensation. The determination of any reduction in the payments
and benefits to be made pursuant to Section 5 shall be based upon the opinion of
independent counsel selected by the Employer's independent public accountants
and paid by the Employer. Such counsel shall be reasonably acceptable to the
Employer and the Executive; shall promptly prepare the foregoing opinion, but in
no event later than thirty (30) days from the Date of Termination; and may use
such actuaries as such counsel deems necessary or advisable for the purpose.
Nothing contained herein shall result in a reduction of any payments or benefits
to which the Executive may be entitled upon termination of employment under any
circumstances other than as specified in this Section 6, or a reduction in the
payments and benefits specified in Section 5 below zero.
7. MITIGATION; EXCLUSIVITY OF BENEFITS.
(a) The Executive shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise, nor shall the
amount of any such benefits be reduced by
6
any compensation earned by the Executive as a result of employment by another
employer after the Date of Termination or otherwise.
(b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Employer pursuant to employee benefit plans
of the Employer or otherwise.
8. WITHHOLDING. All payments required to be made by the Employer
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Employer may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
9. ASSIGNABILITY. The Employer may assign this Agreement and its rights
and obligations hereunder in whole, but not in part, to any corporation, bank or
other entity with or into which the Employer may hereafter merge or consolidate
or to which the Employer may transfer all or substantially all of its assets, if
in any such case said corporation, bank or other entity shall by operation of
law or expressly in writing assume all obligations of the Employer hereunder as
fully as if it had been originally made a party hereto, but may not otherwise
assign this Agreement or its rights and obligations hereunder. The Executive may
not assign or transfer this Agreement or any rights or obligations hereunder.
10. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
To the Employer: Board of Directors
First Bank & Trust, S. B.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
To the Executive: Xxxxx X. Xxxxxx
[ADDRESS]
[CITY, STATE, ZIP]
11. AMENDMENT; WAIVER. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer or officers as may be
specifically designated by the Board of Directors of the Employer to sign on
their behalf. No waiver by any party hereto at any time of any breach by any
other party hereto of, or compliance with, any condition or provision of this
7
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
12. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United States
where applicable and otherwise by the substantive laws of the State of Illinois.
13. NATURE OF OBLIGATIONS. Nothing contained herein shall create or
require the Employer to create a trust of any kind to fund any benefits which
may be payable hereunder, and to the extent that the Executive acquires a right
to receive benefits from the Employer hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Employer.
14. HEADINGS. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
15. VALIDITY. The invalidity or unenforceability of any provision 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.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
17. REGULATORY PROHIBITION. Notwithstanding any other provision of this
Agreement to the contrary, any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with Section 18(k) of the Federal Deposit Insurance Act (12 U.S.C.ss.1828(k))
and the regulations promulgated thereunder, including 12 C.F.R. Part 359.
18. PAYMENT OF COSTS AND LEGAL FEES AND REINSTATEMENT OF BENEFITS. In
the event any dispute or controversy arising under or in connection with the
Executive's termination is resolved in favor of the Executive, whether by
judgment, arbitration or settlement, the Executive shall be entitled to the
payment of (a) all legal fees incurred by the Executive in resolving such
dispute or controversy, and (2) any back-pay, including Base Salary, bonuses and
any other cash compensation, fringe benefits and any compensation and benefits
due to the Executive under this Agreement.
19. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
between the Employer and the Executive with respect to the matters agreed to
herein. All prior agreements between the Employer and the Executive with respect
to the matters agreed to herein are hereby superseded and shall have no force or
effect.
8
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
Attest: FIRST BANK & TRUST, S. B.
By:
---------------------------- -------------------------------
EXECUTIVE
----------------------------------
Xxxxx X. Xxxxxx
9
