EXHIBIT 10.17
COVEST BANCSHARES, INC.
EMPLOYMENT AGREEMENT
This AGREEMENT is made effective as of December 31, 1999, by and
between CoVest Bancshares, Inc., a Delaware corporation, (the "Company") and J.
Xxxxxx Xxxxxx, Xx., ("Senior Vice President").
WHEREAS, the Company desires to employ J. Xxxxxx Xxxxxx, Xx. the SENIOR
VICE PRESIDENT RETAIL BANKING of the Company and its subsidiary, CoVest Banc,
National Association (the Bank); and
WHEREAS, the Senior Vice President is willing to commit himself to
serving the Company and the Bank on the terms and conditions herein provided;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and upon the other terms and conditions hereinafter provided, the
parties hereby agree as follows:
1. POSITION AND RESPONSIBILITIES.
(a) J. Xxxxxx Xxxxxx, Xx. shall be employed as SENIOR VICE PRESIDENT
RETAIL BANKING of the Company and of the Bank effective as of the date hereof
for the Period of Employment as defined hereafter. The Senior Vice President
shall report to the President and Chief Executive Officer of the Company. The
Senior Vice President's duties and responsibilities shall consist of such duties
and responsibilities as may from time to time be assigned to the Senior Vice
President by the President and Chief Executive Officer which duties and
responsibilities shall be duties customary for a SENIOR VICE PRESIDENT RETAIL
BANKING of the Company or Bank.
2. PERIOD OF EMPLOYMENT. The period of the Senior Vice President's
employment under this Agreement (the Period of Employment) shall commence upon
the Effective Date hereof and shall continue for a period of twelve (12) full
calendar months thereafter, subject to extension as provided herein or to
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earlier termination as provided in Paragraph 4 below. The Period of Employment
may be automatically extended for twelve (12) additional months on each
anniversary date of the Effective date by the Board of the Company or a duly
authorized committee of the Board on behalf of the Company, provided, however,
that in no event shall the Period of Employment extend beyond the date Senior
Vice President attains age 65. Notwithstanding anything in this Agreement to the
contrary, if at any time during the Period of Employment there is a Change of
Control (as defined in Paragraph 4), the Period of Employment shall
automatically extend to a date which is the first to occur of (a) the date which
is twelve (12) months from the date of the Change in Control, and (b) the date
Senior Vice President attains age 65.
3. COMPENSATION AND REIMBURSEMENT.
(a) Salary. During the Period of Employment, the Bank shall pay the
Senior Vice President the compensation specified in this Agreement for the
services performed hereunder. The Bank shall pay the Senior Vice President as
compensation a base salary (Base Salary) of $120,000 per year. The Base Salary
shall be subject to review by the Board and may be increased (but not
decreased), whereupon such increased amount shall become the Base Salary
hereunder.
(b) Bonuses. The Senior Vice President shall be eligible for
consideration in 1999 and subsequent years for annual incentive bonuses as
recommended by the President and Chief Executive Officer but solely determined
by the Board.
(c) Options. The Company shall grant to the Senior Vice President an
option to purchase 20,000 shares of Company common stock under the Company's
1996 Stock Option and Incentive Plan. Said option shall provide for an exercise
price per share equal to the fair market value on the Effective Date, shall vest
at a rate of 5,000 shares on the Effective Date from each Plan and 5,000 shares
on each of the first three anniversary dates of the Effective Date. The option
shall be evidenced by the Option Agreements attached hereto as Appendix A-1 and
Appendix A-2, respectively.
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(d) Vacation; Expense Reimbursement. During the Period of Employment,
the Senior Vice President shall be entitled to a paid vacation, periods of
absence occasioned by illness and reasonable leaves of absence, and to expense
reimbursement in accordance with Company policies.
(e) Benefit Plans. The Senior Vice President shall be eligible to
participate in or receive benefits under any benefit plans and arrangements of
the Company and Bank in which Senior officers of the Company and the Bank are
generally entitled to participate including, but not limited to, the profit
sharing/401(k) plan, health-and-accident plans, medical coverage, disability or
any other benefit plans or arrangements, subject to and on a basis consistent
with the terms, conditions and overall administration of such plans and
arrangements applicable to Senior officers of the Company and the Bank
generally.
4. TERMINATION; NOTICE.
(a) Termination. The Company may terminate the Senior Vice President's
employment with the Company and the Bank (and the Period of Employment) at any
time, with or without Cause. The Senior Vice President may terminate his
employment with the Company and Bank at any time for any reason.
(b) Event of Termination. As used in this Agreement, an "Event of
Termination" shall mean:
(i) the termination by the Company and the Bank of the Senior Vice
President's full-time employment hereunder for any reason other than for Cause,
death or Disability, or
(ii) the voluntary termination by the Senior Vice President of
employment with the Company and the Bank within sixty (60) days of a
Constructive Discharge; or
(iii) the voluntary termination by the Senior Vice President of
employment with the Company and the Bank within one (1) year after the date of a
Change in Control.
(c) Severance Benefits. Following the occurrence of an Event of
Termination and only so long as the Senior Vice President complies with his
obligations under the Non-Competition Agreement described in Paragraph 6 below,
the Bank
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shall continue to pay to the Senior Vice President, or, in the event of his
subsequent death, his beneficiary or beneficiaries, or his estate, as the case
may be, as severance pay, the Base Salary described in Paragraph 3(a) above and
to continue the medical insurance benefits otherwise provided hereunder for the
remainder of the Period of Employment, on the same basis as if Senior Vice
President's employment continued hereunder.
(d) Cause. The term "for Cause" shall mean termination by the Company
because (i) a material violation by the Senior Vice President of any applicable
material law or regulation respecting the business of the Company and its
affiliates; (ii) the Senior Vice President's being found guilty of a felony, an
act of dishonesty in connection with the performance of his duties as an officer
of the Company or an affiliate of the Company; or which disqualifies the Senior
Vice President from serving as an officer of the Company or an affiliate of the
Company; or (iii) the willful or negligent failure of the Senior Vice President
to perform his duties hereunder in any material respect. The Senior Vice
President shall be entitled to at least thirty days prior written notice of the
Company's intention to terminate his employment for Cause, specifying the
grounds for such termination, 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 of Directors of the Company his position
regarding any dispute relating to the existence of Cause for such termination.
In determining willfulness, no act or failure to act on the Senior Vice
President's part shall be considered "willful" unless done or omitted to be done
by him not in good faith and without reasonable belief that his action or
omission was in the best interests of the Company or Bank.
(e) Disability. The term "Disability" shall mean Senior Vice
President's inability, as a result of physical or mental incapacity,
substantially to perform his duties hereunder for a period of six (6) months. In
the event that it is reasonably determined that Senior Vice President has
suffered a Disability, the Company shall be entitled to terminate his
employment. Senior Vice President shall be entitled to compensation and benefits
provided for under this Agreement for any period during the term of this
Agreement prior to the establishment of a Disability during which Senior Vice
President is unable to work due to a physical or mental disability, provided
that if Senior Vice President receives disability income benefits while employed
hereunder, the Company's obligation to pay him salary
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shall be reduced accordingly. Notwithstanding anything contained herein to the
contrary, following a period in which Senior Vice President is unable
substantially to perform his duties hereunder, until the date specified in a
notice of termination relating to a Disability, the Senior Vice President shall
be entitled to return to the performance of his duties hereunder, in which event
no Disability shall be deemed to have occurred. In addition to such disability
income benefits, if any, as are paid to Senior Vice President under a disability
benefit plan of the Company following termination of his employment, the Company
shall for a period of one year following such termination of employment, pay to
Senior Vice President such amount as, when aggregated with such disability
income benefits, will provide to him the same after tax income as he would have
received if he had remained employed at the same rate of salary as was payable
when his employment was terminated.
(f) Constructive Discharge. The term "Constructive Discharge" shall
mean the occurrence, other than in connection with a termination by the Company,
of any one of the following events without the Senior Vice President's consent:
(i) The Senior Vice President is removed from the position of
SENIOR VICE PRESIDENT RETAIL BANKING of the Company or the Bank, other
than as a result of the Executive's election or appointment to
positions of equal or superior scope and responsibility; or
(ii) The Senior Vice President shall fail to be vested by the
Company Employer with the powers, authority and support services of
such position and such failure has not been remedied by the Company
within thirty (30) days after receipt of written notice of such failure
from Senior Vice President, or
(iii) The Company shall fail to pay the compensation and
benefits required by Paragraph 3 hereof and such failure has not been
remedied by the Company within thirty (30) days after receipt of
written notice of such failure from Senior Vice President; or
(iv) The Company changes the primary employment location of
the Senior Vice President to a place that is more than thirty-five (35)
miles from Company's principal office as of the Effective Date, or
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(g) Change in Control. For purposes of this Agreement, the term "Change
in Control" shall mean the following:
(i) 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
twenty-five percent (25%) or more of the combined voting power of the
then outstanding voting securities; or
(ii) The individuals who, as of the date hereof, are members
of the Board of Directors of the Company cease for any reason to
constitute a majority of such Board members, 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
(iii) Approval by the stockholders of: (A) a merger or
consolidation if the stockholders of the Company 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 of the Company
outstanding immediately before such merger or consolidation; or (B) a
complete liquidation or dissolution or an agreement for the sale or
other disposition of all or substantially all of the assets of the
entity.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because twenty-five percent (25%) 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
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indirectly by the stockholders in the same proportion as their ownership of
stock immediately prior to such acquisition.
(iv) Notice of Termination. Any termination by the Company or by Senior
Vice President shall be communicated by Notice of Termination to the other party
hereto and the termination shall become effective as of the "Date of
Termination" with respect thereto. For purposes of this Agreement, a "Notice of
Termination" shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
detail the facts and circumstances claimed to provide a basis for the
termination. The "Date of Termination" shall be
(i) thirty (30) days after the Notice of Termination is given
if the Notice of Termination is given by the Company without Cause or
due to Disability, or by the Senior Vice President in the absence of a
Constructive Discharge; or
(ii) the date the Notice of Termination is given if the
termination is by the Company for Cause; or
(iii) thirty (30) days after the Notice of Termination is
given if the Notice of Termination is given in connection with a
Constructive Discharge.
5. INDEMNIFICATION.
(a) The Company shall provide the Senior Vice President (including his
heirs, personal representatives, executors and administrators) for the term of
this Agreement with coverage under any director's and officer's liability
insurance policy which the Company may maintain.
(b) In addition to such insurance coverage, the Company shall hold
harmless and indemnify the Senior Vice President (and his heirs, executors and
administrators) to the fullest extent permitted under applicable law against all
expenses and liabilities reasonably incurred by his in connection with or
arising out of any action, suit or proceeding in which he may be involved by
reason of his having been an officer of the Company or an affiliate of the
Company (whether
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or not he continues to be an officer at the time of incurring such expenses or
liabilities), such expenses and liabilities to include, but not be limited to,
judgments, court costs and attorneys' fees and the cost of reasonable
settlements.
(c) In the event the Senior Vice President becomes a party, or is
threatened to be made a party, to any action, suit or proceeding for which the
Company has agreed to provide insurance coverage or indemnification under this
Paragraph 5, the Company shall, to the full extent permitted under applicable
law, advance all expenses (including reasonable attorneys' fees), judgements,
fines and amounts paid in settlement (collectively "Expenses") incurred by the
Senior Vice President in connection with the investigation, defense, settlement,
or appeal of any threatened, pending or completed action, suit or proceeding,
subject to receipt by the Company of a written undertaking from the Senior Vice
President : (i) to reimburse the Company for all Expenses actually paid by the
Company to or on behalf of the Senior Vice President in the event it shall be
ultimately determined that the Senior Vice President is not entitled to
indemnification by the Company for such Expenses; and (ii) to assign to the
Company all rights of the Senior Vice President to indemnification, under any
policy of directors' and officers' liability insurance or otherwise, to the
extent of the amount of Expenses actually paid by the Company to or on behalf of
the Senior Vice President.
6. POST-EMPLOYMENT RESTRICTIVE COVENANTS. The Senior Vice President's
activities during his employment and following the termination of his employment
for any reason shall be subject to the Agreement Regarding Post-Employment
Restrictive Covenants (the "Non-Competition Agreement") attached hereto as
Appendix B.
7. EFFECT ON PRIOR AGREEMENTS. This Agreement contains the entire
understanding between the parties hereto and supersedes any prior written or
oral understandings and agreements between Senior Vice President and the
Company.
8. MODIFICATION AND WAIVER. This Agreement may not be modified or
amended except by an instrument in writing signed by the parties hereto. No term
or condition of this Agreement shall be deemed to have been waived, nor shall
there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver or
estoppel. No such written waiver shall be
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deemed a continuing waiver unless specifically stated therein, and each such
waiver shall operate only as to the specific term or condition waived and shall
not constitute a waiver of such term or condition for the future as to any act
other than that specifically waived.
9. TAX WITHHOLDING. The Company or Bank may withhold from any amounts
payable to the Senior Vice President under this Agreement to satisfy all
applicable Federal, State, local or other withholding taxes. In the event the
Company or Bank fails to withhold such sums for any reason, it may require the
Senior Vice President to promptly remit to it sufficient cash to satisfy all
applicable income and employment withholding taxes.
10. ARBITRATION. Except as expressly set forth elsewhere in this
Agreement or the Non-Competition Agreement, it is mutually agreed between the
parties that arbitration shall be the sole and exclusive remedy to redress any
dispute, claim or controversy (hereinafter referred to as "grievance") involving
the interpretation of this Agreement or the terms or conditions of this
Agreement or the terms, conditions or termination of the Senior Vice President`s
employment with the Company or Bank. It is the intention of the parties that the
arbitration award shall be final and binding and that a judgment on the award
may be entered in any court of competent jurisdiction and enforcement may be had
according to its terms. Arbitration shall be initiated by one party filing a
written demand on the other party. Any demand for arbitration by the Senior Vice
President shall be made within 20 days after receipt of the Notice of
Termination. The arbitrator shall be chosen in accordance with the voluntary
labor arbitration rules of the American Arbitration Association. The place of
the arbitration shall be the offices of the American Arbitration Association in
Chicago, Illinois. The arbitrator shall not have jurisdiction or authority to
change any of the provisions of this Agreement but shall interpret or apply any
clause or clauses of this Agreement. The arbitrator shall have the power to
compel the attendance of witnesses at the hearing. The parties stipulate that
the provisions hereof, and the decision of the arbitrator with respect to any
grievance, shall be the sole and exclusive remedy for any alleged breach of the
employment relationship in which event the Company or Bank shall be entitled to
seek relief in any court having jurisdiction thereof. The parties hereby
acknowledge that subject to the foregoing exception, neither party has the right
to resort to any federal, state or local court or administrative agency
concerning breaches of this
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Agreement and that the decision of the arbitrator shall be a complete defense to
any suit, action or proceeding instituted in any federal, state or local court
or before any administration agency with respect to any grievance which is
arbitrable as herein set forth. The arbitration provisions hereof shall, with
respect to any grievance, survive the termination or expiration of the Senior
Vice President's employment under this Agreement.
11. MISCELLANEOUS.
(a) If, for any reason, any provision of this Agreement, or any part of
any provision, is held invalid, such invalidity shall not affect any other
provision of this Agreement or any part of such provision not held so invalid,
and each such other provision and part thereof shall to the full extent
consistent with law continue in full force and effect.
(b) The headings of sections and paragraphs herein are included solely
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement.
(c) To the extent not preempted by Federal law, this Agreement shall be
governed by and construed in accordance with the laws of the State of Illinois.
(d) Notwithstanding anything herein to the contrary, to the extent that
any compensation or benefits are paid to or received by Senior Vice President
from the Bank or any other subsidiary of the Company, such compensation or
benefits shall be deemed to satisfy the Company's obligations hereunder.
(e) Notices pursuant to this Agreement shall be in writing and shall be
deemed given to any party (i) upon delivery, if delivered personally or by
courier, or (ii) upon dispatch, if transmitted by telecopy or other means of
facsimile, provided a copy thereof is sent by regular mail or courier; or (c)
within forty-eight (48) hours after deposit thereof in U.S. mail, postage
prepaid for delivery as registered or certified mail, return receipt requested
and, if to the Company, addressed to the principal office of the Company,
attention: Chairman; or, if to the Senior Vice President, to the address set
forth below the Senior Vice President's signature on this Agreement, or to such
other address as the party to be notified shall have given to the other.
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12. SUCCESSORS. This Agreement shall be binding upon and inure to the
benefit of the Company, and its successors and Senior Vice President and his
successors and assigns. The Company shall require any successor or assignee,
whether direct or indirect, by purchase, merger, consolidation or otherwise,
expressly and unconditionally to assume and agree to perform the Company's
obligations under this Agreement, in the same manner and to the same extent that
the Company would be required to perform if no such succession or assignment had
taken place.
IN WITNESS WHEREOF, each of the Company and Bank have caused this
Agreement to be executed by its duly authorized officer and the Senior Vice
President has signed this Agreement, effective as of the date first written
above.
COVEST BANCSHARES, INC.
By:
-------------------------------------
Its: President & Chief Executive
Officer
COVEST BANC, NATIONAL ASSOCIATION
By:
-------------------------------------
Its: President & Chief Executive
Officer
SENIOR VICE PRESIDENT:
-----------------------------------------
J. Xxxxxx Xxxxxx, Xx.
Address:
Telecopy No.:
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