Exhibit 10.6
XXXXXX X. XXXXXX
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into as of the
___ day of _________, 1998 (the "Effective Date"), by and between BANKILLINOIS
FINANCIAL CORPORATION, a Delaware corporation ("BIF"), and XXXXXX X. XXXXXX
("Bob").
RECITALS
A. Bob has served as the Executive Vice President-Retail Banking of BIF's
wholly-owned subsidiary, BankIllinois, Champaign, Illinois (the "Bank"),
since the Effective Date.
B. BIF and Bob have made commitments to each other on a variety of important
issues concerning his employment, including the performance that will be
expected of him, the compensation that he will be paid, how long and under
what circumstances he will remain employed, and the financial details
relating to any decision that either Bob or BIF might ever make to
terminate this Agreement.
C. BIF and Bob believe that the commitments they have made to each other
should be memorialized in writing, and that is the purpose of this
Agreement.
THEREFORE, BIF and Bob agree as follows:
AGREEMENTS
1. Employment. BIF and Bob each confirm that Bob has been employed as the
Executive Vice President-Retail Banking of the Bank since the Effective
Date in accordance with the terms of this Agreement.
(a) Positions. Subject to the terms of this Agreement, BIF will cause the
Bank to employ Bob as the Executive Vice President-Retail Banking of
the Bank, or in such other capacities with BIF or the Bank as the
Board of Directors of BIF (the "Board") deems appropriate in its sole
discretion.
(b) Duties. Bob's duties, authority and responsibilities as an employee of
BIF and an officer of the Bank shall consist of such duties, authority
and responsibilities as are imposed by the charter and bylaw
provisions and the policies of BIF and the Bank and the directions of
their respective Boards of Directors.
(c) Care and Loyalty. Bob will devote his full business time, energy,
skills and attention to the business and affairs of BIF and the Bank,
and will faithfully and loyally discharge his duties to BIF and the
Bank.
(d) Transfers. The Board may, in its sole discretion, cause Bob's
employment to be transferred from the Bank to another wholly-owned
banking subsidiary of BIF, in which case all references in this
Agreement to the "Bank" will be deemed to refer to such other
subsidiary.
2. Compensation. BIF will compensate Bob for his services as follows during
the term of this Agreement and his employment hereunder:
(a) Salary. Upon the signing of this Agreement Bob's annual base salary
shall be $65,000. The Board will review Bob's base salary annually
during the term of this Agreement to determine whether it should be
maintained at its existing level or increased. Bob's annual base
salary for any year after 1998 will not be lower than his base salary
for the immediately preceding year.
(b) Discretionary Performance Bonus. BIF will consider Bob for a bonus at
the end of each year based on performance criteria established by the
Board and/or Bob's senior officers and any other factors deemed by the
Board to be appropriate. Bonuses will be awarded, if at all, in the
sole discretion of the Board, and nothing in this Agreement will
require the payment of a bonus in any given year nor will any bonus be
deemed earned until the Board determines the amount of such bonus.
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(c) Profit Sharing Benefit. Xxx xxx receive an annual profit sharing
benefit of up to ten percent (10%) of the combined amount of his
annual base salary and if applicable, his performance bonus. The Board
will decide the exact amount of this benefit annually within that
range. BIF will contribute this benefit for the account of Bob to
BIF's tax-qualified retirement plans and/or any nontax-qualified
deferred compensation programs that BIF may elect to establish. All
such benefit payments will be determined and governed by the terms of
the particular plan or program.
(d) Car Allowance. BIF will provide Bob with a monthly automobile
allowance in the gross amount of $300. The automobile allowance will
be subject to annual review by the Board starting in 1999, and may be
terminated, decreased, maintained or increased as the Board deems
appropriate.
(e) Club Membership. BIF expects Bob to entertain clients and prospective
clients of BIF and the Bank at the country club to which he belongs,
and thus will reimburse Bob's dues for his country club membership in
an amount not to exceed $3,600 per year. This allowance will be
subject to annual review by the Board starting in 1999, and may be
terminated, decreased, maintained or increased as the Board deems
appropriate.
(f) Reimbursement of Expenses. BIF will reimburse Bob for all travel,
entertainment and other out-of-pocket expenses that he reasonably and
necessarily incurs in the performance of his duties. Bob will document
these expenses to the extent necessary to comply with all applicable
laws and internal policies.
(g) Other Benefits. Bob will be entitled to participate in all plans and
benefits that are now or later made available by BIF or the Bank to
its officers of equal or junior ranking generally.
(h) Vacations. Bob will receive at least twenty (20) days of paid vacation
annually, subject to BIF's general vacation policy.
(i) Withholding. Bob acknowledges that BIF may withhold any applicable
federal, state or local withholding or other taxes from payments that
become due or allowances that are provided to him.
3. Term and Termination.
(a) Term and Automatic Renewal. The term of this Agreement and Bob's
employment hereunder will be one (1) year commencing as of the
Effective Date. This Agreement and the term of Bob's employment
hereunder will automatically renew for one (1) additional year on each
anniversary of the Effective Date unless this Agreement and Bob's
employment hereunder are terminated in accordance with the provisions
of this Section 3.
(b) Termination Without Cause. Either BIF or Xxx xxx terminate this
Agreement and Bob's employment hereunder for any reason by delivering
written notice of termination to the other party no less than ninety
(90) days before the effective date of termination, which date will be
specified in the notice of termination.
(c) Termination for Cause. BIF may terminate this Agreement and Bob's
employment hereunder for Cause by delivering written notice of
termination to Bob no less than thirty (30) days before the effective
date of termination. "Cause" for termination will exist if: (i) Bob
engages in one or more unsafe and unsound banking practices or
material violations of a law or regulation applicable to BIF or the
Bank, any repeated violations of a policy of BIF or the Bank after
being warned in writing by the Board and/or a senior officer not to
violate such policy, any single violation of a policy of BIF or the
Bank if such violation materially and adversely affects the business
or affairs of BIF or the Bank, or a direction or order of the Board
and/or one of Bob's senior officers; (ii) Bob engages in a breach of
fiduciary duty or act of dishonesty involving the affairs of BIF or
the Bank; (iii) Bob is removed or suspended from banking pursuant to
Section 8(e) of the Federal Deposit Insurance Act or any other
applicable State or Federal law; (iv) Bob commits a material breach of
his obligations under this Agreement; or (v) Bob fails to perform his
duties to BIF or the Bank with the degree of skill, care or competence
expected by the Board and/or Bob's senior officers.
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(d) Constructive Discharge. If Bob is ever Constructively Discharged, he
may terminate this Agreement and his employment hereunder by
delivering written notice to BIF no later than thirty (30) days before
the effective date of termination. "Constructive Discharge" means the
occurrence of any one or more of the following: (i) Bob is removed as
an executive officer of the Bank; or (ii) BIF or the Bank fails to
xxxx Xxx with or removes from him the duties, responsibilities,
authority or resources that he reasonably needs to competently perform
his duties as an executive officer of the Bank; (iii) BIF notifies Bob
pursuant to Section 3(b) that it is terminating this Agreement; or
(iv) BIF changes the primary location of Bob's employment to a place
that is more than fifty (50) miles from Champaign, Illinois; or (v)
BIF otherwise commits a material breach of its obligations under this
Agreement and fails to cure the breach within thirty (30) days after
Bob gives BIF written notice of the breach.
(e) Termination upon Change of Control. Xxx xxx terminate this Agreement
and his employment hereunder for any reason within one (1) year after
a Change of Control occurs by delivering written notice of termination
to BIF or its successor no less than thirty (30) days before the
effective date of termination. After one (1) year following the Change
of Control, Xxx xxx terminate this Agreement and his employment
hereunder only in accordance with Section 3(b) or (d).
(i) A "Change of Control" will be deemed to have occurred if: (a)
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")) acquires beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the 0000 Xxx) of more than fifty
percent (50%) of the combined voting power of the then
outstanding voting securities; or (b) the individuals who were
members of the Board on the Effective Date (the "Current Board
Members") cease for any reason (other than the reasons
specified in Subsection 3(e)(ii) below) to constitute a
majority of the Board of BIF or its successor; however, if the
election or the nomination for election of any new director of
BIF or its successor is approved by a vote of a majority of the
individuals who are Current Board Members, such new director
shall, for the purposes of this Section 3(e)(i), be considered
a Current Board Member; or (c) BIF's stockholders approve (1) a
merger or consolidation of BIF or the Bank and the stockholders
of BIF immediately before such merger or consolidation do not,
as a result of such merger or consolidation, own, directly or
indirectly, more than fifty percent (50%) 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 outstanding securities of BIF
immediately before such merger or consolidation; or (2) a
complete liquidation or dissolution or an agreement for the
sale or other disposition of all or substantially all of the
assets of BIF or the Bank.
(ii) Notwithstanding and in lieu of Section 3(e)(i), a Change of
Control will not be deemed to have occurred: (a) solely because
more than fifty percent (50%) of the combined voting power of
the then outstanding voting securities of BIF are acquired by
(1) a trustee or other fiduciary holding securities under one
or more employee benefit plans maintained for employees of BIF
or the Bank, or (2) any person pursuant to the will or trust of
any existing stockholder of BIF, or who is a member of the
immediate family of such stockholder, or (3) 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;
or (b) if Bob agrees in writing that the transaction or event
in question does not constitute a Change of Control for the
purposes of this Agreement.
(f) Termination upon Disability. BIF will not terminate this Agreement and
Bob's employment hereunder if Bob becomes disabled within the meaning
of BIF's then current employee disability program or, at BIF's
election, as determined by a physician selected by BIF, unless as a
result of such disability, Bob is unable to perform his duties with
the requisite level of skill and competence for a period of six (6)
consecutive months. Thereafter, BIF may terminate this Agreement for
Cause in accordance with Subsection 3(c)(v).
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(g) Termination upon Death. This Agreement will terminate if Bob dies
during the term of this Agreement, effective on the date of his death.
Any payments that are owing to Bob under this Agreement or otherwise
at the time of his death will be made to whomever Xxx xxx designate in
writing as his beneficiary, or absent such a designation, to the
executor or administrator of his estate.
(h) Severance Benefits. BIF will pay severance benefits to Bob as follows:
(i) If this Agreement and Bob's employment hereunder are terminated
by BIF without Cause pursuant to Section 3(b), or by reason of
Bob's Constructive Discharge pursuant to Section 3(d), BIF will
pay Bob an amount equal to the sum of his then applicable
annual base salary, plus the amount of the most recent
performance bonus that BIF awarded to Bob pursuant to Section
2(b) (collectively, the "Severance Payment"); provided,
however, that the Severance Payment shall be reduced by (A) the
amount, if any, paid in lieu of the notice contained in Section
3(b) or 3(d), and (B) the amount of any unemployment benefits
received by Bob pursuant to a claim filed with a state
unemployment insurance agency. If the effective date of
termination occurs before the last day of the then current
term, the Severance Payment will also include the value of the
contributions that would have been made to Bob or for his
benefit under all applicable retirement and other employee
benefit plans had he remained in BIF's employ through the last
day of the then current term. BIF will also continue to provide
Bob and his dependents, at the expense of BIF, with continuing
coverage under all existing life, health and disability
programs for a period of one (1) year following the effective
date of termination; provided that Bob shall be obligated to
continue to pay that portion of the applicable premium be was
obligated to pay at the time his employment terminates.
(ii) Notwithstanding Section 3(h)(i), BIF or its successor will pay
Bob an amount equal to the greater of $150,000 or two (2) times
the Severance Payment if this Agreement is terminated by Bob
within one (1) year after a Change of Control occurs pursuant
to Section 3(b), (d) or (e), or by BIF or its successor
pursuant to Section 3(b) either in contemplation of a Change of
Control or within one (1) year after a Change of Control
occurs. In this event, BIF or its successor will also continue
to provide Bob and his dependents, at the expense of BIF or its
successor, with continuing coverage under all existing life,
health and disability programs for a period of two (2) years
following the effective date of termination; provided, however,
that if this Agreement is terminated by BIF in contemplation of
a Change of Control then the amount due under this subsection
(ii) shall be reduced by (A) the amount, if any, paid in lieu
of the notice contained in Section 3(b) or 3(d), and (B) the
amount of any unemployment benefits received by Bob pursuant to
a claim filed with a state unemployment insurance agency.
(iii) All payments that become due to Bob under this Section 3(h)
will be made in equal monthly installments unless BIF elects to
make those payments in one (1) lump sum. BIF will be obligated
to make all payments that become due to Bob under this Section
3(h) whether or not he obtains other employment following
termination or takes steps to mitigate any damages that he
claims to have sustained as a result of termination. The
payments and other benefits provided for in this Section 3(h)
are intended to supplement any compensation or other benefits
that have accrued or vested with respect to Bob or his account
as of the effective date of termination.
(iv) BIF and Bob intend that no portion of any payment under this
Agreement, or payments to or for the benefit of Bob 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 any payments to or for the
benefit of Bob in the nature of compensation, as determined by
the legal counsel or certified public accountants for BIF in
accordance with Section 280G(d)(4) of the Code, receipt of
which is contingent on the Change of Control of BIF, and to
which Section 280G of the Code applies (in the aggregate "Total
Payments"), shall not exceed an amount equal to one dollar
($1.00) less than the maximum amount which BIF may pay without
loss of deduction under Section 280G(a) of the Code.
(v) BIF may elect to defer any payments that may become due to Bob
under this Section 3(h) if, at the time the payments become
due, BIF is not in compliance with any regulatory-mandated
minimum capital requirements or if making the payments would
cause BIF's capital to fall below such minimum capital
requirements. In this event, BIF will resume making the
payments as soon as it can do so without violating such minimum
capital requirements.
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4. Confidentiality. Bob acknowledges that the nature of his employment will
require that he produce and have access to records, data, trade secrets and
information that are not available to the public regarding BIF, the Bank
and their subsidiaries and affiliates ("Confidential Information"). Bob
will hold in confidence and not directly or indirectly disclose any
Confidential Information to third parties unless disclosure becomes
reasonably necessary in connection with Bob's performance of his duties
hereunder, or the Confidential Information lawfully becomes available to
the public from other sources, or he is authorized in writing by BIF to
disclose it, or he is required to make disclosure by a law or pursuant to
the authority of any administrative agency or judicial body. All
Confidential Information and all other records, files, documents and other
materials or copies thereof relating to the business of BIF or any of its
subsidiaries or affiliates that Bob prepares or uses will always be the
sole property of BIF. Bob will promptly return all originals and copies of
such Confidential Information and other records, files, documents and other
materials to BIF if his employment with BIF or the Bank is terminated for
any reason.
5. Non-Competition Covenant.
(a) Restrictive Covenant. BIF and Bob have jointly reviewed the customer
lists and operations of BIF and agree that BIF's primary service area
for its lending and deposit activities encompasses a fifty (50) mile
radius from BIF's main office. Bob agrees that, for a period of one
(1) year after the termination of this Agreement, he will not, without
BIF's prior written consent, directly or indirectly Compete with BIF.
For the purposes of Section 5(a):
(i) "Compete" means directly or indirectly owning, managing,
operating or controlling a Competitor, or directly or
indirectly serving as an employee, officer or director of or a
consultant to a Competitor, or soliciting or inducing any
employee or agent of BIF to terminate employment with BIF and
become employed by a Competitor.
(ii) "Competitor" means any person, firm, partnership, corporation,
trust or other entity that owns, controls or is a bank, savings
and loan association, credit union or similar financial
institution (a "Financial Institution") that is physically
located and conducts substantial lending and deposit taking
activities within a fifty (50) mile radius of BIF's main
office.
(b) Successors. In the event that a successor to BIF or the Bank succeeds
to or assumes BIF's rights and obligations under this Agreement,
Section 5(a) will apply only to the primary service area of BIF as it
existed immediately before the succession or assumption occurred and
will not apply to any of the successor's other offices.
(c) Investment Exception. Section 5(a) will not prohibit Bob from directly
or indirectly owning or acquiring any capital stock or similar
securities that are listed on a securities exchange or quoted on the
National Association of Securities Dealers Automated Quotation System
and do not represent more than five percent (5%) of the outstanding
capital stock of any Financial Institution.
(d) Injunctive Relief. Bob agrees that a violation of this Section 5 would
result in direct, immediate and irreparable harm to BIF, and in such
event, agrees that BIF, in addition to its other right and remedies,
would be entitled to injunctive relief enforcing the terms and
provisions of this Section 5.
6. Indemnity; Other Protections.
(a) Indemnification. BIF will indemnify Bob (and, upon his death, his
heirs, executors and administrators) to the fullest extent permitted
by law against all expenses, including reasonable attorneys' fees,
court and investigative costs, judgments, fines and amounts paid in
settlement (collectively, "Expenses") reasonably incurred by him in
connection with or arising out of any pending, threatened or completed
action, suit or proceeding in which he may become involved by reason
of his having been an officer or director of BIF or the Bank. The
indemnification rights provided for herein are not exclusive and will
supplement any rights to indemnification that Xxx xxx have under any
applicable bylaw or charter provision of BIF or the Bank, or any
resolution of BIF or the Bank, or any applicable statute.
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(b) Advancement of Expenses. In the event that Bob becomes a party, or is
threatened to be made a party, to any pending, threatened or completed
action, suit or proceeding for which BIF or the Bank is permitted or
required to indemnify him under this Agreement, any applicable bylaw
or charter provision of BIF or the Bank, any resolution of BIF or the
Bank, or any applicable statute, BIF will, to the fullest extent
permitted by law, advance all Expenses reasonably incurred by Bob in
connection with the investigation, defense, settlement, or appeal of
any threatened, pending or completed action, suit or proceeding,
subject to receipt by BIF of a written undertaking from Bob to
reimburse BIF for all Expenses actually paid by BIF to or on behalf of
Bob in the event it shall be ultimately determined that BIF or the
Bank cannot lawfully indemnify Bob for such Expenses, and to assign to
BIF all rights of Bob to indemnification under any policy of
directors' and officers' liability insurance to the extent of the
amount of Expenses actually paid by BIF to or on behalf of Bob.
(c) Litigation. Unless precluded by an actual or potential conflict of
interest, BIF will have the right to recommend counsel to Bob to
represent him in connection with any claim covered by this Section 6.
Further, Bob's choice of counsel, his decision to contest or settle
any such claim, and the terms and amount of the settlement of any such
claim will be subject to BIF's prior written approval, which approval
shall not be unreasonably withheld by BIF.
7. General Provisions.
(a) Successors; Assignment. This Agreement will be binding upon and inure
to the benefit of Bob, BIF and their respective personal
representatives, successors and assigns. For the purposes of this
Agreement, any successor or assign of BIF shall be deemed to be "BIF,"
and any successor or assign of the Bank shall be deemed to be the
"Bank." BIF will require any successor or assign of BIF or any direct
or indirect purchaser or acquiror of all or substantially all of the
business, assets or liabilities of BIF or the Bank, whether by
transfer, purchase, merger, consolidation, stock acquisition or
otherwise, to assume and agree in writing to perform this Agreement
and BIF's obligations hereunder in the same manner and to the same
extent as BIF would have been required to perform them if no such
transaction had occurred.
(b) Entire Agreement; Survival. This Agreement constitutes the entire
agreement between the Bob and BIF concerning the subject matter
hereof, and supersedes all prior negotiations, undertakings,
agreements and arrangements with respect thereto, whether written or
oral. The provisions of this Agreement will be regarded as divisible
and separate; if any provision is ever declared invalid or
unenforceable, the validity and enforceability of the remaining
provisions will not be affected. In the event any provision of this
Agreement (including, but not limited to, any provision of the
covenant not to compete set forth in Section 5) is held to be
overbroad as written, such provision shall be deemed to be amended to
narrow the application of such provision to the extent necessary to
make such provision enforceable according to applicable law. This
Agreement may not be amended or modified except by a writing signed by
Bob and BIF, and except for the employment obligations set forth in
Section 1, all rights and obligations of Bob and BIF hereunder shall
survive the termination of this Agreement.
(c) Governing Law and Enforcement. This Agreement will 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 at a location selected by BIF within fifty (50) miles from
Champaign, Illinois, in accordance with the rules of the American
Arbitration Association.
(e) Legal Fees. All reasonable legal fees paid or incurred in connection
with any dispute or question of interpretation relating to this
Agreement shall be paid to the party who is successful on the merits
by the other party.
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(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 BIF, addressed to the principal
headquarters of BIF, attention: President Van X. Xxxxxxx, with a copy
sent to each member of the Board at his/her business address; or, if
to Xxx, to the address set forth below Bob'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.
BANKILLINOIS FINANCIAL CO. XXXXXX X. XXXXXX
By:
-------------------------------- ------------------------------------
Name:
------------------------------ ------------------------------------
Title:
----------------------------- ------------------------------------
(Address)
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