EMPLOYMENT AGREEMENT
Exhibit
10.1
This
Employment Agreement (the “Agreement”) is made and entered into this 11th day of
December,
2007, by and between First Mid-Illinois Bancshares, Inc. (“the Company”), a
corporation with its principal place of business located in Mattoon, Illinois,
and Xxxxxxx X. Xxxxxxx (“Executive”).
In
consideration of the promises and
mutual covenants and agreements contained herein, the parties hereto acknowledge
and agree as follows:
ARTICLE
ONE
TERM
AND NATURE OF AGREEMENT
1.01 Term
of Agreement. The term of this Agreement shall commence as of
December 11, 2007 and shall continue until December 31,
2010. Thereafter, unless Executive’s employment with the Company has
been previously terminated, Executive shall continue his employment with
the
Company on an at will basis and, except as provided in Articles Five, Six
and
Seven, this Agreement shall terminate unless extended by mutual written
agreement.
1.02 Employment
as President and CEO. The Company agrees to continue to employ
Executive as its President and Chief Executive Officer commencing December
11,
2007 and Executive accepts such employment by the Company on the terms and
conditions herein set forth. The duties of Executive shall be
determined by the Company’s Board of Directors and Executive shall adhere to the
policies and procedures of the Company and shall follow the supervision and
direction of the Board in the performance of such duties. During the
term of his employment, Executive agrees to devote his full working time,
attention and energies to the diligent and satisfactory performance of his
duties hereunder. Executive shall not, while he is employed by the
Company, engage in any activity which would (a) interfere with, or have an
adverse effect on, the reputation, goodwill or any business relationship
of the
Company or any of its subsidiaries; (b) result in economic harm to the Company
or any of its subsidiaries; or (c) result in a breach of Section Six of the
Agreement.
1.03 Service
as Chairman. The Company shall use its best efforts to continue
Executive’s position as Chairman of the Board of Directors of the Company during
the term of his employment, to which position he was elected effective as
of
June 1, 1999.
ARTICLE
TWO
COMPENSATION
AND BENEFITS
While
Executive is employed with the
Company during the term of this Agreement, the Company shall provide Executive
with the following compensation and benefits:
2.01 Base
Salary. The Company shall pay Executive an annual base salary of
$275,000 per fiscal year, payable in accordance with the Company’s customary
payroll practices for executive employees. The Board may review and
adjust Executive’s base salary from year to year; provided, however, that during
the term of Executive’s employment, the Company shall not decrease Executive’s
base salary.
2.02 Incentive
Compensation Plan. Executive shall continue to participate in the
First Mid-Illinois Bancshares, Inc. Incentive Compensation Plan in accordance
with the terms and conditions of such Plan. Pursuant to the Plan,
Executive shall have an opportunity to receive incentive compensation of
up to a
maximum of 50% of Executive’s annual base salary. The incentive
compensation payable for a particular fiscal year will be based upon the
attainment of the performance goals in effect under the Plan for such year
and
will be paid in accordance with the terms of the Plan and at the
sole discretion of the Board.
2.03 Deferred
Compensation Plan. Executive may continue to participate in the
First Mid-Illinois Bancshares, Inc. Deferred Compensation Plan in accordance
with the terms and conditions of such Plan.
2.04 Supplemental
Executive Retirement Plan. Executive shall continue to
participate in the First Mid-Illinois Bancshares, Inc. Supplemental Executive
Retirement Plan, including the Participation Agreement as amended and restated
effective as of January 1, 2005, in accordance with the terms and conditions
of
such Plan and Participation Agreement as in effect from time to time; provided,
however, that the retirement benefit payable under the Plan upon Executive’s
retirement shall be $50,000 per year with unreduced benefits commencing at
age
63.
2.05 Stock
Option Plan. Executive may participate in the First Mid-Illinois
Bancshares, Inc. 2007 Stock Incentive Plan.
2.06 Vacation. Executive
shall be entitled to four (4) weeks of paid vacation each year during the
term
of this Agreement.
2.07 Fringe
Benefits. The Company shall provide the following additional
fringe benefits to Executive:
|
(a)
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Use
of a Company-owned or leased vehicle for professional and personal
use.
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(b)
|
An
amount equal to the annual dues for a Class “H” membership at the Mattoon
Golf and Country Club.
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(c)
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Use
of a cellular phone for work-related calls.
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2.08 Other
Benefits. Executive shall be eligible (to the extent he
qualifies) to participate in any other retirement, health, accident and
disability insurance, or similar employee benefit plans as may be maintained
from time to time by the Company for its other executives or employees subject
to and on a consistent basis with the terms, conditions and overall
administration of such plans.
2.09 Business
Expenses. Executive shall be entitled to reimbursement by the
Company for all reasonable expenses actually and necessarily incurred by
him on
its behalf in the course of his employment hereunder and in accordance with
expense reimbursement plans and policies of the Company from time to time
in
effect for executive employees.
2.10 Withholding. All
salary, incentive compensation and other benefits provided to Executive pursuant
to this Agreement shall be subject to withholding for federal, state or local
taxes, amounts withheld under applicable employee benefit plans, policies
or
programs, and any other amounts that may be required to be withheld by law,
judicial order or otherwise or by agreement with, or consent of,
Executive.
ARTICLE
THREE
DEATH
OF EXECUTIVE
This
Agreement shall terminate prior to
the end of the term described in Section 1.01 upon Executive’s termination of
employment with the Company due to his death. Upon Executive’s
termination due to death, the Company shall pay Executive’s estate the amount of
Executive’s base salary and his accrued but unused vacation time earned through
the date of such death and any incentive compensation earned for the preceding
fiscal year that is not yet paid as of the date of such death.
ARTICLE
FOUR
TERMINATION
OF EMPLOYMENT
Executive’s
employment with the Company
may be terminated by Executive or by the Company at any time for any
reason. Upon Executive’s termination of employment prior to the end
of the term of the Agreement, the Company shall pay Executive as
follows:
4.01 Termination
by the Company for Other than Cause. If the Company terminates
Executive’s employment for any reason other than Cause, the Company shall pay
Executive the following:
(a) An
amount equal to
Executive’s monthly base salary in effect at the time of such termination of
employment for a period of twelve (12) months thereafter. Such amount
shall be paid to Executive periodically in accordance with the Company’s
customary payroll practices for executive employees.
(b) The
base salary and
accrued but unused paid vacation time earned through the date of termination
and
any incentive compensation earned for the proceeding fiscal year that is
not yet
paid.
(c) Continued
coverage for
executive and/or Executive’s family under the Company’s health plan pursuant to
Title I, Part 6 of the Employee Retirement Income Security Act of 1974 (“COBRA”)
and for such purpose the date of Executive’s termination of employment shall be
considered the date of the “qualifying event” as such term is defined by
COBRA. During the twelve month period beginning on the date of such
termination, the Executive shall be charged for such coverage in the amount
that
he would have paid for such coverage had he remained employed by the Company,
and for the duration of the COBRA period, the Executive shall be charged
for
such coverage in accordance with the provisions of COBRA.
For
purposes of this Agreement, “Cause”
shall mean Executive’s (i) conviction in a court of law of (or entering a plea
of guilty or no contest to) any crime or offense involving fraud, dishonesty
or
breach of trust or involving a felony; (ii) performance of any act which,
if
known to the customers, clients, stockholders or regulators of the Company,
would materially and adversely impact the business of the Company; (iii)
act or
omission that causes a regulatory body with jurisdiction over the Company
to
demand, request, or recommend that Executive be suspended or removed from
any
position in which Executive serves with the Company; (iv) substantial
nonperformance of any of his obligations under this Agreement; (v)
misappropriation of or intentional material damage to the property or business
of the Company or any affiliate; or (vi) breach of Article Five or Six of
this
Agreement.
4.02 Termination
Following a Change in Control. Notwithstanding Section 4.01, if,
following a Change in Control, Executive’s employment is terminated by the
Company (or any successor thereto) for any reason other than Cause, or if
Executive terminates his employment because of a decrease in his then current
base salary or a substantial diminution in his position and responsibilities,
the Company (or any successor thereto) shall pay Executive the
following:
(a) Two times Executive’s annual base salary in effect at the time of such
termination. Such amount shall be paid periodically in accordance
with the Company’s or successor’s customary payroll practices for executive
employees.
(b)
An amount equal to the incentive
compensation earned by or paid to Executive for the fiscal year immediately
preceding the year in which Executive’s termination of employment
occurs. Such amount shall be paid to Executive in a lump sum as soon
as practicable after the date of his termination.
(c)
The base salary and accrued but
unused paid vacation time earned through the date of termination and any
incentive compensation earned for the preceding fiscal year that is not yet
paid.
(d)
Continued coverage for Executive
and/or Executive’s family under the Company’s health plan pursuant to Title I,
Part 6 of the Employee Retirement Income Security Act of 1974 (“COBRA”) and for
such purpose the date of Executive’s termination of employment shall be
considered the date of the “qualifying event” as such term is defined by
COBRA. During the twelve month period beginning on the date of such
termination, the Executive shall be charged for such coverage in the amount
that
he would have paid for such coverage had he remained employed by the Company,
and for the duration of the COBRA period, the Executive shall be charged
for
such coverage in accordance with the provisions of COBRA.
For
the purposes of this Agreement,
“Change of Control” shall have the meaning as set forth in the First
Mid-Illinois Bancshares, Inc. 2007 Stock Incentive Plan (or successor stock
incentive plan maintained by the Company).
4.03 Other
Termination of Employment. If, prior to the end of the term of
this Agreement, the Company terminates Executive’s employment for Cause, or if
Executive terminates his employment for any reason other than as described
in
Section 4.02 above, the Company shall pay Executive the base salary and accrued
but unused paid vacation time earned through the date of such termination
and
any incentive compensation earned for the preceding fiscal year that is not
yet
paid.
4.04 Key
Employee Status. If as the time of such termination of employment
Executive is a “Key Employee” as defined in Section 416(i) of the Internal
Revenue Code (without reference to paragraph thereof), and the amounts payable
to Executive pursuant to Article Four are subject to Section 409A of the
Internal Revenue Code, payment of such amounts shall not commence until six
months following Manager’s termination of employment, with the first payment to
include the payments that otherwise would have been made during such six-month
period.
ARTICLE
FIVE
CONFIDENTIAL
INFORMATION
5.01 Non-Disclosure
of Confidential Information. During his employment
with Company, and after his termination of such employment with the Company,
Executive shall not, in any form or manner, directly or indirectly, use,
divulge, disclose or communicate to any person, entity, firm, corporation
or any
other third party, any Confidential Information, except as required in the
performance of Executive’s duties hereunder, as required by law or as necessary
in conjunction with legal proceedings.
5.02 Definition
of Confidential Information. For the purposes of this Agreement,
the term “Confidential Information” shall mean any and all information either
developed by Executive during his employment with the Company and used by
the
Company or its affiliates or developed by or for the Company or its affiliates
of which Executive gained knowledge by reason of his employment with the
Company
that is not readily available in or known to the general public or the industry
in which the Company or any affiliate is or becomes engaged. Such
Confidential Information shall include, but shall not be limited to, any
technical or non-technical data, formulae, compilations, programs, devices,
methods, techniques, procedures, manuals, financial data, business plans,
lists
of actual or potential customers, lists of employees and any information
regarding the Company’s or any affiliate’s products, marketing or
database. The Company and Executive acknowledge and agree that such
Confidential Information is extremely valuable to the Company and may constitute
trade secret information under applicable law. In the event that any
part of the Confidential Information becomes generally known to the public
through legitimate origins (other than by the breach of this Agreement by
Executive or by other misappropriation of the Confidential Information),
that
part of the Confidential Information shall no longer be deemed Confidential
Information for the purposes of this Agreement, but Executive shall continue
to
be bound by the terms of this Agreement as to all other Confidential
Information.
5.03 Delivery
upon Termination. Upon termination of Executive’s employment with
the Company for any reason, Executive shall promptly deliver to the Company
all
correspondence, files, manuals, letters, notes, notebooks, reports, programs,
plans, proposals, financial documents, and any other documents or data
concerning the Company’s or any affiliate’s customers, database, business plan,
marketing strategies, processes or other materials which contain Confidential
Information, together with all other property of the Company or any affiliate
in
Executive’s possession, custody or control.
ARTICLE
SIX
NON-COMPETE
AND NON-SOLICITATION COVENANTS
6.01 Covenant
Not to Compete. During the term of this Agreement and for a
period of two years following the later of the termination of Executive’s
employment for any reason or the last day of the term of the Agreement,
Executive shall not, on behalf of himself or on behalf of another person,
corporation, partnership, trust or other entity, within any county in which
the
Company or any affiliate conducts business.
(a) Directly
or indirectly
own, manage, operate, control, participate in the ownership, management,
operation or control of, be connected with or have any financial interest
in, or
serve as an officer, employee, advisor, consultant, agent or otherwise to
any
person, firm, partnership, corporation, trust or other entity which owns
or
operates a business similar to that of the Company or its
affiliates.
(b) Solicit
for sale,
represent, and/or sell Competing Products to any person or entity who or
which
was the Company’s customer or client during the last two years of Executive’s
employment. “Competing Products,” for purposes of this Agreement,
means products or services which are similar to, compete with, or can be
used
for the same purposes as products or services sold or offered for sale by
the
Company or any affiliate or which were in development by the Company or any
affiliate within the last two years of Executive’s employment.
6.02 Covenant
Not to Solicit. For a period of two years following the later of
the termination of Executive’s employment for any reason or the last day of the
term of this Agreement, Executive shall not:
(a) Attempt
in any manner to
solicit from any client or customer business of the type performed by the
Company or any affiliate or persuade any client or customer of the Company
or
any affiliate to cease to do such business or to reduce the amount of such
business which any such client or customer has customarily done or contemplates
doing with the Company or any affiliate, whether or not the relationship
between
the Company or affiliate and such client or customer was originally established
in whole or in part through Executive’s efforts.
(b) Render
any services of
the type rendered by the Company or any affiliate for any client or customer
of
the Company.
(c) Solicit
or encourage, or
assist any other person to solicit or encourage, any employees, agents or
representatives of the Company or an affiliate to terminate or alter their
relationship with the Company or any affiliate.
(d) Do
not cause to be done,
directly or indirectly, any acts which may impair the relationship between
the
Company or any affiliate with their respective clients, customers or
employees.
ARTICLE
SEVEN
REMEDIES
Executive
acknowledges that compliance
with the provisions of Articles Five and Six herein is necessary to protect
the
business, goodwill and proprietary information of the Company and that a
breach
of these covenants will irreparably and continually damage the Company for
which
money damages may be inadequate. Consequently, Executive agrees that,
in the event that he breaches or threatens to breach any of these provisions,
the Company shall be entitled to both (a) a temporary, preliminary or permanent
injunction in order to prevent the continuation of such harm; and (b) money
damages insofar as they can be determined. In addition, the Company
will cease payment of all compensation and benefits under Articles Three
and
Four hereof. In the event that any of the provisions, covenants,
warranties or agreements in this Agreement are held to be in any respect
an
unreasonable restriction upon the Executive or are otherwise invalid, for
whatsoever cause, then the court so holding shall reduce, and is so authorized
to reduce, the territory to which it pertains and/or the period of time in
which
it operates, or the scope of activity to which it pertains or effect any
other
change to the extent necessary to render any of the restrictions of this
Agreement enforceable.
ARTICLE
EIGHT
MISCELLANEOUS
8.01 Successors
and Assignability.
(a) No rights or obligations of the Company under this Agreement may
be assigned or transferred except that the Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to
all or substantially all of the business and/or assets of the Company to
expressly assume and agree to perform this Agreement in the same manner and
to
the same extent that the Company would be required to perform it if no such
succession had taken place.
(b) No rights or obligations of Executive under this Agreement may be
assigned or transferred by Executive other than his rights to payments or
benefits hereunder which may be transferred only by will or the laws of descent
and distribution.
8.02 Entire
Agreement. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
may
not be modified except in writing by the parties hereto. Furthermore,
the parties hereto specifically agree that all prior agreements, whether
written
or oral, relating to Executive’s employment by the Company shall be or no
further force or effect from and after the date of hereof.
8.03 Severability. If
any phrase, clause or provision of this Agreement is deemed invalid or
unenforceable, such phrase, clause or provision shall be deemed severed from
this Agreement, but will not affect any other provisions of this Agreement,
which shall otherwise remain in full force and effect. If any
restriction or limitation in this Agreement is deemed to be unreasonable,
onerous or unduly restrictive, it shall not be stricken in its entirety and
held
totally void and unenforceable, but shall be deemed rewritten and shall remain
effective to the maximum extent permissible within reasonable
bounds.
8.04 Controlling
Law and Jurisdiction. This Agreement shall be governed by and
interpreted and construed according to the laws of the State of
Illinois. The parties hereby consent to the jurisdiction of the state
and federal courts in the State of Illinois in the event that any disputes
arise
under this Agreement.
8.05 Notices. All
notices, requests, demands and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given (a) on the
date
of service if served personally on the party to whom notice is to be given;
(b)
on the day after delivery to an overnight courier service; (c) on the day
of
transmission if sent via facsimile to the facsimile number given below; or
(d)
on the third day after mailing, if mailed to the party to whom notice is
to be
given, by first class mail, registered or certified, postage prepaid and
properly addressed, to the party as follows:
If
to
Executive: Xxxxxxx
X. Xxxxxxx
0
Xxxxxxx Xxx Xxxx
Xxxxxxx,
XX 00000
If
to the
Company: First
Mid-Illinois Bancshares, Inc.
0000
Xxxxxxxxxx Xxxxxx
Xxxxxxx
XX 00000
Facsimile:
000-000-0000
Attention:
Chairman of Compensation
Committee
Any
party may change its address for
the purpose of this Section by giving the other party written notice of its
new
address in the manner set forth above.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
FIRST
MID-ILLINOIS BANCSHARES,
INC.
By:/s/
Xxxxxxx X.
Xxxxxxxx
Title:
Director
EXECUTIVE:
/s/ Xxxxxxx X.
Xxxxxxx
Xxxxxxx
X. Xxxxxxx
