EMPLOYMENT AGREEMENT
Exhibit
99.1
This
EMPLOYMENT AGREEMENT (this “Agreement”), dated as of June 27, 2008, is by and
among Castle Creek Capital, L.L.C a California limited liability company (the
“Company”), First Chicago Bancorp, a Delaware corporation (“FCB”), White River
Capital, Inc., an Indiana corporation (“WRC”), and Xxxx X. Xxx, an individual
residing in California (“Executive”).
WHEREAS,
Executive has served as the President and Chief Operating Officer of WRC since
December, 2004 and is a Vice President of the Company; and
WHEREAS,
WRC has entered into an Agreement and Plan of Merger with FCB, dated as of the
date of this Agreement (the “Merger Agreement”), whereby, at the Effective Time
(as defined in the Merger Agreement) (i) FCB will be merged with and into WRC
(the “Merger”), and (ii) the separate corporate existence of FCB will thereupon
cease and WRC will be the surviving corporation in the Merger; and
WHEREAS,
Executive is an integral part of the management of the Company, and the parties
hereto believe that it is critical to the continued success of WRC, and to the
ultimate success of the Merger that Executive continue to be employed with the
Company after the Merger as its Executive Vice President for a one year period,
and Executive wishes to accept such employment on the terms set forth below,
effective from and after the consummation of the Merger (the “Effective
Date”).
NOW,
THEREFORE, in consideration of the premises and mutual covenants herein and for
other good and valuable consideration, the parties hereby agree as
follows:
1. Effectiveness. This
Agreement shall be effective as of the Effective Date (other than with respect
to the covenants set forth in the immediately following sentence, which shall be
effective immediately) conditioned upon the consummation of the Merger; in the
event the Merger does not occur for any reason before the date the Merger
Agreement terminates in accordance with its terms, this Agreement shall
terminate, and shall be of no further force or effect. Provided that
the Effective Date is no later than December 31, 2008, from and after the date
of this Agreement and continuing until the Effective Date, Executive agrees not
to terminate his employment with the Company or WRC on or prior to the Effective
Date unless Good Reason exists, and the Company and WRC agrees not to take any
actions that would constitute Good Reason for Executive to terminate his
employment, and not to otherwise terminate the employment
of Executive for any reason (other than for theft or embezzlement
against the Company or WRC, after notice to FCB and a reasonable opportunity for
FCB to make inquiry into the matter and respond) on or prior to the Effective
Date. As of the Effective Date, this Agreement shall supersede any
other agreement or understanding Executive has with respect to his employment
with the Company, and the terms and conditions of Executive’s employment with
the Company shall be governed only by this Agreement. Executive
hereby agrees that he shall not be paid any amounts, nor shall Executive be
provided with any benefits or other compensation of any kind (including any
acceleration of compensation or benefits) in connection with, or from and after,
the Merger (including in connection with any subsequent termination
of
employment
or vesting date that occurs from and after the Merger) other than as set forth
in this Agreement. The parties hereto represent, acknowledge and
agree that the payments to be provided to Executive from and after the Effective
Date under the terms and conditions of this Agreement represent reasonable
compensation to Executive in exchange for the personal services to be rendered
by Executive for periods from and after the Merger.
2. Definitions. The terms
defined in this Section 2 shall have the respective meanings indicated below for
all purposes of this Agreement.
(a) Affiliate. “Affiliate” of a
Person means a Person that directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, the
first Person. “Control” means the possession, directly or indirectly, of the
power to direct or cause the direction of the management policies of a Person,
whether through the ownership of voting securities, by contract, as trustee or
executor, or otherwise.
(b) Cause. “Cause” shall mean
any one or more of the following:
i. engaging
in a material dishonest act, including without limitation any material
misrepresentation or intentional omission to state a material fact to the
Company, WRC or the WRC Board, willful breach of fiduciary duty,
misappropriation or fraud against the WRC, the Company or any of their
Affiliates (the “Group”);
ii. any
indictment or similar charge against Executive by a governmental authority
alleging the commission of a felony, or a guilty plea or no-contest plea by
Executive to a felony;
iii. material
failure by Executive to follow the Company or WRC’s general policies, reasonable
directives or orders applicable to officers of the Company after failing to cure
prior similar failures within thirty (30) days of receiving written notice
thereof from the WRC Board;
iv. intentional
destruction or theft of any member of the Group’s property or falsification of
documents of any member of the Group;
v. a
breach by Executive of the provisions of Section 14; or
vi. a
material breach by Executive of any other provision of this Agreement and the
failure by Executive to cure such breach within thirty (30) days of the date on
which the Company gives Executive notice thereof.
(c) Date of Termination. “Date
of Termination” shall mean in the case of Executive’s death, the date of death,
in the case of Disability, thirty (30) days after Notice of Termination is given
(provided Executive shall not have returned to the full-time performance of his
duties during such thirty (30) day period), and
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in all
other cases, the date specified in the Notice of Termination, which shall be at
least thirty (30) days after the date of the Notice of Termination, unless the
termination is by the Company for Cause or by Executive for Good
Reason.
(d) Disability. “Disability”
shall occur if as a result of Executive’s incapacity due to physical or mental
illness, Executive shall have been absent from the full-time performance of his
duties with the Company for three (3) consecutive months.
(e) Good Reason. “Good Reason”
shall mean any one or more of the following bases for termination of Executive’s
employment by Executive during the Term:
i. the
removal of Executive as Executive Vice President of the Company without
Cause;
ii. the
assignment to Executive of any duties inconsistent in any material respect with
Executive’s position, authority, duties or responsibilities as contemplated by
Section 6(a) of this Agreement, excluding for this purpose an isolated,
insubstantial or inadvertent action not taken in bad faith and which is remedied
by the Company promptly after receipt of notice thereof given by
Executive;
iii. a
material change of more than 50 miles in the geographical location at which
Executive must perform his duties;
iv. any
action by the Company to materially reduce Executive’s base compensation below
the amount established in Section 7; or any failure by the Company that would
constitute a material breach of this Agreement if the Company has failed to cure
such breach within thirty (30) days of the date on which Executive gives written
notice thereof to the WRC Board or the Company.
(f) Notice of Termination. Any
termination of Executive’s employment by either the Company or Executive or
both, as the case may be, except for a termination based on Executive’s death,
shall be communicated by a written Notice of Termination.
(g) WRC Board. “WRC Board”
shall mean the Board of Directors of WRC or a duly authorized committee of such
Board.
(h) Person. “Person” shall mean
any natural person, corporation, partnership, association, limited liability
company, trust, governmental authority, or other entity.
3. Employment. The
Company hereby employs Executive and Executive hereby accepts employment with
the Company for the Term set forth in Section 4 below, in the
position
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and with
the duties and responsibilities set forth in Sections 5 and 6 below, and upon
the other terms and conditions hereinafter stated.
4. Term. Executive’s
employment as the Executive Vice President of the Company under this Agreement
shall be for the period commencing on the Effective Date and terminating one
year after the Effective Date, or upon Executive’s earlier death, termination by
reason of Disability or termination by mutual agreement or by either party
pursuant to Section 11 (the “Term”).
5. Position. Although
Executive will be employed by the Company, Executive shall serve as Executive
Vice President of WRC.
6. Duties and
Responsibilities.
(a) The
Company hereby engages Executive as a full-time executive employee and Executive
accepts such employment, on the terms and subject to the conditions set forth in
this Agreement. During the Term, Executive shall devote all of his business time
and best efforts to, and shall perform faithfully, loyally and efficiently, his
duties as Executive Vice President of the Company and shall exercise such powers
and fulfill such responsibilities as may be duly assigned to or vested in him by
the WRC Board or the Chief Executive Officer of the Company, consistent with the
responsibilities of the Executive Vice President of the Company.
(b) During
the Term, Executive will not engage in other employment or consulting work or
any trade or business for his own account or on behalf of any other
Person. Notwithstanding the foregoing, Executive may (i) serve on
such corporate, civic, industry or charitable boards or committees as are
approved by the WRC Board and/or the Company (with the exception of Executive’s
membership on the board of Xxxxxxxxxx Bank, a subsidiary of Affinity Financial
Corporation, which shall not require approval of the WRC Board), and (ii) manage
his own and his family’s personal investments, provided that the
activities permitted by clauses (i) and (ii) above shall not, individually or in
the aggregate, interfere in any material respect with the performance of
Executive’s responsibilities hereunder.
7. Salary/Bonus.
(a) For
all services rendered by Executive under this Agreement, the Company shall pay
to Executive an aggregate annual base salary at the rate of $190,000, payable,
in equal installments, in accordance with the Company’s regular payroll
procedures.
(b) As
soon as practicable following the end of 2008, the Executive will receive an
annual performance bonus of 100% of his annual base salary, or a pro-rated
portion thereof if he is no longer employed by the Company at that time (unless
this Agreement is terminated by the Company for Cause or by Executive without
Good Reason). The Executive shall also receive a bonus in 2009 of
100%
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of his
base salary pro-rated for that portion of 2009 in which the Executive is
employed by the Company. If Executive is still employed by the Company in 2010,
Executive shall also receive an annual performance bonus in 2010 of 100% of his
annual base salary pro-rated for that portion of 2010 in which Executive is
employed by the Company (unless this Agreement is terminated by the Company for
Cause or by Executive without Good Reason). Such bonuses shall be
payable in accordance with the Company’s regular payroll practices.
8. Employee Benefits. During
the Term, the Company shall provide or cause to be provided to Executive and to
Executive’s dependents, at the Company’s expense, substantially similar
disability, medical and dental benefits provided to other similarly situated
executives of WRC. During any waiting period for insurance
eligibility, any COBRA costs incurred by or with respect to Executive and
Executive’s dependents will be paid by the Company.
9. Vacation. Executive shall
be entitled to four (4) weeks vacation during the Term. In the event that the
full vacation is not taken by Executive during the Term, no vacation time shall
accrue for use in future periods, except as approved by the WRC
Board.
10. Business
Expenses. Executive will be reimbursed for all reasonable,
ordinary and necessary business expenses incurred by Executive in connection
with Executive’s employment (to be supported by receipts and other documentation
as required by the Internal Revenue Code of 1986, as amended (the “Code”)), and
in conformance with the Company’s normal procedures). Except as otherwise
expressly provided herein, to the extent any expense reimbursement under this
Section 10 is determined to be subject to Section 409A of the Code (“Section
409A”), the amount of any such expenses eligible for reimbursement in one
calendar year shall not affect the expenses eligible for reimbursement in any
other taxable year, in no event shall any expenses be reimbursed after the last
day of the calendar year following the calendar year in which Executive incurred
such expenses, and in no event shall any right to reimbursement be subject to
liquidation or exchange for another benefit.
11. Termination. Subject to the
terms and conditions of this Agreement, either the Company or Executive may
terminate the employment of Executive at any time prior to or upon the
expiration of the Term, with or without Cause or Good Reason.
12. Payments During Disability and Upon
Termination. Executive or his estate shall be entitled to the
following during a period of Disability, upon Executive’s death, or upon
termination of Executive’s employment by Executive or the Company, as the case
may be.
(a) During
any period that Executive fails to perform his full-time duties with the Company
as a result of incapacity due to physical or mental illness, until such time as
Executive returns to the full-time performance of his duties or the Date of
Termination if Executive’s employment is terminated for Disability, Executive
shall continue to receive his base salary at the rate in effect at the
commencement of any such period minus any disability benefits received by him
under any insurance or disability plan of the Company. If terminated for
Disability or in the event of his death, Executive or his estate, as the case
may be,
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shall
additionally be entitled to receive the severance compensation provided for in
subsection 12(c)(i) (reduced by any disability benefits received by him under
any insurance or disability plan of the Company), and subsection
12(c)(ii).
(b) If
(1) Executive’s employment is terminated by Executive without Good Reason or (2)
Executive’s employment is terminated by the Company for Cause, then the Company
shall pay Executive his full base salary through the Date of Termination at the
rate in effect at the time Notice of Termination is given, plus all other
amounts or benefits to which Executive is entitled through such date under any
plan, arrangement or practice in effect at the time of such termination, minus
any amounts owed by Executive to the Company. Executive shall not be
entitled to receive any bonus applicable to the period in which termination
occurs, and the Company shall have no further obligations to Executive under
this Agreement (other than under COBRA and for vested and accrued benefits and
accrued and unpaid vacation).
(c) If
(1) Executive’s employment is terminated by the Company other than for Cause;
(2) Executive’s employment is terminated by Executive for Good Reason, (3) by
mutual agreement of Executive and the Company, or (4) the Executive’s employment
terminates at the expiration of the Term, then Executive shall be entitled to
the following:
i. Within
30 days of the Date of Termination, the Company shall pay to Executive a lump
sum payment in cash equal to: (A) any unpaid base salary through the Date of
Termination, plus (B) one year’s base salary at the rate in effect at the Date
of Termination, plus (C) $190,000; and
ii. Executive
shall be entitled to any other compensation and benefits granted under this
Agreement (other than base salary and the $190,000 payment, which are addressed
in subparagraph (i)), for and through the end of the then-remaining Term. Such
benefits shall be determined in accordance with the Company’s employee benefit
plans and other applicable programs, policies and practices then in effect as
though Executive was still then in the employ of the Company. The
provisions of this Agreement, and any payment provided for hereunder, shall not
reduce any amounts otherwise payable, or in any way diminish Executive’s
existing rights, or rights which accrue solely as a result of the passage of
time under any benefit plan, employment agreement or other contract, plan or
arrangement.
13. Confidentiality. Except as
provided in the next two sentences, Executive covenants and agrees that all
information, knowledge or data of or pertaining to the Group, or pertaining to
any other Person with which they or any of them may do business during the Term
and which is not generally known in the relevant trade or industry (and whether
relating to methods, merchandising, processes, techniques, discoveries, pricing,
sales practices, marketing or any other proprietary matters) (the “Company
Information”) shall be kept secret and
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confidential
at all times during and after the termination or expiration of this Agreement
and shall not be used or divulged by him outside the scope of his employment as
contemplated by this Agreement, except as WRC and/or the Company may otherwise
expressly authorize. In the event that Executive is requested in a
judicial, administrative or governmental proceeding to disclose any of the
Company Information, Executive will promptly so notify the Company so that the
Company may seek a protective order at the Company’s expense or other
appropriate remedy and/or waive compliance with this Agreement. If such
protective order or other remedy is not obtained or the Company waives
compliance with this Agreement and disclosure of any of the Company Information
is required, Executive may furnish the material so required to be furnished, but
Executive will furnish only that portion of the Company Information which is
legally required and will exercise his best efforts to ensure that confidential
treatment will be accorded the Company Information furnished.
14. Non-Solicitation/No-Hire. Executive
agrees and acknowledges that the services of Executive pursuant to this
Agreement are unique and extraordinary, and that the Group will be dependent
upon Executive for the development and growth of their business and related
functions. Executive agrees, during the Term and for a period of two years after
the Date of Termination or expiration of the Term, not to conduct or participate
(directly or indirectly, including through one or more Affiliates)
in:
(a) Hiring,
attempting to hire or assisting any other Person in hiring or attempting to
hire, or inducing to leave the employ of any member of the Group, any employee
or officer of any member of the Group, or any person who was an employee or
officer of any member of the Group within the six-month period prior to the Date
of Termination. This Section 14 shall not apply to Executive with respect to
Xxxxxx Xxxxxxx;
(b) Soliciting
the business on behalf of himself or any other person with respect to any
business competitive with the business of any member of the Group as such
business exists on the date hereof with respect to any vehicle dealers who were
clients of the Company or WRC during the 12-month period prior to the Date of
Termination.
Executive
agrees that if Executive acts in violation of this Section, the number of days
Executive is in such violation will be added to any periods of limitation on
Executive’s activities specified herein.
15. Section 409A. If and to the
extent that any payment or benefit is determined by the Company to constitute
“non-qualified deferred compensation” subject to Section 409A and is payable
hereunder to Executive by reason of his termination of employment, then (a) such
payment or benefit shall be made or provided to Executive only upon a
“separation from service” as defined for purposes of Section 409A under
applicable regulations and (b) if Executive is a “specified employee” (within
the meaning of Section 409A and as determined by the Company), such payment or
benefit shall not be made or provided before the date that is six months after
the date of Executive’s separation from service. Any amount not paid in respect
of the six month period specified in the preceding sentence will be paid to
Executive in a lump sum with the first
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payment
made after the end of such six month period (or if no other payment is then due,
then promptly after the expiration of such six month period.)
16. Monies Owed to the
Company. Upon the termination of Executive’s employment with
the Company, Executive hereby authorizes the Company to deduct from Executive’s
final wages or other monies due to Executive (other than amounts that would
constitute “deferred compensation” pursuant to Section 409A) all debts or
financial obligations owed to the Company by Executive.
17. Remedies. Executive
understands and agrees that the Group will be irreparably damaged in the event
that Section 14 of this Agreement is violated. Executive agrees that the Company
and WRC shall be entitled (in addition to any other remedy to which it may be
entitled, at law or in equity) to an injunction to redress breaches of such
Section of this Agreement and to specifically enforce the terms and provisions
thereof.
18. Successors and
Assigns. This Agreement is a personal contract, and the rights
and interests of Executive hereunder and under the awards and plans referred to
herein may not be sold, transferred, assigned, pledged, encumbered, or
hypothecated by him, except as may be expressly permitted by the provisions of
such awards or plans and that payments due Executive hereunder shall be payable
to his heirs or fiduciaries upon his death. Except as may be expressly provided
otherwise herein, this Agreement shall be binding upon the Company and inure to
the benefit of the Company and its Affiliates, and its successors and assigns,
including (but not limited to) any corporation or other entity which may acquire
all or substantially all of the Company’s assets or business or into or with
which the Company or an Affiliate may be consolidated or merged.
19. Jurisdiction and Governing
Law. Any controversy or claim arising out of or relating to
this Agreement, or any breach thereof shall be governed by and construed in
accordance with the laws of California, without giving effect to principles of
conflicts of laws thereof.
20. Entire Agreement. This
Agreement contains all the understandings between the parties hereto pertaining
to the matters referred to herein, and supersedes all undertakings and
agreements, whether oral or in writing, previously entered into by them with
respect thereto. No representations or warranties of any kind or
nature relating to any member of the Group or their respective businesses,
assets, liabilities, operations, future plans or prospects have been made by or
on behalf of the Group to Executive, nor have any representations or warranties
of any kind or nature been made by Executive to the Group.
21. Amendment or Modification,
Waiver. No provision of this Agreement may be amended or
waived unless such amendment or waiver is agreed to in writing, signed by
Executive and by a duly authorized officer of each of the parties to this
Agreement. No waiver by any party hereto of any breach by another party hereto
of any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of a similar or dissimilar condition or provision
at the same time, any prior time or any subsequent time.
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22. Notices. Any notice to be
given hereunder shall be in writing and delivered personally or by overnight
courier or sent by registered or certified mail, postage prepaid, return receipt
requested, addressed to each of the parties to this Agreement:
To:
Xxxx X.
Xxx
000 Xxx
Xxxxxxx Xxxxx, Xxxxxx Xxxxx XX 00000
With a
copy to:
Xxxx,
Forward, Xxxxxxxx & Scripps LLP
000 X.
Xxxxxxxx, Xxxxx 0000
Xxx
Xxxxx, XX 00000
Attention:
Xxxxx X. Xxxxxx
Facsimile:
(000) 000-0000
To:
Castle
Creek Capital, L.L.C.
XX Xxx
0000
Xxxxxx
Xxxxx Xx, Xxxxxxxxx 00000
With a
copy to:
First
Chicago Bancorp
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxx,
XX 00000
With a
copy to:
White
River Capital, Inc.
0000
Xxxxxxxxxx Xxx, Xxxxx X
Xxxxxxxxxxxx,
XX 00000
With a
copy to:
Xxxxxxxx
& Xxxxxxxx LLP
000 Xxxxx
Xxxxxx
Xxx Xxxx,
XX 00000
Attention: Xxxx
X. X’Xxxxx
Facsimile:
(000) 000-0000
Any
notice delivered personally shall be deemed given on the date delivered, any
notice transmitted by fax machine shall be deemed delivered upon receipt of
confirmation of fax transmission, any notice delivered by overnight courier
shall be deemed given the day after
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deposit
with a courier, and any notice sent by registered or certified mail, postage
prepaid, return receipt requested, shall be deemed given three days after
mailing.
23. Severability. If any
provision of this Agreement or the application of any such provision to any
party or circumstances shall be determined by any court of competent
jurisdiction to be invalid and unenforceable to any extent, the remainder of
this Agreement or the application of such provision to such person or
circumstances other than those to which it is so determined to be invalid and
unenforceable, shall not be affected thereby, and each provision hereof shall be
validated and shall be enforced to the fullest extent permitted by
law.
24. Survivorship. The
respective rights and obligations of the parties hereunder shall survive any
termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations.
25. Headings. All descriptive
headings of sections and paragraphs in this Agreement are intended solely for
convenience, and no provision of this Agreement is to be construed by reference
to the heading of any section or paragraph.
26. Withholding Taxes. All
payments to Executive under this Agreement shall be reduced by any applicable
federal, state or city withholding taxes.
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This
Agreement may be executed in counterparts, each of which shall be deemed an
original and all of which together shall be one and the same
agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.
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Castle
Creek Capital, L.L.C
|
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| /s/ Xxxx X. Xxxxx | |
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By:
Xxxx X. Xxxxx
|
|
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Title:
Principal
|
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First
Chicago Bancorp:
|
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| /s/ Xxxxxxx X. Xxx | |
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By: Xxxxxxx
X. Xxx
|
|
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Title: Chief
Executive Officer
|
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White
River Capital, Inc.:
|
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| /s/ Xxxx X. Xxxxxxxxx, III | |
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By: Xxxx
X. Xxxxxxxxx, III
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Title: Chief
Executive Officer
|
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| /s/ Xxxx X. Xxx | |
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Xxxx
X. Xxx
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