EXHIBIT 10.1
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (this "Agreement"), is made and entered into
as of October 5, 2007 (the "Effective Date") by and between Centrue Financial
Corporation, Inc., a Delaware corporation (the "Employer"), and Xxxxxx X. Xxxxx
(the "Executive").
RECITALS
A. The Executive serves as a St. Louis Market President of
Employer, and its wholly-owned subsidiary, Centrue Bank (the "Bank").
B. The Employer and the Executive have made commitments to each
other on a variety of important issues concerning the Executive's employment,
including the performance that will be expected of the Executive, the
compensation the Executive will be paid, how long and under what circumstances
the Executive will remain employed and the financial details relating to any
decision that either the Employer or the Executive might ever make to terminate
this Agreement.
C. The Employer and the Executive desire to enter into this
Agreement as of the Effective Date and as of such date this Agreement shall
supersede all terms of any other employment or severance agreement, with
Employer, providing for benefits similar in nature to those contained herein,
except that the provisions of the Restricted Stock Agreement between the
Employer and the Executive (the "Restricted Stock Agreement") shall not be
affected in any way by this Agreement, nor shall the terms of the Restricted
Stock Agreement be deemed to apply to the terms, conditions and interpretation
of this Agreement.
D. The Employer recognizes that circumstances may arise in which
a future change of control of the Employer through acquisition or otherwise may
occur thereby causing uncertainty of employment without regard to the competence
or past contributions of the Executive, which uncertainty may result in the loss
of valuable services of the Executive and the Employer wishes to provide
reasonable security to the Executive against changes in the employment
relationship in the event of any such change of control.
NOW, THEREFORE, in consideration of the premises and of the covenants
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Employer and the Executive
agree as follows:
AGREEMENT
Section 1. Term With Automatic Renewal Provisions. The term of
this Agreement and the Executive's employment hereunder shall be for a term of
four (4) years commencing on the Effective Date, and shall automatically be
extended for one (1) additional year on the third anniversary of the Effective
Date and each anniversary thereafter, unless and until either party to this
Agreement provides written notice of non-renewal to the other party.
Section 2. Position and Duties. The Employer hereby employs the
Executive as set forth above or in such other senior executive capacity or
capacities as shall be mutually agreed between the Employer and the Executive.
During the period of the Executive's employment hereunder, the Executive shall
devote his best efforts and full business time, energy, skills and attention to
the business and affairs of the Employer, the Bank, and the other direct and
indirect subsidiaries of the Employer (together with the Bank, the
"Subsidiaries" or a "Subsidiary"). The Executive's duties and authority shall
consist of and include all duties and authority customarily performed and held
by persons holding equivalent positions with business organizations similar in
nature and size to the Employer, as such duties and authority are reasonably
defined, modified and delegated from time to time by the Board of Directors of
the Employer to which the Executive shall report during the term of this
Agreement (the "Board"). The Executive shall have the powers necessary to
perform the duties assigned to him and shall be provided such supporting
services, staff, secretarial and other assistance, office space and
accoutrements as shall be reasonably necessary and appropriate in the light of
such assigned duties. At least annually, Employer shall evaluate Executive's
performance in accordance with and as described in the Employer's standard
employment policies.
Section 3. Compensation. As compensation for the services to be
provided by the Executive hereunder, the Executive shall receive the following
compensation, expense reimbursement and other benefits:
(a) Base Compensation. The Executive shall receive an
aggregate annual minimum Base Salary of $325,000 payable in installments in
accordance with the regular payroll schedule of the Bank ("Base Salary"). Such
Base Salary shall be subject to review annually commencing in 2009 and shall be
maintained or increased during the term of this Agreement in accordance with the
Employer's established management compensation policies and plans.
(b) Performance Bonus. The Executive shall receive an
annual performance bonus, payable within sixty (60) days after the end of the
fiscal year of the Employer, in an amount equal to ten percent (10%) of the
pretax profit of the Bank's St. Louis, Missouri branch(es) (the "Annual
Performance Bonus") with up to half of the Annual Performance Bonus (i.e., five
percent (5%) of the Bank's St. Louis, Missouri branch(es)) available to be paid
to the Executive's direct reports for the applicable year. The amount, if any,
of the Annual Performance Bonus payable to the Executive's direct reports shall
be determined by the Executive and ratified by the Board.
(c) Reimbursement of Expenses. The Executive shall be
reimbursed, upon submission of appropriate vouchers and supporting
documentation, for all travel, entertainment and other out-of-pocket expenses
reasonably and necessarily incurred by the Executive in the performance of his
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duties hereunder and shall be entitled to attend seminars, conferences and
meetings relating to the business of the Employer consistent with the Employer's
or the Bank's established policies in that regard.
(d) Other Benefits. The Executive shall be entitled to
all benefits specifically established for him and, when and to the extent he is
eligible therefore, to participate in all plans and benefits generally accorded
to senior executives of the Employer and the Bank, including, but not limited
to, pension, profit-sharing, supplemental retirement, incentive compensation,
bonus, disability income, group life medical and hospitalization insurance,
director and officer liability insurance and similar or comparable plans, and
also to perquisites extended to similarly situated senior executives, provided,
however, that such plans, benefits and perquisites shall be no less than those
made available to all other employees of the Employer and the Bank.
(e) Vacations. The Executive shall be entitled to paid
time off for all Bank holidays. In addition to Bank holidays, the Executive
shall be entitled to annual paid time off ("PTO") which shall accrue each
calendar year and which shall be taken at a time or times mutually agreeable to
the Employer and the Executive; provided, however, that the Executive shall be
entitled to at least twenty five (25) PTO days annually.
(f) Withholding. The Employer shall be entitled to
withhold from amounts payable to the Executive hereunder, any federal, state or
local withholding or other taxes which it is from time to time required to
withhold. The Employer shall be entitled to rely upon the opinion of its legal
counsel with regard to any question concerning the amount or requirement of any
such withholding.
(g) Stock Awards. On the Effective Date, the Employer
shall grant to the Executive an option to purchase fifty thousand (50,000)
shares of the Employer's common stock (the "Option"). One fifth (1/5) of the
Option shall vest on the Effective Date and one fifth (1/5) shall vest on each
anniversary thereafter, until fully vested on the fourth (4th) anniversary. The
Option award shall provide that it shall fully vest upon a subsequent Change in
Control (as defined in the Employer's stock plan ("Stock Plan"), termination of
the Executive without Cause or by the Executive due to a Constructive Discharge
(with the terms Cause and Constructive Discharge as defined herein). The Option
will expire, to the extent not exercised, as of the seventh (7th) anniversary of
the Effective Date. The exercise price of the Option shall be based on the fair
market value of the Employer's common stock on the date of grant.
Section 4. Confidentiality and Loyalty. The Executive
acknowledges that during the course of his employment he may produce and have
access to material, records, data, trade secrets and information not generally
available to the public regarding the Employer and its Subsidiaries
(collectively, "Confidential Information"). Accordingly, during the Term and
during the Restricted Period (defined below), the Executive shall hold in
confidence and not directly or indirectly disclose, use, copy or make lists of
any such Confidential Information, except to the extent that such information is
or thereafter becomes lawfully available from public sources, or such disclosure
is authorized in writing by the Employer, required by a law or any competent
administrative agency or judicial authority, or otherwise as reasonably
necessary or appropriate in connection with the performance by the Executive of
his duties hereunder. All records, files, documents and other materials or
copies thereof relating to the business of the Employer and its Subsidiaries
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which the Executive shall prepare or use, shall be and remain the sole property
of the Employer, shall not be removed from the premises of the Employer or its
Subsidiaries, as the case may be, without the written consent of the Employer's
Chairman of the Board, except as reasonably necessary or appropriate in
connection with the performance by the Executive of his duties hereunder, and
shall be promptly returned to the Employer upon termination of the Executive's
employment hereunder. The Executive agrees to abide by the reasonable policies
of the Employer, as in effect from time to time, respecting avoidance of
interests conflicting with those of the Employer and its Subsidiaries.
Section 5. Termination.
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(a) Termination Without Cause. Either the Employer or the
Executive may terminate this Agreement and the Executive's employment hereunder
for any reason by delivering written notice of termination to the other party no
less than thirty (30) days before the effective date of termination, which date
will be specified in the notice of termination.
(b) Voluntary Termination by the Executive. If the
Executive voluntarily terminates his employment under this Agreement other than
pursuant to Section 5(d) (Constructive Discharge) or Section 5(h) (Termination
Upon Change of Control), then the Employer shall only be required to pay the
Executive such Base Salary as shall have accrued through the effective date of
such termination, the amount of any expense reimbursements for expenses incurred
prior to the effective date of such termination, provided that the Executive
shall have submitted all reimbursement requests within ten (10) business days of
the effective date of such termination, and any other amounts to which the
Executive is entitled under applicable law. None of the Employer or any of its
Subsidiaries shall have any further obligations to the Executive.
(c) Termination by Employer Without Cause.
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(i) In the event of the termination of this
Agreement by the Employer prior to the last day of the Term for any reason other
than a termination in accordance with the provisions of Section 5(e)
(Termination for Cause), then notwithstanding any mitigation of damages by the
Executive, the Employer shall pay the Executive a sum equal to two times the
Executive's Base Salary and Annual Performance Bonus (which shall be based on
the performance of the Bank's St. Louis, Missouri branches for the twelve (12)
whole calendar months prior to the date of termination and capped at five
percent (5%) of the pretax profit of the Bank's St. Louis, Missouri branch(es)).
In addition, the Employer shall pay the cost on behalf of the Executive for
continued coverage (COBRA continuation coverage) for the Executive and the
Executive's dependents (if applicable) under the health insurance programs
maintained by the Employer during the period of the Executive's COBRA
eligibility; provided, however, that the continued payment of these amounts by
the Employer shall not offset or diminish any compensation or benefits accrued
as of the date of termination.
(ii) Payment to the Executive will be made on a
monthly basis over the twelve (12) month period immediately following the
Executive's termination of employment. Payment of the amounts due under Section
5(c)(i) shall not be reduced in the event the Executive obtains other employment
following the termination of employment by the Employer.
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(iii) If the Employer is not in compliance with
its minimum capital requirements or if the payments required under subsection
(i) above would cause the Employer's capital to be reduced below its minimum
capital requirements, such payments shall be deferred until such time as the
Employer is in capital compliance.
(iv) In addition to the amounts payable to
Executive under this Section 3, Employer shall pay the Executive such Base
Salary as shall have accrued through the effective date of such termination, the
amount of any expense reimbursements for expenses incurred prior to the
effective date of such termination, provided that the Executive shall have
submitted all reimbursement requests within ten (10) business days of the
effective date of such termination, and any other amounts to which the Executive
is entitled under applicable law. Apart from the obligations of Section 3 and
Section 5, none of the Employer or any of its Subsidiaries shall have any
further obligations to the Executive under this Agreement.
(d) Constructive Discharge. If at any time during the
Term of this Agreement, except in instances where Employer has valid grounds to
terminate the Executive's employment pursuant to Section 5(e) (Termination for
Cause), the Executive is Constructively Discharged (as hereinafter defined),
then the Executive shall have the right, by written notice given to the Employer
not later than ninety (90) days after such Constructive Discharge, to terminate
his services hereunder, effective as of thirty (30) days after the date of such
notice, and the Executive shall have no rights or obligations under this
Agreement other than as provided in this Section 5(d), Section 4
(Confidentiality and Loyalty) and Section 6 (Non-Competition Covenant). In such
event, notwithstanding any mitigation of damages by the Executive, the Employer
shall pay the Executive a sum equal to two times the Executive's Base Salary and
the percentage of Annual Performance Bonus earned from the end of the calendar
year preceding until the last date of Executive's employment (based on five
percent (5%) of the pretax profit of the Bank's St. Louis, Missouri branch(es)),
such percentage being determined by dividing the number of days that have
occurred in the calendar year through the date of Executives services terminate
by 365. In addition, the Employer shall pay the cost on behalf of the Executive
for continued coverage (COBRA continuation coverage) for the Executive and the
Executive's dependents (if applicable) under the health insurance programs
maintained by the Employer during the period of the Executive's COBRA
eligibility; provided, however, that the continued payment of these amounts by
the Employer shall not offset or diminish any compensation or benefits accrued
as of the date of termination.
For purposes of this Agreement, the Executive shall be "Constructively
Discharged" upon the occurrence, without the Executive's express written
consent, of any of the following events, provided that the Executive gives at
least thirty (30) days prior written notice of Executive's termination:
(i) a reduction in the Executive's then current
Base Salary;
(ii) any change in the Executive's duties and
responsibilities that is inconsistent in any adverse respect with the
Executive's position(s), duties or responsibilities, or an adverse change in the
Executive's place in the organization chart or in the seniority of the
individual (or Board, where applicable) to whom the Executive shall report;
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(iii) a material and adverse change in the
Executive's titles or offices (including, if applicable, membership on a board
of directors);
(iv) a material reduction in the Executive's
annual target bonus opportunity (if any) (for this purpose, a reduction for any
year of over twenty percent (20%) of the Executive's annual target bonus
opportunity (if any) measured by the preceding year shall be considered
"material");
(v) requiring the Executive to be based more
than fifty (50) miles from the location of the Executive's place of employment
as of the Effective Date, except for normal business travel in connection with
the Executive's duties; or
(vi) a material breach of this Agreement by the
Employer.
An isolated, insubstantial and inadvertent action taken in good faith
and that is remedied within ten (10) days after receipt of notice thereof given
by the Executive shall not constitute a Constructive Discharge. The Executive's
right to terminate employment due to a Constructive Discharge shall not be
affected by incapacities due to mental or physical illness and the Executive's
continued employment or lack of notice hereunder shall not constitute consent
to, or a waiver of rights with respect to, any event or condition constituting a
Constructive Discharge.
The Executive shall be deemed to have been Constructively Discharged if
Executive resigns within thirty (30) days following either (i) a change in the
majority of the Employer's Board of Directors within a single twelve month
period; or (ii) a change in the Employer's CEO and two (2) of the CEO's direct
reports where they are no longer employed by the Employer or an affiliate of the
Employer in those, or more senior positions within a single twelve (12) month
period.
(e) Termination for Cause. This Agreement may be
terminated for Cause as hereinafter defined. "Cause" shall mean:
(i) the Executive's death;
(ii) the Executive's Permanent Disability, which
shall mean the Executive's inability, as a result of physical or mental
incapacity, substantially to perform his duties hereunder for a period of six
(6) consecutive months, with the determination of the Executive's Permanent
Disability to be determined by a physician chosen by two other physicians, each
of which is selected by the Employer and the Executive, respectively;
(iii) the willful and continued failure by the
Executive to perform substantially the Executive's duties (other than any such
failure resulting from the Executive's incapacity due to physical or mental
illness or any such failure subsequent to the delivery to the Executive of a
notice of intent to terminate the Executive's employment without Cause or
subsequent to the Executive's delivery of a notice of the Executive's intent to
terminate employment for Constructive Discharge), and such willful and continued
failure continues after a demand for substantial performance is delivered to the
Executive that specifically identifies the manner in which the Executive has not
substantially performed the Executive's duties;
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(iv) the Executive is removed or suspended from
banking pursuant to Section 8(e) of the Federal Deposit Insurance Act, as
amended ("FDIA"), or any other applicable state or federal law; or
(v) the willful engaging by the Executive in
illegal conduct or gross misconduct which is materially and demonstrably
injurious to the business or reputation of the Employer.
(vi) For purposes of determining whether "Cause"
exists, no act or failure to act on the Executive's part shall be considered
"willful" unless done, or omitted to be done, by the Executive in bad faith and
without reasonable belief that the action or omission was in, or not opposed to,
the best interests of the Employer. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board, based upon
the advice of counsel for the Employer or upon the instructions to the Executive
by a more senior officer shall be conclusively presumed to be done, or omitted
to be done, by the Executive in good faith and in the best interests of the
Employer. The Employer must notify the Executive of any event constituting Cause
within ninety (90) days following its knowledge of its existence or such event
shall not constitute Cause under this Agreement.
(vii) Upon a termination of the Executive's
employment with the Employer for Cause, the Executive shall be entitled to
receive from the Employer only such Base Salary as shall have accrued through
the effective date of such termination, the amount of any expense reimbursements
for expenses incurred prior to the effective date of such termination, provided
that the Executive shall have submitted all reimbursement requests within ten
(10) business days of the effective date of such termination, and any other
amounts to which the Executive is entitled under applicable law. None of the
Employer or any of its Subsidiaries shall have any further obligations to the
Executive.
(f) Payments Upon Death. In the event payments are due
and owing under this Agreement at the death of the Executive, payment shall be
made to such beneficiary as the Executive may designate in writing, or failing
such designation, to the executor of his estate, in full settlement and
satisfaction of all claims and demands on behalf of the Executive.
(g) Payments Prior to Permanent Disability. The Executive
shall be entitled to the compensation and benefits provided for under this
Agreement for any period during the term of this Agreement and prior to the
establishment of the Executive's Disability during which the Executive is unable
to work due to a physical or mental infirmity. Notwithstanding anything
contained in this Agreement to the contrary, until the date specified in a
notice of termination relating to the Executive's Disability, the Executive
shall be entitled to return to his positions with the Employer as set forth in
this Agreement in which event no Disability of the Executive will be deemed to
have occurred.
(h) Termination Upon Change of Control.
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(i) In the event of a Change of Control (as
defined below) of the Employer and the termination of the Executive's employment
under either A or B below, subject to Section 5(h)(iii) below, the Executive
shall be entitled to receive in lieu of any other payments provided for in this
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Agreement a lump sum payment equal to the amount determined pursuant to Section
5(c) (Termination by Employer without Cause), and the continuation of benefits
as provided in Section 5(c). Either of the following shall constitute
termination of the Executive's employment within the meaning of this Section
5(h):
(A) The Executive voluntarily
terminates his employment within the twelve (12) month period immediately
following the Change of Control due to Constructive Discharge.
(B) This Agreement and the Executive's
employment is terminated by the Employer or its successor within the twelve (12)
month period immediately following the Change of Control, for reasons other than
Cause.
(ii) For purposes of this Section, the term
"Change of Control" shall mean the following:
(A) 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
fifty percent (50%) or more of the combined voting power of the then outstanding
voting securities of the Employer; or
(B) Consummation of: (1) a merger or
consolidation to which the Employer is a party if the stockholders 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 Employer's
voting securities outstanding 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 the Employer or
the Bank.
Notwithstanding the foregoing, a Change of Control shall not be deemed to occur
solely because fifty percent (50%) or more of the combined voting power of the
Employer's 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 indirectly by the stockholders in the
same proportion as their ownership of stock immediately prior to such
acquisition.
(iii) It is the intention of the Employer and the
Executive that no portion of any payment under this Agreement, or payments to or
for the benefit of the Executive 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 and payments to or for the benefit of the Executive in
the nature of compensation, receipt of which is contingent on the Change of
Control of the Employer, 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 the Employer may pay without loss of
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deduction under Section 280G(a) of the Code. Present value for purposes of this
Agreement shall be calculated in accordance with Section 280G(d)(4) of the Code.
Within ninety (90) days following the earlier of (A) the giving of the notice of
termination or (B) the giving of notice by the Employer to the Executive of its
belief that there is a payment or benefit due the Executive which will result in
an excess parachute payment as defined in Section 280G of the Code, the
Executive and the Employer, at the Employer's expense, shall obtain the opinion
of such legal counsel and certified public accountants as the Executive may
choose (notwithstanding the fact that such persons have acted or may also be
acting as the legal counsel or certified public accountants for the Employer),
which opinions need not be unqualified, which sets forth (I) the amount of the
Base Period Income of the Executive, (II) the present value of Total Payments
and (III) the amount and present value of any excess parachute payments. In the
event that such opinions determine that there would be an excess parachute
payment, the payment hereunder or any other payment determined by such counsel
to be includable in Total Payments shall be modified, reduced or eliminated as
specified by the Executive in writing delivered to the Employer within sixty
(60) days of the Executive's receipt of such opinions or, if the Executive fails
to so notify the Employer, then as the Employer shall reasonably determine, so
that under the bases of calculation set forth in such opinions there will be no
excess parachute payment. The provisions of this subparagraph, including the
calculations, notices and opinions provided for herein shall be based upon the
conclusive presumption that (y) the compensation and benefits provided for in
Section 3 hereof and (z) any other compensation earned by the Executive pursuant
to the Employer's compensation programs which would have been paid in any event,
are reasonable compensation for services rendered, even though the timing of
such payment is triggered by the Change of Control; provided, however, that in
the event such legal counsel so requests in connection with the opinion required
by this subparagraph, the Executive and the Employer shall obtain, at the
Employer's expense, and the legal counsel may rely on in providing the opinion,
the advice of a firm of recognized executive compensation consultants as to the
reasonableness of any item of compensation to be received by the Executive. In
the event that the provisions of Sections 280G and 4999 of the Code are repealed
without succession, this subparagraph shall be of no further force or effect.
(i) Regulatory Suspension and Termination.
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(i) If the Executive is suspended from office
and/or temporarily prohibited from participating in the conduct of the
Employer's affairs by a notice served under Section 8(e)(3) (12 U.S.C. ss.
1818(e)(3)) or 8(g) (12 U.S.C. ss. 1818(g)) of the FDIA, the Employer's
obligations under this contract shall be suspended as of the date of service,
unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, and the Employer's Board has decided to make indemnification payments
pursuant to 12 CFR Section 359.5(a), the Employer shall (A) pay the Executive
all of the compensation withheld while their contract obligations were suspended
and (B) reinstate (in whole) any of the obligations which were suspended.
(ii) If the Executive is removed and/or
permanently prohibited from participating in the conduct of the Employer's
affairs by an order issued under Section 8(e) (12 U.S.C. ss. 1818(e)) or 8(g)
(12 U.S.C. ss. 1818(g)) of the FDIA, all obligations of the Employer under this
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contract shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected.
(iii) If the Employer is in default as defined in
Section 3(x) (12 U.S.C. ss. 1813(x)(1)) of the FDIA, all obligations of the
Employer under this contract shall terminate as of the date of default, but this
paragraph shall not affect any vested rights of the contracting parties.
(iv) All obligations of the Employer under this
contract shall be terminated, except to the extent determined that continuation
of the contract is necessary for the continued operation of the institution by
the Federal Deposit Insurance Corporation (the "FDIC"), at the time the FDIC
enters into an agreement to provide assistance to or on behalf of the Employer
under the authority contained in Section 13(c) (12 U.S.C. ss. 1823(c)) of the
FDIA, or when the Employer is determined by the FDIC to be in an unsafe or
unsound condition. Any rights of the parties that have already vested, however,
shall not be affected by such action.
Section 6. Non-Competition Covenant.
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(a) Restrictive Covenant. The Employer and the Executive
have jointly reviewed the customer lists and operations of the Employer and its
Subsidiaries and have agreed that the primary service area of the Employer's and
its Subsidiaries' loan and deposit origination functions in which the Employer
and its Subsidiaries have and will actively participate extends to an area
within twenty-five (25) miles of any Missouri office or branch of the Employer
and its Subsidiaries (the "Restrictive Area"). Therefore, as an essential
ingredient of and in consideration of this Agreement and the payment of the
amounts described in Section 3, the Executive hereby agrees that, except with
the express prior written consent of the Employer, for a period of twenty four
(24) months after the termination of the Executive's employment with the
Employer, whether such termination of employment occurs during the term of this
Agreement or following the term or termination of this Agreement, except this
period shall be reduced to twelve (12) months in the event Executive's
employment terminates following a Change of Control or if the Executive
voluntarily terminates employment within thirty (30) days following either (i) a
change in the majority of the Employer's Board of Directors within a single
twelve (12) month period; or (ii) a change in the Employer's CEO and two (2) of
the CEO's direct reports where they are no longer employed by the Employer or an
affiliate of the Employer in those, or more senior positions within a single
twelve (12) month period (the "Restrictive Period"):
(i) The Executive will not, directly or
indirectly, engage or invest in, own, manage, operate, finance, control, or
participate in the ownership, management, operation or control of, be employed
by, associated with, or in any manner connected with, lend the Executive's name
or any similar name to, lend the Executive's credit to, or render services or
advice to, any person, firm, partnership, corporation or trust which owns or
operates, a bank, savings and loan association, credit union or similar
financial institution (a "Financial Institution") within the Restrictive Area;
provided however, that the ownership by the Executive of shares of the capital
stock which are listed on a securities exchange or quoted on the National
Association of Securities Dealers Automated Quotation System which do not
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represent more than five percent (5%) of the outstanding capital stock of any
Financial Institution, shall not violate any terms of this Agreement.
(ii) The Executive will not, directly or
indirectly, either for himself, or any other Financial Institution: (A) induce
or attempt to induce any employee of the Employer or its Subsidiaries to leave
the employ of the Employer or its Subsidiaries; (B) in any way interfere with
the relationship between Employer or its Subsidiaries and any employee of
Employer or its Subsidiaries; (C) employ, or otherwise engage as an employee,
independent contractor or otherwise, any employee of Employer or its
Subsidiaries; or (D) induce or attempt to induce any customer, supplier,
licensee, or business relation of Employer or its Subsidiaries to cease doing
business with the Employer or its Subsidiaries or in any way interfere with the
relationship between any customer, supplier, licensee or business relation of
Employer or its Subsidiaries.
(iii) The Executive will not, directly or
indirectly, either for himself, or any other Financial Institution, solicit the
business of any person or entity known to the Executive to be a customer of the
Employer or its Subsidiaries, whether or not such Executive had personal contact
with such person or entity, with respect to products or activities which compete
in whole or in part with the products or activities of the Employer or its
Subsidiaries.
(iv) The Executive will not, directly or
indirectly, serve as the agent, broker or representative of, or otherwise
assist, any person or entity in obtaining services or products from any
Financial Institution within the Restrictive Area.
(v) The Executive expressly agrees that the
covenants contained in this Section 6(a) are reasonable with respect to their
duration, geographical area, and scope.
(b) Violation of Restrictive Covenant. If the Executive
violates the restrictions contained in Section 6(a) and the Employer brings
legal action for injunctive or other relief, the Employer shall not, as a result
of the time involved in obtaining such relief, be deprived of the benefit of the
full period of the Restrictive Period. Accordingly, the Restrictive Period shall
be deemed to have the duration specified in Section 6(a) computed from the date
the relief is granted but reduced by the time between the period when the
Restrictive Period began to run and the date of the first violation of the
restrictions contained in Section 6(a) by the Executive. In the event that a
successor assumes and agrees to perform this Agreement, the restrictions
contained in Section 6(a) shall continue to apply only to the primary service
area of the Employer as it existed immediately before such assumption and shall
not apply to any of the successor's other offices.
Remedies for Breach of Restrictive Covenant. The Executive
acknowledges that the restrictions contained in Section 4 and Section 6(a) of
this Agreement are reasonable and necessary for the protection of the legitimate
business interests of the Employer, that any violation of these restrictions
would cause substantial injury to the Employer and such interests, that the
Employer would not have entered into this Agreement with the Executive without
receiving the additional consideration offered by the Executive in binding
himself to these restrictions and that such restrictions were a material
inducement to the Employer to enter into this Agreement. In the event of any
violation or threatened violation of these restrictions, the Employer, in
addition to and not in limitation of, any other rights, remedies or damages
available to the Employer under this Agreement or otherwise at law or in equity,
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shall be entitled to preliminary and permanent injunctive relief to prevent or
restrain any such violation by the Executive and any and all persons directly or
indirectly acting for or with him, as the case may be. In the event of a
violation of the restrictions in Section 4 and Section 6(a) of this Agreement,
the Employer shall have the right to cease making any payments, or providing
benefits, otherwise required hereunder.
Section 7. Intercorporate Transfers. If the Executive shall be
voluntarily transferred to a Subsidiary of the Employer, such transfer shall not
be deemed to terminate or modify this Agreement and the employing corporation to
which the Executive shall have been transferred shall, for all purposes of this
Agreement, be construed as standing in the same place and stead as the Employer
as of the date of such transfer, provided however, that this Section 7 shall not
modify Employer's obligations under Section 2, Section 3 and Section 5 hereof.
Section 8. Interest in Assets. Neither the Executive nor his
estate shall acquire hereunder any rights in funds or assets of the Employer,
otherwise than by and through the actual payment of amounts payable hereunder;
nor shall the Executive or his estate have any power to transfer, assign,
anticipate, hypothecate or otherwise encumber in advance any of said payments;
nor shall any of such payments be subject to seizure for the payment of any
debt, judgment, alimony, separate maintenance or be transferable by operation of
law in the event of bankruptcy, insolvency or otherwise of the Executive.
Section 9. Indemnification. The Employer shall provide the
Executive (including his heirs, personal representatives, executors and
administrators) for the term of this Agreement with coverage under a standard
directors' and officers' liability insurance policy at its expense.
Section 10. General Provisions.
------------------
(a) Successors; Assignment. This Agreement shall be
binding upon and inure to the benefit of the Executive, his heirs, legatees and
personal representatives, the Employer and its successors and assigns, and any
successor or assign of the Employer shall be deemed the "Employer" hereunder.
The Employer shall require any successor to all or substantially all of the
business and/or assets of the Employer, whether directly or indirectly, by
purchase, merger, consolidation, acquisition of stock, or otherwise, by an
agreement in form and substance satisfactory to the Executive, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent as the Employer would be required to perform if no such succession had
taken place.
(b) Entire Agreement; Modifications. This Agreement
constitutes the entire agreement between the parties respecting the subject
matter hereof, and supersedes all prior negotiations, undertakings, agreements
and arrangements with respect thereto, whether written or oral, and without
limiting the foregoing, the Executive hereby agrees and acknowledges that this
Agreement supersedes, and he shall have no rights to payments or otherwise
under, any other agreement other than the Restricted Stock Agreement. Except as
otherwise explicitly provided herein, this Agreement may not be amended or
modified except by written agreement signed by the Executive and the Employer;
provided, however, that the Employer may unilaterally modify the Agreement to
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comply with applicable law, including, but not limited to, Code Section 409A,
while maintaining the spirit and intent of the Agreement.
(c) Survival. The provisions of Section 4 and Section 6
shall survive the expiration or termination of this Agreement, in each case for
the period and to the extent set forth in such section.
(d) Enforcement and Governing Law. The provisions of this
Agreement shall be regarded as divisible and separate; if any of said provisions
should be declared invalid or unenforceable by a court of competent
jurisdiction, the validity and enforceability of the remaining provisions shall
not be affected thereby. This Agreement shall 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 conflict of law provisions of
any jurisdiction.
(e) Arbitration. Any dispute or controversy arising under
or in connection with this Agreement (with the exception of the remedies set
forth in Section 6(c)) shall be settled exclusively by arbitration, conducted
before a panel of three arbitrators sitting in a location selected by the
Executive within twenty-five (25) miles from the location of the main office of
the Employer, in accordance with the employment rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that the
Executive shall be entitled to seek specific performance of his right to be paid
through the date of termination during the pendency of any dispute or
controversy arising under or in connection with this Agreement.
(f) Legal Fees. All reasonable legal fees paid or
incurred by either party pursuant to any dispute or question of interpretation
relating to this Agreement shall be paid or reimbursed by the opposing party if
the party is successful on the merits pursuant to a legal judgment, arbitration
or settlement.
(g) 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.
(h) 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 the Employer, addressed to the principal headquarters
of the Employer, attention: Chairman of the Board; or, if to the Executive, to
the address set forth below the Executive's signature on this Agreement, or to
such other address as the party to be notified shall have given to the other.
(i) Internal Revenue Code Section 409A. Notwithstanding
anything contained herein to the contrary, if at the time of a termination of
employment, (i) Employee is a "specified employee" as defined in Code Section
409A, and the regulations and guidance thereunder in effect at the time of such
termination ("409A"), and, (ii) any of the payments or benefits provided
hereunder may constitute "deferred compensation" under 409A, then, and only to
the extent required by such provisions, the date of payment of such payments or
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benefits otherwise provided shall be delayed for a period of up to six (6)
months following the date of termination.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CENTRUE FINANCIAL CORPORATION XXXXXX X. XXXXX
By: /s/ Xxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxx
------------------------------ ------------------------------------
Xxxxxx X. Xxxxxx
Its: President & CEO
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Address:
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