EMPLOYMENT AGREEMENT
Exhibit
10.1
This
Employment Agreement (the “Agreement”) is made and entered into this 1st day of
October, 2008, by and between First Mid-Illinois Bancshares, Inc. (“the
Company”), a corporation with its principal place of business located in
Mattoon, Illinois, and Xxxx X. Xxxxxx (“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
October 1, 2008 and shall continue until September 30,
2011. 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. The
Company agrees to employ Executive 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 Chief Executive Officer and
Executive shall adhere to the policies and procedures of the Company and shall
follow the supervision and direction of the Chief Executive Officer or his
designee 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 of any of its
subsidiaries; or (c) result in a breach of Section Six of the
Agreement.
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 $173,000 per fiscal year, payable in accordance with the Company’s customary
payroll practices for executive employees. The Chief Executive
Officer or his designee 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 35% of Executive’s annual base salary. The Chief Executive Officer
or his designee may review and adjust the maximum percentage from year to year,
provided, however, that during the term of Executive’s employment, the Company
shall not decrease this percentage. 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 shall 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 Vacation. Executive
shall be entitled to three (3) weeks of paid vacation each year during the term
of this Agreement.
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2.05
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Fringe
Benefits. The Company shall provide the following
additional fringe benefits to
Executive:
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(a)
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Use
of a Company-owned or leased vehicle for professional and personal
use.
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(b)
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An
amount equal to the annual dues for a Class “A” 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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(d)
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An
Internet connection for Executive’s
home.
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2.06 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 management
employees subject to and on a consistent basis with the terms, conditions and
overall administration of such plans.
2.07 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.
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2.08
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Withholding. All
salary, incentive compensation and other benefits provided
to
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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 plus 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:
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4.01
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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:
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(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 by
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.
(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 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.
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4.02
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Termination Following
a Change in Control. Notwithstanding Section 4.01, if,
following a Change in Control and prior to the end of the term of this
Agreement, Executive’s
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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 purposes of this Agreement, “Change
in 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 at 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 Executive’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 (i) the termination of Executive’s employment
for any reason or (ii) 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 (i)
the termination of Executive’s employment for any reason or (ii) 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
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8.01
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Successors and
Assignability.
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(a) No rights or obligations
of the Company under this Agreement may be 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 Manager other
than his rights to payment 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; provided, however, that any
amendment or modification that the Company in its sole discretion deems
necessary to comply with the American Jobs Creation act, and regulations
promulgated thereunder, shall not require the consent of Executive as long as
such amendment or modification does not reduce the absolute dollar amount of
benefits payable hereunder. Furthermore, the parties hereto
specifically agree that all prior agreements, whether written or oral, relating
to Executive’s employment by the Company shall be of no further force or effect
from and after the date hereof.
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8.03
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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
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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:
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If
to Executive:
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Xxxx
X. Xxxxxx
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#4 Pinehurst
Xxxxxxx,
XX 00000
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If
to the Company:
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First
Mid-Illinois Bancshares, Inc.
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0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx XX 00000
Facsimile: 000-000-0000
Attention: Chairman
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. Xxxxxxx
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Xxxxxxx
X. Xxxxxxx
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Title: Chairman of the
Board
EXECUTIVE:
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/s/
Xxxx X. Xxxxxx
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