EXECUTIVE EMPLOYEE SALARY CONTINUATION AGREEMENT
FOR
XXXXXX X. JUST, JR.
THIS AGREEMENT is made as of this 14th day of May, 1992,
between Mound City Bank, a Wisconsin banking corporation (the
"Company") and Xxxxxx X. Just, Jr. (the "Participant").
WHEREAS, the Participant is an executive employee of the
Company and as such has materially contributed to the Company's
position, and
WHEREAS, the Company wishes to establish this Agreement for
purposes of promoting in the Participant the strongest interest
in the successful operation of the Company and increased
efficiency in his or her work and to provide the Participant
benefits upon retirement, death, disability or other termination
of employment, in consideration of services to be performed after
the date of this Agreement but prior to his or her retirement.
NOW, THEREFORE, in consideration of the premises, the
parties hereto agree as follows:
1. Definitions.
1.1 Administrative Committee. "Administrative Committee"
shall mean the committee appointed pursuant to Section 4 of this
Agreement.
1.2 Age. "Age" shall mean the age of the person as of his
or her last birthday.
1.3 Change in Control. "Change in Control" shall mean the
first to occur of any of the following events: (a) any person or
entity becomes, subsequent to the date of this Agreement, the
beneficial owner, directly or indirectly of 51% or more of the
then issued and outstanding voting stock of the Company (and, for
the purposes hereof, a person will be considered to be a
beneficial owner of such stock if such person, directly or
indirectly, through any contract, arrangement, understanding,
relationship, or otherwise has or shares voting power, which
includes the power to vote or to direct the voting of such stock,
or investment power, which includes the power to dispose or to
direct the disposition of such stock), (b) the Company merges or
consolidates with or reorganizes with or into any other
corporation or corporations other than its affiliates or engages
in any other similar business combination or reorganization, or
(c) the Company sells, assigns or transfers all or substantially
all of its business and assets, in one or a series of related
transactions, except any such sales to affiliates.
1.4 Disability. "Disability" shall mean, if the
Participant is insured under a life insurance policy, the
premiums for which are paid by the Company, and which policy
contains a "waiver of premiums" benefit, the definition of total
disability contained in the insurance policy. If the Participant
is not insured under such a life insurance policy, the Company
shall, in its complete and sole discretion, determine whether the
Participant is disabled for the purposes of this Agreement.
1.5 Discharge for Cause. "Discharge for Cause" shall mean
the termination of the Participant's employment with the Company
because of (a) the Participant's willful and continued failure to
substantially perform his or her duties (other than any such
failure resulting from his or her incapacity due to physical or
mental illness), after a demand for substantial performance is
delivered to him or her by the Company which specifically
identifies the manner in which the Company believes he or she has
not substantially performed his or her duties; (b) any willful
act of misconduct by the Participant; (c) a criminal conviction
of the Participant for any act involving the business and affairs
of the Company or for any act involving dishonesty, breach of
trust or a violation of the banking laws of the State of
Wisconsin or the United States; (d) a criminal conviction of the
Participant for commission of a felony; or (e) the removal of the
Participant by a regulatory agency. For purposes of this
definition, no act or failure to act on the Participant's part
will be considered "willful" unless done or omitted by him or her
not in good faith and without reasonable belief that his or her
act or omission was in the best interest of the Company.
1.6 Normal Retirement Date. "Normal Retirement Date" shall
mean the first day of the month following the month in which the
Participant reaches age 60.
1.7 Termination of Employment. "Termination of Employment"
shall mean the Participant's ceasing to be employed by the
Company for any reason whatsoever, voluntary or involuntary,
including by reason of death or disability.
2. Eligibility.
The Participant is eligible for the benefits provided herein
in accordance with the terms of this Agreement upon the execution
hereof.
The Participant shall cease to be a Participant at
Termination of Employment. However, the employment of the
Participant shall not be deemed to be terminated by reason of an
approved leave of absence granted in accordance with uniform
rules applied in a non-discriminatory manner.
3. Payment of Benefits.
3.1 Benefits For Termination Upon Normal Retirement Date.
Upon the Participant's Termination of Employment on the
Normal Retirement Date for reasons other than death or Discharge
for Cause, the Company shall pay to the Participant, as
compensation for services rendered prior to such date, the sum of
$40,000 per year, payable in monthly installments of $3,333 each,
commencing on the first day of the month coincident with or next
following the date of Termination of Employment and continuing on
the first day of each month until a total of 204 monthly payments
are made to the Participant or the Participant's beneficiary per
Section 3.6(b).
3.2 Benefits For Termination After Normal Retirement Date.
Upon the Participant's Termination of Employment after the
Normal Retirement Date for reasons other than death or Discharge
for Cause, the Company shall pay to the Participant as
compensation for services rendered prior to such date, the normal
retirement benefit described in Section 3.1 above, increased by
5% per year or .416% for each month that the Participant's
Termination of Employment is deferred beyond the Normal
Retirement Date.
3.3 Benefits Upon Disability.
Upon the Participant's Termination of Employment prior to
the Normal Retirement Date due to Disability, no separate
provision is made for a disability benefit under this Agreement.
However, in the event of such Participant's death while disabled
prior to reaching the Normal Retirement Date, such Participant's
beneficiary shall receive the survivor's benefits described in
Section 3.5(a). In the event the Participant lives to the Normal
Retirement Date, the Participant shall thereupon receive the
normal retirement date benefit described in Section 3.1.
3.4 Other Terminations of Employment.
(a) Voluntary Termination of Employment prior to the
Normal Retirement Date or Discharge for Cause at any time.
Except as provided in subparagraph (c), upon the Participant's
voluntary Termination of Employment prior to reaching the Normal
Retirement Date, for reasons other than death or Disability, or
upon the Participant's Discharge for Cause at any time, the
Company shall not be obligated to pay any benefit to the
Participant pursuant to this Agreement, and the Participant shall
have no further right to receive any benefit hereunder.
(b) Involuntary Termination of Employment prior to the
Normal Retirement Date other than because of death, Disability or
Discharge for Cause. Except as provided in subparagraph (c),
upon the Participant's involuntary Termination of Employment
prior to the Normal Retirement Date for reasons other than death,
Disability, or Discharge for Cause, the Company shall pay to the
Participant, as compensation for services rendered prior to such
Termination of Employment, the sum of $40,000 per year, payable
in monthly installments of $3,333 each, commencing on the first
day of the month coincident with or next following the date of
such Termination of Employment and continuing on the first day of
each month thereafter until a total of 144 total monthly payments
are made to the Participant or the Participant's beneficiary per
Section 3.5(b). For purposes of this subsection 3.4(b), the
Participant shall be deemed to have incurred an involuntary
Termination of Employment covered by this subsection if he or she
quits employment as a result of the Company's significantly
lessening either his or her title, duties, responsibilities,
compensation or altering his or her situs of employment, without
his or her consent. The Participant's compensation shall be
deemed to be significantly lessened if any cut-back is imposed
except as a part of an overall cut-back applied proportionately
to all of the Company's management employees or if the
Participant fails to receive periodic increases substantially
proportionate to and coincident with the increases granted to
management employees.
(c) Termination of Employment at or after a Change in
Control. If a Participant incurs a voluntary or involuntary
Termination of Employment prior to reaching the Normal Retirement
Date, for reasons other than death, Disability or Discharge for
Cause, but on or after the occurrence of a Change in Control, and
in connection with such change, the Participant's title, duties,
responsibilities or compensation is significantly lessened or his
or her situs of employment is changed, without his or her
consent, the Company shall pay to the Participant, as
compensation for services rendered prior to such event, the sum
of $40,000 per year, payable in monthly installments of $3,333
each, commencing on the first day of the month coincident with or
next following the date of such Termination of Employment and
continuing on the first day of the month thereafter until a total
of 144 monthly payments are made to the Participant or the
Participant's beneficiary per Section 3.5(b). For purposes
hereof, the standards set forth in subparagraph (b) above with
respect to what constitutes a significant lessening of
compensation shall apply.
(d) Limitations on Compensation.
(i) In the event that the benefits payable to the
Participant under Section 3.4(c) ("Severance Benefits"), or any
other payments or benefits received or to be received by the
Participant from the Company (whether payable pursuant to the
terms of this Agreement, any other plan, agreement or arrangement
with the Company or any corporation ("Affiliate") affiliated with
the Company within the meaning of Section 1504 of the Internal
Revenue Code of 1954, as amended (the "Code"), in the opinion of
tax counsel selected by the Company's independent auditors,
constitute "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and the present value of such "parachute
payments" equals or exceeds three (3) times the average of the
annual compensation payable to the Participant by the Company (or
an Affiliate) and includable in the Participant's gross income
for federal income tax purposes for the five (5) calendar years
preceding the year in which a change in ownership or control of
the Company occurred ("Base Amount"), such Severance Benefits
shall be reduced to an amount the present value of which (when
combined with the present value of any other payments or benefits
otherwise received or to be received by the Participant from the
Company (or an Affiliate) that are deemed "parachute payments")
is equal to 2.99 times the Base Amount, notwithstanding any other
provision to the contrary in this Agreement. The Severance
Benefits shall not be reduced if (A) the Participant shall have
effectively waived his receipt or enjoyment of any such payment
or benefit which triggered the applicability of this Section
3.4(d), or (B) in the opinion of such tax counsel, the Severance
Benefits (in its full amount or as partially reduced, as the case
may be) plus all other payments or benefits which constitute
"parachute payments" within the meaning of Section 280G(b)(2) of
the Code are reasonable compensation for services actually
rendered, within the meaning of Section 280G(b)(4) of the Code,
and such payments are deductible by the Company. The Base Amount
shall include every type and form of compensation includable in
the Participant's gross income in respect of his employment by
the Company (or an Affiliate), except to the extent otherwise
provided in temporary or final regulations promulgated under
Section 280G(b) of the Code. For purposes of this Section
3.4(d), a "change in ownership or control" shall have the meaning
set forth in Section 280G(b) of the Code and any temporary or
final regulations promulgated thereunder. The present value of
any non-cash benefits or any deferred cash payment shall be
determined by the Company's independent auditors in accordance
with the principles of Sections 280G(b)(3) and (4) of the Code.
(ii) The Participant shall have the right to
request that the Company obtain a ruling from the Internal
Revenue Service ("Service") as to whether any or all payments or
benefits determined by such tax counsel are, in the view of the
Service, "parachute payments" under Section 280G. If a ruling is
sought pursuant to the Participant's request, no Severance
Benefits payable under this Agreement shall be made to the
Participant until after fifteen (15) days from the date of such
ruling. For purposes of this Subsection 3.4(d)(ii), the
Participant and the Company agree to be bound by the payments
under Section 280G. If the Service declines, for any reason, to
provide the ruling requested, the tax counsel's opinion provided
under Subsection 3.4(d)(i) with respect to what payments or
benefits constitute "parachute payments" shall control, and the
period during which the Severance Benefits may be deferred shall
be extended to a date fifteen (15) days from the date of the
Service's notice indicating that no ruling would be forthcoming.
(iii) In the event that Section 280G, or any
successor statute, is repealed, this Section 3.4(d) shall cease
to be effective on the effective date of such repeal. The
parties to this Agreement recognize that final Treasury
Regulations under Section 280G of the Code may affect the amounts
that may be paid under this Agreement and agree that, upon
issuance of such final Regulations, this Agreement may be
modified as in good faith deemed necessary in light of the
provisions of such Regulations to achieve the purposes of this
Agreement, and that consent to such modifications shall not be
unreasonably withheld.
(e) Non-Competition Covenant and Termination of
Benefits. The Participant agrees that during the three (3) year
period after a Termination of Employment for which the
Participant is receiving benefits pursuant to this Agreement, he
shall not directly or indirectly, as agent, employee, officer,
director, trustee, partner, proprietor or otherwise become
engaged by, render advice or assistance to, or be employed on a
compensated basis without the prior written consent of the
Company by any person or entity which competes in Grant County,
Wisconsin, with the business of the Company (a "Competitor").
The Participant acknowledges that these restrictions on
competition are reasonable and are necessary to protect the
interests of the Company.
If following Participant's Termination of Employment
pursuant to paragraph 3.4(b) or 3.4(c), Participant receives
compensation, directly or indirectly, as agent, employee,
consultant, partner or in any other capacity for services
provided to or employment by any person or entity other than a
Competitor, the benefits payable under this Agreement during any
such month shall be reduced by amounts received by or to be paid
to the Participant during such month by the other person or
entity.
If after a Termination of Employment for which the
Participant is receiving benefits pursuant to this Agreement, the
Participant receives compensation, directly or indirectly, as
agent, employee, consultant, partner or in any other capacity for
services provided to or employment by a Competitor, all benefits
otherwise payable under this Agreement shall thereupon cease, and
the Participant shall have no further right to receive any
benefit hereunder.
3.5 Survivorship Benefits.
(a) Prior to commencement of normal retirement
benefits. If a Participant dies while in the service of the
Company or after a Termination of Employment due to Disability
and while disabled, but prior to commencement of any benefit
payments under this Agreement, the Company shall pay to the
Participant's beneficiary a survivor's benefit of 204 equal
monthly installments of $3,333 each commencing on the first day
of the month after the Participant's death and continuing on the
first day of each month thereafter until all such payments are
completed. In the event a beneficiary dies before receiving all
the survivor's benefit payments, the remaining payments shall be
paid to the legal representative of the beneficiary's estate.
Payment of the survivor's benefit shall relieve the Company of
the obligation to pay any other benefit which the Participant
would have otherwise received, under the terms of this Agreement.
(b) After commencement of benefits. If the
Participant dies after any benefit payments have commenced, but
prior to receiving all of the scheduled number of monthly
payments, the Company shall pay the remaining monthly payments to
the Participant's beneficiary. In the event a beneficiary dies
before receiving all the remaining payments, the then remaining
payments shall be paid to the legal representative of the
beneficiary's estate.
3.6 Receipts of Payments: Designation of Beneficiary. All
payments to be made by the Company shall be made to the
Participant, if living. In the event of the Participant's death
prior to the receipt of all benefit payments, all subsequent
payments to be made under this Agreement shall be to the
beneficiary or beneficiaries of the Participant. The Participant
shall designate the beneficiary by filing a written notice of
such designation with the Company in such form as the Company may
prescribe. The Participant may revoke or modify said designation
at any time by a further written designation. The Participant's
beneficiary designation shall be deemed automatically revoked in
the event of the death of the beneficiary or, if the beneficiary
is the Participant's spouse, in the event of dissolution of
marriage. If no designation shall be in effect at the time when
any benefits payable under this Agreement shall become due, the
beneficiary shall be the spouse of the Participant, or if no
spouse is then living, the legal representative of the
Participant's estate.
4. Administration and Interpretation of this Agreement.
The Board of Directors shall appoint an Administrative Committee
consisting of three (3) or more persons to administer and
interpret this Agreement. Interpretation by the Administrative
Committee shall be final and binding upon the Participant. The
Administrative Committee may adopt rules and regulations relating
to this Agreement as it may deem necessary or advisable for the
administration thereof, but may not reduce benefits without
consent of the Participant.
5. Claims Procedure. If the Participant or the
Participant's beneficiary (hereinafter referred to as a
"Claimant") is denied all or a portion of an expected benefit
under this Agreement for any reason, he or she may file a claim
with the Administrative Committee. The Administrative Committee
shall notify the Claimant within sixty (60) days of allowance or
denial of the claim, unless the Claimant receives written notice
from the Administrative Committee prior to the end of the sixty
(60) day period stating that special circumstances require an
extension of the time for decision. The notice of the
Administrative Committee's decision shall be in writing, sent by
mail to Claimant's last known address, and, if a denial of the
claim, must contain the following information:
(a) the specific reasons for the denial;
(b) specific reference to pertinent provisions of this
Agreement on which the denial is based; and
(c) if applicable, a description of any additional
information or material necessary to perfect the claim, an
explanation of why such information or material is necessary, and
an explanation of the claims review procedure.
6. Review Procedure.
(a) A Claimant is entitled to request a review of any
denial of his or her claim by the Administrative Committee. The
request for review must be submitted in writing within sixty (60)
days of mailing of notice of the denial. Absent a request for
review within the 60-day period, the claim will be deemed to be
conclusively denied. The Claimant or his or her representative
shall be entitled to review all pertinent documents, and to
submit issues and comments orally and in writing.
(b) If the request for review by a Claimant concerns
the interpretation and application of the provisions of this
Agreement and the Company's obligations, then the review shall be
conducted by a separate committee consisting of three (3) persons
designated or appointed by the Administrative Committee. The
separate committee shall afford the Claimant a hearing and the
opportunity to review all pertinent documents and submit issues
and comments orally and in writing and shall render a review
decision, together with specific reasons for the decision and
reference to the pertinent provisions of this Agreement.
7. Life Insurance and Funding. The Company in its
discretion may apply for and procure as owner and for its own
benefit, insurance on the life of the Participant, in such
amounts and in such forms as the Company may choose. The
Participant shall have no interest whatsoever in any such policy
or policies, but at the request of the Company he or she shall
submit to medical examinations and supply such information and
execute such documents as may be required by the insurance
company or companies to whom the Company has applied for
insurance.
The rights of the Participant, or his or her beneficiary, or
estate, to benefits under this Agreement shall be solely those of
an unsecured creditor of the Company. Any insurance policy or
other assets acquired by or held by the Company in connection
with the liabilities assumed by it pursuant to this Agreement
shall not be deemed to be held under any trust for the benefit of
the Participant, his or her beneficiary, or his or her estate, or
to be security for the performance of the obligations of the
Company but shall be, and remain, a general, unpledged, and
unrestricted asset of the Company.
If this Agreement is funded through insurance on the life of
the Participant, then in the event of such Participant's death
during the first two (2) years after the effective date of this
Agreement, or if such Participant's death was a result of suicide
or if such Participant made any material misstatement or failed
to make a material disclosure of information in any documentation
which the Participant is requested to complete in connection with
this Agreement, then no death benefits under the terms of this
Agreement will be payable, unless and to the extent that the
Board of Directors of Company, in their absolute discretion, may
otherwise determine.
8. Assignment of Benefits. Neither the Participant nor
any other beneficiary under this Agreement shall have any right
to assign the right to receive any benefits hereunder, and in the
event of any attempted assignment or transfer, the Company shall
have no further liability hereunder.
9. Employment Not Guaranteed by Agreement. Neither this
Agreement nor any action taken hereunder shall be construed as
giving a Participant the right to be retained as an Executive
Employee or as an employee of the Company for any period.
10. Taxes. The Company shall deduct from all payments made
hereunder all applicable federal or state taxes required by law
to be withheld from such payments.
11. Amendment and Termination. The Board of Directors may,
at any time, amend or terminate this Agreement, provided that the
Board may not reduce or modify any benefit in pay status to the
Participant or beneficiary hereunder or any benefit that would
become payable hereunder if the Participant were to have died or
were to have been involuntarily terminated under Section 3.4(b)
hereof on the day prior to such action by the Board, without the
prior written consent of the Participant.
The Company is entering into this Agreement upon the
assumption that certain existing tax laws will continue in effect
in substantially their current form. In the event of any changes
in Federal law relating to and allowing the tax-free accumulation
of earnings within a life insurance policy, the income tax-free
payment of proceeds from life insurance policies or any other law
which would result in a material adverse impact upon the
Company's ability to perform its obligations under this
Agreement, the Company shall have an option to terminate or
modify this Agreement subject to the protections afforded
Participant in the preceding paragraph above.
12. Construction. This Agreement shall be construed
according to the laws of the State of Wisconsin.
13. Form of Communication. Any election, application,
claim, notice or other communication required or permitted to be
made by a Participant to the Company shall be made in writing and
in such form as the Company shall prescribe. Such communication
shall be effective upon mailing, if sent by first class mail,
postage prepaid, and addressed to the Company's office at 00 Xxxx
Xxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, 00000.
14. Captions. The captions at the head of a section or
paragraph of this Agreement are designed for convenience of
reference only and are not to be resorted to for the purpose of
interpreting any provision of this Agreement.
15. Severability. The invalidity of any portion of this
Agreement shall not invalidate the remainder thereof, and the
remainder shall continue in full force and effect.
16. Binding Effect. This Agreement shall be binding upon
and shall inure to the benefit of the Company and the
Participant, and each of their successors, heirs, personal
representatives and permitted assigns. No sale of substantially
all of the Company's assets shall be made without the buyer
expressly assuming the obligation of this Agreement. The Company
further agrees that it will not be a party to any merger,
consolidation or reorganization unless and until its obligations
hereunder are expressly assumed by the successor or successors.
IN WITNESS WHEREOF, this Agreement has been executed by the
parties as of the date first set forth above.
ATTEST: MOUND CITY BANK
_________________________ By:________________________________
Its Vice President & Chairman
of the Board
ATTEST:
_________________________ ___________________________________
Xxxxxx X. Just, Jr., Participant
