EMPLOYMENT AGREEMENT
EXHIBIT
10.1
THIS
AGREEMENT entered into this 27th
day of
July, 2005, by and between River Valley Financial Bank, a federal savings
bank
(the “Bank”), and Xxxxxxx X. Xxxxxxx (the “Employee”). The parties agree,
however, that the “Effective Date” of this Agreement shall be July 25,
2005.
WHEREAS,
the Employee is being employed by the Bank as Executive Vice President and
as
such will perform valuable services for the Bank; and
WHEREAS,
the Board of Directors of the Bank believes it is in the best interests of
the
Bank to enter into this Agreement with the Employee in order to assure
continuity of management of the Bank and to reinforce and encourage the
continued attention and dedication of the Employee to his assigned duties;
and
WHEREAS,
the parties desire by this writing to set forth the continuing employment
relationship of the Bank and the Employee.
NOW,
THEREFORE, it is AGREED as follows:
1. Employment.
The
Employee is employed as Executive Vice President of the Bank. The Employee
shall
render such administrative and management services for the Bank as are currently
rendered and as are customarily performed by persons situated in a similar
executive capacity. The Employee shall also promote, by entertainment or
otherwise, as and to the extent permitted by law, the business of the Bank.
The
Employee’s other duties shall be such as the Board of Directors (the “Board”) of
the Bank may from time to time reasonably direct, including normal duties
as an
officer of the Bank.
2. Base
Compensation.
The
Bank agrees to pay the Employee during the term of this Agreement a salary
at
the rate of $95,000 per annum, payable in cash not less frequently than monthly,
and shall be effective and calculated commencing the Effective Date. The
salary
shall be reviewed annually by the Board of Directors of the Bank in January
of
each year commencing January of 2006 and any adjustment in the future on
salary
shall be effective on January 1st
of each
year.
3. Bonuses.
The
Employee shall participate in any year end bonus granted to other employees
by
the Board. The Employee shall further participate in an equitable manner
with
all other senior management employees of the Bank in discretionary bonuses
that
the Board may award from time to time to the Bank’s senior management employees.
No other compensation provided for in this Agreement shall be deemed a
substitute for the Employee’s right to participate in such discretionary
bonuses.
(a) Participation
in Retirement, Medical and Other Plans.
During
the term of this Agreement, the Employee shall be eligible to participate
in the
following benefit plans: group hospitalization, disability, health, dental,
sick
leave, retirement, pension, and/or other present or future qualified plans
provided by the Bank, generally, which benefits, taken as a whole, must be
at
least as favorable as those in effect on the Effective Date, unless the
continued operation of such plans would adversely affect the Bank’s operating
results or financial condition in a material way, the Bank’s Board of Directors
concludes that modifications to such plans are necessary to avoid such adverse
effects and such modifications apply consistently to all employees of the
Bank.
(b) Employee
Benefits; Expenses.
The
Employee shall be eligible to participate in any fringe benefits which are
or
may become available to the Bank’s senior management employees, including, for
example, any stock option or incentive compensation plans, and any other
benefits which are commensurate with the responsibilities and functions to
be
performed by the Employee under this Agreement. The Employee shall be reimbursed
for all reasonable out-of-pocket business expenses which he shall incur in
connection with his services under this Agreement, upon substantiation of
such
expenses in accordance with the policies of the Bank.
5. Term.
The
Bank hereby employs the Employee, and the Employee hereby accepts such
employment under this Agreement, for the period commencing on the Effective
Date
and ending thirty six months thereafter (or such earlier date as is determined
in accordance with Section 9). Additionally, on each annual anniversary date
from the Effective Date, the Employee's term of employment shall be extended
for
an additional one-year period beyond the then effective expiration date,
provided the Board determines in a duly adopted resolution that the performance
of the Employee has met the Board's requirements and standards, and that
this
Agreement shall be extended. Only those members of the Board of Directors
who
have no personal interest in this Employment Agreement shall discuss and
vote on
the approval and subsequent review of this Agreement.
6. Loyalty;
Noncompetition.
(a) During
the period of his employment hereunder and except for illnesses, reasonable
vacation periods, and reasonable leaves of absence, the Employee shall devote
all his full business time, attention, skill, and efforts to the faithful
performance of his duties hereunder; provided, however, from time to time,
the
Employee may serve on the Boards of Directors of, and hold any other offices
or
positions in, companies or organizations, which will not present any conflict
of
interest with the Bank or any of its subsidiaries or affiliates, or unfavorably
affect the performance of Employee’s duties pursuant to this Agreement, or will
not violate any applicable statute or regulation. “Full business time” is hereby
defined as that amount of time usually devoted to like companies by similarly
situated executive officers. During the term of his employment under this
Agreement, the Employee shall not engage in any business or activity contrary
to
the business affairs or interests of the Bank, or be gainfully employed in
any
other position or job other than as provided above.
(b) Nothing
contained in this Paragraph 6 shall be deemed to prevent or limit the Employee’s
right to invest in the capital stock or other securities of any business
dissimilar from that of the Bank, or, solely as a passive or minority investor,
in any business.
(c) While
Employee is employed by the Bank and for a period of three years after
termination of Employee’s employment by the Bank or by the Employee for reasons
other than those set forth in Section 9 (d) hereof, the Employee shall not
directly or indirectly, engage in any bank or bank-related business which
competes with the business of the Bank as conducted during Employee’s employment
by the Bank for any financial institution, including but not limited to banks,
savings and loan associations, and credit unions within a fifty mile radius
of
Madison, Indiana.
7. Standards.
The
Employee shall perform his duties under this Agreement in accordance with
such
reasonable standards as the Board may establish from time to time. The Bank
will
provide Employee with the working facilities and staff customary for similar
executives and necessary for him to perform his duties.
8. Vacation,
Sick Leave and Disability.
The
Employee shall be entitled to fifteen days vacation annually and shall be
entitled to the same personal time and sick leave, and disability leave as
other
employees of the Bank.
The
Employee shall not receive any additional compensation from the Bank on account
of his failure to take a vacation, and the Employee shall not accumulate
unused
vacation leave from one fiscal year to the next. Personal time awarded each
year
can be converted to accumulated sick time to the extent authorized by the
Board.
In
addition to the aforesaid paid vacations, the Employee shall be entitled,
without loss of pay, to absent himself voluntarily from the performance of
his
employment with the Bank for such additional periods of time and for such
valid
and legitimate reasons as the Board may in its discretion determine. Further,
the Board may grant to the Employee a leave or leaves of absence, with or
without pay, at such time or times and upon such terms and conditions as
such
Board in its discretion may determine.
9. Termination
and Termination Pay.
Subject
to Section 11 hereof, the Employee’s employment hereunder may be terminated
under the following circumstances:
(a) Death.
The
Employee’s employment under this Agreement shall terminate upon his death during
the term of this Agreement, in which event the Employee’s estate shall be
entitled to receive the compensation due the Employee through the last day
of
the calendar month in which his death occurred.
(b) Disability.
(i) The
Bank
may terminate the Employee’s employment, should the Employee become disabled, in
a manner consistent with the Bank’s and the Employee’s rights and obligations
under the Americans With Disabilities Act or other applicable state and federal
laws concerning disability. For the purpose of
this
Agreement, “Disability” means a physical or mental condition which substantially
limits the employee’s ability to perform the essential functions of his
position, as established by this Agreement, and which results in the Employee
becoming eligible for long-term disability benefits under the Bank’s long-term
disability plan.
(ii) During
any period that the Employee shall receive disability benefits and to the
extent
that the Employee shall be physically and mentally able to do so, he shall
furnish such information, assistance and documents so as to assist in the
continued ongoing business of the Bank and, if able, shall make himself
available to the Bank to undertake reasonable assignments consistent with
his
prior position and his physical and mental health. The Bank shall pay all
reasonable expenses incident to the performance of any assignment given to
the
Employee during the disability period.
(c) Just
Cause.
The
Board may, by written notice to the Employee, immediately terminate his
employment at any time, for Just Cause. The Employee shall have no right
to
receive compensation or other benefits for any period after termination for
Just
Cause. Termination for “Just Cause” shall mean termination because of, in the
good faith determination of the Board, the Employee’s personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of
any
law, rule or regulation (other than traffic violations or similar offenses)
or
final cease-and-desist order, or material breach of any provision of this
Agreement. Notwithstanding the foregoing, in the event of termination for
Just
Cause there shall be delivered to the Employee a copy of a resolution duly
adopted by the affirmative vote of not less than a majority of the entire
membership of the Board at a meeting of the Board called and held for that
purpose (after reasonable notice to the Employee and an opportunity for the
Employee, together with the Employee’s counsel, to be heard before the Board),
such meeting and the opportunity to be heard to be held at least 30 days
prior
to such termination, finding that in the good faith opinion of the Board
the
Employee was guilty of conduct set forth above in the second sentence of
this
Subsection (c) and specifying the particulars thereof in detail.
(d) Without
Just Cause; Constructive Discharge.
(i) The
Board
may, by written notice to the Employee, immediately terminate his employment
at
any time for a reason other than Just Cause, in which event the Employee
shall
be entitled to receive the following compensation and benefits (unless such
termination occurs within the time period set forth in Section 11(b) hereof,
in
which event the benefits and compensation provided for in Section 11 shall
apply): (i) the salary provided pursuant to Section 2 hereof, up to the date
of
termination of the term as provided in Section 5 hereof (including any renewal
term) of this Agreement (the “Expiration Date”), and (ii) at the Employee’s
election, either (A) cash in an amount equal to the cost to the Employee
of
obtaining all health, life, disability and other benefits (excluding stock
options) which the Employee would have been eligible to participate in through
the Expiration Date, based upon the benefit levels substantially equal to
those
that the Bank provided for the Employee at the date of termination
of
employment,
or (B) continued participation under such Bank benefit plans through the
Expiration Date, but only to the extent the Employee continues to qualify
for
participation therein. All amounts payable to the Employee shall be paid,
at the
option of the Employee, either (I) in periodic payments through the Expiration
Date, or (II) in one lump sum within ten (10) days of such
termination.
(ii) The
Employee may voluntarily terminate his employment under this Agreement, and
the
Employee shall thereupon be entitled to receive the compensation and benefits
payable under Section 9(d)(1) hereof, within ninety (90) days following the
occurrence of any of the following events, which has not been consented to
in
advance by the Employee in writing (unless such voluntary termination occurs
within the time period set forth in Section 11(b) hereof, in which event
the
benefits and compensation provided for in Section 11 shall apply): (i) the
requirement that the Employee move his personal residence, or perform his
principal executive functions, more than thirty (30) miles from his primary
office; (ii) a material reduction in the Employee’s base compensation, unless
part of an institution-wide reduction; (iii) the failure by the Bank to continue
to provide the Employee with compensation and benefits provided for under
this
Agreement, as the same may be increased from time to time, or with benefits
substantially similar to those provided to him under any of the employee
benefit
plans in which the Employee now or hereafter becomes a participant, or the
taking of any action by the Bank which would directly or indirectly reduce
any
of such benefits or deprive the Employee of any material fringe benefit enjoyed
by him, unless part of an institution-wide reduction; (iv) the assignment
to the
Employee of duties and responsibilities materially different from those normally
associated with his position as referenced in Section 1; or (v) a material
diminution or reduction in the Employee’s responsibilities or authority
(including reporting responsibilities) in connection with his employment
with
the Bank.
(iii) Notwithstanding
the foregoing, but only to the extent required under federal banking law,
the
amount payable under clause (d)(1)(i) hereof shall be reduced to the extent
that
on the date of the Employee’s termination of employment, the present value of
the benefits payable under clauses (d)(1)(i) and (ii) hereof exceeds the
limitation on severance benefits that is set forth in Regulatory Bulletin
27a of
the Office of Thrift Supervision, as in effect on the Effective Date. In
the
event that Section 280G of the Internal Revenue Code of 1986, as amended
(the
“Code”), becomes applicable to payments made under this Section 9(d), and the
payments exceed the “Maximum Amount” as defined in Section 11(a)(1) hereof, the
payments shall be reduced as provided by Section 11(a)(2) of this
Agreement.
(e) Termination
or Suspension Under Federal Law.
(i) If
the
Employee is removed and/or permanently prohibited from participating in the
conduct of the Bank’s affairs by an order issued under Sections 8(e)(4) or
8(g)(1) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. 1818(e)(4) and
(g)(1)), all obligations of the Bank under this Agreement
shall
terminate, as of the effective date of the order, but vested rights of the
parties shall not be affected.
(ii) If
the
Bank is in default (as defined in Section 3(x)(1) of FDIA), all obligations
under this Agreement shall terminate as of the date of default; however,
this
Paragraph shall not affect the vested rights of the parties.
(iii) All
obligations under this Agreement shall terminate, except to the extent
determined that continuation of this Agreement is necessary for the continued
operation of the Bank; (i) by the Director of the Office of Thrift Supervision
(“Director of OTS”), or his or her designee, at the time that the Federal
Deposit Insurance Corporation (“FDIC”) enters into an agreement to provide
assistance to or on behalf of the Bank under the authority contained in Section
13(c) of FDIA; or (ii) by the Director of the OTS, or his or her designee,
at
the time that the Director of the OTS, or his or her designee approves a
supervisory merger to resolve problems related to operation of the Bank or
when
the Bank is determined by the Director of the OTS to be in an unsafe or unsound
condition. Such action shall not affect any vested rights of the
parties.
(iv) If
a
notice served under Section 8(e)(3) or (g)(1) of the FDIA (12 U.S.C. 1818(e)(3)
or (g)(1) suspends and/or temporarily prohibits the Employee from participating
in the conduct of the Bank’s affairs, the Bank’s obligations under this
Agreement shall be suspended as of the date of such service, unless stayed
by
appropriate proceedings. If the charges in the notice are dismissed, the
Bank
may in its discretion (i) pay the Employee all or part of the compensation
withheld while its contract obligations were suspended, and (ii) reinstate
(in
whole or in part) any of its obligations which were suspended.
(f) Voluntary
Termination by Employee.
Subject
to Section 11 hereof, the Employee may voluntarily terminate employment with
the
Bank during the term of this Agreement, upon at least ninety (90) days’ prior
written notice to the Board of Directors, in which case the Employee shall
receive only his compensation, vested rights and employee benefits up to
the
date of his termination (unless such termination occurs pursuant to Section
9(d)(2) hereof, in which event the benefits and compensation provided for
in
section 9(d) shall apply).
10. No
Mitigation.
The
Employee shall not be required to mitigate the amount of any payment provided
for in this Agreement by seeking other employment or otherwise and no such
payment shall be offset or reduced by the amount of any compensation or benefits
provided to the Employee in any subsequent employment.
11. Change
in Control.
(a) Change
in Control; Involuntary Termination.
(i) Notwithstanding
any provision herein to the contrary, if the Employee’s employment under this
Agreement is terminated by the Bank, without the Employee’s prior written
consent and for a reason other than Just Cause, in connection with or within
twelve (12) months after any Change in Control of the
Bank,
the
Employee shall, subject to paragraph (2) of this Section 11(a), be paid an
amount equal to the difference between (i) the product of 2.99 times his
“base
amount” as defined in Section 280G(b)(3) of the Code and regulations promulgated
thereunder (the “Maximum Amount”), and (ii) the sum of any other parachute
payments (as defined under Section 280G(b)(2) of the Code) that the Employee
receives on account of the Change in Control. Said sum shall be paid in one
lump
sum within ten (10) days of such termination. This paragraph would not apply
to
a termination of employment due to death, disability or voluntary termination
by
the Employee.
(ii) In
the
event that the Employee and the Bank jointly determine and agree that the
total
parachute payments receivable under clauses (i) and (ii) of Section 11(a)(1)
hereof exceed the Maximum Amount, notwithstanding the payment procedure set
forth in Section 11(a)(1) hereof, the Employee shall determine which and
how
much, if any, of the parachute payments to which he is entitled shall be
eliminated or reduced so that the total parachute payments to be received
by the
Employee do not exceed the Maximum Amount. If the Employee does not make
his
determination within ten business days after receiving a written request
from
the Bank, the Bank may make such determination, and shall notify the Employee
promptly thereof. Within five business days of the earlier of the Bank’s receipt
of the Employee’s determination pursuant to this paragraph or the Bank’s
determination in lieu of a determination by the Employee, the Bank shall
pay to
or distribute to or for the benefit of the Employee such amounts as are then
due
the Employee under this Agreement.
(iii) As
a
result of uncertainty in application of Section 280G of the Code at the time
of
payment hereunder, it is possible that such payments will have been made
by the
Bank which should not have been made (“Overpayment”) or that additional payments
will not have been made by the Bank which should have been made
(“Underpayment”), in each case, consistent with the calculations required to be
made under Section 11(a)(1) hereof. In the event that the Employee, based
upon
the assertion by the Internal Revenue Service against the Employee of a
deficiency which the Employee believes has a high probability of success,
determines that an Overpayment has been made, any such Overpayment paid or
distributed by the Bank to or for the benefit of Employee shall be treated
for
all purposes as a loan ab initio which the Employee shall repay to the Bank
together with interest at the applicable federal rate provided for in Section
7872(f)(2)(B) of the Code; provided, however, that no such loan shall be
deemed
to have been made and no amount shall be payable by the Employee to the Bank
if
and to the extent such deemed loan and payment would not either reduce the
amount on which the Employee is subject to tax under Section 1 and Section
4999
of the Code or generate a refund of such taxes. In the event that the Employee
and the Bank determine, based upon controlling precedent or other substantial
authority, that an Underpayment has occurred, any such Underpayment shall
be
promptly paid by the Bank to or for the benefit of the Employee together
with
interest at the applicable federal rate provided for in Section 7872(f)(2)(B)
of
the Code.
(iv) A
“Change
in Control” shall be deemed to have occurred if:
1) as
a
result of, or in connection with, any public offering, tender offer or exchange
offer, merger or other business combination, sale of assets or contested
election, any combination of the foregoing transactions, or any similar
transaction, the persons who were non-employee directors of the Bank or a
holding company controlling the Bank before such transaction (the “Continuing
Directors”) cease to constitute a majority of the Board of Directors of the Bank
or such holding company or any successor thereof;
2) the
Bank
or a holding company controlling the Bank transfers substantially all of
its
assets to another corporation which is not a wholly owned subsidiary of the
Bank
or such holding company;
3) the
Bank
or a holding company controlling the Bank sells substantially all of the
assets
of a subsidiary or affiliate which, at the time of such sale, is the principal
employer of the Employee; or
4) the
Bank
or a holding company controlling the Bank is merged or consolidated with
another
corporation and, as a result of the merger or consolidation, less than fifty
one
percent (51%) of the outstanding voting securities of the surviving or resulting
corporation is owned in the aggregate by the former stockholders of the Bank
or
of such holding company controlling the Bank.
Notwithstanding
the foregoing, but only to the extent required under federal banking law,
the
amount payable under Subsection(a) of this Section 11 shall be reduced to
the
extent that on the date of the Employee’s termination of employment, the amount
payable under Subsection(a) of this Section 11 exceeds the limitation on
severance benefits that is set forth in Regulatory Bulletin 27a of the Office
of
Thrift Supervision, as in effect on the Effective Date.
(b)
Change
in Control; Voluntary Termination.
Notwithstanding any other provision of this Agreement to the contrary, but
subject to Section 11(a)(2) hereof, the Employee may voluntarily terminate
his
employment under this Agreement within twelve (12) months following a Change
in
Control of the Bank, as defined in paragraph (a)(4) of this Section 11, and
the
Employee shall thereupon be entitled to receive the payment described in
Section
11(a)(1) of this Agreement, within ninety (90) days following the occurrence
of
any of the following events, which has not been consented to in advance by
the
Employee in writing; (i) the requirement that the Employee perform his principal
executive functions more than thirty (30) miles from his primary office as
of
the date of the Change in Control; (ii) a material reduction in the Employee’s
base compensation as in effect on the date of the Change in Control or as
the
same may be changed by mutual agreement from time to time, unless part of
an
institution-wide reduction; (iii) the failure by the Bank to continue to
provide
the Employee with compensation and benefits provided for under this Agreement,
as the same may be increased from time to time, or with benefits substantially
similar to those provided to him under any employee benefit in which the
Employee is a participant at the time of the Change in Control, or the taking
of
any
action which would materially reduce any of such benefits or deprive the
Employee of any material fringe benefit enjoyed by him at the time of the
Change
in Control, unless part of an institution-wide reduction; (iv) the assignment
to
the Employee of duties and responsibilities materially different from those
normally associated with his position as referenced at Section 1; or (v)
a
material diminution or reduction in the Employee’s responsibilities or authority
(including reporting responsibilities) in connection with his employment
with
the Bank.
(c) Compliance
with 12 U.S.C. Section 1828(k).
Any
payments made to the Employee pursuant to this Agreement, or otherwise, are
subject to and conditioned upon their compliance with 12 U.S.C. Section 1828(k)
and any regulations promulgated thereunder.
(d) Trust.
(i) Within
five business days before or after a Change in Control as defined in Section
11(a) of this Agreement which was not approved in advance by a resolution
of a
majority of the Continuing Directors of the Bank, the Bank shall (i) deposit,
or
cause to be deposited, in a grantor trust (the “Trust”), designed to conform
with Revenue Procedure 93-64 (or any successor) and having a trustee independent
of the Bank, an amount equal to 2.99 times the Employee’s “base amount” as
defined in Section 280G(b)(3) of the Code, and (ii) provide the trustee of
the
Trust with a written direction to hold said amount and any investment return
thereon in a segregated account for the benefit of the Employee, and to follow
the procedures set forth in the next paragraph as to the payment of such
amounts
from the Trust.
(ii) During
the twelve (12) consecutive month period following the date on which the
Bank
makes the deposit referred to in the preceding paragraph, the Employee may
provide the trustee of the Trust with a written notice requesting that the
trustee pay to the Employee an amount designated in the notice as being payable
pursuant to Section 11(a) or (b). Within three business days after receiving
said notice, the trustee of the Trust shall send a copy of the notice to
the
Bank via overnight and registered mail, return receipt requested. On the
tenth
(10th) business day after mailing said notice to the association, the trustee
of
the Trust shall pay the Employee the amount designated therein in immediately
available funds, unless prior thereto the Bank provides the trustee with
a
written notice directing the trustee to withhold such payment. In the latter
event, the trustee shall submit the dispute to non-appealable binding
arbitration for a determination of the amount payable to the Employee pursuant
to Section 11(a) or (b) hereof, and the party responsible for the payment
of the
costs of such arbitration (which may include any reasonable legal fees and
expenses incurred by the Employee) shall be determined by the arbitrator.
The
trustee shall choose the arbitrator to settle the dispute, and such arbitrator
shall be bound by the rules of the American Arbitration Association in making
his or her determination. The parties and the trustee shall be bound by the
results of the arbitration and, within 3 days of the determination by the
arbitrator, the trustee shall pay from the Trust the amounts required to
be paid
to the Employee and/or the Bank, and in no event
shall
the
trustee be liable to either party for making the payments as determined by
the
arbitrator.
(iii) Upon
the
earlier of (i) any payment from the Trust to the Employee, or (ii) the date
twelve (12) months after the date on which the Bank makes the deposit referred
to in the first paragraph of this subsection (d)(1), the trustee of the Trust
shall pay to the Bank the entire balance remaining in the segregated account
maintained for the benefit of the Employee. The Employee shall thereafter
have
no further interest in the Trust pursuant to this Agreement.
(e) In
the
event that any dispute arises between the Employee and the Bank as to the
terms
or interpretation of this Agreement, including this Section 11, whether
instituted by formal legal proceedings or otherwise, including any action
that
the Employee takes to enforce the terms of this Section 11 or to defend against
any action taken by the Bank, the Employee shall be reimbursed for all costs
and
expenses, including reasonable attorneys’ fees, arising from such dispute,
proceedings or actions, provided that the Employee shall obtain a final judgment
by a court of competent jurisdiction in favor of the Employee. Such
reimbursement shall be paid within ten (10) days of Employee’s furnishing to the
Bank written evidence, which may be in the form, among other things, of a
canceled check or receipt, of any costs or expenses incurred by the
Employee.
Should
the Employee fail to obtain a final judgment in favor of the Employee and
a
final judgment is entered in favor of the Bank, then the Bank shall be
reimbursed for all costs and expenses, including reasonable Attorneys’ fees
arising from such dispute, proceedings or actions. Such reimbursement shall
be
paid within ten (10) days of the Bank furnishing to the Employee written
evidence, which may be in the form, among other things, of a canceled check
or
receipt, of any costs or expenses incurred by the Bank.
12. Stock
Options.
Employer will permit Employee or his personal representative(s) or heirs,
during
a period of three months following Employee’s termination of employment by
Employer for the reasons set forth in Subsections 9(d) or 11(a), if such
termination follows a Change of Control, to require Employer, upon written
request, to purchase all outstanding stock options previously granted to
Employee under any stock option plan then in effect to the extent the options
are vested at a cash purchase price equal to the amount by which the aggregate
“fair market value” of the shares subject to such options exceeds the aggregate
option price for such shares. For purposes of this Agreement, the term “fair
market value” shall mean the higher of (1) the average of the highest asked
prices for shares in the over-the-counter market as reported on the NASDAQ
system or other exchange if the shares are traded on such system for the
30
business days preceding such termination, or (2) the average per share price
actually paid for the most highly priced 1% of the shares acquired in connection
with the Change of Control by any person or group acquiring such
control.
13. Federal
Income Tax Withholding.
The
Bank may withhold all federal and state income or other taxes from any benefit
payable under this Agreement as shall be required pursuant to any law or
government regulation or ruling.
14. Successors
and Assigns.
(a) Bank.
This
Agreement shall not be assignable by the Bank, provided that this Agreement
shall inure to the benefit of and be binding upon any corporate or other
successor of the Bank which shall acquire, directly or indirectly, by merger,
consolidation, purchase or otherwise, all or substantially all of the assets
or
stock of the Bank.
(b) Employee.
Since
the Bank is contracting for the unique and personal skills of the Employee,
the
Employee shall be precluded from assigning or delegating his rights or duties
hereunder without first obtaining the written consent of the Bank; provided,
however, that nothing in this paragraph shall preclude (i) the Employee from
designating a beneficiary to receive any benefit payable hereunder upon his
death, or (ii) the executors, administrators, or other legal representatives
of
the Employee or his estate from assigning any rights hereunder to the person
or
persons entitled thereunto.
(c) Attachment.
Except
as required by law, no right to receive payments under this Agreement shall
be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance,
charge, pledge, or hypothecation or to exclusion, attachment, levy or similar
process or assignment by operation of law, and any attempt, voluntary or
involuntary, to effect any such action shall be null, void and of no
effect.
15. Amendments.
No
amendments or additions to this Agreement shall be binding unless made in
writing and signed by all of the parties, except as herein otherwise
specifically provided.
16. Applicable
Law.
Except
to the extent preempted by federal law, the laws of the State of Indiana
shall
govern this Agreement in all respects, whether as to its validity, construction,
capacity, performance or otherwise.
17. Severability.
The
provisions of this Agreement shall be deemed severable and the invalidity
or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
18. Entire
Agreement.
This
Agreement, together with any understanding or modifications thereof as agreed
to
in writing by the parties, shall constitute the entire agreement between
the
parties hereto and supersedes any other agreement between the parties hereto
relating to the employment of the Employee
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first hereinabove written.
|
ATTEST:
|
RIVER
VALLEY FINANCIAL BANK
|
|||
|
By:
|
By:
|
/s/
Xxxxxxx X. Xxxxxxxxx
|
||
|
Xxxxxx
X. Xxxxxxx, Secretary
|
Xxxxxxx
X. Xxxxxxxxx, President
|
|||
|
/s/
Xxxxxxx X. Xxxxxxx
|
||||
|
Xxxxxxx
X. Xxxxxxx
|
||||
The
undersigned, River Valley Bancorp, sole shareholder of Bank, agrees that
if it
shall be determined for any reason that any obligation on the part of Bank
to
continue to make any payments due under this Agreement to Employee is
unenforceable for any reason, River Valley Bancorp agrees to honor the terms
of
this Agreement and continue to make any such payments due hereunder to Employee
or to satisfy any such obligation pursuant to the terms of this Agreement,
as
though it were the Bank hereunder.
|
RIVER
VALLEY BANK
|
||||
|
By:
|
/s/
Xxxxxxx X. Xxxxxxxxx
|
|||
|
Xxxxxxx
X. Xxxxxxxxx, President
|
||||
