Exhibit 10.2
VAN X. XXXXXXX
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into as of the
26th day of December, 2001 (the "Effective Date"), by and between MAIN STREET
TRUST, INC., an Illinois corporation ("Main Street"), and VAN X. XXXXXXX
("Van").
RECITALS
A. Van is serving as the President and the Chief Executive Officer ("CEO") of
Main Street and Chairman and CEO of its wholly-owned subsidiary,
BankIllinois (the "Bank"), since the Effective Date.
B. Main Street and Van have made commitments to each other on a variety of
important issues concerning his employment, including the performance that
will be expected of him, the compensation that he will be paid, how long
and under what circumstances he will remain employed, and the financial
details relating to any decision that either Van or Main Street might ever
make to terminate this Agreement.
C. Main Street and Van believe that the commitments they have made to each
other should be memorialized in writing, and that is the purpose of this
Agreement.
THEREFORE, Main Street and Van agree as follows:
AGREEMENTS
1. Term and Automatic Renewal. The term of this Agreement and Van's employment
hereunder shall commence as of the Effective Date hereof and continue until
December 31, 2002. On January 1, 2003 and each January 1 thereafter this
Agreement and the term of Van's employment hereunder will automatically
renew for one (1) additional year unless this Agreement and Van's
employment hereunder are terminated in accordance with the provisions of
Section 4.
2. Employment. Main Street and Van each confirm that Van is employed as the
President and the CEO of Main Street and Chairman and CEO of the Bank as of
the Effective Date in accordance with the terms of this Agreement.
(a) Positions. Subject to the terms of this Agreement, Main Street will
continue to employ Van as the President and the CEO of Main Street,
and will cause the Bank to continue to employ Van as the Chairman and
CEO of the Bank.
(b) Duties. Van's duties, authority and responsibilities as the CEO of
Main Street and the Bank include and will continue to include all
duties, authority and responsibilities customarily held by the highest
ranking officer of comparable banks and bank holding companies,
subject always to the charter and bylaw provisions and the policies of
Main Street and the directions of its board of directors (the
"Board"), and where applicable, of any of its subsidiaries.
(c) Care and Loyalty. Van will devote his best efforts and full business
time, energy, skills and attention to the business and affairs of Main
Street and the Bank, and will faithfully and loyally discharge his
duties to Main Street and the Bank.
3. Compensation. Main Street will compensate Van for his services as follows
during the term of this Agreement and his employment hereunder:
(a) Base Compensation. Van will receive an annual base salary of two
hundred and fifteen thousand dollars ($215,000) through March 1, 2002.
Prior to March 1, 2002, the Board will review Van's base salary to
determine whether it should be maintained at its then existing level
or increased effective as of March 1, 2002. Following the adjustment,
if any, made as of March 1, 2002, the Board will review Van's base
salary annually during the term of this Agreement to determine whether
it should be maintained at its then existing level or increased;
provided that Van's annual base salary after any such adjustment will
not be lower than his base salary for the immediately preceding year.
(b) Performance Bonus. Main Street will pay Van a performance bonus at the
end of each year. Van and the Board will establish mutually acceptable
performance criteria and will also establish the amount of the maximum
bonus that Van will receive for each year if he meets the performance
criteria. The maximum bonus amount in any year will not be less than
30% of Van's base salary for that year. Nothing in this Agreement will
preclude the Board from awarding Van an annual bonus in any year that
exceeds the maximum bonus amount established for that year.
(c) Profit Sharing Benefit. Van will receive an annual profit sharing
benefit that will range between 8% and 15% of the combined amount of
his annual base salary and performance bonus. The Board will decide
the exact amount of this benefit annually within that range. Main
Street will contribute this benefit to Main Street's tax-qualified
retirement plans and/or its nontax-qualified deferred compensation
programs for the account of Van. All such benefit payments will be
determined and governed by the terms of the particular plan or
program.
(d) Car Allowance. Main Street will pay Van a car allowance of seven
hundred dollars ($700) per month through March 1, 2002. Commencing as
of March 1, 2002, the car allowance will be subject to annual review
by the Board and will be maintained or increased as the Board deems
appropriate. Main Street will also insure Van's car at Main Street's
expense under Main Street's general corporate automobile insurance
program.
(e) Club Membership. Main Street expects Van to entertain clients and
prospective clients of Main Street and the Bank at the country club to
which he belongs, and thus will reimburse Van's dues for his country
club membership in an amount not to exceed three hundred and fifty
dollars ($350) per month through March 1, 2002. Commencing as of March
1, 2002, this allowance will be subject to annual review by the Board
and may be maintained or increased as the Board deems appropriate.
(f) Reimbursement of Expenses. Main Street will reimburse Van for all
travel, entertainment and other out-of-pocket expenses that he
reasonably and necessarily incurs in the performance of his duties.
Van will document these expenses to the extent necessary to comply
with all applicable laws and internal policies.
(g) Other Benefits. Van will be entitled to participate in all plans and
benefits that are now or later made available by Main Street to its
senior executives generally.
(h) Vacations. Van will receive at least twenty (20) days of paid vacation
annually, subject to Main Street's general vacation policy.
(i) Withholding. Van acknowledges that Main Street may withhold any
applicable federal, state or local withholding or other taxes from
payments that become due to him.
(j) Allocations. Van and Main Street intend that Van will be a dual
employee of Main Street and one or more of its subsidiaries, and that
Van will be devoting substantial time and attention to the affairs of
the subsidiaries, including the Bank in his capacity as the Bank's
Chairman and CEO. Main Street may allocate to the Bank, or any other
of Main Street's subsidiaries any portion of Van's salary, cash bonus
and other compensation and benefits that Main Street and the Bank or
any other of Main Street's subsidiaries deem to be a lawful and
appropriate allocation, but no such allocation will relieve Main
Street of any of its obligations to Van under this Agreement.
4. Term and Termination.
(a) Termination Without Cause. Either Main Street or Van may terminate
this Agreement and Van's employment hereunder for any reason by
delivering written notice of termination to the other party no less
than ninety (90) days before the effective date of termination, which
date will be specified in the notice of termination.
(b) Termination for Cause. Main Street may terminate this Agreement and
Van's employment hereunder for Cause by delivering written notice of
termination to Van no less than thirty (30) days before the effective
date of termination. "Cause" for termination will exist if: (i) Van
engages in one or more unsafe and unsound banking practices or
violations of a law, regulation or written policy of Main Street or
any of its subsidiaries, which individually or together have or
threaten to have a material and adverse effect on the financial
condition of Main Street taken as a whole; (ii) Van engages in a
deliberate act of dishonesty involving the affairs of Main Street or
any of its subsidiaries or commits a wilful and material violation of
his fiduciary duties to Main Street or any of its subsidiaries; (iii)
Van is removed or suspended from banking pursuant to Section 8(e) of
the Federal Deposit Insurance Act or any other applicable State or
Federal law; or (iv) Van commits a material breach of his obligations
under this Agreement and fails to cure the breach within thirty (30)
days after Main Street gives Van written notice of the breach. Main
Street will specify the factual and legal basis for its belief that
Cause for termination exists in the notice of termination. If Van so
requests, Main Street will provide Van with a reasonable opportunity
prior to the effective date of termination to cure any correctable
violation of law, regulation, policy or duty that Main Street has
specified in the notice of termination, and to appear before the Board
and any applicable governmental authority to dispute any facts that
are alleged to constitute Cause for termination.
(c) Constructive Discharge. If Van is ever Constructively Discharged, he
may terminate this Agreement and his employment hereunder by
delivering written notice to Main Street no later than thirty (30)
days before the effective date of termination. "Constructive
Discharge" means the occurrence of any one or more of the following:
(i) Van is not reelected to or is removed as CEO of Main Street or the
Bank; or (ii) Main Street fails to vest Van with or removes from him
the duties, responsibilities, authority or resources that he
reasonably needs to competently perform his duties as the CEO of Main
Street and the Bank; or (iii) Main Street notifies Van pursuant to
Section 4(a) that it is terminating this Agreement; or (iv) Main
Street changes the primary location of Van's employment to a place
that is more than fifty (50) miles from Champaign, Illinois; or (v)
Main Street otherwise commits a material breach of its obligations
under this Agreement and fails to cure the breach within thirty (30)
days after Van gives Main Street written notice of the breach.
(d) Termination upon Change of Control. Van may terminate this Agreement
and his employment hereunder for any reason within one (1) year after
a Change of Control occurs by delivering written notice of termination
to Main Street or its successor no less than thirty (30) days before
the effective date of termination. After one (1) year following the
Change of Control, Van may terminate this Agreement and his employment
hereunder only in accordance with Section 4(a) or (c).
(i) A "Change of Control" will be deemed to have occurred if: a) 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"))
acquires beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 0000 Xxx) of 33% or more of the combined
voting power of the then outstanding voting securities; or b) the
individuals who were members of the Board on the Effective Date
(the "Current Board Members") cease for any reason to constitute
a majority of the Board of Main Street or its successor; however,
if the election or the nomination for election of any new
director of Main Street or its successor is approved by a vote of
a majority of the individuals who are Current Board Members, such
new director shall, for the purposes of this Section 4(d)(i), be
considered a Current Board Member; or c) Main Street's
stockholders approve (1) a merger or consolidation of Main Street
or the Bank and the stockholders of Main Street immediately
before such merger or consolidation do not, as a result of such
merger or consolidation, own, directly or indirectly, more than
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 outstanding
securities of Main Street 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 Main Street or the Bank.
(ii) Notwithstanding and in lieu of Section 4(d)(i), a Change of
Control will not be deemed to have occurred: a) solely because
33% or more of the combined voting power of the then outstanding
voting securities of Main Street are acquired by (1) a trustee or
other fiduciary holding securities under one or more employee
benefit plans maintained for employees of Main Street or the
Bank, or (2) any person pursuant to the will or trust of any
existing stockholder of Main Street, or who is a member of the
immediate family of such stockholder, or (3) 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; or b)
if Van agrees in writing to waive a particular Change of Control
for the purposes of this Agreement.
(e) Termination upon Disability. Main Street will not terminate this
Agreement and Van's employment hereunder if Van becomes disabled
within the meaning of Main Street's then current employee disability
program or, at Main Street's election, as determined by a physician
selected by Main Street, unless as a result of such disability, Van is
unable to perform his duties with the requisite level of skill and
competence for a period of six (6) consecutive months. Thereafter,
Main Street may terminate this Agreement in accordance with Section
4(a).
(f) Termination upon Death. This Agreement will terminate if Van dies
during the term of this Agreement, effective on the date of his death.
Any payments that are owing to Van under this Agreement or otherwise
at the time of his death will be made to whomever Van may designate in
writing as his beneficiary, or absent such a designation, to the
executor or administrator of his estate.
(g) Severance Benefits. Main Street will pay severance benefits to Van as
follows:
(i) If this Agreement and Van's employment hereunder are terminated
by Main Street without Cause pursuant to Section 4(a), or by
reason of Van's Constructive Discharge pursuant to Section 4(c),
or due to Van's disability or death pursuant to Section 4(e) or
4(f), Main Street will pay Van an amount equal to the sum of his
then applicable annual base salary, plus the amount of the most
recent performance bonus that Main Street awarded to Van pursuant
to Section 3(b) (collectively, the "Severance Payment"). If the
effective date of termination occurs before the last day of the
then current term, the Severance Payment will also include the
value of the contributions that would have been made to Van or
for his benefit under all applicable retirement and other
employee benefit plans had he remained in Main Street's employ
through the last day of the then current term. Main Street will
also continue to provide Van and his dependents, at the expense
of Main Street, with continuing coverage under all existing life,
health and disability programs for a period of one (1) year
following the effective date of termination. In addition, if Van
is terminated without Cause pursuant to Section 4(a), or by
reason of Van's Constructive Discharge pursuant to Section 4(e),
or due to Van's disability or death pursuant to Section 4(e) or
4(f), within the eighteen (18) month period immediately preceding
a Change of Control, then upon the Change of Control, Main Street
or its successor will pay Van the difference between the amount
paid pursuant to this Section 4(g)(i) and the amount which would
have been paid pursuant to Section 4(g)(ii) had Van's employment
not earlier terminated.
(ii) If within one (1) year after a Change of Control occurs this
Agreement and Van's employment hereunder are terminated by Van
pursuant to Section 4(a), (c) or (d), or this Agreement and
Greg's employment hereunder are terminated by Main Street or its
successor pursuant to Section 4(a) or (b) either within the
eighteen (18) month period immediately preceding a Change of
Control or at any time after a Change of Control occurs, then
Main Street or its successor will pay Van an amount equal to the
greater of nine hundred thousand dollars ($900,000) or three (3)
times the Severance Payment. In this event, Main Street or its
successor will also continue to provide Van and his dependents,
at the expense of Main Street or its successor, with continuing
coverage under all existing life, health and disability programs
for a period of three (3) years following the effective date of
termination.
(iii)All payments that become due to Van under this Section 4(g) will
be made in equal monthly installments unless Main Street elects
to make those payments in one (1) lump sum. Main Street will be
obligated to make all payments that become due to Van under this
Section 4(g) whether or not he obtains other employment following
termination or takes steps to mitigate any damages that he claims
to have sustained as a result of termination. The payments and
other benefits provided for in this Section 4(g) are intended to
supplement any compensation or other benefits that have accrued
or vested with respect to Van or his account as of the effective
date of termination.
(iv) If it is determined, in the opinion of Main Street's independent
accountants, in consultation, if necessary, with Main Street's
independent legal counsel, that any payment under this Agreement,
either separately or in conjunction with any other payments,
benefits and entitlements received by Van hereunder or under any
other plan or agreement under which Van participates or to which
he is a party, would constitute an "Excess Parachute Payment"
within the meaning of Section 280G of the Internal Revenue Code
of 1986, as amended (the "Code"), and thereby be subject to the
excise tax imposed by Section 4999 of the Code (the "Excise
Tax"), then in such event Main Street, or its successor, as
applicable, shall pay to Van a "grossing-up" amount equal to the
amount of such Excise Tax, plus all federal and state income or
other taxes with respect to the payment of the amount of such
Excise Tax, including all such taxes with respect to any such
grossing-up amount. If, at a later date, the Internal Revenue
Service assesses a deficiency against Van for the Excise Tax
which is greater than that which was determined at the time such
amounts were paid, then Main Street shall pay to Van the amount
of such unreimbursed Excise Tax plus any interest, penalties and
reasonable professional fees or expenses incurred by Van as a
result of such assessment, including all such taxes with respect
to any such additional amount. The highest marginal tax rate
applicable to individuals at the time of the payment of such
amounts will be used for purposes of determining the federal and
state income and other taxes with respect thereto. Main Street
shall withhold from any amounts paid under this Agreement the
amount of any Excise Tax or other federal, state or local taxes
then required to be withheld. Computations of the amount of any
grossing-up supplemental compensation paid under this
subparagraph shall be conclusively made by Main Street's
independent accountants, in consultation, if necessary, with the
Employer's independent legal counsel. If, after Van receives any
gross-up payments or other amount pursuant to this subparagraph
(iv), Van receives any refund with respect to the Excise Tax, Van
shall promptly pay Main Street the amount of such refund within
ten (10) days of receipt by Van.
(v) Main Street may elect to defer any payments that may become due
to Van under this Section 4(g) if, at the time the payments
become due, Main Street is not in compliance with any
regulatory-mandated minimum capital requirements or if making the
payments would cause Main Street's capital to fall below such
minimum capital requirements. In this event, Main Street will
resume making the payments as soon as it can do so without
violating such minimum capital requirements.
5. Confidentiality. Van acknowledges that the nature of his employment will
require that he produce and have access to records, data, trade secrets and
information that are not available to the public regarding Main Street and
its subsidiaries and affiliates ("Confidential Information"). Van will hold
in confidence and not directly or indirectly disclose any Confidential
Information to third parties unless disclosure becomes reasonably necessary
in connection with Van's performance of his duties hereunder, or the
Confidential Information lawfully becomes available to the public from
other sources, or he is authorized in writing by Main Street to disclose
it, or he is required to make disclosure by a law or pursuant to the
authority of any administrative agency or judicial body. All Confidential
Information and all other records, files, documents and other materials or
copies thereof relating to Main Street's business that Van prepares or uses
will always be the sole property of Main Street. Van will promptly return
all originals and copies of such Confidential Information and other
records, files, documents and other materials to Main Street if his
employment with Main Street is terminated for any reason.
6. Non-Competition Covenant.
(a) Restrictive Covenant. Main Street and Van have jointly reviewed the
customer lists and operations of Main Street and agree that Main
Street's primary service area for its lending and deposit activities
encompasses a fifty (50) mile radius from Main Street's main office.
Van agrees that, for a period of one (1) year after the termination of
this Agreement, he will not, without Main Street's prior written
consent, directly or indirectly Compete with Main Street. For the
purposes of Section 6(a):
(i) "Compete" means directly or indirectly owning, managing,
operating or controlling a Competitor, or directly or indirectly
serving as an employee, officer or director of or a consultant to
a Competitor, or soliciting or inducing any employee or agent of
Main Street to terminate employment with Main Street and become
employed by a Competitor.
(ii) "Competitor" means any person, firm, partnership, corporation,
trust or other entity that owns, controls or is a bank, savings
and loan association, credit union or similar financial
institution (a "Financial Institution") that is physically
located and conducts substantial lending and deposit taking
activities within a fifty (50) mile radius of Main Street's main
office.
(b) Successors. In the event that a successor to Main Street or the Bank
succeeds to or assumes Main Street's rights and obligations under this
Agreement, Section 6(a) will apply only to the primary service area of
Main Street as it existed immediately before the succession or
assumption occurred and will not apply to any of the successor's other
offices.
(c) Investment Exception. Section 6(a) will not prohibit Van from directly
or indirectly owning or acquiring any capital stock or similar
securities that are listed on a securities exchange or quoted on the
National Association of Securities Dealers Automated Quotation System
and do not represent more than 5% of the outstanding capital stock of
any Financial Institution.
(d) Injunctive Relief. Van agrees that a violation of this Section 6 would
result in direct, immediate and irreparable harm to Main Street, and
in such event, agrees that Main Street, in addition to its other right
and remedies, would be entitled to injunctive relief enforcing the
terms and provisions of this Section 6.
7. Indemnity; Other Protections.
(a) Indemnification. Main Street will indemnify Van (and, upon his death,
his heirs, executors and administrators) to the fullest extent
permitted by law against all expenses, including reasonable attorneys'
fees, court and investigative costs, judgments, fines and amounts paid
in settlement (collectively, "Expenses") reasonably incurred by him in
connection with or arising out of any pending, threatened or completed
action, suit or proceeding in which he may become involved by reason
of his having been an officer or director of Main Street or any of its
subsidiaries. The indemnification rights provided for herein are not
exclusive and will supplement any rights to indemnification that Van
may have under any applicable bylaw or charter provision of Main
Street or any of its subsidiaries, or any resolution of Main Street or
any of its subsidiaries, or any applicable statute.
(b) Advancement of Expenses. In the event that Van becomes a party, or is
threatened to be made a party, to any pending, threatened or completed
action, suit or proceeding for which Main Street or any of its
subsidiaries is permitted or required to indemnify him under this
Agreement, any applicable bylaw or charter provision of Main Street or
any of its subsidiaries, any resolution of Main Street or any of its
subsidiaries, or any applicable statute, Main Street will, to the
fullest extent permitted by law, advance all Expenses incurred by Van
in connection with the investigation, defense, settlement, or appeal
of any threatened, pending or completed action, suit or proceeding,
subject to receipt by Main Street of a written undertaking from Van to
reimburse Main Street for all Expenses actually paid by Main Street to
or on behalf of Van in the event it shall be ultimately determined
that Main Street or any of its subsidiaries cannot lawfully indemnify
Van for such Expenses, and to assign to Main Street all rights of Van
to indemnification under any policy of directors' and officers'
liability insurance to the extent of the amount of Expenses actually
paid by Main Street to or on behalf of Van.
(c) Litigation. Unless precluded by an actual or potential conflict of
interest, Main Street will have the right to recommend counsel to Van
to represent him in connection with any claim covered by this Section
7. Further, Van's choice of counsel, his decision to contest or settle
any such claim, and the terms and amount of the settlement of any such
claim will be subject to Main Street's prior written approval.
8. General Provisions.
(a) Successors; Assignment. This Agreement will be binding upon and inure
to the benefit of Van and his personal representatives in the event of
his death and Main Street and its successors and assigns. For the
purposes of this Agreement, any successor or assign of Main Street
shall be deemed to be "Main Street," and any successor or assign of
the Bank shall be deemed to be the "Bank." Main Street will require
any successor or assign of Main Street or any direct or indirect
purchaser or acquiror of all or substantially all of the business,
assets or liabilities of Main Street or the Bank, whether by transfer,
purchase, merger, consolidation, stock acquisition or otherwise, to
assume and agree in writing to perform this Agreement and Main
Street's obligations hereunder in the same manner and to the same
extent as Main Street would have been required to perform them if no
such transaction had occurred.
(b) Entire Agreement; Survival. This Agreement constitutes the entire
agreement between Van and Main Street concerning the subject matter
hereof, and supersedes all prior negotiations, undertakings,
agreements and arrangements with respect thereto, whether written or
oral. The provisions of this Agreement will be regarded as divisible
and separate; if any provision is ever declared invalid or
unenforceable, the validity and enforceability of the remaining
provisions will not be affected. This Agreement may not be amended or
modified except by a writing signed by Van and Main Street, and except
for the employment obligations set forth in Section 2, all rights and
obligations of Van and Main Street hereunder shall survive the
termination of this Agreement.
(c) Governing Law and Enforcement. This Agreement will 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 law regarding conflicts of law. With regard to each and every term
and condition of this Agreement and any and all agreements and
instruments subject to the terms hereof, the parties to this Agreement
understand and agree that the same have and has been mutually
negotiated, prepared and drafted, and that if at any time the parties
hereto desire or are required to interpret or construe any such term
or condition or any agreement or instrument subject hereto, no
consideration shall be given to the issue of which party to this
Agreement actually prepared, drafted or requested any term or
condition of this Agreement or any agreement or instrument subject
hereto.
(d) Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration
conducted at a location selected by Van within fifty (50) miles from
Champaign, Illinois, in accordance with the rules of the American
Arbitration Association.
(e) Legal Fees. All reasonable legal fees paid or incurred in connection
with any dispute or question of interpretation relating to this
Agreement shall be paid to the party who is successful on the merits
by the other party.
(f) 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.
(g) 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 Main Street, addressed to the
principal headquarters of Main Street, attention: Xxx X. XxxXxxxxxx,
with a copy sent to each member of the Board at his/her business
address; or, if to Van, to the address set forth below Van's signature
on this Agreement, or to such other address as the party to be
notified shall have given to the other.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
MAIN STREET TRUST, INC. VAN X. XXXXXXX
/s/ Xxxxxxx X. Xxxxxx /s/ Van X. Xxxxxxx
------------------------------------ ------------------------
Xxxxxxx X. Xxxxxx Van X. Xxxxxxx
