EMPLOYMENT AGREEMENT
Exhibit
10.2
This
Employment Agreement (the "Agreement") is made and entered into this 11th day
of
December, 2007, by and between First Mid-Illinois Bancshares, Inc. ("the
Company"), a corporation with its principal place of business located in
Mattoon, Illinois, and Xxxxx X. Xxxxx (“Manager”).
In
consideration of the promises and mutual covenants and agreements contained
herein, the parties hereto acknowledge and agree as follows:
ARTICLE
ONE
TERM
AND NATURE OF AGREEMENT
1.01 Term
of Agreement. The term of this Agreement shall commence as of
December 11, 2007 and shall continue for until December 31,
2010. Thereafter, unless Manager’s employment with the Company has
been previously terminated, Manager shall continue his employment with the
Company on an at will basis and, except as provided in Articles Five, Six and
Seven, this Agreement shall terminate unless extended by mutual written
agreement.
1.02 Employment. The
Company agrees to employ Manager and Manager accepts such employment by the
Company on the terms and conditions herein set forth. The duties of Manager
shall be determined by the Company’s Chief Executive Officer and shall adhere to
the policies and procedures of the Company and shall follow the supervision
and
direction of the Chief Executive Officer or his designee in the performance
of
such duties. During the term of his employment, Manager agrees to
devote his full working time, attention and energies to the diligent and
satisfactory performance of his duties hereunder. Manager shall not,
while he is employed by the Company, engage in any activity which would (a)
interfere with, or have an adverse effect on, the reputation, goodwill or any
business relationship of the Company or any of its subsidiaries; (b) result
in
economic harm to the Company or any of its subsidiaries; or (c) result in a
breach of Section Six of the Agreement.
ARTICLE
TWO
COMPENSATION
AND BENEFITS
While
Manager is employed with the Company during the term of this Agreement, the
Company shall provide Manager with the following compensation and
benefits:
2.01 Base
Salary. The Company shall pay Manager an annual base salary of
$67,500 per fiscal year, payable in accordance with the Company’s customary
payroll practices for management employees. The Chief Executive
Officer or his designee may review and adjust Manager's base salary from year
to
year; provided, however, that during the term of Manager's employment, the
Company shall not decrease Manager's base salary.
2.02 Incentive
Compensation Plan. Manager shall continue to participate in the
First Mid-Illinois Bancshares, Inc. Incentive Compensation Plan in accordance
with the terms and conditions of such Plan. Pursuant to the Plan,
beginning in 2008, Manager shall have an opportunity to receive incentive
compensation of up to a maximum of 20% of Manager's annual base
salary. The Chief Executive Office or his designee may review and
adjust the maximum percentage from year to year, provided, however, that during
the term of manager’s employment, the Company shall not decrease this
percentage. The incentive compensation payable for a particular
fiscal year will be based upon the attainment of the performance goals in effect
under the Plan for such year and will be paid in accordance with the terms
of
the Plan and at the sole discretion of the Board.
2.03 Deferred
Compensation Plan. Beginning in 2008, Manager shall be
eligible to participate in the First Mid-Illinois Bancshares, Inc. Deferred
Compensation Plan in accordance with the terms and conditions of such
Plan.
2.04 Vacation. Manager
shall be entitled to four (4) weeks of paid vacation each year during the term
of this Agreement.
2.05 Other
Benefits. Manager shall be eligible (to the extent he qualifies)
to participate in any other retirement, health, accident and disability
insurance, or similar employee benefit plans as may be maintained from time
to
time by the Company for its other management employees subject to and on a
consistent basis with the terms, conditions and overall administration of such
plans.
2.06 Business
Expenses. Manager shall be entitled to reimbursement by the
Company for all reasonable expenses actually and necessarily incurred by him
on
its behalf in the course of his employment hereunder and in accordance with
expense reimbursement plans and policies of the Company from time to time in
effect for management employees.
2.07 Withholding. All
salary, incentive compensation and other benefits provided to Manager pursuant
to this Agreement shall be subject to withholding for federal, state or local
taxes, amounts withheld under applicable employee benefit plans, policies or
programs, and any other amounts that may be required to be withheld by law,
judicial order or otherwise or by agreement with, or consent of,
Manager.
ARTICLE
THREE
DEATH
OF MANAGER
This
Agreement shall terminate prior to the end of the term described in Section
1.01
upon Manager’s termination of employment with the Company due to his
death. Upon Manager’s termination due to death, the Company shall pay
Manager’s estate the amount of Manager’s base salary plus his accrued but unused
vacation time earned through the date of such death and any incentive
compensation earned for the preceding fiscal year that is not yet paid as of
the
date of such death.
ARTICLE
FOUR
TERMINATION
OF EMPLOYMENT
Manager’s
employment with the Company may be terminated by Manager or by the Company
at
any time for any reason. Upon Manager’s termination of employment
prior to the end of the term of the Agreement, the Company shall pay Manager
as
follows:
4.01 Termination
by the Company for Other than Cause. If the Company terminates
Manager’s employment for any reason other than Cause, the Company shall pay
Manager the following:
(a) An
amount
equal to Manager’s monthly base salary in effect at the time of such termination
of employment for a period of twelve (12) months thereafter. Such
amount shall be paid to Manager periodically in accordance with the Company’s
customary payroll practices for management employees.
(b) The
base
salary and accrued but unused paid vacation time earned through the date of
termination and any incentive compensation earned for the preceding fiscal
year
that is not yet paid.
(c) Continued
coverage for Manager and/or Manager’s family under the Company’s health plan
pursuant to Title I, Part 6 of the Employee Retirement Income Security Act
of
1974 (“COBRA”) and for such purpose the date of Manager’s termination of
employment shall be considered the date of the “qualifying event” as such term
is defined by COBRA. During the period beginning on the date of such
termination and ending at the end of the period described in Section 4.01(a),
Manager shall be charged for such coverage in the amount that he would have
paid
for such coverage had he remained employed by the Company, and for the duration
of the COBRA period, Manager shall be charged for such coverage in accordance
with the provisions of COBRA.
For
purposes of this Agreement, “Cause” shall mean Manager’s (i) conviction in a
court of law of (or entering a plea of guilty or no contest to) any crime or
offense involving fraud, dishonesty or breach of trust or involving a felony;
(ii) performance of any act which, if known to the customers, clients,
stockholders or regulators of the Company, would materially and adversely impact
the business of the Company; (iii) act or omission that causes a
regulatory body with jurisdiction over the Company to demand,
request, or recommend that Manager be suspended or removed from any position
in
which Manager serves with the Company; (iv) substantial nonperformance of any
of
his obligations under this Agreement; (v) misappropriation of or
intentional material damage to the property or business of the Company or any
affiliate; or (vi) breach of Article Five or Six of this Agreement.
4.02 Termination
Following a Change in Control. Notwithstanding Section 4.01, if,
following a Change in Control, and prior to the end of the term of this
Agreement, Manager’s employment is terminated by the Company (or any successor
thereto) for any reason other than Cause, or if Manager terminates his
employment because of a decrease in his then current base salary or a
substantial diminution in his position and responsibilities, the Company (or
any
successor thereto) shall pay Manager the following:
(a) An
amount
equal to Manager’s monthly base salary in effect at the time of such termination
for a period of twelve (12) months thereafter. Such amount shall be
paid periodically in accordance with the Company’s or successor’s customary
payroll practices for management employees.
(b) An
amount
equal to the incentive compensation earned by or paid to Manager for the fiscal
year immediately preceding the year in which Manager’s termination of employment
occurs. Such amount shall be paid to Manager in a lump sum as soon as
practicable after the date of his termination.
(c) The
base
salary and accrued but unused paid vacation time earned through the date of
termination and any incentive compensation earned for the preceding fiscal
year
that is not yet paid.
(d) Continued
coverage for Manager and/or Manager’s family under the Company’s health plan
pursuant to Title I, Part 6 of the Employee Retirement Income Security Act
of
1974 (“COBRA”) and for such purpose the date of Manager’s termination of
employment shall be considered the date of the “qualifying event” as such term
is defined by COBRA. During the period beginning on the date of such
termination and ending at the end of the period described in Section 4.02(a),
Manager shall be charged for such coverage in the amount that he would have
paid
for such coverage had he remained employed by the Company, and for the duration
of the COBRA period, Manager shall be charged for such coverage in accordance
with the provisions of COBRA.
For
purposes of this Agreement, “Change in Control” shall have the meaning as set
forth in the First Mid-Illinois Bancshares, Inc. 2007 Stock Incentive Plan
(or
successor stock incentive plan maintained by the Company).
4.03 Other
Termination of Employment. If, prior to the end of the term of
this Agreement, the Company terminates Manager’s employment for Cause, or if
Manager terminates his employment for any reason other than as described in
Section 4.02 above, the Company shall pay Manager the base salary and accrued
but unused paid vacation time earned through the date of such termination and
any incentive compensation earned for the preceding fiscal year that is not
yet
paid.
4.04 Key
Employee Status. If at the time of such termination of employment
Manager is a “Key Employee” as defined in Section 416(i) of the Internal Revenue
Code (without reference to paragraph 5 thereof), and the amounts payable to
Manager pursuant to Article Four are subject to Section 409A of the Internal
Revenue Code, payment of such amounts shall not commence until six months
following Manager’s termination of employment, with the first payment to include
the payments that otherwise would have been made during such six-month
period.
ARTICLE
FIVE
CONFIDENTIAL
INFORMATION
5.01 Non-Disclosure
of Confidential Information. During his employment with the Company, and
after his termination of such employment with the Company, Manager shall not,
in
any form or manner, directly or indirectly, use, divulge, disclose or
communicate to any person, entity, firm, corporation or any other third party,
any Confidential Information, except as required in the performance of Manager’s
duties hereunder, as required by law or as necessary in conjunction with legal
proceedings.
5.02 Definition
of Confidential Information. For the purposes of this Agreement,
the term "Confidential Information" shall mean any and all information either
developed by Manager during his employment with the Company and used by the
Company or its affiliates or developed by or for the Company or its affiliates
of which Manager gained knowledge by reason of his employment with the Company
that is not readily available in or known to the general public or the industry
in which the Company or any affiliate is or becomes engaged. Such
Confidential Information shall include, but shall not be limited to, any
technical or non-technical data, formulae, compilations, programs, devices,
methods, techniques, procedures, manuals, financial data, business plans, lists
of actual or potential customers, lists of employees and any information
regarding the Company's or any affiliate’s products, marketing or
database. The Company and Manager acknowledge and agree that such
Confidential Information is extremely valuable to the Company and may constitute
trade secret information under applicable law. In the event that any
part of the Confidential Information becomes generally known to the public
through legitimate origins (other than by the breach of this Agreement by
Manager or by other misappropriation of the Confidential Information), that
part
of the Confidential Information shall no longer be deemed Confidential
Information for the purposes of this Agreement, but Manager shall continue
to be
bound by the terms of this Agreement as to all other Confidential
Information.
5.03 Delivery
upon Termination. Upon termination of Manager's employment with
the Company for any reason, Manager shall promptly deliver to the Company all
correspondence, files, manuals, letters, notes, notebooks, reports, programs,
plans, proposals, financial documents, and any other documents or data
concerning the Company's or any affiliate’s customers, database, business plan,
marketing strategies, processes or other materials which contain Confidential
Information, together with all other property of the Company or any affiliate
in
Manager's possession, custody or control.
ARTICLE
SIX
NON-COMPETE
AND NON-SOLICITATION COVENANTS
6.01 Covenant
Not to Compete. During the term of this Agreement and for a
period of one (1) year following the later of the termination of Manager's
employment for any reason or the last day of the term of the Agreement, Manager
shall not, on behalf of himself or on behalf of another person, corporation,
partnership, trust or other entity, within the counties of Coles, Xxxxxxxx,
Xxxxxxx, Cumberland, Effingham, Champaign, Christian, Madison, Macon, Bond
or
Xxxxx, Illinois, or any other county in which the Company or any affiliate
conducts business:
(a) Directly
or indirectly own, manage, operate, control, participate in the ownership,
management, operation or control of, be connected with or have any financial
interest in, or serve as an officer, employee, advisor, consultant, agent or
otherwise to any person, firm, partnership, corporation, trust or other entity
which owns or operates a business similar to that of the Company or its
affiliates.
(b) Solicit
for sale, represent, and/or sell Competing Products to any person or entity
who
or which was the Company’s customer or client during the last year of Manager's
employment. "Competing Products," for purposes of this Agreement, means products
or services which are similar to, compete with, or can be used for the same
purposes as products or services sold or offered for sale by the Company or
any
affiliate or which were in development by the Company or any affiliate within
the last year of Manager's employment.
6.02 Covenant
Not to Solicit. For a period of one year following the later of
the termination of Manager’s employment for any reason or the last day of the
term of this Agreement, Manager shall not:
(a) Attempt
in any manner to solicit from any client or customer business of the type
performed by the Company or any affiliate or persuade any client or customer
of
the Company or any affiliate to cease to do such business or to reduce the
amount of such business which any such client or customer has customarily done
or contemplates doing with the Company or any affiliate, whether or not the
relationship between the Company or affiliate and such client or customer was
originally established in whole or in part through Manager’s
efforts.
(b) Render
any services of the type rendered by the Company or any affiliate for any client
or customer of the Company.
(c) Solicit
or encourage, or assist any other person to solicit or encourage, any employees,
agents or representatives of the Company or an affiliate to terminate or alter
their relationship with the Company or any affiliate.
(d) Do
or
cause to be done, directly or indirectly, any acts which may impair the
relationship between the Company or any affiliate with their respective clients,
customers or employees.
ARTICLE
SEVEN
REMEDIES
Manager
acknowledges that compliance with the provisions of Articles Five and Six herein
is necessary to protect the business, goodwill and proprietary information
of
the Company and that a breach of these covenants will irreparably and
continually damage the Company for which money damages may be
inadequate. Consequently, Manager agrees that, in the event that he
breaches or threatens to breach any of these provisions, the Company shall
be
entitled to both (a) a temporary, preliminary or permanent injunction in order
to prevent the continuation of such harm; and (b) money damages insofar as
they
can be determined. In addition, the Company will cease payment of all
compensation and benefits under Articles Three and Four hereof. In
the event that any of the provisions, covenants, warranties or agreements in
this Agreement are held to be in any respect an unreasonable restriction
upon Manager or are otherwise invalid, for whatsoever cause, then the
court so holding shall reduce, and is so authorized to reduce, the territory
to
which it pertains and/or the period of time in which it operates, or the scope
of activity to which it pertains or effect any other change to the extent
necessary to render any of the restrictions of this Agreement
enforceable.
ARTICLE
EIGHT
MISCELLANEOUS
8.01 Successors
and Assignability.
(a) No
rights
or obligations of the Company under this Agreement may be assigned or
transferred except that the Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.
(b) No
rights
or obligations of Manager under this Agreement may be assigned or transferred
by
Manager other than his rights to payments or benefits hereunder which may be
transferred only by will or the laws of descent and distribution.
8.02 Entire
Agreement. This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and may not be modified
except in writing by the parties hereto. Furthermore, the parties
hereto specifically agree that all prior agreements, whether written or oral,
relating to Manager's employment by the Company shall be of no further force
or
effect from and after the date hereof.
8.03 Severability. If
any phrase, clause or provision of this Agreement is deemed invalid or
unenforceable, such phrase, clause or provision shall be deemed severed from
this Agreement, but will not affect any other provisions of this Agreement,
which shall otherwise remain in full force and effect. If any
restriction or limitation in this Agreement is deemed to be unreasonable,
onerous or unduly restrictive, it shall not be stricken in its entirety and
held
totally void and unenforceable, but shall be deemed rewritten and shall remain
effective to the maximum extent permissible within reasonable
bounds.
8.04 Controlling
Law and Jurisdiction. This Agreement shall be governed by and
interpreted and construed according to the laws of the State of
Illinois. The parties hereby consent to the jurisdiction of the state
and federal courts in the State of Illinois in the event that any disputes
arise
under this Agreement.
8.05 Notices.
All notices, requests, demands and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given (a) on the
date
of service if served personally on the party to whom notice is to be given;
(b)
on the day after delivery to an overnight courier service; (c) on the day of
transmission if sent via facsimile to the facsimile number given below; or
(d)
on the third day after mailing, if mailed to the party to whom notice is to
be
given, by first class mail, registered or certified, postage prepaid and
properly addressed, to the party as follows:
If
to
Manager: Xxxxx
X. Xxxxx
0000
Xxxxxxxxxx Xxxxx
Xxxxxxxxxx,
XX 00000
If
to the
Company: First
Mid-Illinois Bancshares, Inc.
0000
Xxxxxxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxxx 00000
Facsimile:
000-000-0000
Attention:
Chairman and Chief
Executive Officer
Any
party may change its address for
the purpose of this Section by giving the other party written notice of its
new
address in the manner set forth above.
IN
WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the date first written
above.
FIRST
MID-ILLINOIS BANCSHARES,
INC.
By:
/s/ Xxxxxxx X.
Xxxxxxx
Title:
Chairman
and Chief Executive
Officer
MANAGER:
/s/
Xxxxx X.
Xxxxx
Xxxxx
X.
Xxxxx
