EXHIBIT B
EXECUTIVE EMPLOYMENT AGREEMENT
This Agreement is made as of the first day of January, 1997, between
Upbancorp, Inc., a Delaware corporation, (Upbancorp), and Xxxxxxx X. Xxxxxx
(Xxxxxx).
Xxxxxx has served Upbancorp well and favorably since it was
incorporated and served Uptown National Bank of Chicago (Uptown), one of its
subsidiaries, approximately thirty-four years and is now President and Chief
Executive Officer of Upbancorp and Chairman and Chief Executive Officer of
Uptown. The principal business of Upbancorp is the banking business of Uptown
and Heritage Bank, Phoenix, Arizona (Heritage), its wholly owned subsidiaries.
Xxxxxx is also Chairman of the latter bank. Upbancorp desires to be assured of
Xxxxxx'x continued valuable services as hereinafter provided.
Xxxxxx has been serving Upbancorp, Uptown and Heritage under a
contract dated January 1, 1992, which terminated December 31, 1996. The
prior contract was principally with Uptown but Xxxxxx has been providing
oversight and executive services to Heritage and Upbancorp believes Xxxxxx
should be Upbancorp's employee with assigned responsibilities to both
subsidiaries. Upbancorp further desires to have Xxxxxx'x services at least
for a period of five years from date hereof.
In consideration of the foregoing and the mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. Upbancorp shall employ Xxxxxx on a full-time basis and Xxxxxx
shall serve Upbancorp on a full-time basis until December 31, 2001, provided,
however, such period of employment on a full-time basis may be extended from
time to time by mutual written consent of Upbancorp and Xxxxxx. Said employment
on a full-time basis is hereinafter referred to as the "employment period".
During the employment period, Xxxxxx shall serve Upbancorp in an executive
capacity with such duties as may reasonably be assigned to him from time to time
by the Board of Directors of Upbancorp and he shall devote his full time and
attention during usual business hours exclusively to the business of Upbancorp
except during usual vacation periods. Until further action of the Board of
Directors of Upbancorp, Xxxxxx shall continue in his present capacity as
President and Chief Executive Officer of Upbancorp, Chairman and Chief Executive
Officer of Uptown and as Chairman of Heritage.
2. During the employment period Upbancorp shall pay to Xxxxxx
compensation at the base rate of Two Hundred Twenty-Five Thousand Dollars
($225,000) per annum beginning calendar year 1997, $150,000 of which
compensation shall be payable in equal monthly installments. The balance,
$75,000, shall accrue monthly and be paid quarterly in the final month of each
quarter upon mutually agreeable dates.
3. During the employment period, Xxxxxx shall be entitled to
participate in any supplemental compensation plan for executives of the
corporation, in the pension plan maintained for employees of Upbancorp, Inc., in
any profit sharing or similar
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plan (ESOP, 401K, etc.), long-term disability plan and any other incentive or
benefit plan (stock option plan, etc.) maintained for employees or executives.
Upbancorp will arrange for Xxxxxx to participate in any such plans.
4. During the employment period Xxxxxx shall be provided with a
luxury class automobile of his choice. This automobile will be provided by
Uptown at the direction of Upbancorp. Xxxxxx will pay an agreed upon rate for
personal usage of the vehicle. All expense shall be borne by Uptown. At any
time after three years after any vehicle acquired after the date of this
contract or the prior contract between Uptown and Xxxxxx has been placed in
service, Uptown shall at Xxxxxx'x option provide Xxxxxx with a replacement
luxury class vehicle of his choice and allow Xxxxxx to acquire the original
vehicle for a reasonable consideration. Upon Xxxxxx'x retirement or termination
under the provisions of Section 10 below, he shall be permitted to acquire his
then provided vehicle upon the same terms as above.
5. During the employment period, Upbancorp shall cause Uptown to
provide Xxxxxx with life insurance on the same basis provided Uptown employees.
Further, Xxxxxx'x coverage shall not be less than the coverage provided him in
1988.
6. During his employment period, Upbancorp shall cause Uptown, in
addition to the life insurance provided for Xxxxxx under paragraph 5 above, to
provide Xxxxxx five hundred thousand dollars in coverage under a split dollar
arrangement whereby Uptown is assigned the cash value of the policy to the
extent of the premiums paid by Uptown and Xxxxxx owns all other rights in
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the policy. Xxxxxx'x obligation under the arrangement shall be to pay the
annual cost of the policy as if the policy were a term policy, and Uptown shall
pay the balance of premiums. Xxxxxx shall be entitled to receive each year a
bonus in sufficient amount and at such time that he will have the necessary
funds to pay his required cost amount. Upon termination of employment, Xxxxxx
shall be afforded the right to continue the plan upon payment to Uptown of the
amount it has contributed to the payment of the premiums. Reasonable
arrangements shall be made to continue the insurance coverage in the case of
Xxxxxx'x disability.
7. During the employment period and after the employment period
during retirement, unless Xxxxxx leaves employment pursuant to the provisions of
Section 10 hereof, Upbancorp shall cause Uptown to provide him with complete
medical and dental coverage at no cost to Xxxxxx, said coverage to be the same
or equivalent to the coverage provided other Uptown executive employees.
Coverage in retirement shall be reduced by any coverage Xxxxxx then has under
any public medical plan such as Medicare. Medical and dental coverage as
provided herein shall include Xxxxxx'x spouse, provided she does not have
coverage available to her from any other source including Medicare.
8. During the employment period Xxxxxx shall be required to belong
to two Chicago area clubs, one of which shall be a golf club and the other a
dining or in town athletic club. The choice of clubs shall be Xxxxxx'x and they
shall be primarily chosen for business purposes. The cost of said clubs shall
be
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borne by Uptown and Xxxxxx shall reimburse Uptown for any strictly personal
charges incurred. Upon Xxxxxx'x termination of employment hereunder, he shall
be allowed to continue membership in said clubs but at his expense. He shall
not be required to reimburse Uptown for any dues, assessments or initial
membership fees.
9. Xxxxxx agrees that for a period of one (1) year immediately
following the termination of his employment with Upbancorp he will not directly
or indirectly render services within the geographical area having a radius of
ten (10) miles from the principal office of Upbancorp or any of its
subsidiaries, except for the central loop area of Chicago, in an executive
management capacity similar to those he now renders Upbancorp or Uptown as
President or Chairman and Chief Executive Officer to or for any financial
business in competition with Upbancorp.
10. If any one of the following occur while Xxxxxx is employed by
Upbancorp, and this Agreement is in effect, to wit:
(a) a "change in control" of Upbancorp which is required to be
reported to the Securities and Exchange Commission and/or the Office of the
Comptroller of the Currency and/or the Federal Reserve Board;
(b) 30% or more of the then outstanding voting securities of
Upbancorp are acquired or controlled by one person, group or entity; or
(c) during any two (2) consecutive years the members of its
Board of Directors sitting at the beginning of that period cease to be a
majority (unless the newly elected Directors were nominated by at least
two-thirds of the members sitting at
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the beginning of that period);
(d) Upbancorp or Uptown is sold, merged or consolidated with
another bank holding company or bank;
and if within three (3) years after the happening of any one of
those four (4) events (notwithstanding that the term of this Agreement may have
expired), Xxxxxx'x employment is terminated then, unless any provision of
Section 13 hereof applies, Upbancorp agrees to:
(aa) continue his salary payable by the terms provided above, for
the next 48 months immediately following such termination, or his death,
whichever first occurs;
(bb) continue in full force for the same period and for the same
coverage all life insurance, medical, health and accident and disability
insurance maintained by it for his benefit at the time of his termination.
Notwithstanding the foregoing provisions should federal banking
regulations prohibit Upbancorp from continuing the benefits hereunder, then the
provisions of this Section 10 shall be of no affect so long as such prohibitions
continue and Xxxxxx during such time shall have no recourse against Upbancorp
under this section of this agreement.
11. If Xxxxxx is terminated by Upbancorp for cause, if he resigns for
other than good reason, or if termination occurs due to his death, disability or
retirement, then his employment has not been "terminated" for purposes of
Section 10, and Upbancorp shall be under no obligation to continue any benefits
under Section 10.
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"Cause" shall mean termination by Upbancorp because of (a) the
commission of a criminal act against Upbancorp or any of its subsidiaries, (b)
personally profiting from transactions to the detriment of Upbancorp in which
Upbancorp would have an interest without first obtaining its written consent,
(c) gross neglect of the office of President or Chairman and Chief Executive
Officer, (d) unwillingness to obey policies adopted by Upbancorp, Uptown or
Heritage.
"Good reason" shall mean voluntary termination by Xxxxxx because
Upbancorp (a) reduces his base salary, (b) discontinues his participation in any
benefit and/or incentive program (for example, life insurance, health and
accident insurance, disability insurance, pension, profit sharing, vacation),
(c) relocates him so as to require a change in personal residence or otherwise
work an undue hardship on him or member(s) of his immediate family, or (d)
reduces any of his current duties, authority, or status as President and Chief
Executive Officer, Chairman and Chief Executive Officer and Chairman
respectively of the three entities.
12. The benefits provided for in Section 10 shall be subject to the
following offsets and adjustments:
(a) no offset shall be made against the first one (1) year of
salary continuance in any event;
(b) if it is not possible under the terms of a particular
Upbancorp or Uptown benefit plan or program to continue Xxxxxx'x participation
therein after termination, then Upbancorp or Uptown shall provide him with
substantially comparable
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benefits at no cost to him; provided, however, if subsequent employment provides
Xxxxxx with benefits substantially comparable to those provided by a particular
Upbancorp or Uptown benefit plan or program, then Upbancorp shall have no
obligation to (a) continue his participation in that particular plan or program
or (b) provide him with substantially comparable benefits once he satisfies his
eligibility requirements and becomes a participant in the subsequent employer's
plan or program. What is "substantially comparable" shall be solely determined
by Upbancorp and its decision shall be conclusive;
(c) in no event shall the benefits payable under Section 10
exceed that amount which is allowable under the Internal Revenue Code and the
Regulations thereunder as not constituting an "excess parachute payment".
Should any reduction in benefits be required pursuant to this provision, then
Xxxxxx shall within 30 days of having been advised of the requirement for
reduction, direct Upbancorp of the items of benefit to be reduced and the amount
of reduction to each. Upbancorp shall provide Xxxxxx with any information he
may reasonably need in order to arrive at a decision under this subsection.
13. Notwithstanding any other provisions of this contract, should
Upbancorp, Uptown or Heritage acquire or establish a separate additional bank or
banks, or become engaged in any other new activity, Xxxxxx may be entitled to be
separately compensated for his services rendered in an official status in said
bank or banks or new activity in accordance with the mutual agreement of
Upbancorp and Xxxxxx.
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14. Should the reported net earnings of Upbancorp exceed $3,000,000
for two consecutive years, then Xxxxxx shall be entitled to a renegotiated
contract for a period not to exceed five years.
15. Should changes in the Internal Revenue Code during the term of
this agreement materially affect the calculation of any benefit or benefits
hereunder, Xxxxxx shall be entitled to have the affected benefit calculated so
as to closely approximate the benefit contemplated at the date of this
agreement.
IN WITNESS WHEREOF, Xxxxxx has executed this instrument and Upbancorp
by order of the Board of Directors has caused this instrument to be executed as
of the date above first written.
/s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxx
UPBANCORP, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
ATTEST: /s/ Xxxxxx X. Xxxxxx
------------------------------
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AMENDMENT NO. 1
TO
EXECUTIVE EMPLOYMENT AGREEMENT
------------------------------
This AMENDMENT NO. 1 to the Executive Employment Agreement (the
"Amendment") is being made and entered into as of the 29th day of July, 1998, by
and between Upbancorp, Inc., a Delaware corporation ("Upbancorp"), and Xxxxxxx
X. Xxxxxx ("Xxxxxx").
WITNESSETH THAT:
WHEREAS, the parties entered into an Executive Employment Agreement as of
January 1, 1997 (the "Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement as set forth
below.
NOW, THEREFORE, the parties agree as follows:
SECTION 1. DEFINITIONS; REFERENCES. Unless otherwise specifically defined
herein, each term used herein which is defined in the Agreement shall have the
meaning assigned to such term in the Agreement. Except as amended and
supplemented hereby, all the terms of the Agreement shall remain and continue in
full force and effect and are hereby confirmed in all respects.
SECTION 2. AMENDMENT TO SECTION 2 OF THE AGREEMENT. Section 2 of the
Agreement shall read as follows:
"During the employment period, Upbancorp shall pay to Xxxxxx compensation
at the base rate of Two Hundred Fifty Thousand Dollars ($250,000) per annum
beginning calendar year July 1, 1998, $175,000 of which compensation shall
be payable in equal monthly installments. The balance, $75,000, shall
accrue monthly and be paid quarterly in the final month of each quarter
upon mutually agreeable dates."
SECTION 3. COUNTERPARTS; EFFECTIVENESS. This Amendment may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This amendment shall become effective as of the date hereof.
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed as of the day and year first above written.
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx
UPBANCORP, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Its Authorized Officer
By: /s/ Xxx Xxxxxxxx
------------------------------
Its Authorized Officer
EXHIBIT C
EXECUTIVE EMPLOYMENT AGREEMENT
This Agreement is made as of and is effective the first day of January,
1999, between Heritage Bank, an Arizona corporation and state banking
association ("Heritage"), Upbancorp, Inc., a Delaware corporation ("Upbancorp"),
and Xxxx X. Xxxxxxxxxx, Xx. ("Xxxxxxxxxx").
Xxxxxxxxxx has served Heritage (formerly known as First West Bank) well and
favorably since July 15, 1991, and is now its President and Chief Executive
Officer. Heritage and Upbancorp, its parent company, desire to be assured of
Xxxxxxxxxx'x continued valuable services as hereinafter provided.
In consideration of the foregoing and the mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. Heritage shall employ Xxxxxxxxxx on a full-time basis and Xxxxxxxxxx
shall serve Heritage on a full-time basis until December 31, 2000, unless said
employment period is extended as provided in Section 14 hereof. Said employment
on a full-time basis is hereinafter referred to as the "employment period".
During the employment period, Xxxxxxxxxx shall serve Heritage in an executive
capacity with such duties as may reasonably be assigned to him from time to time
by the Board of Directors of Heritage, consistent with Upbancorp's resolution
designating Xxxxxxxxxx as an executive officer, and he shall devote his full
time and attention during usual business hours exclusively to the business of
Heritage and Upbancorp except during usual vacation periods. Until further
action of the Board of Directors of Heritage, Xxxxxxxxxx shall continue in his
present capacity as President and Chief Executive Officer of Heritage.
2. During 1999, Heritage shall pay to Xxxxxxxxxx compensation at the base
rate of One Hundred Seventy Thousand Dollars ($170,000) per annum and during
2000, Heritage shall pay to
Xxxxxxxxxx compensation at the base rate of One Hundred Seventy-Five Thousand
Dollars ($175,000) per annum.
2.1 Xxxxxxxxxx shall be entitled to additional "Incentive
Compensation" to be paid by Heritage in accordance with appropriate incentive
plans as amended or established by Upbancorp and Heritage.
3. During the employment period, Xxxxxxxxxx shall be entitled to
participate in the pension plan, as amended, maintained for employees of
Upbancorp and its subsidiaries, in any supplemental compensation plan for the
executives of the corporation, in any profit sharing or similar plan (ESOP,
401K, etc.), any stock option plan which Heritage or Upbancorp provides for its
employees, any long-term disability plan and any other benefit plan maintained
for executives of Heritage or Upbancorp. Upbancorp and Heritage will arrange
for Xxxxxxxxxx to participate in any such plans.
4. During the employment period, Xxxxxxxxxx shall be provided with a
luxury class vehicle to be mutually acceptable to Xxxxxxxxxx, Heritage and
Upbancorp. This vehicle will be provided by Heritage. Xxxxxxxxxx will pay an
established agreed upon rate for personal usage of the vehicle. All other
expense shall be borne by Heritage. At any time after three years after any
vehicle acquired has been placed in service, Heritage and Upbancorp shall, at
Xxxxxxxxxx'x option, provide Xxxxxxxxxx with a replacement, luxury class
vehicle mutually acceptable to Xxxxxxxxxx, Heritage and Upbancorp and allow
Xxxxxxxxxx to acquire the original vehicle for its fair market value. Upon
Xxxxxxxxxx'x retirement or termination under the provisions of Sections 10 or 15
below, he shall be permitted to acquire his then provided vehicle upon the same
terms as above.
2
5. During the employment period, Heritage shall provide Xxxxxxxxxx with
life insurance on the same basis provided Heritage employees.
6. During the employment period, Heritage and Upbancorp in addition to
the life insurance provided for Xxxxxxxxxx under Section 5 above, will provide
Xxxxxxxxxx with insurance under Minnesota Mutual Life Insurance Co. Policy
1984491, which is a split dollar arrangement in the initial face amount of
$250,000 which adjusts for inflation, whereby Heritage is assigned the cash
value of the policy to the extent of the premiums paid by Heritage, and
Xxxxxxxxxx owns all other rights in the policy. Xxxxxxxxxx'x obligation under
the arrangement shall be to pay the annual cost of the policy as if the policy
were a term policy, and Heritage shall pay the balance of the premiums.
Xxxxxxxxxx shall be entitled to receive each year a bonus in sufficient amount
and at such time that he will have the necessary funds to pay his required share
of the premiums and the resulting income taxes. Upon termination of employment,
Xxxxxxxxxx shall be afforded the right to continue the insurance upon payment to
Heritage of the amount it has contributed as its portion of the payment of the
premiums. Reasonable arrangements shall be made to continue the insurance
coverage in the case of Xxxxxxxxxx'x disability. Furthermore, should Xxxxxxxxxx
leave his employment prior to Heritage having cash equity in the Split Dollar
Insurance policy equal to its cumulative premium contributions, Heritage shall
pay a bonus to Xxxxxxxxxx in an amount equal to that required to provide full
recovery by Heritage. Said bonus shall be treated as ordinary income to
Xxxxxxxxxx for inclusion in his personal income tax base.
7. During the employment period, unless Xxxxxxxxxx leaves employment
pursuant to the provisions of Section 10 hereof, Heritage shall provide him with
medical and dental coverage at no cost to Xxxxxxxxxx, said coverage to be the
same or equivalent to the coverage provided other
3
Heritage or Upbancorp executive employees. Medical and dental coverage as
provided herein shall include spouse and dependent coverage for all children
under the age of twenty-three (23) who are not regularly employed. Said
dependent coverage shall not exceed coverage regularly available through
Heritage's insurers.
8. During his employment period, Xxxxxxxxxx shall be required to belong
to two Phoenix area clubs, one of which shall be a golf club and the other an in
town dining or athletic club. The clubs shall be selected primarily for
business purposes to facilitate the performance of Xxxxxxxxxx'x duties as an
employee of Heritage, and unless otherwise approved by Heritage, shall be
Paradise Valley Country Club and the University Club. Subject to the following
provisions regarding personal charges, all costs of the clubs, including
periodic dues and assessments and charges incurred in promoting the business of
Heritage, shall be paid or reimbursed by Heritage. Xxxxxxxxxx shall be solely
responsible for any personal charges incurred at the clubs other than in the
furtherance of Heritage's business. Upon termination of Xxxxxxxxxx'x employment
he shall be allowed to continue the memberships in his own name and at his own
expense free and clear of any interest of Heritage.
9. Xxxxxxxxxx agrees that for a period of ninety (90) days immediately
following the termination of his employment with Heritage, unless Xxxxxxxxxx is
terminated by Heritage or Upbancorp or leaves employment pursuant to the
provisions of Section 10 hereof, he will not directly or indirectly render
services in an executive management capacity similar to the one he now renders
Heritage as President and/or Chief Executive Officer to or for any financial
business in competition with Upbancorp or Heritage. Notwithstanding the
foregoing, the provisions of this
4
Section shall cease to be applicable at the end of the term of this Agreement
unless renewed in any subsequent agreement.
10. If any one of the following occur while Xxxxxxxxxx is employed by
Heritage, and this Agreement is in effect, to wit:
(a) a "change in control" of Upbancorp or Heritage which may be
required to be reported to the Securities and Exchange Commission and/or the
Arizona State Banking Department and/or the Federal Deposit Insurance
Corporation and/or the Board of Governors of the Federal Reserve System; or
(b) thirty percent (30%) or more of the then outstanding voting
securities of Upbancorp are acquired or controlled by one person, group or
entity; or
(c) during any two (2) consecutive years the members of Upbancorp's
Board of Directors sitting at the beginning of that period cease to be a
majority (unless the newly elected Directors were nominated by at least
two-thirds of the members sitting at the beginning of that period); or
(d) Heritage is sold, merged or consolidated with another bank
holding company, bank or financial services institution other than a bank
holding company, bank or financial services institution which is controlled by
Upbancorp; or
(e) the consummation of a reorganization, merger or consolidation or
the sale or other disposition of' all or substantially all of the assets of
Upbancorp (a "Business Combination"), in each case, unless (1) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the common stock of Upbancorp immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 60% of
the total voting power
5
represented by the voting securities entitled to vote generally in the election
of directors of the corporation resulting from the Business Combination
(including, without limitation, a corporation which as a result of the Business
Combination owns Upbancorp or all or substantially all of Upbancorp's assets
either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to the Business Combination,
of the common stock of Upbancorp, and (2) at least two-thirds of the members of
the board of directors of the corporation resulting from the Business
Combination were members of Upbancorp's Board of Directors at the time of the
execution of the initial agreement, or action of Upbancorp's Board of Directors,
providing for such Business Combination;;
and if within three (3) years after the happening of any one of those
five (5) events (notwithstanding that the term of this Agreement may thereafter
have expired), Xxxxxxxxxx'x employment is terminated then, unless any provision
of Section 11 hereof applies or unless Xxxxxxxxxx is that person or entity or
part of the group which causes any of the five (5) events, Heritage agrees to:
(aa) continue his base salary payable by the terms provided
above, for the next twenty-four (24) months immediately following such
termination, or until his death, whichever first occurs;
(bb) continue in full force for the same period and for the same
coverage all life insurance, medical, health and accident and disability
insurance maintained by it for his benefit at the time of his termination.
Notwithstanding the foregoing provisions, should Federal or State
of Arizona banking regulations prohibit Upbancorp or Heritage from continuing
the benefits hereunder, then
6
the provisions of this Section 10 shall be of no affect so long as such
prohibitions continue and Xxxxxxxxxx during such time shall have no recourse
against Upbancorp or Heritage under this Section of the Agreement.
11. If Xxxxxxxxxx is terminated by Heritage for cause, if he resigns for
other than good reason, or if termination occurs due to his death, disability or
retirement, then his employment has not been "terminated" for purposes of
Section 10, and Upbancorp or Heritage shall be under no obligation to continue
any benefits under Section 10.
"Cause" shall mean termination by Upbancorp or Heritage because of (a)
the commission of a criminal act against Upbancorp or Heritage or any of its
subsidiaries, (b) personally profiting from transactions to the detriment of
Upbancorp or Heritage in which Upbancorp or Heritage would have an interest
without first obtaining its written consent, or (c) gross neglect of the office
of President and Chief Executive Officer of Heritage.
"Good reason" shall mean voluntary termination by Xxxxxxxxxx because
Heritage (a) reduces his base salary, (b) discontinues his participation in any
benefit and/or incentive program (for example, life insurance, health and
accident insurance, disability insurance, pension, profit sharing, vacation);
provided, however, that this provision shall not apply if Heritage determines in
its sole discretion to terminate any benefit and/or incentive program available
generally to its employees or its executive employees, (c) relocates him so as
to require a change in personal residence or otherwise work an undue hardship on
him or member(s) of his immediate family, or (d) reduces any of his current
duties, authority, or status as President and Chief Executive Officer.
12. The benefits provided for in Section 10 shall be subject to the
following offsets and adjustments:
7
(a) if it is not possible under the terms of a particular Heritage
benefit plan or program to continue Xxxxxxxxxx'x participation therein after
termination, then Heritage shall provide him with substantially comparable
benefits at no cost to him; provided, however, if subsequent employment provides
Xxxxxxxxxx with benefits substantially comparable to those provided by a
particular Upbancorp or Heritage benefit plan or program, then Upbancorp or
Heritage shall have no obligation to (a) continue his participation in that
particular plan or program or (b) provide him with substantially comparable
benefits once he satisfies his eligibility requirements and becomes a
participant in the subsequent employer's plan or program. What is "substantially
comparable" shall be determined in good faith solely by Upbancorp and its
decision shall be conclusive;
(b) in no event shall the benefits payable under Section 10 exceed
that amount which is allowable under the Internal Revenue Code and the
regulations thereunder as not constituting an "excess parachute payment".
Should any reduction in benefits be required pursuant to this provision, then
Xxxxxxxxxx shall within thirty (30) days of having been advised of the
requirement for reduction, direct Heritage of the items of benefit to be reduced
and the amount of reduction to each. Heritage and Upbancorp shall provide
Xxxxxxxxxx with any information he may reasonably need in order to arrive at a
decision under this subsection.
13. Should changes in the Internal Revenue Code during the term of this
agreement materially affect the calculation of any benefit or benefits
hereunder, Xxxxxxxxxx shall be entitled to have the affected benefit calculated
so as to closely approximate the benefit contemplated at the date of this
Agreement.
14. This Agreement shall be extended for a one-year period commencing
January 1, 2001, if Xxxxxxxxxx has achieved all of the following goals:
8
(a) the revocation by the FDIC of the Memorandum of Understanding
arising out of the FDIC's compliance examination of Heritage conducted during
1998;
(b) no actions shall have been commenced against Heritage by bank
regulatory authorities;
(c) Heritage shall have received a CAMELS rating of "2" from bank
regulatory authorities with respect to the most recent regulatory examination
conducted prior to September 30, 2000;
(d) Heritage shall have received "Satisfactory" ratings from bank
regulatory authorities with respect to the most recent CRA and Compliance
examinations conducted prior to September 30, 2000;
(e) the efficiency ratio of Heritage as of June 30, 2000 shall have
decreased from the efficiency ratio of Heritage as of December 31, 1998;
(f) Heritage shall have achieved the net income goals set forth in
each year's budget as approved by Heritage's and Upbancorp's Board of Directors;
and
(g) Xxxxxxxxxx shall have reasonably assisted Upbancorp in
transferring activities of Heritage from Heritage to Upbancorp or other related
entities as directed by Upbancorp's Board of Directors.
The determination that Xxxxxxxxxx has achieved all of the aforementioned goals
shall be made in good faith by the Board of Directors of Upbancorp by September
30, 2000, whose determination shall be final and binding upon the parties
hereto. In the event this Agreement is extended for one year, Xxxxxxxxxx and
Heritage and Upbancorp shall agree upon his base rate compensation for such year
with said base rate being no less than One Hundred Seventy-Five Thousand Dollars
($175,000).
9
15. Should Upbancorp or Heritage terminate Xxxxxxxxxx'x employment
hereunder without cause as defined in Section 11 hereof, then Xxxxxxxxxx shall
be entitled to severance pay equivalent to his base salary then payable under
Section 2 for one (1) year payable monthly together with all benefits otherwise
conferred in the other Sections of this Agreement other than Section 10. Any
deferred portion of any incentive amounts earned but not payable under any
incentive plan of Upbancorp or Heritage shall be due and payable upon
Xxxxxxxxxx'x termination without cause, but if Xxxxxxxxxx terminates or elects
not to renew the Agreement, then such deferred amounts shall be forfeited.
16 Upbancorp guarantees the performance by Heritage of its undertaking
under each and every provision hereof.
17. This Agreement may not be amended except by an instrument in writing
signed by all of the parties hereto.
18. This Agreement shall be construed and interpreted according to the
laws of the State of Delaware without regard to conflicts of laws principles
thereof, except to the extent that the federal laws of the United States apply.
19. This Agreement supersedes all prior Agreements, either oral or
written, pertaining to Xxxxxxxxxx'x compensation or employment.
10
IN WITNESS WHEREOF, Xxxxxxxxxx has executed this instrument and Heritage
and Upbancorp by order of the respective Board of Directors has caused this
instrument to be executed as of the date above first written.
/s/ Xxxx X. Xxxxxxxxxx, Xx.
----------------------------------------
Xxxx X. Xxxxxxxxxx, Xx.
HERITAGE BANK
By: Xxxxxxxx X. Xxxxxx
-------------------------------------
ATTEST: Xxxxxxx X. Xxxxxx
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UPBANCORP, INC.
By: Xxxxxxx X. Xxxxxx
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ATTEST: Xxxxxxxx X. Xxxxxx
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EXHIBIT D
EXECUTIVE EMPLOYMENT AGREEMENT
This Agreement is made as of and is effective the first day of January,
1999, between Uptown National Bank of Chicago, a national banking association
("Uptown"), Upbancorp, Inc., a Delaware corporation ("Upbancorp"), and Xxxxxx X.
Xxxxxxxxx ("Xxxxxxxxx").
Xxxxxxxxx has served Uptown well and favorably since April 5, 1993, and is
now its President and Chief Executive Officer. Uptown and Upbancorp, its parent
company, desire to be assured of Xxxxxxxxx' continued valuable services as
hereinafter provided. In consideration of the foregoing and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Uptown shall employ Xxxxxxxxx on a full-time basis and Xxxxxxxxx shall
serve Uptown on a full-time basis until December 31, 2000, unless said
employment period is extended as provided in Section 14 hereof. Said employment
on a full-time basis is hereinafter referred to as the "employment period".
During the employment period, Xxxxxxxxx shall serve Uptown in an executive
capacity with such duties as may reasonably be assigned to him from time to time
by the Board of Directors of Uptown, consistent with Upbancorp's resolution
designating Xxxxxxxxx as an executive officer, and he shall devote his full time
and attention during usual business hours exclusively to the business of Uptown
and Upbancorp except during usual vacation periods. Until further action of the
Board of Directors of Uptown, Xxxxxxxxx shall continue in his present capacity
as President and Chief Executive Officer of Uptown.
2. During 1999, Uptown shall pay to Xxxxxxxxx compensation at the base
rate of One Hundred Seventy-Two Thousand Five Hundred Dollars ($172,500) per
annum and during 2000, Uptown shall pay to Xxxxxxxxx compensation at the base
rate of One Hundred Seventy-Seven Thousand Five Hundred Dollars ($177,500).
2.1 Xxxxxxxxx shall be entitled to additional "Incentive
Compensation" to be paid by Uptown in accordance with appropriate incentive
plans amended or established by Upbancorp.
3. During the employment period, Xxxxxxxxx shall be entitled to
participate in the pension plan, as amended, maintained for employees of
Upbancorp and its subsidiaries, in any supplemental compensation plan for
executives of the corporation, in any profit sharing or similar plan (ESOP,
401K, etc.), any stock option plan which Uptown or Upbancorp my provide for its
employees, any long-term disability plan and any other benefit plan maintained
for executives of Uptown or Upbancorp. Upbancorp and Uptown will arrange for
Xxxxxxxxx to participate in any such plans.
4. During the employment period, Xxxxxxxxx shall be provided with a
luxury class vehicle to be mutually acceptable to Xxxxxxxxx, Uptown and
Upbancorp. This vehicle will be provided by Uptown. Xxxxxxxxx will pay an
established agreed upon rate for personal usage of the vehicle. All other
expense shall be borne by Uptown. At any time after three years after any
vehicle acquired has been placed in service, Uptown and Upbancorp shall at
Xxxxxxxxx' option provide Xxxxxxxxx with a replacement luxury class vehicle
mutually acceptable to Xxxxxxxxx, Uptown and Upbancorp and allow Xxxxxxxxx to
acquire the original vehicle for its fair market value. Upon Xxxxxxxxx'
retirement or termination under the provisions of Sections 10 or 15 below, he
shall be permitted to acquire his then provided vehicle upon the same terms as
above.
5. During the employment period, Uptown shall provide Xxxxxxxxx with life
insurance on the same basis provided Uptown employees.
6. During the employment period, Upbancorp and Uptown, in addition to the
life insurance provided for Xxxxxxxxx under Section 5 above, will provide
Xxxxxxxxx with insurance under Minnesota Mutual Life Insurance Co. Policy
1989654, which is a split dollar arrangement in the
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initial face amount of $250,000 which adjusts for inflation, whereby Uptown is
assigned the cash value of the policy to the extent of the premiums paid by
Uptown, and Xxxxxxxxx owns all other rights in the policy. Xxxxxxxxx'
obligation under the arrangement shall be to pay the annual cost of the policy
as if the policy were a term policy, and Uptown shall pay the balance of the
premiums. Xxxxxxxxx shall be entitled to receive each year a bonus in
sufficient amount and at such time that he will have the necessary funds to pay
his required share of the premiums and the resulting income taxes. Upon
termination of employment, Xxxxxxxxx shall be afforded the right to continue the
insurance upon payment to Uptown of the amount it has contributed as its portion
of the payment of the premiums. Reasonable arrangements shall be made to
continue the insurance coverage in the case of Xxxxxxxxx' disability.
Furthermore, should Xxxxxxxxx leave his employment prior to Uptown having cash
equity in the Split Dollar Insurance policy equal to its cumulative premium
contributions, Uptown shall pay a bonus to Xxxxxxxxx in an amount equal to that
required to provide full recovery by Uptown. Said bonus shall be treated as
ordinary income to Xxxxxxxxx for inclusion in his personal income tax base.
7. During the employment period, unless Xxxxxxxxx leaves employment
pursuant to the provisions of Section 10 hereof, Uptown shall provide him with
medical and dental coverage at no cost to Xxxxxxxxx, said coverage to be the
same or equivalent to the coverage provided other Uptown or Upbancorp executive
employees. Medical and dental coverage as provided herein shall include spouse
and dependent coverage for all children. under the age of twenty-three (23) who
are not regularly employed. Said dependent coverage shall not exceed coverage
regularly available through Uptown's insurers.
8. During the employment period, Xxxxxxxxx shall be required to belong to
two Chicago area clubs, one of which shall be a golf club and the other a dining
or in town athletic club. The
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choice of clubs shall be Xxxxxxxxx' and they shall be primarily chosen for
business purposes, and unless otherwise approved by Uptown, shall be Onwetsia
Country Club and the University Club. The cost of said clubs shall be borne by
Uptown and Xxxxxxxxx shall reimburse Uptown for any strictly personal charges
incurred. He shall not be required to reimburse Uptown for any dues or
assessments. Upon Xxxxxxxxx' termination of employment hereunder, he shall be
allowed to continue membership in said clubs but at his expense.
9. Xxxxxxxxx agrees that for a period of ninety (90) days immediately
following the termination of his employment with Uptown, unless Xxxxxxxxx is
terminated by Upbancorp or Uptown or leaves employment pursuant to the
provisions of Section 10 hereof, he will not directly or indirectly render
services in an executive management capacity similar to the one he now renders
Uptown as President and/or Chief Executive Officer to or for any financial
business in competition with Uptown or Upbancorp. Notwithstanding the
foregoing, the provisions of this Section shall cease to be applicable at the
end of the term of this Agreement unless renewed by any subsequent agreement.
10. If any one of the following occur while Xxxxxxxxx is employed by
Uptown, and this Agreement is in effect, to wit:
(a) a "change in control" of Upbancorp or Uptown which may be
required to be reported to the Securities and Exchange Commission and/or the
Office of the Comptroller of the Currency and/or the Board of Governors of the
Federal Reserve System; or
(b) thirty percent (30%) or more of the then outstanding voting
securities of Upbancorp are acquired or controlled by one person, group or
entity; or
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(c) during any two (2) consecutive years the members of Upbancorp's
Board of Directors sitting at the beginning of that period cease to be a
majority (unless the newly elected Directors were nominated by at least
two-thirds of the members sitting at the beginning of that period); or
(d) Uptown is sold, merged or consolidated with another bank holding
company, bank or financial services institution other than a bank holding
company, bank or financial services institution which is controlled by
Upbancorp, or
(e) the consummation of a reorganization, merger or consolidation or
the sale or other disposition of all or substantially all of the assets of
Upbancorp (a "Business Combination"), in each case, unless (1) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the common stock of Upbancorp immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 60% of
the total voting power represented by the voting securities entitled to vote
generally in the election of directors of the corporation resulting from the
Business Combination (including, without limitation, a corporation which as a
result of the Business Combination owns Upbancorp or all or substantially all of
Upbancorp's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to the
Business Combination, of the common stock of Upbancorp, and (2) at least
two-thirds of the members of the board of directors of the corporation resulting
from the Business Combination were members of Upbancorp's Board of Directors at
the time of the execution of the initial agreement, or action of Upbancorp's
Board of Directors, providing for such Business Combination;
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and if within three (3) years after the happening of any one of those
five (5) events (notwithstanding that the term of this Agreement may have
expired), Xxxxxxxxx' employment is terminated then, unless any provision of
Section 11 hereof applies or unless Xxxxxxxxx is that person or entity or part
of the group which causes any of the five (5) events, Uptown agrees to:
(aa) continue his salary payable by the terms provided above, for the
next twenty-four (24) months immediately following such termination, or until
his death, whichever first occurs;
(bb) continue in full force for the same period and for the same
coverage all life insurance, medical, health and accident and disability
insurance maintained by it for his benefit at the time of his termination.
Notwithstanding the foregoing provisions, should federal banking
regulations prohibit Upbancorp or Uptown from continuing the benefits hereunder,
then the provisions of this Section 10 shall be of no affect so long as such
prohibitions continue and Xxxxxxxxx during such time shall have no recourse
against Upbancorp or Uptown under this Section of this Agreement.
11. If Xxxxxxxxx is terminated by Uptown for cause, if he resigns for
other than good reason, or if termination occurs due to his death, disability or
retirement, then his employment has not been "terminated" for purposes of
Section 10, and Upbancorp or Uptown shall be under no obligation to continue any
benefits under Section 10.
"Cause" shall mean termination by Upbancorp or Uptown because of (a)
the commission of a criminal act against Upbancorp or Uptown or any of its
subsidiaries, (b) personally profiting from transactions to the detriment of
Upbancorp or Uptown in which Upbancorp or Uptown would have an interest without
first obtaining its written consent, or (c) gross neglect of the office of
President and Chief Executive Officer of Uptown.
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"Good reason" shall mean voluntary termination by Xxxxxxxxx because
Uptown (a) reduces his base salary, (b) discontinues his participation in any
benefit and/or incentive program (for example, life insurance, health and
accident insurance, disability insurance, pension, profit sharing, vacation);
provided, however, that this provision shall not apply if Uptown determines in
its sole discretion to terminate any benefit and/or incentive program available
generally to its employees or its executive employees, (c) relocates him so as
to require a change in personal residence or otherwise work an undue hardship on
him or member(s) of his immediate family, or (d) reduces any of his current
duties, authority, or status as President and Chief Executive Officer.
12. The benefits provided for in Section 10 shall be subject to the
following offsets and adjustments:
(a) no offset shall be made against the first six (6) months of
salary continuance in any event;
(b) if it is not possible under the terms of a particular Uptown
benefit plan or program to continue Xxxxxxxxx' participation therein after
termination, then Uptown shall provide him with substantially comparable
benefits at no cost to him; provided, however, if subsequent employment provides
Xxxxxxxxx with benefits substantially comparable to those provided by a
particular Upbancorp or Uptown benefit plan or program, then Upbancorp or Uptown
shall have no obligation to (a) continue his participation in that particular
plan or program or (b) provide him with substantially comparable benefits once
he satisfies his eligibility requirements and becomes a participant in the
subsequent employer's plan or program. What is "substantially comparable" shall
be determined in good faith solely by Upbancorp and its decision shall be
conclusive;
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(c) in no event shall the benefits payable under Section 10 exceed
that amount which is allowable under the Internal Revenue Code and the
regulations thereunder as not constituting an "excess parachute payment".
Should any reduction in benefits be required pursuant to this provision, then
Xxxxxxxxx shall within thirty (30) days of having been advised of the
requirement for reduction, direct Uptown of the items of benefit to be reduced
and the amount of reduction to each. Uptown and Upbancorp shall provide
Xxxxxxxxx with any information he may reasonably need in order to arrive at a
decision under this subsection.
13. Should changes in the Internal Revenue Code during the term of this
Agreement materially affect the calculation of any benefit or benefits
hereunder, Xxxxxxxxx shall be entitled to have the affected benefit calculated
so as to closely approximate the benefit contemplated at the date of this
Agreement.
14. This Agreement shall be extended for a one-year period commencing
January 1, 2001, if Xxxxxxxxx has achieved all of the following goals:
(a) no actions shall have been commenced against Uptown by bank
regulatory authorities;
(b) Uptown shall have received a CAMELS rating of "2" from bank
regulatory authorities with respect to the most recent regulatory examination
conducted prior to September 30, 2000;
(c) Uptown shall have received "Satisfactory" ratings from bank
regulatory authorities with respect to the most recent CRA and Compliance
examinations conducted prior to September 30, 2000;
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(d) the efficiency ratio of Uptown as of June 30, 2000 shall have
decreased from the efficiency ratio of Uptown as of December 31, 1998;
(e) Uptown shall have achieved the net income goals set forth in each
year's budget as approved by Uptown's and Upbancorp's Board of Directors; and
(f) Xxxxxxxxx shall have reasonably assisted Upbancorp in
transferring agreed upon activities of Uptown from Uptown to Upbancorp or other
related entities as directed by Upbancorp's Board of Directors. The
determination that Xxxxxxxxx has achieved all of the aforementioned goals shall
be made in good faith by the Board of Directors of Upbancorp by September 30,
2000, whose determination shall be final and binding upon the parties hereto.
In the event this Agreement is extended for one year, Xxxxxxxxx and Uptown and
Upbancorp shall agree upon his base rate compensation for such year with said
base rate being no less than One Hundred Seventy-Seven Thousand Five Hundred
Dollars ($177,500).
15. Should Upbancorp or Uptown terminate Xxxxxxxxx' employment hereunder
without cause as defined in Section 11 hereof, then Xxxxxxxxx shall be entitled
to severance pay equivalent to his base salary then payable under Section 2 for
one (1) year payable monthly together with all benefits otherwise conferred in
the other Sections of this Agreement other than Section 10. Any deferred
portion of any incentive amounts earned but not payable under any incentive plan
of Upbancorp and Uptown shall be due and payable upon Xxxxxxxxx' termination
without cause, but if Xxxxxxxxx terminates or elects not to renew the Agreement,
then such deferred amounts shall be forfeited.
16. Upbancorp guarantees the performance by Uptown of its undertaking
under each and every provision hereof.
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17. This Agreement may not be amended except by an instrument in writing
signed by all of the parties hereto.
18. This Agreement shall be construed and interpreted according to the
laws of the State of Delaware without regard to conflicts of laws principles
thereof, except to the extent that the federal laws of the United States apply.
19. This Agreement supersedes all prior Agreements, either oral or
written, pertaining to Xxxxxxxxx' compensation or employment.
IN WITNESS WHEREOF, Xxxxxxxxx has executed this instrument and Uptown and
Upbancorp by order of the respective Boards of Directors has caused this
instrument to be executed as of the date above first written.
/s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
UPTOWN NATIONAL BANK OF CHICAGO
By: Xxxxxxx X. Xxxxxx
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ATTEST: Xxx Xxxxxxxx
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UPBANCORP, INC.
By: Xxxxxxx X. Xxxxxx
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ATTEST: Xxxxxx X. Xxxxxx
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