EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the 1st day of
January, 1998 by and between MID AMERICA BANCORP, INC., a
Kentucky corporation and MID AMERICA BANK OF LOUISVILLE & TRUST
COMPANY, a Kentucky Combined Bank and Trust Company, (together
with their successors and assigns permitted under this Agreement,
the "Companies"), and XXXXXXX X. XXXXXX (the "Executive").
W I T N E S S E T H:
WHEREAS, the Companies and the Executive are parties to an
Agreement dated as of February 10, 1995, covering the employment
relationship of Executive with Companies, and
WHEREAS, the Parties desire to cancel that Agreement and
replace it in its entirety with this Employment Agreement (this
"Agreement").
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable
consideration, the receipt of which is mutually acknowledged, the
Companies and the Executive (individually a "Party" and together
the "Parties") agree as follows:
1. Definitions.
(a) "Affiliate" of a person or other entity shall mean a
person or other entity that directly or indirectly
controls, is controlled by, or is under common control
with the person or other entity specified.
(b) Except as provided otherwise in Section 8 hereof, "Base
Salary" shall mean the salary provided for in Section 5
below or any increased salary granted to the Executive
pursuant to Section 5.
(c) "Board" shall mean the Boards of Directors of the
Companies.
(d) "Cause" shall mean:
(i) The Executive is convicted of a felony; or
(ii) The Executive is guilty of willful gross neglect
or willful gross misconduct in carrying out his
duties under this Agreement, resulting, in either
case, in material economic harm to the Companies,
unless the Executive believed in good faith that
such act or nonact was in the best interests of
such Company.
(e) A "Change of Control" shall mean the occurrence of any
one of the following events:
(i) Any "person," as such term is used in Sections
3(a)(9) and 13(d)of the Securities Exchange Act of
1923, after the date hereof becomes a "beneficial
owner," as such term is used in Rule 13d-3
promulgated under that Act, of 20% or more of the
Voting Stock of the Companies;
(ii) The majority of either Board consists of
individuals other than Incumbent Directors, which
term means the members of the Board on the date of
this Agreement; provided that any person becoming
a director subsequent to such date whose election
or nomination for election was supported by
two-thirds of the directors who then comprised the
Incumbent Directors shall be considered to be an
Incumbent Director;
(iii)The Companies adopt any plan of liquidation
providing for the distribution of all or
substantially all of its assets;
(iv) All or substantially all of the assets or business
of the Companies is disposed of pursuant to a
merger, consolidation or other transaction (unless
the shareholders of such Company immediately prior
to such merger, consolidation or other transaction
beneficially own, directly or indirectly, in
substantially the same proportion as they owned
the Voting Stock of such Company, all of the
Voting Stock or other ownership interests of the
entity or entities, if any, that succeed to the
business of such Company); or
(v) The Companies combine with another company and is
the surviving corporation but, immediately after
the combination, the shareholders of such Company
immediately prior to the combination hold,
directly or indirectly, 50% or less of the Voting
Stock of the combined company (there being
excluded from the number of shares held by such
shareholders, but not from the Voting Stock of the
combined company, any shares received by
Affiliates of such other company in exchange for
stock of such other company).
(f) "Constructive Termination Without Cause" shall mean a
termination of the Executive's employment at his
initiative as provided in Section 8(d) below following
the occurrence, without the Executive's prior written
consent, of one or more of the following events (except
in consequence of a prior termination):
(i) A reduction in the Executive's then current Base
Salary or the termination or material reduction of
any employee benefit or perquisite enjoyed by him;
(ii) The failure to elect or reelect the Executive to
any of the positions described in Section 4 below
or removal of him from any such position;
(iii)A material diminution in the Executive's
duties or the assignment to the Executive of
duties which are materially inconsistent with his
duties or which materially impair the Executive's
ability to function as the Executive Vice
President and Chief Executive Officer or any other
office to which he may be elected or appointed:
(iv) The failure to continue the Executive's
participation in any incentive compensation plan
unless a plan providing a substantially similar
opportunity is substituted;
(v) The relocation of a Companies' principal office,
or the Executive's own office location as assigned
to him by the Companies, to a location outside of
the metropolitan area of Louisville, Kentucky; or
(vi) The failure of the Companies to obtain the
assumption in writing of its obligation to perform
this Agreement by any successor to all or
substantially all of the assets of such Company
within 45 days after a merger, consolidation, sale
or similar transaction.
(g) "Disability" shall mean the Executive's inability to
substantially perform his duties and responsibilities
under this Agreement for a period of 180 consecutive
days.
(h) "Term of Employment" shall mean the period specified in
Section 3 below.
2. Cancellation of Old Agreement.
The Agreement between the Parties entered into as of
February 10, 1995, is hereby revoked and canceled in its
entirety.
3. Term of Employment.
The employment of the Executive will continue for thirty-six
months from the date hereof or until the earlier termination of
his employment in accordance with the terms of this Agreement.
Thereafter, if not so terminated, employment shall be renewed for
successive thirty-six month periods or until the earlier
termination in accordance with the terms of this Agreement.
4. Position. Duties and Responsibilities.
(a) During the term of Employment, the Executive shall
continue to be employed as Executive Vice President of
the Companies with duties commensurate with that
position. The Executive, in carrying out his duties
under this Agreement, shall report to the Chief
Executive Officer.
(b) Anything herein to the contrary notwithstanding,
nothing shall preclude the Executive from (i) serving
on the boards of directors of a reasonable number of
other corporations (except Executive will not serve on
the board of any other financial institution) or the
boards of a reasonable number of trade associations
and/or charitable organizations, (ii) engaging in
charitable activities and community affairs, and (iii)
managing his personal investments and affairs, provided
that such activities do not materially interfere with
the proper performance of his duties and
responsibilities as the Companies' Executive Vice
President or any other office to which he may be
elected or appointed.
5. Base Salary.
The Executive shall be paid an annualized Base Salary,
payable in accordance with the regular payroll practices of the
Companies, of $123,200. The Base Salary shall be reviewed no less
frequently than annually for increase at the sole discretion of
the Board and its Nominating and Executive Compensation
Committee.
6. Employee Benefit Programs.
During the Term of Employment, the Executive shall be
entitled to participate in all employee incentive, pension and
welfare benefit plans and programs made available to the
Companies' senior level executives or to its employees generally,
as such plans or programs may be in effect from time to time,
including without limitation, annual stock option grant, ESOP,
bonus, pension, profit sharing, savings and other retirement
plans or programs, medical, dental, hospitalization, short-term
and long-term disability and life insurance plans, accidental
death and dismemberment protection, travel accident insurance,
and any other pension or retirement plans or programs and any
other employee incentive compensation plan, employee welfare
benefit plans or programs that may be sponsored by the Companies
from time to time, including any plans that supplement the above-
listed types of plans or programs, whether funded or unfunded.
7. Reimbursement of Business and Other Expenses.
The Executive is authorized to incur reasonable expenses in
carrying out his duties and responsibilities under this agreement
and the Companies shall promptly reimburse him for all business
expenses incurred in connection with carrying out the business of
the Companies, subject to documentation in accordance with the
Companies' policy.
8. Termination of Employment.
(a) Termination for Cause. In the event the Companies
terminate the Executive's employment for Cause, he
shall be entitled to:
(i) The Base Salary through the date of the
termination of his employment for Cause;
(ii) Any incentive awards earned (but not yet paid);
(iii)Any pension benefit that may become due
pursuant to Section 6 above, determined as of the
date of such termination;
(iv) Other or additional benefits in accordance with
applicable plans or programs of the Companies to
the date of termination.
(b) Termination Without Cause. If the Executive's
employment is terminated without Cause other than due
to Disability or death, or there is a Constructive
Termination without Cause, the Executive shall be
entitled to:
(i) The Base Salary through the date of termination of
the Executive's employment;
(ii) The Base Salary, at the annualized rate in effect
on the date of termination of the Executive's
employment for thirty-six months following such
termination, paid in installments in accordance
with the regular pay practices of the Companies;
provided that at the Executive's option the
Companies shall pay him the present value of such
salary continuation payments in a lump sum (using
as the discount rate the Applicable Federal Rate
for short term Treasury obligations as published
by the Internal Revenue Service for the month in
which such termination occurs). For purposes of
this subsection (ii) Base Salary shall include
an annual bonus calculated by taking the average
of the bonuses of the three years preceding the
year of termination;
(iii)The balance of any incentive awards earned
(but not yet paid);
(iv) The right to exercise any stock option in full,
whether or not such right is exercisable pursuant
to the terms of the grant.
(v) Any pension benefit that may become due pursuant
to Section 6 above;
(vi) Continued accrual of credited service for the
purpose of the pension benefit provided under
Section 6 for thirty-six months;
(vii)Continued participation in all medical,
dental, hospitalization and life insurance
coverage and in other employee benefit plans or
programs in which he was participating on the date
of the termination of his employment until the
earlier of:
(A) The end of the period during which he is
receiving salary continuation payments (or in
respect of which a lump-sum severance payment
is made);
(B) The date, or dates, he receives equivalent coverage and
benefits under the plans and programs of a subsequent
employer (such coverages and benefits to be determined on
a coverage-by-coverage, or benefit-by-benefit, basis);
provided that (x) if the Executive is precluded
from continuing his participation in any employee
benefit plan or program as provided in this clause
(vii) of this Section 8(b), he shall be provided
with the after-tax economic equivalent of the
benefit provided under the plan or program in
which he is unable to participate for the period
specified in this clause (vii) of this Section
8(b), (y) the economic equivalent of any benefit
foregone shall be deemed to be the lowest cost
that would be incurred by the Executive in
obtaining such benefit himself on an individual
basis, and (z) payment of such after-tax economic
equivalent shall be made quarterly in advance; and
(viii)Immediate vesting of the Companies
contribution to his Employee Stock Option Plan
(ix) Other or additional benefits in accordance with
applicable plans and programs of the Companies to
the date of termination.
(c) Termination of Employment Following a Change in
Control. If following a Change in Control, the
Executive's employment is terminated without Cause or
there is a Constructive Termination Without Cause, the
Executive shall be entitled to the payments and
benefits provided in Section 8(b), provided that the
salary continuation payments shall be paid in a lump
sum without any discount. Also, immediately following a
Change in Control, all amounts, entitlements or
benefits in which he is not yet vested shall become
fully vested. In addition, if Executive continues in
the employ of the Companies for a period of two years
following the effective date of the Change of Control,
he may then voluntarily terminate his employment and in
such a case would receive a sum equal to three times
Base Salary. A voluntary termination under this
Section 8(c) shall be effective upon 30 days prior
notice to the Companies and shall not be deemed a
breach of this Agreement. For purposes of this Section
8(c) Base Salary shall include an annual bonus
calculated by taking the highest bonus of the three
years preceding the year of termination;
(d) Voluntary Termination. In the event of a termination
of employment by the Executive on his own initiative
other than a termination due to death or Disability or
a Constructive Termination without Cause, the Executive
shall have the same entitlements as provided in Section
8(a) for a Termination for Cause.
(e) Limitation Following a Change in Control. In the event
that the termination of the Executive's employment is
for one of the reasons set forth in Section 8(b) above
following a Change in Control, and the aggregate of all
payments or benefits made or provided to the Executive
under such Section above and under all other plans and
programs of the Companies (the "Aggregate Payment") is
determined to constitute a Parachute Payment, as such
term is defined in Section 280G(b)(2) of the Internal
Revenue Code of 1986, as amended, notwithstanding any
other provision of this Agreement to the contrary, the
aggregate amount of payments or benefits paid by the
Companies to the Executive pursuant to this Agreement,
the amount to be paid to the Executive and the time of
payment pursuant to this Section 8(e) shall be adjusted
so as to make such payments fully deductible by the
Companies. If the Parties are unable to agree upon an
Auditor to calculate such an adjustment, then the
Executive and Companies shall each select one
accounting firm and those two firms shall jointly
select the accounting firm to serve as the Auditor.
(f) Upon termination pursuant to Section 8(b), the
Executive will have the option of purchasing his
Company car for the value of such car on the books of
the Company at the time of termination, adjusted for
value of the Executives cash contribution, if any, to
the purchase of the car.
(g) No Mitigation - No Offset. In the event of any
termination of employment under this Section 8, the
Executive shall be under no obligation to seek other
employment and there shall be no offset against amounts
due the Executive under this Agreement on account of
any remuneration attributable to any subsequent
employment that he may obtain except as specifically
provided in this Section 8.
(h) Nature of Payments. Any amounts due under this Section 8 are
in the nature of severance payments considered to be reasonable
by the Companies and are not in the nature of a penalty.
9. Conditional Future Payment. In the event that Executive
retires from the employment of the Companies and there
has been no event of Termination under Section 8 hereof
(other than Voluntary Termination in connection with
retirement), Executive will receive the following,
payable in a lump sum:
(a) If Executive retires after attaining the age of 65 --
$369,600.
(b) If Executive retires before age 65 and after attaining the
age of 55 - The amount shown in Exhibit A hereof, applicable to
his age upon retirement, or
(c) If Executive is totally and permanently disabled during the
term of his employment hereunder - The amount shown in Exhibit A
applicable to his age when first determined to be totally and
permanently disabled. If Executive is determined to be totally
and permanently disabled prior to reaching age 55, he will be
paid a sum equal to the amount then accrued on the books of the
Companies for the purpose of providing for the payment schedule
reflected in Exhibit A.
(d) In no event will Executive receive both a payment pursuant
to this Section 9 and severance pay pursuant to Section 8 hereof.
10. Indemnification.
(a) The Companies agree that if the Executive is made a
party, or is threatened to be made a party, to any
action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "Proceeding"), by
reason of the fact that he is or was a director,
officer or employee of the Companies or is or was
serving at the request of the Companies as a director,
officer, member, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, including service with respect to employee
benefit plans, whether or not the basis of such
Proceeding is the Executive's alleged action in an
official capacity while serving as a director, officer,
member, employee or agent, the Executive shall be
indemnified and held harmless by the Companies to the
fullest extent permitted or authorized by the
Companies' certificates of incorporation or bylaws or,
if greater, by the laws of the State of Kentucky,
against all cost, expense, liability and loss
(including, without limitation, reasonable attorney's
fees, judgments, fines, ERISA fines, excise taxes or
penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by the Executive in
connection therewith, and such indemnification shall
continue as to the Executive even if he has ceased to
be a director, member, employee or agent of the
Companies or other entity and shall inure to the
benefit of the Executive's heirs, executors and
administrators. The Companies shall advance to the
Executive all reasonable costs and expenses incurred by
him in connection with a Proceeding within 20 days
after receipt by the Companies of a written request for
such advance. Such request shall include an undertaking
by the Executive to repay the amount of such advance if
it shall ultimately be determined that he is not
entitled to be indemnified against such costs and
expenses.
(b) Neither the failure of the Companies (including its
board of directors, independent legal counsel or
stockholders) to have made a determination prior to the
commencement of any proceeding concerning payment of
amounts claimed by the Executive under Section 9(a)
that indemnification of the Executive is proper because
he has met the applicable standard of conduct, nor a
determination by the Companies (including its board of
directors, independent legal counsel or stockholders)
that the Executive has not met such applicable standard
of conduct, shall create a presumption that the
Executive has not met the applicable standard of
conduct.
(c) The Companies agree to continue and maintain a
directors' and officers' liability insurance policy
covering the Executive to the extent either Company
provides such coverage for its other executive
officers.
11. Representation. The Companies represent and warrant
that they are fully authorized and empowered to enter into this
Agreement and that the performance of their obligations under
this Agreement will not violate any agreement between it and any
other person, form or organization.
12. Entire Agreement. This Agreement contains the entire
understanding and agreement between the Parties concerning the
subject matter hereof and supersedes all prior agreements,
understandings, discussions, negotiations and undertakings,
whether written or oral, between the Parties with respect
thereto.
13. Amendment or Waiver. No provision in this Agreement
may be amended unless such amendment is agreed to in writing and
signed by the Executive and an authorized officer of the
Companies. No waiver by either Party of any breach by the other
Party of any condition or provision contained in this Agreement
to be performed by such other Party shall be deemed a waiver of a
similar or dissimilar condition or provision at the same or any
prior or subsequent time. Any waiver must be in writing and
signed by the Executive or an authorized officer of the
Companies, as the case may be.
14. Severability. In the event that any provision or
portion of this Agreement shall be determined to be invalid or
unenforceable for any reason, in whole or in part, the remaining
provisions of this Agreement shall be unaffected thereby and
shall remain in full force and effect to the fullest extent
permitted by law.
15. Survivorship. The respective rights and obligations of
the Parties hereunder shall survive any termination of the
Executive's employment to the extent necessary to the intended
preservation of such rights and obligations.
16. Resolution of Disputes. Any disputes arising under or
in connection with this Agreement shall, at the election of the
Executive or the Companies, be resolved by binding arbitration,
to be held in Kentucky in accordance with the rules and
procedures of the American Arbitration Association. Judgment upon
the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof. Costs of the arbitration or
litigation, including, without limitation, attorneys' fees of
both Parties, shall be borne by the Companies, provided that if
the arbitrator(s) determine that the claims or defenses of the
Executive were without any reasonable basis, each Party shall
bear his or its own costs.
17. Notices. Any notice given to a party shall be in
writing and shall be deemed to have been given when delivered
personally or sent by certified or registered mail, postage
prepaid, return receipt requested, duly addressed to the Party
concerned at the address indicated below or to such changed
address as such Party may subsequently give such notice of:
If to the Companies: Mid-America Bancorp, Inc.
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx
If to the Executive: XXXXXXX X. XXXXXX
0000 Xxxx Xxxx Xxxx
XxXxxxxx, XX 00000
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first written above.
MID-AMERICA BANCORP, INC.
By:/s/ Xxxxxxx X. Xxxxx
Title: Chairman of the Board
MID-AMERICA BANK OF LOUISVILLE
& TRUST COMPANY
By:/s/ Xxxxxxx X. Xxxxx
Title: Chairman of the Board
/s/ Xxxxxxx X. Xxxxxx
XXXXXXX X. XXXXXX
EXHIBIT A
Age At Conditional
Retirement Payment
65 $369,600
64 $363,834
63 $341,628
62 $320,199
61 $301,199
60 $282,816
59 $265,555
58 $249,348
57 $234,129
56 $219,840
55 $206,422
