EXHIBIT 10.6
TERMINATION
OF
EMPLOYMENT AGREEMENT
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THIS TERMINATION OF EMPLOYMENT AGREEMENT (the "Agreement"), made and
entered into this 5th day of February, 1998, by and among SHELBY COUNTY
SAVINGS BANK, FSB (the "Bank"), a federal stock savings bank headquartered in
Shelbyville, Indiana, BLUE RIVER BANCSHARES, INC. ("Blue River"), an Indiana
corporation headquartered in Shelbyville, Indiana, and XXXXXX X. XXXXXXXXXX
(the "Employee"), an Indiana resident,
W I T N E S S E T H:
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WHEREAS, the Bank and the Employee are parties to that certain Employment
Agreement (the "Employment Agreement") dated October 17, 1991, pursuant to
which the Bank is presently employing the Employee, and a copy of which
Employment Agreement is attached hereto; and
WHEREAS, the Bank has determined to affiliate with Blue River pursuant to
that certain Agreement of Affiliation and Merger (the "Merger Agreement")
dated of even date herewith by and among the Bank, Shelby County Bancorp
("Shelby County"), the sole shareholder of the Bank, and Blue River; and
WHEREAS, the Employee has advised Blue River and the Bank that he does
not desire to continue to be employed by the Bank upon consummation of the
transactions contemplated by the Merger Agreement and that he desires to
terminate the Employment Agreement pursuant hereto; and
WHEREAS, Blue River, the Bank and the Employee have agreed to the terms
and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises, the
agreements and obligations contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Bank, the Employee and Blue River, intending to be legally bound, hereby
agree as follows:
Section 1. Termination of the Employment Agreement. (a) The Bank
and the Employee hereby agree that the Employment Agreement shall be
automatically terminated in its entirety (without the need for any further
action, writing or notice by either party hereto) immediately following the
Effective Time (as defined in the Merger Agreement) and that following the
Effective Time, neither the Bank nor the Employee shall have any obligation to
the other under the Employment Agreement. In the event that the Merger
Agreement is terminated as provided therein, then this Agreement shall also
automatically terminate as of the same time that the Merger Agreement has been
terminated.
(b) The termination of the Employment Agreement pursuant hereto shall
not be deemed a termination by the Bank of the Employee's employment under the
Employment Agreement with or
without "cause" (as defined in Section 7(A) of the Employment Agreement), a
termination by the Employee of the Employee's employment under the Employment
Agreement with or without "cause" (as defined in Section 7(C) of the
Employment Agreement) or otherwise. Accordingly, the termination of the
Employment Agreement pursuant hereto shall not require the Bank to pay any
compensation or provide any continued employee benefits to the Employee under
the Employment Agreement.
Section 2. Payment and Health Insurance.
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2.01. Payment.
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(a) As further consideration to the Employee to enter into this
Agreement and to terminate the Employment Agreement pursuant hereto, the Bank
shall pay to the Employee an amount equal to Two Hundred Eleven Thousand
Ninety-Four Dollars ($211,094) without any interest thereon (the "Amount"),
less any withholdings for applicable taxes required by law; provided, however,
that the Bank shall pay the Employee the Amount only if the merger
contemplated by the Merger Agreement is consummated. The Bank shall pay the
Amount to the Employee in thirty-five (35) equal installments of $5,863.72 and
a final installment of $5,863.80, commencing the later of (i) the first day of
the month following the Effective Time or (ii) seven (7) days following the
Effective Time; and continuing on the first day of each and every calendar
month thereafter until paid in full; provided, however, that if the Employee
shall have died before the final installment has been paid, then all
installments due following the Employee's death, less any withholdings for
applicable taxes required by law, shall be paid to the Employee's estate.
(b) The Employee hereby acknowledges and agrees that the Amount is a
sum which he advised the Bank was the sum that he would accept in order to
terminate the Employment Agreement and to provide the release and the
covenants specified in this Agreement and that the Amount was calculated
notwithstanding the terms of the Employment Agreement.
2.02. Health Insurance. (a) As further consideration to the
Employee to enter into this Agreement and to terminate the Employment
Agreement pursuant hereto, the Employee shall have the choice as to whether he
desires to receive health insurance coverage following the Effective Time
either pursuant to the exercise of his COBRA rights pursuant to Section
2.02(c) hereof or pursuant to Section 2.02(b) hereof, and shall provide
written notice to the Bank and Blue River indicating his decision at the
Effective Time.
(b) If the Employee chooses to receive health insurance coverage
pusuant to this Section 2.02(b), then for a period of three (3) years
following the Effective Time, Blue River shall (a) provide, at its sole cost
and expense, health insurance to the Employee under Blue River's group health
insurance policy, subject to the terms and conditions of the insurer(s)
providing such insurance policy, and (b) permit the Employee's wife and three
(3) children to be covered, at the Employee's sole cost and expense, under
Blue River's group health insurance policy, subject to the terms and
conditions of the insurer(s) providing such insurance policy; provided,
however, if the
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Employee fails to pay in a timely manner all premiums and other amounts
relating to such insurance for the Employee's wife and children, then Blue
River, in its sole discretion and without any liability to the Employee, his
wife and his children, may either pay such premiums and other costs and deduct
the amount therefor from the Amount or remove the Employee's wife and children
from coverage under Blue River's group health insurance policy. Coverage
under this Section 2.02(b) will only be provided if the Employee and the
Employee's family waive their COBRA continuation coverage rights pursuant to
procedures established by the Bank for that purpose.
(c) If the Employee chooses to receive health insurance coverage
through the exercise of his COBRA rights pursuant to this Section 2.02(c),
then for a period of eighteen (18) months Blue River shall reimburse the
Employee for the COBRA cost of his individual coverage. The Employee shall be
responsible for the cost and expense of COBRA continuation coverage for his
spouse and children.
(d) Notwithstanding the foregoing, in the event that the Employee
becomes eligible to participate in a group health insurance policy or plan of
a subsequent employer, then Blue River's obligations under this Section 2.02
shall immediately terminate.
Section 3. Certain Other Matters.
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3.01. Other Agreements. The Bank and the Employee hereby acknowledge
and agree that the Employment Agreement (including the agreements and
arrangements referred to therein) constitutes the only contract, agreement,
commitment, understanding or arrangement between the Bank and the Employee
relating to the Bank's employment of the Employee. The Bank and the Employee
further acknowledge and agree that the Employment Agreement has never been
amended or modified in any respect, except for extensions to the term
thereof. The Employee represents and agrees that neither Shelby County nor
either of the Subsidiaries (as defined in the Merger Agreement) is bound by
any contract, agreement, commitment, understanding or arrangement regarding
(a) the employment of the Employee, (b) the payment to the Employee of any
salary or other compensation (other than regular director's fees of Shelby
County payable to the Employee), and (c) employee pension benefit, employee
welfare benefit plans or any other plans or programs of any nature (other than
with respect to unexercised options of the Employee to purchase an aggregate
of 2,415 shares of common stock of Shelby County).
3.02. Release. (a) In consideration of the recitals stated above,
the Bank's payment to the Employee of the Amount, the provision by the Bank of
health insurance pursuant to Sections 2.01 and 2.02 hereof and other good and
valuable consideration, the Employee, effective on and after the Effective
Time, hereby (i) forever releases, waives and relinquishes any and all rights
or claims to any and all salary and other payments, health and hospitalization
insurance, life and disability insurance, other employee pension benefit and
employee welfare benefit plans and other plans, programs or benefits provided
by Shelby County, the Bank and either of the Subsidiaries, whether under the
Employment Agreement or otherwise (other than pursuant to Sections 2.01 and
2.02 of this Agreement); (ii) forever releases, waives and discharges any and
all claims, causes of action, suits,
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proceedings, losses and damages under or relating to the Employment Agreement
and the Employee's employment by Shelby County, the Bank and the Subsidiaries
which the Employee had prior to or has as of and following the Effective Time
against Shelby County, the Bank, either of the Subsidiaries or Blue River, or
any predecessor or successor to any of them, or against any of their
respective directors, officers, employees and agents; and (iii) forever
releases, waives and discharges any and all other claims, causes of action,
suits, proceedings, losses and damages which the Employee had prior to or has
as of and following the Effective Time against Shelby County, the Bank, either
of the Subsidiaries or Blue River, or any predecessor or successor to any of
them, or against any of their respective directors, officers, employees or
agents, whether arising under or relating to the mutual termination of the
Employment Agreement pursuant hereto, this Agreement (other than pursuant to
Sections 2.01 and 2.02 hereof) or otherwise and whether arising under the Age
Discrimination in Employment Act of 1967, as amended, Title VII of the Civil
Rights Act of 1964, as amended, the Americans with Disabilities Act, as
amended, and all other federal, state, local or other laws, statutes, rules or
regulations regarding retirement, discrimination, employment or otherwise.
(b) The Employee hereby further understands, acknowledges and agrees
as follows:
(i) The Employee is hereby advised to consult with an attorney
prior to executing this Agreement. The Employee represents
that he has consulted with an attorney prior to executing
this Agreement.
(ii) The Employee hereby expressly acknowledges that he has been
given twenty-one (21) days prior to the date of this
Agreement to decide whether to sign this Agreement.
(iii) The Employee has the right to revoke this Agreement for
seven (7) days following his execution of this Agreement and
for seven (7) days following the Effective Time. The
Employee must communicate in writing any such revocation to
the Chairman of the Board of Directors of the Bank and the
President of Blue River within the designated seven (7) day
period.
3.03. No Breaches. The Bank and the Employee hereby acknowledge and
agree that neither the Bank nor the Employee has breached or defaulted under,
or is presently in breach of or default under, the Employment Agreement and
that no act, omission or event has occurred which would permit the Employee to
terminate his employment for "cause" pursuant to Section 7(C) of the
Employment Agreement. The Bank and the Employee hereby further acknowledge
and agree that neither the Bank nor the Employee has waived compliance by the
other of any term, condition or provision of the Employment Agreement.
3.04. Covenants of the Employee. In consideration of the recitals
stated above, the Bank's payment to the Employee of the Amount, the provision
by the Bank of health insurance pursuant to
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Sections 2.01 and 2.02 hereof and other good and valuable consideration, and
in order to induce the Bank to enter into this Agreement, the Employee hereby
covenants and agrees, from and after the Effective Time, with the Bank and
Blue River as follows:
(a) Employee shall not divulge, disclose or furnish any trade secrets
(as defined in Indiana Code Section 24-2-3-2 as now in effect or as hereafter
amended) of the Bank or Shelby County and any confidential information
acquired by him while employed by the Bank or while serving as the President
and Chief Executive Officer of Shelby County concerning the business,
operations, affairs, policies, plans, procedures, strategies and customers of
the Bank or Shelby County to any person, financial institution, corporation or
other entity, or use any such trade secrets or confidential information
directly or indirectly for Employee's own benefit or for the benefit of any
person, financial institution, corporation or other entity since such trade
secrets and confidential information are confidential and shall at all times
remain the sole and exclusive property of the Bank or Shelby County. In
addition, the Employee shall not divulge, disclose or furnish any confidential
information relating to Blue River to any person, financial institution,
corporation or other entity. As used in this Section 3.04(a), confidential
information shall include any and all documents, writings, records, data and
information relating to Blue River or to Shelby County, the Bank, the
Subsidiaries or any of their customers (i) that any of them considers to be
confidential or proprietary or (ii) that is not available to the public other
than through the breach of this Agreement or any other confidentiality
obligation.
(b) Employee hereby understands, acknowledges and agrees that, by
virtue of his position with the Bank, he has advantageous familiarity and
personal contacts with Shelby County's and the Bank's customers, where ever
located, and the business, operations and affairs of Shelby County and the
Bank. Accordingly, for a period of eighteen (18) months after the Effective
Time, Employee shall not, directly or indirectly, or individually or jointly,
(i) provide bank, savings bank or bank-related products or services to or
solicit the bank, savings bank or bank-related business of any party who is an
existing customer of Shelby County or the Bank at the Effective Time or who
was an actual or prospective customer of Shelby County or the Bank during the
one (1) year period immediately preceding the Effective Time, (ii) request,
suggest or advise any customer of the Bank to close, terminate, reduce, limit
or change his account, business or relationship with the Bank, or (iii)
induce, request or attempt to influence any employee of the Bank to terminate
his employment with the Bank.
(c) Employee hereby understands, acknowledges and agrees that, by
virtue of his position with the Bank, he has advantageous familiarity and
personal contacts with Shelby County's and the Bank's customers, where ever
located, and the business, operations and affairs of Shelby County and the
Bank. Accordingly, for a period of eighteen (18) months after the Effective
Time, Employee shall not, directly or indirectly, or individually or jointly,
in Shelby County, Indiana, or within a radius of 25 miles of the main office
of the Bank, as owner, shareholder, member, investor, partner, proprietor,
principal, director, officer, employee, agent, representative, consultant or
otherwise, compete against, engage in, assist another party in engaging in
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or provide services to any party engaging in any banking, savings bank,
financial services or bank-related business or engaging in any other business,
operation or venture that competes or is contemplating competing with the
business of the Bank.
(d) At the Effective Time, Employee shall turn over to the Bank all
furniture, equipment, property, computers, computer software, programs and
disks, business correspondence, letters, papers, reports, customer lists,
financial statements, credit reports, manuals and other confidential
information or documents of Shelby County and/or the Bank in the possession or
control of Employee, all of which items are and continue to be the sole and
exclusive property of Shelby County and/or the Bank.
(e) At all times prior to and after the Effective Time, the Employee
shall not make any negative, unfavorable or disparaging statements or comments
about the IPO (as defined in the Merger Agreement), the Bank, Shelby Xxxxxx,
Xxxx River or any of their respective directors, officers, employees or agents
or the transactions contemplated by the Merger Agreement .
(f) The Employee, the Bank and Blue River each acknowledge and agree
that the restrictions specified in this Section 3.04 are reasonable in view of
the nature of the business in which Shelby County and the Bank are presently
engaged, the Employee's position with Shelby County and the Bank as of the
date of this Agreement and the Employee's knowledge of and familiarity with
Shelby County's and the Bank's business, operations, affairs and customers.
Notwithstanding anything contained herein to the contrary, if the scope of any
restriction contained in this Section 3.04 is determined by a court of
competent jurisdiction to be too broad to permit enforcement of such
restriction to its fullest extent, then such restriction shall be enforced to
the maximum extent permitted by law.
3.05. Payments under the Employment Agreement. The Employee hereby
acknowledges and agrees that he has received in full all benefits under all
plans or programs, salary, compensation, employee benefits and payments to
which he is entitled under the Employment Agreement or otherwise from Shelby
County and the Bank from the date of the Employment Agreement through and
including the date hereof.
3.06. Confirmation. Immediately prior to the Effective Time, the
Bank and the Employee shall, if requested by Blue River, confirm in writing
that the acknowledgments and agreements contained in this Section 3 continue
to be true and accurate as of the Effective Time and shall remain in full
force and effect on and after the Effective Time.
3.07. Resignation. The Employee hereby resigns as a director and
officer of the Bank, and the Bank hereby accepts such resignation, effective
as of the Effective Time; provided, however, that if this Agreement is
terminated because of the termination of the Merger Agreement, then this
resignation shall also terminate and be of no force or effect.
3.08 Amendment to Employment Agreement. On the date hereof, the
Employment Agreement is hereby amended such that the Employee shall not be
entitled to any grants of options
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to purchase shares of common stock of Shelby County in addition to the options
presently held by the Employee.
Section 4. Certain Remedies; Withhold.
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4.01. Certain Remedies. The Employee hereby understands,
acknowledges and agrees that irreparable harm to the Bank and/or Blue River
would occur if any actual or threatened breach of or non-compliance with any
provision of this Agreement by the Employee occurred, that the Bank and Blue
River shall be entitled to specific performance or an injunction or
restraining order as a remedy for any such actual or threatened breach or
non-compliance, that a bond posted by the Bank or Blue River in the amount of
$1,000 would be adequate and appropriate in connection with such injunction or
restraining order, that actual damages need not be proved by the Bank or Blue
River prior to it being entitled to obtain such injunction or restraining
order, and that the Bank and Blue River shall be entitled to recover their
attorneys' fees and disbursements, costs and other expenses in connection with
the enforcement of this Agreement against the Employee. The foregoing
remedies shall not be deemed to be the exclusive remedies for any actual or
threatened breach of or non-compliance with this Agreement by the Employee but
shall be in addition to all other rights and remedies available hereunder or
at law, in equity or otherwise to the Bank and/or Blue River. The Employee
further understands, acknowledges and agrees that no failure or delay in
exercising any right or remedy hereunder or at law, in equity or otherwise
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
right or remedy hereunder or at law, in equity or otherwise.
Section 4.02. Withhold. In addition to any other rights and remedies
available to the Bank under Section 4.01 hereof or at law, in equity or
otherwise, the Bank shall have the right to withhold and refrain from paying
any installments of the Amount during such times that the Employee is in
breach of or non-compliance with any covenant or provision of this Agreement.
Section 5. Miscellaneous.
5.01. Notices. All notices, requests and other communications
hereunder shall be in writing (which shall include facsimile communication)
and shall be deemed to have been duly given if (a) delivered by hand and
receipted for, (b) sent by certified United States Mail, return receipt
requested, first class postage pre-paid, (c) delivered by receipted overnight
delivery service or (d) telecopied if confirmed immediately thereafter by also
mailing a copy of such notice, request or other communication by certified
United States Mail, return receipt requested, first class postage pre-paid, as
follows:
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If to Blue River: with a copy to (which shall not
constitute notice):
000 Xxxxx Xxxxxxxx Xxxxxx Xxxxx XxXxxxx Xxxxxxxxx & Xxxxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000 One Indiana Square, Suite 2800
ATTN: Xxxxxx X. Xxxx Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Telephone: (000) 000-0000 ATTN: Xxxxxxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000 Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If to the Bank: with a copy to (which shall not
constitute notice):
Shelby County Savings Bank, FSB Bose XxXxxxxx & Xxxxx
00 Xxxx Xxxxxxxxxx Xxxxxx 2700 First Indiana Building
P.O. Box 438 000 Xxxxx Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000 Xxxxxxxxxxxx, Xxxxxxx 00000
ATTN: Xxxxx X. Xxxxxxxx, Chairman ATTN: Xxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Telecopier: (000) 000-0000 Telecopier: (000) 000-0000
If to the Employee:
Xx. Xxxxxx X. Xxxxxxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
or such substituted address or person as either party has given to the other
in writing.
All such notices, requests and other communications shall be effective
(a) if delivered by hand, when delivered, (b) if mailed in the manner provided
herein, two (2) business days after deposit with the United States Postal
Service, (c) if delivered by overnight express delivery service, on the next
business day after deposit with such service, and (d) if by telecopier, on the
next business day if also confirmed by mail in the manner provided
herein.
5.02. Binding Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
heirs, representatives, successors and assigns as of the date hereof;
provided, however, that no party hereto may assign this Agreement without the
prior written consent of the other parties, except that no consent shall be
required if this Agreement is assigned to any successor to Blue River or the
Bank following the Effective Time.
5.03. Waiver; Amendment. (a) Either the Employee or the Bank may by
an instrument in writing waive the performance by the other of any of the
covenants or agreements to be performed by such other party under this
Agreement; provided, however, that no such waiver shall be effective
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unless Blue River shall first consent in writing thereto. The waiver by any
party hereto of a breach of or noncompliance with any provision of this
Agreement shall not operate or be construed as a continuing waiver or a waiver
of any other or subsequent breach or noncompliance hereunder.
(b) Except as expressly provided otherwise herein, this Agreement and
the Employment Agreement may be terminated, amended, modified or supplemented
only by a written agreement executed by the Bank, the Employee and Blue River.
5.04. Headings. The headings in this Agreement have been inserted
solely for ease of reference and shall not be considered in the
interpretation, construction or enforcement of this Agreement.
5.05. Severability. In case any one or more of the provisions (or
any portion thereof) contained herein shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision of this Agreement,
but this Agreement shall be construed as if such invalid, illegal or
unenforceable provision or provisions (or portion thereof) had never been
contained herein.
5.06. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute one and the same agreement.
5.07. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana, without
reference to the choice of law principles or rules thereof.
5.08. Entire Agreement. This Agreement supersedes all other prior
understandings, commitments, representations, negotiations or agreements,
whether oral or written, among or between the parties hereto relating to the
matters contemplated hereby and, together with the Employment Agreement (until
such time as it is terminated pursuant hereto), constitute the entire
agreement among or between the parties hereto relating to the subject matter
hereof.
5.09. Construction. The rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement.
5.10. Review and Consultation. The Bank, the Employee and Blue River
hereby acknowledge and agree that each (i) has read this Agreement in its
entirety prior to executing it, (ii) understands the provisions and effects of
this Agreement, and (iii) has consulted with such attorneys, accountants and
other advisors as it or he has deemed appropriate in connection with its or
his execution of this Agreement. THE EMPLOYEE HEREBY UNDERSTANDS, ACKNOWLEDGES
AND AGREES THAT THIS AGREEMENT HAS BEEN PREPARED BY LEGAL COUNSEL FOR BLUE
RIVER AND THAT HE HAS NOT RECEIVED ANY ADVICE OR RECOMMENDATION WITH RESPECT
TO THIS AGREEMENT FROM
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SUCH LEGAL COUNSEL OR FROM LEGAL COUNSEL FOR THE BANK OR SHELBY COUNTY.
5.11. Certain References. Whenever in this Agreement a singular word
is used, it also shall include the plural wherever required by the context and
vice-versa. All references to the masculine, feminine or neuter genders
herein shall include any other gender, as the context requires. All
references herein to the "Bank" shall include Shelby County Savings Bank, FSB
and its predecessors and successors. All capitalized terms used in this
Agreement that are not otherwise defined herein shall have the same meanings
ascribed to them in the Merger Agreement.
5.12. Taxes. All federal, state, local and other taxes (including,
without limitation, interest, fines and penalties) resulting from, imposed
upon by virtue of or relating to the Employee's receipt of the Amount and the
transactions contemplated by this Agreement shall be paid by the Employee,
except for the Bank's share of FICA taxes, if any, owed on the Amount.
IN WITNESS WHEREOF, the Bank, Blue River and the Employee have entered
into, executed and delivered this Agreement, and this Agreement shall be
effective, as of the day and year first above written.
/S/ XXXXXX X. XXXXXXXXXX
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Xxxxxx X. Xxxxxxxxxx (in his individual capacity)
SHELBY COUNTY SAVINGS BANK, FSB
By: /S/ XXXXX X. XXXXXXX
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Xxxxx X. Xxxxxxx, Chairman
ATTEST:
By: /S/ XXXXX X. XXXXXXX
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Xxxxx X. Xxxxxxx, Secretary
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BLUE RIVER BANCSHARES, INC.
By: /S/ XXXXXX X. XXXX
------------------------------------
Xxxxxx X. Xxxx, President
ATTEST:
By: /S/ D. XXXXXX XXXXXXX
----------------------------------
D. Xxxxxx Xxxxxxx, Secretary
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