Exhibit 10.1
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CHANGE OF CONTROL AGREEMENT
THIS CHANGE OF CONTROL AGREEMENT (the "Agreement"), entered into this
27th day of March, 2006, by and between 1st INDEPENDENCE FINANCIAL GROUP, INC.,
a Delaware corporation ("Parent"), and Xxxxxxx X. XxXxxx ("Executive"), and
joined in by 1st Independence Bank ("Bank"), Parent's wholly-owned subsidiary.
WITNESSETH
WHEREAS, Parent desires to assure the continued services of Executive
on behalf of Parent and Bank on an objective and impartial basis and without
distraction or conflict of interest in the event of an attempt by any person to
obtain control of Parent; and
WHEREAS, Parent recognizes that when faced with a proposal for a change
of control of Parent, Executive will have a significant role in helping the
Board of Directors of the Parent, or any successor thereto (the "Board") assess
the options and advising the Board on what is in the best interests of Parent
and its shareholders; and it is necessary for Executive to be able to provide
this advice and counsel without being influenced by the uncertainties of his own
situation; and
WHEREAS, Parent and Bank desire reasonable protection of their
confidential business and customer information which they will develop over the
years at substantial expense and assurance that Executive will not compete with
Parent or Bank for a reasonable period of time after termination of his
employment with Parent or Bank, except as otherwise provided herein.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants and undertakings herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, each intending to be legally bound, covenant and agree as follows:
1. Employment.
(a) The Parent and Bank hereby agree that, effective upon a "Change of
Control," (as defined in subsection 1(b)) and provided that Xx. XxXxxx is still
serving as an executive officer of the Parent and Bank at that time, they will
continue to employ him as an executive officer of the Parent and Bank to perform
the duties described herein, and Xx. XxXxxx hereby accepts such employment on
the terms and conditions stated herein. It is understood that prior to such
"Change of Control," this Agreement shall confer no rights of employment or
other benefits (or obligations) whatsoever upon him, and that he shall remain
subject to termination at will.
(b) For purposes of this Agreement, a "Change of Control" shall mean
(A) any merger, tender offer, consolidation or sale of substantially all of the
assets of Parent, or related series of such events, as a result of which: (1)
shareholders of Parent holding less than 50 percent of the outstanding voting
securities of Parent or its survivor or successor before such event own more
than 50 percent of such securities after such event; (2) persons holding less
than 25 percent of such securities before such event own more than 50 percent of
such securities after such event; or (3) persons constituting a majority of the
Board of Directors were not directors of Parent for at least 24 preceding
months; (B) any sale, lease, exchange, transfer, or other disposition of all or
any substantial part of the assets of the Parent; or (C) any acquisition by any
person or entity, directly or indirectly, of the beneficial ownership of 40
percent or more of the outstanding voting stock of the Parent, excluding
acquisitions by individuals or entities who at the date of this Agreement were
either a Director of the Parent or the beneficial owner (either directly or
indirectly) of 10 percent or more of the voting securities of the Parent.
2. Term. Subject to provisions for termination set forth herein, the
term of Xx. XxXxxx'x employment hereunder (the "Term") shall commence on the
date of a Change of Control and shall extend until three years after the date of
such Change of Control. The Term shall be renewed at the end of the initial Term
and each extension thereof for an additional one (1) year if the Parent's and
Bank's board of directors, or any board of directors of a successor thereof,
determines by resolution to extend this Agreement prior to such anniversary.
3. Duties of Executive. The Executive shall be an executive officer of
the Parent and Bank and shall perform such duties and responsibilities for the
Parent and Bank as may be assigned to him by the Parent and/or Bank. During the
Term, the Executive shall devote substantially all of his business time,
attention and energy, and his reasonable best efforts, to the interests and
business of the Parent and Bank and to the performance of his duties and
responsibilities on behalf of the Parent and Bank.
4. Salary. Through out the Term, the Executive shall receive an annual
minimum salary of One Hundred Twenty Thousand Dollars ($120,000) ("Base
Compensation") payable at regular intervals in accordance with Bank's normal
payroll practices in effect from time to time. The Board of Directors of Parent
and Bank shall review Executive's salary on an annual basis and may, in its
discretion, consider and declare from time to time increases in the Base
Compensation that it pays Executive. Any and all increases in Executive's salary
pursuant to this section shall cause the level of Base Compensation to be
increased by the amount of each such increase for purposes of this Agreement.
The increased level of Base Compensation as provided in this section shall
become the level of Base Compensation for the remainder of the Term of this
Agreement until there is a further increase in Base Compensation as provided
herein.
5. Benefit Programs. During the Term, the Executive shall be entitled
to participate in or receive benefits under (i) any life, health,
hospitalization, medical, dental, disability or other insurance policy or plan,
(ii) pension, retirement or Executive stock ownership plan, (iii) bonus or
profit-sharing plan or program, (iv) deferred compensation plan or arrangement,
and (v) any other Executive benefit plan, program or arrangement, made available
by Parent or Bank on the date of this Agreement and from time to time in the
future to Parent's or Bank's directors, officers and employees on a basis
consistent with the terms, conditions and overall administration of the
foregoing plans, programs or arrangements and with respect to which Executive is
otherwise eligible to participate or receive benefits. The foregoing shall not
prohibit Parent or Bank, in its sole discretion, from amending, modifying,
freezing, suspending or terminating such plans, if any, from time to time in the
future.
6. General Policies. During the Term:
(a) Executive shall receive reimbursement from Parent or Bank, as
appropriate, for all reasonable business expenses incurred in the course of his
employment by Parent and Bank, upon submission to Bank of written vouchers and
statements for reimbursement.
(b) Executive shall attend, at his discretion and with the approval of
the CEO, those professional meetings, conventions, and/or similar functions that
he deems appropriate and useful for purposes of keeping abreast of current
developments in the industry and/or promoting the interests of Parent and Bank.
(c) Executive shall be entitled to office space and working conditions
consistent with his position as Parent's Executive Vice President and Bank's
Executive Vice President.
(d) Executive shall be entitled to four (4) weeks per calendar year of
paid vacation, which shall be utilized at such times when his absence will not
materially impair Parent's or Bank's normal business functions. In addition to
the vacation described above, Executive also shall be entitled to all paid
holidays customarily given by Bank to its officers.
(e) All other matters relating to the employment of Executive by Parent
and Bank not specifically addressed in this Agreement shall be subject to the
general policies regarding employees of Parent and Bank in effect from time to
time.
7. Termination. Subject to the respective continuing obligations of the
parties, including but not limited to those set forth in subsections 9(a), 9(b),
9(c), and 9(d) hereof, Executive's employment by Parent and Bank may be
terminated prior to the expiration of the Term of this Agreement as follows:
(a) Parent or Bank, by action of their respective Board of Directors
and upon written notice to Executive, may terminate Executive's employment with
Parent and Bank immediately for Cause. For purposes of this subsection 7(a),
"Cause" shall be defined as (i) Executive's personal dishonesty of a material
nature affecting Executive's ability to perform his duties under this Agreement,
(ii) Executive's incompetence in the performance of his duties and obligations
under this Agreement, (iii) Executive's willful misconduct or gross negligence,
(iv) Executive's breach of fiduciary duty involving personal profit, (v)
Executive's intentional failure to perform stated duties, (vi) Executive's
conviction of any criminal offense which involves dishonesty or breach of trust
or conviction of any felony, (vii) any requirement of a government agency or
authority having jurisdiction over Parent or Bank, or (viii) any material
violation by Executive of any material provision or covenant of this Agreement.
(b) Parent or Bank, by action of their respective Board of Directors,
may terminate Executive's employment with Parent and Bank without Cause at any
time; provided, however, that the "Date of Termination" for purposes of
determining benefits payable to Executive under subsection 8(b) hereof shall be
the date which is 30 days after Executive receives written notice of such
termination.
(c) Executive, by written notice to Parent and Bank, may terminate his
employment with Parent and Bank immediately for "Good Reason". For purposes of
this subsection 7(c), "Good Reason" shall be defined as (i) any action by
Parent's or Bank's Board of Directors to remove the Executive as Executive Vice
President of Parent or Executive Vice President of Bank without the prior
written consent of Executive, except where the Parent's and Bank's Board of
Directors properly act to remove Executive from such office for Cause as defined
in subsection 7(a) hereof, (ii) any action by Parent's or Bank's Board of
Directors to materially limit, increase, or modify Executive's duties and/or
authority as Executive Vice President of Parent or Executive Vice President of
Bank (including his authority, subject to corporate controls no more restrictive
than those in effect on the date hereof, to hire and discharge Executives who
are not bona fide officers of Parent) without the prior written consent of
Executive, except such change in duties as may be required by any government
agency or authority having jurisdiction over Parent or Bank, or as may be
required for the Board to perform its fiduciary obligations, (iii) any failure
of Parent to obtain the assumption of the obligation to perform this Agreement
by any successor, as contemplated in Section 18 hereof; (iv) any material
violation by Parent or Bank of any material provision or covenant of this
Agreement.
(d) Executive, upon 60 days' written notice to Parent and Bank, may
terminate his employment with Parent and Bank without Good Reason.
(e) Executive's employment with Parent and Bank shall terminate in the
event of Executive's death or disability. For purposes hereof, "Disability"
shall have the meaning assigned to it by the Bank's then-in-place long term
disability benefits plan, provided that notice of any termination by Parent and
Bank because of Executive's "Disability" shall have been given to Executive
prior to the full resumption by him of the performance of such duties.
(f) Nothing contained in this Agreement shall impair, affect or change
any requirements otherwise imposed upon Parent or Bank or Executive by
applicable statute, law, rule, regulation or other legal requirement, including,
without limitation, Executive's COBRA rights upon termination of employment.
8. Termination Payments. In the event of termination of Executive's
employment pursuant to Section 7 hereof, compensation shall continue to be paid
to Executive as follows:
(a) In the event of termination pursuant to subsection 7(a) or 7(d),
compensation provided for herein (including Base Compensation) shall continue to
be paid, and Executive shall continue to participate in the Executive benefit,
retirement, and compensation plans and other perquisites as provided in Sections
5 and 6 hereof, through the date of termination specified in the notice of
termination in a manner consistent with the applicable terms of the governing
plan documents. Any benefits payable under insurance, health, retirement and
bonus plans as a result of Executive's participation in such plans through such
date shall be paid when due under those plans. The date of termination specified
in any notice of termination pursuant to subsection 7(a) shall be no later than
the last business day of the month in which such notice is provided to
Executive.
(b) In the event of termination pursuant to subsection 7(b) or 7(c):
(i) Compensation provided for herein (including Base
Compensation) shall continue to be paid and Executive shall continue to
participate in the Executive benefit, retirement and compensation plans and
other perquisites as provided in Sections 5 and 6 hereof, through the date of
termination specified in the notice of termination in a manner consistent with
the applicable terms of the governing plan documents. Any benefits payable under
insurance, health, retirement and bonus plans as a result of Executive's
participation in such plans through such date shall be paid when due under those
plans.
(ii) If the termination occurs during the two-year period
following a Change of Control, Executive shall be paid an amount equal to the
product of 2.99 times Executive's "base amount" as defined in Section 280G(b)(3)
of the Internal Revenue Code of 1986, as amended (the "Code") and any proposed
or final regulations thereunder, less the value of any benefits provided or
rights accelerated by the Change of Control, as determined pursuant to Code
Section 280G and any proposed or final regulations thereunder. Said sum shall be
paid in one lump sum within 30 days after such termination as if Executive's
employment had not been terminated, and such payments shall be in lieu of any
other future payments which Executive would be otherwise entitled to receive
under this Agreement. Notwithstanding the foregoing, all sums payable hereunder
shall be reduced in such manner and to such extent so that no such payments made
hereunder when aggregated with all other payments or benefits to be made to or
provided by Executive by Parent or Bank shall be deemed an "excess parachute
payment" in accordance with Code Section 280G and be subject to the excise tax
provided at Code Section 4999(a).
(iii) If the termination does not occur during the two-year
period following a Change of Control, Executive shall be entitled to continue to
receive from Parent and Bank his Base Compensation at the rates in effect at the
time of termination for the period of time equal to the remaining Term of the
Agreement. Payment of such amount shall be made in semi-monthly installments in
the same sequence of semi-monthly payments as followed by the Parent for the
payment of salary, beginning on the first salary payment date following the date
of termination and continuing until paid in full.
(iv) In lieu of the COBRA coverage otherwise available to the
Executive during the period of time equal to the remaining Term of the
Agreement, Parent or Bank will maintain in full force and effect for the
continued benefit of Executive, and if applicable for his spouse and dependent
children, each Executive welfare benefit plan (as such term is defined in
Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended)
in which Executive was entitled to participate immediately prior to the date of
his termination, unless an essentially equivalent and no less favorable benefit
is provided by a subsequent employer of Executive. If the terms of any Executive
welfare benefit plan of Parent do not permit continued participation by
Executive, Parent will arrange to provide to Executive a benefit substantially
similar to, and no less favorable than, the benefit he was entitled to receive
under such plan at the end of the period of coverage.
(c) In the event of termination pursuant to subsection 7(e),
compensation provided for herein (including Base Compensation) shall continue to
be paid, or at Executive's or his personal representative's election, shall be
paid to him in a single sum payment as soon as practicable following the date of
his termination, but without regard to the timing of payment of his Base
Compensation, and Executive shall continue to participate in the Executive
benefit, retirement, and compensation plans and other perquisites as provided in
Sections 5 and 6 hereof in a manner consistent with the applicable terms of the
governing plan documents, (i) in the event of Executive's death, through the
date of death, or (ii) in the event of Executive's disability, through the date
of proper notice of disability as required by subsection 7(e). Any benefits
payable under insurance, health, retirement and bonus plans as a result of
Parent's participation in such plans through such date shall be paid when due
under those plans.
(d) Parent will permit Executive or his personal representative(s) or
heirs, during a period of three months following Executive's termination of
employment (as specified in the notice of termination) by Parent for the reasons
set forth in subsections 7(b) or (c), if such termination follows a Change of
Control, to require Parent, upon written request, to purchase all outstanding
stock options previously granted to Executive under any Parent stock option plan
then in effect whether or not such options are then exercisable or have
terminated at a cash purchase price equal to the amount by which the aggregate
"fair market value" of the shares subject to such options on the date of
termination specified in the notice of termination exceeds the aggregate option
price for such shares. For purposes of this Section 8(d), "fair market value"
shall mean the closing price on the trading day before the Change of Control for
the shares of common stock of Parent as reported by the National Association of
Securities Dealer Automated Quotation System ("NASDAQ") or any other established
securities market that readily trades securities. If the common stock of Parent
is not quoted on NASDAQ or any other established securities market that readily
trades securities, the fair market value shall be determined by the Compensation
Committee of the Board based upon quotations of the entities which make a market
in Parent's stock. In the event no entities make a market in Parent's stock,
"fair market value" shall mean the amount agreed upon by the Executive and
Parent. If the Executive and Parent are unable to reach an agreement regarding
the fair market value of the stock within ten days of the date of termination
specified in the notice of termination, then the Executive and Parent shall each
select an appraisal firm and the two firms shall determine the fair market value
of the Executive's stock. If the two appraisal firms cannot agree upon the value
within 30 days of their appointment, they shall appoint a third appraiser, the
decision of a majority of the three appraisers shall be final and binding on the
Executive and Parent.
(e) If a termination payment is payable to Executive under subsection
8(b)(ii) or 8(b)(iii) due to Executive's "Separation from Service," as defined
below, for any reason other than death, and if at the time of the Separation
from Service Executive is a "Specified Employee," as defined below, payment of
all amounts to Executive under subsection 8(b)(ii) or 8(b)(iii) will be
suspended for six months following Executive's Separation from Service. If
Executive is to receive his termination payment in the form of a lump sum under
subsection 8(b)(ii), he will receive payment of that amount on the first day
following the six-month suspension period. If Executive is to receive payment of
his termination payment in the form of installments under subsection 8(b)(iii),
payment of any installments that Executive was otherwise entitled to receive
during the six-month suspension period will be accumulated and paid in the form
of a lump sum on the first day following the six-month suspension period. The
remainder of Executive's termination payments will then continue distribution in
installments in the manner specified in subsection 8(b)(iii).
(i) "Separation from Service" means the date on which
Executive dies, retires or otherwise experiences a Termination of Employment
with Parent or a subsidiary. Provided, however, a Separation from Service does
not occur if Executive is on military leave, sick leave or other bona fide leave
of absence (such as temporary employment by the government) if the period of
such leave does not exceed six months, or if the leave is for a longer period,
so long as the individual's right to reemployment with Parent or a subsidiary is
provided either by statute or by contract. If the period of leave exceeds six
months and Executive's right to reemployment is not provided either by statute
or contract, there will be a Separation from Service on the first date
immediately following such six-month period. Executive will incur a "Termination
of Employment" when a termination of employment is incurred under Proposed
Treasury Regulation 1.409A-1(h)(ii) or any final version of such Proposed
Regulation.
(ii) A "Specified Employee" means Executive is a "Key
Employee," as defined below, at a time when Parent's stock is publicly traded on
an established securities market. Executive will be a Specified Employee on the
first day of the fourth month following any "Identification Date," as defined
below, on which Executive is a Key Employee.
(iii) Executive is a "Key Employee" if at any time during the
12-month period ending on an "Identification Date" Executive is: (A) an officer
of the Parent or a subsidiary having annual compensation greater than $140,000
(as adjusted in the same manner as under Code Section 415(d) except that the
base period will be the calendar quarter beginning July 1, 2001, and any
increase under this sentence which is not a multiple of $5,000 will be rounded
to the next lower multiple of $5,000); (B) a five-percent owner of Parent; or
(C) a one-percent owner of Parent having an annual compensation greater than
$150,000. For purposes of determining whether Executive is an officer under
clause (A), nor more than 50 employees (or, if lesser, the greater of 3 or 10
percent of the employees) will be treated as officers, and those categories of
employees listed in Code Section 414(q)(5) will be excluded.
(iv) The Identification Date for purposes of this Agreement is
December 31 of each calendar year.
9. Confidentiality and Non-Compete Covenants. In order to induce Parent
and Bank to enter into this Agreement, Executive hereby agrees as follows:
(a) Without the prior written consent of Parent and Bank, except for
authorized use in performance of Executive's duties on behalf of and for the
benefit of Parent and Bank, Executive shall not disclose to any others, or use,
at any time, in any way, or anywhere, either during or subsequent to the Term,
any trade secret or other confidential information (of either technical or
non-technical nature) of Parent and the Bank including but not limited to
customer names, customer account information, specialty product and services and
pricing. Executive agrees and acknowledges that such trade secrets and
confidential information are confidential and shall at all times remain the
property of Parent or Bank.
(b) Executive, during and following termination of the Term, shall not
directly or indirectly, individually, in partnership or through a corporation,
as proprietor, manager, executive, major stockholder or consultant, compete with
Parent and Bank or assist others to so compete for any business activity that
competes with any business conducted by Parent and Bank. Except as otherwise
stated herein, this covenant-not-to-compete shall be limited to: (1) a period of
one year following such termination; (2) any business in which Parent or Bank
are actually engaged or intend to engage within said one year period as
evidenced by a formal proposal or offer for such business provided within on
year prior to Executive's termination; and (3) those geographical areas where
Parent and Bank, at the time of said termination, are actually doing business or
intend to do business within said one year period as evidenced by a formal
proposal or offer for such business provided within one year prior to
Executive's termination.
(c) Executive further agrees that during the Term and for a period of
one year following the termination of the Term, he will not, by influencing or
attempting to influence previously existing customers or those customers
specifically targeted by Parent and Bank within one year prior to Executive's
termination, or otherwise, either directly or indirectly, divert or attempt to
divert from Parent and Bank, any business Parent and Bank had enjoyed or
solicited anywhere during the past one year, or in connection with which
Executive worked during the last one year of his employment.
(d) Executive agrees that for a period of one year following any
termination of the Term, he shall not, directly or indirectly, approach or
solicit any employee of Parent and Bank with a view to hiring such employee for
any other entity or persuading such employee to leave the employment of Parent
or Bank.
(e) The provisions of this Section 9 shall survive any termination of
this Agreement.
(f) Notwithstanding the foregoing, but not including termination of the
Executive's employment under Section 7(a) or (d) hereof, the provisions of the
Section 9 shall not survive the termination of Executive's employment following
a Change of Control as defined in Section 1(b) of this Agreement.
10. Notice of Termination. Any termination of Executive's employment
with Parent as contemplated by Section 7 hereof, except in the circumstances of
Executive's death, shall be communicated by written "Notice of Termination" by
the terminating party to the other party hereto. Any "Notice of Termination"
pursuant to Section 7 shall indicate the specific provisions of this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for such termination.
11. Suspensions. If Executive is suspended and/or temporarily
prohibited from participating in the conduct of Bank's or any affiliates'
affairs by a notice served under section 8(e)(3) or (g)(1) of the Federal
Deposit Insurance Act (12 U.S.C. ss. 1818(e)(3) and (g)(1)), Parent's and Bank's
obligations under this Agreement shall be suspended as of the date of service,
unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, Bank shall (i) pay Executive all or part of the compensation withheld
while its obligations under this Agreement were suspended and (ii) reinstate (in
whole or in part) any of its obligations which were suspended.
12. Removal. If Executive is removed and/or permanently prohibited from
participating in the conduct of Bank's or any affiliates' affairs by an order
issued under section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12
U.S.C. ss. 1818(e)(4) or (g)(1)), all obligations of Parent under this Agreement
shall terminate as of the effective date of the order, but vested rights of the
parties shall not be affected.
13. Regulatory Oversight. (a) All obligations under this Agreement may
be terminated except to the extent determined that the continuation of the
Agreement is necessary for the continued operation of Parent or Bank by order of
any state or federal banking regulatory agency with supervision of the Parent or
Bank or any of their affiliates, unless stayed by appropriate proceedings, and
neither Parent nor Bank shall be under no obligation to perform any of its
obligations hereunder if it is informed in writing by any state or federal
banking regulatory agency with supervision of the Parent or Bank or any of their
affiliates that performance of its obligations would constitute an unsafe or
unsound banking practice.
(b) If Bank is in default (as defined in section 3(x)(1) of the Federal
Deposit Insurance Act), all obligations under this Agreement shall terminate as
of the date of default, but this provision shall not affect any vested rights of
the parties.
(c) Notwithstanding anything herein to the contrary, any payments made
to Executive pursuant to the Agreement, or otherwise, shall be subject to and
conditional upon compliance with 12 USC ss.1828(k) and any regulation
promulgated thereunder.
14. Legal Fees. If a dispute arises regarding the termination of
Executive pursuant to Section 7 hereof or as to the interpretation or
enforcement of this Agreement and Executive obtains a final judgment in his
favor in a court of competent jurisdiction or his claim is settled by Parent and
Bank prior to the rendering of a judgment by such a court, all reasonable legal
fees and expenses incurred by Executive in contesting or disputing any such
termination or seeking to obtain or enforce any right or benefit provided for in
this Agreement or otherwise pursuing his claim shall be paid by Parent or Bank,
to the extent permitted by law.
15. Death. Should Executive die after termination of his employment
with Bank while any amounts are payable to him hereunder, this Agreement shall
inure to the benefit of and be enforceable by Executive's executors,
administrators, heirs, distributees, devisees and legatees and all amounts
payable hereunder shall be paid in accordance with the terms of this Agreement
to Executive's devisee, legatee or other designee or, if there is no such
designee, to his estate.
16. Notices. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been given when delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive: Xxxxxxx X. XxXxxx
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
If to Parent or Bank: 1st Independence Financial Group, Inc.
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxxx, Xxxxxxx 00000
Attention: President
or to such other address as either party hereto may have furnished to the other
party in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
17. Governing Law. The validity, interpretation, and performance of
this Agreement shall be governed by the laws of the State of Indiana, without
reference to the choice of law principles or rules thereof, except to the extent
that federal law shall be deemed to apply.
18. Successors and Assigns. Parent shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of Parent, by agreement in form and
in substance satisfactory to Executive to expressly assume and agree to perform
this Agreement in the same manner and same extent that Parent would be required
to perform it if no such succession had taken place. Failure of Parent to obtain
such agreement prior to the effectiveness of any such succession shall be a
material intentional breach of this Agreement and shall entitle Executive to
terminate his employment with Parent and Bank pursuant to subsection 7(c)
hereof. As used in this Agreement, "Parent" shall mean Parent as hereinbefore
defined and any successor to its business or assets as aforesaid.
19. Modification. No provision of this agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by Parent, Bank and Executive. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a wavier of dissimilar provisions or conditions at the
same or any prior subsequent time. No agreements or representation, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Agreement.
20. Validity. The invalidity or unenforceability of any provisions of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement which shall remain in full force and effect.
21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.
22. Assignment. This Agreement is personal in nature and neither party
hereto shall, without consent of the other, assign or transfer this Agreement or
any rights or obligations hereunder except as provided in Section 15 and Section
18 above. Without limiting the foregoing, Executive's right to receive
compensation hereunder shall not be assignable or transferable, whether by
pledge, creation of a security interest or otherwise, other than a transfer by
his will or by the laws of descent or distribution as set forth in Section 15
hereof, and in the event of any attempted assignment or transfer contrary to
this paragraph, Parent shall have no liability to pay any amounts so attempted
to be assigned or transferred.
23. Enforcement. Executive acknowledges that the restrictions contained
in Section 9, in view of the nature of the business in which Parent and Bank are
engaged, are reasonable and necessary in order to protect the legitimate
business interests of Parent and Bank and that any violation of Section 9 would
result in irreparable injury to Parent and Bank. In the event of a breach or a
threatened breach by Executive of the Section 9 of this Agreement, Parent and
Bank shall be entitled to an injunction restraining Executive from the
commission of such breach, and to recover their attorneys' fees, costs and
expenses related to the breach or threatened breach. Nothing herein contained
shall be construed as prohibiting Parent and Bank from pursuing any other
remedies available to them for such breach or threatened breach, including the
recovery of money damages. These covenants and disclosures shall each be
construed as independent of any other provisions in this Agreement, and the
existence of any claim or cause of action by Executive against Parent and Bank,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by Parent and Bank of such covenants and agreements.
If any provision of this Agreement, including Section 9, is invalid in part or
in whole, it will be deemed to have been amended, whether as to time, area
covered or otherwise, as and to the extent required for its validity under
applicable law and, as so amended, will be enforceable. The parties will execute
all documents necessary to evidence such amendment.
24. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the rules then in effect of the district office of the American
Arbitration Association ("AAA") nearest to the home office of Bank, and judgment
upon the award rendered may be entered in any court having jurisdiction thereof,
except to the extent that the parties may otherwise reach a mutual settlement of
such issue. Parent or Bank shall incur the cost of all fees and expenses
associated with filing a request for arbitration with the AAA, whether such
filing is made on behalf of Parent, Bank or Executive, and the costs and
administrative fees associated with employing the arbitrator and related
administrative expenses assessed by the AAA. Parent or Bank shall reimburse
Executive for all costs and expenses, including reasonable attorneys' fees,
arising from such dispute, proceedings or actions, following the delivery of the
decision of the arbitrator finding in favor of Executive; provided that if such
finding is not in favor of Executive then such Executive shall reimburse Parent
or Bank for the initial filing fee paid by either of them to the AAA. Further,
the settlement of the dispute by the parties to be approved by the Bank Board or
the Parent Board may include a provision for the reimbursement by Bank or Parent
to Executive for all costs and expenses, including reasonable attorneys' fees,
arising from such dispute, proceedings or actions. Additionally, the Bank Board
or the Parent Board may authorize such reimbursement of such costs and expenses
by separate action upon a written action and determination of such Board
following a final disposition of the matter. Such reimbursement shall be paid
within ten (10) days of Executive furnishing to Bank or Parent evidence, which
may be in the form, among other things, of a canceled check or receipt, of any
costs or expenses incurred by Executive.
25. Document Review. Parent and Executive 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, (iii) has
consulted with such attorneys, accountants and financial and other advisors as
it or he has deemed appropriate in connection with their respective execution of
this Agreement, and (iv) has executed this Agreement voluntarily and knowingly.
EXECUTIVE HEREBY UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT HAS
BEEN PREPARED BY LEGAL COUNSEL TO THE EMPLOYER AND THAT HE HAS NOT RECEIVED ANY
ADVICE, COUNSEL OR RECOMMENDATION WITH RESPECT TO THIS AGREEMENT FROM SUCH
COUNSEL.
26. Entire Agreement This Agreement together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto.
* * * * * *
IN WITNESS WHEREOF, the parties have caused the Agreement to be
executed and delivered as of the 27th day of March, 2006.
1st INDEPENDENCE FINANCIAL GROUP, INC.
("Parent")
By: /s/ N. Xxxxxxx Xxxxx
_____________________________________
President and Chief Executive Officer
1st INDEPENDENCE BANK
("Bank")
By: /s/ N. Xxxxxxx Xxxxx
_____________________________________
President and Chief Executive Officer
/s/ Xxxxxxx X. XxXxxx
_____________________
("Executive")
