EXHIBIT 4.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of this
26th day of October, 2004 by and among Blackhawk State Bank, a Wisconsin
chartered bank (hereinafter referred to as "Employer"), which is a subsidiary of
Blackhawk Bancorp, Inc., (the "Company"), and Xxxx X. Xxxxx (hereinafter
referred to as "Executive").
WHEREAS, Executive, has been employed in and has served as an Executive
Officer for many years and has extensive knowledge of and experience in the
banking industry; and
WHEREAS, Executive has been employed by Employer and the Company for a
period of time as Executive Vice President and Chief Financial Officer.
WHEREAS, the Board of Directors of Employer and of the Company believes
that it is in the best interests of the Employer and that the Employer would
substantially benefit from the continued employment of Executive as an executive
member of its management team in the position of Executive Vice President and
Chief Financial Officer, and Employer and the Company desire to continue to
employ Executive in such positions, and Executive desires to retain such
positions and obtain the benefits of this Agreement; and
WHEREAS, Executive, the Company and Employer have agreed that it is in
their mutual best interest to enter into this Agreement pursuant to the terms
and conditions described herein.
NOW, THEREFORE, for good and valuable consideration which is hereby
acknowledged by Executive and Employer, including, without limitation, the
promises and covenants described herein, the parties hereto hereby agree as
follows:
ARTICLE I
EMPLOYMENT
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1.1 Term of Employment.
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Employer and the Company shall employ Executive for an initial period of
two (2) years commencing on August 1, 2004 (the "Effective Date"); provided,
however, on each annual anniversary of the Effective Date, the term of
employment hereunder may be extended by adding one additional year to the
remaining term of this Agreement so that said term is annually restored to a
full two-year term upon the agreement of the Executive and by affirmative action
taken by Employer's and the Company's Boards of Directors not less than sixty
(60) days prior to such annual anniversary of the Effective Date. Executive's
employment under this Agreement may otherwise be terminated only as contemplated
by Sections 2.1, 2.2, 2.3, 2.4, 2.5 and 2.6 of this Agreement.
1.2 Duties of Executive.
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Executive is hereby employed full-time to hold the office of Executive
Vice President and Chief Financial Officer of the Company and Employer
("Corporate Position") and to perform such executive duties as are normally
performed by persons serving in similar capacities at similar institutions
together with such other duties and responsibilities as may be appropriate to
Executive's position and as may be from time to time determined by Employer's
and the Company's Boards of Directors to be necessary to their operations and in
accordance with their bylaws. Employer and the Company agree that they will
not, without otherwise terminating Executive's employment hereunder, reduce
Executive's current job title, status and responsibilities without Executive's
consent. Executive hereby accepts such employment and undertakes to use his
best efforts to discharge his duties and responsibilities. Unless Executive's
employment is earlier terminated pursuant to the terms of this Agreement, during
the term of this Agreement, Executive shall devote substantially his full
business time to the discharge of his duties and responsibilities under this
Agreement, except for vacations in accordance with this Agreement and with
Employer's vacation policy applicable to executive personnel. This provision
shall not prevent Executive from devoting a reasonable amount of time during
normal business hours to serving as a director, trustee or member of any
charitable, community, trade or financial industry board, committee or
organization.
1.3 Base and Incentive Compensation.
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During the term of this Agreement, Executive shall be entitled to an
annual base salary of $106,590.00 per year. Executive's annual salary will be
reviewed annually by the Board of Directors of Employer and the Company on the
basis of his performance to such date and the progress of Employer and the
Company and shall be increased or decreased as of such date if so determined by
the Boards in their absolute discretion. This review and the decision on
subsequent annual compensation may be delegated by the Boards to the Chief
Executive Officer of Employer and Company. The Boards of Directors may also
increase Executive's compensation at any other time, in their absolute
discretion. Executive shall also be entitled to receive incentive compensation
which compensation shall be calculated in accordance with the provisions of
Employer's Officer Incentive Compensation Plan, or other similar plans as in
effect from time to time. Executive's base salary shall be payable periodically
according to the normal practice of Employer and his incentive compensation
shall be payable as earned in accordance with the provisions of Employer's
Officer Incentive Compensation Plan, or other similar plans.
1.4 Expense Reimbursement.
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Executive shall be entitled to reimbursement of business expenses
reasonably incurred in connection with his employment, upon presentation of
adequate documentation and to the extent then permitted by Employer's and the
Company's general practices and policies for reimbursement of such expenses.
1.5 Benefits.
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In accordance with Employer's and the Company's policies, as in effect
from time to time:
(a) Executive shall be entitled, at the expense of Employer and/or
the Company, to: (i) reimbursement for membership dues and other business
related expenses, including initiation fees and special assessments, but
excluding minimum monthly assessments of the Country Club of Beloit; (ii) a
monthly automobile allowance ; and (iii) attend up to two (2) professional
conferences related to the Executive's area of responsibility per year, subject
to the Bank's approval of such conferences.
(b) Executive shall be entitled to an annual vacation of four weeks
in each year of the term of this agreement, and to sick leave and other time off
in accordance with Employer's and the Company's policies.
(c) Executive shall be entitled to participate in any life or
accidental death insurance program maintained by Employer. Such life and
accidental death insurance shall be maintained for the benefit of the Executive,
who shall be entitled to designate all beneficiaries of such life insurance. In
addition, Employer shall purchase a universal life insurance policy, which will
be owned by Executive, and will carry a death benefit of $200,000 with the
Executive being entitled to designate all beneficiaries of such insurance.
(d) Executive shall also be entitled to participate in any medical
and dental insurance program maintained by Employer and the Company.
(e) Executive shall be entitled to participate in all of Employer's
deferred compensation plans, retirement plans, pension plans, profit sharing
plans, excess benefit plans, 401(k) plans or other similar plans as in effect
from time to time in accordance with and to the extent qualified under the
provisions of such plans. Executive shall also participate in any Employer
sponsored Employee Stock Option Plan, Stock Recognition Plan, Executive Stock
Option Plan, Stock Bonus Plan, Supplemental Employee Retirement Plan, Excess
Benefit Plan or any other similar plan adopted by Employer from time to time.
(f) Executive shall be entitled to participate, at Employer's
expense, in any short-term and long-term disability plans. In addition,
Employer shall provide Executive with supplemental long-term disability
insurance affording $1500 per month of disability income to age 65, a
catastrophic disability benefit of $2,000 per month, and a long-term care
benefit of $2,500 per month (up to a lifetime maximum of $200,000).
(g) Executive shall be entitled to participate in any Employer
Flexible Spending Account program.
(h) In addition to the foregoing benefits, Executive shall also be
entitled to participate, as determined by Employer's and the Company's Boards of
Directors, in such other employee benefit plans or programs as are offered to or
provided for other executives of Employer and the Company from time to time.
Neither the Employer nor the Company will reduce the foregoing benefits provided
to the Executive, other than as part of a general reduction of benefits
available to executive officers or all employees in general, without Executive's
consent.
1.6 Directors and Officers Insurance.
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Employer and the Company shall use their best efforts to provide
Executive during the term of this Agreement with insurance coverage against
business liability to the extent that such coverage is reasonably available for
officers and directors of financial institutions of comparable size.
1.7 Indemnity by Employer and the Company.
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For valuable consideration, and as a material inducement to Executive to
enter into this Agreement, Employer and the Company shall take whatever actions
are necessary to provide indemnification of Executive by Employer for business
liability, including without limitation, liability as a director and officer to
all interested parties, to the fullest extent it can be made available under
applicable law.
ARTICLE II
TERMINATION OF EMPLOYMENT
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2.1 Termination at Expiration of the Term of this Agreement.
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(a) At the termination of employment by reason of the expiration of the
original or any extended term of this Agreement pursuant to an election by
Executive under Section 1.1. Executive shall be entitled to receive (i)
Executive's theretofore unpaid base salary and incentive compensation for the
period of employment, and (ii) compensation for accrued but unused vacation
time. Executive and his spouse and dependent children will be entitled to
medical coverage, at his and/or their expense, to the extent required by the
Consolidated Omnibus Reconciliation Act of 1985 ("COBRA"). To the extent
allowed by the pertinent insurers, the Executive shall be entitled to continue,
at his expense, such supplemental life and disability insurance in effect at the
time of termination. If, however, termination occurs by reason of the
expiration of the original or any extended term of this Agreement pursuant to an
election by Executive under Section 1.1, and if Executive is age 65 or older at
that time, Executive shall be deemed to have retired and he and his spouse shall
be entitled to medical coverage benefits as if he had retired at age 65, under
Section 2.2.
(b) At the termination of employment by reason of the expiration of the
original or any extended term of this Agreement pursuant to an election by
Employer under Section 1.1, Executive may, at his option and upon written notice
to the President of the Company delivered at least thirty (30) days prior to
such expiration of the original or any extended term of this Agreement, either
(i) complete the then remaining term of his employment under this Agreement and
receive upon the expiration of such term (A) an amount equal to one hundred
percent (100%) of his then current Annual Compensation (defined to include his
current annual base salary plus the average annual bonus compensation, if any,
received by Executive in the three years preceding termination), (B) Executive's
theretofore unpaid base salary and incentive compensation for the period of
employment, and (C) compensation for accrued but unused vacation time or, (ii)
provided he first assists, to the reasonable satisfaction of the Boards of
Directors of the Employer and the Company, in an orderly transition to his
successor as Executive Vice President and Chief Financial Officer of the Company
and the Employer, or other officer that will be performing the duties normally
performed by Executive, terminate his employment and receive (A) an amount equal
to two times his then current Annual Compensation, (B) Executive's theretofore
unpaid base salary and incentive compensation, if any, for the period of
employment, and (C) compensation for accrued but unused vacation time.
Executive shall be owed and Employer shall be obligated to pay to Executive the
aggregate amount provided in clauses (i) B or (ii) B, as the case may be and (i)
C or (ii) C above, as the case may be, (other than incentive compensation which
shall be payable when earned as provided in Section 1.3 hereof), within fifteen
(15) days after the termination of Executive pursuant to this Section 2.1(b),
and until such amounts are paid in full to Executive. Employer and the Company
shall be obligated to pay the Executive the entire amount, provided in clause
(i) (A) or (ii) A above, as the case may be, in the amounts and at the time it
would have been required to make such payments had Executive's employment not
been terminated. Furthermore, at Employer's cost, Employer shall continue to
provide Executive with the following benefits, consistent with the terms and
conditions set forth in Section 1.5 hereof: (i) life insurance and medical,
dental and optical insurance, to the extent the same can be provided under the
arrangements in effect at the time of termination, and (ii) any other benefits
to which Executive is entitled by law or the specific terms of Employer's
policies in effect at the time of his termination of employment. Benefits will
be continued pursuant to this Section 2.1(b) for a period of twelve (12) months
from the date of termination of employment, unless Executive becomes employed by
another company and becomes eligible for employment benefits substantially
similar to those which would otherwise be provided under this Section.
Notwithstanding the foregoing, Executive and his spouse and dependent children
will, if then participating in Employer's plan, be entitled, at the expense of
Employer, to further medical coverage to the extent required by COBRA which
shall, in this case, be deemed to commence upon expiration of the twelve (12)
month period set forth in the preceding sentence. Notwithstanding anything
contained herein to the contrary, if Executive becomes unable to perform each of
the material duties of his employment under this Agreement prior to his
termination of employment pursuant to this paragraph (b), and Executive
thereafter, as a result of the same condition, becomes Totally and Permanently
Disabled as defined in Section 2.3, Executive will be entitled to the Full
Disability Benefits (as defined in Section 2.3) provided for in Section 2.3 upon
his termination of employment.
2.2 Termination for Death or Retirement.
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If Executive's employment is terminated by reason of Executive's
retirement or death then Executive, or Executive's personal representative, as
the case may be, shall be entitled to receive (a) Executive's theretofore unpaid
base salary and incentive compensation for the period of employment, prorated to
the end of the calendar month in which such termination occurs, and (b)
compensation for accrued but unused vacation time. Employer shall pay the
amounts due under this Section 2.2 to Executive or Executive's personal
representative within thirty (30) days of Executive's retirement or death, as
the case may be. If Executive was participating in Employer's plan at the time
of retirement or death, Executive's spouse and dependent children shall continue
to be entitled, at the expense of Employer in the case of death and at the
expense of Executive in the case of retirement, to further medical coverage to
the extent required by COBRA. The term "retirement" for purposes of this
Agreement shall mean the point in time after the Executive reaches 55 years of
age and at which Executive gives notice to Employer that he is retiring. In the
case of Executive's retirement, and to the extent allowed by the pertinent
insurers, the Executive shall be entitled to continue, at his expense, such
supplemental life and disability insurance in effect at the time of termination.
2.3 Termination for Disability.
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If Executive becomes Totally and Permanently Disabled during the term of
this Agreement, Executive's employment may be terminated by the Employer at any
time during the continuance of such disability. The Executive is Totally and
Permanently Disabled if he is unable to perform each of the material duties of
his employment under this Agreement, by reason of any disability, illness,
accident or condition, for a period of more than six consecutive months during
any twelve-month period, which is expected to continue for more than one year as
certified by a medical doctor of Executive's own choosing and concurred in by a
doctor of Employer's choosing.
Upon termination as described in this Section 2.3, Executive shall be
entitled to receive (a) Executive's theretofore unpaid base salary and incentive
compensation for the period of employment, prorated to the end of the calendar
month in which such termination occurs, and (b) compensation for accrued but
unused vacation time. Provided Executive was participating in Employer's plan
at the time of termination as described in this Section 2.3, Executive and his
spouse and dependent children shall continue to be entitled to further medical
coverage, at the expense of Employer, to the extent required by COBRA. In
addition to the foregoing, Employer and Executive intend that Executive will
receive benefits upon his termination of employment pursuant to this Section 2.3
under Employer's current short-term and long-term disability plans. Employer
shall use its best efforts to obtain and maintain disability insurance coverage
for the Executive in accordance with that generally provided by Employer to
other employees. To the extent allowed by the pertinent insurers, the Executive
shall be entitled to continue, at his expense, such supplemental life insurance
in effect at the time of termination.
2.4 Voluntary Termination by Executive or Termination by Employer for Cause.
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Employer or the Company may terminate Executive's employment hereunder
for cause (as such term is defined below). If Executive's employment is
voluntarily terminated by Executive or is terminated by Employer or the Company
for cause, Executive shall be entitled to receive (a) Executive's theretofore
unpaid base salary and incentive compensation for the period of employment,
prorated to the date of termination, and (b) compensation for accrued but unused
vacation time, but shall not be entitled to any compensation or employment
benefits pursuant to this Agreement for any period after the date of
termination, or the continuation of any benefits except as may be required by
law, including, at his own expense, COBRA.
Termination by Employer or the Company for cause shall mean termination
because of the Executive's Personal Dishonesty (as hereinafter defined),
Incompetence (as hereinafter defined), Willful Misconduct (as hereinafter
defined), breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule, or
regulation (other than traffic violations or similar offenses) or final cease-
and-desist order, or material breach of any provision of this Agreement;
provided, however, in the event Employer or the Company determines that
Executive has intentionally failed to perform his stated duties or materially
breached this Agreement, Employer or the Company may not terminate Executive for
cause unless Employer or the Company have notified Executive in writing
specifying the particular failure or breach, Executive has been given a
reasonable period of time to cure such failure or breach, and in the opinion of
Employer or the Company, Executive has not cured such failure or breach. For
the purpose of this Agreement: (i) "Incompetence" means Executive's
demonstrated lack of ability to perform the duties assigned to him which lack of
ability directly causes (or the Board of Directors (of the Employer or the
Company) determines is reasonably likely to cause) material injury to Employer
or the Company; (ii) "Personal Dishonesty" means conduct on the part of
Executive which evinces a want of integrity or an intentional breach of trust
and which directly causes (or the Board of Directors (of the Employer or the
Company) determines is reasonably likely to cause) material injury to Employer
or the Company; and (iii) "Willful Misconduct" means conduct on the part of
Executive which evinces a deliberate disregard of the interest of Employer or
the Company and which causes (or the Board of Directors (of the Employer or the
Company) determines is reasonably likely to cause) direct material injury to
Employer or the Company.
2.5 Termination by Employer Without Cause or Termination by Executive for
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Cause.
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(a) In the event Employer or the Company reduces Executive's base
compensation, benefits (other than as provided in Section 1.5(h) above),
responsibilities or duties without Executive's consent or otherwise breaches
this Agreement, Executive may elect to terminate this Agreement for cause. In
the event Employer or the Company terminates Executive other than under Section
2.2 (death/retirement), Section 2.3 (disability) or Section 2.4 (voluntary
termination by Executive or termination by Employer or the Company for cause) or
Executive elects to terminate his employment hereunder for cause, then in either
such event Executive shall receive (i) an amount equal to two times his then
current Annual Compensation (defined to include his then current annual base
salary plus the annual average bonus compensation, if any, received by the
Executive in the two years preceding termination), (ii) Executive's theretofore
unpaid base salary and incentive compensation, if any, prorated to the end of
the calendar month in which such termination occurs, and (iii) compensation for
accrued but unused vacation time. Executive shall be owed, and Employer and the
Company shall be obligated to pay to Executive, the entire amount provided in
clauses (ii) and (iii) above (other than incentive compensation which shall be
payable as soon as reasonably possible after the Employer and the Company have
the information necessary to calculate and prorate such incentive compensation)
within fifteen (15) days after the termination of Executive pursuant to this
Section 2.5. Employer and the Company shall be obligated to pay the Executive,
the entire amount, provided in clause (i) above in the amounts and at the times
it would have been required to make such payments had Executive's employment not
been terminated.
(b) Furthermore, Executive, his spouse and dependent children will be
entitled to further medical coverage, at the expense of Employer, to the extent
required by COBRA.
2.6 Termination by Executive Due to Change in Control.
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(a) Following a Change in Control (as hereinafter defined), Executive
may, by giving notice to Employer, immediately terminate his employment under
this Agreement upon: (A) any reduction in Executive's base or incentive
compensation, or employee benefits (other than as provided in Section 1.5(h)
above) described in Section 1.3 or 1.5; (B) any assignment to any position,
responsibilities or duties that are less significant than his position, duties
and responsibilities as of the time immediately preceding a Change in Control;
(C) the Executive being removed from or the Employer failing to re-elect
Executive to his Corporate Position (except in connection with termination of
Executive's employment for death, disability or retirement or for cause under
Section 2.4); or (D) the Employer and the Company fail to obtain an agreement
from any successor as required by Section 2.8(c).
If Executive terminates this Agreement pursuant to this Section 2.6,
Executive shall have the right to receive payments and benefits under Section
2.5 as if a termination by Employer without cause had occurred.
(b) For purposes of this Agreement, a "Change in Control" shall be
deemed to have occurred if (i) any "person" (as such term is used in Section
13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the
beneficial owner, directly or indirectly, of securities of the Bank or the
Company in a transaction or transactions subject to the notice provisions of the
Change in Bank Control Act of 1978, as amended from time to time, or approval
under the Bank Holding Company Act of 1956, as amended from time to time; (ii)
someone other than the Company becomes owner of more than 25% of the voting
securities of the Bank; (iii) during any period of two (2) consecutive years,
the individuals, who at the beginning of any such period constituted the
directors of the Bank or the Company, cease for any reason to constitute at
least a majority thereof; or (iv) the occurrence of any of the following events:
(A) There is a Successor (as hereinafter defined) of or to Employer
or the Company; or
(B) The filing by the Employer or the Company of a report or proxy
statement with the Federal Deposit Insurance Corporation ("FDIC") or the
Securities and Exchange Commission disclosing in response to Item 1 of Form 8-K
or Item 5 of Part II of Form 10-Q, each promulgated pursuant to the Securities
Exchange Act of 1934, as amended ("Exchange Act"), or Item 6(e) of Schedule 14A
promulgated thereunder, or successor Items, that a Change in Control of the
Employer or the Company has or may have occurred pursuant to any contract or
transaction.
2.7 Compensation and Benefits Offset.
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If the Executive's employment is terminated in accordance with Sections
2.1(b), 2.5, or 2.6, he shall have no obligation, while receiving payments from
the Employer and/or the Company, to seek other employment. Notwithstanding the
foregoing, and subject to the provisions of Section 3.2(b), if the Executive
becomes employed on a full-time basis by another employer, while receiving
payments from the Employer and/or the Company, then to the extent the Executive
shall receive compensation, benefits or service credit from such other employer,
the aggregate amount of all compensation to be paid and benefits and service
credit to be provided by the Employer and the Company under this Agreement shall
be correspondingly reduced.
2.8 Successors and Binding Agreements.
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(a) This Agreement shall be binding upon and inure to the benefit of
Employer, the Company and any Successor of or to Employer or the Company, but
shall not otherwise be assignable or delegatable by Employer or the Company.
"Successor" shall mean any successor in interest, including, without limitation,
any entity, individual or group of persons acquiring directly or indirectly all
or substantially all of the business or assets of Employer and/or the Company
whether by sale, merger, consolidation, reorganization or otherwise.
(b) This Agreement shall inure to the benefit of and be enforceable
by Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees and legatee.
(c) Employer shall require any Successor to agree (by agreement in
form and substance satisfactory to Executive) within thirty (30) days after
becoming a Successor to perform this Agreement to the same extent as the
original parties would be required if no succession had occurred.
(d) This Agreement is personal in nature and neither of the parties
shall, without the consent of the other, assign, transfer or delegate this
Agreement or any rights or obligations hereunder except as expressly provided in
this Section 2.8.
2.9 Limitations on Termination Compensation.
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(a) In the event that the severance benefits payable to the Executive
under Sections 2.5, or 2.6 ("Severance Benefits"), or any other payments or
benefits received or to be received by the Executive from the Employer (whether
payable pursuant to the terms of this Agreement, any other plan, agreement or
arrangement with the Employer) or any corporation ("Affiliate") affiliated with
the Employer within the meaning of Section 1504 of the Internal Revenue Code of
1986, as amended (the "Code"), in the opinion of tax counsel selected by the
Employer's independent auditors and acceptable to the Executive, constitute
"parachute payments" within the meaning of Section 280G(b)(2) of the Code, and
the present value of such "parachute payments" equals or exceeds three (3) times
the average of the annual compensation payable to the Executive by the Employer
(or an Affiliate) and includible in the Executive's gross income for federal
income tax purposes for the five (5) calendar years preceding the year in which
a change in ownership or control of the Employer occurred ("Base Amount"), such
Severance Benefits shall be reduced to an amount the present value of which
(when combined with the present value of any other payments or benefits
otherwise received or to be received by the Executive from the Employer (or an
Affiliate) that are deemed "parachute payments") is equal to 2.99 times the Base
Amount, notwithstanding any other provision to the contrary in this Agreement.
The Severance Benefits shall not be reduced if (A) the Executive shall have
effectively waived his receipt or enjoyment of any such payment or benefit which
triggered the applicability of this Section 2.9, or (B) in the opinion of tax
counsel, the Severance Benefits (in its full amount or as partially reduced, as
the case may be) plus all other payments or benefits which constitute "parachute
payments" within the meaning of Section 280G(b)(2) of the Code are reasonable
compensation for services actually rendered, within the meaning of Section
280G(b)(4) of the Code, and such payments are deductible by the Employer. The
Base Amount shall include every type and form of compensation includible in the
Executive's gross income in respect of his employment by the Employer (or an
Affiliate), except to the extent otherwise provided in temporary or final
regulations promulgated under Section 280G(b) of the Code. For purposes of this
Section 2.9, a "change in ownership or control" shall have the meaning set forth
in Section 280G(b) of the Code and any temporary or final regulations
promulgated thereunder. The present value of any non-cash benefit or any
deferred cash payment shall be determined by the Employer's independent auditors
in accordance with the principles of Sections 280G(b)(3) and (4) of the Code.
(b) The Executive shall have the right to request that the Employer
obtain a ruling from the Internal Revenue Service ("Service") as to whether any
or all payments or benefits determined by such tax counsel are, in the view of
the Service, "parachute payments" under Section 280G. If a ruling is sought
pursuant to the Executive's request, no Severance Benefits payable under this
Agreement shall be made to the Executive until after fifteen (15) days from the
date of such ruling. For purposes of this Section 2.9(b), the Executive and the
Employer agree to be bound by the Service's ruling as to whether payments
constitute "parachute payments" under Section 280G. If the Service declines,
for any reason, to provide the ruling requested, the tax counsel's opinion
provided in Subsection 2.9(a) with respect to what payments or benefits
constitute "parachute payments" shall control, and the period during which the
Severance Benefits may be deferred shall be extended to a date fifteen (15) days
from the date of the Service's notice indicating that no ruling would be
forthcoming.
(c) In the event that Section 280G, or any successor statute, is
repealed, this Section 2.9 shall cease to be effective on the effective date of
such repeal. The parties to this Agreement recognize that final regulations
under Section 280G of the Code may affect the amounts that may be paid under
this Agreement and agree that, upon issuance of such final regulations, this
Agreement may be modified as in good faith deemed necessary in light of the
provisions of such regulations to achieve the purposes of this Agreement, and
that consent to such modifications shall not be unreasonably withheld.
(d) Any payments made to the Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with section
18(k) of the Federal Deposit Insurance Act (12 USC Section 1828(k)) and any
regulations promulgated thereunder.
2.10 If the Executive's employment is terminated (other than for Death,
Disability or Retirement; for Cause or voluntarily by him) by the Bank after a
Change in Control or the Executive terminates his Employment pursuant to Section
2.5 or 2.6, then the Employer will provide Executive with private, professional
outplacement services at a cost not to exceed fifteen percent (15%) of the
Executive's annual base salary in effect on the Termination Date.
ARTICLE III
NON-COMPETITION
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3.1 Confidentiality.
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(a) Nondisclosure. Except as required for his employment with
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Employer or the Company, Executive shall not directly or indirectly use,
disseminate or disclose any Confidential Information (as defined herein).
Confidential Information means information in any form, format or media
disclosed to Executive or known by Executive as a consequence of or through his
employment by Employer and the Company, not generally known in the industry in
which Employer is or may become engaged, about the Employer's or the Company's
customers, processes or services, including information relating to business
plans, products and business strategies.
(b) Confidential Documents. Upon termination of his employment with
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Employer and the Company, all documents or records containing Confidential
Information, including copies thereof, then in Executive's possession or under
his control, whether prepared by him or others, shall be left with or returned
to Employer and the Company. All such material shall remain the property of
Employer and the Company.
3.2 Non-Competition.
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(a) No Interference. During the Restricted Period, as hereinafter
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defined, Executive shall not, directly or indirectly, whether for his own
account or for the account of any other individual, partnership, firm
corporation or other business organization, intentionally solicit, endeavor to
entice away from the Employer or the Company, or otherwise interfere with the
relationship of the Employer or the Company, any person who is employed by or
otherwise engaged to perform services for Employer or the Company.
(b) Non-Competition Covenant. During the term of his employment by
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Employer and the Company and for a period of one year thereafter ("Restricted
Period"), Executive shall not, unless he receives the prior written consent of
Employer, directly or indirectly, own an interest in, manage, operate, join,
control, lend money or render financial or other assistance to or participate in
or be connected with, as an employee, officer, director, partner, stockholder,
agent, representative, consultant or otherwise, any individual, partnership,
firm, corporation or other business organization or entity that, at such time,
competes or plans to compete with the Employer or its affiliates and has, or has
plans to have, a home, branch or other office with 35 miles of the Beloit Main
office of the Employer. To the extent reasonably requested by the Employer,
Executive shall notify any regulatory authority that he is not affiliated with
or assisting other existing or proposed financial institutions. Notwithstanding
the foregoing, Executive may own up to 1% of any class of outstanding stock of
any corporation if such stock is registered under Section 12(b) or (g) of the
Securities Exchange Act of 1934 as amended.
(c) Injunctive Relief. Without intending to limit the remedies
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available to Employer, Executive acknowledges that a breach of any of the
covenants contained in this Section 5 may result in material irreparable injury
to Employer or its affiliates for which there is no adequate remedy at law, that
it will not be possible to measure damages for such injuries precisely and that,
in the event of such a breach or threat thereof, Employer shall be entitled to
obtain a temporary restraining order and/or a preliminary or permanent
injunction restraining Executive from engaging in activities prohibited by this
Section 5 or such other relief as may be required to enforce specifically any of
the covenants of this Section 5. Executive hereby agrees and consents that such
injunctive relief may be sought in any state or federal court of record in which
venue is appropriate or in any other court having jurisdiction over Executive,
at the election of Employer. Executive shall also pay to the Bank all of Bank's
expenses, costs and attorney's fees incurred by Employer in enforcing the terms
of this Agreement.
(d) Change in Control. Executive shall not be subject to the non-
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competition covenant in 3.2(b) above if there is a Change in Control and (1) he
terminates employment following any of the events described in 2.6(a) or he is
terminated by the Employer as described in Section 2.6(a).
ARTICLE IV
GENERAL PROVISIONS
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4.1 Entire Agreement.
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This Agreement supersedes any other agreements, oral or written, between
the parties with respect to the employment of Executive by Employer and contains
all of the agreements and understandings between the parties with respect to
such employment. Any waiver or modification of any term of this Agreement shall
be effective only if it is signed in writing by both parties.
4.2 Withholding of Taxes.
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Employer may withhold from any amounts payable under this Agreement all
federal, state, city or other taxes as shall be required pursuant to any law or
government regulation or ruling.
4.3 Notices.
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Any notice to be given hereunder by either party to the other may be
made by personal delivery in writing or by mail, registered or certified,
postage prepaid with return receipt requested. Mailed notices shall be
addressed to the parties at the addresses appearing below, but each party may
change his or its address by written notice in accordance with this paragraph.
Notices delivered personally shall be deemed communicated as of actual receipt;
mailed notices shall be deemed communicated five (5) days after the date of
mailing.
If to Employer, addressed to:
Blackhawk Bancorp, Inc. and
Blackhawk State Bank
000 Xxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
Attention: Chairman of the Executive Committee of the Board of
Directors
If to Executive, addressed to:
Xxxx X. Xxxxx
000 Xxxx 0xx Xxxxxx
Xxxxxxxxxx, XX 00000
4.4 Dispute Resolution.
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Any controversy or claim arising out of or related to this Agreement or
Executive's employment by the Employer or the Company shall be finally settled
by binding arbitration in the City of Beloit, Wisconsin in accordance with the
then prevailing rules of the American Arbitration Association, and judgment upon
the award rendered by the arbitration may be entered in any court having
jurisdiction thereof. Each party shall be responsible for its own legal fees
and expenses, if any, incurred in connection with any such arbitration or
judgment.
4.5 Governing Law.
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This Agreement shall be construed in accordance with and governed by the
laws of the State of Wisconsin and, to the extent applicable, of the United
States.
4.6 Incapacity.
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If Employer shall reasonably and in good faith find that any person to
whom any payment is payable under this Agreement is unable to care for his or
her affairs because of illness or accident, or is a minor, any payment due
(unless a prior claim therefore shall have been made by a duly appointed
guardian, committee, or other legal representative) may be paid to the spouse, a
child, a parent, or a brother or sister, or to any person reasonably and in good
faith deemed by Employer to have incurred expense for such person otherwise
entitled to payment in such manner and proportions as Employer may determine in
its sole discretion. Any such payment shall be a complete discharge of the
liabilities of Employer to make such payment to Executive.
4.7 Waivers.
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The waiver by any party of any breach, default, misrepresentation or
breach of warranty or covenant in this Agreement, whether intentional or not,
shall be in writing and shall not be deemed to extend to any prior or subsequent
breach, default, misrepresentation or breach of warranty or covenant herein and
shall not affect in any way any rights arising by virtue of any such prior or
subsequent occurrence.
4.8 Severability.
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In case any one or more of the provisions contained in this Agreement
should be invalid, illegal, or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained in this
Agreement shall not in any way be affected or impaired thereby.
4.9 Remedies Cumulative.
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Remedies under this Agreement of any party hereto are in addition to any
remedy or remedies to which such party is entitled or may become entitled at law
or in equity.
4.10 Counterparts.
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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.
4.11 Headings.
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The headings in this Agreement are for convenience of reference only,
and under no circumstances should they be construed as being a substantive part
of this Agreement nor shall they limit or otherwise affect the meaning thereof.
4.12 Additional Documents
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Each of the parties hereto, without further consideration, agrees to
execute and deliver such additional documents and to take such other actions
reasonably necessary to more effectively consummate the purposes of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
of the day and year first above written.
BLACKHAWK BANCORP, INC.
By:
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R. Xxxxxxx Xxxxxxx, III, Chief Executive Officer
BLACKHAWK STATE BANK
By:
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R. Xxxxxxx Xxxxxxx, III, Chief Executive Officer
XXXX X. XXXXX
