EXHIBIT 10.1
Executive Employee Salary Continuation Agreement between
Mound City Bank and Xxxxxx X. Just, Jr.
EXECUTIVE EMPLOYEE SALARY CONTINUATION AGREEMENT
FOR
XXXXXX X. JUST, JR.
THIS AGREEMENT is made as of this 14th day of May, 1992, between Mound City
Bank, a Wisconsin banking corporation (the "Company") and Xxxxxx X. Just, Jr.
(the "Participant").
WHEREAS, the Participant is an executive employee of the Company and as
such has materially contributed to the Company's position, and
WHEREAS, the Company wishes to establish this Agreement for purposes of
promoting in the Participant the strongest interest in the successful operation
of the Company and increased efficiency in his or her work and to provide the
Participant benefits upon retirement, death, disability or other termination of
employment, in consideration of services to be performed after the date of this
Agreement but prior to his or her retirement.
NOW, THEREFORE, in consideration of the premises, the parties hereto agree
as follows:
1. Definitions.
1.1 Administrative Committee. "Administrative Committee" shall mean the
committee appointed pursuant to Section 4 of this Agreement.
1.2 Age. "Age" shall mean the age of the person as of his or her last
birthday.
1.3 Change in Control. "Change in Control" shall mean the first to occur of
any of the following events: (a) any person or entity becomes, subsequent to the
date of this Agreement, the beneficial owner, directly or indirectly of 51% or
more of the then issued and outstanding voting stock of the Company (and, for
the purposes hereof, a person will be considered to be a beneficial owner of
such stock if such person, directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise has or shares voting
power, which includes the power to vote or to direct the voting of such stock,
or investment power, which includes the power to dispose or to direct the
disposition of such stock), (b) the Company merges or consolidates with or
reorganizes with or into any other corporation or corporations other than its
affiliates or engages in any other similar business combination or
reorganization, or (c) the Company sells, assigns or transfers all or
substantially all of its business and assets, in one or a series of related
transactions, except any such sales to affiliates.
1.4 Disability. "Disability" shall mean, if the Participant is insured
under a life insurance policy, the premiums for which are paid by the Company,
and which policy contains a "waiver of premiums" benefit, the definition of
total disability contained in the insurance policy. If the Participant is not
insured under such a life insurance policy, the Company shall, in its complete
and sole discretion, determine whether the Participant is disabled for the
purposes of this Agreement.
1.5 Discharge for Cause. "Discharge for Cause" shall mean the termination
of the Participant's employment with the Company because of (a) the
Participant's willful and continued failure to substantially perform his or her
duties (other than any such failure resulting from his or her incapacity due to
physical or mental illness), after a demand for substantial performance is
delivered to him or her by the Company which specifically identifies the manner
in which the Company believes he or she has not substantially performed his or
her duties; (b) any willful act of misconduct by the Participant; (c) a criminal
conviction of the Participant for any act involving the business and affairs of
the Company or for any act involving dishonesty, breach of trust or a violation
of the banking laws of the State of Wisconsin or the United States; (d) a
criminal conviction of the Participant for commission of a felony; or (e) the
removal of the Participant by a regulatory agency. For purposes of this
definition, no act or failure to act on the Participant's part will be
considered "willful" unless done or omitted by him or her not in good faith and
without reasonable belief that his or her act or omission was in the best
interest of the Company.
1.6 Normal Retirement Date. "Normal Retirement Date" shall mean the first
day of the month following the month in which the Participant reaches age 60.
1.7 Termination of Employment. "Termination of Employment" shall mean the
Participant's ceasing to be employed by the Company for any reason whatsoever,
voluntary or involuntary, including by reason of death or disability.
2. Eligibility.
The Participant is eligible for the benefits provided herein in accordance
with the terms of this Agreement upon the execution hereof.
The Participant shall cease to be a Participant at Termination of
Employment. However, the employment of the Participant shall not be deemed to be
terminated by reason of an approved leave of absence granted in accordance with
uniform rules applied in a non-discriminatory manner.
3. Payment of Benefits.
3.1 Benefits For Termination Upon Normal Retirement Date.
Upon the Participant's Termination of Employment on the Normal Retirement
Date for reasons other than death or Discharge for Cause, the Company shall pay
to the Participant, as compensation for services rendered prior to such date,
the sum of $40,000 per year, payable in monthly installments of $3,333 each,
commencing on the first day of the month coincident with or next following the
date of Termination of Employment and continuing on the first day of each month
until a total of 204 monthly payments are made to the Participant or the
Participant's beneficiary per Section 3.6(b).
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3.2 Benefits For Termination After Normal Retirement Date.
Upon the Participant's Termination of Employment after the Normal
Retirement Date for reasons other than death or Discharge for Cause, the Company
shall pay to the Participant as compensation for services rendered prior to such
date, the normal retirement benefit described in Section 3.1 above, increased by
5% per year or .416% for each month that the Participant's Termination of
Employment is deferred beyond the Normal Retirement Date.
3.3 Benefits Upon Disability.
Upon the Participant's Termination of Employment prior to the Normal
Retirement Date due to Disability, no separate provision is made for a
disability benefit under this Agreement. However, in the event of such
Participant's death while disabled prior to reaching the Normal Retirement Date,
such Participant's beneficiary shall receive the survivor's benefits described
in Section 3.5(a). In the event the Participant lives to the Normal Retirement
Date, the Participant shall thereupon receive the normal retirement date benefit
described in Section 3.1.
3.4 Other Terminations of Employment.
(a) Voluntary Termination of Employment prior to the Normal Retirement
Date or Discharge for Cause at any time. Except as provided in subparagraph
(c), upon the Participant's voluntary Termination of Employment prior to
reaching the Normal Retirement Date, for reasons other than death or
Disability, or upon the Participant's Discharge for Cause at any time, the
Company shall not be obligated to pay any benefit to the Participant
pursuant to this Agreement, and the Participant shall have no further right
to receive any benefit hereunder.
(b) Involuntary Termination of Employment prior to the Normal
Retirement Date other than because of death, Disability or Discharge for
Cause. Except as provided in subparagraph (c), upon the Participant's
involuntary Termination of Employment prior to the Normal Retirement Date
for reasons other than death, Disability, or Discharge for Cause, the
Company shall pay to the Participant, as compensation for services rendered
prior to such Termination of Employment, the sum of $40,000 per year,
payable in monthly installments of $3,333 each, commencing on the first day
of the month coincident with or next following the date of such Termination
of Employment and continuing on the first day of each month thereafter
until a total of 144 total monthly payments are made to the Participant or
the Participant's beneficiary per Section 3.5(b). For purposes of this
subsection 3.4(b), the Participant shall be deemed to have incurred an
involuntary Termination of Employment covered by this subsection if he or
she quits employment as a result of the Company's significantly lessening
either his or her title, duties, responsibilities, compensation or altering
his or her situs of employment, without his or her consent. The
Participant's compensation shall be deemed to be significantly lessened if
any cut-back is imposed except as a part of an overall cut-back applied
proportionately to all of the Company's
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management employees or if the Participant fails to receive periodic
increases substantially proportionate to and coincident with the increases
granted to management employees.
(c) Termination of Employment at or after a Change in Control. If a
Participant incurs a voluntary or involuntary Termination of Employment
prior to reaching the Normal Retirement Date, for reasons other than death,
Disability or Discharge for Cause, but on or after the occurrence of a
Change in Control, and in connection with such change, the Participant's
title, duties, responsibilities or compensation is significantly lessened
or his or her situs of employment is changed, without his or her consent,
the Company shall pay to the Participant, as compensation for services
rendered prior to such event, the sum of $40,000 per year, payable in
monthly installments of $3,333 each, commencing on the first day of the
month coincident with or next following the date of such Termination of
Employment and continuing on the first day of the month thereafter until a
total of 144 monthly payments are made to the Participant or the
Participant's beneficiary per Section 3.5(b). For purposes hereof, the
standards set forth in subparagraph (b) above with respect to what
constitutes a significant lessening of compensation shall apply.
(d) Limitations on Compensation.
(i) In the event that the benefits payable to the Participant
under Section 3.4(c) ("Severance Benefits"), or any other payments or
benefits received or to be received by the Participant from the
Company (whether payable pursuant to the terms of this Agreement, any
other plan, agreement or arrangement with the Company or any
corporation ("Affiliate") affiliated with the Company within the
meaning of Section 1504 of the Internal Revenue Code of 1954, as
amended (the "Code"), in the opinion of tax counsel selected by the
Company's independent auditors, 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 Participant by the
Company (or an Affiliate) and includable in the Participant'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
Company 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 Participant from the Company (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 Participant shall have effectively waived his
receipt or enjoyment of any such payment or benefit which triggered
the applicability of this Section 3.4(d), or (B) in the opinion of
such 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 Company. The Base
Amount shall include every type and form of compensation includable in
the Participant's gross income in respect of his employment by the
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Company (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 3.4(d), 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 benefits or any deferred cash
payment shall be determined by the Company's independent auditors in
accordance with the principles of Sections 280G(b)(3) and (4) of the
Code.
(ii) The Participant shall have the right to request that the
Company 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 Participant's
request, no Severance Benefits payable under this Agreement shall be
made to the Participant until after fifteen (15) days from the date of
such ruling. For purposes of this Subsection 3.4(d)(ii), the
Participant and the Company agree to be bound by the payments under
Section 280G. If the Service declines, for any reason, to provide the
ruling requested, the tax counsel's opinion provided under Subsection
3.4(d)(i) 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.
(iii) In the event that Section 280G, or any successor statute,
is repealed, this Section 3.4(d) shall cease to be effective on the
effective date of such repeal. The parties to this Agreement recognize
that final Treasury 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.
(e) Non-Competition Covenant and Termination of Benefits. The
Participant agrees that during the three (3) year period after a
Termination of Employment for which the Participant is receiving benefits
pursuant to this Agreement, he shall not directly or indirectly, as agent,
employee, officer, director, trustee, partner, proprietor or otherwise
become engaged by, render advice or assistance to, or be employed on a
compensated basis without the prior written consent of the Company by any
person or entity which competes in Grant County, Wisconsin, with the
business of the Company (a "Competitor"). The Participant acknowledges that
these restrictions on competition are reasonable and are necessary to
protect the interests of the Company.
If following Participant's Termination of Employment pursuant to paragraph
3.4(b) or 3.4(c), Participant receives compensation, directly or indirectly, as
agent, employee, consultant, partner or in any other capacity for services
provided to or employment by any person or entity other than a Competitor, the
benefits payable under this Agreement during any such month shall be reduced by
amounts received by or to be paid to the Participant during such month by the
other person or entity.
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If after a Termination of Employment for which the Participant is receiving
benefits pursuant to this Agreement, the Participant receives compensation,
directly or indirectly, as agent, employee, consultant, partner or in any other
capacity for services provided to or employment by a Competitor, all benefits
otherwise payable under this Agreement shall thereupon cease, and the
Participant shall have no further right to receive any benefit hereunder.
3.5 Survivorship Benefits.
(a) Prior to commencement of normal retirement benefits. If a
Participant dies while in the service of the Company or after a Termination
of Employment due to Disability and while disabled, but prior to
commencement of any benefit payments under this Agreement, the Company
shall pay to the Participant's beneficiary a survivor's benefit of 204
equal monthly installments of $3,333 each commencing on the first day of
the month after the Participant's death and continuing on the first day of
each month thereafter until all such payments are completed. In the event a
beneficiary dies before receiving all the survivor's benefit payments, the
remaining payments shall be paid to the legal representative of the
beneficiary's estate. Payment of the survivor's benefit shall relieve the
Company of the obligation to pay any other benefit which the Participant
would have otherwise received, under the terms of this Agreement.
(b) After commencement of benefits. If the Participant dies after any
benefit payments have commenced, but prior to receiving all of the
scheduled number of monthly payments, the Company shall pay the remaining
monthly payments to the Participant's beneficiary. In the event a
beneficiary dies before receiving all the remaining payments, the then
remaining payments shall be paid to the legal representative of the
beneficiary's estate.
3.6 Receipts of Payments: Designation of Beneficiary. All payments to be
made by the Company shall be made to the Participant, if living. In the event of
the Participant's death prior to the receipt of all benefit payments, all
subsequent payments to be made under this Agreement shall be to the beneficiary
or beneficiaries of the Participant. The Participant shall designate the
beneficiary by filing a written notice of such designation with the Company in
such form as the Company may prescribe. The Participant may revoke or modify
said designation at any time by a further written designation. The Participant's
beneficiary designation shall be deemed automatically revoked in the event of
the death of the beneficiary or, if the beneficiary is the Participant's spouse,
in the event of dissolution of marriage. If no designation shall be in effect at
the time when any benefits payable under this Agreement shall become due, the
beneficiary shall be the spouse of the Participant, or if no spouse is then
living, the legal representative of the Participant's estate.
4. Administration and Interpretation of this Agreement. The Board of
Directors shall appoint an Administrative Committee consisting of three (3) or
more persons to administer and interpret this Agreement. Interpretation by the
Administrative Committee shall be final and binding upon the Participant. The
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Administrative Committee may adopt rules and regulations relating to this
Agreement as it may deem necessary or advisable for the administration thereof,
but may not reduce benefits without consent of the Participant.
5. Claims Procedure. If the Participant or the Participant's beneficiary
(hereinafter referred to as a "Claimant") is denied all or a portion of an
expected benefit under this Agreement for any reason, he or she may file a claim
with the Administrative Committee. The Administrative Committee shall notify the
Claimant within sixty (60) days of allowance or denial of the claim, unless the
Claimant receives written notice from the Administrative Committee prior to the
end of the sixty (60) day period stating that special circumstances require an
extension of the time for decision. The notice of the Administrative Committee's
decision shall be in writing, sent by mail to Claimant's last known address,
and, if a denial of the claim, must contain the following information:
(a) the specific reasons for the denial;
(b) specific reference to pertinent provisions of this Agreement on
which the denial is based; and
(c) if applicable, a description of any additional information or
material necessary to perfect the claim, an explanation of why such
information or material is necessary, and an explanation of the claims
review procedure.
6. Review Procedure.
(a) A Claimant is entitled to request a review of any denial of his or
her claim by the Administrative Committee. The request for review must be
submitted in writing within sixty (60) days of mailing of notice of the
denial. Absent a request for review within the 60-day period, the claim
will be deemed to be conclusively denied. The Claimant or his or her
representative shall be entitled to review all pertinent documents, and to
submit issues and comments orally and in writing.
(b) If the request for review by a Claimant concerns the
interpretation and application of the provisions of this Agreement and the
Company's obligations, then the review shall be conducted by a separate
committee consisting of three (3) persons designated or appointed by the
Administrative Committee. The separate committee shall afford the Claimant
a hearing and the opportunity to review all pertinent documents and submit
issues and comments orally and in writing and shall render a review
decision, together with specific reasons for the decision and reference to
the pertinent provisions of this Agreement.
7. Life Insurance and Funding. The Company in its discretion may apply for
and procure as owner and for its own benefit, insurance on the life of the
Participant, in such amounts and in such forms as the Company may choose. The
Participant shall have no interest whatsoever in any such policy or policies,
but at the request of the Company he or she shall submit to medical examinations
and supply such information and execute such documents as may be required by the
insurance company or companies to whom the Company has applied for insurance.
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The rights of the Participant, or his or her beneficiary, or estate, to
benefits under this Agreement shall be solely those of an unsecured creditor of
the Company. Any insurance policy or other assets acquired by or held by the
Company in connection with the liabilities assumed by it pursuant to this
Agreement shall not be deemed to be held under any trust for the benefit of the
Participant, his or her beneficiary, or his or her estate, or to be security for
the performance of the obligations of the Company but shall be, and remain, a
general, unpledged, and unrestricted asset of the Company.
If this Agreement is funded through insurance on the life of the
Participant, then in the event of such Participant's death during the first two
(2) years after the effective date of this Agreement, or if such Participant's
death was a result of suicide or if such Participant made any material
misstatement or failed to make a material disclosure of information in any
documentation which the Participant is requested to complete in connection with
this Agreement, then no death benefits under the terms of this Agreement will be
payable, unless and to the extent that the Board of Directors of Company, in
their absolute discretion, may otherwise determine.
8. Assignment of Benefits. Neither the Participant nor any other
beneficiary under this Agreement shall have any right to assign the right to
receive any benefits hereunder, and in the event of any attempted assignment or
transfer, the Company shall have no further liability hereunder.
9. Employment Not Guaranteed by Agreement. Neither this Agreement nor any
action taken hereunder shall be construed as giving a Participant the right to
be retained as an Executive Employee or as an employee of the Company for any
period.
10. Taxes. The Company shall deduct from all payments made hereunder all
applicable federal or state taxes required by law to be withheld from such
payments.
11. Amendment and Termination. The Board of Directors may, at any time,
amend or terminate this Agreement, provided that the Board may not reduce or
modify any benefit in pay status to the Participant or beneficiary hereunder or
any benefit that would become payable hereunder if the Participant were to have
died or were to have been involuntarily terminated under Section 3.4(b) hereof
on the day prior to such action by the Board, without the prior written consent
of the Participant.
The Company is entering into this Agreement upon the assumption that
certain existing tax laws will continue in effect in substantially their current
form. In the event of any changes in Federal law relating to and allowing the
tax-free accumulation of earnings within a life insurance policy, the income
tax-free payment of proceeds from life insurance policies or any other law which
would result in a material adverse impact upon the Company's ability to perform
its obligations under this Agreement, the Company shall have an option to
terminate or modify this Agreement subject to the protections afforded
Participant in the preceding paragraph above.
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12. Construction. This Agreement shall be construed according to the laws
of the State of Wisconsin.
13. Form of Communication. Any election, application, claim, notice or
other communication required or permitted to be made by a Participant to the
Company shall be made in writing and in such form as the Company shall
prescribe. Such communication shall be effective upon mailing, if sent by first
class mail, postage prepaid, and addressed to the Company's office at 00 Xxxx
Xxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, 00000.
14. Captions. The captions at the head of a section or paragraph of this
Agreement are designed for convenience of reference only and are not to be
resorted to for the purpose of interpreting any provision of this Agreement.
15. Severability. The invalidity of any portion of this Agreement shall not
invalidate the remainder thereof, and the remainder shall continue in full force
and effect.
16. Binding Effect. This Agreement shall be binding upon and shall inure to
the benefit of the Company and the Participant, and each of their successors,
heirs, personal representatives and permitted assigns. No sale of substantially
all of the Company's assets shall be made without the buyer expressly assuming
the obligation of this Agreement. The Company further agrees that it will not be
a party to any merger, consolidation or reorganization unless and until its
obligations hereunder are expressly assumed by the successor or successors.
IN WITNESS WHEREOF, this Agreement has been executed by the parties as of
the date first set forth above.
ATTEST: MOUND CITY BANK
/s/ Xxxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxxxxxx
Its Vice President & Chairman
of the Board
ATTEST:
/s/ Xxxx X. Xxxxxx /s/ Xxxxxx X. Just, Jr.
Xxxxxx X. Just, Jr., Participant
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