AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit
10.1
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
This
Amended and Restated Employment Agreement (the “Agreement”),
made and dated as of October 1, 2007, by and between Lincoln Bank, an Indiana
commercial bank (“Employer”), and Xxxxx X. Xxxxx, a resident of
Xxxxxxx County, Indiana (“Employee”), but effective as of
January 1, 2005.
This
Agreement amends and restates the prior Employment Agreement between the
Employer and the Employee dated January 1, 2007 (the “Prior
Agreement”). It has been amended and restated for compliance with the
final regulations under Section 409A of the Internal Revenue Code of 1986,
as
amended, effective as of January 1, 2005.
W
I T N E S S E T H
Whereas,
Employee is employed by Employer as its President and Chief Executive Officer
and has made valuable contributions to the profitability and financial strength
of Employer;
Whereas,
Employer and Employee entered into an Employment Agreement dated as of January
1, 2007, which Employer and Employee now desire to amend and restate in its
entirety as provided herein;
Whereas,
Employer desires to encourage Employee to continue to make valuable
contributions to Employer’s business operations and not to seek or accept
employment elsewhere;
Whereas,
Employee desires to be assured of a secure minimum compensation from Employer
for his services over a defined term;
Whereas,
Employer desires to assure the continued services of Employee on behalf of
Employer 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
Employer or Lincoln Bancorp (the “Holding Company”), the
Indiana corporation which owns all of the issued and outstanding capital stock
of Employer;
Whereas,
Employer recognizes that when faced with a proposal for a change of control
of
Employer or the Holding Company, Employee will have a significant role in
helping the Boards of Directors assess the options and advising the Boards
of
Directors on what is in the best interests of Employer, the Holding Company,
and
its shareholders, and it is necessary for Employee to be able to provide this
advice and counsel without being influenced by the uncertainties of his own
situation;
Whereas,
Employer desires to provide fair and reasonable benefits to Employee on the
terms and subject to the conditions set forth in this Agreement;
Whereas,
Employer desires reasonable protection of its confidential business and customer
information which it has developed over the years at substantial expense and
assurance that Employee will not compete with Employer for a reasonable period
of time after termination of his employment with Employer, except as otherwise
provided herein.
Now,
Therefore, in consideration of these premises, the mutual covenants and
undertakings herein contained and the continued employment of Employee by
Employer as its
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President,
Employer and Employee, each intending to be legally bound, covenant and agree
as
follows:
1. Upon
the terms and subject to the conditions set forth in this Agreement, Employer
employs Employee as its President and Chief Executive Officer, and Employee
accepts such employment.
2. Employee
agrees to serve as President and Chief Executive Officer and to perform such
duties in those offices as may reasonably be assigned to him by Employer’s Board
of Directors; provided, however, that such duties shall be
performed in or from the offices of Employer currently located at 000 Xxxxxxxxxx
Xxxxx, Xxxxxxxxxx, Xxxxxxx, and shall be of the same character as those
previously performed by Employee and generally associated with the offices
held
by Employee. Employee shall render services to Employer as President and Chief
Executive Officer in substantially the same manner and to substantially the
same
extent as Employee rendered his services to Employer before the date hereof.
While employed by Employer, Employee shall devote substantially all his business
time and efforts to Employer’s business during regular business hours and shall
not engage in any other related business.
3. During
the term of this Agreement, Employer shall nominate Employee to successive
terms
as a member of Employer’s Board of Directors and shall use its best efforts to
elect and re-elect Employee as a member of such Board and to cause Employee
to
be nominated, elected and re-elected as a member of Holding Company’s Board of
Directors. Employee shall receive additional compensation and benefits as are
provided from time to time to any other member of Employer’s Board of Directors
who is also an officer of Employer, but Employee acknowledges that currently
there is no such additional compensation being paid and that there may never
be
any such additional compensation.
4. The
term of this Agreement shall begin on January 1, 2005 (the “Effective
Date”) and shall end on January 1, 2010; provided,
however, that such term shall be extended automatically
for an
additional year on each anniversary of January 1, 2007, if Employer’s Board of
Directors determines by resolution with respect to each such annual extension
that the performance of Employee has met the Board’s requirements and standards
and that this Agreement should be extended for another year. Notwithstanding
the
foregoing, if either party hereto gives written notice to the other party not
to
so extend within ninety (90) days prior to such anniversary, or if Employer’s
Board of Directors does not adopt the resolution authorizing annual extension
of
the contract with respect to any annual period during the term of this
Agreement, no further automatic extension shall occur and the term of this
Agreement shall end two years subsequent to the anniversary as of which the
notice not to extend or failure to extend for an additional year occurs (such
term, including any extension thereof shall herein be referred to as the
“Term”). Notwithstanding the foregoing, the Term may end
earlier upon the occurrence of any event described in Section 8.
In
the
event that this Agreement is not extended for an additional year pursuant to
this Section 4, subject to the occurrence of another event described in Section
8, compensation provided for herein (including Base Compensation) shall continue
to be paid, and Employee shall continue to participate in the employee benefit,
retirement, and compensation plans and other perquisites as provided in Section
5, Section 6 and Section 7 hereof through and until the end of the remaining
two
(2) years of the Term. Any benefits payable under insurance,
health,
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retirement
and bonus plans as a result of Employee’s participation in such plans through
such date shall be paid when due under those plans.
5. Employee
shall receive an annual salary of Two Hundred Fifteen Thousand Dollars
($215,000) (“Base Compensation”) payable at regular intervals
in accordance with Employer’s normal payroll practices now or hereafter in
effect. Employer may consider and declare from time to time increases in the
salary it pays Employee and thereby increases in his Base Compensation. Prior
to
a Change in Control, Employer may also declare decreases in the salary it pays
Employee if the operating results of Employer are significantly less favorable
than those for the fiscal year ending December 31, 2004, and Employer makes
similar decreases in the salary it pays to other executive officers of Employer.
After a Change in Control, Employer shall consider and declare salary increases
based upon the following standards:
(a) Inflation;
(b) Adjustments
to the salaries of other senior management personnel; and
(c) Past
performance of Employee and the contribution which Employee makes to the
business and profits of Employer during the Term.
Any
and
all increases or decreases in Employee’s salary pursuant to this Section 5 shall
cause the level of Base Compensation to be increased or decreased by the amount
of each such increase or decrease for purposes of this Agreement. The increased
or decreased level of Base Compensation as provided in this Section 5 shall
become the level of Base Compensation for the remainder of the Term of this
Agreement until there is a further increase or decrease in Base Compensation
as
provided herein.
6. So
long as Employee is employed by Employer pursuant to this Agreement, he shall
be
included as a participant in all present and future employee benefit,
retirement, and compensation plans available to any management employee of
Employer, consistent with his Base Compensation and his position as President
and Chief Executive Officer of Employer, including, without limitation,
Employer’s or the Holding Company’s 401(k) plan, Stock Option Plan, Recognition
and Retention Plan and Trust, Employee Stock Ownership Plan, and
hospitalization, disability and group life insurance plans, each of which
Employer agrees to continue in effect on terms no less favorable than those
currently in effect as of the date hereof (as permitted by law) during the
Term
of this Agreement unless prior to a Change in Control the operating results
of
Employer are significantly less favorable than those for the fiscal year ending
December 31, 2004, and unless (either before or after a Change in Control)
changes in the accounting, legal, or tax treatment of such plans would adversely
affect Employer’s operating results or financial condition in a material way,
and the Board of Directors of Employer or the Holding Company concludes that
modifications to such plans need to be made to avoid such adverse
effects.
7. So
long as Employee is employed by Employer pursuant to this Agreement, Employee
shall receive reimbursement from Employer for all reasonable business expenses
incurred in the course of his employment by Employer, upon submission to
Employer of written vouchers and statements for reimbursement. Employee shall
attend, upon the prior approval of Employer’s Board of Directors, 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 Employer. So long as
Employee
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is
employed by Employer pursuant to the terms of this Agreement, Employer shall
continue in effect vacation policies applicable to Employee no less favorable
from his point of view than those written vacation policies in effect on the
date hereof. So long as Employee is employed by Employer pursuant to this
Agreement, Employee shall be entitled to office space and working conditions
no
less favorable than were in effect for him on the date hereof.
8. Subject
to the respective continuing obligations of the parties, including but not
limited to those set forth in Section 10(a) Section 10(b) Section 10(c) and
Section 10(d) hereof, Employee’s employment by Employer may be terminated prior
to the expiration of the Term of this Agreement as follows:
(a) Employer,
by action of its Board of Directors and upon written notice to Employee, may
terminate Employee’s employment with Employer immediately for cause. For
purposes of this Section 8(a), “cause” shall be defined as (i)
personal dishonesty, (ii) incompetence, (iii) willful misconduct, (iv) breach
of
fiduciary duty involving personal profit, (v) intentional failure to perform
stated duties, (vi) willful violation of any law, rule, or regulation (other
than traffic violations or similar offenses) or final cease-and-desist order,
or
(vii) any material breach of any provision of this Agreement.
(b) Employer,
by action of its Board of Directors may terminate Employee’s employment with
Employer without cause at any time; provided, however, that
the “date of termination” for purposes of determining benefits
payable to Employee under Section 9(b) hereof shall be the date which is sixty
(60) days after Employee receives written notice of such
termination.
(c) Employee,
by written notice to Employer, may terminate his employment with Employer
immediately for cause. For purposes of this Section 8(c),
“cause” shall be defined as (i) any action by Employer’s Board
of Directors to remove Employee as President and Chief Executive Officer of
Employer, except for title changes contemplated by this Agreement and other
promotions, if any, and except where Employer’s Board of Directors properly acts
to remove Employee from such office for “cause” as defined in Section 8(a)
hereof, (ii) any action by Employer’s Board of Directors to materially limit,
increase, or modify Employee’s duties and/or authority as President and Chief
Executive Officer of Employer, except for changes commensurate with promotions,
if any, (iii) any failure of Employer to obtain the assumption of the obligation
to perform this Agreement by any successor or the reaffirmation of such
obligation by Employer, as contemplated in Section 21 hereof; or (iv) any
material breach by Employer of a term, condition or covenant of this
Agreement.
(d) Employee,
upon sixty (60) days’ written notice to Employer, may terminate his employment
with Employer without cause.
(e) Employee’s
employment with Employer shall terminate in the event of Employee’s death or
disability. For purposes hereof, “disability” shall be defined
as Employee’s inability by reason of illness or other physical or mental
incapacity to perform the duties required by his employment for any consecutive
one hundred eighty (180) day period, provided that notice of any termination
by
Employer because of Employee’s “disability” shall have been given to Employee
prior to the full resumption by him of the performance of such
duties.
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9. In
the event of termination of Employee’s employment with Employer pursuant to
Section 8 hereof , compensation shall continue to be paid by Employer to
Employee as follows:
(a) In
the event of termination pursuant to Section 8(a) or Section 8(d) compensation
provided for herein (including Base Compensation) shall continue to be paid,
and
Employee shall continue to participate in the employee benefit, retirement,
and
compensation plans and other perquisites as provided in Section 5, Section
6 and
Section 7 hereof, through the date of termination specified in the notice of
termination. Any benefits payable under insurance, health, retirement and bonus
plans as a result of Employee’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 Section 8(a) shall be no later than the
last business day of the month in which such notice is provided to
Employee.
(b) In
the event of termination pursuant to Section 8(b) or Section 8(c), compensation
provided for herein (including Base Compensation) shall continue to be paid,
and
Employee shall continue to participate in the employee benefit, retirement,
and
compensation plans and other perquisites as provided in Section 5, Section
6 and
Section 7 hereof, through the date of termination specified in the notice of
termination. Any benefits payable under insurance, health, retirement and bonus
plans as a result of Employee’s participation in such plans through such date
shall be paid when due under those plans. In addition, Employee shall be
entitled to continue to receive from Employer his Base Compensation at the
rates
in effect at the time of termination for the remaining Term of the Agreement,
but not less than six (6) months, if the termination does not follow a Change
in
Control. In addition, during such periods and except as otherwise specifically
provided herein, Employer will maintain in full force and effect for the
continued benefit of Employee each employee welfare benefit plan and each
employee pension benefit plan (as such terms are defined in the Employee
Retirement Income Security Act of 1974, as amended) in which Employee 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 Employee. If the terms of any employee welfare benefit
plan or employee pension benefit plan of Employer do not permit continued
participation by Employee, Employer will arrange to provide to Employee 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 If the termination pursuant to Section 7(b) or Section 7(c)
occurs within 12 months following a Change in Control, Employee shall be
entitled to a lump sum payment paid by the Employer within 30 days following
his
termination of employment equal to three times his Base Compensation at the
rate
in effect at the time of his termination of employment. In addition, Employee
shall be entitled to the continued payment to Employee through the date of
termination of this Agreement of all compensation and benefits provided for
in
Sections 5 and 6.
(c) In
the event of termination pursuant to Section 8(e), compensation provided for
herein (including Base Compensation) shall continue to be paid, and Employee
shall continue to participate in the employee benefit, retirement, and
compensation plans and other perquisites as provided in Section 5, Section
6 and
Section 7 hereof, (i) in the event of Employee’s death, through the date of
death, or (ii) in the event of Employee’s
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disability,
through the date of proper notice of disability as required by Section 8(e).
Any
benefits payable under insurance, health, retirement and bonus plans as a result
of Employer’s participation in such plans through such date shall be paid when
due under those plans.
(d) Employer
will permit Employee or his personal representative(s) or heirs, during a period
of three months following Employee’s termination of employment by Employer for
the reasons set forth in Section 7(b) or Section 7(c), if such termination
follows a Change in Control, to require Employer, upon written request, to
purchase all outstanding stock options previously granted to Employee under
any
Holding Company stock option plan then in effect whether or not such options
are
then exercisable at a cash purchase price equal to the amount by which the
aggregate “fair market value” of the shares subject to such options exceeds the
aggregate option price for such shares. For purposes of this Agreement, the
term
“fair market value” shall mean the higher of (1) the average of
the highest asked prices for Holding Company shares as reported on the NASDAQ
Global Market or other NASDAQ tier or market if the shares are traded on such
tier or market for the thirty (30) business days preceding such termination,
or
(2) the average per share price actually paid for the most highly priced one
percent (1%) of the Holding Company shares acquired in connection with the
Change in Control of the Holding Company by any person or group acquiring such
control.
(e) For
purposes of this Agreement, a “Change of Control” shall mean any of the
following:
(i)
a
change in the ownership of
the Employer or the Holding Company, which shall occur on the date that any
one
person, or more than one person acting as a group, acquires ownership of stock
of the Employer or the Holding Company that, together with stock held by such
person or group, constitutes more than fifty percent (50%) of the total fair
market value or total voting power of the stock of the Employer or the Holding
Company. Such acquisition may occur as a result of a merger of the
Holding Company or the Employer into another entity which pays consideration
for
the shares of capital stock of the merging Holding Company or Employer or as
a
result of a merger of another entity into the Holding Company or the Employer
if
the entity’s shareholders as a group acquire or receive over 50% of the total
fair market value or total voting power of the stock of the entity resulting
from the merger. However, if any one person, or more than one person
acting as a group, is considered to own more than fifty percent (50%) of the
total fair market value or total voting power of the stock of the Employer
or
the Holding Company, the acquisition of additional stock by the same person
or
persons is not considered to cause a change in the ownership of the Employer
or
the Holding Company (or to cause a change in the effective control of the
Employer or the Holding Company (within the meaning of subsection
(ii)). An increase in the percentage of stock owned by any one
person, or persons acting as a group, as a result of a transaction in which
the
Employer or the Holding Company acquires its stock in exchange for property
will
be treated as an acquisition of stock for purposes of this
subsection. This subsection applies only when there is a transfer of
stock of the Employer or the Holding Company (or
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issuance
of stock of the Employer or the Holding Company) and stock in the Employer
or
the Holding Company remains outstanding after the transaction.
(ii)
a
change in the effective
control of the Employer or the Holding Company, which shall occur only on
the
date new directors are added to the Holding Company’s board of directors as a
result of a merger transaction involving the Holding Company or the Employer,
respectively, and as a result of such replacement the Holding Company’s
directors or the Employer’s directors, respectively, before the merger
constitute 50% or less of the total directors of the Holding Company or the
Employer immediately following the merger; provided, however, that this
provision shall not apply if another corporation is a majority shareholder
of
the Holding Company. If any one person, or more than one person
acting as a group, is considered to effectively control the Employer or the
Holding Company, the acquisition of additional control of the Employer or
the
Holding Company by the same person or persons is not considered to cause
a
change in the effective control of the Employer or the Holding Company (or
to
cause a change in the ownership of the Employer or the Holding Company within
the meaning of subsection (i) of this section).
(iii)
a
change in the ownership
of a substantial portion of the Employer’s assets, which shall occur on the date
that any one person, or more than one person acting as a group, acquires
(or has
acquired during the 12 month period ending on the date of the most recent
acquisition by such person or persons) assets from the Employer that have
a
total gross fair market value equal to or more than forty percent (40%) of
the
total gross fair market value of all of the assets of the Employer immediately
before such acquisition or acquisitions. For this purpose, gross fair
market value means the value of the assets of the Employer, or the value
of the
assets being disposed of, determined without regard to any liabilities
associated with such assets. No change in control occurs under this
subsection (iii) when there is a transfer to an entity that is controlled
by the
shareholders of the Employer immediately after the transfer. A
transfer of assets by the Employer is not treated as a change in the ownership
of such assets if the assets are transferred to –
1) a
shareholder of the Employer (immediately before the asset transfer) in
exchange
for or with respect to its stock;
2) an
entity, 50 percent or more of the total value or voting power of which
is owned,
directly or indirectly, by the Employer.
3) a
person, or more than one person acting as a group, that owns, directly
or
indirectly, 50 percent or more of the total value or voting power of all
the
outstanding stock of the Employer; or
4) an
entity, at least 50 percent of the total value or voting power of which
is
owned, directly or indirectly, by a person described in paragraph
(iii).
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For
purposes of this subsection (iii) and except as otherwise provided in paragraph
1) above, a person’s status is determined immediately after the transfer of the
assets.
(iv)
For
purposes of this
section, persons will not be considered to be acting as a group solely because
they purchase or own stock of the same corporation at the same time, or as
a
result of the same public offering. Persons will be considered to be
acting as a group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar business transaction
with the Employer or the Holding Company.
(f) To
the extent the Employee is a “specified employee” (as defined below), payments
due to the Employee under this Section 8 shall begin no sooner than six
months after the Employee’s separation from service; provided, however, that any
payments not made during the six month period described in this
Section 8(f) shall be made in a single lump sum as soon as administratively
practicable after the expiration of such six month period; provided, further,
that the six month delay required under this Section 8(f) shall not apply
to the portion of any payment resulting from the Employee’s “involuntary
separation from service” (as defined in Treasury Reg. Section 1.409A-1(n)
and including a “separation from service for good reason,” as defined in
Treasury Reg. Section 1.409A-1(n)(2)) that (i) is payable no later than the
last day of the second year following the year in which the separation from
service occurs, and (ii) does not exceed two times the lesser of (1) the
Employee’s annualized compensation for the year prior to the year in which the
separation from service occurs, or (2) the dollar limit described in
Section 401(a)(17) of the Code.
To
the
extent any life, health, disability or other welfare benefit coverage provided
to the Employee under this Section 8 would be taxable to the Employee, the
taxable amount of such coverage shall not exceed the applicable dollar amount
under Section 402(g)(1)(B) of the Code determined as of the year in which
the Employee’s separation from service occurs. The intent of the
foregoing sentence is to permit the Holding Company and the Employer to treat
the provision of such benefits as a limited payment under Treasury Reg.
Section 1.409A-1(a)(9)(v)(D) so as to avoid application of the six month
delay rule for specified employees. For purposes of this
Section 8, any reference to severance of employment or termination of
employment shall mean a “separation from service” as defined in Treasury Reg.
Section 1.409A-1(h).
For
purposes of this Agreement, the term “specified employee” shall have the meaning
set forth in Treasury Reg. Section 1.409A-1(i) and shall include, without
limitation, (1) an officer of the Employer or the Holding Company having annual
compensation greater than $130,000 (as adjusted for inflation under the Code),
(2) a five percent owner of the Employer or the Holding Company, or (3) a one
percent owner of the Employer or the Holding Company having annual compensation
of more than $150,000. The determination of whether the Employee is a
“specified employee” shall be made by the Employer in good faith applying the
applicable Treasury regulations.
10. In
order to induce Employer to enter into this Agreement, Employee hereby agrees
as
follows:
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(a) While
Employee is employed by Employer and for a period of three (3) years after
termination of such employment, Employee shall not divulge or furnish any trade
secrets (as defined in Ind. Code § 24-2-3-2) of Employer or any
confidential information acquired by him while employed by Employer concerning
the policies, plans, procedures or customers of Employer to any person, firm
or
corporation, other than Employer or upon its written request, or use any such
trade secret or confidential information directly or indirectly for Employee’s
own benefit or for the benefit of any person, firm or corporation other than
Employer, since such trade secrets and confidential information are confidential
and shall at all times remain the property of Employer.
(b) For
a period of two (2) years after termination of Employee’s employment by Employer
for reasons other than those set forth in Section 8(b) or Section 8(c) of this
Agreement, Employee shall not directly or indirectly provide banking or
bank-related services to or solicit the banking or bank-related business of
any
customer of Employer at the time of such provision of services or solicitation
which Employee served either alone or with others while employed by Employer
in
any city, town, borough, township, village or other place in which Employee
performed services for Employer while employed by it, or assist any actual
or
potential competitor of Employer to provide banking or bank-related services
to
or solicit any such customer’s banking or bank-related business in any such
place. Notwithstanding the foregoing, the period for application of this
restriction in Section 10(b) shall be reduced from two (2) years to six (6)
months following termination of Employee’s employment if Employer provides the
notice not to extend for an additional year under Section 4 of this
Agreement.
(c) While
Employee is employed by Employer and for a period of one (1) year after
termination of Employee’s employment by Employer for reasons other than those
set forth in Section 8(b) or Section 8(c) of this Agreement, Employee shall
not,
directly or indirectly, as principal, agent, or trustee, or through the agency
of any corporation, partnership, trade association, agent or agency, engage
in
any banking or bank-related business which competes with the business of
Employer as conducted during Employee’s employment by Employer if Employee’s
office with the competing business is within a radius of twenty-five (25) miles
of Employer’s Greenwood office or within twenty-five (25) miles of Employer’s
main office. (Notwithstanding the foregoing, ownership of less than two percent
(2%) of a class of publicly held securities in any corporation shall not violate
the provisions of this Section 10(c).) Furthermore, notwithstanding the
foregoing, the period for application of this restriction in Section 10(c)
shall
be reduced from one (1) year to six (6) months following termination of
Employee’s employment if Employer provides the notice not to extend for an
additional year under Section 4 of this Agreement.
(d) If
Employee’s employment by Employer is terminated hereunder for any reason,
Employee will turn over immediately thereafter to Employer all business
correspondence, letters, papers, reports, customers’ lists, financial
statements, credit reports or other confidential information or documents of
Employer or its affiliates in the possession or control of Employee, all of
which writings are and will continue to be the sole and exclusive property
of
Employer or its affiliates.
If
Employee’s employment by Employer is terminated during the Term of this
Agreement for reasons set forth in Section 8(b) or Section 8(c) of this
Agreement, Employee
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shall
have no obligations to Employer with respect to the noncompetition provisions
under this Section 10.
11. Any
termination of Employee’s employment with Employer as contemplated by Section 8
hereof, except in the circumstances of Employee’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 8(a), Section 8(c) or
Section 8(e) 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.
12. If
Employee is suspended and/or temporarily prohibited from participating in the
conduct of Employer’s affairs by a notice served under Section 8(e)(3) or (g)(1)
of the Federal Deposit Insurance Act (12 U.S.C. § 1818(e)(3) or (g)(1)),
Employer’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, Employer shall (i) pay Employee 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.
13. If
Employee is removed and/or permanently prohibited from participating in the
conduct of Employer’s affairs by an order issued under Section 8(e)(4) or (g)(1)
of the Federal Deposit Insurance Act (12 U.S.C. § 1818(e)(4) or (g)(1)),
all obligations of Employer under this Agreement shall terminate as of the
effective date of the order, but vested rights of the parties to the Agreement
shall not be affected.
14. If
Employer 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
Employer or Employee.
15. All
obligations under this Agreement shall be terminated except to the extent
determined that the continuation of the Agreement is necessary for the continued
operation of Employer: (i) by the Director of the Indiana Department of
Financial Institutions, or his or her designee (the
“Director”), at the time the Federal Deposit Insurance
Corporation enters into an agreement to provide assistance to or on behalf
of
Employer under the authority contained in Section 13(c) of the Federal Deposit
Insurance Act; or (ii) by the Director at the time Director approves a
supervisory merger to resolve problems related to operation of Employer or
when
Employer is determined by the Director to be in an unsafe and unsound condition.
Any rights of the parties that have already vested, however, shall not be
affected by such action.
16. Anything
in this Agreement to the contrary notwithstanding, in the event that Employer’s
independent public accountants determine that any payment by Employer to or
for
the benefit of Employee, whether paid or payable pursuant to the terms of this
Agreement, would be non-deductible by Employer for federal income tax purposes
because of Section 280G of the Internal Revenue Code of 1986, as amended (the
“Code”), then the amount payable to or for the benefit of
Employee pursuant to this Agreement shall be reduced (but not below zero) to
the
Reduced Amount. For purposes of this Section 16, the “Reduced
Amount” shall be the amount which maximizes the amount payable without
causing the payment to be non-deductible by Employer because of Section 280G
of
the Code. Any payments made to Employee pursuant to this Agreement or otherwise,
are subject to and conditional upon their compliance with 12 U.S.C. §1828(k) and
FDIC regulation 12 C.F.R. Part 359 (Golden Parachute and
Indemnification
Page
10
Payments)
and any other regulations promulgated thereunder, to the extent applicable
to
such parties.
17. If
a dispute arises regarding the termination of Employee pursuant to Section
8
hereof or as to the interpretation or enforcement of this Agreement and Employee
obtains a final judgment in his favor in a court of competent jurisdiction
or
his claim is settled by Employer prior to the rendering of a judgment by such
a
court, all reasonable legal fees and expenses incurred by Employee 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 Employer, to the extent permitted by law.
18. Should
Employee die after termination of his employment with Employer while any amounts
are payable to him hereunder, this Agreement shall inure to the benefit of
and
be enforceable by Employee’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 Employee’s devisee, legatee or
other designee or, if there is no such designee, to his estate.
19. 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 Employee:
|
Xxxxx
X. Xxxxx
000
Xxxxx Xxxxxxx Xxxxx
Xxxxxxxxx,
XX 00000
|
|
|
If
to Employer:
|
Lincoln
Bank
000
Xxxxxxxxxx Xxxxx
X.X.
Xxx 000
Xxxxxxxxxx,
Xxxxxxx 00000-0000
|
or
to
such 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.
20. The
validity, interpretation, and performance of this Agreement shall be governed
by
the laws of the State of Indiana, except as otherwise required by mandatory
operation of federal law.
21. Employer
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 Employer, by agreement in form and substance satisfactory to Employee
to expressly assume and agree to perform this Agreement in the same manner
and
same extent that Employer would be required to perform it if no such succession
had taken place. Failure of Employer to obtain such agreement prior to the
effectiveness of any such succession shall be a material intentional breach
of
this Agreement and shall entitle Employee to terminate his employment with
Employer pursuant to Section 8(c) hereof. As used in this Agreement,
“Employer” shall mean Employer as hereinbefore defined and any
successor to its business or assets as aforesaid.
22. No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing signed by Employee
and
Page
11
Employer.
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 waiver of dissimilar
provisions or conditions at the same or any prior subsequent time. No agreements
or representations, 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. This Agreement supersedes and replaces the
Employment Agreement dated as of August 2, 2004 between Lincoln Bank and
Employee which shall terminate on the Effective Date hereof and thereupon be
void and without further force and effect.
23. 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.
24. 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.
25. 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 18 and Section 21 above. Without
limiting the foregoing, Employee’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 18 hereof, and in the event
of
any attempted assignment or transfer contrary to this paragraph, Employer shall
have no liability to pay any amounts so attempted to be assigned or
transferred.
Page
12
In
Witness Whereof, the parties have caused this Amended and Restated Employment
Agreement to be executed and delivered as of the day and year first above set
forth.
|
“Employer”
|
||
|
Lincoln
Bank
|
||
|
By:
|
/s/
Xxxx X. Xxxx
|
|
|
Xxxx
X. Xxxx, Senior Vice President and Chief Financial
Officer
|
||
|
“Employee”
|
||
|
/s/
Xxxxx X. Xxxxx
|
||
|
Xxxxx
X. Xxxxx
|
||
The
undersigned, Lincoln Bancorp, sole shareholder of Employer, agrees that if
it
shall be determined for any reason that any obligations on the part of Employer
to continue to make any payments due under this Agreement to Employee is
unenforceable for any reason, Lincoln Bancorp, agrees to honor the terms of
this
Agreement and continue to make any such payments due hereunder to Employee
pursuant to the terms of this Agreement.
During
Employee’s active employment by Employer, Lincoln Bancorp shall nominate
Employee to successive terms as a member of Lincoln Bancorp’s Board of Directors
and as Lincoln Bancorp’s Chairman. Lincoln Bancorp shall use its best efforts to
elect and re-elect Employee as a member of such Board and Chairman. While
serving as the Chairman of Lincoln Bancorp and as a director of Lincoln Bancorp,
Employee shall be entitled to the same benefits and compensation for services
as
provided to the Chairman and other employee directors of Lincoln
Bancorp.
|
Lincoln
Bancorp
|
||
|
By:
|
/s/
Xxxx X. Xxxx
|
|
|
Xxxx
X. Xxxx, Secretary and Treasurer
|
||
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