UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
DECEMBER 16, 2004
FIRST MID-ILLINOIS BANCSHARES, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State of Other Jurisdiction of Incorporation)
0-13368 37-1103704
(Commission File Number) (IRS Employer Identification No.)
1515 CHARLESTON AVENUE, MATTOON, IL 61938
(Address Including Zip Code of Principal Executive Offices)
(217) 234-7454
(Registrant's Telephone Number, including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On December 14, 2004, First Mid-Illinois Bancshares, Inc. ("the Company")
entered into an Executive Employment Agreement, effective January 1, 2005 and
continuing for three years, until December 31, 2007, with William S. Rowland
under which Mr. Rowland agrees to continue to serve as President and Chief
Executive Officer of the Company (the "Rowland Agreement"). Under the Rowland
Agreement, Mr. Rowland will receive an annual base salary of $214,000 and will
continue to participate in the Company's Incentive Compensation Plan, Deferred
Compensation Plan, Supplemental Executive Retirement Plan, and 1997 Stock
Incentive Plan. The Rowland Agreement also provides Mr. Rowland with severance
benefits in the event of the termination of his employment under certain
circumstances and contains certain confidentiality and non-competition and
non-solicitation provisions.
On December 14, 2004, the Company also entered into an Employment Agreement,
effective January 1, 2005 and continuing for three years, until December 31,
2007, with Kelly A. Downs under which Ms. Downs agrees to continue to serve as
Vice President and Manager of Human Resources (the "Downs Agreement"). Under the
Downs Agreement, Ms. Downs will receive an annual base salary of $53,300 and
will continue to participate in the Company's Incentive Compensation Plan and
Deferred Compensation Plan. The Agreement also provides Ms. Downs with severance
benefits in the event of the termination of her employment under certain
circumstances and contains certain confidentiality and non-competition and
non-solicitation provisions.
The Rowland Agreement and the Downs Agreement are filed as Exhibit 10.1 and
Exhibit 10.2, respectively, and are incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits.
(a) None required
(b) None required
(c) Exhibits
Exhibit 10.1 - Employment Agreement between First Mid-Illinois
Bancshares, Inc. and William S. Rowland effective January 1, 2005.
Exhibit 10.2 - Employment Agreement between First Mid-Illinois
Bancshares, Inc. and Kelly A. Downs effective January 1, 2005.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
FIRST MID-ILLINOIS BANCSHARES, INC.
Date: December 16, 2004 /s/ Michael L. Taylor
Michael L. Taylor
Vice President and Chief Financial Officer
INDEX TO EXHIBITS
Exhibit Number Description
--------------------------------------------------------------------------------
10.1 Employment Agreement between First Mid-Illinois Bancshares, Inc. and
William S. Rowland
10.2 Employment Agreement between First Mid-Illinois Bancshares, Inc. and
Kelly A. Downs
Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into this 14th
day of December, 2004, by and between First Mid-Illinois Bancshares, Inc. ("the
Company"), a corporation with its principal place of business located in
Mattoon, Illinois, and William S. Rowland ("Executive").
In consideration of the promises and mutual covenants and agreements contained
herein, the parties hereto acknowledge and agree as follows:
ARTICLE ONE
TERM AND NATURE OF AGREEMENT
1.01 Term of Agreement. The term of this Agreement shall commence as of January
1, 2005 and shall continue for three years, until December 31, 2007. Thereafter,
unless Executive's employment with the Company has been previously terminated,
Executive shall continue his employment with the Company on an at will basis
and, except as provided in Articles Five, Six and Seven, this Agreement shall
terminate unless extended by mutual written agreement.
1.02 Employment as President and CEO. The Company agrees to continue to employ
Executive as its President and Chief Executive Officer commencing January 1,
2005 and Executive accepts such employment by the Company on the terms and
conditions herein set forth. The duties of Executive shall be determined by the
Company's Board of Directors and Executive shall adhere to the policies and
procedures of the Company and shall follow the supervision and direction of the
Board in the performance of such duties. During the term of his employment,
Executive agrees to devote his full working time, attention and energies to the
diligent and satisfactory performance of his duties hereunder.
Executive shall not, while he is employed by the Company, engage in any activity
which would (a) interfere with, or have an adverse effect on, the reputation,
goodwill or any business relationship of the Company or any of its subsidiaries;
(b) result in economic harm to the Company or any of its subsidiaries; or (c)
result in a breach of Section Six of the Agreement.
1.03 Service as Chairman. The Company shall use its best efforts to continue
Executive's position as Chairman of the Board of Directors of the Company during
the term of his employment, to which position he was elected effective as of
June 1, 1999.
ARTICLE TWO
COMPENSATION AND BENEFITS
While Executive is employed with the Company during the term of this Agreement,
the Company shall provide Executive with the following compensation and
benefits:
2.01 Base Salary. The Company shall pay Executive an annual base salary of
$214,000 per fiscal year, payable in accordance with the Company's customary
payroll practices for executive employees. The Board may review and adjust
Executive's base salary from year to year; provided, however, that during the
term of Executive's employment, the Company shall not decrease Executive's base
salary.
2.02 Incentive Compensation Plan. Executive shall continue to participate in the
First Mid-Illinois Bancshares, Inc. Incentive Compensation Plan in accordance
with the terms and conditions of such Plan. Pursuant to the Plan, Executive
shall have an opportunity to receive incentive compensation of up to a maximum
of 50% of Executive's annual base salary. The incentive compensation payable for
a particular fiscal year will be based upon the attainment of the performance
goals in effect under the Plan for such year and will be paid in accordance with
the terms of the Plan and at the sole discretion of the Board.
2.03 Deferred Compensation Plan. Executive may continue to participate in the
First Mid-Illinois Bancshares, Inc. Deferred Compensation Plan in accordance
with the terms and conditions of such Plan as in effect from time to time.
2.04 Supplemental Executive Retirement Plan. Executive shall continue to
participate in the First Mid-Illinois Bancshares, Inc. Supplemental Executive
Retirement Plan, including the Participation Agreement dated as of August 20,
1991, in accordance with the terms and conditions of such Plan and Participation
Agreement as in effect from time to time; provided, however, that the retirement
benefit payable under the Plan upon Executive's retirement shall be $50,000 per
year with unreduced benefits commencing at age 63.
2.05 Stock Option Plan. Executive may continue to participate in the First
Mid-Illinois Bancshares, Inc. 1997 Stock Incentive Plan.
2.06 Vacation. Executive shall be entitled to four (4) weeks of paid vacation
each year during the term of this Agreement.
2.07 Fringe Benefits. The Company shall provide the following additional fringe
benefits to Executive:
(a) Use of a Company-owned or leased vehicle for professional and personal
use.
(b) An amount equal to the annual dues for a Class "H" membership at the
Mattoon Golf and Country Club.
(c) Use of a cellular phone for work-related calls and calls associated
with Internet connection for Executive's home.
2.08 Other Benefits. Executive shall be eligible (to the extent he qualifies) to
participate in any other retirement, health, accident and disability insurance,
or similar employee benefit plans as may be maintained from time to time by the
Company for its other executives or employees subject to and on a consistent
basis with the terms, conditions and overall administration of such plans.
2.09 Business Expenses. Executive shall be entitled to reimbursement by the
Company for all reasonable expenses actually and necessarily incurred by him on
its behalf in the course of his employment hereunder and in accordance with
expense reimbursement plans and policies of the Company from time to time in
effect for executive employees.
2.10 Withholding. All salary, incentive compensation and other benefits provided
to Executive pursuant to this Agreement shall be subject to withholding for
federal, state or local taxes, amounts withheld under applicable employee
benefit plans, policies or programs, and any other amounts that may be required
to be withheld by law, judicial order or otherwise or by agreement with, or
consent of, Executive.
ARTICLE THREE
DEATH OF EXECUTIVE
This Agreement shall terminate prior to the end of the term described in Section
1.01 upon Executive's termination of employment with the Company due to his
death. Upon Executive's termination due to death, the Company shall pay
Executive's estate the amount of Executive's base salary and his accrued but
unused vacation time earned through the date of such death and any incentive
compensation earned for the preceding fiscal year that is not yet paid as of the
date of such death.
ARTICLE FOUR
TERMINATION OF EMPLOYMENT
Executive's employment with the Company may be terminated by Executive or by the
Company at any time for any reason. Upon Executive's termination of employment
prior to the end of the term of the Agreement, the Company shall pay Executive
as follows:
4.01 Termination by the Company for Other than Cause. If the Company terminates
Executive's employment for any reason other than Cause, the Company shall pay
Executive the following:
(a) An amount equal to Executive's monthly base salary in effect at the
time of such termination of employment for a period of twelve (12) months
thereafter. Such amount shall be paid to Executive periodically in
accordance with the Company's customary payroll practices for executive
employees; provided, however, that the Company may delay payment of such
amount to the extent required by law.
(b) The base salary and accrued but unused paid vacation time earned
through the date of termination and any incentive compensation earned for
the proceeding fiscal year that is not yet paid.
(c) Continued coverage for executive and/or Executive's family under the
Company's health plan pursuant to Title I, Part 6 of the Employee
Retirement Income Security Act of 1974 ("COBRA") and for such purpose the
date of Executive's termination of employment shall be considered the date
of the "qualifying event" as such term is defined by COBRA. During the
twelve month period beginning on the date of such termination, the
Executive shall be charged for such coverage in the amount that he would
have paid for such coverage had he remained employed by the Company, and
for the duration of the COBRA period, the Executive shall be charged for
such coverage in accordance with the provisions of COBRA.
For purposes of this Agreement, "Cause" shall mean Executive's (i) conviction in
a court of law of (or entering a plea of guilty or no contest to) any crime or
offense involving fraud, dishonesty or breach of trust or involving a felony;
(ii) performance of any act which, if known to the customers, clients,
stockholders or regulators of the Company, would materially and adversely impact
the business of the Company; (iii) act or omission that causes a regulatory body
with jurisdiction over the Company to demand, request, or recommend that
Executive be suspended or removed from any position in which Executive serves
with the Company; (iv) substantial nonperformance of any of his obligations
under this Agreement; (v) misappropriation of or intentional material damage to
the property or business of the Company or any affiliate; or (vi) breach of
Article Five or Six of this Agreement.
4.02 Termination Following a Change in Control. Notwithstanding Section 4.01,
if, following a Change in Control (as defined in the First Mid-Illinois
Bancshares, Inc. 1997 Stock Incentive Plan), Executive's employment is
terminated by the Company (or any successor thereto) for any reason other than
Cause, or if Executive terminates his employment because of a decrease in his
then current base salary or a substantial diminution in his position and
responsibilities, the Company (or any successor thereto) shall pay Executive the
following:
(a) Two times Executive's annual base salary in effect at the time of such
termination. Such amount shall be paid periodically in accordance with the
Company's or successor's customary payroll practices for executive
employees.
(b) An amount equal to the incentive compensation earned by or paid to
Executive for the fiscal year immediately preceding the year in which
Executive's termination of employment occurs. Such amount shall be paid to
Executive in a lump sum as soon as practicable after the date of his
termination.
(c) The base salary and accrued but unused paid vacation time earned
through the date of termination and any incentive compensation earned for
the preceding fiscal year that is not yet paid.
(d) Continued coverage for Executive and/or Executive's family under the
Company's health plan pursuant to Title I, Part 6 of the Employee
Retirement Income Security Act of 1974 ("COBRA") and for such purpose the
date of Executive's termination of employment shall be considered the date
of the "qualifying event" as such term is defined by COBRA. During the
twelve month period beginning on the date of such termination, the
Executive shall be charged for such coverage in the amount that he would
have paid for such coverage had he remained employed by the Company, and
for the duration of the COBRA period, the Executive shall be charged for
such coverage in accordance with the provisions of COBRA.
Not withstanding the foregoing, the Company may delay payment of the benefits
described in this Section 4.02 to the extent required by law.
4.03 Other Termination of Employment. If the Company terminates Executive's
employment for Cause, or if Executive terminates his employment for any reason
other than as described in Section 4.02 above, the Company shall pay Executive
the base salary and accrued but unused paid vacation time earned through the
date of such termination and any incentive compensation earned for the preceding
fiscal year that is not yet paid.
ARTICLE FIVE
CONFIDENTIAL INFORMATION
5.01 Non-Disclosure of Confidential Information. During his employment with
Company, and after his termination of such employment with the Company,
Executive shall not, in any form or manner, directly or indirectly, use,
divulge, disclose or communicate to any person, entity, firm, corporation or any
other third party, any Confidential Information, except as required in the
performance of Executive's duties hereunder, as required by law or as necessary
in conjunction with legal proceedings.
5.02 Definition of Confidential Information. For the purposes of this Agreement,
the term "Confidential Information" shall mean any and all information either
developed by Executive during his employment with the Company and used by the
Company or its affiliates or developed by or for the Company or its affiliates
of which Executive gained knowledge by reason of his employment with the Company
that is not readily available in or known to the general public or the industry
in which the Company or any affiliate is or becomes engaged. Such Confidential
Information shall include, but shall not be limited to, any technical or
non-technical data, formulae, compilations, programs, devices, methods,
techniques, procedures, manuals, financial data, business plans, lists of actual
or potential customers, lists of employees and any information regarding the
Company's or any affiliate's products, marketing or database. The Company and
Executive acknowledge and agree that such Confidential Information is extremely
valuable to the Company and may constitute trade secret information under
applicable law. In the event that any part of the Confidential Information
becomes generally known to the public through legitimate origins (other than by
the breach of this Agreement by Executive or by other misappropriation of the
Confidential Information), that part of the Confidential Information shall no
longer be deemed Confidential Information for the purposes of this Agreement,
but Executive shall continue to be bound by the terms of this Agreement as to
all other Confidential Information.
5.03 Delivery upon Termination. Upon termination of Executive's employment with
the Company for any reason, Executive shall promptly deliver to the Company all
correspondence, files, manuals, letters, notes, notebooks, reports, programs,
plans, proposals, financial documents, and any other documents or data
concerning the Company's or any affiliate's customers, database, business plan,
marketing strategies, processes or other materials which contain Confidential
Information, together with all other property of the Company or any affiliate in
Executive's possession, custody or control.
ARTICLE SIX
NON-COMPETE AND NON-SOLICITATION COVENANTS
6.01 Covenant Not to Compete. During the term of this Agreement and for a period
of two years following the later of (i) the termination of Executive's
employment for any reason or (ii) the last day of the term of the Agreement,
Executive shall not, on behalf of himself or on behalf of another person,
corporation, partnership, trust or other entity, within any county in which the
Company or any affiliate conducts business.
(a) Directly or indirectly own, manage, operate, control, participate in
the ownership, management, operation or control of, be connected with or
have any financial interest in, or serve as an officer, employee, advisor,
consultant, agent or otherwise to any person, firm, partnership,
corporation, trust or other entity which owns or operates a business
similar to that of the Company or its affiliates.
(b) Solicit for sale, represent, and/or sell Competing Products to any
person or entity who or which was the Company's customer or client during
the last two years of Executive's employment. "Competing Products," for
purposes of this Agreement, means products or services which are similar
to, compete with, or can be used for the same purposes as products or
services sold or offered for sale by the Company or any affiliate or which
were in development by the Company or any affiliate within the last two
years of Executive's employment.
6.02 Covenant Not to Solicit. For a period of two years following the later of
(i) the termination of Executive's employment for any reason or (ii) the last
day of the term of this Agreement, Executive shall not:
(a) Attempt in any manner to solicit from any client or customer business
of the type performed by the Company or any affiliate or persuade any
client or customer of the Company or any affiliate to cease to do such
business or to reduce the amount of such business which any such client or
customer has customarily done or contemplates doing with the Company or any
affiliate, whether or not the relationship between the Company or affiliate
and such client or customer was originally established in whole or in part
through Executive's efforts.
(b) Render any services of the type rendered by the Company or any
affiliate for any client or customer of the Company.
(c) Solicit or encourage, or assist any other person to solicit or
encourage, any employees, agents or representatives of the Company or an
affiliate to terminate or alter their relationship with the Company or any
affiliate.
(d) Do not cause to be done, directly or indirectly, any acts which may
impair the relationship between the Company or any affiliate with their
respective clients, customers or employees.
ARTICLE SEVEN
REMEDIES
Executive acknowledges that compliance with the provisions of Articles Five and
Six herein is necessary to protect the business, goodwill and proprietary
information of the Company and that a breach of these covenants will irreparably
and continually damage the Company for which money damages may be inadequate.
Consequently, Executive agrees that, in the event that he breaches or threatens
to breach any of these provisions, the Company shall be entitled to both (a) a
temporary, preliminary or permanent injunction in order to prevent the
continuation of such harm; and (b) money damages insofar as they can be
determined. In addition, the Company will cease payment of all compensation and
benefits under Articles Three and Four hereof. In the event that any of the
provisions, covenants, warranties or agreements in this Agreement are held to be
in any respect an unreasonable restriction upon the Executive or are otherwise
invalid, for whatsoever cause, then the court so holding shall reduce, and is so
authorized to reduce, the territory to which it pertains and/or the period of
time in which it operates, or the scope of activity to which it pertains or
effect any other change to the extent necessary to render any of the
restrictions of this Agreement enforceable.
ARTICLE EIGHT
MISCELLANEOUS
8.01 Successors and Assignability.
(a) No rights or obligations of the Company under this Agreement may be
assigned or transferred except that the Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform
it if no such succession had taken place.
(b) No rights or obligations of Executive under this Agreement may be
assigned or transferred by Executive other than his rights to payments or
benefits hereunder which may be transferred only by will or the laws of
descent and distribution.
8.02 Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and may not be modified except
in writing by the parties hereto; provided, however, that any amendment or
modification that the Company in its sole discretion deems necessary to comply
with the American Jobs Creation Act, and regulations promulgated thereunder,
shall not require the consent of Executive as long as such amendment or
modification does not reduce the absolute dollar amount of benefits payable
hereunder. The parties further specifically agree that all prior agreements,
whether written or oral, relating to Executive's employment by the Company shall
be of no further force or effect from and after the date hereof. The parties
further agree that the provisions of Section 2.04 constitute an amendment to
Executive's Participation Agreement dated as of August 20, 1991 under the First
Mid-Illinois Bancshares, Inc. Supplemental Executive Retirement Plan.
8.03 Severability. If any phrase, clause or provision of this Agreement is
deemed invalid or unenforceable, such phrase, clause or provision shall be
deemed severed from this Agreement, but will not affect any other provisions of
this Agreement, which shall otherwise remain in full force and effect. If any
restriction or limitation in this Agreement is deemed to be unreasonable,
onerous or unduly restrictive, it shall not be stricken in its entirety and held
totally void and unenforceable, but shall be deemed rewritten and shall remain
effective to the maximum extent permissible within reasonable bounds.
8.04 Controlling Law and Jurisdiction. This Agreement shall be governed by and
interpreted and construed according to the laws of the State of Illinois. The
parties hereby consent to the jurisdiction of the state and federal courts in
the State of Illinois in the event that any disputes arise under this Agreement.
8.05 Notices. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given (a) on
the date of service if served personally on the party to whom notice is to be
given; (b) on the day after delivery to an overnight courier service; (c) on the
day of transmission if sent via facsimile to the facsimile number given below;
or (d) on the third day after mailing, if mailed to the party to whom notice is
to be given, by first class mail, registered or certified, postage prepaid and
properly addressed, to the party as follows:
If to Executive: William S. Rowland
1 Prairie Sun Lane
Mattoon, IL 61938
If to the Company: First Mid-Illinois Bancshares, Inc.
1515 Charleston Avenue
Mattoon IL 61938
Facsimile: 217-258-0485
Attention: Chairman of Compensation Committee
Any party may change its address for the purpose of this Section by giving the
other party written notice of its new address in the manner set forth above.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
FIRST MID-ILLINOIS BANCSHARES, INC.
By: /s/ Kenneth R. Diepholz
Kenneth R. Diepholz
Title: Chairman, Compensation Committee
EXECUTIVE:
/s/ William S. Rowland
William S. Rowland
12/14/04
Exhibit 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into this 14th
day of December, 2004, by and between First Mid-Illinois Bancshares, Inc. ("the
Company"), a corporation with its principal place of business located in
Mattoon, Illinois, and Kelly A. Downs ("Manager").
In consideration of the promises and mutual covenants and agreements contained
herein, the parties hereto acknowledge and agree as follows:
ARTICLE ONE
TERM AND NATURE OF AGREEMENT
1.01 Term of Agreement. The term of this Agreement shall commence as of January
1, 2005 and shall continue until December 31, 2007. Thereafter, unless Manager's
employment with the Company has been previously terminated, Manager shall
continue her employment with the Company on an at will basis and, except as
provided in Articles Five, Six and Seven, this Agreement shall terminate unless
extended by mutual written agreement.
1.02 Employment. The Company agrees to employ Manager and Manager accepts such
employment by the Company on the terms and conditions herein set forth. The
duties of Manager shall be determined by the Company's Chief Executive Officer
and shall adhere to the policies and procedures of the Company and shall follow
the supervision and direction of the Chief Executive Officer or his designee in
the performance of such duties. During the term of her employment, Manager
agrees to devote her full working time, attention and energies to the diligent
and satisfactory performance of her duties hereunder. Manager shall not, while
she is employed by the Company, engage in any activity which would (a) interfere
with, or have an adverse effect on, the reputation, goodwill or any business
relationship of the Company or any of its subsidiaries; (b) result in economic
harm to the Company or any of its subsidiaries; or (c) result in a breach of
Section Six of the Agreement.
ARTICLE TWO
COMPENSATION AND BENEFITS
While Manager is employed with the Company during the term of this Agreement,
the Company shall provide Manager with the following compensation and benefits:
2.01 Base Salary. The Company shall pay Manager an annual base salary of
$53,300.00 per fiscal year, payable in accordance with the Company's customary
payroll practices for management employees. The Chief Executive Officer or his
designee may review and adjust Manager's base salary from year to year;
provided, however, that during the term of Manager's employment, the Company
shall not decrease Manager's base salary.
2.02 Incentive Compensation Plan. Manager shall continue to participate in the
First Mid-Illinois Bancshares, Inc. Incentive Compensation Plan in accordance
with the terms and conditions of such Plan. Pursuant to the Plan, Manager shall
have an opportunity to receive incentive compensation of up to a maximum of 20%
of Manager's annual base salary. The incentive compensation payable for a
particular fiscal year will be based upon the attainment of the performance
goals in effect under the Plan for such year and will be paid in accordance with
the terms of the Plan and at the sole discretion of the Board.
2.03 Deferred Compensation Plan. Manager may continue to participate in the
First Mid-Illinois Bancshares, Inc. Deferred Compensation Plan in accordance
with the terms and conditions of such Plan as in effect from time to time.
2.04 Vacation. Manager shall be entitled to three (3) of paid vacation each year
during 2005. Manager shall be entitled to four (4) weeks of paid vacation during
2006 and 2007.
2.05 Other Benefits. Manager shall be eligible (to the extent she qualifies) to
participate in any other retirement, health, accident and disability insurance,
or similar employee benefit plans as may be maintained from time to time by the
Company for its other management employees subject to and on a consistent basis
with the terms, conditions and overall administration of such plans.
2.06 Business Expenses. Manager shall be entitled to reimbursement by the
Company for all reasonable expenses actually and necessarily incurred by her on
its behalf in the course of her employment hereunder and in accordance with
expense reimbursement plans and policies of the Company from time to time in
effect for management employees.
2.07 Withholding. All salary, incentive compensation and other benefits provided
to Manager pursuant to this Agreement shall be subject to withholding for
federal, state or local taxes, amounts withheld under applicable employee
benefit plans, policies or programs, and any other amounts that may be required
to be withheld by law, judicial order or otherwise or by agreement with, or
consent of, Manager.
ARTICLE THREE
DEATH OF MANAGER
This Agreement shall terminate prior to the end of the term described in Section
1.01 upon Manager's termination of employment with the Company due to her death.
Upon Manager's termination due to death, the Company shall pay Manager's estate
the amount of Manager's base salary plus her accrued but unused vacation time
earned through the date of such death and any incentive compensation earned for
the preceding fiscal year that is not yet paid as of the date of such death.
ARTICLE FOUR
TERMINATION OF EMPLOYMENT
Manager's employment with the Company may be terminated by Manager or by the
Company at any time for any reason. Upon Manager's termination of employment
prior to the end of the term of the Agreement, the Company shall pay Manager as
follows:
4.01 Termination by the Company for Other than Cause. If the Company terminates
Manager's employment for any reason other than Cause, the Company shall pay
Manager the following:
(a) An amount equal to Manager's monthly base salary in effect at the time
of such termination of employment for a period of twelve (12) months
thereafter. Such amount shall be paid to Manager periodically in accordance
with the Company's customary payroll practices for management employees;
provided, however, that that Company may delay payment of such amount to
the extent required by law.
(b) The base salary and accrued but unused paid vacation time earned
through the date of termination and any incentive compensation earned for
the preceding fiscal year that is not yet paid.
(c) Continued coverage for Manager and/or Manager's family under the
Company's health plan pursuant to Title I, Part 6 of the Employee
Retirement Income Security Act of 1974 ("COBRA") and for such purpose the
date of Manager's termination of employment shall be considered the date of
the "qualifying event" as such term is defined by COBRA. During the period
beginning on the date of such termination and ending at the end of the
period described in Section 4.01(a), Manager shall be charged for such
coverage in the amount that he would have paid for such coverage had she
remained employed by the Company, and for the duration of the COBRA period,
Manager shall be charged for such coverage in accordance with the
provisions of COBRA.
For purposes of this Agreement, "Cause" shall mean Manager's (i) conviction in a
court of law of (or entering a plea of guilty or no contest to) any crime or
offense involving fraud, dishonesty or breach of trust or involving a felony;
(ii) performance of any act which, if known to the customers, clients,
stockholders or regulators of the Company, would materially and adversely impact
the business of the Company; (iii) act or omission that causes a regulatory body
with jurisdiction over the Company to demand, request, or recommend that Manager
be suspended or removed from any position in which Manager serves with the
Company; (iv) substantial nonperformance of any of her obligations under this
Agreement; (v) misappropriation of or intentional material damage to the
property or business of the Company or any affiliate; or (vi) breach of Article
Five or Six of this Agreement.
4.02 Termination Following a Change in Control. Notwithstanding Section 4.01,
if, following a Change in Control, and prior to the end of the term of this
Agreement, Manager's employment is terminated by the Company (or any successor
thereto) for any reason other than Cause, or if Manager terminates her
employment because of a decrease in her then current base salary or a
substantial diminution in her position and responsibilities, the Company (or any
successor thereto) shall pay Manager the following:
(a) An amount equal to Manager's monthly base salary in effect at the time
of such termination for a period of twelve (12) months thereafter. Such
amount shall be paid in accordance with the Company's or successor's
customary payroll practices for Manager employees.
(b) The base salary and accrued but unused paid vacation time earned
through the date of termination and any incentive compensation earned for
the preceding fiscal year that is not yet paid.
(c) Continued coverage for Manager and/or Manager's family under the
Company's health plan pursuant to Title I, Part 6 of the Employee
Retirement Income Security Act of 1974 ("COBRA") and for such purpose the
date of Manager's termination of employment shall be considered the date of
the "qualifying event" as such term is defined by COBRA. During the period
beginning on the date of such termination and ending at the end of the
period described in Section 4.02(a), Manager shall be charged for such
coverage in the amount that she would have paid for such coverage had he
remained employed by the Company, and for the duration of the COBRA period,
Manager shall be charged for such coverage in accordance with the
provisions of COBRA.
For purposes of this Agreement, "Change in Control" shall have the meaning as
set forth in the First Mid-Illinois Bancshares, Inc. 1997 Stock Incentive Plan.
4.03 Other Termination of Employment. If, prior to the end of the term of this
Agreement, the Company terminates Manager's employment for Cause, or if Manager
terminates her employment for any reason other than as described in Section 4.02
above, the Company shall pay Manager the base salary and accrued but unused paid
vacation time earned through the date of such termination and any incentive
compensation earned for the preceding fiscal year that is not yet paid.
ARTICLE FIVE
CONFIDENTIAL INFORMATION
5.01 Non-Disclosure of Confidential Information. During her employment with the
Company, and after her termination of such employment with the Company, Manager
shall not, in any form or manner, directly or indirectly, use, divulge, disclose
or communicate to any person, entity, firm, corporation or any other third
party, any Confidential Information, except as required in the performance of
Manager's duties hereunder, as required by law or as necessary in conjunction
with legal proceedings.
5.02 Definition of Confidential Information. For the purposes of this Agreement,
the term "Confidential Information" shall mean any and all information either
developed by Manager during her employment with the Company and used by the
Company or its affiliates or developed by or for the Company or its affiliates
of which Manager gained knowledge by reason of her employment with the Company
that is not readily available in or known to the general public or the industry
in which the Company or any affiliate is or becomes engaged. Such Confidential
Information shall include, but shall not be limited to, any technical or
non-technical data, formulae, compilations, programs, devices, methods,
techniques, procedures, manuals, financial data, business plans, lists of actual
or potential customers, lists of employees and any information regarding the
Company's or any affiliate's products, marketing or database. The Company and
Manager acknowledge and agree that such Confidential Information is extremely
valuable to the Company and may constitute trade secret information under
applicable law. In the event that any part of the Confidential Information
becomes generally known to the public through legitimate origins (other than by
the breach of this Agreement by Manager or by other misappropriation of the
Confidential Information), that part of the Confidential Information shall no
longer be deemed Confidential Information for the purposes of this Agreement,
but Manager shall continue to be bound by the terms of this Agreement as to all
other Confidential Information.
5.03 Delivery Upon Termination. Upon termination of Manager's employment with
the Company for any reason, Manager shall promptly deliver to the Company all
correspondence, files, manuals, letters, notes, notebooks, reports, programs,
plans, proposals, financial documents, and any other documents or data
concerning the Company's or any affiliate's customers, database, business plan,
marketing strategies, processes or other materials which contain Confidential
Information, together with all other property of the Company or any affiliate in
Manager's possession, custody or control.
ARTICLE SIX
NON-COMPETE AND NON-SOLICITATION COVENANTS
6.01 Covenant Not to Compete. During the term of this Agreement and for a period
of one year following the later of (i) the termination of Manager's employment
for any reason or (ii) the last day of the term of the Agreement, Manager shall
not, on behalf of herself or on behalf of another person, corporation,
partnership, trust or other entity, within the counties of Coles, Moultrie,
Douglas, Cumberland, Effingham, Champaign, Christian, Madison, Macon, Bond or
Piatt, Illinois, or any other county in which the Company or any affiliate
conducts business:
(a) Directly or indirectly own, manage, operate, control, participate in
the ownership, management, operation or control of, be connected with or
have any financial interest in, or serve as an officer, employee, advisor,
consultant, agent or otherwise to any person, firm, partnership,
corporation, trust or other entity which owns or operates a business
similar to that of the Company or its affiliates.
(b) Solicit for sale, represent, and/or sell Competing Products to any
person or entity who or which was the Company's customer or client during
the last year of Manager's employment. "Competing Products," for purposes
of this Agreement, means products or services which are similar to, compete
with, or can be used for the same purposes as products or services sold or
offered for sale by the Company or any affiliate or which were in
development by the Company or any affiliate within the last year of
Manager's employment.
6.02 Covenant Not to Solicit. For a period of one year following the later of
(i) the termination of Manager's employment for any reason or (ii) the last day
of the term of this Agreement, Manager shall not:
(a) Attempt in any manner to solicit from any client or customer business
of the type performed by the Company or any affiliate or persuade any
client or customer of the Company or any affiliate to cease to do such
business or to reduce the amount of such business which any such client or
customer has customarily done or contemplates doing with the Company or any
affiliate, whether or not the relationship between the Company or affiliate
and such client or customer was originally established in whole or in part
through Manager's efforts.
(b) Render any services of the type rendered by the Company or any
affiliate for any client or customer of the Company.
(c) Solicit or encourage, or assist any other person to solicit or
encourage, any employees, agents or representatives of the Company or an
affiliate to terminate or alter their relationship with the Company or any
affiliate.
(d) Do or cause to be done, directly or indirectly, any acts which may
impair the relationship between the Company or any affiliate with their
respective clients, customers or employees.
ARTICLE SEVEN
REMEDIES
Manager acknowledges that compliance with the provisions of Articles Five and
Six herein is necessary to protect the business, goodwill and proprietary
information of the Company and that a breach of these covenants will irreparably
and continually damage the Company for which money damages may be inadequate.
Consequently, Manager agrees that, in the event that she breaches or threatens
to breach any of these provisions, the Company shall be entitled to both (a) a
temporary, preliminary or permanent injunction in order to prevent the
continuation of such harm; and (b) money damages insofar as they can be
determined. In addition, the Company will cease payment of all compensation and
benefits under Articles Three and Four hereof. In the event that any of the
provisions, covenants, warranties or agreements in this Agreement are held to be
in any respect an unreasonable restriction upon Manager or are otherwise
invalid, for whatsoever cause, then the court so holding shall reduce, and is so
authorized to reduce, the territory to which it pertains and/or the period of
time in which it operates, or the scope of activity to which it pertains or
effect any other change to the extent necessary to render any of the
restrictions of this Agreement enforceable. ARTICLE EIGHT MISCELLANEOUS
8.01 Successors and Assignability.
(a) No rights or obligations of the Company under this Agreement may be
assigned or transferred except that the Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform
it if no such succession had taken place.
(b) No rights or obligations of Manager under this Agreement may be
assigned or transferred by Manager other than her rights to payments or
benefits hereunder which may be transferred only by will or the laws of
descent and distribution.
8.02 Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and may not be modified except
in writing by the parties hereto; provided, however, that any amendment or
modification that the Company in its sole discretion deems necessary to comply
with the American Jobs Creation act, and regulations promulgated thereunder,
shall not require the consent of Manager as long as such amendment or
modification does not reduce the absolute dollar amount of benefits payable
hereunder. Furthermore, the parties hereto specifically agree that all prior
agreements, whether written or oral, relating to Manager's employment by the
Company shall be of no further force or effect from and after the date hereof.
8.03 Severability. If any phrase, clause or provision of this Agreement is
deemed invalid or unenforceable, such phrase, clause or provision shall be
deemed severed from this Agreement, but will not affect any other provisions of
this Agreement, which shall otherwise remain in full force and effect. If any
restriction or limitation in this Agreement is deemed to be unreasonable,
onerous or unduly restrictive, it shall not be stricken in its entirety and held
totally void and unenforceable, but shall be deemed rewritten and shall remain
effective to the maximum extent permissible within reasonable bounds.
8.04 Controlling Law and Jurisdiction. This Agreement shall be governed by and
interpreted and construed according to the laws of the State of Illinois. The
parties hereby consent to the jurisdiction of the state and federal courts in
the State of Illinois in the event that any disputes arise under this Agreement.
8.05 Notices. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given (a) on
the date of service if served personally on the party to whom notice is to be
given; (b) on the day after delivery to an overnight courier service; (c) on the
day of transmission if sent via facsimile to the facsimile number given below;
or (d) on the third day after mailing, if mailed to the party to whom notice is
to be given, by first class mail, registered or certified, postage prepaid and
properly addressed, to the party as follows:
If to Manager: Kelly A. Downs
1 Hance Drive
Charleston, IL 61920
If to the Company: First Mid-Illinois Bancshares, Inc.
1515 Charleston Avenue
Mattoon, Illinois 61938
Facsimile: 217-258-0485
Attention: Chairman and Chief Executive Officer
Any party may change its address for the purpose of this Section by giving the
other party written notice of its new address in the manner set forth above.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
FIRST MID-ILLINOIS BANCSHARES, INC.
By: /s/ William S. Rowland
William S. Rowland
Title: Chairman and Chief Executive Officer
MANAGER:
/s/ Kelly A. Downs
Kelly A. Downs
12/14/04