Exhibit 10.7(a)
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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THIS AGREEMENT entered into this 1st of October, 2003, by and between
HEARTLAND Community Bank (the "Bank") and Charles T. Black (the "Employee"),
effective on the date (the "Effective Date") this agreement is executed.
WHEREAS, the Employee has heretofore been employed by the Bank as its
President and Chief Executive Officer and is experienced in all phases of the
business of the Bank; and
WHEREAS, the Board of Directors of the Bank believes it is in the best
interests of the Bank to enter into this Agreement with the Employee in order to
assure continuity of management of the Bank and to reinforce and encourage the
continued attention and dedication of the Employee to his assigned duties; and
WHEREAS, the parties desire by this writing to set forth the continuing
employment relationship of the Bank and the Employee.
NOW, THEREFORE, it is AGREED as follows:
1. Defined Terms
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When used anywhere in this Agreement, the following terms shall have the
meaning set forth herein.
(a) "Affiliate" shall mean any "parent corporation" or "subsidiary
corporation" of the Bank, as the terms are defined in Section 424(e) and (f),
respectively, of the Code.
(b) When the Bank is in the "mutual" form of organization, a "Change in
Control" shall be deemed to have occurred if:
(i) as a result of, or in connection with, any exchange offer, merger
or other business combination, sale of assets or contested election, any
combination of the foregoing transactions, or any similar transaction, the
persons who were non-employee directors of the Bank before such transaction
cease to constitute a majority of the Board of Directors of the Bank or any
successor to the Bank;
(ii) the Bank transfers substantially all of its assets to another
corporation which is not an Affiliate of the Bank;
(iii) the Bank sells substantially all of the assets of an Affiliate
which accounted for 50% or more of the controlled group's assets
immediately prior to such sale;
(iv) any "person" including a "group", exclusive of the Board of
Directors of the Bank or any committee thereof, is or becomes the
"beneficial owner", directly or indirectly, of proxies of the Bank
representing twenty-five percent (25%) or more of the combined voting power
of the Bank's members; or
(v) the Bank is merged or consolidated with another corporation and,
as a result of the merger or consolidation, less than seventy percent (70%)
of the outstanding proxies relating to the surviving or resulting
corporation are given, in the aggregate, by the former members of the Bank.
(c) If the Bank is in the "stock" form of organization, a "Change in
Control" shall be deemed to have occurred if:
(i) as a result of, or in connection with, any initial public
offering, tender offer or exchange offer, merger or other business
combination, sale of assets or contested election, any combination of the
foregoing transactions, or any similar transaction, the persons who were
non-employee directors of the Bank before such transaction cease to
constitute a majority of the Board of Directors of the Bank or any
successor to the Bank;
(ii) the Bank transfers substantially all of its assets to another
corporation which is not an Affiliate of the Bank;
(iii) the Bank sells substantially all of the assets of an Affiliate
which accounted for 50% or more of the controlled group's assets
immediately prior to such sale;
(iv) any "person" including a "group" is or becomes the "beneficial
owner", directly or indirectly, of securities of the Bank representing
twenty-five percent (25%) or more of the combined voting power of the
Bank's outstanding securities (with the terms in quotation marks having the
meaning set forth under the federal securities laws); or
(v) the Bank is merged or consolidated with another corporation and,
as a result of the merger or consolidation, less than seventy percent (70%)
of the outstanding voting securities of the surviving or resulting
corporation is owned in the aggregate by the former stockholders of the
Bank.
Notwithstanding the foregoing, a "Change in Control" shall not be deemed to
occur solely by reason of a transaction in which the Bank converts to the stock
form of organization, or creates an independent holding company in connection
therewith.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and as interpreted through applicable rulings and regulations in
effect from time to time.
(e) "Code Sec. 280G Maximum" shall mean product of 2.99 and his "base
amount" as defined in Codess. 280G(b)(3).
(f) "Good Reason" shall mean any of the following events, which has not
been consented to in advance by the Employee in writing: (i) the requirement
that the Employee move his personal residence, or perform his principal
executive functions, more than thirty (30) miles from his primary office as of
the later of the Effective Date and the most recent voluntary relocation by the
Employee; (ii) a material reduction in the Employee's base compensation under
this Agreement as the same may be increased from time to time; (iii) the failure
by the Bank to continue to provide the Employee with compensation and benefits
provided under this Agreement as the same may be increased from time to time, or
with benefits substantially similar to those provided to him under any of the
employee benefit plans in which the Employee now or hereafter becomes a
participant, or the taking of any action by the Bank which would directly or
indirectly reduce any of such benefits or deprive the Employee of any material
fringe benefit enjoyed by him under this Agreement; (iv) the assignment to the
Employee of duties and responsibilities materially different from those normally
associated with his position; (v) a failure to reelect the Employee to the Board
of Directors of the Bank, if the Employee has served on such Board at any time
during the term of the Agreement; (vi) a material diminution or reduction in the
Employee's responsibilities or authority (including reporting responsibilities)
in connection with his employment with the Bank; or (vii) a material reduction
in the secretarial or other administrative support of the Employee. In addition,
"Good Reason" shall mean an impairment of the Employee's health to an extent
that it makes continued performance of his duties hereunder hazardous to his
physical or mental health.
(g) "Just Cause" shall mean, in the good faith determination of the Bank's
Board of Directors, the Employee's personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final
cease-and-desist order, or material breach of any provision of this Agreement.
The Employee shall have no right to receive compensation or other benefits for
any period after termination for Just Cause. No act, or failure to act, on the
Employee's part shall be
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considered "willful" unless he has acted, or failed to act, with an absence of
good faith and without a reasonable belief that his action or failure to act was
in the best interest of the Bank.
(h) "Protected Period" shall mean the period that begins on the date one
year before the Change in Control and ends on the closing date of the Change in
Control.
(i) "Trust" shall mean a grantor trust that is designed in accordance with
Revenue Procedure 92-64 and has a trustee independent of the Bank.
2. Employment. The Employee is employed as the President and Chief
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Executive Officer of the Bank. The Employee shall render such administrative and
management services for the Bank as are currently rendered and as are
customarily performed by persons situated in a similar executive capacity. The
Employee shall also promote, by entertainment or otherwise, as and to the extent
permitted by law, the business of the Bank. The Employee's other duties shall be
such as the Board of Directors (the "Board") of the Bank may from time to time
reasonably direct, including normal duties as an officer of the Bank.
3. Base Compensation. The Bank agrees to pay the Employee during the term
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of this Agreement a salary at the rate of $120,000 per annum, payable in cash
not less frequently than monthly. The Board shall review, not less often than
annually, the rate of the Employee's salary, and in its sole discretion may
decide to increase his salary. Notwithstanding the foregoing, following a Change
in Control, the Board of Directors of the Bank shall continue to annually review
the rate of the Employee's salary, and shall increase said rate of salary by a
percentage which is not less than the average annual percentage increase in
salary that the Employee received over the three calendar years immediately
preceding the year in which the Change in Control occurs.
4. Discretionary Bonuses. The Employee shall participate in an equitable
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manner with all other senior management employees of the Bank in discretionary
bonuses that the Board may award from time to time to the Bank's senior
management employees. No other compensation provided for in this Agreement shall
be deemed a substitute for the Employee's right to participate in such
discretionary bonuses. Notwithstanding the foregoing, following a Change in
Control, the Employee shall receive discretionary bonuses that are made no less
frequently than, and in annual amounts not less than, the average annual
discretionary bonuses paid to the Employee during each of the three calendar
years immediately preceding the year in which such Change in Control occurs.
5. (a) Participation in Retirement, Medical and Other Plans. During the
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term of this Agreement, the Employee shall be eligible to participate in the
following benefit plans: group hospitalization, disability, health, dental, sick
leave, life insurance, travel and/or accident insurance, auto allowance/auto
lease, retirement, pension, and/or other present or future qualified plans
provided by the Bank, generally which benefits, taken as a whole, must be at
least as favorable as those in effect on the Effective Date.
(b) Employee Benefits; Expenses. The Employee shall be eligible to
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participate in any fringe benefits which are or may become available to the
Bank's senior management employees, including for example: any stock option or
incentive compensation plans, and any other benefits which are commensurate with
the responsibilities and functions to be performed by the Employee under this
Agreement. The Employee shall be reimbursed for all reasonable out-of-pocket
business expenses which he shall incur in connection with his services under
this Agreement upon substantiation of such expenses in accordance with the
policies of the Bank.
6. Term. The Bank hereby employs the Employee, and the Employee hereby
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accepts such employment under this Agreement, for the period commencing on the
Effective Date and ending 36 months thereafter (or such earlier date as is
determined in accordance with Section 9). Additionally, on each annual
anniversary date from the Effective Date, the Employee's term of employment
shall be extended for an additional one-year period beyond the then effective
expiration date provided the Board determines in a duly adopted resolution that
the performance of the Employee has met the Board's requirements and standards,
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and that this Agreement shall be extended. Only those members of the Board of
Directors who have no personal interest in this Employment Agreement shall
discuss and vote on the approval and subsequent review of this Agreement.
7. Loyalty; Noncompetition.
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(a) During the period of his employment hereunder and except for illnesses,
reasonable vacation periods, and reasonable leaves of absence, the Employee
shall devote all his full business time, attention, skill, and efforts to the
faithful performance of his duties hereunder; provided, however, from time to
time, Employee may serve on the boards of directors of, and hold any other
offices or positions in, companies or organizations, which will not present any
conflict of interest with the Bank or any of its subsidiaries or affiliates, or
unfavorably affect the performance of Employee's duties pursuant to this
Agreement, or will not violate any applicable statute or regulation. "Full
business time" is hereby defined as that amount of time usually devoted to like
companies by similarly situated executive officers. During the term of his
employment under this Agreement, the Employee shall not engage in any business
or activity contrary to the business affairs or interests of the Bank, or be
gainfully employed in any other position or job other than as provided above.
(b) Permissible Investments. Nothing contained in this Section shall be
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deemed to prevent or limit the Employee's right to invest in the capital stock
or other securities of any business dissimilar from that of the Bank, or, solely
as a passive or minority investor, in any business.
8. Standards. The Employee shall perform his duties under this Agreement in
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accordance with such reasonable standards as the Board may establish from time
to time. The Bank will provide Employee with the working facilities and staff
customary for similar executives and necessary for him to perform his duties.
9. Vacation and Sick Leave. At such reasonable times as the Board shall in
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its discretion permit, the Employee shall be entitled, without loss of pay, to
absent himself voluntarily from the performance of his employment under this
Agreement, all such voluntary absences to count as vacation time, provided that:
(a) The Employee shall be entitled to an annual vacation in accordance with
the policies that the Board periodically establishes for senior management
employees of the Bank.
(b) The Employee shall not receive any additional compensation from the
Bank on account of his failure to take a vacation or sick leave, and the
Employee shall not accumulate unused vacation or sick leave from one fiscal year
to the next, except in either case to the extent authorized by the Board.
(c) In addition to the aforesaid paid vacations, the Employee shall be
entitled without loss of pay, to absent himself voluntarily from the performance
of his employment with the Bank for such additional periods of time and for such
valid and legitimate reasons as the Board may in its discretion determine.
Further, the Board may grant to the Employee a leave or leaves of absence, with
or without pay, at such time or times and upon such terms and conditions as such
Board in its discretion may determine.
(d) In addition, the Employee shall be entitled to an annual sick leave
benefit as established by the Board.
10. Termination and Termination Pay. Subject to Section 12 hereof, the
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Employee's employment hereunder may be terminated under the following
circumstances:
(a) Death. The Employee's employment under this Agreement shall terminate
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upon his death during the term of this Agreement, in which event the Employee's
estate shall be entitled to receive the compensation due the Employee through
the last day of the calendar month in which his death occurred.
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(b) Disability. (1) The Bank may terminate the Employee's employment after
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having established the Employee's Disability. For purposes of this Agreement,
"Disability" means a physical or mental infirmity which impairs the Employee's
ability to substantially perform his duties under this Agreement and which
results in the Employee becoming eligible for long-term disability benefits
under the Bank's long-term disability plan (or, if the Bank has no such plan in
effect, which impairs the Employee's ability to substantially perform his duties
under this Agreement for a period of one hundred eighty (180) consecutive days).
The Employee shall be entitled to the compensation and benefits provided for
under this Agreement for (i) any period during the term of this Agreement and
prior to the establishment of the Employee's Disability during which the
Employee is unable to work due to the physical or mental infirmity, or (ii) any
period of Disability which is prior to the Employee's termination of employment
pursuant to this Section 10(b); provided that any benefits paid pursuant to the
Bank's long term disability plan will continue as provided in such plan.
(2) During any period that the Employee shall receive disability benefits
and to the extent that the Employee shall be physically and mentally able to do
so, he shall furnish such information, assistance and documents so as to assist
in the continued ongoing business of the Bank and, if able, shall make himself
available to the Bank to undertake reasonable assignments consistent with his
prior position and his physical and mental health. The Bank shall pay all
reasonable expenses incident to the performance of any assignment given to the
Employee during the disability period.
(c) Just Cause. The Board may, by written notice to the Employee,
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immediately terminate his employment at any time, for Just Cause. The Employee
shall have no right to receive compensation or other benefits for any period
after termination for Just Cause.
(d) Without Just Cause; Constructive Discharge. (1) The Board may, by
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written notice to the Employee, immediately terminate his employment at any time
for a reason other than Just Cause, in which event the Employee shall be
entitled to receive the following compensation and benefits (unless such
termination occurs during the Protected Period in which event the benefits and
compensation provided for in Section 12 shall apply):
(i) the salary provided pursuant to Section 3 hereof, up to the
expiration date of this Agreement including any renewal term (the
"Expiration Date"), plus said salary for an additional 12-month period,
(ii) a put option meeting the requirements set forth in subsection 3
hereof, provided that the Employee shall not be entitled to such put option
if on the date the Employee terminates employment, either the Employee does
not own any common stock of the Bank or an affiliated company, or such
common stock is "readily tradable" within the meaning of Code Sec.
401(a)(28)(C); and
(iii) at the Employee's election either (A) cash in an amount equal to
the cost to the Employee of obtaining all health, life, disability and
other benefits which the Employee would have been eligible to participate
in through the Expiration Date based upon the benefit levels substantially
equal to those that the Bank provided for the Employee at the date of
termination of employment or (B) continued participation under such Bank
benefit plans through the Expiration Date, but only to the extent the
Employee continues to qualify for participation therein. All amounts
payable to the Employee shall be paid, at the option of the Employee,
either (I) in periodic payments through the Expiration Date, or (II) in one
lump sum within ten (10) days of such termination.
(2) The Employee shall be entitled to receive the compensation and benefits
payable under subsection 10(d)(1) hereof in the event that the Employee
voluntarily terminates employment within 90 days of an event that constitutes
Good Reason, (unless such voluntary termination occurs during the Protected
Period, in which event the benefits and compensation provided for in Section 12
shall apply).
(3) A put option deliverable to the Employee pursuant to this Section 10(d)
shall, at a minimum, obligate the Bank and any successor to purchase any shares
of its common stock are the common stock of any affiliated company that the
Employee owns on the date of terminating employment. The terms of
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such purchase shall be set forth in a written instrument prepared and executed
by the Bank, and shall require that (i) the purchase price be no less than the
appraised value of such stock, determined in accordance with Code Sec.
401(a)(28)(C), by an appraiser mutually agreed upon by the Employee and the
Bank, as of the last day of the fiscal year in which the Employee's employment
terminates, and (ii) the Bank make such payment as soon as practicable after the
Bank receives said appraisal.
(e) Termination or Suspension Under Federal Law. (1) If the Employee is
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removed and/or permanently prohibited from participating in the conduct of the
Bank's affairs by an order issued under Sections 8(e)(4) or 8(g)(1) of the
Federal Deposit Insurance Act ("FDIA") (12 U.S.C. 1818(e)(4) and (g)(1)), all
obligations of the Bank under this Agreement shall terminate, as of the
effective date of the order, but vested rights of the parties shall not be
affected.
(1) If the Bank is in default (as defined in Section 3(x)(1) of FDIA), all
obligations under this Agreement shall terminate as of the date of default;
however, this Paragraph shall not affect the vested rights of the parties.
(2) All obligations under this Agreement shall terminate, except to the
extent that continuation of this Agreement is necessary for the continued
operation of the Bank: (i) by the Director of the Office of Thrift Supervision
("Director of OTS"), or his or her designee, at the time that the Federal
Deposit Insurance Corporation ("FDIC") or the Resolution Trust Corporation
enters into an agreement to provide assistance to or on behalf of the Bank under
the authority contained in Section 13(c) of FDIA; or (ii) by the Director of the
OTS, or his or her designee, at the time that the Director of the OTS, or his or
her designee approves a supervisory merger to resolve problems related to
operation of the Bank or when the Bank is determined by the Director of the OTS
to be in an unsafe or unsound condition. Such action shall not affect any vested
rights of the parties.
(3) If a notice served under Section 8(e)(3) or (g)(1) of the FDIA (12
U.S.C. 1818(e)(3) or (g)(1)) suspends and/or temporarily prohibits the Employee
from participating in the conduct of the Bank's affairs, the Bank's obligations
under this Agreement shall be suspended as of the date of such service, unless
stayed by appropriate proceedings. If the charges in the notice are dismissed,
the Bank may in its discretion (i) pay the Employee all or part of the
compensation withheld while its contract obligations were suspended, and (ii)
reinstate (in whole or in part) any of its obligations which were suspended.
(4) Any payments made to the Employee pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with 12 U.S.C.
Section 1828(k) and any regulations promulgated thereunder.
(f) Voluntary Termination by Employee. Subject to Section 12 hereof, the
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Employee may voluntarily terminate employment with the Bank during the term of
this Agreement, upon at least ninety (90) days' prior written notice to the
Board of Directors, in which case the Employee shall receive only his
compensation, vested rights and employee benefits up to the date of his
termination (unless such termination occurs pursuant to Section 10(d)(2) hereof
or within the Protected Period in Section 12(a) hereof in which event the
benefits and compensation provided for in Sections 10(d) or 12, as applicable,
shall apply).
11. No Mitigation. The Employee shall not be required to mitigate the
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amount of any payment provided for in this Agreement by seeking other employment
or otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Employee in any subsequent employment.
12. Change in Control.
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(a) Trigger Events. The Employee shall be entitled to collect the severance
benefits set forth in Subsection (b) hereof in lieu of any benefits under
Section 10 hereof in the event that (i) a Change in Control occurs, or (ii) the
Bank or its successor(s) in interest terminate the Employee's employment without
his written consent and for any reason other than Just Cause during the
Protected Period.
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(b) Amount of Severance Benefit. If the Employee becomes entitled to
collect severance benefits pursuant to Section 12(a) hereof, the Bank shall (i)
pay the Employee a severance benefit equal to the difference between the Code
Sec. 280G Maximum and the sum of any other "parachute payments" as defined under
Code Sec. 280G(b)(2) that the Employee receives on account of the Change in
Control.
Said sum shall be paid in one lump sum within ten (10) days of the later of
the date of the Change in Control and the Employee's last day of employment with
the Bank, provided that the Employee may elect at any time on or before becoming
entitled to collect benefits hereunder, to have such benefits be paid in
substantially equal installments over a period of up to 10 years. In the event
that the Employee and the Bank jointly agree that the Employee has collected an
amount exceeding the Code Sec. 280G Maximum, the parties may agree in writing
that such excess shall be treated as a loan ab initio which the Employee shall
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repay to the Bank, on terms and conditions mutually agreeable to the parties,
together with interest at the applicable federal rate provided for in Section
7872(f)(2)(B) of the Code.
(c) Funding of Grantor Trust upon Change in Control. Not later than ten
business days after a Change in Control, the Bank shall (i) deposit in a Trust
an amount equal to the Code Sec. 280G Maximum, unless the Employee has
previously provided a written release of any claims under this Agreement, and
(ii) provide the trustee of the Trust with a written direction to hold said
amount and any investment return thereon in a segregated account for the benefit
of the Employee, and to follow the procedures set forth in the next paragraph as
to the payment of such amounts from the Trust. Upon the later of the Trust's
final payment of all amounts due under the following paragraph or the date
twelve months after the Change in Control, the trustee of the Trust shall pay to
the Bank the entire balance remaining in the segregated account maintained for
the benefit of the Employee. The Employee shall thereafter have no further
interest in the Trust.
During the 12-consecutive month period after a Change in Control, the
Employee may provide the trustee of the Trust with a written notice requesting
that the trustee pay to the Employee an amount designated in the notice as being
payable pursuant to this Agreement. Within three business days after receiving
said notice, the trustee of the Trust shall send a copy of the notice to the
Bank via overnight and registered mail return receipt requested. On the tenth
(10th) business day after mailing said notice to the Bank, the trustee of the
Trust shall pay the Employee the amount designated therein in immediately
available funds, unless prior thereto the Bank provides the trustee with a
written notice directing the trustee to withhold such payment. In the latter
event, the trustee shall submit the dispute to non-appealable binding
arbitration for a determination of the amount payable to the Employee pursuant
to this Agreement, and the costs of such arbitration shall be paid by the Bank.
The trustee shall choose the arbitrator to settle the dispute, and such
arbitrator shall be bound by the rules of the American Arbitration Bank in
making his determination. The parties and the trustee shall be bound by the
results of the arbitration and, within 3 days of the determination by the
arbitrator, the trustee shall pay from the Trust the amounts required to be paid
to the Employee and/or the Bank, and in no event shall the trustee be liable to
either party for making the payments as determined by the arbitrator.
(d) Covenant Not to Compete. If the Employee voluntarily terminates
employment for any reason within thirty (30) days of the date of a Change in
Control or for Good Reason within twelve (12) months of the date of Change of
Control, or is terminated without Just Cause within twelve (12) months of the
date of the Change in Control, the Bank shall pay the Employee an amount equal
to the Employee's annual base compensation in effect on the date of the Change
in Control. Such sum shall be paid in one lump sum within ten (10) days of the
Employee's last day of employment with the Bank or successor thereto. In
consideration of the payments to be made to him under this Section 12(d), the
Employee agrees as follows:
(i) The parties recognize that the Employee's reputation and business
and personal relationships are of significant benefit to the Bank. The
parties further recognize that the Bank is in direct competition with
certain banks and other similar institutions. Therefore, the Employee
agrees that for a period of twelve (12) months following his termination of
employment he will not accept employment or serve in any capacity with any
bank, savings bank or savings and loan association, the deposits or
accounts or shares of which are insured by the Federal Deposit Insurance
Corporation, or credit union, the deposits or accounts or shares of which
are insured
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by the National Credit Union Administration or any holding company for such
bank, savings bank, savings and loan association or credit union or other
entity controlling, controlled by or under common control with such
financial institution at a principal place of employment within the
following Arkansas counties: Ouachita, Union and Columbia.
(ii) For a period of one (1) year following his termination of
employment, the Employee will not solicit or induce any person who is an
employee of the Bank, or any entity controlling, controlled by or under
common control with the Bank, or any successor to either, or any person who
was such on the date of his termination of employment, to become employed
by any other person or entity or approach any such employee for such
purpose or authorize or knowingly approve the taking of such actions by
other persons.
(iii) The Employee acknowledges that during the course of his
employment with the Bank he has and will continue to receive, obtain or
become aware of, and will have access to proprietary information, lists and
records of customers and trade secrets which are the property of the Bank
which are not known by competitors or generally by the public ("Proprietary
Information") and recognizes that such Proprietary Information to be
valuable and unique assets of the Bank, as the case may be. For a period of
three (3) years following his termination of employment, the Employee
agrees to hold the Proprietary Information in the strictest confidence and
agrees not to use or disclose any Proprietary Information, directly or
indirectly, at any time for any purpose, or to use for the Employee's
benefit or the benefit of any person or entity (other than the Bank or an
affiliate of or successor to either), any Proprietary Information, and to
use Employee's best efforts to prevent such prohibited use or disclosure by
any other persons.
(iv) The Employee hereby acknowledges that his duties and
responsibilities under this Section 12(d) are unique and extraordinary and
that irreparable injury may result to the Bank or an affiliate of or
successor to either in the event of a breach of the terms and conditions of
this Section 12(d), which may be difficult to ascertain, and that the award
of damages would not be adequate relief to the Bank or affiliate or
successor. The Employee therefore agrees that in the event of his breach of
any of the terms or conditions of this Section 12(d), the Bank or its
successor shall have the right, without posting any bond or other security,
to preliminary and permanent injunctive relief as well as damages and an
equitable accounting of all earnings, profits and other benefits arising
from such violation, which rights shall be cumulative and in addition to
any other rights or remedies in law or equity to which it may be entitled
against the Employee. If at the time of the enforcement of any provision of
this Section 12(d) a court shall hold that the period or scope of the
provisions thereof are unreasonable under the circumstances then existing,
the parties hereby agree that the maximum period or scope under the
circumstances shall be substituted for the period or scope stated in such
provision.
13. Indemnification. The Bank agrees that its Bylaws shall continue to
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provide for indemnification of directors, officers, employees and agents of the
Bank, including the Employee during the full term of this Agreement, and to at
all times provide adequate insurance for such purposes.
14. Reimbursement of Employee for Enforcement Proceedings. In the event
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that any dispute arises between the Employee and the Bank as to the terms or
interpretation of this Agreement, whether instituted by formal legal proceedings
or otherwise, including any action that the Employee takes to defend against any
action taken by the Bank, the Employee shall be reimbursed for all costs and
expenses, including reasonable attorneys' fees, arising from such dispute,
proceedings or actions, provided that the Employee obtains either a written
settlement or a final judgement by a court of competent jurisdiction
substantially in his favor. Such reimbursement shall be paid within ten (10)
days of Employee's furnishing to the Bank written evidence, which may be in the
form, among other things, of a cancelled check or receipt, of any costs or
expenses incurred by the Employee.
15. Federal Income Tax Withholding. The Bank may withhold all federal and
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state income or other taxes from any benefit payable under this Agreement as
shall be required pursuant to any law, government regulation or ruling.
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16. Successors and Assigns.
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(a) Bank. This Agreement shall not be assignable by the Bank, provided that
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this Agreement shall inure to the benefit of and be binding upon any corporate
or other successor of the Bank which shall acquire, directly or indirectly, by
merger, consolidation, purchase or otherwise, all or substantially all of the
assets of the Bank.
(b) Employee. Since the Bank is contracting for the unique and personal
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skills of the Employee, the Employee shall be precluded from assigning or
delegating his rights or duties hereunder without first obtaining the written
consent of the Bank; provided, however, that nothing in this paragraph shall
preclude (i) the Employee from designating a beneficiary to receive any benefit
payable hereunder upon his death, or (ii) the executors, administrators, or
other legal representatives of the Employee or his estate from assigning any
rights hereunder to the person or persons entitled thereunto.
(c) Attachment. Except as required by law, no right to receive payments
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under this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation or to exclusion,
attachment, levy or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.
17. Amendments. No amendments or additions to this Agreement shall be
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binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.
18. Applicable Law. Except to the extent preempted by federal law, the laws
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of the State of Arkansas shall govern this Agreement in all respects, whether as
to its validity, construction, capacity, performance or otherwise.
19. Severability. The provisions of this Agreement shall be deemed
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severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
20. Entire Agreement. This Agreement, together with any understanding or
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modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto and shall supersede any prior
agreement between the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first hereinabove written.
ATTEST: HEARTLAND Community Bank
/s/ Paula J. Bergstrom /s/ Vida H. Lampkin
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Secretary Its Chairman of the Board
WITNESS:
/s/ Paula J. Bergstrom /s/ Charles T. Black
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Charles T. Black
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