Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of
October 27, 1999, by and between JOCK BROWN ("Executive") and FIRST NATIONAL
BANK OF OTTAWA, an Illinois banking institution (the "Bank") and FIRST OTTAWA
BANCSHARES, INC. (the "Holding Company") (the Bank and the Holding Company
shall collectively be referred to as the "Corporation," which shall be deemed
to include any affiliate or related entity of the Bank or the Holding Company
whether currently in existence or later created or acquired), the terms of
which are as follows:
1. EMPLOYMENT TERM. Subject to the terms and conditions set forth herein,
including Section 9, the Corporation will employ Executive for a term
commencing on November 1, 1999, and ending on October 31, 2002 (the
"Employment Term").
2. EMPLOYMENT DUTIES. During the Employment Term, Executive will serve as
President and Chief Officer of the Bank and the Holding Company,
subject to the terms of this Agreement and to the direction of the
Board of Directors of the Corporation (the "Board"), and to the
direction of the Chairman of the Board (the "Chairman"). Executive
shall, during the Employment Term, perform such duties commensurate
with his position and title as are reasonable and customary, including,
but not limited to personnel and expense occasions, pricing, loan
approval, etc. and shall, on a full-time basis, serve the Corporation
faithfully, diligently and competently and to the best of his ability.
Executive shall serve as a member of the Board of Directors of the Bank
and the Holding Company (a "Director"), and as an ex-officio member of
each committee of each of such Boards, excepting audit committee.
3. COMPENSATION. In exchange for Executive's services as President and
Chief Executive Officer and as a Director, Executive shall be
compensated as follows:
(a) The Corporation shall pay Executive an annual base salary of
$180,000 (the "Base Salary"), which amount shall be deemed to
be inclusive of any and all fees normally paid to Directors.
The Base Salary shall be adjusted on January 1, 2001 and
annually thereafter to the greater of the previous year's Base
Salary or the average of the third quartile for a president
and chief executive officer of an independent bank for
similarly-situated institutions in Illinois as reported in the
most recent Illinois Banker's Association Annual Survey. The
Base Salary shall be payable in accordance with the
Corporation's ordinary payment practices and shall be subject
to withholding and employment taxes.
(b) The Corporation will establish an employee bonus plan in which
the Executive will participate, for calendar year 2000 and
thereafter. The plan will be similar to a stock appreciation
rights plan, to consist of 150,000
phantom shares. Employees will receive annual bonuses based on
the appreciation in book value of those shares. Executive
shall be a participant in the "Impact Group" for allocation of
those bonuses, the "Impact Group" shall be entitled an
allocation of 50% of the total, and Executive shall receive
and shall be entitled to 50% of the "Impact Group" allocation.
The Corporation may adjust the allocation, as necessary, to
accommodate non-operating fluctuations in book value.
(c) The Corporation shall arrange for and pay all reasonable
moving expenses for Executive and his wife's relocation to the
Ottawa, Illinois area, which move shall be completed by July
1, 2000.
(d) The Corporation shall make available to Executive, for
purchase within twelve (12) months of the date hereof, up to
4,000 shares of common stock of the Holding Company at fair
market value.
4. BENEFITS.
(a) Executive also shall be entitled to participate in all
coverages, including life, health, and disability insurance
and employee benefit plans and programs as offered from time
to time to executive officers of the Corporation or to
directors. Executive's and his dependents' participation in
any such plan or program shall be subject to the provisions,
rules, regulations and laws applicable thereto.
(b) Executive shall be entitled to paid vacation in accordance
with Corporation policies applicable to its executive
officers, during each twelve (12) month period of the
Employment Term and any extension thereof.
(c) The Corporation shall provide Executive with a monthly
automobile allowance of $600.00 through the Employment Term
and any extension thereof.
(d) The Corporation shall pay reasonable expenses related to
Executive's participation in business and business-related
social events and for such club, community and professional
association dues and expenses that Executive and the Chairman
agree are in the best interests of the Corporation, including,
but not limited to, the CEO Network Program.
(e) The Board shall consider the adoption of an employee stock
option plan in which Executive would be allowed to
participate.
5. RESTRICTIVE COVENANTS. Executive acknowledges and agrees that in the
course of his employment he will learn valuable trade secrets and other
proprietary information, and that the Corporation would be irreparably
damaged if Executive were to use or disclose such information and/or to
provide services to any person or entity in violation of the
restrictions contained in this Agreement. Accordingly,
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Executive agrees that duing the term of this Agreement and for twelve
(12) months thereafter (the "Restricted Period"), Executive shall not,
directly or indirectly, either for himself or for any other person or
entity:
(a) engage or participate in any activity or business, or assist,
advise or be connected with (including as an employee, owner,
partner, shareholder, officer, directs, advisor, consultant,
agent or otherwise), or permit his name to be used by or
otherwise render services, directly or indirectly, for any
person or entity which directly competes with the Corporation
and which has a facility located within twenty (20) miles of
any facility of the Corporation or within twenty (20) miles of
any facility that the Corporation plans to acquire, merge
with, or establish within the twelve (12)- month period
following Executive's termination of employment, the location
of such future facilities are identified to Executive in
writing by the Corporation within sixty (60) days following
Executive's termination (a "Competitor");
(b) solicit or attempt to solicit business from any customer of
the Corporation with which Executive has had contact during
the six (6) months prior to Executive's termination of
employment with the Corporation for the purpose of having such
customer or other business relation of the Corporation to
cease doing business with the Corporation; or
(c) solicit or attempt to solicit any officer, employee or
agent of the Corporation who is an officer, employee or agent
of the Corporation as of the effective date of Executive's
termination to cease employment or association with the
Corporation.
6. CONFIDENTIAL INFORMATION. Executive recognizes that, as a result of his
employment by the Corporation, he will gain possession of Confidential
Information as defined below. Accordingly, Executive agrees as follows:
(a) Executive shall not at any time during or after termination of
this Agreement, in any form or manner, whether directly or
indirectly, disclose or communicate any Confidential
Information to any third party, or otherwise utilize any
Confidential Information for Executive's benefit or for the
benefit of any third party. For purposes of this Agreement,
"Confidential Information" shall include, any financial data,
business plans and strategies, and lists of actual or
potential customers of the Corporation and information
concerning relationships therewith, any of which (i) derives
independent economic value, actual or potential, from not
being generally known to the public and (ii) is the subject of
efforts that are reasonably under the circumstances to
maintain its secrecy. "Confidential information" shall also
include any information concerning a third party that has been
disclosed to the Corporation in confidence which the
Corporation has an obligation to treat as confidential.
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(b) Executive shall, immediately following a request from the
Corporation, return to the Corporation, without retaining
copies, all tangible items of Corporation property which are
or which contain Confidential Information. Executive shall
destroy any Confidential Information stored in electronic,
magnetic, or other mechanical medium.
7. SPECIFIC PERFORMANCE. Executive agrees that any violation by him of
Section 5 or 6 of this Agreement, as applicable, would be highly
injurious to the Corporation and would cause irreparable harm to the
Corporation. By reason of the foregoing, Executive consents and agrees
that if he violates any provision of Section 5 or 6 of this Agreement,
the Corporation shall be entitled, in addition to any other rights and
remedies that it may have, to apply to any court of competent
jurisdiction for specific performance and/or injunctive or other
equitable relief in order to enforce, or prevent any continuing
violation of, the provisions of such Section. In the event Executive
breaches Section 5 of this Agreement, the Restricted Period shall be
extended to include the period of such breach.
8. ENFORCEMENT. Executive acknowledges that the territorial, time and
scope limitations set forth in Sections 5 and 6, as applicable, are
reasonable and are properly required for the protection of the
Corporation and in the event that any such territorial, time or scope
limitation is deemed to be unreasonable by a court of competent
jurisdiction, the Corporation and Executive agree, and Executive
submits, to the reduction of any or all of said territorial, time or
scope limitations to such an area, period or scope as said court shall
deem reasonable and enforceable under the circumstances.
9. TERMINATION; SEVERANCE. Notwithstanding the provisions of Section 1 and
the other provisions of this Agreement, Executive's employment with the
Corporation and this Agreement may be terminated prior to the
expiration of the Employment Term or any extension thereof:
(a) by the Board at any time for "cause," which shall be defined
as (i) Executive's conviction for, or plea of nolo contendere
to, a felony or crime involving moral turpitude; (ii)
Executive's commission of an act involving self-dealing, fraud
or personal profit that is injurious to the Corporation; (iii)
Executive's commission of an act of willful and wanton
misconduct of his duties hereunder; and (iv) Executive's
breach of any material provision of this Agreement. Any
termination by the Corporation under this Section 9(a) shall
be in writing. In the event of termination under this Section
9(a), the Corporation's obligations under this Agreement and
this Agreement shall cease, except that Executive shall be
entitled to his Base Salary for services performed through the
date of such termination.
(b) by the Board at any time, without cause, upon ninety (90)
days' written notice to Executive. In the event of termination
pursuant to this Section 9(b), Executive shall be entitled to
his Base Salary and all other compensation and benefits for
the remainder of the Employment Term.
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(c) in the event of Executive's death or "total disability", which
for purposes of this Section 9(c) shall be defined as
Executive's inability to perform the essential functions of
his job, with or without reasonable accommodation, due to
illness, injury or other physical or mental incapacity, for a
period of ninety (90) or more days in any twelve (12) month
period.
(d) by Executive or the Board in the event Executive elects to
resign or the Board terminates Executive's employment within
ninety (90) days of a "change of control", which for purposes
of this Section 9(d) shall be defined as: (i) the acquisition
by one or more persons or entitles of 50% or more of the
outstanding capital stock of the corporation or of all or
substantially all of the Corporation's assets within a twelve
(12) month period; (ii) any other transaction or series of
transactions the result of which is the loss of control of the
Corporation of the Bank or the Holding Company by its current
shareholders. In the event of Executive's termination pursuant
to this Section 9(d), Executive shall be entitled to receive
his Base Salary and all other compensation and benefits for
the remainder of the Employment Term, including any extension
thereof.
10. PRIOR BUSINESS RELATIONSHIPS. Executive represents that there are no
claims or actions, whether pending, threatened or potential, with
respect to any of his prior employment, independent contractor or other
business relationships that prevent him, or that would prevent him,
from carrying out his duties under this Agreement or that subjects the
Corporation to any potential or actual liability. Executive agrees and
understands that any such claim or action shall be reviewed by the
Board and may be grounds for his termination of employment.
Notwithstanding the foregoing, this Section 10 shall not prevent the
Corporation from pursuing any other remedy available at law or in
equity.
11. MISCELLANEOUS.
(a) All notices hereunder shall be in writing and shall be deemed
given when delivered in person or when telecopied with hard
copy to follow, or three business days after being deposited
in the United States mail, postage prepaid, registered or
certified mail, or two business days after delivery to a
nationally recognized express courier, expenses prepaid,
addressed as follows:
If to Executive:
Jock Brown
231 S. 7th
La Grange
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If the Corporation:
and/or at such addresses as may be designated by notice given
in accordance with the provisions hereof.
(b) This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, successors
and permitted assigns. No party shall assign this Agreement or
its rights hereunder without the prior written consent of the
other party hereto; provided, however, that the Corporation
will require any person or entity acquiring all or
substantially all of the business of the Corporation (whether
by sale of stock, sale of assets, merger, consolidation or
otherwise) to assume its obligations pursuant to this
Agreement upon closing.
(c) This Agreement contains all of the agreements between the
patties with respect to the subject matter hereof and this
Agreement supersedes all other agreements, oral or written,
between the parties hereto with respect to the subject matter
hereof.
(d) No change or modification of this Agreement shall be valid
unless the same shall be in writing and signed by the parties
hereto. No waiver of any provision of this Agreement shall be
valid unless in writing and signed by the waiving party. No
waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision,
nor shall any waiver constitute a continuing waiver, unless so
provided in the waiver.
(e) If any provision of this Agreement (or portion thereof) shall,
for any reason, be considered invalid or unenforceable by any
court of competent jurisdiction and such provision is not
subject to revision pursuant to Section 9, such provision (or
portion thereof) shall be ineffective only to the extent of
such invalidity or unenforceability, and the remaining
provisions of this Agreement (or portions thereof) shall
nevertheless be valid, enforceable and of full force and
effect.
(f) The section headings or titles herein are for convenience of
reference only and shall not be deemed a part of this
Agreement.
(g) This Agreement shall be governed and controlled as a validity,
enforcement, interpretation, construction, effect and in all
other respects by the laws of the State of Illinois applicable
to contracts made in that State (other than any conflict of
laws rule which might result in the application of the laws of
any other jurisdiction).
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The parties have executed this Agreement on the date first above
written.
FIRST NATIONAL BANK OF OTTAWA
(the "Bank")
/s/ W.J. Walsh
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(the "Holding Company")
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EXECUTIVE
/s/ Jock Brown
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JOCK BROWN
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