Exhibit 10.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT, is entered into as
of June 17, 2008, by and between Peoples State Bank, Wausau,
Wisconsin, a Wisconsin banking corporation, (“the
Bank”), and Peter W. Knitt (“Mr. Knitt”).
WITNESSETH:
WHEREAS, the Bank and Mr. Knitt initially entered into an
employment agreement dated June 30, 2006.
WHEREAS, the Company and Mr. Knitt now desire to amend and restate
the employment agreement in its entirety by setting forth the terms
and conditions of their agreements and understandings in this
Amended and Restated Employment Agreement
(“Agreement”), which shall replace and supercede the
initial employment agreement effective as of the date first written
above.
NOW, THEREFORE, in consideration of the premises, covenants, and
mutual agreements contained herein, the Bank and Mr. Knitt agree as
follows:
1.
Employment . Subject to the earlier termination of
this agreement pursuant to the terms hereof, Mr. Knitt is hereby
employed on the Commencement Date (as defined below) as the
President and CEO of the Bank; provided , however ,
that, prior to a Change of Control, Mr. Knitt may be employed in
such other capacity as the Board of Directors of the Bank shall
deem appropriate and in the best interests of the Bank. Mr.
Knitt agrees to serve in such capacity or capacities on the terms
and conditions hereinafter set forth.
2.
Term . The term of this agreement commenced on July 1,
2006 (the “Commencement Date”) and shall end at
midnight on the Expiration Date, except as otherwise provided in
paragraph 8(a) hereof. The term “Expiration Date”
shall mean the first to occur of (a) the date of Mr. Knitt’s
death, or (b) the later of (i) the third anniversary of the
Commencement Date and (ii) the date to which the term of this
agreement has most recently been extended pursuant to the following
sentence. On the third and each subsequent anniversary of the
Commencement Date the term of this agreement shall automatically be
extended for one calendar year; provided , however ,
that automatic extensions of the term of this agreement (and,
consequently, the Expiration Date) pursuant to this sentence shall
cease on the first to occur of (x) either the Bank or Mr. Knitt
giving to the other, at any time on or after the Commencement Date,
a written notice that no, or no further, as the case may be,
automatic extensions of the term of this agreement shall thereafter
occur, but the giving of such a notice shall not affect any
previous extensions, or (y) Mr. Knitt’s 64th birthday.
For all purposes of this Agreement other than as provided in
paragraph 8(a) hereof, the term “Term of Employment”
shall mean the period beginning on the Commencement Date and ending
on the earlier of the Expiration Date or the date on which Mr.
Knitt’s employment is terminated hereunder.
3.
Extent of Services . Mr. Knitt agrees to devote his
full-time attention and efforts (except during vacation periods,
periods of illness, and other approved absences as provided for in
paragraph 4(g)) to the duties of any office held by him during the
Term of Employment; provided, however, that Mr. Knitt’s
devotion of a reasonable and de minimis portion of his attention or
efforts to the management of his personal affairs during normal
business hours shall not constitute a breach of the foregoing
requirement.
4.
Compensation and Reimbursement .
(a)
Salary . The Bank shall pay to Mr. Knitt a salary
based on an annual amount of $218,400. The Bank may increase
Mr. Knitt’s salary from the amount specified herein during
the Term of Employment, but may not decrease Mr. Knitt’s
salary from any previously established amount. Mr.
Knitt’s salary shall be payable at such times and in such
installments as are consistent with the manner in which the
salaries of other executive officers of the Bank are paid.
(b)
Incentive Compensation . During the Term of
Employment, Mr. Knitt shall be entitled to receive such additional
compensation from the Bank as may be provided for officers under
the terms of any incentive program from time to time maintained and
in effect at the Bank for the President and CEO.
(c)
Automobile . The Bank shall furnish an automobile for
Mr. Knitt’s business use during the Term of Employment.
The Bank shall have sole discretion of the model and year of
such automobile, but such automobile shall be at least commensurate
with other automobiles provided to other executive officers of the
Bank and, for the initial term of this agreement, shall be
comparable to a vehicle provided for his immediate predecessor in
office as President and CEO of the Bank
(d)
Club Memberships . During the Term of Employment, the
Bank shall provide Mr. Knitt with a social membership at the Wausau
Country Club.
(e)
[INTENTIONALLY LEFT BLANK].
(f)
Deferred Compensation . The Bank will not terminate,
with respect to future deferrals or Bank contributions, that
certain Amended and Restated Executive Deferred Compensation
Agreement dated as of December 31, 2007 and entered into by the
Bank and Mr. Knitt, prior to January 1, 2009.
(g)
Other Benefits . During the Term of Employment, Mr.
Knitt shall be
entitled to receive all benefits and perquisites ordinarily
provided to executive officers of
the Bank including coverage under an officer’s and
director’s liability insurance policy,
and Mr. Knitt shall participate in all employee benefit plans or
fringe benefit programs
now or hereafter established or maintained by the Bank including,
but not limited to,
group insurance plans, pension benefit plans, welfare benefit
plans, pay practices, and
vacation and sick leave benefits, except to the extent Mr. Knitt is
then participating in a separately negotiated plan or program.
Mr. Knitt shall be entitled to participate in all
plans or programs maintained by the Bank on terms no less favorable
than those
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generally available to officers of the Bank and at a level of
participation commensurate with his office.
(h)
Expenses . The Bank shall pay or reimburse Mr. Knitt,
upon submission of receipts by him, for all entertainment, travel,
meal, hotel accommodation, and miscellaneous expenses reasonably
incurred by him in the interest of the Bank’s business during
the Term of Employment.
5.
Termination of Employment .
(a)
Termination by the Bank for Good Cause . The Bank may
terminate Mr. Knitt’s employment prior to the Expiration
Date for good cause only upon compliance with the requirements of
this paragraph 5(a). “Good cause” for termination
of Mr. Knitt’s employment by the Bank shall consist only of
one or more of (i) the commission of an act or acts by Mr. Knitt
which results in a payment to the Bank or to PSB Holdings, Inc.,
the parent company of the Bank (“PSB”) of a claim filed
by the Bank or PSB under a fidelity bond policy as from time to
time and at any time maintained; (ii) the willful and continuing
failure to perform his duties in accordance with standards or
policies established, from time to time, or at any time, by the
Bank, after a written demand for substantial performance is
delivered to Mr. Knitt by the Board which specifically identifies
the manner in which the Board believes that Mr. Knitt has not
substantially performed his duties; (iii) the commission by Mr.
Knitt of any crime of moral turpitude, of dishonesty, of breach of
trust, of theft, of embezzlement, of misapplication of funds, of
unauthorized issuance of obligations or of false entries; (iv) any
intentional, reckless, or negligent act or omission to act by Mr.
Knitt which results in the violation by Mr. Knitt of any policy
established by the Bank which is designed to insure compliance with
applicable banking, securities, employment discrimination, or other
laws or which causes or results in the Bank’s violation of
such laws, or any violation of an employment policy maintained by
the Bank and applicable to all other employees (for example,
employment policies relating to the use of drugs or alcohol) and
which, by the terms of such policy, is grounds for termination of
employment, except any act done by Mr. Knitt in good faith, as
determined in the reasonable discretion of the Board of Directors
of the Bank, or which results in a violation of such policies or
law which is, in the reasonable sole discretion of such Board,
immaterial; or (v) Mr. Knitt’s physical or mental disability,
if such disability either results in Mr. Knitt receiving permanent
disability payments pursuant to any group disability insurance
policy or prevents Mr. Knitt from the normal performance of his
duties for a continuous period of at least six months. Upon
the occurrence of any event constituting good cause for which the
Bank elects to terminate Mr. Knitt’s employment prior to the
Expiration Date, the Bank shall provide written notice to Mr.
Knitt, which shall state the good cause for termination, and Mr.
Knitt’s termination of employment shall be effective as of
the date specified in such notice. In the event of
termination of Mr. Knitt’s employment in accordance with the
conditions of this paragraph (a), on the effective date of Mr.
Knitt’s termination of employment, the Term of Employment
shall end, all of Mr. Knitt’s obligations pursuant to this
agreement (except for those provided in paragraphs 6 and 7) shall
end, and the Bank’s obligations to pay compensation or
provide benefits to Mr. Knitt pursuant to paragraph 4 shall
end.
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(b)
Termination by the Bank Other Than for Good Cause .
The Bank may terminate Mr. Knitt’s employment prior to
the Expiration Date for any reason other than good cause (as
defined in paragraph 5(a)) upon providing written notice to Mr.
Knitt specifying the effective date of Mr. Knitt’s
termination of employment. If the Bank terminates Mr.
Knitt’s employment other than for good cause under paragraph
5(a), the Term of Employment and all of Mr. Knitt’s
obligations pursuant to this agreement (except for those provided
in paragraphs 6 and 7) shall end on the effective date of
Mr. Knitt’s termination of employment and the Bank shall
provide, for a period beginning on the effective date of Mr.
Knitt’s termination of employment, as a severance benefit to
Mr. Knitt and as liquidated damages for breach by the Bank of its
otherwise applicable obligations hereunder, (i) for a period of 12
months beginning on the first day of the first month following Mr.
Knitt’s termination of employment a monthly cash payment
equal to 110% of the amount which would, except for Mr.
Knitt’s termination of employment, have been paid to Mr.
Knitt, if then living, as salary under paragraph 4(a) and (ii)
until Mr. Knitt becomes eligible for coverage under the health
insurance plan of another employer of Mr. Knitt, coverage for
Mr. Knitt, under the same terms then available to executive
officers of the Bank, under any group health insurance program in
which Mr. Knitt was a participant on the effective date of Mr.
Knitt’s termination of employment, or under such successor
plan or program as maintained after such date for the benefit of
the Bank’s employees, but in no event longer than the period
for which payments are made pursuant to clause (i). Mr. Knitt
shall not, by virtue of his severance benefit and liquidated
damages rights, acquire any right, title, or interest in particular
assets of the Bank, and such rights shall be no greater than the
right of any unsecured general creditor of the Bank. Despite
any other provision of this agreement, Mr. Knitt shall not be
entitled to any severance benefit or liquidated damages, and the
Bank shall not be obligated to pay any such benefit or damages, if
Mr. Knitt violates the provisions of paragraph 6 or 7.
(c)
Termination by Mr. Knitt . Mr. Knitt may terminate his
employment at any time upon providing 30 days prior written notice
to the Bank stating the effective date of his termination. In
any such event, all obligations of the Bank to Mr. Knitt under this
agreement and all obligations of Mr. Knitt to the Bank (except
those provided for in paragraphs 6 and 7) shall cease and the Term
of Employment shall end on the effective date of Mr. Knitt’s
termination of employment.
(d)
Section 409A Considerations . This paragraph 5(d)
shall apply in the event the Bank determines, in good faith, that
payment of severance benefits pursuant to this paragraph or
paragraph 8(d) are subject to the provisions of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”).
For purposes of Mr. Knitt’s
entitlement to any severance benefit pursuant to paragraph 5(b) or
8(b), Mr. Knitt shall be deemed to have incurred a termination of
employment with the Bank only on such date on which his employment
has been terminated by the Bank, each other member of the
controlled group of corporations of which the Bank is a member, and
each other entity
under common control with the Bank, and has thereby incurred a
separation from service
(a “Separation from Service”) within the meaning of
Code Section 409A(a)(2)(A) and the applicable regulations
promulgated thereunder. Notwithstanding any other provision
of
this agreement to the contrary, in no event shall the severance
benefit to which Mr. Knitt
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may become entitled under the terms of paragraph 5(b) or 8(d) be
paid to Mr. Knitt until the date on which he has incurred a
Separation from Service; provided , however , that in
the event Mr. Knitt was a Key Employee as of the date of his
Sep
