This
Employment Agreement (the “ Agreement ”) is
made and entered into effective as of January 1, 2008 (“
Effective Date ”), by and between Mercantile Bancorp,
Inc., a Delaware corporation (“ Company ”), with
its principal office located at Quincy, Illinois, and Ted T.
Awerkamp, of Quincy, Illinois (“ Employee
”).
A. Company is
a bank holding company.
B. Employee
is currently employed by Company, pursuant to the terms of an
employment agreement dated March 1, 2007 (the “ Prior
Employment Agreement ”), in the position of President and
Chief Executive Officer of Company.
C. Company
desires to continue the employment of Employee in the position of
President and Chief Executive Officer of Company on the terms,
covenants and conditions set forth in this Agreement.
D. Employee
desires to continue in the employ of Company in the position of
President and Chief Executive Officer of Company on the terms,
covenants and conditions set forth in this Agreement.
E. Company
and Employee desire to enter into this Agreement as of the
Effective Date and this Agreement shall supersede all of the terms
and conditions of all prior employment terms and conditions,
whether or not in writing, including the Prior Employment Agreement
and any such prior employment agreement shall become null and void
as of the Effective Date, and the parties thereunder shall have no
rights or interests therein.
NOW,
THEREFORE, in consideration of the premises and of the
covenants and agreement hereinafter contained, it is covenanted and
agreed by and between the parties hereto as follows:
1.1 Company
Employs Employee. Company hereby employs Employee as President
and Chief Executive Officer of Company. All duties or
responsibilities hereunder taken or performed by Employee pursuant
to this Agreement shall be subject to the direction, supervision
and control of the Board of Directors of Company. Employee shall be
obligated as part of his duties to be a director of the Company (if
elected by the Company’s stockholders) and a director of such
Subsidiaries as the Company’s Board of Directors shall
determine from time to time. For the purposes of this Agreement,
“ Subsidiary ” is defined as any entity in which
the Company has voting control of at least fifty percent (50%) of
such entity’s voting stock.
1.2 Employee
Accepts Employment. Employee hereby accepts employment with
Company as President and Chief Executive Officer and agrees that he
will at all times faithfully, industriously, and to the best of his
ability, experience and talents, perform all of the duties that may
be required of and from him pursuant to the express and implicit
terms of this Agreement, to the reasonable satisfaction of
Company.
ARTICLE II
TERM OF EMPLOYMENT
2.1 Term.
The initial term of this Agreement shall be for the period
beginning on January 1, 2008 and ending on February 28,
2010 (the “ Term ”). This Agreement shall be
reviewed annually by the Company and Employee no later than
February of each year and a determination will be made at such time
whether to extend the Term of the Agreement for an additional one
(1) year (with any such extension(s) of the Term also referred
to as the “ Term ”). For example, when the
Agreement is reviewed in February 2008, if the decision is to
extend the Term for an additional one (1) year, the Term will
then be three (3) years commencing March 1, 2008. If, in
the annual review process by the Company and Employee, there is no
offer by the Company to extend the Term of the Agreement for an
additional year, the Employee may terminate the Agreement under
Section 5.4 with a sixty (60) day prior written
notice.
3.1 Salary.
Company shall pay Employee a base salary of Three Hundred
Twenty-five Thousand and 00/100 Dollars ($325,000.00) annually,
payable in accordance with Company’s normal payroll
practices, to be prorated in any partial year of employment with
Company. Company shall withhold from all compensation any
applicable withholding and payroll taxes and such other amounts as
required by law. No additional compensation shall be paid to
Employee for his service as a director of the Company or any of its
Subsidiaries.
3.2 Incentive
Bonus. In addition to the base salary as provided in
Section 3.1 above, Company shall pay Employee an annual
incentive bonus in an amount up to forty percent (40%) of base
salary in accordance with the incentive compensation plan
established by the Compensation Committee and Board of Directors of
Company during 2007. The bonus shall be prorated for any partial
year. Further, Employee must be employed on December 31 of
each year to be entitled to a bonus for such year.
3.3
Automobile. Company shall provide Employee with a leased
automobile from a customer of Mercantile Trust & Savings Bank,
to be used by Employee in his capacity as President and Chief
Executive Officer of Company.
3.4 Country
Club Membership and Dues. Company shall provide to Employee a
membership in a country club located in the Quincy, Illinois area
and shall pay annually the dues and any assessment for such
membership.
3.5 Business
Expenses. During the Term, Company shall reimburse Employee for
reasonable business expenses incurred by Employee in the
performance of his duties under this Agreement.
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3.6
Benefits. As an employee of Company, Employee shall, upon
meeting any applicable eligibility and enrollment requirements, be
entitled to participate in and receive such benefits, including but
not limited to, health and retirement plans, which shall be no less
beneficial to Employee than those offered to other employees of
Company from time to time.
4.1 Suspension
of Agreement. If, during the period of this Agreement, Employee
becomes disabled in accordance with the definition of being
disabled as set forth in Section 409A(a)(2)(C) of the Internal
Revenue Code of 1986, as amended (the “ Code ”),
Company may suspend this Agreement during the period of such
disability by giving notice to Employee of its intention to suspend
due to disability, subject to the following:
(a) This
Agreement shall thereupon be suspended as of the end of the month
in which such notice was given and shall continue to be suspended
until Employee is no longer suffering such disability. The
determination of Employee’s disability, and recovery
therefrom, will be made by a physician mutually acceptable to
Company and Employee. The opinion of such physician shall be in
writing and shall be given to Company and Employee.
(b) If
during any time of Employee’s disability that he is eligible
for and is receiving disability income payments from
Company’s disability income insurance carrier, such payments
are less than sixty percent (60%) of the sum of the annual base
salary he was receiving from Company immediately prior to his
disability and the amount of any incentive bonus pursuant to
Section 3.2 Employee received within the last twelve
(12) months prior to his disability, Company shall pay
Employee an amount which, when added to the gross payments (before
any deductions) received by Employee from Company’s
disability insurance carrier, will result in the Employee receiving
from Company and Company’s disability insurance carrier an
annual sum equal to sixty percent (60%) of the sum of his annual
base salary immediately prior to his disability and the amount of
any incentive bonus pursuant to Section 3.2 Employee received
within the last twelve (12) months prior to his disability.
Such payment from Company shall be due Employee for as long as
Employee is eligible to receive disability income payments from
Company’s disability insurance carrier. When Employee is no
longer eligible to receive such disability income payments from the
insurance carrier, any obligation for an additional payment from
Company shall terminate.
ARTICLE V
TERMINATION OF AGREEMENT
5.1 Death.
In the event of the death of Employee during the Term hereof, this
Agreement shall terminate at the end of the month during which
Employee dies and Company shall have no further obligation
hereunder.
5.2 Termination
for Cause. Company may terminate Employee’s employment
under the terms of this Agreement upon the occurrence of any one of
the following events (each such event being hereinafter referred to
as “ Cause ”):
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(a) The
conviction of Employee of any crime punishable as a felony or a
crime involving moral turpitude or immoral conduct;
(b) An
embezzlement or misappropriation by Employee of funds of Company or
any of its Subsidiaries;
(c) Employee
committing an unauthorized act to aid or abet a competitor of
Company or any of its Subsidiaries;
(d) Employee
being removed by order of a regulatory agency having jurisdiction
over Company or any of its Subsidiaries; and
(e) For
Cause thirty (30) days after written notice by Company to
Employee and failure to cure by Employee within such thirty
(30) day period, or if not capable of cure within such time
period, failure by Employee to promptly commence cure and proceed
with continuity and diligence to cure, due to: (i) material
breach of any provision of this Agreement; (ii) failure or
neglect to perform the duties of his position as President and
Chief Executive Officer; (iii) failure to comply with
Company’s rules and policies or the code of conduct of
Company or any of its Subsidiaries; (iv) misconduct in connection
with performance of any of Employee’s duties; or
(v) commission of an act involving moral turpitude,
dishonesty, theft or unethical business conduct, or other
misconduct that impairs or injures the reputation of Company or any
of its Subsidiaries.
5.3 Effect of
Termination Under Section 5.1 or 5.2. In the event of
Employee’s death or that Company terminates this Agreement
for Cause, Company shall be obligated to pay Employee his
compensation only until the end of the month during which Employee
dies or his employment is terminated for Cause.
5.4 Termination
Without Cause. Except as provided in Section 2.1, either
Company or Employee may terminate this Agreement without Cause by
providing to the other party six (6) months prior written
notice.
(a)
Termination by Employee . If Employee terminates this
Agreement for any reason, Employee shall be obligated to continue
to perform his duties under this Agreement during the six
(6) months (except, only sixty (60) days if
Section 2.1 applies) following delivery of his termination
notice. If Employee so terminates this Agreement, Employee shall
not be entitled to compensation hereunder after the date Employee
ceases the performance of his duties under this
Agreement.
(b)
Termination by Company .
(i) If
Company terminates this Agreement for any reason other than Cause,
Employee shall not be obligated thereafter to perform his duties
hereunder, but Company shall be obligated to pay an amount equal to
the amount of Employee’s base salary and benefits (except
automobile and country club), including, without limitation, the
amount paid to Employee for the incentive bonus provided in
Section 3.2 for the last calendar year preceding termination
of employment, that would have been due to Employee had he remained
employed by the Company for the remainder of the Term (the “
Severance Amount ”); provided,
however,
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that such
Severance Amount shall in no event be calculated based on a period
of
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