DEFERRED COMPENSATION AGREEMENT
This DEFERRED COMPENSATION AGREEMENT (the "Agreement") is
entered into as of the 10th day of February, 2009, by and between
Denmark State Bank, a Wisconsin corporation ("the Bank"), and Carl
T. Laveck ("the Employee"), an adult resident of the State of
Wisconsin.
W I T N E S S E T H :
WHEREAS, the Bank values the Employee's knowledge, experience,
relationships and skills, and desires to retain the Employee's
services for a period of time, and
WHEREAS, the Bank and the Employee are willing to enter into
this Agreement in order to provide incentives to the Bank and to
the Employee to continue the employment relationship as described
below,
NOW, THEREFORE, in consideration of the mutual promises
hereinafter set forth, the Bank and the Employee do promise and
agree as follows:
ARTICLE I
DEFERRED COMPENSATION AGREEMENT
A. Covenant of Future Services by Employee . The Employee
agrees that, from the date of this Agreement until January 1, 2014
(the "Contract Term"), he will continue to work on a full-time
basis for the Bank in his current role and will provide such
employment, information, consultation, assistance and services to
the Bank as the Bank may from time to time reasonably request. In
addition, the Employee agrees that, during his employment and
following the conclusion of his employment with the Bank
(regardless of the reason or circumstances), he will continue to
fulfill his obligations under Article IV of this Agreement.
B. Deferred Compensation . In exchange for the
consideration set forth in this Agreement, the Bank will award the
Employee a Stay Bonus of up to $125,000.00 (the "Deferred
Compensation"). It is the intent of the parties that such Deferred
Compensation be paid in addition to the Employee's regular salary
and employee benefits.
ARTICLE II
CONDITIONS PRECEDENT
Except as provided in paragraphs B., C., and D. of Article III,
below, the Employee's right to receive the Deferred Compensation is
contingent upon the following conditions precedent:
-
The
Employee must continue to be employed by the Bank through January
1, 2010, whereupon the Employee will earn the right to receive
$25,000.00 pursuant to the schedule described in Article III
below.
-
The
Employee must continue to be employed by the Bank through January
1, 2011, whereupon the Employee will earn the right to receive an
additional $25,000.00 pursuant to the schedule described in Article
III below.
-
The
Employee must continue to be employed by the Bank through January
1, 2012, whereupon the Employee will earn the right to receive an
additional $25,000.00 pursuant to the schedule described in Article
III below.
-
The
Employee must continue to be employed by the Bank through January
1, 2013, whereupon the Employee will earn the right to receive an
additional $25,000.00 pursuant to the schedule described in Article
III below.
-
The
Employee must continue to be employed by the Bank through January
1, 2014, whereupon the Employee will earn the right to receive an
additional $25,000.00 pursuant to the schedule described in Article
III below.
-
The
Employee must fulfill and continue to fulfill all of his
obligations under Article IV of this Agreement.
ARTICLE III
PAYMENT OF DEFERRED COMPENSATION
A. Payment . Except as provided in paragraph B., below,
beginning on a reasonable date of the Bank's choosing between
January 1, 2014 and January 15, 2014, the Bank will pay to the
Employee the Deferred Compensation to which he is entitled under
Article II, above in a single lump sum installment.
B. Effect of Resignation/Termination . In the event that the
Employee resigns his employment before January 1, 2014 for "Good
Reason" (as that term is defined below) or in the event that the
Employee's employment is terminated by the Bank before January 1,
2014 without "Cause" (as that term is defined below), then the Bank
will pay to the Employee Deferred Compensation in the amount of
$125,000.00 just as though the Employee had continued to be
employed through January 1, 2014, and pursuant to the terms set
forth in paragraph A., above.
For purposes of this Agreement, "Good Reason" shall mean only the
following:
1. A unilateral and material reduction
in the Employee's salary; or
2. A unilateral, material and adverse
change in the Employee's reporting responsibilities; or
1.
A unilateral and
material reduction in the Employee's authority;
2.
A change in the
ownership of the Bank or Denmark Bancshares, Inc. ("DBI") whereby a
person or group (a "Person") (within the meaning of Code section
409A) acquires, directly or indirectly, ownership of a number of
shares of capital stock of the Bank or DBI which, together with
capital stock already held by such Person, constitutes more than
fifty percent (50%) of the total fair market value or of the
combined voting power of the Bank's or DBI's outstanding capital
stock.
For purposes of this Agreement, "Cause" shall mean only the
following:
1. A conviction in a court of law of
any felony; or
2. Commission of any act of dishonesty
involving the Bank; or
3. Any act or conduct having a
material adverse affect on the Bank's reputation, employees and/or
business; or
4. Unauthorized use or disclosure of
any of the Bank's confidential or proprietary information; or
5. Giving substantial advice or
assistance to an entity, person or business that competes with the
Bank; or
6. Scandalous or immoral behavior;
or
7. Failure or refusal to perform such
duties as the Board of Directors of the Bank may from time to time
reasonably direct; or
8. A material breach of duty under
this Agreement.
C. Effect of Total Disability . If the Employee should
become "Totally Disabled" (as that term is defined below) prior to
January 1, 2014, and if the Employee is still employed with the
Bank at the time of his total disability, then the Bank will pay to
the Employee the deferred compensation to which he is entitled
under Article II above, according to the schedule outlined in
paragraph III.A. above.
For purposes of this Agreement, the Employee is considered to be
"Totally Disabled" if, in a medically-supported opinion of a
physician , he (i) is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable
physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits for a
period of not less than 3 months under an accident and health plan
which covers the employees of the Bank.
D. Death . If the Employee should die prior to January 1,
2014, and if the Employee is still employed with the Bank at the
time of his death, then the Bank will pay to the Employee's
beneficiary (as designated in Schedule A attached hereto) the
deferred compensation to which he is entitled under Article II
above, according to the schedule outlined in paragraph III.A.
above.
E. Withholding of Employment-Related Taxes . The Bank
shall deduct from the payments to be made under the terms of this
Agreement any federal, state or local withholding or other taxes or
charges which the Bank is from time to time required to deduct
under applicable law. In addition, the Employee acknowledges,
agrees and authorizes the Bank to withhold a proper sum from the
payments hereunder for his premium contribution for the
Bank-provided health and/or dental insurance benefit plans in which
he elects to participate. All amounts payable to Employee under
this Agreement are stated herein before any such deductions
(including, but not limited to, all FICA and medicare taxes which
may be owed for the entire Deferred Compensation upon Employee's
receipt of the First Payment).
ARTICLE IV
RESTRICTIVE COVE
