Exhibit 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") made as of the ______ day of
________, 199_, by and among CITY HOLDING COMPANY, a West Virginia corporation
("Employer"), and Xxxxxx X. XxXxxxxxxx ("Employee").
WITNESSETH THAT:
WHEREAS, Employee has heretofore been employed and rendered services to
Horizon Bancorp, Inc. ("Horizon"), as President and Chief Operating Officer;
WHEREAS, Horizon was merged into Employer on __________ __, 199_, (the
"Merger") pursuant to an Agreement and Plan of Reorganization dated as of August
7, 1998 (the "Reorganization Agreement") between Horizon and Employer;
WHEREAS, Employer considers the continued availability of Employee's
services to be important to the management and conduct of Employer's business
and desire to secure for itself the continued availability of Employee's
services; and
WHEREAS, Employee is willing to make his services available to Employer on
the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
1. Employment. Employee is employed as Chairman of the Board of Directors
of Employer. Employee shall have such duties and responsibilities as are
commensurate with such positions. Employee hereby accepts and agrees to such
employment, subject to the general supervision and pursuant to the orders,
advice, and direction of Employer and its Board of Directors. Employee shall
perform such duties as are customarily performed by one holding such positions
in other same or similar businesses or enterprises as that engaged in by
Employer, and shall also additionally render such other services and duties as
may be reasonably assigned to him from time to time by Employer, consistent with
his positions.
2. Term of Employment. The term of this Agreement shall commence from and
after the date hereof, and shall terminate on the day next preceding the fifth
anniversary of the date hereof unless extended as provided herein. On each
monthly anniversary date starting the first month after the date hereof, this
Agreement will be automatically extended for an additional month; provided,
however, that on any one month anniversary date either Employer or Employee may
serve notice to the other party to fix the term to a definite five year period
from the date of such notice and no further automatic extensions will occur.
Notwithstanding the foregoing, this Agreement will not be extended beyond the
first day of the month coincident with or next following the date on which
Employee attains age sixty-five (65). The term of this Agreement as may be
extended pursuant to this Section 2, or, as may be shortened in accordance with
Section 5 or 6 hereof, is hereinafter referred to as the "Term."
3. Compensation.
a. For all services rendered by Employee to Employer under this
Agreement, Employer shall pay to Employee, for the one-year period beginning on
the date hereof, a minimum annual salary at a rate not less than $180,000,
payable in accordance with the payroll practices of Employer applicable to all
officers.
b. Employee shall participate in such incentive plans of Employer
for which he may become eligible and designated a participant, as such plans may
be modified from time to time.
c. After the first year following the date hereof, any salary
increase payable to Employee shall be determined in accordance with Employer's
annual salary plan, and be based on Employer's performance and the performance
of Employee.
d. Except as otherwise specifically provided herein, for so long as
Employee is employed by Employer, Employee also shall be paid, on the same basis
as other officers of Employer, employee pension and welfare benefits and group
employee benefits such as sick leave, vacation, group disability and health,
life, and accident insurance and similar indirect compensation which Employer
may from time to time extend to its officers; provided that Employee shall
receive term life insurance coverage in an amount not less than $400,000.00
e. If during the Term of the Agreement the Employee becomes eligible
for retirement under Employer's retirement plans and he retires, Employee may
elect to continue receiving the health insurance coverage provided to Employee
prior to retirement at a comparable rate available to other retired employees.
f. For so long as Employee is employed by Employer, Employer shall
pay Employee's reasonable country club dues and expenses.
g. For so long as Employee is employed by Employer, Employer shall
furnish Employee with an automobile in accordance with the customary practices
of Employer for executives at his level.
h. For so long as Employee is employed by Employer, Employer shall
pay Employee's reasonable civic club dues.
4. Covenants of the Employee.
a. Subject to the limitations provided in Sections 4(b) and 4(d)
(whichever may be applicable), upon termination of Employee's employment prior
to the expiration of the Term, Employee will not directly or indirectly, either
as a principal, agent, employee, employer, stockholder, co-partner or in any
other individual or representative capacity whatsoever, engage in the banking
and financial services business, which includes consumer, savings, commercial
banking and the insurance and trust businesses, or the savings and loan or
mortgage banking business, or any other business in which the Employer or its
Affiliates are engaged, anywhere in the state of West Virginia and in any county
outside of West Virginia contiguous to West Virginia, nor will the Employee
solicit, or assist any other person in so soliciting, any depositors or
customers of Employer or its Affiliates or induce any then or former employee of
Employer or its Affiliates to terminate their employment with Employer or its
Affiliates. The term "Affiliate" as used in this Agreement means a Person that
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, another Person. The term
"Person" as used in this Agreement means any person, partnership, corporation,
group or other entity.
b. If Employee voluntarily terminates his employment with Employer
and its Affiliates, Employee will be subject to the provisions of Section 4(a)
for any period of time during which Employee elects to receive compensation
pursuant to Section 6(e).
c. If Employee's employment is terminated by Employer or its
Affiliates for Just Cause (as defined in Section 6(b) herein), Employee will not
be subject to the provisions of Section 4(a).
d. If Employee's employment is terminated by Employer or its
Affiliates for reasons other than Just Cause (as defined in Section 6(b) herein)
at any time, Employee will be subject to the provisions of Section 4(a) until
the earlier of: (i) the first anniversary of Employee's termination or (ii) the
date as of which Employee elects to forego any further compensation pursuant to
the last sentence of Section 6(c).
e. Notwithstanding any other provision of this Agreement to the
contrary, if Employee voluntarily terminates his employment with Employer or its
Affiliates in accordance with Section 6(d), Employee will not be subject to
Section 4(a).
f. During the Term of Employee's employment hereunder and
thereafter, and except as required by any court, supervisory authority or
administrative agency or as may be otherwise required by applicable law,
Employee shall not, without the written consent of the Board of Directors of
Employer or a person authorized thereby, disclose to any person, other than an
employee of Employer or an Affiliate thereof or a person to whom disclosure is
reasonably necessary or appropriate in connection with the performance by
Employee of his duties as an employee of Employer or an Affiliate, any
confidential information obtained by him while in the employ of Employer, unless
such information has become a matter of public knowledge at the time of such
disclosure.
g. The covenants contained in this Section 4 shall be construed and
interpreted in any judicial proceeding to permit their enforcement to the
maximum extent permitted by law. Employee agrees that the restraints imposed
herein are necessary for the reasonable and proper protection of Employer and
its Affiliates and that each and every one of the restraints is reasonable in
respect to such matter, length of time and the area. Employee further
acknowledges that damages at law would not be a measurable or adequate remedy
for breach of the covenants contained in this Section 4 and, accordingly,
Employee agrees to submit to the equitable jurisdiction of any court of
competent jurisdiction in connection with any action to enjoin Employee from
violating any such covenants.
5. Disability. If, by reason of physical or mental disability during the
term hereof, Employee is unable to carry out the essential functions of his
employment hereunder for twelve (12) consecutive months, his services hereunder
may be terminated by action of the Board of Directors of Employer determining so
to do upon one month's notice to be given to Employee at any time after the
period of twelve (12) continuous months of disability and while such disability
continues. If, prior to the expiration of the one month period after the giving
of such notice, Employee shall recover from such disability and return to the
full-time active discharge of his duties, then such notice shall be of no
further force and effect and Employee's employment shall continue as if the same
had been uninterrupted. If Employee shall not so recover from his disability and
return to his duties, then his services shall terminate at the expiration date
of such one month's notice with the same force and effect as if that date had
been the date of termination originally provided for hereunder. During the first
twelve (12) months of the period of Employee's disability, Employee shall
continue to earn all compensation (including bonuses and incentive compensation)
to which Employee would have been entitled as if he had not been disabled, such
compensation to be paid at the time, in the amounts, and in the manner provided
in Section 3(a), inclusive of any compensation received pursuant to any
applicable disability insurance plan of Employer. Thereafter, Employee shall
receive compensation to which he is entitled under any applicable disability
insurance plan. At that time Employee shall also be deemed to have voluntarily
terminated his employment and shall be entitled to receive Termination
Compensation as set forth in Section 6(e). In the event a dispute arises between
Employee and Employer concerning Employee's physical or mental ability to
continue or return to the performance of his duties as aforesaid, Employee shall
submit to examination by a competent physician mutually agreeable to the
parties, and his opinion as to Employee's capability to so perform will be final
and binding. Upon termination of Employee's services by reason of disability,
the Term shall end.
6. Termination.
a. If Employee shall die during the Term, this Agreement and the
employment relationship hereunder will automatically terminate on the date of
death, which date shall be the last date of the Term. Notwithstanding this
Subsection 6(a), if Employee dies while employed by Employer, Employee's estate
shall receive annually 60% of Employee's Termination Compensation until the
earlier to occur of (x) five years from the date of Employee's death, or (y) the
date on which Employee would have reached age 65. Notwithstanding this
Subsection 6(a), if Employee dies while receiving payments under Subsection
6(e), Employee's estate shall receive annually 60% of Employee's Termination
Compensation until the earlier to occur of (i) five years from the date any
payments under Subsection 6(e) commenced, or (ii) the date on which Employee
would have reached age 65.
b. Employer shall have the right to terminate Employee's employment
under this Agreement at any time for Just Cause, which termination shall be
effective immediately. Termination for "Just Cause" shall include termination
for Employee's personal dishonesty, gross incompetence, willful misconduct,
breach of a 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 a final cease-and-desist order,
conviction of a felony or of a misdemeanor involving moral turpitude, unethical
business practices in connection with Employer's business, misappropriation of
Employer's assets (determined on a reasonable basis) or those of their
Affiliates, or material breach of any other provision of this Agreement,
provided that Employee has received written notice from Employer of such
material breach and such breach remains uncured thirty days after the delivery
of such notice. In the event Employee's employment under this Agreement is
terminated for Just Cause, Employee shall have no right to receive compensation
or other benefits under this Agreement for any period after such termination.
c. Employer may terminate Employee's employment other than for "Just
Cause," as described in Subparagraph (b) above, at any time upon written notice
to Employee, which termination shall be effective immediately. In the event
Employer terminates Employee pursuant to this Subparagraph (c), Employee will
receive the highest amount of the annual cash compensation (including cash
bonuses and other cash-based benefits, including for these purposes amounts
earned or payable whether or not deferred) received during any of the preceding
five calendar years ("Termination Compensation") in each year until the end of
the Term, so long as Employee complies with Section 4(a) of the Agreement until
the first anniversary of Employee's termination. Such amounts shall be payable
at the times such amounts would have been paid in accordance with Section 3(a).
In addition, Employee shall continue to receive health insurance coverage from
Employer on the same terms as were in effect prior to Employee's termination,
either under Employer's plans or comparable coverage, for all periods Employee
receives Termination Compensation. Notwithstanding anything in this Agreement to
the contrary, if Employee breaches Section 4(a) of this Agreement prior to the
first anniversary of Employee's termination pursuant to this Section 6(c),
Employee will not be entitled to receive any further compensation or benefits
pursuant to this Section 6(c).
d. In the event of a Change of Control (as defined below) of
Employer at any time after the date hereof, Employee may voluntarily terminate
employment with Employer up until 24 months after the Change of Control for
"Good Reason" and be entitled to receive in a lump sum (i) any compensation due
but not yet paid through the date of termination and (ii) in lieu of any further
salary payments from the date of termination to the end of the Term, an amount
equal to the Termination Compensation times 2.99.
"Good Reason" shall mean the occurrence of any of the following events
without Employee's express written consent:
(a) the assignment to Employee of duties inconsistent with the
position and status of the offices and positions of Employer held
immediately prior to the Change of Control;
(b) a reduction by Employer in Employee's pay grade or base
salary as then in effect or the exclusion of Employee from participation
in Employer's benefit plans in which he previously participated as in
effect at the date hereof or as the same may be increased from time to
time during the term of this Agreement (or supplanted as a result of the
Merger) or Employer's failure to increase (within 12 months of Employee's
last increase in base salary) Employee's base salary in an amount which at
least equals, on a percentage basis, the average percentage increase in
base salary for all executives entitled to participate in Employer's
executive incentive plans for which Employee was eligible during the
preceding 12 months;
(c) an involuntary relocation of Employee more than 50 miles
from the location where Employee worked immediately prior to the Change of
Control or the breach by Employer of any other material provision of this
Agreement; or
(d) any purported termination of the employment of Employee by
Employer which is not effected in accordance with this Agreement.
A "Change of Control" shall be deemed to have occurred if (i) any person
or group of persons (as defined in Section 13(d) and 14(d) of the Securities
Exchange Act of 1934 together with its affiliates, excluding employee benefit
plans of Employer, is or becomes, directly or indirectly, the "beneficial owner"
(as defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934)
of securities of Employer representing 20% or more of the combined voting power
of Employer's then outstanding securities; or (ii) during the term of this
Agreement as a result of a tender offer or exchange offer for the purchase of
securities of Employer (other than such an offer by Employer for its own
securities), or as a result of a proxy contest, merger, consolidation or sale of
assets, or as a result of any combination of the foregoing, individuals who at
the beginning of any two-year period during the term of this Agreement
constitute Employer's Board of Directors, plus new directors whose election or
nomination for election by Employer's shareholders is approved by a vote of at
least two-thirds of the directors still in office who were directors at the
beginning of such two-year period, cease for any reason during such two-year
period to constitute at least two-thirds of the members of such Board of
Directors; or (iii) the shareholders of Employer approve a merger or
consolidation of Employer with any other corporation or entity regardless of
which entity is the survivor, other than a merger or consolidation which would
result in the voting securities of Employer outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or being
converted into voting securities of the surviving entity) at least 80% of the
combined voting power of the voting securities of Employer or such surviving
entity outstanding immediately after such merger or consolidation; or (iv) the
shareholders of Employer approve a plan of complete liquidation or winding-up of
Employer or an agreement for the sale or disposition by Employer of all or
substantially all of Employer's assets; or (v) any event which Employer's Board
of Directors determines should constitute a Change of Control. Notwithstanding
the foregoing, the transactions contemplated by the Reorganization Agreement
shall not be considered a Change of Control.
e. Notwithstanding any other provision of this Agreement to the
contrary, in the event that Employee voluntarily terminates employment with
Employer at any time after the first anniversary of the Merger (other than
pursuant to Section 6(d)), Employee will be entitled to receive annually 60% of
Employee's Termination Compensation, so long as Employee complies with Section
4(a) of this Agreement, until the earlier of (i) five years from the date on
which Employee voluntarily terminates employment with Employer in accordance
with this Subsection 6(e), or (ii) the date on which Employee reaches age 65.
Such Termination Compensation shall be payable at the times such amounts would
have been paid in accordance with Section 3(a). In addition, Employee shall
continue to receive health insurance coverage from Employer on the same terms as
were in effect prior to Employee's termination, either under the Employer's
plans or comparable coverage, for all periods Employee receives Termination
Compensation pursuant to this Section 6(e), so long as Employee complies with
Section 4(a) of the Agreement.
f. In receiving any payments pursuant to this Section 6, Employee
shall not be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to Employee hereunder and such amounts
shall not be reduced or terminated whether or not Employee obtains other
employment.
g. Notwithstanding anything in this Agreement to the contrary, if
any of the payments provided for under this Agreement (the "Agreement
Payments"), together with any other payments that Employee has the right to
receive (such other payments together with the Agreement Payments are referred
to as the "Total Payments"), would constitute an "excess parachute payment," as
defined in Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended
(the "Code") (an "Excess Parachute Payment"), the Agreement Payments shall be
reduced by the smallest amount necessary so that no portion of such Total
Payments would constitute Excess Parachute Payments. In the event Employer shall
make an Agreement Payment to Employee that would constitute an Excess Parachute
Payment, Employee shall return such payment to Employee (together with interest
at the rate set forth in Section 1274(b)(2)(B) of the Code). To the extent the
application of this Section 6(g) is triggered, the provisions of Section 4(a)
shall not apply.
7. Other Employment.
Employee shall devote all of his business time, attention, knowledge and
skills solely to the business and interest of Employer and its Affiliates, and
Employer and its Affiliates shall be entitled to all of the benefits, profits
and other emoluments arising from or incident to all work, services and advice
of Employee, and Employee shall not, during the Term hereof, become interested
directly or indirectly, in any manner, as partner, officer, director,
stockholder, advisor, employee or in any other capacity in any other business
similar to Employer's business; provided, however, that nothing herein contained
shall be deemed to prevent or limit the right of Employee to invest in a
business similar to Employer's business if such investment is limited to less
than one percent of the capital stock or other securities of any corporation or
similar organization whose stock or securities are publicly owned or are
regularly traded on any public exchange.
8. Miscellaneous.
a. This Agreement shall be governed by and construed in accordance
with the laws of the State of West Virginia without regard to conflicts of law
principles thereof.
b. This Agreement constitutes the entire Agreement between Employee
and Employer, with respect to the subject matter hereof, and supersedes all
prior agreements with respect thereto. Without limiting the foregoing, Employee
agrees that this Agreement satisfies any rights he may have had under any prior
agreement or understanding with Horizon with respect to his employment by
Horizon.
c. This Agreement may be executed in one or more counterparts, all
of which, taken together, shall constitute one and the same instrument.
d. Any notice or other communication required or permitted under
this Agreement shall be effective only if it is in writing and delivered in
person or by reliable overnight courier service or deposited in the mails,
postage prepaid, return receipt requested, addressed as follows:
To Employer:
City Holding Company
00 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
(000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Chief Financial Officer
To Employee:
Xxxxxx X. XxXxxxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx Xxxxxxxx 00000
Notices given in person or by overnight courier service shall be deemed given
when delivered to the address required by this Section 8(d), and notices given
by mail shall be deemed given three days after deposit in the mails. Any party
hereto may designate by written notice to the other party in accordance herewith
any other address to which notices addressed to him shall be sent.
e. The provisions of this Agreement shall be deemed severable and
the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof. It is understood and
agreed that no failure or delay by Employer or Employee in exercising any right,
power or privilege under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder.
f. In the event any dispute shall arise between Employee and
Employer as to the terms or interpretations of this Agreement, whether
instituted by formal legal proceedings or otherwise, including any action taken
by Employee to enforce the terms of this Agreement or in defending against any
action taken by Employer, Employer shall reimburse Employee for all reasonable
costs and expenses, including reasonable attorneys' fees, arising from such
dispute, proceeding or action, if Employee shall prevail in any action initiated
by Employee or shall have acted reasonably and in good faith in defending
against any action initiated by Employer. Such reimbursement shall be paid
within 10 days of Employee furnishing to Employer written evidence, which may be
in the form, among other things, of a canceled check or receipt, of any costs or
expenses incurred by Employee. Any such request for reimbursement by Employee
shall be made no more frequently than at 60 day intervals.
SIGNATURE PAGE FOLLOWS
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
CITY HOLDING COMPANY
By:___________________________
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
EMPLOYEE:
------------------------------
Xxxxxx X. XxXxxxxxxx
