EXHIBIT 10.1
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DEFERRED COMPENSATION PLAN NO. 1
Employment Agreement Deferring a Portion of Employee's Compensation
THIS AGREEMENT made effective this first day of January 1,2002, by and
between Allied First Bank, a corporation organized under the laws of the State
of Illinois (the "Corporation"), and Xxxxxxx X. Xxxxxxxx residing in the City of
St. Xxxxxxx, Illinois (the "Employee").
WITNESSETH THAT:
In consideration of the agreements hereinafter contained the parties hereto
agree as follows:
1. The Corporation agrees to employ the Employee and the Employee agrees to
serve the corporation in such capacity as the Board of Directors of the
Corporation (the "Board") may designate from time to time, beginning January 1,
2002 and continuing until terminated by either party on at least 90 days prior
written notice to the other.
2. During the term of his employment, the Employee shall devote all of his
time, attention, skill, and efforts to the performance of his duties for the
Corporation.
3. The Corporation shall pay the Employee beginning January 1, 2002, and
continuing during the term of his employment hereunder such salary payable
monthly as the Board may from time to time determine together with deferred
compensation payable as provided in paragraph 5 below, unless forfeited by the
occurrence of any of the events of forfeiture specified in paragraph 7, below.
4.
(a) The Corporation shall credit to a book reserve (the "Deferred
Compensation Account") established for this purpose, $8,500.00 on the
last day of January, 2002.
(b) Any such funds so credited to the Deferred Compensation Account may be
kept in cash or invested and reinvested in mutual funds, stocks,
bonds, securities, or any other assets as may be selected by the Board
in its discretion. In the exercise of the foregoing discretionary
investment powers, the Board may engage investment counsel and, if it
so desires, may delegate to such counsel full or limited authority to
select the assets in which the funds are to be invested.
(c) The Employee agrees on behalf of himself and his designated
beneficiary to assume all risk in connection with any decrease in
value of the funds which are invested or which continue to be invested
in accordance with the provisions of this Agreement.
(d) Title to and beneficial ownership of any assets, whether cash or
investments which the Corporation may earmark to pay the contingent
deferred compensation hereunder, shall at all times remain in the
Corporation and the Employee and his
designated beneficiary shall not have any property interest whatsoever
in any specific assets of the Corporation.
5. The benefits to be paid as deferred compensation (unless they are
forfeited by the occurrence of any of the events of forfeiture specified in
paragraph 7, below) are as follows:
(a) If the Employee's employment hereunder is terminated on or after the
Employee shall have reached the age of 65, the Corporation shall pay
to him in 15 annual installments an amount equal to the fair market
value of the assets in the Deferred Compensation Account as of such
date. Notwithstanding the foregoing, the total amount payable to the
Employee shall be appropriately increased or decreased as the case may
be, but not more than semi-annually, to reflect the appreciation or
depreciation in value and the net income or loss on the funds which
remain invested in the Deferred Compensation Account. If the Employee
should die on or after his 65th birthday and before the 15 annual
payments are made, the unpaid balance will continue to be paid in
installments for the unexpired portion of such 15-year period to his
designated beneficiary in the same manner as set forth above.
(b) If the Employee's employment hereunder is terminated for any reason
other than death and disability but before the Employee shall have
reached the age of 65, then the amount in the Deferred Compensation
Account shall continue to be invested or held in cash as the Board in
its discretion may determine and no payments shall be until the
Employee shall have reached the age of 65 at which time payments shall
be made in the same manner and to the same extent as set forth in
paragraph 5 (a), above. Notwithstanding the foregoing, if before
reaching age 65 the Employee should die, or if before reaching age 65
the Employee should become disabled, then payments shall be made in
the same manner and to the same extent as set forth in paragraph 5
(c), below.
(c) If the Employee's employment is terminated because of disability or
death before he has reached the age of 65, and while he is in the
employ of the Corporation, then the Corporation shall make 15 annual
payments to the Employee (in the event of his disability) or his
designated beneficiary (in the even of his death) in the same manner
and to the same extent as provided in paragraph 5 (a), above.
(d) If both the Employee and his designated beneficiary should die before
a total of 15 annual payments are made by the Corporation, then the
remaining value of the Deferred Compensation Account shall be
determined as of the date of the death of the designated beneficiary
and shall be paid as promptly as possible in one lump sum to the
estate of such designated beneficiary.
(e) The beneficiary referred to in this paragraph may be designated or
changed by the Employee (without the consent of any prior beneficiary)
on a form provided by the Corporation and delivered to the Corporation
before his death. If no such beneficiary shall have been designated,
or if no designated beneficiary shall survive the Employee, the
installment payments payable under paragraph 5 (c), above shall be
payable to the Employee's estate.
(f) The Employee shall be deemed to have become disabled for purposes of
paragraph 5 (c), above if the Board shall find on the basis of medical
evidence satisfactory to the Board that the Employee is totally
disabled, mentally or physically, so as to be prevented from engaging
in further employment by the Corporation and that such disability will
be permanent and continuous during the remainder of his life.
(g) The Installment payments to be made to the Employee under paragraphs 5
(a) and 5 (c), above shall commence on the first day of the month next
following the date of the termination of his employment, and the
installment payments to be made to the Employee under paragraph 5 (b),
above shall commence on the first day of the month next following the
date on which the Employee shall have reached the age of 65. The
installment payments to be made to the designated beneficiary under
the provisions of this paragraph 5 shall commence on a date to be
selected by the Corporation but within six months from the date of
death of the Employee.
(h) Notwithstanding anything herein contained to the contrary, the Board
shall have the right in its sole discretion to vary the manner and
time of making the installment distributions provided in this
paragraph and may make such distributions in lump sums or over a
shorter or longer period of time than 15 years as it may find
appropriate.
6. Nothing contained in this Agreement and no action taken pursuant to the
provisions of this Agreement shall create or be construed to create a trust of
any kind, or a fiduciary relationship between the Corporation and the Employee,
his designated beneficiary or any other person. Any funds which may be invested
under the provisions of this Agreement shall continue for all purposes to be a
part of the general funds of the Corporation and no person other than the
Corporation shall be virtue of the provisions of this Agreement have any
interest in such funds. To the extent that any person acquires a right to
receive payments from the Corporation under this agreement, such right shall be
no greater than the right of any unsecured general creditor of the Corporation.
7. Notwithstanding anything herein contained to the contrary, no payment of
any then unpaid installments of deferred compensation shall be made and all
rights under the Agreement of the Employee, his designated beneficiary,
executors of administrators, or any other person, to receive payments thereof
shall be forfeited if either or both of the following events shall occur:
(a) The Employee shall engage in any activity or conduct which in the
opinion of the Board is inimical to the best interests of the
Corporation.
(b) After the Employee ceases to be employed by the Corporation he shall
fail or refuse to provide advice and counsel to the Corporation when
reasonably requested to do so.
8. The right of the Employee or any other person to the payment of deferred
compensation or other benefits under this Agreement shall not be assigned,
transferred, pledged or encumbered except by will or by the laws of descent and
distribution.
9. If the Board shall find that any person to whom any payment is payable
under this Agreement is unable to care for his affairs because of illness or
accident, or is a minor, any payment due (unless a prior claim thereafter shall
have been made by a duly appointed guardian, committee or other legal
representative) may be paid to the spouse, a child, a parent, or a brother or
sister, or to any person deemed by the Board to have incurred expense for such
person otherwise entitled to payment, in such manner and proportions as the
Board may determine. Any such payment shall be a complete discharge of the
liabilities of the Corporation under this agreement.
10. Nothing contained herein shall be construed as conferring upon the
Employee the right to continue in the employ of the Corporation as an executive
or in any other capacity.
11. Any deferred compensation payable under this Agreement shall not be
deemed salary or other compensation to the Employee for the purpose of computing
benefits to which he may be entitled under any pension plan or other arrangement
of the Corporation for the benefit of its employees.
12. The Board shall have full power and authority to interpret, construe,
and administer this Agreement and the Board's interpretations and construction
thereof, and actions thereunder, including any valuation of the Deferred
Compensation Account, or the amount or recipient of the payment to be made
therefrom, shall be binding and conclusive on all persons for all purposes. No
member of the Board shall be liable to any person for any action taken or
omitted in connection with the interpretation and administration of this
Agreement unless attributable to his own willful misconduct or lack of good
faith.
13. This agreement shall be binding upon and inure to the benefit of the
Corporation, its successors and assigns, and the Employee and his heirs,
executors, administrators, and legal representatives.
14. This Agreement shall be construed in accordance with and governed by
the law of the State of Illinois.
15. In WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed by its duly authorized officers and Employee has hereunto set his hand
and seal as of the date first above written.
Corporation
By: /s/ Xxxx X. Xxxxxxx, Xx.
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
