Exhibit 10.4
AMENDMENT NO. 1
Dated as of November 2, 2006
to
Agreement
Between
Xxxx X. Xxxxxxx
and
Community Bank Shares of Indiana, Inc.
Dated July 3, 2003
Xxxx X. Xxxxxxx ("Executive") and Community Bank Shares of Indiana, Inc.
("Employer") (collectively, the "Parties") agree as follows:
PRELIMINARY STATEMENT
The Parties entered into a certain Agreement dated July 3, 2003 (the
"Agreement") in connection with the employment of the Executive by the Employer.
The Parties have agreed to amend the Agreement in the manner set forth below in
order to comply with changes in federal income tax laws that have occurred since
the Agreement was entered into and in consideration of Employer's grant of
performance units to Executive under Employer's Performance Units Plan.
NOW THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereby agree as follows:
Section I. Cross-References and Definitions.
A. Reference is made to the Agreement. Upon and after the effective date
of this Amendment all references to the Agreement in that document, or in any
related document, shall mean the Agreement as amended by this Amendment. Except
as expressly provided in this Amendment, the execution and delivery of this
Amendment does not and will not amend, modify or supplement any provision of, or
constitute a consent to or waiver of any noncompliance with the provisions of,
the Agreement, and, except as specifically provided in this Amendment, the
Agreement shall remain in full force and effect.
B. Unless otherwise defined herein, terms used in this Amendment which are
defined in the Agreement shall have the same meaning herein as therein.
Section II. Amendments. The Agreement is hereby amended as of the date hereof as
follows:
A. by deleting Section 1(c) of the Agreement in its entirety and
substituting in lieu thereof the following:
(c) Change in Control of the Corporation. A "Change
in Control of the Corporation" shall be determined in
accordance with the definition of "a change in the ownership or
effective control of the [C]orporation, or in the ownership of
a substantial portion of the assets of the [C]orporation" under
Section 409A, and the regulations and other guidance
promulgated thereunder (collectively, "IRC 409A"), of the
Internal Revenue Code of 1986, as amended (the "Code").
B. by adding the following two definitions in Section 1 of the Agreement
as Section 1(e) and Section 1(h) and renumbering Sections 1(e) through 1(i) as
Sections 1(f), 1(g), 1(i), 1(j) and 1(k):
(e) Compensation. "Compensation" shall mean all
wages and other compensation identified on all IRS Forms W-2
issued to the Executive by the Corporation with respect to any
calendar year.
(h) Employment Change. "Employment Change" shall
mean any of the following not agreed to by the Executive in
writing: (i) the requirement that Executive move his personal
residence, or perform his principal executive functions, more
than thirty-five (35) miles from his primary office as of the
date of the subject Change in Control of the Corporation; (ii)
the failure by the Corporation (or its successor) to continue
to provide Executive with Compensation and benefits
substantially similar to those provided Executive as of the
date of the subject Change in Control of the Corporation or
benefits substantially similar to those provided to him under
any of the employee benefit plans in which the Executive is a
participant as of such Change in Control of the Corporation (or
the failure by the Corporation [or its successor] to afford the
Executive annual increases in the Executive's Compensation
commensurate with the average increases in Compensation
received by the Executive for the three years preceding the
subject Change in Control, or the failure by the Corporation
[or its successor] to make available to the Executive new
benefits made generally available to the executive officers of
the Corporation [or its successor]), or the taking of any
action by the Corporation which would directly or indirectly
reduce any of such Compensation or benefits or deprive
Executive of any material fringe benefit enjoyed by him; or
(iii) a material diminution or reduction in Executive's
responsibilities or authority (including reporting
responsibilities) in connection with his employment with the
Corporation, or the taking of any action by the Corporation
which would directly or indirectly reduce any of such
Compensation or benefits or deprive Executive of any material
fringe benefit enjoyed by him; (iv) the assignment to Executive
of duties and responsibilities other than those normally
associated with his position; (v) the requirement that the
Executive report to any person other than the Chief Executive
Officer of the Corporation (or its successor); or (vi) a
material diminution or
reduction in Executive's responsibilities or authority
(including reporting responsibilities) in connection with his
employment with the Corporation.
C. by adding the following definition in Section 1 of the Agreement as
Section 1(l):
(l) Triggering Event. "Triggering Event" shall mean
either one of the following events if such event occurs within
the twenty-four (24) month period immediately following the
date of a Change in Control of the Corporation: (i) the
Executive's employment with the Corporation is terminated
without Cause or (ii) the Executive resigns his employment with
the Corporation within ninety (90) days following any
Employment Change.
D. by adding the following Section 3(f) to the Agreement:
(f) During the term of this Agreement, Employer
shall provide the Executive with a cash allowance of at least
$600.00 per month for an automobile.
E. by deleting Section 5(c)(1) of the Agreement in its entirety and
substituting in lieu thereof the following:
(1) pay to the Executive, in equal monthly
installments beginning with the first business day of the month
following the Date of Termination, a cash severance amount
equal to the Base Salary which the Executive would have earned
over the remaining term of this Agreement as of his Date of
Termination; provided, however, that if said payments
constitute nonqualified deferred compensation pursuant to IRC
409A and if the Executive is a "specified employee" as that
term is defined under Code Section 409A(a)(2)(B), the aggregate
amount of the first seven installments shall be paid on the
first business day of the seventh month following the Date of
Termination, with the remaining installment payments to be made
on the first business day of each succeeding month; and
F. by deleting the introductory paragraph of Section 6 and Section 6(a) of
the Agreement in their entirety and substituting in lieu thereof the following:
6. CHANGE IN CONTROL OF THE CORPORATION. In the event of
a Triggering Event, then the Employer shall, subject to the
provisions of Section 7 hereof, if applicable:
(a) immediately pay to the Executive, in a single
lump sum payment, a cash amount equal to two (2) times each of
(i) the Executive's Base Salary, (ii) the Executive's average
yearly automobile allowance paid during the prior two (2) years
and (iii) the Executive's
average yearly bonus compensation paid during the prior two (2)
years, which amount shall be calculated as of the date of the
Change in Control of the Corporation; provided, however, that
if said payment constitutes nonqualified deferred compensation
pursuant to IRC 409A and if the Executive is a "specified
employee" as that term is defined under Code Section
409A(a)(2)(B), the lump sum payment shall be made on the first
business day of the seventh month following the date of the
Change in Control of the Corporation; and
G. by adding the following sentence to the end of Section 8(b) of the
Agreement:
For the sake of clarification, in the event of a Change in
Control of the Corporation, the covenants described above in
this Section 8(b) will not apply to the Executive regardless of
whether or not the Executive voluntarily resigned or was
terminated and regardless of whether or not the Executive is
entitled to the lump sum cash payment described in Section
6(A).
Section III. Governing Law. This Amendment shall be construed in accordance
with, and governed by, the laws of the State of Indiana.
Section IV. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and shall be binding
upon all parties and their respective successors and assigns and all of which
taken together shall constitute one and the same agreement.
Section V. Binding Effect; Benefit. This Amendment shall be binding on, and
inure to the benefit of, the parties hereto, and their respective heirs,
successors, legal representatives and permitted assigns.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment, or
have caused this Amendment to be executed by their duly authorized officers or
agents, all as of the day and year first above written.
"Executive"
Date Signed: November 2, 2006 /s/ Xxxx X. Xxxxxxx
-------------------
Xxxx X. Xxxxxxx
COMMUNITY BANK SHARES OF INDIANA, INC.
("Employer")
Date Signed: November 2, 2006 By: /s/ Xxxxx X. Xxxxxxx
--------------------
Xxxxx X. Xxxxxxx
President and Chief Executive Officer
