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SUPPLEMENTAL COMPENSATION AGREEMENT
BY AND AMONG
WEST ALLIS SAVINGS BANK, HALLMARK CAPITAL CORPORATION
AND
XXXXX X. XXXXXXXXX
This Agreement entered into as of this 22nd day of December, 1998, by
and between West Allis Savings Bank (the "Bank"), a stock savings-bank chartered
under the laws of the State of Wisconsin, Hallmark Capital Corporation (the
"Company"), a Wisconsin Chapter 180 stock corporation, and Xxxxx X. Xxxxxxxxx
("Executive"), a resident of the Town of Delafield, Wisconsin.
W I T N E S S E T H:
WHEREAS, Executive has been a valuable officer and employee of the Bank
and Capital Corporation (sometimes hereinafter collectively referred to as the
"Employers"), and
WHEREAS, Executive has performed his duties with Employers in an
exemplary fashion, enabling the Bank and Company to meet the needs of their
customers and stockholders while operating effectively and efficiently in a
competitive market; and
WHEREAS, the Employers are willing to pay and provide certain benefits
to Executive in accordance with the provisions and conditions hereinafter set
forth to insure that in the future Executive will (i) continue to be available
to provide services to the Employers, and (ii) refrain from entering the employ
of, or directly or indirectly rendering any service or assistance to, any
competitor of the Employers.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:
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1. Payment Of Supplemental Compensation. The Employers shall pay to
Executive the amount of Nine Thousand Five Hundred Eighty-Three Dollars and
Thirty-Three Cents ($9,583.33) per month, until the latter of Executive's death
or the completion of a total of 240 payments. Such payments shall commence as of
the first day of the month following the earlier of (i) the month in which
Executive attains the Applicable Benefit Commencement Age ("ABCA"), as
determined pursuant to Exhibit A hereto based on the year in which Executive's
Voluntary Termination or Retirement Date ("VTRD") occurs, (ii) the earlier of
the month in which Executive attains age 65 or in which Executive's death occurs
if Executive's employment had previously terminated either involuntarily or
following a change-in-control, or (iii) Executive's death. For purposes of this
Agreement, the Executive's VTRD shall be the date on which Executive ceases to
be an active employee of the Employers as the result of either a voluntary
termination of employment or retirement.
2. Conditions to Payments. Once commenced, the benefits provided
hereunder shall be payable to Executive for life; provided that in the event
Executive dies prior to either the commencement of benefits or receipt of 240
payments, whichever is applicable of Executive's estate or designated
beneficiary shall receive monthly payments until a total of 240 payments have
been made to Executive and/or his estate and/or beneficiary.
All payments to Executive or to his estate or beneficiary under this
Agreement shall be contingent upon Executive's
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compliance with the provisions of Section 3 hereof. In the event Executive
breaches any of the provisions of Section 3, all payments to Executive hereunder
shall cease and Executive shall forfeit any further payments remaining
hereunder.
3. Restrictive Covenant. During the term of his employment by
Employers and for a period of eighteen (18) months following any voluntary
termination of such employment (excluding only a voluntary termination of
employment following a "change in control" of either the Bank or Company),
Executive shall not accept employment with or otherwise engage, directly or
indirectly, in any business with any Significant Competitor of the Employer. For
purposes of this Agreement, the term Significant Competitor means any financial
institution including, but not limited to, any commercial bank, savings bank,
savings and loan association, credit union, or mortgage banking corporation
which, at the time of termination of Executive's employment or during the period
of this restrictive covenant, (i) maintains a home, branch or other office in
Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Washington or Waukesha counties,
or (ii) has originated within any of said counties $10,000,000 or more in
residential mortgage loans during any consecutive twelve (12) month period
within the thirty-six (36) months prior to Executive's termination, or (iii)
commences origination of such residential mortgage loans within such counties
during the period of this restrictive covenant. The foregoing prohibition shall
extend to Executive's becoming an employee, agent, independent
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contractor, officer, director, a greater than 5% stockholder of, or consultant
in any capacity to, any Significant Competitor. For purposes of this Agreement,
a "change in control" means any change in control which is of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act") or any successor thereto; provided that, without limitation,
such a change in control shall be deemed to have occurred if (i) any "person"
(as such term in used in Sections 13(d) and 14(d) of the Exchange Act) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities representing 25% or more of the
combined voting power of the Bank or Company's then outstanding securities.
Executive agrees that the non-competition provisions set forth herein
are necessary for the protection of the Employers and are reasonably limited as
to (i) the scope of activities affected, (ii) their duration and geographic
scope, and (iii) their effect on Executive and the public. In the event
Executive violates the non-competition provisions set forth herein, the
Employers shall have as their only remedies the right to declare all remaining
payments that would otherwise have been made to Executive under this Agreement
forfeited and/or to seek enforcement of this restrictive covenant for the
balance of its term (extended by a period necessary to obtain enforcement of
said covenant).
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4. Provision for Payments. Employers shall have no obligation to set
aside, earmark or entrust any fund or money with which to pay their obligations
under this Agreement. Executive shall be and remain simply a creditor of the
Employers in the same manner as any other creditor having a general claim for
unpaid compensation as (if and when) his rights to receive any payment hereunder
shall mature and become payable.
The Employers reserve the absolute right at their sole discretion to
fund the obligations undertaken by this Agreement or refrain from funding the
same and to determine the extent, nature and method of any funding or funding
vehicle if they elect to fund this Agreement in whole or in part. Employers
reserve the absolute right, in their sole discretion, to terminate any funding
arrangement or program at any time, either in whole or in part. At no time shall
Executive be deemed to have any right, title or interest in or to any specified
asset or assets of the Employers as a result of this Agreement.
5. Designation of Beneficiary, Nonassignibility. Executive may
designate a beneficiary for receipt of any benefits that may become or remain
payable under this Agreement subsequent to Executive's death, which beneficiary
may be designated or changed by Executive only by signed, written, notice
provided to the Secretary of the Bank. Except for designation of a beneficiary
as provided herein, Executive shall have no right to commute, sell, assign,
transfer or otherwise convey the right to receive any payment hereunder, which
payments and the right to
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receipt thereof are expressly declared to be non-assignable and
non-transferable. Absent designation by Executive of a beneficiary, or in the
event of death of the duly designated beneficiary, Executive's estate shall be
deemed the beneficiary for purposes of this Agreement.
6. Effect On Other Agreements and Employment Rights. The payments to
be made under this Agreement shall be independent of, and in addition to, any
other agreement or agreements for services or benefits that may exist from time
to time between the parties hereto; provided, however, that this Agreement shall
supersede and replace the Executive Employee Salary Continuation Agreement of
August 18, 1992, and the August 3, 1994 Amendment thereto, as previously entered
into between Executive and the Bank. This Agreement shall not be construed as a
contract of employment nor shall it restrict the Employers' rights to discharge
Executive with or without cause at any time or restrict Executive's right to
terminate employment with the Employers at any time.
7. Definition "Change in Control". For purposes of this Agreement,
the term "change in control" as used herein shall mean any change in control
with respect to the Bank or Company that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended ("Exchange Act"), or any successor
thereto provided that, without limitation, a change in control shall be deemed
to have occurred if (i) any "person" (as
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such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities representing 25% or more of the combined
voting power of the Bank's or Company's then outstanding securities; or (ii)
during any period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors of the Bank or Company cease for
any reason to constitute at least a majority thereof unless the election, or the
nomination for election by stockholders, of each new director was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period.
8. Intended Legal Consequences. The parties hereto intend that this
Agreement constitute a plan "which is unfunded and is maintained by an employer
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees" within the meaning of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"). In the
event applicable federal law (including but not limited to ERISA and the
Internal Revenue Code of 1986 and any regulations promulgated under either ERISA
or the Code), as currently in effect or as amended, developed, established or
otherwise created subsequent to the date of this Agreement, either (i) precludes
or substantially prevents the Employers from treating the payments hereunder in
the same manner as payments of compensation to current employees at the time
such benefits are actually paid to
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Executive, or (ii) results in taxation of the payments under this Agreement to
Executive prior to Executive's actual receipt of the payments, this Agreement
shall automatically become null and void, and no further benefits hereunder
shall then be payable, paid or otherwise owed to Executive.
9. Liability. Any and all liability created under this Agreement to
provide Executive with payments of supplemental compensation shall be
exclusively and solely that of the Employers. No officer and/or director, past,
present or future, of the Employers shall have any liability to Executive, or to
any other person or entity, to provide or pay such supplemental compensation,
such liability hereby being expressly and unconditionally denied.
10. Bank and Company Not Advisors. The Employers offer this Agreement
to Executive without assuming any responsibility as an advisor or consultant
relative to the tax, Social Security or other aspects of this Agreement or the
payment of supplemental compensation hereunder.
11. Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the Bank, Company, and Executive and to each of their
respective successors, heirs, personal representatives and assigns. No sale of
substantially all of the Bank's and/or Company's assets shall be made without
the buyer expressly assuming the obligation of this Agreement.
12. Amendment and Governing Law. This Agreement may be altered,
amended or revoked by a written agreement signed by the
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Employers and Executive. The laws of the State of Wisconsin shall govern this
Agreement, except to the extent (if any) preempted by federal law.
IN WITNESS WHEREOF, the Employers have caused this Agreement to be
executed in their corporate names by duly authorized officers and Executive has
hereunto set his hand, all as of the day and year first above written.
Xxxxx X. Xxxxxxxxx WEST ALLIS SAVINGS BANK
/s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
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Executive Title:Executive Vice President
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HALLMARK CAPITAL CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
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Title:Executive Vice President
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EXHIBIT A
XXXXX X. XXXXXXXXX
Schedule for determination of Executive's Applicable Benefit
Commencement Age ("ABCA"), based on date of termination of Executive's
employment.
Year In Which
Termination Or Age At Applicable Benefit
Retirement Occurs Calendar Year End Commencement Age
----------------- ----------------- ----------------
1998 60 70
1999 61 69
2000 62 68
2001 63 67
2002 64 66
2003 65 65
Benefits are fully vested, subject to compliance with the non-competition
provisions of Section 3, upon execution of the Agreement. Executive's ABCA is
determined based on the year in which employment terminates.
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