UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
placeCityWashington, StateD.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
AUGUST 1, 2006
FIRST MID-ILLINOIS BANCSHARES, INC.
(Exact Name of Registrant as Specified in its Charter)
placeStateDELAWARE
(State of Other Jurisdiction of Incorporation)
0-13368 37-1103704
(Commission File Number) (IRS Employer Identification No.)
1515 CHARLESTON AVENUE
MATTOON, IL 61938
(Address of Principal Executive Offices) (Zip Code)
(217) 234-7454
(Registrant's Telephone Number, including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On August 1, 2006, First Mid-Illinois Bancshares, Inc. ("the Company") entered
into an Executive Employment Agreement, effective August 1, 2006 and continuing
for three years, until July 31, 2009, with Robert J. Swift. Jr. under which Mr.
Swift agrees to continue to serve as Executive Vice President of First Mid Bank
(the "Swift Agreement"). Under the Swift Agreement, Mr. Swift will receive an
annual base salary of $133,800 and will continue to participate in the Company's
Incentive Compensation Plan, Deferred Compensation Plan, Supplemental Executive
Retirement Plan, and 1997 Stock Incentive Plan. The Swift Agreement also
provides Mr. Swift with severance benefits in the event of the termination of
his employment under certain circumstances and contains certain confidentiality
and non-competition and non-solicitation provisions.
The Swift Agreement is filed as Exhibit 10.1 and is incorporated by reference
herein.
Item 9.01. Financial Statements and Exhibits.
(a) None required
(b) None required
(c) None required
(d) Exhibits
Exhibit 10.1 - Employment Agreement between First Mid-Illinois Bancshares,
Inc. and Robert J. Swift, Jr. effective August 1, 2006.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
FIRST MID-ILLINOIS BANCSHARES, INC.
Date: August 3, 2006 /s/ William S. Rowland
William S. Rowland
President and Chief Executive Officer
INDEX TO EXHIBITS
Exhibit
Number Description
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10.1 Employment Agreement between First Mid-Illinois Bancshares, Inc. and
Robert J. Swift, Jr.
Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into this
1st day of August, 2006, by and between First Mid-Illinois Bancshares, Inc.
("the Company"), a corporation with its principal place of business located in
CityplaceMattoon, StateIllinois, and Robert J. Swift, Jr. ("Executive").
In consideration of the promises and mutual covenants and agreements
contained herein, the parties hereto acknowledge and agree as follows:
ARTICLE ONE
TERM AND NATURE OF AGREEMENT
1.01 Terms of Agreement. The term of this Agreement shall commence on
August 1, 2006 and shall continue until July 31, 2009. Thereafter, unless
Executive's employment with the Company has been previously terminated,
Executive shall continue his employment with the Company on an at will basis
and, except as provided in Articles Five, Six and Seven, this Agreement shall
terminate unless extended by mutual written agreement.
1.02 Employment. The Company agrees to employ Executive as Executive
Vice President commencing August 1, 2006 and Executive accepts such employment
by the Company on the terms and conditions herein set forth. The duties of
Executive shall be determined by the Company's Chief Executive Officer (CEO) and
Executive shall adhere to the policies and procedures of the Company and shall
follow the supervision and direction of the CEO or his designee in the
performance of such duties. During the term of his employment, Executive agrees
to devote his full working time, attention and energies to the diligent and
satisfactory performance of his duties hereunder. Executive shall not, while he
is employed by the Company, engage in any activity which would (a) interfere
with, or have an adverse effect on, the reputation, goodwill or any business
relationship of the Company or any of its subsidiaries; (b) result in economic
harm to the Company of any of its subsidiaries; or (c) result in a breach of
Section Six of the Agreement.
ARTICLE TWO
COMPENSATION AND BENEFITS
While Executive is employed with the Company during the term of this
Agreement, the Company shall provide Executive with the following compensation
and benefits:
2.01 Base Salary. The Company shall pay Executive an annual base salary
of $133,800 per fiscal year, payable in accordance with the Company's customary
payroll practices for executive employees. The CEO or his designee may review
and adjust Executive's base salary from year to year; provided, however, that
during the term of Executive's employment, the Company shall not decrease
Executive's base salary.
2.02 Incentive Compensation Plan. Executive shall continue to
participate in the First Mid-Illinois Bancshares, Inc. Incentive Compensation
Plan in accordance with the terms and conditions of such Plan. Pursuant to the
Plan, Executive shall have an opportunity to receive incentive compensation of
up to a maximum of 25% of Executive's annual base salary. The incentive
compensation payable for a particular fiscal year will be based upon the
attainment of the performance goals in effect under the Plan for such year and
will be paid in accordance with the terms of the Plan and at the sole discretion
of the Board.
2.03 Deferred Compensation Plan. Executive shall be eligible to
participate in the First Mid-Illinois Bancshares, Inc. Deferred Compensation
Plan in accordance with the terms and conditions of such Plan as in effect from
time to time.
2.04 Vacation. Executive shall be entitled to three (3) weeks of paid
vacation each year during the term of this Agreement.
2.05 Fringe Benefits. The Company shall provide the following additional
fringe benefits to Executive:
a) Use of a Company-owned or leased vehicle for professional and
personal use.
b) An amount equal to the annual dues for a Class "H" membership at
the Mattoon Golf and Country Club. c) Use of a cellular phone for
work-related calls and calls associated with Internet connection for
Executive's home.
2.06 Other Benefits. Executive shall be eligible (to the extent he
qualifies) to participate in any other retirement, health, accident and
disability insurance, or similar employee benefit plans as may be maintained
from time to time by the Company for its other executives or employees subject
to and on a consistent basis with the terms, conditions and overall
administration of such plans.
2.07 Business Expenses. Executive shall be entitled to reimbursement by the
Company for all reasonable expenses actually and necessarily incurred by him on
its behalf in the course of his employment hereunder and in accordance with
expense reimbursement plans and policies of the Company from time to time in
effect for executive employees.
2.08 Withholding. All salary, incentive compensation and other benefits
provided to Executive pursuant to this Agreement shall be subject to withholding
for federal, state or local taxes, amounts withheld under applicable employee
benefit plans, policies or programs, and any other amounts that may be required
to be withheld by law, judicial order or otherwise or by agreement with, or
consent of, Executive.
ARTICLE THREE
DEATH OF EXECUTIVE
This Agreement shall terminate prior to the end of the term described
in Section 1.01 upon Executive's termination of employment with the Company due
to his death. Upon Executive's termination due to death, the Company shall pay
Executive's estate the amount of Executive's base salary plus his accrued but
unused vacation time earned through the date of such death and any incentive
compensation earned for the preceding fiscal year that is not yet paid as of the
date of such death.
ARTICLE FOUR
TERMINATION OF EMPLOYMENT
Executive's employment with the Company may be terminated by Executive
or by the Company at any time for any reason. Upon Executive's termination of
employment prior to the end of the term of the Agreement, the Company shall pay
Executive as follows:
4.01 Termination by the Company for Other Than Cause. If the Company
terminates Executive's employment for any reason other than Cause, the Company
shall pay Executive the following:
(a) An amount equal to Executive's monthly base salary in effect at
the time of such termination of employment for a period of twelve (12)
months thereafter. Such amount shall be paid to Executive periodically in
accordance with the Company's customary payroll practices for executive
employees; however, the Company may delay payment of such amount to the
extent required by law.
(b) The base salary and accrued but unused paid vacation time earned
through the date of termination and any incentive compensation earned for
the preceding year that is not yet paid.
(c) Continued coverage for Executive and/or Executive's family under
the Company's health plan pursuant to Title I, Part 6 of the Employee
Retirement Income Security Act of 1974 ("COBRA") and for such purposes the
date of Executive's termination of employment shall be considered the date
of the "qualifying event" as such term is defined by COBRA. During the
twelve month period beginning on the date of such termination, the
Executive shall be charged for such coverage in the amount that he would
have paid for such coverage had he remained employed by the Company, and
for the duration of the COBRA period, the Executive shall be charged for
such coverage in accordance with the provisions of COBRA. For purposes of
this Agreement, "Cause" shall mean Executive's (i) conviction in a court of
law of (or entering a plea of guilty or no contest to) any crime or offense
involving fraud, dishonesty or breach of trust or involving a felony; (ii)
performance of any act which, if known to the customers, clients,
stockholders or regulators of the Company, would materially and adversely
impact the business of the Company; (iii) act or omission that causes a
regulatory body with jurisdiction over the Company to demand, request, or
recommend that Executive be suspended or removed from any position in which
Executive serves with the Company; (iv) substantial nonperformance of any
of his obligations under this Agreement; (v) misappropriation of or
intentional material damage to the property or business of the Company or
any affiliate; or (vi) breach of Article Five or Six of this Agreement.
4.02 Termination Following a Change in Control. Notwithstanding Section
4.01, if, following a Change of Control, and prior to the end of the term of
this Agreement, Executive's employment is terminated by the Company (or any
successor thereto) for any reason other than Cause, or if Executive terminates
his employment because of a decrease in his then current base salary or a
substantial diminution in his position and responsibilities, the Company (or any
successor thereto) shall pay Executive the following:
(a) The Executive's annual base salary in effect at the time of such
termination. Such amount shall be paid in a lump sum payment as soon as
practicable following the date of such termination.
(b) An amount equal to the incentive compensation earned by or paid to
Executive for the fiscal year immediately preceding the year in which
Executive's termination of employment occurs. Such amount shall be paid to
Executive in a lump sum as soon as practicable after the date of his
termination.
(c) The base salary and accrued but unused paid vacation time earned
through the date of termination and any incentive compensation earned for
the preceding fiscal year that is not yet paid.
(d) Continued coverage for Executive and/or Executive's family under
the Company's health plan pursuant to Title I, Part 6 of the Employee
Retirement Income Security Act of 1974 ("COBRA") and for such purpose of
the date of Executive's termination of employment shall be considered the
date of the "qualifying event" as such term if defined by COBRA. During the
twelve month period beginning on the date of such termination, the
Executive shall be charged for such overage in the amount that he would
have paid for such coverage had he remained employed by the Company, and
for the duration of the COBRA period, the Executive shall be charged for
such coverage in accordance with the provisions of COBRA.
For purposes of this Agreement, "Change in Control", shall have the meaning
as set forth in the First Mid-Illinois Bancshares, Inc. 1997 Stock Incentive
Plan.
If at the time of such termination of employment Executive is a "Key
Employee" as defined in Section 416(i) of the Internal Revenue Code (without
reference to paragraph 5 thereof), and the amounts payable to Executive pursuant
to Section 4.02(a) and (b) are subject to Section 409A of the Internal Revenue
Code, payment of such amounts shall not commence until six month following
Executive's termination of employment, with the first payment to include the
payments that otherwise would have been made during such six-month period.
4.03 Other Termination of Employment. If, prior to the end of the term
of this Agreement, the Company terminates Executive's employment for Cause, or
if Executive terminates his employment for any reason other than as described in
Section 4.02 above, the Company shall pay Executive the base salary and accrued
but unused paid vacation time earned through the date of such termination and
any incentive compensation earned for the preceding fiscal year that is not yet
paid.
ARTICLE FIVE
CONFIDENTIAL INFORMATION
5.01 Non-Disclosure of Confidential Information. During his employment
with the Company, and after his termination of such employment with the Company,
Executive shall not, in any form or manner, directly or indirectly, use,
divulge, disclose or communicate to any person, entity, firm, corporation or any
other third party, any confidential information, except as required in the
performance of Executive's duties hereunder, as required by law or as necessary
in conjunction with legal proceedings.
5.02 Definition of Confidential Information. For the purposes of this
Agreement, the term "Confidential Information" shall mean any and all
information either developed by Executive during his employment with the Company
and used by the Company or its affiliates or developed by or for the Company or
its affiliates of which Executive gained knowledge by reason of his employment
with the Company that is not readily available in or known to the general public
or the industry in which the Company or any affiliate is or becomes engaged.
Such confidential information shall include, but shall not be limited to, any
technical or non-technical data, formulae, compilations, programs, devices,
methods, techniques, procedures, manuals, financial data, business plans, lists
of actual or potential customers, lists of employees and any information
regarding the Company's or any affiliate's products, marketing or database. The
Company and Executive acknowledge and agree that such confidential information
is extremely valuable to the Company and may constitute trade secret information
under applicable law. In the event that any part of the confidential information
becomes generally known to the public through legitimate origins (other than by
the breach of this Agreement by Executive or by other misappropriation of the
confidential information), that part of the confidential information shall no
longer be deemed confidential information for the purposes of this Agreement,
but Executive shall continue to be bound by the terms of this Agreement as to
all other confidential information.
5.03 Delivery Upon Termination. Upon termination of Executive's
employment with the Company for any reason, Executive shall promptly deliver to
the Company all correspondence, files, manuals, letters, notes, notebooks,
reports, programs, plans, proposals, financial documents, and any other
documents or data concerning the Company's or any affiliate's customers,
database, business plan, marketing strategies, processes or other materials
which contain confidential information, together with all other property of the
Company or any affiliate in Executive's possession, custody or control.
ARTICLE SIX
NON-COMPETE AND NON-SOLICITATION COVENANTS
6.01 Covenant Not to Compete. During the term of this Agreement and for
a period of two years following the later of (i) the termination of Executive's
employment for any reasons or (ii) the last day of the term of the Agreement,
Executive shall not, on behalf of himself or on behalf of another person,
corporation, partnership, trust or other entity, within any county in which the
Company or any affiliate conducts business:
(a) Directly or indirectly own, manage, operate, control, participate
in the ownership, management, operation or control of, be connected with or
have any financial interest in, or serve as an officer, employee, advisor,
consultant, agent or otherwise to any person, firm, partnership,
corporation, trust or other entity which owns or operates a business
similar to that of the Company or its affiliates.
(b) Solicit for sale, represent, and/or sell competing products to any
person or entity who or which was the Company's customer or client during
the last two years of Executive's employment.
"Competing Products," for purposes of this Agreement, means products or
services which are similar to, compete with, or can be used for the same
purposes as products or services sold or offered for sale by the Company or any
affiliate or which were in development by the Company or any affiliate within
the last two years of Executive's employment.
6.02 Covenant Not to Solicit. For a period of two years following the
later of (i) the termination of Executive's employment for any reason or (ii)
the last day of the term of this Agreement Executive shall not:
(a) Attempt in any manner to solicit from any client or customer
business of the type performed by the Company or any affiliate or persuade
any client or customer of the Company or any affiliate to cease to do such
business or to reduce the amount of such business which any such client or
customer has customarily done or contemplates doing with the Company or any
affiliate, whether or not the relationship between the Company or affiliate
and such client or customer was originally established in whole or in part
through Executive's efforts.
(b) Render any services of the type rendered by the Company or any
affiliate for any client or customer of the Company.
(c) Solicit or encourage, or assist any other person to solicit or
encourage, any employees, agents or representatives of the Company or an
affiliate to terminate or alter their relationship with the Company or any
affiliate. (d) Do not cause to be done, directly or indirectly, any acts
which may impair the relationship between the Company or any affiliate with
their respective clients, customers or employees.
ARTICLE SEVEN
REMEDIES
Executive acknowledges that compliance with the provisions of Articles
Five and Six herein is necessary to protect the business, goodwill and
proprietary information of the Company and that a breach of these covenants will
irreparably and continually damage the Company for which money damages may be
inadequate. Consequently, Executive agrees that, in the event that he breaches
or threatens to breach any of these provisions, the Company shall be entitled to
both (a) a temporary, preliminary or permanent injunction in order to prevent
the continuation of such harm; and (b) money damages insofar as they can be
determined. In addition, the Company will cease payment of all compensation and
benefits under Articles Three and Four hereof. In the event that any of the
provisions, covenants, warranties or agreements in this Agreement are held to be
in any respect an unreasonable restriction upon the Executive or are otherwise
invalid, for whatsoever cause, then the court so holding shall reduce, and is so
authorized to reduce, the territory to which it pertains and/or the period of
time in which it operates, or the scope of activity to which it pertains or
effect any other change to the extent necessary to render any of the
restrictions of this Agreement enforceable.
ARTICLE EIGHT
MISCELLANEOUS
8.01 Successors and Assignability.
(a) No rights or obligations of the Company under this Agreement may
be assigned or transferred except that the Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or assets of
the Company to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place.
(b) No right or obligations of Executive under this Agreement may be
assigned or transferred by Executive other than his rights to payments or
benefits hereunder which may be transferred only by will or the laws of
descent and distribution.
8.02 Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and may not be
modified except in writing by the parties hereto; provided, however, that any
amendment or modification that the Company in its sole discretion deems
necessary to comply with the American Jobs Creation Act, and regulations
promulgated thereunder, shall not require the consent of Manager as long as such
amendment or modification does not reduce the absolute dollar amount of benefits
payable hereunder. Furthermore, the parties hereto specifically agree that all
prior agreements, whether written or oral, relating to Executive's employment by
the Company shall be of no further force or effect from and after the date
hereof.
8.03 Severability. If any phase, clause or provision of this Agreement
is deemed invalid or unenforceable, such phrase, clause or provision shall be
deemed severed from this Agreement, but will not affect any other provisions of
this Agreement, which shall otherwise remain in full force and effect. If any
restriction or limitation in this Agreement is deemed to be unreasonable,
onerous or unduly restrictive, it shall not be stricken in its entirety and held
totally void and unenforceable, but shall be deemed rewritten and shall remain
effective to the maximum extent permissible within reasonable bounds.
8.04 Controlling Law and Jurisdiction. This Agreement shall be governed
by and interpreted and construed according to the laws of the State of
StateplaceIllinois. The parties hereby consent to the jurisdiction of the state
and federal courts in the State of StateplaceIllinois in the event that any
disputes arise under this Agreement.
8.05 Notices. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given (a) on the date of service if served personally on the party to whom
notice is to be given; (b) on the day after delivery to an overnight courier
service; (c) on the day of transmission if sent via facsimile to the facsimile
number given below; or (d) on the third day after mailing, if mailed to the
party to whom notice is given, by first class mail, registered or certified,
postage prepaid and properly addressed, to the party as follows:
If to Executive: Robert J. Swift, Jr.
addressStreet56 Country Club Rd.
CityplaceMattoon, StateIL PostalCode61938
If to the Company: First Mid-Illinois Bancshares, Inc.
1515 Charleston Ave.
Mattoon, Illinois 619338
Facsimile: 217-258-0485
Attention: Chairman
Any party may change its address for the purpose of this Section by
giving the other party written notice of its new address in the manner set forth
above.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
FIRST MID-ILLINOIS BANCSHARES, INC.
By: /s/ William S. Rowland
William S. Rowland
Title: Chief Executive Officer
EXECUTIVE:
/s/ Robert J. Swift
Robert J. Swift, Jr.