Exhibit 10.16
CONSULTING AGREEMENT
     This Consulting Agreement (the “Agreement”) is made and entered into this
15th day of January, 2008 by and between Mercantile Bancorp, Inc., a Delaware
corporation, (“Company”) and Dan S. Dugan (“Consultant”). WITNESSETH:
RECITALS
     A. Consultant possesses certain knowledge and expertise in the businesses
of bank holding companies and banks which Company wishes to utilize on a
consulting basis and for representation on Company’s board and boards of certain
banks and bank holding companies in which Company owns all or a significant
percentage of the issued and outstanding stock; and
     B. Company desires Consultant to act as a consultant to the Company upon
the terms and conditions hereinafter set forth.
     C. Consultant is willing to act as a consultant for Company upon the terms
and conditions hereinafter set forth.
     In consideration of the matters described above, and of the mutual
benefits, covenants and obligations set forth in this Agreement, Company and
Consultant agree as follows:
     1. Consulting Services. Company agrees to retain Consultant and Consultant
agrees to serve as an advisor and consultant to Company. Without limiting the
generality of the foregoing, the consulting services provided by Consultant
shall be in the area of management, operations and customer relations of bank
holding companies and banks. In addition, Consultant shall serve on Company’s
board, if elected by the stockholders of Company, and as Company’s
representative on the boards of up to six (6) banks or bank holding companies in
which Company owns all or a significant percentage of the issued and outstanding
stock. The board of directors of Company shall designate such banks or bank
holding companies from time to time but the number at any one time shall not
exceed six (6).
     2. Term. This Agreement shall commence on March 1, 2008 and shall continue
until February 28, 2009 or Consultant’s earlier death or disability rendering
him unable to provide the consulting services, or until earlier terminated by
Company for cause.
     3. Consideration for Consulting Services. As consideration for the services
to be performed by Consultant pursuant to paragraph 1, Consultant shall be
entitled to a fee of Seventy-five Thousand and 00/100 Dollars ($75,000.00) which
shall be payable in twelve (12) monthly installments on the fifteenth day of
each month during the term of this Agreement. Consultant shall not be paid a
director fee for serving as a director on Company’s board and those banks or
bank holding companies upon which Consultant will be the Company’s
representative. In addition, to assist Consultant with customer relations, the
Company shall pay for or reimburse to Consultant the dues for a social
membership at the Quincy Country Club, Quincy, Illinois.

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     4. Time Devoted to Work. The services and hours Consultant is to work on
any given day in rendering consulting and advisory services hereunder will be
determined by Consultant after consultation with the Company and by the dates
and times of the board meetings for those boards on which Consultant will be a
director. Company will rely upon Consultant to work such hours as are reasonably
necessary to fulfill the spirit and purpose of this Agreement.
     5. Confidentiality; Services for Others. During the term of this Agreement
and at all times thereafter, Consultant shall not divulge or appropriate for his
own use or for the use of others any trade secret or confidential information of
Company or any of its subsidiaries, relating to the products, customers,
prospective customers or related data of Company or its subsidiaries obtained by
Consultant during his engagement by Company.
     6. Independent Contractor Status. It is specifically understood and agreed
upon by the parties that Consultant is not an employee of Company but rather an
independent contractor for all purposes in that he is engaged in the performance
of services hereunder not as an employee of Company but as an independent
contractor. Notwithstanding any determination by a court, administrative agency
or other party, such independent contractor status shall apply for purposes of
worker’s compensation, unemployment compensation, Federal Insurance Contribution
Act (FICA), income tax withholding and all other purposes. Consultant agrees to
pay all such taxes and contributions. Consultant shall not be entitled to
participate in any employee benefit programs or plans established by Company.
Consultant agrees to indemnify and hold harmless Company and its employees and
officers from and against any loss, expense or cost resulting from a
determination that Consultant is other than an independent contractor or from
any claim Consultant may make as a purported employee.
     7. Expenses. Company shall provide to Consultant a cell phone and shall pay
for the expense thereof. Company shall reimburse Consultant for all reasonable
expenses incurred in carrying out his duties and responsibilities pursuant to
this Agreement, including travel and lodging expenses. Consultant shall submit
to Company, periodically, requests for expense reimbursement with an itemization
of the expenses incurred. All reimbursement for reasonable and customary travel
and out-of-pocket expenses will be based upon their actual cost. Any
entertainment expenses Consultant intends to incur must be pre-approved by
Company, at Consultant’s request.
     8. Consultation Concerning Acquisitions. If Company requests that
Consultant advise the Company with regard to specific targeted acquisitions of
the Company, Company and Consultant shall in advance agree to the scope of such
services and a reasonable fee to be paid to Consultant for the rendering of such
consulting services regarding acquisitions.
     9. Assignment. This Agreement shall be binding upon and inure to the
benefit of the Company, its successors and assigns. This Agreement is a personal
services contract as to Consultant and shall not be assignable by Consultant,
but all obligations and agreements of Consultant hereunder shall be binding upon
and enforceable against Consultant and his personal representatives and heirs.

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     10. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and any amendments hereto must be in writing and be duly
executed by each of the parties hereto.
     11. Construction. Titles and headings to various subdivisions of this
Agreement are for convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation of this Agreement.
     12. Severability. If any provision of this Agreement is determined to be
invalid or unenforceable under any court or governmental agency or competent
jurisdiction, or under any statute, the remaining provisions shall not thereby
be invalidated but shall remain in full force and effect, unless to do so would
clearly violate the present legal and valid intention of the parties hereto.
     13. Notices. All notices given hereunder shall be in writing and shall be
deemed delivered when served personally or when deposited in the United States
mail, postage prepaid, addressed at the address following the parties’
signatures, or at such other address as may be designated by written notice
given in accordance with the provisions of this paragraph.
     14. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois.
     IN WITNESS WHEREOF, Company and Consultant have executed this Agreement on
the day and year first above written.

         
 
  COMPANY:         Mercantile Bancorp, Inc.
 
       
 
  By   /s/ Ted T. Awerkamp
 
       
 
      Ted T. Awerkamp, its President
 
       
 
  Address:   200 North 33rd Street
 
      P.O. Box 3455
 
      Quincy, IL 62305-3455
 
            /s/ Dan S. Dugan           Dan S. Dugan
 
       
 
  Address:   1025 Evangeline Road East
Quincy, IL 62301

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