**Exhibit 10.7**

 

**EMPLOYMENT AGREEMENT**

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”), entered into this the 20th day of August 2004, by and between 1st INDEPENDENCE FINANCIAL GROUP, INC., a Delaware corporation (“Parent”), and Kathy L. Beach (“Executive”),and joined in by 1st Independence Bank, Inc. (“Bank”), Parent’s wholly-owned subsidiary. 

 

**WITNESSETH**

 

**WHEREAS,** Parent desires to encourage Executive to make valuablecontributions to Parent’s and Bank’s business operations and not to seek or accept employment elsewhere; 

 

**WHEREAS,** Executive desires to be assured of a secure minimum compensation from Parent and Bank for her services over a defined term; 

 

**WHEREAS,** Parent desires to assure the continued services of Executiveon behalf of Parent and Bank on an objective and impartial basis and without distraction or conflict of interest in the event of an attempt by any person to obtain control of Parent; 

 

**WHEREAS,**Parent recognizes that when faced with a proposal for a change of control of Parent, Executive will have asignificant role in helping the Board of Directors assess the options and advising the Board of Directors on what is in the best interests of Parent and its shareholders, and it is necessary for Executive to be able to provide this advice andcounsel without being influenced by the uncertainties of her own situation; 

 

**WHEREAS,** Parent and Bank desire to provide fair and reasonable benefits to Executive on the terms and subject to the conditions set forth in this Agreement; and 

 

**WHEREAS,** Parent and Bank desire reasonable protection of theirconfidential business and customer information which they will develop over the years at substantial expense and assurance that Executive will not compete with Parent or Bank for a reasonable period of time after termination of her employment withParent or Bank, except as otherwise provided herein. 

 

**NOW,THEREFORE,** in consideration of the foregoing premises, the mutual covenants and undertakings herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, each intending tobe legally bound, covenant and agree as follows: 

 

1.Employment. Upon the terms and subject to the conditions set forth in this Agreement, Parent employs Executive as Parent’s and Bank’s Executive Vice President and Chief Operations Officer, and Executive accepts such employment.

 

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2. Positions. Executive agrees to serve as Parent’s and Bank’s Executive Vice Presidentand Chief Operations Officer and to perform such duties in that office as may reasonably be assigned to her by Parent’s or Bank’s Board of Directors and such duties which are of the character as those generally associated with thoseoffices; provided, however that such duties shall be performed in or from the principal executive offices of Bank, currently located in New Albany, Indiana. Executive shall not be required to be absent from the location of the principal executiveoffices of Bank on travel status or otherwise more than 45 days in any calendar year. Neither Parent nor Bank shall, without the written consent of Executive, relocate or transfer Executive to a location more than 30 miles from her principalresidence in Louisville, Kentucky. Executive shall devote substantially all her business time and efforts to Parent’s and Bank’s business. Executive may invest her assets in such form or manner as will not require any substantial serviceson her part in the operation of the affairs of the enterprises in which the investments are made. 

 

3. Term. The term of this Agreement shall begin on August 20, 2004 (the “Effective Date”) and shall end on the date which is three yearsfollowing such date; provided, however, that such term shall be extended automatically for an additional year on each anniversary of the Effective Date, unless either party hereto gives written notice to the other party not to so extend prior to ananniversary, in which case no further automatic extension shall occur and the term of this Agreement shall end two years subsequent to the anniversary as of which the notice not to extend for an additional year is given (such term, including anyextension thereof shall herein be referred to as the “Term”). Notwithstanding the foregoing, this Agreement shall automatically terminate (and the Term of this Agreement shall thereupon end) without notice when Executive attains 65 yearsof age. 

 

4. Salary. Executive shall receive an annualminimum salary of Eighty Thousand Dollars ($80,000) (“Base Compensation”) payable at regular intervals in accordance with Bank’s normal payroll practices in effect from time to time. The Board of Directors of Bank shall reviewExecutive’s salary on an annual basis and may, in its discretion, consider and declare from time to time increases in the Base Compensation that it pays Executive. Any and all increases in Executive’s salary pursuant to this section shallcause the level of Base Compensation to be increased by the amount of each such increase for purposes of this Agreement. The increased level of Base Compensation as provided in this section shall become the level of Base Compensation for theremainder of the Term of this Agreement until there is a further increase in Base Compensation as provided herein. 

 

5. Benefit Programs. (a) During the term of this Agreement, Executive shall be entitled to participate in or receive benefits under (i) any life,health, hospitalization, medical, dental, disability or other insurance policy or plan, (ii) pension, retirement or Executive stock ownership plan, (iii) bonus or profit-sharing plan or program, (iv) deferred compensation plan or arrangement, and(v) any other Executive benefit plan, program or arrangement, made available by Parent or Bank on the date of this Agreement and from time to time in the future to Parent or Bank’s directors, officers and employees on a basis consistent withthe terms, conditions and overall administration of the foregoing plans, programs or arrangements and with respect to 

 

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which Executive is otherwise eligible to participate or receive benefits. The foregoing shall not prohibit Parent orBank, in its sole discretion, from amending, modifying, freezing, suspending or terminating such plans, if any, from time to time in the future. 

 

(b) In addition to the benefits specifically described above, Parent or Bank shall provide to Executive, at no expense to Executive, family health carecoverage (i) for the benefit of the Executive’s spouse and (ii) for the benefit of her children, if any, who for federal income tax purposes are dependents of the Executive. 

 

6. General Policies. (a) So long as Executive is employed by Parent and Bank pursuant to this Agreement, Executiveshall receive reimbursement from Parent or Bank, as appropriate, for all reasonable business expenses incurred in the course of her employment by Parent and Bank, upon submission to Bank of written vouchers and statements for reimbursement.

 

(b) Executive shall attend, after receipt of approval of theChairman or President of Bank, those professional meetings, conventions, and/or similar functions that she deems appropriate and useful for purposes of keeping abreast of current developments in the industry and/or promoting the interests of Parentand Bank. 

 

(c) So long as Executive is employed by Parent orBank pursuant to this Agreement, Executive shall be entitled to office space and working conditions consistent with her position as Executive Vice President and Chief Operations Officer of the Parent and Bank. 

 

(d) During the term of this Agreement, Executive shall be entitled to four(4) weeks per calendar year of paid vacation, which shall be utilized at such times when her absence will not materially impair Parent’s or Bank’s normal business functions. In addition to the vacation described above, Executive also shallbe entitled to all paid holidays customarily given by Bank to its officers. 

 

(e) All other matters relating to the employment of Executive by Parent and Bank not specifically addressed in this Agreement shall be subject to the general policies regarding employees of Bank in effect from time totime. 

 

7. Termination. Subject to the respectivecontinuing obligations of the parties, including but not limited to those set forth in subsections 9(a), 9(b), 9(c), and 9(d) hereof, Executive’s employment by Parent and Bank may be terminated prior to the expiration of the Term of thisAgreement as follows: 

 

(a) Parent or Bank, by action of theirrespective Board of Directors and upon written notice to Executive, may terminate Executive’s employment with Parent and Bank immediately for cause. For purposes of this subsection 7(a), “cause” shall be defined as (i)Executive’s personal dishonesty of a material nature affecting Executive’s ability to perform her duties under this Agreement, (ii) Executive’s incompetence in the performance of her duties and obligations 

 

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under this Agreement, (iii) Executive’s willful misconduct or gross negligence, (iv) Executive’s breach offiduciary duty involving personal profit, (v) Executive’s intentional failure to perform stated duties, (vi) Executive’s conviction of any criminal offense which involves dishonesty or breach of trust or conviction of any felony, (vii) anyrequirement of a government agency or authority having jurisdiction over Parent or Bank, or (viii) any material violation by Executive of any material provision or covenant of this Agreement. 

 

(b) Parent or Bank, by action of their respective Board of Directors, mayterminate Executive’s employment with Parent and Bank without cause at any time; provided, however, that the “date of termination” for purposes of determining benefits payable to Executive under subsection 8(b) hereof shall bethe date which is 30 days after Executive receives written notice of such termination. 

 

(c) Executive, by written notice to Bank, may terminate her employment with Parent and Bank immediately for cause. For purposes of this subsection 7(c), “cause” shall be defined as (i) any action byParent’s or Bank’s Board of Directors to remove the Executive as Executive Vice President and Chief Operations Officer of Parent or Bank without the prior written consent of Executive, except where the Parent’s and Bank’s Boardof Directors properly act to remove Executive from such office for “cause” as defined in subsection 7(a) hereof, (ii) any action by Parent’s or Bank’s Board of Directors to materially limit, increase, or modifyExecutive’s duties and/or authority as Executive Vice President and Chief Operations Officer of Parent or Bank without the prior written consent of Executive, except such change in duties as may be required by any government agency or authorityhaving jurisdiction over Parent or Bank, or as may be required for the Board to perform its fiduciary obligations, (iii) any failure of Parent to obtain the assumption of the obligation to perform this Agreement by any successor, as contemplated inSection 18 hereof; (iv) any material violation by Parent or Bank of any material provision or covenant of this Agreement. 

 

(d) Executive, upon sixty (60) days written notice to Bank, may terminate her employment with Parent and Bank without cause. 

 

(e) Executive’s employment with Employer shall terminate in the event ofExecutive’s death or disability. For purposes hereof, “disability” shall be defined in accordance with the applicable terms of the then-in-effect long term disability benefits plan sponsored by the Bank, provided that notice of anytermination by Parent and Bank because of Executive’s “disability” shall have been given to Executive prior to the full resumption by her of the performance of such duties. 

 

(f) Nothing contained in this Agreement shall impair, affect or change any requirements otherwise imposed upon Parent orBank or Executive by applicable statute, law, rule, regulation or other legal requirement, including, without limitation, Executive’s COBRA rights upon termination of employment. 

 

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8. Termination Payments. In the event of termination of Executive’s employment pursuant toSection 7 hereof, compensation shall continue to be paid to Executive as follows: 

 

(a) In the event of termination pursuant to subsection 7(a) or 7(d), compensation provided for herein (including Base Compensation) shall continue to be paid, and Executive shall continue to participate in theExecutive benefit, retirement, and compensation plans and other perquisites as provided in Sections 5 and 6 hereof, through the date of termination specified in the notice of termination. Any benefits payable under insurance, health,retirement and bonus plans as a result of Executive’s participation in such plans through such date shall be paid when due under those plans in a manner consistent with the applicable terms of the governing plan document. The date oftermination specified in any notice of termination pursuant to subsection 7(a) shall be no later than the last business day of the month in which such notice is provided to Executive. 

 

(b) In the event of termination pursuant to subsection 7(b) or 7(c),

 

(i) compensation provided for herein (including BaseCompensation) shall continue to be paid, or at Executive’s election shall be paid to her in a single sum payment as soon as practicable following the date of her termination but without regard to the timing of payment of her Base Compensation,and Executive shall continue to participate in the Executive benefit, retirement, and compensation plans and other perquisites as provided in Sections 5 and 6 hereof, through the date of termination specified in the notice of termination. Anybenefits payable under insurance, health, retirement and bonus plans as a result of Executive’s participation in such plans through such date shall be paid when due under those plans in a manner consistent with the applicable terms of thegoverning plan document. 

 

(ii) If the termination occursduring the two-year period following a Change of Control, Executive shall be paid an amount equal to the product of 2.99 times Executive’s “base amount” as defined in Section 280G(b) (3) of the Internal Revenue Code of 1986, asamended (the “Code”) and any proposed or final regulations thereunder, less the value of any benefits provided or rights accelerated by the Change of Control, as determined pursuant to Section 280G of the Code and any proposed or finalregulations thereunder. Said sum shall be paid, at the option of Parent, either in one (1) lump sum within thirty (30) days after such termination or in periodic payments over the next 36 months or the remaining term of this Agreement whichever isless, as if Executive’s employment had not been terminated, and such payments shall be in lieu of any other future payments which Executive would be otherwise entitled to receive under this Agreement. Notwithstanding the foregoing, all sumspayable hereunder shall be reduced in such manner and to such extent so that no 

 

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such payments made hereunder when aggregated with all other payments or benefits to be made to orprovided by Executive by Parent or Bank shall be deemed an “excess parachute payment” in accordance with Section 280G of the Code and be subject to the excise tax provided at Section 4999(a) of the Code. 

 

(iii) If the termination does not occur during the two-year period followinga Change of Control, Executive shall be entitled to continue to receive from Bank her Base Compensation at the rates in effect at the time of termination for the period of time equal to the remaining Term of the Agreement. Payment of such amountshall be made in semi-monthly installments in the same sequence of semi-monthly payments as followed by the Employer for the payment of salary, beginning on the first salary payment date following the date of termination and continuing until paid infull, or at the option of Executive, in a lump sum no later than thirty (30) calendar days following the date of termination. 

 

(iv) In lieu of the COBRA coverage otherwise available to the Executive during the period of time equal to the remaining Term of the Agreement, Parent orBank will maintain in full force and effect for the continued benefit of Executive, if applicable for her spouse and dependent children, each Executive welfare benefit plan (as such term is defined in the Executive Retirement Income Security Act of1974, as amended) in which Executive was entitled to participate immediately prior to the date of her termination, unless an essentially equivalent and no less favorable benefit is provided by a subsequent employer of Executive. If the terms of anyExecutive welfare benefit plan of Employer do not permit continued participation by Executive, Employer will arrange to provide to Executive a benefit substantially similar to, and no less favorable than, the benefit she was entitled to receiveunder such plan at the end of the period of coverage. 

 

(v) Forpurposes of this Agreement, a “Change of Control” shall mean (A) any merger, tender offer, consolidation or sale of substantially all of the assets of Employer, or related series of such events, as a result of which: (1) shareholders ofEmployer immediately prior to such event hold less than 50% of the outstanding voting securities of Employer or its survivor or successor immediately after such event; (2) persons holding less than 25% of such securities before such event own morethan 50% of such securities after such event; or (3) persons constituting a majority of the Board of Directors were not directors of Employer for at least 24 preceding months; (B) any sale, lease, exchange, transfer, or other disposition of all orany substantial part of the assets of the Employer; or (C) any acquisition by any person or entity, directly or indirectly, of the 

 

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beneficial ownership of 40% or more of the outstanding voting stock of the Employer, excludingacquisitions by individuals or entities who at the date of this Agreement were either a Director of the Employer or the beneficial owner (either directly or indirectly) of 10% or more of the voting securities of the Employer. 

 

(c) In the event of termination pursuant to subsection 7(e),compensation provided for herein (including Base Compensation) shall continue to be paid, or at Executive’s or her personal representative’s election shall be paid to her in a single sum payment as soon as practicable following the date ofher termination, but without regard to the timing of payment of her Base Compensation, and Executive shall continue to participate in the Executive benefit, retirement, and compensation plans and other perquisites as provided in Sections 5 and6 hereof, (i) in the event of Executive’s death, through the date of death, or (ii) in the event of Executive’s disability, through the date of proper notice of disability as required by subsection 7(e). Any benefits payableunder insurance, health, retirement and bonus plans as a result of Employer’s participation in such plans through such date shall be paid when due under those plans in a manner consistent with the applicable terms of the governing plandocument. 

 

(d) Parent will permit Executive or her personalrepresentative(s) or heirs, during a period of three months following Executive’s termination of employment (as specified in the notice of termination) by Employer for the reasons set forth in subsections 7(b) or (c), if such terminationfollows a Change of Control, to require Parent, upon written request, to purchase all outstanding stock options previously granted to Executive under any Parent stock option plan then in effect whether or not such options are then exercisable orhave terminated at a cash purchase price equal to the amount by which the aggregate “fair market value” of the shares subject to such options on the date of termination specified in the notice of termination exceeds the aggregate optionprice for such shares. For purposes of this Section 8(d), “fair market value” shall mean the Official Closing Price for the shares of common stock of Parent as reported by the National Association of Securities Dealer AutomatedQuotation System (“NASDAQ”). If the common stock of Parent is not quoted on NASDAQ, the fair market value shall be determined by the Compensation Committee of the Board based upon quotations of the entities which make a market inParent’s stock. In the event no entities make a market in Parent’s stock, “fair market value” shall mean the amount agreed upon by the Executive and Parent. If the Executive and Parent are unable to reach an agreement regardingthe fair market value of the stock within ten (10) days of the date of termination specified in the notice of termination, then the Executive and Parent shall each select an appraisal firm and the two firms shall determine the fair market value ofthe Executive’s stock. If the two appraisal firms cannot agree upon the value within thirty (30) days of their appointment, they shall appoint a third appraiser, the decision of a majority of the three (3) appraisers shall be final and bindingon the Executive and Parent. 

 

9. Confidentiality andNon-Compete Covenants. In order to induce Parent and Bank to enter into this Agreement, Executive hereby agrees as follows: 

 

(a) Without the prior written consent of Parent and Bank, except for authorized use in performance of Executive’s duties on behalf of and for thebenefit of Parent and Bank, Executive shall not disclose to any others, or use, at any time, in any way, or anywhere, either during or subsequent to employment with Parent and the Bank, any trade secret or other confidential information (of eithertechnical or non-technical nature) of Parent and the Bank. Executive agrees and acknowledges that such trade secrets and confidential information are confidential and shall at all times remain the property of Parent or Bank. 

 

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(b) Executive, during and following termination of employment with Parent and the Bank, shall notdirectly or indirectly, individually, in partnership or through a corporation, as proprietor, manager, executive, major stockholder or consultant, compete with Parent and Bank or assist others to so compete. Except as otherwise stated herein, thiscovenant-not-to-compete shall be limited to: (1) a period of one year following such termination; (2) any business in which Parent or Bank are actually engaged or intend to engage within said one year period; and (3) those geographical areas whereParent and Bank, at the time of said termination, are actually doing business or intend to do business within said one year period. 

 

(c) Executive further agrees that during her employment and for a period of one year following the date of any termination of her employment, she willnot, by influencing or attempting to influence previously existing customers, or otherwise, either directly or indirectly, divert or attempt to divert from Parent and Bank, any business Parent and Bank had enjoyed or solicited anywhere during thepast one year, or in connection with which Executive worked during the last one year of her employment. 

 

(d) Executive agrees that for a period of one year following any termination of her employment with Parent and Bank, she shall not, directly orindirectly, approach or solicit any management employee of Parent and Bank with a view to hiring such employee for any other entity or persuading such employee to leave the employment of Parent or Bank. 

 

(e) The provisions of this Section 9 shall survive any termination ofthis Agreement. 

 

(f) Notwithstanding the foregoing but notincluding termination of the Executive’s employment under Section 7(a) or (d) hereof, the provisions of the Section 9 shall not survive the termination of Executive’s employment following a Change of Control as defined inSection 8(b)(v) of this Agreement. 

 

10. Notice ofTermination. Any termination of Executive’s employment with Employer as contemplated by Section 7 hereof, except in the circumstances of Executive’s death, shall be communicated by written “Notice of Termination” bythe terminating party to the other party hereto. Any “Notice of Termination” pursuant to subsections 7(a), 7(c) or 7(e) shall indicate the specific provisions of this Agreement relied upon and shall set forth in reasonable detailthe facts and circumstances claimed to provide a basis for such termination. 

 

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11. Suspensions. If Executive is suspended and/or temporarily prohibited from participating in theconduct of Bank’s or any affiliates’ affairs by a notice served under section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. § 1818(e)(3) and (g)(1)), Parent’s and Bank’s obligations under this Agreementshall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, Bank shall (i) pay Executive all or part of the compensation withheld while its obligations under this Agreement weresuspended and (ii) reinstate (in whole or in part) any of its obligations which were suspended. 

 

12. Removal. If Executive is removed and/or permanently prohibited from participating in the conduct of Bank’s or any affiliates’ affairsby an order issued under section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. § 1818(e)(4) or (g)(1)), all obligations of Employer under this Agreement shall terminate as of the effective date of the order, but vestedrights of the parties shall not be affected. 

 

13. RegulatoryOversight. (a) All obligations under this Agreement may be terminated except to the extent determined that the continuation of the Agreement is necessary for the continued operation of Parent or Bank by order of any state or federal bankingregulatory agency with supervision of the Parent or Bank or any of their affiliates, unless stayed by appropriate proceedings, and neither Parent nor Bank shall be under no obligation to perform any of its obligations hereunder if it is informed inwriting by any state or federal banking regulatory agency with supervision of the Parent or Bank or any of their affiliates that performance of its obligations would constitute an unsafe or unsound banking practice. 

 

(b) If Bank is in default (as defined in section 3(x)(1) of the FederalDeposit Insurance Act), all obligations under this Agreement shall terminate as of the date of default, but this provision shall not affect any vested rights of the parties. 

 

(c) Notwithstanding anything herein to the contrary, any payments made to Executive pursuant to the Agreement, or otherwise,shall be subject to and conditional upon compliance with 12 USC §1828(k) and any regulation promulgated thereunder. 

 

14. Legal Fees. If a dispute arises regarding the termination of Executive pursuant to Section 7 hereof or as to the interpretation orenforcement of this Agreement and Executive obtains a final judgment in her favor in a court of competent jurisdiction or her claim is settled by Parent and Bank prior to the rendering of a judgment by such a court, all reasonable legal fees andexpenses incurred by Executive in contesting or disputing any such termination or seeking to obtain or enforce any right or benefit provided for in this Agreement or otherwise pursuing her claim shall be paid by Parent or Bank, to the extentpermitted by law. 

 

15. Death. Should Executive die aftertermination of her employment with Bank while any amounts are payable to her hereunder, this Agreement shall inure to the benefit of and be enforceable by Executive’s executors, administrators, heirs, distributees, devisees and legatees and allamounts payable hereunder shall be paid in accordance with the terms of this Agreement to Executive’s devisee, legatee or other designee or, if there is no such designee, to her estate. 

 

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16. Notices. For purposes of this Agreement, notices and all other communications provided forherein shall be in writing and shall be deemed to have been given when delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: 

 

If to Executive:
  
3801 Charlestown Road
   
New Albany, IN 47151

If to Parent or Bank:
  
104 South Chiles Street
   
Harrodsburg, KY 40330-1620

 

or to such other address as eitherparty hereto may have furnished to the other party in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 

 

17. Governing Law. The validity, interpretation, and performance of this Agreement shall be governed by the laws ofthe Commonwealth of Kentucky, without reference to the choice of law principles or rules thereof, except to the extent that federal law shall be deemed to apply. 

 

18. Successors and Assigns. Parent shall require any successor (whether direct or indirect, by purchase, merger,consolidation or otherwise) to all or substantially all of the business or assets of Parent, by agreement in form and in substance satisfactory to Executive to expressly assume and agree to perform this Agreement in the same manner and same extentthat Parent would be required to perform it if no such succession had taken place. Failure of Parent to obtain such agreement prior to the effectiveness of any such succession shall be a material intentional breach of this Agreement and shallentitle Executive to terminate her employment with Parent and Bank pursuant to subsection 7(c) hereof. As used in this Agreement, “Parent” shall mean Parent as hereinbefore defined and any successor to its business or assets asaforesaid. 

 

19. Modification. No provision of thisagreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by Parent, Bank and Executive. No waiver by either party hereto at any time of any breach by the other party hereto of, orcompliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a wavier of dissimilar provisions or conditions at the same or any prior subsequent time. No agreements or representation, oral orotherwise, express or implied, with respect to the subject matter hereof have been made by either party, which are not set forth expressly in this Agreement. 

 

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20. Validity. The invalidity or unenforceability of any provisions of this Agreement shall notaffect the validity or enforceability of any other provisions of this Agreement which shall remain in full force and effect. 

 

21. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which togethershall constitute one and the same agreement. 

 

22.Assignment. This Agreement is personal in nature and neither party hereto shall, without consent of the other, assign or transfer this Agreement or any rights or obligations hereunder except as provided in Section 15 and Section18 above. Without limiting the foregoing, Executive’s right to receive compensation hereunder shall not be assignable or transferable, whether by pledge, creation of a security interest or otherwise, other than a transfer by her will or bythe laws of descent or distribution as set forth in Section 15 hereof, and in the event of any attempted assignment or transfer contrary to this paragraph, Employer shall have no liability to pay any amounts so attempted to be assigned ortransferred. 

 

23. Enforcement. Executive acknowledgesthat the restrictions contained in Section 9, in view of the nature of the business in which Parent and Bank are engaged, are reasonable and necessary in order to protect the legitimate business interests of Parent and Bank and that anyviolation of Section 9 would result in irreparable injury to Parent and Bank. In the event of a breach or a threatened breach by Executive of the Section 9 of this Agreement, Parent and Bank shall be entitled to an injunctionrestraining Executive from the commission of such breach, and to recover their attorneys’ fees, costs and expenses related to the breach or threatened breach. Nothing herein contained shall be construed as prohibiting Parent and Bank frompursuing any other remedies available to them for such breach or threatened breach, including the recovery of money damages. These covenants and disclosures shall each be construed as independent of any other provisions in this Agreement, and theexistence of any claim or cause of action by Executive against Parent and Bank, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by Parent and Bank of such covenants and agreements. If anyprovision of this Agreement, including Section 9, is invalid in part or in whole, it will be deemed to have been amended, whether as to time, area covered or otherwise, as and to the extent required for its validity under applicable law and,as so amended, will be enforceable. The parties will execute all documents necessary to evidence such amendment. 

 

24. Arbitration. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration inaccordance with the rules then in effect of the district office of the American Arbitration Association (“AAA”) nearest to the home office of Bank, and judgment upon the award rendered may be entered in any court having jurisdictionthereof, except to the extent that the parties may otherwise reach a mutual settlement of such issue. Parent or Bank shall incur the cost of all fees and expenses associated with filing a request for arbitration with the AAA, whether such filing ismade on behalf of Parent, Bank or Executive, and the costs and administrative fees associated with employing the arbitrator and 

 

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related administrative expenses assessed by the AAA. Parent or Bank shall reimburse Executive for all costs and expenses,including reasonable attorneys’ fees, arising from such dispute, proceedings or actions, following the delivery of the decision of the arbitrator finding in favor of Executive; provided that if such finding is not in favor of Executive thensuch Executive shall reimburse Parent or Bank for the initial filing fee paid by either of them to the AAA. Further, the settlement of the dispute by the parties to be approved by the Bank Board or the Parent Board may include a provision for thereimbursement by Bank or Parent to Executive for all costs and expenses, including reasonable attorneys’ fees, arising from such dispute, proceedings or actions. Additionally, the Bank Board or the Parent Board may authorize such reimbursementof such costs and expenses by separate action upon a written action and determination of such Board following a final disposition of the matter. Such reimbursement shall be paid within ten (10) days of Executive furnishing to Bank or Parentevidence, which may be in the form, among other things, of a canceled check or receipt, of any costs or expenses incurred by Executive. 

 

25. Document Review. Employer and Executive hereby acknowledge and agree that each (i) has read this Agreement in its entirety prior to executingit, (ii) understands the provisions and effects of this Agreement, (iii) has consulted with such attorneys, accountants and financial and other advisors as it or she has deemed appropriate in connection with their respective execution of thisAgreement, and (iv) has executed this Agreement voluntarily and knowingly. **EXECUTIVE HEREBY UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT HAS BEEN PREPARED BY LEGAL COUNSEL TO THE EMPLOYER AND THAT SHE HAS NOT RECEIVED ANY ADVICE,COUNSEL OR RECOMMENDATION WITH RESPECT TO THIS AGREEMENT FROM SUCH COUNSEL.**

 

26. Entire Agreement This Agreement together with any understanding or modifications thereof as agreed to in writing by the parties, shall constitute the entire agreement between the parties hereto. 

 

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