**Exhibit10.(ii)(10)**

 

**MANAGEMENTCONTINUITY AGREEMENT**

 

This ManagementContinuity Agreement (“Agreement”) is made and entered into as of January 15,2004, by and between Illini Corporation, an Illinois bank holding companyorganized under the laws of the Illinois (“**Illini**”),Illini Bank, a bank organized under the Illinois Banking Act **(“Bank”)**, and Gaylon E. Martin, 13788 North2200 Avenue, Geneseo, Illinois **(“Officer”).**

 

**WITNESSETH**

 

**WHEREAS**, the Officer is seeking employmentwith Illini as Executive Vice President, and with Bank as President with thesalary as set forth in this Agreement;

 

**WHEREAS**, Illini and Bank wishes to attractand retain highly qualified executives and to achieve this goal it is in thebest interests of Illini and Bank to secure the continued services of theOfficer regardless of a change in control of Illini, and to reward the Officerin accordance with his contributions to Illini’s success;

 

**WHEREAS**, Illini and Officer are willing, inorder to induce the Officer to remain an employee of Illini and Bank, and toprovide the Officer a measure of security with respect to his employment withIllini in the event of a change in control of Illini so that the Officer willbe in a position to act with respect to a possible change in control of Illiniin the best interests of Illini and its shareholders without concern as to theOfficer’s own financial security, to agree that employment of the Officer shallbe terminable only in accordance with Section II herein;

 

**WHEREAS,**Illini is willing, in order to compensate the Officer fairly for theOfficer’s contribution to the prosperity of Illini, and in order to induce theOfficer to remain in employment with Illini, to agree that Officer shall becompensated in accordance with the terms and conditions herein; and

 

**NOW**, **THEREFORE**, Illini, Bank, and Officer agreeas follows:

 

**I.  EMPLOYMENT**

 

**A.  Term.**  Illini shall continue to employ Officer asits Executive Vice President, and Bank shall continue to employ Officer at itsPresident until December 31, 2006,  (the“Term”), unless terminated prior to the expiration of the Term pursuant toSection II herein.

 

**B.  Compensation.**  As compensation for services provided toIllini and Bank by Officer pursuant to this Agreement, Illini shall pay theOfficer an annual base salary of $135,000.00, which salary may be increasedfrom time to time. It is expressly understood that the annual base salary ofOfficer shall be allocated between Illini and Bank in accordance to the timedevoted to each position.  The Officershall also be eligible to participate in any other compensation and benefitplans generally available to executive employees of Illini of like grade andsalary including, but not limited to, retirement plans,

 

1

----

 

group life, disability,accidental death and dismemberment, travel and accident, and health and dentalinsurance plans, incentive compensation plans, stock compensation plans,deferred compensation plans, supplemental retirement plans, qualified and non-qualifiedincentive stock option plans, and excess benefit plans. Such other compensationand benefit plans are hereinafter referred to collectively as the “Compensationand Benefits Plans”.

 

**C.  Duties.**Officer shall perform such duties and functions as are assigned to him by thebylaws of Illini or Bank, as amended or restated by the Board of Directors ofIllini or by the Board of Directors of Bank. Illini shall provide the Officerwith a description of his duties at the inception of his employment which shallremain unchanged until such time as changes in duties or function are approvedby Illini’s or Bank’s Board of Directors. In the event of an actual orpotential Change in Control (as defined in Section II, H) of Illini, Officershall perform his duties and function in a manner that is consistent with thebest interests of Illini and its shareholders, without regard to the effectthat the potential or actual Change in Control may have on the officerpersonally.

 

**D.  Duty Of Loyalty.** The Officer shall work full-time for Illiniand Bank only, or for a subsidiary thereof, provided that:

 

(a) He may also engage incharitable, civic and other similar activities;

 

(b) With the consent ofthe Board of Directors of Illini or Bank, he may serve as a director of abusiness organization not competing with the Illini or Bank; and

 

(c) He may make suchinvestment and reinvestment in business activities as shall not require asubstantial portion of his time.

 

**E. Duty Not To Disclose Confidential Information.**  The Officer acknowledges that hisrelationship with the Illini is one of high trust and confidence, and that hehas access to Confidential Information, as hereinafter defined, of Illini andBank.  The Officer shall not directly orindirectly, communicate, deliver, exhibit or provide Confidential Informationto any person, firm, partnership, corporation, organization or entity, exceptas required in the normal course of the Officer’s duties. The duties containedin this paragraph shall be binding upon the Officer during the time that he isemployed under this Agreement and following the termination of such employment.Such duties will not apply to any such Confidential Information that is orbecomes in the public domain through no action on the part of the Officer, isgenerally disclosed to third parities by Illini without restriction on suchthird parties, or is approved for release by written authorization of the Boardof Directors of Illini or Bank.  Theterm “Confidential Information” shall mean any and all confidential,proprietary, or secret information relating to the Illini’s or Bank’s business,services, customers, business operations, or activities and any and all tradesecrets, products, methods of conducting business, information, skills,knowledge, ideas, know-

 

2

----

 

how or devices used in,developed by, or pertaining to Illini’s or Bank’s business and not generallyknown, in whole or in part, in any trade or industry in which Illini isengaged.

 

**SectionII. TERMINATION**

 

**A.  Term of Agreement**.  This Agreement shall run for an initial termof three years from its inception. Subject to the approval of the Board ofDirectors of Illini, or unless Illini terminates for cause, or Officerterminates in accordance with Section II, the original agreement shall beextended each year for one additional year for each year that lapses from theinitial term so that the Agreement maintains a length of three years. In theevent of a termination by Illini for cause, or by the Officer under Section II,all obligations hereunder shall terminate except as specifically set forth inthe Agreement.

 

**B.Voluntary Termination by Officer.** The Officer may voluntarilyterminate this Agreement by providing thirty days notice to Illini, in whichevent Illini shall have no further obligation to the Officer hereunder from thedate of such termination except to pay Officer earned but unpaid salary andbenefits and to honor vested option rights without imposing further conditionor reduction thereof, and the Officer shall have no further obligation toIllini hereunder except the duty to not disclose Confidential Information inaccordance with Section E.

 

**C.Termination By Death Of Officer.** In the event the Officer’semployment with Illini is terminated due to the Officer’s death, Illini shallhave no further obligation to the Officer, his heirs or legatees hereunder fromthe date of such termination, except to notify Officer’s heirs or legatees ofearned but unpaid salary and benefits due under the Compensation and BenefitPlans and the value, terms and condition of vested option rights, and to payOfficer’s heirs or legatees amounts due officer hereunder without imposingfurther condition or reduction thereof and the heirs and legatees of the Officershall have no further obligation.

 

**D.Termination By Disability Of Officer.** In the event theOfficer’s employment with the Illini is terminated due to the Officer’sPermanent Disability, Illini shall have no further obligation to the Officerhereunder from the date of such termination except to notify the employee ofand pay at the direction of Officer or person empowered by Officer to directpayment earned but unpaid salary and benefits due under the Compensation andBenefit Plans and to honor vested option rights without imposing furthercondition or reduction thereof, and Illini shall have no further obligation toOfficer or person empowered by Officer to direct payments due under theAgreement. For purposes of this Agreement, the term “Permanent Disability”means a physical or mental condition of the Officer which:

 

1.               Hascontinued uninterrupted for six months;

 

2.               Isexpected to continue indefinitely; and

 

3.               Isdetermined by Illini to render the Officer incapable of adequately performinghis duties.

 

3

----

 

Incase of dispute in applying “Permanent Disability” to a physical or mentalcondition of Officer, the test of disability used by the United States SocialSecurity Administration for the same or similar purposes shall be the finalstandard for determining the “Permanent Disability” of the Officer.

 

**E.  Termination byIllini Without Cause.** Illini may terminate this Agreement without cause prior to the Firm Termas hereinafter defined by providing thirty days notice to the Officer. In suchevent, the Officer shall have no further obligation to Illini hereunder, exceptthe duty to not disclose Confidential Information in accordance with SectionII, E, and Illini shall have no further obligation to the Officer hereunderfrom the date of such termination except (i) to pay to the Officer the salarypayments described in Section II, B, in the amount in effect on the date oftermination, for a period of twelve months from the date of termination, (ii)to pay to the Officer earned but unpaid salary and any other benefits under theCompensation and Benefit Plans without imposing further condition or reduction,and (iii) to pay to the Officer reasonable expenses of out placement within thefinancial institutions or financial industry during the twelve month periodfollowing the date of termination; provided, however, out placement expensesshall be paid only upon actually incurring such expense and Officer’sfurnishing of evidence thereof to Illini and shall not include moving orrelocation expense; and provided, however, that any benefit to be provided by aCompensation and Benefit Plan may be provided by Illini through cash orequivalent value or through a nonqualified arrangement or arrangements if, inthe judgment of Illini, permitting the Officer to participate in such planafter the date of termination would adversely affect the tax status of suchplan, and if, in the judgment of the Officer, any proposed cash or equivalentvalue through a nonqualified arrangement or arrangement would not materiallyincrease the tax liabilities of Officer under federal or state income tax orestate tax laws.

 

**F. Termination by Illini With Cause**. Priorto or during the Firm Term, Illini may terminate this Agreement for Cause.  For purposes of this Agreement, Cause shallmean;

 

1.               TheOfficer’s willful and material breach of a provision of this Agreement;  or

 

2.               TheOfficer willfully engages in illegal conduct or gross misconduct, whichmaterially and demonstrably injures Illini;

 

For purposes ofdetermining whether “Cause” exists, no act or failure to act, on the Officer’spart shall be considered “willful” unless it is done, or omitted to be done, bythe Officer in bad faith or without reasonable belief by the Officer that hisaction or omission was in the best interest of Illini. In the event of theOfficer’s termination for Cause, Illini will have no further obligation to theOfficer under the Agreement from the date of such termination.

 

**G. Termination Following Change in Control.**In the event there is a Change in Control of Illini, as defined in Section Hbelow, during the Term, and (1) within the period

 

4

----

 

commencing twelve monthsprior to the date of a Change in Control and ending twelve months following thedate of the Change in Control (the “Firm Term”), the Officer’s employmenthereunder is terminated by the Illini other than for Cause, as defined inSection II, F; or (2) Within the Firm Term, the Officer resigns from his employmenthereunder upon thirty days written notice given to Illini within thirty daysfollowing a material change in the Officer’s title, authorities or duties, ineffect immediately prior to the Change in Control, a reduction in thecompensation or a reduction in benefits provided pursuant to this Agreement orthe Compensation and Benefit Plans below the amount of compensation andbenefits in effect immediately prior to the Change in Control, or a change ofthe Officer’s principal place of employment without his consent to a city morethan 25 miles from Springfield, Illinois, then the Officer shall have nofurther obligation to Illini hereunder, except the duty not to discloseConfidential Information in accordance with Section I, E, and Illini shall haveno further obligation to the Officer hereunder from the date of terminationexcept (i) to pay to the Officer the salary payments described in Section I, B,in the amount in effect on the date of termination, for a period of twelvemonths from the date of termination, (ii) to pay to the Officer any otherbenefits due under the Compensation and Benefit Plans without imposing furthercondition or reduction thereof, and (iii) to pay to the Officer reasonableexpenses of out placement within the financial institutions industry orfinancial industry following the date of termination; provided, however, outplacement expenses shall be paid only upon actually incurring such expenses andOfficer’s furnishing of evidence thereof to the Illini and shall not includemoving or relocation expenses and provided, however, that any benefit to beprovided  by the Illini through cash ofequivalent values or through a nonqualified arrangement or arrangements if, inthe judgment of the Illini, permitting the Officer to participate in such planafter the date of termination would adversely affect the tax status of suchplan.

 

**H. Change in Control Defined.**A Change inControl of the Illini shall have occurred:

 

1.               Onthe fifth day preceding the scheduled expiration date of a tender offer by, orexchange offer by any corporation, person, other entity or group (other thanIllini or any of its wholly owned subsidiaries), to acquire Voting Stock ofIllini if:

 

i.                  Aftergiving effect to such offer such corporation, person, other entity or groupwould own 50% or more of the Voting Stock of the Illini;

 

ii.               Thereshall have been filed documents with the Securities and Exchange Commission inconnection therewith (or, if no such filing is required, public evidence thatthe offer has already commenced); and such corporation, person, other entity orgroup has secured all

 

5

----

 

required regulatory approvals to own or control 50% ormore of the Voting Stock of Illini;

 

2.               Ifthe shareholders of Illini approve a definitive agreement to merger orconsolidate Illini with or into another corporation in a transaction in whichneither Illini nor any of its wholly owned subsidiaries will be the survivingcorporation, or to sell or otherwise dispose of all or substantially all of theIllini’s assets to any corporation, person, other entity or group (other thanIllini or any of its wholly owned subsidiaries), and such definitive agreementis consummated;

 

i.                  (c)If any corporation, person, other entity or group (other than Illini or any ofits wholly owned subsidiaries) becomes the Beneficial Owner (as that term isdefined in the Securities and Exchange Commission’s Rule 13d-3 under theSecurities Exchange Act of 1934) of stock representing 50% or more of theVoting Stock of Illini; or

 

ii.               (d)If during any period of two consecutive years Continuing Directors cease tocomprise a majority of Illini’s Board of Directors.

 

3.               Theterm “Continuing Director’ means:

 

i.                  Anymember of the Board of Directors of the Illini at the beginning of any periodof two consecutive years; and

 

ii.               Anyperson who subsequently become s a member of the Board of Directors of theIllini, if:

 

(i) Such person’snomination for election or election to the Board of Directors of Illini orIllini is recommended or approved by resolution of a majority of the ContinuingDirectors; or

 

(ii) Such person isincluded a nominee in a proxy statement of the Illini  distributed when a majority of the Board of Directors of Illinior Illini consists of Continuing Directors.

 

4.               “VotingStock” means those shares of Illini entitled to vote generally in the electionof directors.

 

**I. Termination of Related Offices**.  The parties agree that in the eventOfficer’s employment by Illini is terminated for any reason, Officer willimmediately resign from all other positions or offices held with Illini,including any directorships with Illini, or any subsidiaries thereof.

 

**J. Officer’s Costs of Enforcement**.  Illini shall pay all expenses of Officer,including but not limited to attorney’s fees, incurred in enforcing payments byIllini pursuant to this Agreement.

 

6

----

 

**Section III. MISCELLANEOUS**

 

**A. Assignment of Officer’s Rights**.  The Officer may not assign, pledge orotherwise transfer any of the benefits of this Agreement either before or aftertermination of employment, and any purported assignment, pledge or transfer ofany payment to be made by Illini” hereunder shall be void and of no effect.  No payment to be made to the Officerhereunder shall be subject to the claims of creditors of the Officer.

 

**B. Agreements Binding on Successor. **This Agreement shall be binding and inure tothe benefit of the parties hereto and their respective successors, assign,personal representatives, heirs, legatees and beneficiaries.

 

**C. Notices.**  Any notice required or desired to be given under this Agreementshall be deemed given if in writing and sent by first class mail to the Officeror Illini, at his or its address as set forth above, or to such other addressof which either the Officer or Illini shall notify the other in writing.

 

**D. Waiver of Breach**.  The waiver by either party of a breach ofany provision of this Agreement shall not operate or be construed as a waiverof any subsequent breach by either the Officer or Illini.

 

**E. Intellectual Property Rights. **Officershall have sole and exclusive rights over any intellectual property created byhim while employed under this Agreement, and shall not be subject to claims byIllini of rights they may have under equity or statute arising from Officer’semployment with Illini.

 

**F. Entire Agreement.**  This Agreement contains the entireunderstanding of the parties and supersedes prior agreements between Officerand Illini.  It may be modified or amendedonly by an agreement in writing signed by the party against whom enforcement ofany change or amendment is sought.

 

**G. Severability of Provisions.** If for any reason any paragraph, term orprovision of this Agreement is held to be invalid or unenforceable, all othervalid provisions herein shall remain in full force and effect and allparagraphs, terms and provisions of this Agreement shall be deemed to beseveral in nature. An Offer of Employment containing various special terms andconditions of the Officer’s employment was made between Illini and Officer andis attached to this Agreement and incorporated hereinto by this reference.

 

**H. Governing Law**.  This Agreement is made in, and shall be governed by, the laws ofthe State of Illinois.

 

 

**IN WITNESS WHEREOF**, the parties haveexecuted this Agreement as of the day and year first set forth above.

 
| **ILLINI  CORPORATION**            | **[OFFICER]**         |   |
|------------------------------------|-----------------------|--------|
| **ILLINI  BANK**                   |                  |
| By:                                | /s/ Burnard K. McHone |   | /s/ Gaylon E. Martin |   |
| Its:  President          | Date:                 | 1-7-04 |   |
| Date:  January  15, 2004 |                  |
|                                    |                       |        |  |  |  |  |  |

 

7

----

 

**ExhibitA**

 

**DESCRIPTIONOF RESPONSIBILITES AND DUTIES**

 

 

[Insert or attach jobdescription.]

 

8

----