AutoCoded Document





EMPLOYMENT
AGREEMENT



     THIS
AGREEMENT is made this 15th day of June,  1987,  between  MERCANTILE  TRUST & SAVINGS
BANK, 440 Maine  Street,  Quincy,  Illinois,  an Illinois  banking  corporation
(“Employer”)  and DAN S. DUGAN,  31 Ridgewood Hill,  Quincy, Illinois,
(“Employee”);



     WHEREAS,
Employee is presently President and Chief Executive Officer of Employer; and



     WHEREAS,
the parties hereto desire to provide for the continued employment of Employee
with Employer on the terms and conditions stated below.



     NOW,
THEREFORE, in consideration of the mutual undertakings of the parties hereto, IT
IS HEREBY AGREED as follows:



     1. Employment



     (a)
Employer hereby employs Employee as President and Chief Executive Officer of
Employer, or in such other executive or advisory capacity for Employer as may be
assigned to him from time to time by the Board of Directors of Employer.
Employment hereunder shall commence on the date hereof, and shall continue until
December 31, 1990, unless this Agreement is earlier terminated as provided in
Section 4 hereof. All duties or responsibilities undertaken or performed by
Employee pursuant to this Agreement shall be subject to the direction,
supervision and control of the Board of Directors of Employer.



     (b)
Employee hereby accepts employment with Employer in the capacities and for the
period specified in paragraph 1(a) above and, while so employed, agrees to
devote such of his time, skill, labor and attention to the affairs and business
of Employer as may be necessary or desirable to assure the proper performance of
his duties.



1










     2. Direct Compensation



     (a) Salary.



     (1)
From the date hereof through December 31, 1987, Employer shall pay Employee a
base salary of $7,766.67 per month, in installments paid no less frequently than
monthly.



     (2)
After December 31, 1987, Employer shall pay Employee a monthly salary determined
by the Board of Directors of Employer, but in no event shall such salary be less
than the monthly base salary paid Employee during the period from the date
hereof through December 31, 1987.



     (b)
Automobile. Employer shall provide Employee with an automobile.



     (c) Membership.
Employee is required to be a member of Quincy Country Club as a condition of his
employment, and Employer agrees to pay the dues and assessment for such
membership.



     (d)
Expenses. Employer shall reimburse Employee for reasonable business
expenses incurred by Employee in the performance of his duties under this
Agreement.



     3. Employee Benefits



     During
the term hereof, Employee shall be entitled to participate in all benefit plans
and programs of Employer in which he is eligible to participate. Nothing herein
is intended to or shall be deemed to be granted to Employee in lieu of any
rights and privileges to which he may be entitled as an employee of Employer
under any deferred profit sharing, insurance, hospitalization, vacation or other
plans which may now be in effect or which may hereafter be adopted, it being
understood that Employee shall have the same rights and privileges to
participate in such plans and benefits as any other employee of Employer.



2










     4. Termination of Agreement



     (a)
Disability. If, during the period of this Agreement, Employee comes under
such physical or mental disability that he is unable to undertake his duties for
a period of 180 consecutive days, Employer may suspend this Agreement during the
period of such disability by giving notice to Employee of its intention to
suspend due to disability. This Agreement shall thereupon be suspended as of the
end of the month in which such notice was given and shall continue until
Employee is no longer suffering such disability.



     Evidence
of such recovery shall be an opinion of Employee’s physician.



     (b)
Death. In the event of the death of Employee during the term hereof, this
Agreement shall terminate at the end of the month in which Employee dies and
Employer shall have no further obligation hereunder.



     (c)
Wilful Breach of Duty. In accordance with the terms of this paragraph,
Employer may terminate this Agreement for Employee’s Wilful Breach of Duty.
For purposes hereof, Wilful Breach of Duty shall mean only (i) aiding and
abetting a competitor; (ii) embezzlement or misappropriation of corporate funds;
(iii) conviction of a felony involving moral turpitude; or (iv) conviction of a
crime when federal banking laws call for a jail sentence. With respect to the
causes set forth in subparagraphs (c)(iii) and (iv) above, such convictions must
be final from which no appeal can be taken. Employer shall inform Employee by
written notice of its intention to terminate this Agreement for Wilful Breach of
Duty, the specific matters constituting Wilful Breach of Duty and the date on
which this Agreement is to be terminated, which date, in the case of a
termination pursuant to subparagraph (c) (i), shall be reasonably set to allow
Employee to rectify the matters specified, and Employer shall afford Employee an
opportunity, reasonable under the circumstances, to rectify, If possible, the
matters specified in Employer’s Notice.



3










     (d)
Effect of Termination. In the event that Employer terminates this
Agreement for reasons other than those specified in paragraph (c), Employer
shall continue to pay Employee his monthly base salary then in effect for the
remaining term of this Agreement. Should Employee, prior to the end of such
period, attain gainful employment at a compensation level equal to or exceeding
that in effect at the time of termination by Employer, Employee shall cease to
be entitled to receive payments of his monthly base salary. In lieu of
Employer’s obligations under the first sentence of this subparagraph (d),
Employer may elect to pay Employee, within thirty (30) days after such
termination, in a lump sum, an amount equal to the present value, using a
compounded annual discount rate of 8%, of the sums provided for in the first
sentence of this subparagraph (d).



     5. Non-Competition



     (a)
During the term of this Agreement, Employee shall not engage in any business or
practice or become employed in any position which is in competition with
Employer or its affiliates.



     (b)
In the event of Employee’s termination as an Employee of Employer pursuant
to this Agreement, for whatever reason, Employee shall not, for a period of two
(2) years from the date of such termination, engage within twenty-five (25)
miles of the corporate city limits of Quincy, Illinois, in the banking, savings
and loan, or commercial, agricultural or consumer lending business, or in the
sale of any services or products as are provided by Employer, directly or
indirectly, as an individual, partner, stockholder (except to the extent of
owning up to 1% of the issued and outstanding stock of an entity), director,
officer, principal, agent or employee, or in any other relation or capacity
whatsoever.



4










     (c)
Employee hereby acknowledges that the obligations to the Employer hereunder and
the rights and privileges granted to the Employer hereunder are of a special,
personal, unique and extraordinary character. Therefore, anything herein to the
contrary notwithstanding, the Employer shall be entitled to seek injunctive or
other equitable relief in an appropriate court to prevent a further breach by
the terminated Employee. Resort to such equitable relief, however, shall not be
construed as a waiver of any other rights and remedies that the Employer may
have for damages or otherwise.



     (d)
Employee acknowledges that he considers this Non-Competition covenant to be  reasonable. 



     6.
Confidential Information 



     Employee
agrees that he will not  disclose material confidential information related to the
business and  operations of Employer to third parties not entitled to such information
during  the term of this Agreement and for a period of two (2) years after termination
of this Agreement.



     7. Derogatory Statements



     During
the term of this Agreement and thereafter, Employee shall not make any statement
calculated to be derogatory or harmful concerning Employer or any of
Employer’s directors, officers or employees.



     8. Change of Employer Identity



     Employee’s
rights under this Agreement shall not be diminished or in any way prejudiced by
any sale, reorganization, merger, consolidation, liquidation or other event or
condition affecting Employer, and any assignor or successor to Employer shall be
subject to this Agreement as if such party were an original employer hereunder.



5










     9. Certain Legal Expenses



     Employer
shall pay all expenses, including attorney’s fees, incurred by Employee in
his defense of the validity or in the enforcement of this Agreement.



     10. Notices



     Any
notice required or permitted to be given under this Agreement shall be
sufficient if in writing and sent by registered mail to his residence address as
last provided to Employer by him in the case of Employee or to its principal
office in the case of Employer.



     11. Miscellaneous



     (a)
The rights and obligations of the Employer and Employee under this Agreement
shall inure to the benefit of and shall be binding upon their respective heirs,
administrators, successors and assigns.



     (b)
Any provisions of this Agreement prohibited by law shall be ineffective to the
extent of such prohibitions without in any way invalidating or affecting the
remaining provisions of this Agreement.



     (c)
This Agreement shall be governed by and construed in accordance with the
substantive laws of the State of Illinois.



     IN
WITNESS WHEREOF, Employer and Employee have caused this Agreement to be duly
executed, all as of the day and year first above written.



	 	Mercantile
Trust & Savings Bank
 
By: /s/ Dan S. Dugan                                
              Its
President
 
/s/ Dan S. Dugan                                       
              Dan S. Dugan,
Employee







6