exv10w1



 





Exhibit 10.1




EMPLOYMENT AGREEMENT




     This Agreement is made effective as of March 1, 2007, by and between Mercantile Bancorp, Inc.,
a Delaware corporation, with its principal office located at Quincy, Illinois, (the “Company”) and
Ted T. Awerkamp, of Quincy, Illinois (“Employee”) (this “Employment Agreement”).



RECITALS




     A. Company is a bank holding company.



     B. Employee has been engaged and retained by the Board of Directors of Company to serve in the
position of President and Chief Executive Officer of Company on the terms, covenants and conditions
set forth in this Employment Agreement.



     In consideration of the matters described above, and of the mutual benefits, covenants and
obligations set forth in this Employment Agreement, Company and Employee agree as follows:



ARTICLE I

EMPLOYMENT




     1.1 Company Employs Employee. Company hereby employs Employee as President and Chief
Executive Officer of Company commencing March 1, 2007. All duties or responsibilities hereunder
taken or performed by Employee pursuant to this Employment Agreement shall be subject to the
direction, supervision and control of the Board of Directors of Company. Employee shall be
obligated as part of his duties to be a director of the Company (if elected by the Company’s
stockholders) and a director of such subsidiaries of the Company as the Company’s Board of
Directors shall determine from time to time.



     1.2 Employee Accepts Employment. Employee hereby accepts employment with Company as
President and Chief Executive Officer commencing March 1, 2007 and agrees that he will at all times
faithfully, industriously, and to the best of his ability, experience and talents, perform all of
the duties that may be required of and from him pursuant to the express and implicit terms of this
Employment Agreement, to the reasonable satisfaction of Company.



ARTICLE II

TERM OF EMPLOYMENT




     2.1 Term. The term of this Employment Agreement shall be for a period of three (3)
years, commencing on the date hereof. This Employment Agreement shall be reviewed annually by the
Company and Employee no later than February of each year and a determination will be made at such
time whether to extend the term of the Agreement for an additional one (1) year. For example, when
the Agreement is reviewed in February 2008, if the decision is to extend the term for an additional
one (1) year, the term will then be three (3) years commencing March 1, 2008. If, in the annual
review process by the Company and Employee, there is no offer by the Company to



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extend the term of the Agreement for an additional year, the Employee may terminate the Employment
Agreement under Section 5.4 with a sixty (60) day prior written notice.



ARTICLE III

COMPENSATION




     3.1 Salary. Company shall pay Employee a base salary of Three Hundred Ten Thousand
and 00/100 Dollars ($310,000.00) annually, payable in accordance with Company’s normal payroll
practices, to be prorated in any partial year of employment with Company. Company shall withhold
from all compensation any applicable withholding and payroll taxes and such other amounts as
required by law. No additional compensation shall be paid to Employee for his service as a
director of the Company or any of its subsidiaries.



     3.2 Incentive Bonus. In addition to the base salary as provided in Section 3.1 above,
Company shall pay Employee an annual incentive bonus in an amount up to forty percent (40%) of base
salary in accordance with an incentive compensation plan to be determined by the Compensation
Committee and Board of Directors of Company within the next ninety (90) days and presented to
Employee at such time. The bonus shall be prorated for any partial year. Further, Employee must
be employed on December 31 of each year to be entitled to a bonus for such year.



     3.3 Automobile. Company shall provide Employee with a leased automobile from a
customer of the Company’s subsidiary, Mercantile Trust & Savings Bank, to be used by Employee in
his capacity as President and Chief Executive Officer of Company.



     3.4 Country Club Membership and Dues. Company shall provide to Employee a membership
in a country club located in the Quincy, Illinois area and shall pay annually the dues and any
assessment for such membership.



     3.5 Business Expenses. During the term of this Employment Agreement, Company shall
reimburse Employee for reasonable business expenses incurred by Employee in the performance of his
duties under this Employment Agreement.



     3.6 Benefits. As an employee of Company, Employee shall, upon meeting any applicable
eligibility and enrollment requirements, be entitled to participate in and receive such benefits,
including but not limited to, health and retirement plans, which shall be no less beneficial to
Employee than those offered to other employees of Company from time to time.



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ARTICLE IV

DISABILITY




     4.1 Suspension of Employment Agreement. If, during the period of this Employment
Agreement, Employee becomes disabled in accordance with the definition of being disabled as set
forth in Section 409A(a)(2)(C) of the Internal Revenue Code of 1986, as amended, Company may
suspend this Employment Agreement during the period of such disability by giving notice to Employee
of its intention to suspend due to disability, subject to the following:




	 	(a)	 	This Employment Agreement shall thereupon be suspended as of the
end of the month in which such notice was given and shall continue to be
suspended until Employee is no longer suffering such disability. The
determination of Employee’s disability, and recovery therefrom, will be made by
a physician mutually acceptable to Company and Employee. The opinion of such
physician shall be in writing and shall be given to Company and Employee.
	 
	 	(b)	 	If during any time of Employee’s disability that he is eligible
for and is receiving disability income payments from Company’s disability income
insurance carrier, such payments are less than sixty percent (60%) of the sum of
the annual base salary he was receiving from Company immediately prior to his
disability and the amount of any incentive bonus pursuant to Section 3.2
Employee received within the last twelve (12) months prior to his disability,
Company shall pay Employee an amount which, when added to the gross payments
(before any deductions) received by Employee from Company’s disability insurance
carrier, will result in the Employee receiving from Company and Company’s
disability insurance carrier an annual sum equal to sixty percent (60%) of the
sum of his annual base salary immediately prior to his disability and the amount
of any incentive bonus pursuant to Section 3.2 Employee received within the last
twelve (12) months prior to his disability. Such payment from Company shall be
due Employee for as long as Employee is eligible to receive disability income
payments from Company’s disability insurance carrier. When Employee is no
longer eligible to receive such disability income payments from the insurance
carrier, any obligation for an additional payment from Company shall terminate.





ARTICLE V

TERMINATION OF AGREEMENT




     5.1 Death. In the event of the death of Employee during the term hereof, this
Employment Agreement shall terminate at the end of the month during which Employee dies and Company
shall have no further obligation hereunder.



     5.2 Termination for Cause. Company may terminate Employee’s employment under the
terms of this Employment Agreement upon the occurrence of any one of the following events:




	 	(a)	 	The conviction of Employee of any crime punishable as a felony or
a crime involving moral turpitude or immoral conduct;




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	 	(b)	 	An embezzlement or misappropriation by Employee of funds of
Company or any of its subsidiaries;
	 
	 	(c)	 	Employee committing an unauthorized act to aid or abet a
competitor of Company or any of its subsidiaries;
	 
	 	(d)	 	Employee being removed by order of a regulatory agency having
jurisdiction over Company or any of its subsidiaries; and
	 
	 	(e)	 	For cause thirty (30) days after written notice by Company to
Employee and failure to cure by Employee within such thirty (30) day period, or
if not capable of cure within such time period, failure by Employee to promptly
commence cure and proceed with continuity and diligence to cure, due to: (i)
material breach of any provision of this Employment Agreement; (ii) failure or
neglect to perform the duties of his position as President and Chief Executive
Officer; (iii) failure to comply with Company’s rules and policies or the code
of conduct of Company or any of its subsidiaries; (iv) misconduct in connection
with performance of any of Employee’s duties; or (v) commission of an act
involving moral turpitude, dishonesty, theft or unethical business conduct, or
other misconduct that impairs or injures the reputation of Company or any of its
subsidiaries.





     5.3 Effect of Termination Under Section 5.1 or 5.2. In the event of Employee’s death
or that Company terminates this Employment Agreement under Section 5.2 above, Company shall be
obligated to pay Employee his compensation only until the end of the month during which Employee
dies or his employment is terminated for cause.



     5.4 Termination Without Cause. Except as provided in Section 2.1, either the Company
or Employee may terminate this Employment Agreement without cause by providing to the other party
six (6) months prior written notice. If Employee so terminates this Employment Agreement, Employee
shall be obligated to continue to perform his duties under this Employment Agreement during the six
(6) months (except, only sixty (60) days if Section 2.1 applies) following delivery of his
termination notice. If Employee so terminates this Employment Agreement, Employee shall not be
entitled to compensation hereunder after the date Employee ceases the performance of his duties
under this Employment Agreement. If Company so terminates this Employment Agreement, Employee
shall not be obligated thereafter to perform his duties hereunder, but Company shall be obligated
to pay Employee his base salary and benefits (except automobile and country club), including,
without limitation, the amount paid to Employee for the incentive bonus provided in Section 3.2 for
the last calendar year preceding termination of employment, for the remainder of the then term of
this Employment Agreement , but in no event for a period less than twenty-four (24) months.



     5.5 Termination On Account of Change in Control.




	 	(a)	 	A Change in Control shall mean the first to occur of any of the
following events:




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	 	(i)	 	Any person, group of investors or entity becomes
subsequent to the date of this Employment Agreement, the beneficial
owner, directly or indirectly, of one share more than fifty percent
(50%) of the then issued and outstanding shares of voting stock of
Mercantile Bancorp, Inc. (and, for purposes hereof, a person will be
considered to be a beneficial owner of such stock if such person,
directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise has or shares voting power,
which includes the power to vote or to direct the voting of such stock,
or investment power, which includes the power to dispose or to direct
the disposition of such stock);
	 
	 	(ii)	 	Change in the majority of the incumbent board
unless new directors were nominated by a majority of the incumbent
board.
	 
	 	(iii)	 	The Company merges or consolidates with or
reorganizes with or into any other corporation other than its affiliates
or engages in any other similar business combination or reorganization;
or
	 
	 	(iv)	 	The Company sells, assigns or transfers all or
substantially all of its business and assets, in one or a series of
related transactions, except any such sales to affiliates. For the
purposes of this Agreement “affiliates” is defined as any entity in
which the Company has voting control of at least fifty percent (50%) of
such entity’s voting stock.






	 	(b)	 	If during the term of this Employment Agreement and after the
date of a Change in Control, Employee is discharged without cause or Employee
resigns because he has: (i) been demoted; (ii) had his compensation reduced;
(iii) had his principal place of employment transferred away from the City of
Quincy, Illinois; or (iv) had his job title, status or responsibility materially
reduced, then Company shall make the payments to Employee set forth in
subparagraph (c) of this Section 5.5.
	 
	 	(c)	 	In the event of the termination of Employee’s employment as
described in subparagraph (b) above, Employee shall be entitled to receive:






	 	(i)	 	Except as otherwise provided in Section
5.5(c)(iii), a lump sum cash payment equal to two and one-half (2.5)
times his Compensation (as defined hereafter). The term “Compensation”
as used in this Section 5.5, shall mean the last base salary in effect
for Employee (before any reduction after a Change in Control) plus any
incentive bonus as provided in Section 3.2 paid to Employee for the last
calendar year preceding Employee’s termination of employment on account
of a Change in Control. Employee shall also be entitled for two (2)
years after Employee’s termination of employment on account of a Change
in Control to continue receiving his other benefits due pursuant to
Section 3.6, including without limitation, the health plan. Employee




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	 	 	 	shall not receive after a Change in Control the automobile and country
club membership provided in Sections 3.3 and 3.4.
	 
	 	(ii)	 	The payment and benefits provided for in Section
5.5(c)(i) are in lieu of compensation, benefits and other amounts
Employee might otherwise be entitled to under the Company’s severance
policy, if any, or otherwise payable by Company by reason of this
Employment Agreement and termination of employment.
	 
	 	(iii)	 	If the present value of the payment due Employee
on account of a Change in Control pursuant to Section 5.5(c)(i) hereof
plus the present value of any other payments Employee is entitled to
under the Salary Continuation Agreement dated December 8, 1994, as
amended, by and between Mercantile Trust & Savings Bank and Employee on
account of a Change in Control and the present value of any other
payments Employee is entitled to on account of a Change in Control in
any other agreements (collectively, the “Total Change in Control
Payments”) exceed three times his Base Amount, as such term is defined
in Section 280G of the Internal Revenue Code of 1986, as amended, then
the payment due Employee pursuant to Section 5.5(c)(i) hereof shall be
reduced to an amount which will result in the Total Change in Control
Payments due Employee being equal to an amount which is no more than
three times the Base Amount less One Dollar ($1).




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ARTICLE VI

NON-COMPETITION COVENANT




     6.1 Terms of Covenant. For and in consideration of the compensation and benefits paid
to Employee pursuant to Article III and other covenants made herein by the Company, Employee agrees
that during the term of his employment with Company and for a period of two (2) years from the date
of termination of such employment for any reason with or without cause, Employee shall not engage
in, or be interested as an owner, partner, consultant, stockholder, member, manager, officer,
director, agent, representative, independent contractor, or employee or in any other capacity,
solely or jointly with others of any business, firm, corporation, bank or other entity engaged in
the bank holding company, banking, savings and loan, commercial, agricultural or consumer lending
business, or in the sale of any services or products as provided by Company or its subsidiaries,
directly or indirectly, within fifty (50) miles of the corporate limits of the City of Quincy,
Illinois, or within five (5) miles of the main facility of any of the subsidiaries of the Company
as now or hereafter existing, except the foregoing shall not restrict the Employee from being a
stockholder of up to two percent (2%) of the issued and outstanding capital stock of a public
company engaged in the restricted business within the restricted territory. For the purposes of
this Agreement “subsidiaries” is defined as any entity in which the Company has voting control of
at least fifty percent (50%) of such entity’s voting stock.



     Company and Employee hereby expressly acknowledge that the restrictions imposed by this
Employment Agreement have been fully bargained for.



     Employee acknowledges that the breach of this non-competition covenant may render irrevocable
harm to Company. In the event of such breach by Employee, Company shall be entitled to any and all
available equitable relief, including, but not limited to, injunctive relief in addition to any
other remedies that may be available under applicable laws and the agreements between Company and
Employee. Company may institute any action or proceeding to enforce the above covenants or any
part thereof. If said covenant or any part thereof is deemed unenforceable by a court or any
tribunal having jurisdiction of such acts and proceedings, Employee agrees that the covenants or
any part thereof shall be deemed “rewritten” and modified to the extent necessary to render the
same enforceable by such court or other tribunal.



     Employee understands the restrictive covenants and he fully agrees to their applicability. In
the event that Employee violates any of these restrictive covenants then in any suit which may be
brought by Company for the violation of these provisions in any court having jurisdiction, Employee
agrees that an order may be entered in such suit enjoining Employee from violating such provisions.
An order to that effect may be made while the litigation is pending, as well as upon final
determination thereof, and furthermore, any such application for such injunction shall be without
prejudice to any other right of action which may accrue to Company by reason of the breach of these
provisions.



     If Employee is found to have violated this Section 6.1, and Company prevails in an action to
enforce the terms of this Section 6.1, Employee shall be liable to Company for reasonable attorney
fees and all costs incurred in prosecuting such action.



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     In the event of a violation of this Section 6.1, Company shall have the right to obtain
injunctive or other equitable or legal relief. This Section 6.1 shall not be subject to
arbitration under Section 8.11.



ARTICLE VII

CONFIDENTIALITY AND NON-DISCLOSURE




     7.1 Confidential Information. Employee agrees at all times during his employment and
following his termination of employment for any reason, Employee will not disclose to any
non-employee of Company any “Confidential Information” without written consent of Company. For
purposes of this Employment Agreement, Confidential Information means any written information or
documents of Company or any of its subsidiaries and any information in whatever form regarding
strategic plans of Company or any of its subsidiaries, data and compilations of information
regarding customers of Company or any of its subsidiaries, any financial information of Company or
any of its subsidiaries, or any other information in whatever form or medium designated as
confidential by Company or any of its subsidiaries.



     Upon termination of employment and thereafter, Employee shall not remove, retain, disclose or
use any Confidential Information without Company’s prior written consent. Employee’s obligations
of confidentiality shall not apply as to a particular portion of Confidential Information if such
portion (a) is or becomes generally available to the public other than as a result of disclosure by
Employee or any of his agents, advisors, employees or representatives; (b) was rightfully in the
possession of Employee on a non-confidential basis from a source other than Company or its agents,
advisors, employees or representatives, but only if such source has obtained the information
legally and is bound by a confidentiality agreement with Company or its agents, advisors, employees
or representatives; or (c) is required to be disclosed by law.



     7.2 Dispute Resolution. In the event of a violation of this Article VII, Company
shall have the right to obtain injunctive or other equitable or legal relief. This Article VII
shall not be subject to arbitration under Section 8.11.



ARTICLE VIII

GENERAL PROVISIONS




     8.1 Modifications. This Employment Agreement supersedes all prior agreements and
understandings between the parties, including, without limitation, any prior written or verbal
communications or agreements. This Employment Agreement may not be changed or terminated orally.
No modification, termination or attempted waiver of any of its provisions shall be valid unless in
writing signed by the party against whom the same is sought to be enforced.



     8.2 Notices. Whenever any notice is required by this Employment Agreement, it shall
be given in writing and sent by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:



	 	 	 	 	 
	 

	 	To Company:
	 	Mercantile Bancorp, Inc.
	 

	 	 	 	440 Maine Street
	 

	 	 	 	Quincy, Illinois 62301






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	 	To Employee:
	 	Ted T. Awerkamp
	 

	 	 	 	816 Birdie Lane
	 

	 	 	 	Quincy, Illinois 62301






     Notices shall be deemed given and effective three (3) business days after deposit in the U.S.
mail. Either party may change the address for notice by notifying the other party of such change
in accordance with this Section.



     8.3 Survival. Articles IV, V, VI and VII shall survive Employee’s suspension or
termination of employment and shall remain in full force and effect.



     8.4 Waivers. No waiver by Company of any breach of this Employment Agreement shall be
construed as a waiver of any subsequent breach.



     8.5 Binding Effect. This Employment Agreement shall be binding upon and inure to the
benefit of Company, its successors and assigns, and Employee, his heirs and legal representatives.



     8.6 No Other Agreements. Employee and Company mutually represent and warrant that the
execution and delivery of this Employment Agreement and the performance of duties hereunder will
not violate the terms of any other agreement to which they are party of or by which they are bound.



     8.7 Assignment. This Employment Agreement shall be binding upon and inure to the
benefit of Company, it successors, and assigns. The rights of Employee hereunder are personal and
may not be assigned or transferred.



     8.8 Construction. Titles and headings to various subdivisions of this Employment
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 Employment Agreement.



     8.9 Severability. If any provision of this Employment Agreement is determined to be
invalid or unenforceable under any court or governmental agency of 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.



     8.10 Governing Law. This Employment Agreement and all questions arising in connection
with it shall be governed by the laws of the State of Illinois.



     8.11 Arbitration. All disputes arising out of or in connection with this Employment
Agreement and/or with Employee’s employment or termination of employment, other than disputes
arising under Articles VI and VII, shall be determined by arbitration in accordance with the
commercial arbitration rules then in effect of the American Arbitration Association. Judgment upon
the award may be entered in any court having jurisdiction over the matter. The arbitration
proceedings shall be held in Quincy, Illinois, or at such other place as may be mutually agreeable
to the parties and the arbitrator.



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     IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first
above written.



	 	 	 	 	 	 	 
	 	 	Mercantile Bancorp, Inc. (Company)
	 
	 	 	 	 	 	 
	 

	 	By
	 	/S/ Dan S. Dugan	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	   Its Chairman of the Board	 	 
	 
	 	 	 	 	 	 
	 	 	Employee
	 
	 	 	 	 	 	 
	 	 	/S/ Ted T. Awerkamp
	 	 	 	 	 
	 

	 	 	 	   Ted T. Awerkamp	 	 






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