Document:

EXHIBIT 10.15

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT
(“Agreement”) is made and entered into as of March 18, 2004, by and between MERRILL
MERCHANTS BANK, a state-chartered stock bank organized and operating
under the laws of the State of Maine and having an office at 201 Main Street,
Bangor, Maine 04401 (“Bank”) and Deborah A. Jordan (“Executive”).

 

W I T N E
S S E T H:

 

WHEREAS, Executive currently serves the
Bank in the capacity of Executive Vice President;

 

WHEREAS, the Bank is a wholly-owned subsidiary
of Merrill Merchants Bancshares, Inc., a publicly-held Maine corporation
(“Holding Company”);

 

WHEREAS, the Bank desires to assure for
itself the continued availability of the Executive’s services on the terms and
conditions hereinafter set forth; and

 

WHEREAS, the Executive is willing to
continue to serve the Bank on such terms and conditions;

 

NOW THEREFORE, in consideration of the
premises and the mutual covenants and conditions hereinafter set forth, the
Bank and the Executive hereby agree as follows:

 

Section 1.                                          Employment.

 

The Bank agrees to
continue to employ the Executive and the Executive hereby agrees to such
continued employment, during the period and upon the terms and conditions set
forth in this Agreement.

 

Section 2.                                          Employment
Period; Remaining Unexpired Employment Period.

 

(a)                                  The
terms and conditions of this Agreement shall be and remain in effect during the
period of employment established under this section 2 (“Employment
Period”).  The Employment Period shall
be for an initial term of two years beginning on the date of this
Agreement.  Upon the first anniversary
of the date of this Agreement (an “Anniversary Date”), and on each Anniversary
Date occurring thereafter, the Board of Directors of the Bank (“Board”) shall
review the terms of this Agreement and the Executive’s performance of services
hereunder and may, in the absence of objection from the Executive, approve an
extension of the Employment Agreement pursuant to a resolution duly adopted by
the members of the Board.

 

(b)                                 For
all purposes of this Agreement, the term “Remaining Unexpired Employment
Period” as of any date shall mean the period beginning on such date and ending
on the Anniversary Date on which the Employment Period (as it may be extended
pursuant to section 2(a) of this Agreement) is then scheduled to expire.

 

(c)                                  Nothing
in this Agreement shall be deemed to prohibit the Bank at any time from
terminating the Executive’s employment during the Employment Period with or
without notice for any reason; provided, however, that the relative rights and
obligations of the Bank and the Executive in the event of any such terminations
shall be determined under this Agreement.

 

 

Section 3.                                          Duties.

 

The Executive shall serve
as Executive Vice President of the Bank, having such power, authority and
responsibility and performing such duties as are prescribed by or under the
By-Laws of the Bank and as are customarily associated with such position or as
assigned by the Board or the Chief Executive Officer acting in good faith.  The Executive shall devote her full business
time and attention (other than during holidays, approved vacation periods, and
periods of illness or approved leave of absence) to the business and affairs of
the Bank and shall use her best efforts to advance the interests of the Bank.

 

Section 4.                                          Cash
Compensation.

 

In consideration for the
services to be rendered by the Executive hereunder, the Bank shall pay to her a
salary at an initial annual rate of $112,500, payable in approximately equal
installments in accordance with the Bank’s customary payroll practices for
officers.  The Board shall review the
Executive’s annual rate of salary at such times, as it deems appropriate, but
not less frequently than once every twelve months, and may, in its discretion,
approve an increase in such annual rate of salary.  In addition to salary, the Executive may receive other cash
compensation from the Bank for services hereunder at such times, in such
amounts and on such terms and conditions as the Board may determine from time
to time.

 

Section 5.                                          Employee
Benefit Plans And Programs.

 

During the Employment
Period, the Executive shall be treated as an employee of the Bank and shall be
eligible to participate in and receive benefits under any and all qualified or
non-qualified retirement, pension, savings, profit-sharing or stock bonus
plans, any and all group life, health (including hospitalization, medical and
major medical), dental, accident and long-term disability insurance plans, and
any other employee benefit and compensations plans (including, but not limited
to, any incentive compensation plans or programs, stock options and
appreciation rights plans and restricted stock plans) as may from time to time
be maintained by, or cover similarly situated employees of, the Bank, in
accordance with the terms and conditions of such employee benefit plans and
programs and compensations plans and programs and consistent with the Bank’s
customary practices.

 

Section 6.                                          Termination
of Employment with Severance Benefits.

 

(a)                                  The
Executive shall be entitled to the severance benefits described in section 6(b)
in the event that:

 

(i)                                     her employment is
terminated by the Bank during the Employment Period for any reason other than
for “cause” as defined in section 7(b);

 

(ii)                                  her employment with
the Bank terminates during the Employment Period as a result of the Executive’s
voluntary resignation within 90 days following:

 

(A)                              the expiration of a
thirty day period following the date on which the Executive gives written
notice to the Bank of its material breach of any term, condition or covenant
contained in this Agreement (including, without limitation, any reduction of
the Executive’s rate of base salary in effect from time to time), unless during
such thirty day period, the Bank cures such failure; or

 

(B)                                a change in the
Executive’s principal place of employment to a location that is more than 40
miles from the Bank’s principal office in Bangor, Maine; or

 

(iii)                               the Executive
voluntarily resigns following a “Change of Control” (as such term is defined in
section 10(a) hereof) in the manner set forth in section 10(b) hereof.

 

 

(b)                                 Upon
the termination of the Executive’s employment at the Bank under the
circumstances described in section 6(a) of this Agreement, the Bank shall have
no further obligations under this Agreement, other than to pay or to provide
the Executive with:

 

(i)                                     the compensation
she has earned, but which is unpaid, as of the date of the termination of her
employment with the Bank, such payment to be made at the time and in the manner
prescribed by law applicable to the payment of wages but in no event later than
sixty (60) days after termination of employment;

 

(ii)                                  the benefits, if any,
to which she is entitled as a former employee under the employee benefit plans
and programs and compensation plans and programs maintained by the Bank for
employees;

 

(iii)                               continued group life,
health (including hospitalization, medical and major medical), dental, accident
and long-term disability coverage plans under the plans and programs maintained
by the Bank for similarly situated employees until the earlier to occur of:

 

(A)                              the date the Executive
first becomes eligible for such benefit coverage plans under plans or programs
maintained by a subsequent employer or

 

(B)                                the date the Remaining
Unexpired Employment Period terminates; and

 

(iv)                              a lump sum payment within
sixty (60) days following her termination of employment with the Bank, a lump
sum payment, in an amount equal to the salary that the Executive would have
earned if she had continued working for the Bank during the Remaining Unexpired
Employment Period at the highest annual rate of salary achieved during that
portion of the Employment Period which is prior to the Executive’s termination
of employment with the Bank, where such value is to be determined by
multiplying the Remaining Unexpired Employment Period by such highest annual
rate of salary.

 

The Bank and the
Executive hereby stipulate that the damages which may be incurred by the
Executive following any such termination of employment are not capable of
accurate measurement as of the date above first written and that the payments
and benefits contemplated by this section 6(b) constitute reasonable damages
under the circumstances and shall be payable without regard to the Executive’s
efforts, if any, to mitigate damages. 
The Bank and Executive further agree that the Bank may condition the
payments and benefits (if any) due under sections 6(b)(iii) and 6(b)(iv) on:
(i) the receipt of the Executive’s resignation from any and all positions which
she holds as an officer, director or committee member with respect to the
Company, the Bank or any subsidiary or affiliate of either of them and (ii) the
execution of a release in favor of such entities in such form as the Bank may
determine for any and all claims against such entities.

 

Section 7.                                          Termination
Without Additional Bank Liability.

 

Except as provided below,
the Bank (and its affiliates) will have no liability to Executive in the event
that the Executive’s employment with the Bank shall terminate during the
Employment Period on account of:

 

(a)                                  a
voluntary resignation by the Executive, other than a voluntary resignation
described in Section 6(a)(ii) or 6(a)(iii) hereof;

 

(b)                                 a
determination that the Executive is eligible for long-term disability benefits
under the Bank’s long-term disability insurance program or, if there is no such
program, under the federal Social Security Act;

 

(c)                                  the
death of the Executive; or

 

 

(d)                                 the
discharge of the Executive for “cause,” which, for purposes of the Agreement
shall mean personal dishonesty, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties,
willful violation of any banking law, rule or regulation, conviction of a
felony or final cease and desist order issued in response to conduct of the
Executive determined to be substantially deleterious to the Bank, or any
material breach of this Agreement, in each case as measured against standards
generally prevailing at the relevant time in the savings and community banking
industry;  then the Bank (and its
affiliates) shall have no further obligations under this Agreement, other than
the payment to the Executive (or, in the event of her death, to her estate) of
her earned but unpaid salary as of the date of the termination of her
employment, and the provision of such other benefits, if any, to which she is
entitled as a former employee under the employee benefit plans and programs and
compensation plans and programs maintained by, or covering employees of, the
Bank.

 

(e)                                  for
purposes of section 7(d), no act or failure to act, on the part of the
Executive, shall be considered “willful” unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of the Bank and its
affiliates.  Any act, or failure to act,
based upon authority given pursuant to a resolution duly adopted by the Board
or based upon the written advice of counsel for the Bank shall be conclusively
presumed to be done, or omitted to be done, by the Executive in good faith and
in the best interests of the Bank.  The
cessation of employment of the Executive shall not be deemed to be for “cause”
within the meaning of section 7(d) unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of two-thirds of the non-employee members of the Board at a
meeting of the Board called and held for such purpose (after reasonable notice
is provided to the Executive and the Executive is given an opportunity,
together with counsel, to be heard before the Board), finding that, in the good
faith opinion of the Board, the Executive is guilty of the conduct described in
section 7(d) above, and specifying the particulars thereof in detail.

 

Section 8.                                          Covenant
Not To Compete.

 

In the event that the
Executive’s employment with the Bank terminates prior to the expiration of the
Employment Period, then for a period of one (1) year following the date of her
termination of employment with the Bank (or, if less, for the Remaining
Unexpired Employment Period), the Executive shall not, without the written
consent of the Bank, become an officer, employee, consultant, director or
trustee of any competitor (as herein defined) if in this capacity she would be
working for a competitor in any county where a main or a branch office of the
Bank is located on the date of the Executive’s termination of employment.  For this purpose, a “competitor” is any
savings bank, cooperative bank, credit union, savings and loan association,
savings and loan holding company, bank or bank holding company, or any direct
or indirect subsidiary or affiliate of any such entity.  This section 8 shall not apply if the Executive’s
employment is terminated due to death or a voluntary or involuntary termination
following a “Change of Control” as defined in section 10(a) hereof.

 

Section 9.                                          Confidentiality.

 

Unless she obtains the
prior written consent of the Bank, the Executive shall keep confidential and
shall refrain from using for the benefit of herself, or any person or entity
other than the Bank or any entity which is a subsidiary of the Bank or of which
the Bank is a subsidiary, any material document or information obtained from
the Bank, or from its parent or subsidiaries, in the course of her employment
with any of them concerning their properties, operations or business (unless
such document or information is readily ascertainable from public or published
information or trade sources or has otherwise been made available to the public
through no fault of her own) until the same ceases to be material (or becomes
so ascertainable or available); provided, however, that nothing in this section
9 shall prevent the Executive, with or without the Bank’s consent, from
participating in or disclosing documents or information in connection with any
judicial or administrative investigation, inquiry or proceeding to the extent
that such participation or disclosure is required under applicable law.

 

 

Section 10.                                   Termination
Upon Or Following A Change Of Control.

 

(a)                                  A
Change of Control of the Bank (“Change of Control”) shall be deemed to have
occurred upon the happening of any of the following events:

 

(i)                                     approval by the
stockholders of the Bank of a transaction that would result in the
reorganization, merger or consolidation of the Bank, respectively, with one or
more other persons, other than a transaction following which:

 

(A)                              at least 51% of the
equity ownership interest of the entity resulting from such transaction are
beneficially owned (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended “Exchange Act”) in substantially
the same relative proportions by persons who, immediately prior to such
transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) at least 51% of the outstanding equity ownership
interest in the Bank; and

 

(B)                                at least 51% of the
securities entitled to vote generally in the election of directors of the
entity resulting from such transaction are beneficially owned (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the
same relative proportions by persons who, immediately prior to such transaction,
beneficially owned (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) at least 51% of the securities entitled to vote generally in the
election of directors of the Bank;

 

(ii)                                  the acquisition of
all or substantially all of the assets of the Bank or approval by the
stockholders of the Bank of any transaction which would result in such an
acquisition;

 

(iii)                               a complete liquidation
or dissolution of the Bank, or approval by the stockholders of the Bank of a
plan for such liquidation or dissolution;

 

(iv)                              the occurrence of any
event if, immediately following such event, at least 50% of the members of the
Board do not belong to any of the following groups:

 

(A)                              individuals who were
members of the Board of the Bank on the date of this Agreement; or

 

(B)                                individuals who first
became members of the Board of the Bank after the date of this Agreement
either:

 

(I)                                    upon election to
serve as a member of the Board of the Bank by affirmative vote of two-thirds of
the members of such Board, of a nominating committee thereof, in office at the
time of such first election; or

 

(II)                                upon election by the
stockholders of the Bank to serve as a member of the Board of the Bank, but
only if nominated for election by affirmative vote of two-thirds of the members
of the Board of the Bank, or of a nominating committee thereof, in office at
the time of such first nomination;

 

provided, however,
that such individual’s election or nomination did not result from an actual or
threatened election contest or other actual or threatened solicitation of
proxies or consents other than by or on behalf of the Board of the Bank; or

 

(v)                                 any event which would
be described in section 10(a)(i), (ii), (iii) or (iv) if the term “Holding
Company” were substituted for the term “Bank” therein.

 

 

In no event, however,
shall a Change of Control be deemed to have occurred as a result of any
acquisition of securities or assets of the Bank, the Holding Company, or a
subsidiary of either of them, by the Bank, the Holding Company, or a subsidiary
of either of them, or by any employee benefit plan maintained by any of
them.  For purposes of this section
10(a), the term “person” shall have the meaning assigned to it under sections
13(d)(3) or 14(d)(2) of the Exchange Act.

 

(b)                                 In
the event of a Change of Control, the Executive shall be entitled to the
payments and benefits contemplated by section 6(b) in the event her employment
with the Bank terminates due to her voluntary resignation within ninety (90)
days following the effective date of the Change of Control with the Remaining
Unexpired Employment Period deemed in such event to be twenty-four (24)
months.  Notwithstanding anything in
this Agreement to the contrary, in no event shall any payments made or benefits
provided under this Agreement, when combined with all other payments and
benefits to the Executive, be allowed to render any such payment or benefit
nondeductible under Section 280G of the Internal Revenue Code (“Code”) or to
trigger an excise tax under Section 4999 of the Code.  In such event, the payments and/or benefits to be provided under
this Agreement shall be reduced, but not below zero, such that the aggregate
benefits to be provided to the Executive do not exceed 2.99 multiplied by the
Executive’s “base amount” (as such term is defined in Section 280G of the
Code).

 

Section 11.                                   Solicitation.

 

The Executive hereby
covenants and agrees that, during the first one-year period after her
termination of employment with the Bank, she shall not, without the written
consent of the Bank, either directly or indirectly:

 

(a)                                  Solicit,
offer employment of, or take any other action intended, or that a reasonable
person acting in like circumstances would expect, to have the effect of causing
any officer or employee of the Bank, the Holding Company or any affiliate, as
of the date of this Agreement, of either of them to terminate his or her
employment and accept employment or become affiliated with, or provide services
for compensation in any capacity whatsoever to, any savings bank, cooperative bank,
credit union, savings and loan association, bank, bank holding company, savings
and loan holding company, or other institution engaged in the business of
accepting deposits and making loans;

 

(b)                                 Provide
any information, advice or recommendation with respect to any such officer or
employee of any savings bank, cooperative bank, credit union, holding company,
or other institution engaged in the business of accepting deposits and making
loans, of either of them that is intended, or that a reasonable person acting
in like circumstances would expect, to have the effect of causing any officer
or employee of the Bank, the Holding Company or any affiliate as of the date of
this Agreement, of either of them to terminate his or her employment and accept
employment become affiliated with, or provide services for compensation in any
capacity whatsoever to, any savings bank, cooperative bank, credit union,
savings and loan association, bank, bank holding company, savings and loan
holding company, or other institution engaged in the business of accepting
deposits and making loans; and

 

(c)                                  Solicit,
provide any information, advice or recommendation or take any other action
intended, or that a reasonable person acting in like circumstances would
expect, to have the effect of causing any customer of the Bank to terminate an
existing business or commercial relationship with the Bank.

 

This section 11 shall not
apply if the Executive’s employment is terminated due to death, or a voluntary
or involuntary termination following a “Change of Control” as defined in
section 10(a) hereof.

 

Section 12.                                   No
Effect on Employee Benefit Plans or Programs.

 

The termination of the
Executive’s employment during the term of this Agreement or thereafter, whether
by the Bank or by the Executive, shall have no effect on the rights and
obligations of the parties hereto under the

 

 

Bank’s qualified or
non-qualified retirement, pension, savings, thrift, profit-sharing or stock
bonus plans, group life, health (including hospitalization, medical and major
medical), dental, accident and long-term disability insurance plans or such
other employee benefit plans or programs, or compensation plans or programs, as
may be maintained by, or cover employees of, the Bank from time to time.

 

Section 13.                                   Successors
And Assigns.

 

This Agreement will inure
to the benefit of and be binding upon the Executive, her legal representatives
and testate or intestate distributes, and the Bank and its successors and
assigns, including any successor by merger or consolidation or any other person
or firm or corporation to which all or substantially all of the assets and
business of the Bank may be sold or otherwise transferred.

 

Section 14.                                   Notices.

 

Any communication
required or permitted to be given under this Agreement, including any notice,
direction, designation, consent, instruction, objection or waiver, shall be in
writing and shall be deemed to have been given at such time as it is delivered
personally, or five (5) days after mailing if mailed, postage prepaid, by registered
or certified mail, return receipt requested, addressed to such party at the
address listed below or at such other address as one such party may be written
notice specify to the other party:

 

If to the Executive:

Deborah A. Jordan

P.O. Box 634

Holden, Maine
04429

 

If to the Bank:

Merrill Merchants
Bank

201 Main Street

Bangor, Maine  04401

Attention:  Edwin N. Clift

 

with a copy to:

Thacher Proffitt
& Wood LLP

1700 Pennsylvania
Avenue, Suite 800

Washington,
DC  20006

Attention:                                         Richard
A. Schaberg

 

Section 15.                                   Severability.

 

A determination that any
provision of this Agreement is invalid or unenforceable shall not affect the
validity of enforceability of any provision hereof.

 

Section 16.                                   Waiver.

 

Failure to insist upon
strict compliance with any of the terms, covenants or conditions hereof shall
not be deemed a waiver of such term, covenant, or condition.  A waiver of any provision of this Agreement
must be made in writing, designated as a waiver, and signed by the party
against whom its enforcement is sought. 
Any waiver or relinquishment of any right or power hereunder at any one
or more times shall not be deemed a waiver or relinquishment of such right or
power at any other time or times.

 

 

Section 17.                                   Counterparts.

 

This agreement may be
executed in two (2) or more counterparts, each of which shall be deemed an
original, and all of which shall constitute one and the same Agreement.

 

Section 18.                                   Governing
Law.

 

This Agreement shall be
governed by and construed and enforced in accordance with the federal laws of
the United Sates and, to the extent that federal law is inapplicable, in
accordance with the laws of the State of Maine applicable to contracts entered
into and to be performed entirely within the State of Maine.

 

Section 19.                                   Headings
and Construction.

 

The headings of sections
in this Agreement are for convenience of reference only and are not intended to
qualify the meaning of any section.  Any
reference to a section number shall refer to a section of this Agreement,
unless otherwise stated.

 

Section 20.                                   Entire
Agreement; Modifications.

 

This instrument contains
the entire agreement of the parties relating to the subject matter hereof, and
supersedes in its entirety any and all prior agreements, understandings or
representations relating to the subject matter hereof.  No modifications of the Agreement shall be
valid unless made in writing and signed by the parties hereto.

 

Section 21.                                   Required
Regulatory Provisions.

 

The following provisions
are included for the purposes of complying with various laws, rules and
regulations applicable to the Bank:

 

(a)                                  Notwithstanding
anything herein contained to the contrary, any payments to the Executive by the
Bank, whether pursuant to this Agreement or otherwise, are subject to and
conditioned upon their compliance with section 18(k) of the Federal Deposit
Insurance Act (“FDI Act”), 12 U.S.C. §1828(k), and any regulations promulgated
there under.

 

(b)                                 Notwithstanding
anything herein contained to the contrary, if the Executive is suspended from
office and/or temporarily prohibited from participating in the conduct of the
affairs of the Bank pursuant to a notice serviced under section 8(e)(3) or
8(g)(1) of the FDI Act, 12 U.S.C. §1818(e)(3) or1818 (g)(1), the Bank’s
obligations under this Agreement shall be suspended as of the date of service
of such notice, unless stayed by appropriate proceedings.  If the charges in such notice are dismissed,
the Bank, in its discretions, may:

 

(i)                                     pay to the
Executive all or part of the compensation withheld while the Bank’s obligations
hereunder were suspended, and

 

(ii)                                  reinstate, in whole
or in part, any of the obligations which were suspended.

 

(c)                                  Notwithstanding
anything herein contained to the contrary, if the Executive is removed and/or
permanently prohibited from participating in the conduct of the Bank’s affairs
by an order issued under section 8(e)(4) or 8(g)(1) of the FDI Act, 12 U.S.C.
§1818(e)(4) or (g)(1), all prospective obligations of the Bank under this
Agreement shall terminate as of the effective date of the order, but vested
rights and obligations of the Bank and the Executive shall not be affected.

 

(d)                                 Notwithstanding
anything herein contained to the contrary, if the Bank is in default (within
the meaning of section 3(x)(1) of the FDI Act, 12 U.S.C. §1813(x)(1)), all
prospective obligations of the Bank under

 

 

this Agreement
shall terminate as of the date of default, but vested rights and obligations of
the Bank and the Executive shall not be affected.

 

(e)                                  Notwithstanding
anything herein contained to the contrary, all prospective obligations of the
Bank hereunder shall be terminated, except to the extent that a continuation of
this Agreement is necessary for the continued operation of the Bank:

 

(i)                                     By the Maine
Bureau of Financial Institutions or the FDIC, at the time the FDIC enters into
an agreement to provide assistance to or on behalf of the Bank under the
authority contained in section 13(c) of the FDI Act, 12 U.S.C. §1823(c)

 

(ii)                                  By the Maine Bureau
of Financial Institutions at the time the Maine Bureau of Financial
Institutions approves a supervisory merger to resolve problems related to the
operation of the Bank or when the Bank is determined by the Maine Bureau of
Financial Institutions to be in an unsafe or unsound condition.  The vested rights and obligations of the
parties shall not be affected.

 

If and to the extent that
any of the foregoing provisions shall cease to be required or by applicable
law, rule or regulation, the same shall become inoperative as though eliminated
by formal amendment of this Agreement.

 

IN WITNESS WHEREOF, the Bank has caused
this Agreement to be executed and the Executive has hereunto set her hand, all
as of the day and year first above written.

 

 

	
   

  	
  By:

  	
       /s/
  Deborah A. Jordan

  	
   

  
	
   

  	
   

  	
  DEBORAH A. JORDAN

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
   

  	
  MERRILL MERCHANTS BANK

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
       /s/
  Edwin N. Clift

  	
   

  	
  By:

  	
       /s/
  William C. Bullock, Jr.

  	
   

  
	
   

  	
  EDWIN N. CLIFT

  	
   

  	
  WILLIAM C. BULLOCK, JR.

  
	
   

  	
  PRESIDENT AND CEO

  	
   

  	
  CHAIRMAN OF THE BOARD

  
										

 

[Seal]Exhibit
10.(ii)(7)

 

MANAGEMENT
CONTINUITY AGREEMENT

 

This Management
Continuity Agreement (“Agreement”) is made and entered into as of July 1, 2003, by and between Illini Bank (“BANK), a bank organized under
the laws of Illinois, and Lori Lee Griffin
 (“Officer”),
4420 Harvard Drive, Springfield, Illinois.

 

WITNESSETH

 

WHEREAS, the Officer is seeking employment with Illini as credit manager with
the salary as set forth in this Agreement;

 

WHEREAS, Illini wishes to attract and retain highly qualified executives and
to achieve this goal it is in the best interests of Illini to secure the
continued services of the Officer and to reward the Officer in accordance with
the Officer’s contributions to Illini’s success;

 

WHEREAS, In order to provide the Officer a measure of security with respect to
her employment with Illini so that the Officer will be in a position to act in
the best interests of Illini, without concern as to the Officer’s own financial
security, and in order to induce the Officer to remain in employment with
Illini, Illini and Officer are willing to agree that employment of the Officer
shall be terminable only for such reasons and upon such conditions as are
specifically set forth in the employment agreement between Illini and Officer;

 

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

 

NOW, THEREFORE,
Illini and Officer agree as follows:

 

Section
1. EMPLOYMENT

 

(1.1)  Term. 
Illini shall continue to employ the Officer as its Credit Manager until December 31, 2005,
(the “Term”) unless terminated prior to the expiration of the Term pursuant to
Section 2.

 

(1.2)  Compensation. 
As compensation for services provided to Illini by the Officer pursuant
to this Agreement, Illini shall pay the Officer an annual base salary of
$55,000.00, which salary may be increased from time to time and is retroactive
to May 1, 2003. The Officer shall also be eligible to actively participate in
any other compensation and benefit plans generally available to executive
employees of Illini of like grade and salary including, but not limited to,
retirement plans, group life, disability, accidental death and dismemberment,

 

1

 

travel and accident, and
health and dental insurance plans, incentive compensation plans, stock
compensation plans, deferred compensation plans, supplemental retirement plans,
qualified and non-qualified incentive stock option plans, and excess benefit
plans, all as described from time to time in Exhibit A which shall be
updated at least annually. Such other compensation and benefit plans are
hereinafter referred to collectively as the “Compensation and Benefits Plans”.

 

(1.3)  Duties. 
Officer shall perform such duties and functions as are assigned to her
by the bylaws of Illini, as amended or restated, by the Boards of Directors of
Illini, or by a duly authorized committee of the Boards of Directors of Illini.
The duties of the Officer shall be described in detail in Exhibit B to
this Agreement which, if necessary, shall be updated at least annually.

 

(1.4)  Duty Of
Loyalty.  The Officer shall work full-time for Illini
only, or for a subsidiary thereof, provided that:

 

(a) The Officer may also
engage in charitable, civic and other similar activities;

 

(b) With the consent of
the Board of Directors of Illini, the Officer may serve as a director of a
business organization not competing with Illini; and

 

(c) The Officer may make
such investment and reinvestment in business activities as shall not require a
substantial portion of his time.

 

(1.5) Duty Not To Disclose Confidential Information. 
The Officer acknowledges that his relationship with Illini is one of
high trust and confidence, and that the Officer has access to Confidential
Information (as hereinafter defined) of Illini. The Officer shall not directly
or indirectly, communicate, deliver, exhibit or provide Confidential
Information to any person, firm, partnership, corporation, organization or
entity, except as required in the normal course of the Officer’s duties. The
duties contained in this paragraph shall be binding upon the Officer during the
time that the Officer is employed under this Agreement and following the
termination of such employment.  Such
duties will not apply to any such Confidential Information that is or becomes
in the public domain through no action on the part of the Officer, is generally
disclosed to third parities by Illini without restriction on such third
parties, or is approved for release by written authorization of the Board of
Directors of Illini.  The term
“Confidential Information” shall mean any and all confidential, proprietary, or
secret information relating to Illini’s business, services, customers, business
operations, or activities and any and all trade secrets, products, methods of
conducting business, information, skills, knowledge, ideas,

 

2

 

know-how or devices use
in, developed by, or pertaining to Illini’s business and not generally known,
in whole or in part, in any trade or industry in which Illini is engaged. The
terms, definitions, and provision of the Illinois Trade Secrets Act, 765 ILCS
1065/1 through 1065/9 are incorporated herein by reference and made a part
hereof.

 

Section
2. TERMINATION

 

(2.1)  Termination of
Agreement.  Upon approval by the Board of Directors of Illini
Corporation, this Agreement shall upon its maturity on December 31, 2005 be extended from that
date for one additional year and thereafter upon approval by the Board of
Directors of Illini shall be extended in increments of one year upon each
subsequent anniversary date unless Illini terminates or Officer terminates in
accordance with Section 2.2. In the event of a termination by Illini or by the
Officer all obligations hereunder shall terminate except as specifically set
forth in the Agreement.

 

(2.2) Termination by Officer.

 

Voluntary
Termination. The
officer may voluntarily terminate this Agreement by providing thirty days
notice to Illini, in which event Illini shall have no further obligation to the
Officer hereunder from the date of such termination except to pay Officer
earned but unpaid salary and benefits and to honor vested option rights without
imposing further condition or reduction thereof and the Officer shall have no
further obligation to Illini hereunder except the duty to not disclose Confidential
Information in accordance with Section 1.5 and the duty to not engage in any
way in competition with Illini for a period of one year.

 

Termination By Retirement. 
In the event Officer retires from Illini, Illini shall have no further
obligation to the Officer, his heirs, or legatees hereunder from the date of
such termination, except to pay Officer or his heirs or legatees earned but
unpaid salary and benefits due under the Compensation and Benefit Plans and to
honor vested option rights without imposing further condition or reduction
thereof, and the heirs and legatees of the Officer shall have no further
obligation. For purposes of this Agreement, to retire means the voluntary andpermanent cessation of work by Officer with the intention to not resume
work of any type.

 

Termination
By Death. In the
event the Officer’s employment with Illini is terminated due to the Officer’s
death, Illini shall have no further obligation to the Officer, his heirs, or
legatees hereunder from the date of such termination, except to pay his heirs
or legatees earned but unpaid salary and benefits due under the Compensation
and Benefit Plans and to honor vested option rights

 

3

 

without imposing further
condition or reduction thereof and the heirs and legatees of the Officer shall
have no further obligation.

 

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

 

(a)  Has continued uninterrupted for six months;

 

(b)  Is expected to continue indefinitely; and

 

(c) Is determined by
Illini to render the Officer incapable of adequately performing his duties
under Section 1.3 of this Agreement.

 

In
case of dispute in applying “Permanent Disability” to a physical or mental
condition of Officer, the test of disability used by the United States Social
Security Administration for the same or similar purposes shall be the final
standard for determining the “Permanent Disability” of the Officer.

 

(2.3) Termination By Illini.

 

Termination Without Cause. Illini may terminate this Agreement without cause by
providing thirty days notice to the Officer. In such event, the Officer shall
have no further obligation to Illini hereunder, except the duty to not disclose
Confidential Information in accordance with Section 1.5, and Illini shall have
no further obligation to the Officer hereunder from the date of such
termination except (i) to pay to the Officer that salary earned but unpaid
prior to date of termination, and any other benefits under the Compensation and
Benefit Plans without imposing further condition or reduction; and provided,
however, that any benefit to be provided by a Compensation and Benefit Plan may
be provided by Illini through cash or equivalent value or through a
nonqualified arrangement if, in the judgment of Illini, permitting the Officer
to participate in such plan after the date of termination would adversely
affect the tax status of such plan, and if, in the judgment of the Officer, any
proposed cash or equivalent value through a nonqualified arrangement would not
materially increase the tax liabilities of Officer under federal or state
income tax or estate tax laws.

 

Termination With Cause. Illini may terminate this Agreement for Cause at any
time. For purposes of this Agreement, Cause shall mean:

 

4

 

(a)          An act of insubordination by Officer that the Officer
leaves uncorrected after written notice of the act by Illini, or upon a second
or repeated act of insubordination;

 

(b)         Violation of federal or state banking law or
regulation resulting in a formal action against Officer by any regulatory body
or agency;

 

(c)          The Officer’s willful and material breach of a
provision of this Agreement after the Board of Directors delivers a written
demand to cure such breach, which specifically identifies the manner in which
the Board of Directors believes that the Officer has willfully and materially
breached his duties, or

 

(d)         The Officer willfully engages in illegal conduct or
gross misconduct that, in the opinion of the Board of Directors, materially
injures Illini.

 

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

 

(2.4) Termination of Related Offices. 
The parties agree that in the event Officer’s employment by Illini is
terminated for any reason, Officer will be deemed to have immediately resigned
from all other positions or offices held with Illini, including any
directorships with Illini, or any subsidiaries thereof.

 

(2.5) Officer’s Costs of Enforcement. 
Illini shall pay all expenses of the Officer, including but not limited
to attorney’s fees, incurred in enforcing payments by Illini pursuant to this
Agreement.  The obligation of Illini for
the payment of expenses of the Officer, including attorney’s fees, shall be
limited to questions of whether a particular payment is due the Officer and
enforcing payment thereof by Illini.

 

(2.6) Vesting of Benefits. Stock options granted to
Officer shall vest fully upon termination of employment of Officer except for
voluntary terminations by Officer, or terminations for cause by Illini.

 

Section 3. MISCELLANEOUS

 

(3.1) Assignment of Officer’s Rights. 
The Officer may not assign, pledge or otherwise transfer any of the
benefits of this Agreement either before or after termination of employment,
and any purported assignment, pledge or transfer of any payment to be made by
Illini hereunder shall be void and of no effect.  No payment to be made to the Officer hereunder shall be subject
to the claims of creditors of the Officer.

 

5

 

(3.2) Agreements Binding on Successor. This Agreement shall be binding and inure
to the benefit of the parties hereto and their respective successors, assigns,
personal representatives, heirs, legatees and beneficiaries.

 

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

 

(3.4) Waiver of Breach.  The waiver
by either party of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach by either the
Officer or Illini.

 

(3.5) Intellectual Property Rights.  Officer shall have sole and exclusive rights over
any intellectual property created by him while employed under this Agreement,
and shall not be subject to claims by Illini of rights they may have under
equity or statute arising from Officer’s employment with Illini.

 

(3.6) Entire Agreement. This Agreement contains the entire understanding of
the parties and supersedes prior agreements between Officer and Illini.  It may be modified or amended only by an
agreement in writing signed by the party against whom enforcement of any change
or amendment is sought.

 

(3.6)  Severability of
Provisions.  If for any reason any paragraph, term or
provision of this Agreement is held to be invalid or unenforceable, all other
valid provisions herein shall remain in full force and effect and all
paragraphs, terms and provisions of this Agreement shall be deemed to be
several in nature.

 

(3.7) Governing Law.  This
Agreement is made in, and shall be governed by, the laws of the State of
Illinois.

 

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

 

 

	
  ILLINI
  BANK

  	
  Lori
  Lee Griffin

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Burnard K. McHone

  	
   

  	
  /s/ Lori Lee Griffin

  	
   

  
	
  Its:

  	
  President

  	
  Date:

  	
  7-8-03

  	
   

  
	
  Date:

  	
  May 12, 2003

  	
   

  
						

 

 

 

6

 

EXHIBIT
A

 

DESCRIPTION
of COMPENSATION and BENEFITS

 

[Insert listing of
compensation and benefits.]

 

7

 

EXHIBIT
B

 

OFFICER
RESPONSIBILITIES and DUTIES

 

(Attach Illini Human
Resources job description.)

 

8

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