EMPLOYMENT AGREEMENT between INTEGRA BANK CORPORATION and BRADLEY M. STEVENS
Exhibit 10.1
This Employment Agreement (“Agreement”) is made and entered into by and between Integra Bank
Corporation, an Indiana corporation (the “Company”) and Xxxxxxx X. Xxxxxxx (“Executive”) and shall
be effective immediately upon the consummation of the merger (the “Merger”) contemplated by the
Agreement and Plan of Merger by and among the Company, PFC Acquisition Corp. and Prairie Financial
Corporation (“Prairie”), dated October 5, 2006, as amended (the “Merger Agreement”).
Recitals
A. Executive currently serves as the Chairman, President and Chief Executive Officer of
Prairie.
B. The Company desires to employ the Executive following the Merger as its Executive Vice
President and as the President and CEO-Chicago Region of Integra Bank N.A. and the Executive
desires to be employed in such positions.
C. The Company and Executive desire to enter into an agreement embodying the terms of
Executive’s prospective employment.
Agreement
NOW, THEREFORE, in consideration of the foregoing and the mutual promises set forth in this
Agreement, and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and Executive agree as follows:
1. Effective Date. This Agreement shall be effective as of the first calendar day following
the day on which the “Effective Time” as that term is defined in the Merger Agreement occurs (the
“Effective Date”) and shall supersede any prior agreements between the Executive and Prairie or the
Company with respect to the provisions contained herein.
2. Term of Employment. Subject to earlier termination as provided in Section 7 of this
Agreement, the original term of this Agreement shall begin on the Effective Date and shall end on
the third (3rd) anniversary thereof; provided, however, that this Agreement shall be
automatically extended for successive terms of one (1) year each (the original term plus any
extensions of the term are hereinafter referred to as the “Term”) unless either party provides
written notice not to so extend to the other party at least sixty (60) calendar days before the
scheduled expiration of the Term, in which case no further automatic extension shall occur and the
Term shall end on the scheduled expiration date.
3. Position and Responsibilities. During the Term, Executive agrees to serve as an Executive
Vice President of the Company and as President and CEO-Chicago Region
of Integra Bank N.A. and/or in such other senior management position(s) as the Board of
Directors of the Company (the “Board”) may designate. In this capacity the Executive shall have
such duties, authorities and responsibilities as are commensurate with such position(s) and such
other duties and responsibilities as the Board shall designate that are consistent with such
position(s).
4. Standard of Care. During the Term, Executive (a) will devote his full working time,
attention, energies and skills exclusively to the business and affairs of the Company and its
affiliates; (b) will exercise the highest degree of loyalty and the highest standards of conduct in
the performance of his duties; (c) will not, except as noted herein, engage in any other business
activity, whether or not such business activity is pursued for gain, profit or other pecuniary
advantage, without the express written consent of the Company; and (d) will not take any action
that deprives the Company of any business opportunities or otherwise act in a manner that conflicts
with the best interests of the Company or that is detrimental to the business of the Company;
provided, however, this Section 4 shall not be construed as preventing Executive (y) from investing
his personal assets in such form or manner as will not require his services in the daily operations
and affairs of the businesses in which such investments are made, or (z) from participating in
charitable or other not-for-profit activities as long as such activities do not interfere with
Executive’s work for the Company (or its affiliates).
5. Compensation and Benefits. As remuneration for all services to be rendered by Executive
during the Term, and as consideration for complying with the covenants herein, the Company shall
pay and provide to Executive the following:
5.1. Annual Base Salary. The Company shall pay Executive a base salary of Two Hundred
Thousand Dollars ($200,000) (the “Base Salary”) on an annualized basis. The Company shall
review the Base Salary approximately annually during the Term to determine, at the
discretion of the Company, whether the Base Salary should be increased and, if so, the
amount of such adjustment and the time at which the adjustment should take effect. The Base
Salary shall be paid to Executive consistent with the customary payroll practices of the
Company.
5.2. Incentive Bonus. Executive shall be entitled to participate during the Term in
any incentive bonus plan which the Company may adopt and implement from time to time during
the Term with respect to Executive’s specific position. Nothing contained in this Section
shall obligate the Company to institute, maintain or refrain from changing, amending or
discontinuing any incentive bonus plan, so long as such changes are similarly applicable to
other employees under such plan.
5.3. Equity Compensation. Executive shall be entitled to participate during the Term
in any equity compensation plan which the Company may adopt and implement from time to time
during the Term. Nothing contained in this Section shall obligate the Company to institute,
maintain or refrain from changing, amending or discontinuing any equity compensation plan,
so long as such changes are similarly applicable to other employees under such plan.
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5.4. Employee Benefits. The Company shall provide to Executive employee fringe
benefits to which other employees of the Company are generally entitled, commensurate with
his position with the Company and subject to the eligibility requirements and other terms
and conditions of such plans. Nothing contained in this Section shall obligate the Company
to institute, maintain or refrain from changing, amending or discontinuing any employee
fringe benefit plan, so long as such changes are similarly applicable to other employees
generally.
5.5. Automobile Lease. The Company shall reimburse Executive for the lease payments
made on the car lease now in effect until the lease expires.
5.6. Country Club Membership. The Company shall maintain a corporate membership for
Executive at a local country club as determined by the Company. The Company shall be
responsible for the monthly dues and any special assessments relating to such membership.
6. Reimbursement of Business Expenses. The Company shall pay or reimburse Executive for all
ordinary and necessary expenses, in a reasonable amount, which Executive incurs in performing his
duties under this Agreement. Such expenses shall be paid or reimbursed to Executive consistent
with the expense reimbursement policies of the Company in effect from time to time and Executive
agrees to abide by any such expense reimbursement policies.
7. Termination of Employment.
7.1. Termination Due to Death. If Executive dies during the Term, this Agreement shall
terminate on the date of Executive’s death. Upon the death of Executive, the Company’s
obligation to pay and provide to Executive compensation and benefits under this Agreement
shall immediately terminate, except: (a) the Company shall pay Executive or Executive’s
legal representative that portion of his Base Salary, at the rate then in effect, which
shall have been earned through the termination date; and (b) the Company shall pay or
provide Executive or Executive’s legal representative such other payments and benefits, if
any, which had accrued hereunder before Executive’s death. Other than the foregoing, the
Company shall have no further obligations to Executive (or Executive’s legal
representatives, including Executive’s estate, heirs, executors, administrators and personal
representatives) under this Agreement.
7.2. Termination Due to Disability. If Executive suffers a Disability (as hereafter
defined), the Company shall have the right to terminate this Agreement and Executive’s
employment with the Company. The Company shall deliver written notice to Executive of the
Company’s termination because of Disability, pursuant to this Section 7.2, specifying in
such notice a termination date not less than seven (7) calendar days after the giving of the
notice (the “Disability Notice Period”), and this Agreement, and Executive’s employment by
the Company, shall terminate at the close of business on the last day of the Disability
Notice Period.
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Upon the termination of this Agreement because of Disability, the Company’s obligation
to pay and provide to Executive compensation and benefits under this Agreement shall
immediately terminate, except: (a) the Company shall pay Executive that portion of his Base
Salary, at the rate then in effect, which shall have been earned through the termination
date; and (b) the Company shall pay or provide Executive such other payments and benefits,
if any, which had accrued hereunder before the termination for Disability. Other than the
foregoing, the Company shall have no further obligations to Executive under this Agreement.
The term “Disability” shall mean either (i) when Executive is deemed disabled in
accordance with the long-term disability insurance policy or plan of the Company in effect
at the time of the illness or injury causing the disability or (ii) the inability of
Executive, because of injury, illness, disease or bodily or mental infirmity, to perform the
essential functions of his job (with or without reasonable accommodation) for more than one
hundred twenty (120) days during any period of twelve (12) consecutive months.
7.3. Termination by the Company Without Cause. At any time during the Term, the
Company may terminate this Agreement and Executive’s employment with the Company without
cause for any reason or no reason by notifying Executive in writing of the Company’s intent
to terminate, specifying in such notice the effective termination date, and this Agreement
and Executive’s employment with the Company shall terminate at the close of business on the
termination date specified in the Company’s notice. Upon termination of Executive’s
employment by the Company without cause and in the absence of a Change in Control (as
defined in Section 7.12), the Company’s obligation to pay and provide Executive compensation
and benefits under this Agreement shall immediately terminate, except: (a) the Company
shall pay Executive that portion of his Base Salary, at the rate then in effect, which shall
have been earned through the termination date; (b) the Company shall pay or provide
Executive such other payments and benefits, if any, which had accrued hereunder before the
termination date; and (c) in addition, the Company shall pay Executive severance
compensation in a lump sum payment within thirty (30) days after the termination of
employment equal to one (1) times the Base Salary in effect immediately prior to
termination.
7.4. Termination by the Company For Cause. At any time during the Term, the Company
may terminate this Agreement and Executive’s employment with the Company for “Cause” as
provided in this Section 7.4. “Cause” shall mean the occurrence of one or more of the
following events: (a) Executive’s conviction for a felony or of any crime involving moral
turpitude; (b) Executive’s engaging in any illegal conduct or willful misconduct in the
performance of his employment duties for the Company (or its affiliates); (c) Executive’s
engaging in any fraudulent or dishonest conduct in his dealings with, or on behalf of, the
Company (or its affiliates); (d) Executive’s failure or refusal to follow the lawful
instructions of the Company, if such failure or refusal continues for a period of five (5)
calendar days after the Company delivers to Executive a written notice stating the
instructions which
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Executive has failed or refused to follow; (e) Executive’s breach of any of Executive’s obligations under this Agreement; (f) Executive’s gross or
habitual negligence in the performance of his employment duties for the Company (or its
affiliates); (g) Executive’s engaging in any conduct tending to bring the Company into
public disgrace or disrepute or to injure the reputation or goodwill of the Company; (h)
Executive’s material violation of the Company’s business ethics or conflict-of-interest
policies, as such policies currently exist or as they may be amended or implemented during
Executive’s employment with the Company; (i) Executive’s misuse of alcohol or illegal drugs
which interferes with the performance of Executive’s employment duties for the Company or
which compromises the reputation or goodwill of the Company; (j) Executive’s intentional
violation of any applicable banking law or regulation in the performance of Executive’s
employment duties for the Company; or (k) Executive’s failure to abide by any employment
rules or policies applicable to the Company’s employees generally that Company currently has
or may adopt, amend or implement from time to time during Executive’s employment with the
Company.
Upon the occurrence of any of the events specified above, the Company may terminate
Executive’s employment for Cause by notifying Executive in writing of its decision to
terminate his employment for Cause, and Executive’s employment and this Agreement shall
terminate at the close of business on the date on which the Company gives such notice.
Upon termination of Executive’s employment by the Company for Cause, the Company’s
obligation to pay or provide Executive compensation and benefits under this Agreement shall
terminate, except: (a) the Company shall pay Executive that portion of his Base Salary, at
the rate then in effect, which shall have been earned through the termination date; and (b)
the Company shall pay or provide Executive such other payments or benefits, if any, which
had accrued hereunder before the termination date. Other than the foregoing, the Company
shall have no further obligations to Executive under this Agreement.
7.5. Termination by the Company in Connection with a Change in Control. If at any time
during the Term Executive’s employment under this Agreement is terminated by the Company
without the Executive’s prior written consent other than for any of the reasons set forth in
Sections 7.1, 7.2 and 7.4 within six (6) months before or within two (2) years after a
Change in Control, the Company’s obligation to pay or provide Executive compensation and
benefits under this Agreement shall terminate, except (a) the Company shall pay Executive
that portion of his Base Salary, at the rate then in effect, which shall have been earned
through the termination date; (b) the Company shall pay or provide Executive such other
payments or benefits, if any, which had accrued hereunder before the termination date; and
(c) in addition, the Company shall pay Executive within (30) days following such a
termination or, if later, such a Change in Control, a lump sum severance payment of an
amount equal to the greater of the amount calculated under the following clauses (1) and
(2): (1) a cash payment in an amount that, when added to all other accelerated payments or
benefits to Executive, would be equal to two and nine-tenths (2.9) times the “Base Amount”
and (2) two
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and nine-tenths (2.9) times the Base Amount minus the full amount payable by the Executive to the Internal
Revenue Service under Section 4999 of the Internal Revenue Code of 1986, as amended (the
“Code”). For purposes of this Agreement, “Base Amount” is defined as Executive’s average
includable salary, bonus, incentive payments and similar compensation paid by the Company
for the five (5) most recent taxable years ending before the date on which the Change in
Control occurs (or such shorter period of time that the Executive has been employed by the
Company). The definition, interpretation and calculation of the dollar amount of Base
Amount shall be in a manner consistent with and as required by the provisions of Section
280G of the Code, and the regulations and rulings of the Internal Revenue Service
promulgated thereunder.
7.6. Termination by Executive For Good Reason. At any time during the Term, Executive
may terminate this Agreement and his employment with the Company by giving the Company
written notice of termination for Good Reason. For purposes of this Agreement, “Good
Reason” shall mean any of the following:
(i) any material breach by the Company of any provision of this Agreement which is not
cured by the Company within ten (10) days of receipt by the Company of written notice from
Executive specifying with particularity the existence and nature of the breach; or
(ii) the occurrence of any one of the following events within six (6) months prior to
or within two (2) years following a Change in Control:
(A) Without Executive’s express written consent, the assignment
of Executive to any duties which are materially inconsistent with
his positions, duties, responsibilities or status with the Company
immediately prior to the earlier of termination of employment or the
Change in Control or a substantial reduction of his duties or
responsibilities which does not represent a promotion from his
position, duties or responsibilities immediately prior to the
earlier of termination of employment or the Change in Control.
(B) A reduction by the Company in Executive’s salary from the
level of such salary immediately prior to the earlier of termination
of employment or the Change in Control or the Company’s failure to
increase (within twelve (12) months of Executive’s last increase in
base salary) Executive’s base salary after a Change in Control in an
amount which at least equals, on a percentage basis, the average
percentage increase in base salary for all executive and senior
officers of the Company effected in the preceding twelve (12)
months.
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(C) The failure by the Company to continue in effect any
incentive, bonus or other compensation plan in which Executive
participates, including but not limited to the Company’s stock
option plans, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan), with which Executive has
consented, has been made with respect to such plan in connection
with the Change in Control, or the failure by the Company to
continue Executive’s participation therein, or any action by the
Company which would directly or indirectly materially reduce
Executive’s participation therein.
(D) The failure by the Company to continue to provide Executive
with benefits substantially similar to those enjoyed by Executive or
to which Executive was entitled under any of the Company’s principal
pension, profit sharing, life insurance, medical, dental, health and
accident, or disability plans in which Executive was participating
immediately prior to the earlier of the termination of employment or
the Change in Control, the taking of any action by the Company which
would directly or indirectly materially reduce any of such benefits
or deprive Executive of any material fringe benefit enjoyed by
Executive or to which Executive was entitled immediately prior to
the earlier of the termination of employment or the Change in
Control, or the failure by the Company to provide Executive with the
number of paid vacation and sick leave days to which Executive is
entitled on the basis of years of service or position with the
Company in accordance with the Company’s normal vacation policy in
effect on the date hereof.
(E) The Company’s requiring Executive to be based anywhere
other than the metropolitan area where the Company office at which
he was based immediately prior to the earlier of the termination of
employment or the Change in Control was located, except for required
travel on the Company’s business in accordance with the Company’s
past management practices.
(F) Any failure of the Company to obtain the assumption of the
obligation to perform this Agreement by any successor as
contemplated in Section 12.1 hereof.
(G) Any failure by the Company or its shareholders, as the case
may be, to reappoint or reelect Executive to a corporate office held
by him immediately prior to the earlier of the termination of
employment or the Change in Control or his removal from any such
office including any seat held at such time on the Company’s Board
of Directors.
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(H) The effectiveness of a resignation, tendered at any time,
either before or after a Change in Control and regardless of whether
formally characterized as voluntary or otherwise, by Executive of
any corporate office held by him immediately prior to the Change in
Control or of any seat held at such time on the Company’s Board of
Directors, at the request of the Company or at the request of the
person obtaining control of the Company in such Change in Control.
(I) Any request by the Company that Executive participate in an
unlawful act.
(J) Any breach by the Company of any provision of this
Agreement which is not cured by the Company within ten (10) business
days after receipt by the Company of written notice from Executive
specifying with particularity the existence and nature of the
breach.
Notwithstanding anything in this Agreement to the contrary, Executive’s right to
terminate Executive’s employment pursuant to this Section 7.6 shall not be affected by
Executive’s incapacity due to physical or mental illness.
If this Agreement and Executive’s employment are terminated by Executive for the Good
Reason listed in Section 7.6(i), the Company’s obligation to pay or provide Executive
compensation and benefits under this Agreement shall terminate, except (a) the Company shall
pay Executive that portion of his Base Salary, at the rate then in effect, which shall have
been earned through the termination date; (b) the Company shall pay or provide Executive
such other payments or benefits, if any, which had accrued hereunder before the termination
date; and (c) in addition, the Company shall pay Executive severance compensation in a lump
sum payment within (30) days after the termination of employment equal to one (1) times the
Base Salary in effect immediately prior to termination.
If this Agreement and Executive’s employment are terminated by Executive for any of the
Good Reasons listed in Sections 7.6(ii)(A) through (J), the Company’s obligation to pay or
provide Executive compensation and benefits under this Agreement shall terminate, except (a)
the Company shall pay Executive that portion of his Base Salary, at the rate then in effect,
which shall have been earned through the termination date; (b) the Company shall pay or
provide Executive such other payments or benefits, if any, which had accrued hereunder
before the termination date; and (c) in addition, the Company shall pay Executive within
(30) days following such a termination or, if later, such a Change in Control, a lump sum
severance payment equal to the amount payable by the Company under Section 7.5.
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7.7. Termination By Executive Without Good Reason. At any time during the Term,
Executive may terminate this Agreement and his employment with the Company for reasons other
than Good Reason or for no reason by giving the Company written notice of termination,
specifying in such notice a termination date not less than sixty (60) calendar days after
the giving of the notice (the “Executive’s Notice Period”), and Executive’s employment with
the Company shall terminate at the close of business on the last day of Executive’s Notice
Period; provided, however, that in response to Executive’s notice of termination, the
Company shall have the right to terminate Executive’s employment with the Company at any
time during the Executive’s Notice Period. Upon termination of Executive’s employment with
the Company under this Section 7.7, whether at the end of Executive’s Notice Period or
earlier as designated by the Company, the Company’s obligation to pay Executive compensation
and benefits under this Agreement shall immediately terminate, except: (a) the Company
shall pay Executive that portion of his Base Salary, at the rate then in effect, which shall
have been earned through the termination date; and (b) the Company shall pay or provide
Executive such other payments and benefits, if any, which had accrued hereunder before the
termination date. Other than the foregoing, the Company shall have no further obligations
to Executive under this Agreement.
7.8. Non-Renewal By Executive. In the event Executive elects not to renew this
Agreement by giving notice of non-renewal pursuant to Section 2, this Agreement and
Executive’s employment shall terminate at the end of the then current Term. Upon
termination of Executive’s employment as a result of Executive’s non-renewal of this
Agreement, the Company’s obligation to pay and provide Executive compensation and benefits
under this Agreement shall immediately terminate, except: (a) the Company shall pay
Executive that portion of his Base Salary, at the rate then in effect, which shall have been
earned through the termination date; and (b) the Company shall pay or provide Executive such
other payments and benefits, if any, which had accrued hereunder before the termination
date. Other than the foregoing, the Company shall have no further obligations to Executive
under this Agreement.
7.9. Non-Renewal by the Company. In the event the Company elects not to renew this
Agreement by giving notice of non-renewal pursuant to Section 2, this Agreement and
Executive’s employment shall terminate at the end of the then current Term. Upon
termination of Executive’s employment as a result of the Company’s non-renewal of this
Agreement, the Company’s obligation to pay and provide Executive compensation and benefits
under this Agreement shall immediately terminate, except: (a) the Company shall pay
Executive that portion of his Base Salary, at the rate then in effect, which shall have been
earned through the termination date; and (b) the Company shall pay or provide Executive such
other payments and benefits, if any, which had accrued hereunder before the termination
date. Other than the foregoing, the Company shall have no further obligations to Executive
under this Agreement.
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7.10. Forfeiture of Compensation. In the event Executive breaches any of the
non-disclosure or restrictive covenant provisions of Sections 8 or 9 of this Agreement
following termination of employment, Executive immediately shall (a) forfeit his right
to receive (and the Company shall no longer be obligated to pay) any severance compensation
under this Agreement, (b) forfeit any stock options or other rights granted under any stock
option or equity compensation plans of the Company, regardless whether such options or
rights are vested, unvested, exercisable or unexercisable, (c) disgorge and repay to the
Company any gross profits realized from the exercise within the two (2) year period
immediately preceding such termination of any stock options granted under any stock option
or equity compensation plans of the Company during the four (4) year period immediately
preceding such termination, (d) disgorge and repay to the Company an amount equal to the
current market value of any restricted stock of the Company that was granted to Executive
within the four (4) year period immediately preceding such termination and vested to
Executive during the two (2) year period immediately preceding such termination and (e)
repay to the Company any cash incentive or bonus payments paid to Executive within the two
(2) year period immediately preceding such termination. The Company and Executive
acknowledge and agree that the foregoing remedies are in addition to, and not in lieu of,
any and all other legal and/or equitable remedies that may be available to Company in
connection with Executive’s breach or threatened breach, of any non-disclosure or
restrictive covenant provision set forth in Sections 8 and 9 of this Agreement.
7.11. Resignation as Officer and/or Director Upon Employment Termination. In the event
Executive’s employment with the Company terminates for any reason (including, without
limitation, pursuant to Sections 7.1 — 7.9 herein), Executive agrees and covenants that he
will immediately resign any and all positions, including, without limitation, as an officer
and/or member of the Board of Directors, he may hold with the Company or any of its
subsidiaries or affiliates.
7.12. Definition of Change in Control. As used in this Agreement, “Change in Control”
of the Company means:
(i) The acquisition, within a 12-month period ending on the date of the most recent
acquisition, by any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (a
“Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act as in effect from time to time) of thirty-five percent (35%) or more of the
combined voting power of the then outstanding voting securities of the Company entitled to
vote generally in the election of directors; provided, however, that the following
acquisitions shall not constitute an acquisition of control: (A) any acquisition by a
Person who, immediately before the commencement of the 12-month period, already held
beneficial ownership of thirty-five percent (35%) or more of that combined voting power; (B)
any acquisition directly from the Company (excluding an acquisition by virtue of the
exercise of a conversion privilege), (C) any acquisition by the Company, (D) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by the Company or
any corporation controlled by the Company, or (E) any acquisition by any corporation
pursuant to a reorganization, merger or consolidation, if,
following such reorganization, merger or consolidation, the conditions described in clauses
(A), (B) and (C) of subsection (iii) of this Section 7.12 are satisfied;
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(ii) The replacement of a majority of members of the Board of Directors during any
12-month period, by members whose appointment or election is not endorsed by a majority of
the members of the Board of Directors prior to the date of the appointment or election;
(iii) A reorganization, merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation, (A) more than sixty percent (60%) of, respectively,
the then outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or indirectly, by all or substantially all
of the individuals and entities who were the beneficial owners, respectively, of the
outstanding Company common stock and outstanding Company voting securities immediately prior
to such reorganization, merger or consolidation in substantially the same proportions as
their ownership, immediately prior to such reorganization, merger or consolidation, of the
outstanding Company stock and outstanding Company voting securities, as the case may be, (B)
no Person (excluding the Company, any employee benefit plan or related trust of the Company
or such corporation resulting from such reorganization, merger or consolidation and any
Person beneficially owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, twenty-five percent (25%) or more of the outstanding
Company common stock or outstanding voting securities, as the case may be) beneficially
owns, directly or indirectly, twenty-five percent (25%) or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such reorganization,
merger or consolidation or the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of directors and
(C) at least a majority of the members of the board of directors of the corporation
resulting from such reorganization, merger or consolidation were members of the Incumbent
Board at the time of the execution of the initial agreement providing for such
reorganization, merger or consolidation;
(iv) A complete liquidation or dissolution of the Company; or
(v) The sale or other disposition of all or substantially all of the assets of the
Company, other than any of the following dispositions: (A) to a corporation with respect to
which following such sale or other disposition (x) more than sixty percent (60%) of,
respectively, the then outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of such corporation entitled
to vote generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the outstanding Company common stock and outstanding
Company voting securities immediately prior to such sale or other
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disposition in substantially the same proportion as their ownership, immediately prior to
such sale or other disposition, of the outstanding Company common stock and outstanding
Company voting securities, as the case may be, (y) no Person (excluding the Company and any
employee benefit plan or related trust of the Company or such corporation and any Person
beneficially owning, immediately prior to such sale or other disposition, directly or
indirectly, twenty-five percent (25%) or more of the outstanding Company common stock or
outstanding Company voting securities, as the case may be) beneficially owns, directly or
indirectly, twenty-five percent (25%) or more of, respectively, the then outstanding shares
of common stock of such corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the election of
directors and (z) at least a majority of the members of the board of directors of such
corporation were members of the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such sale or other disposition of assets of
the Company; (B) to a shareholder of the Company in exchange for or with respect to its
stock; (C) to a Person that owns, directly or indirectly, fifty percent (50%) or more of the
total value or voting power of all outstanding stock of the Company; or (D) to an entity, at
least fifty percent (50%) or more of the total value or voting power of which is owned,
directly or directly, by the Company or by a Person described in (C).
Despite any other provision of this Section 7.12 to the contrary, an occurrence shall not
constitute a Change in Control if it does not constitute a change in the ownership or
effective control, or in the ownership of a substantial portion of the assets of, the
Company within the meaning of Section 409A(a)(2)(A)(v) of the Code and its interpretive
regulations.
7.13. Severance Release. Executive acknowledges and agrees that the Company’s payment
of the severance compensation pursuant to Sections 7.3, 7.5 or 7.6 of this Agreement shall
be deemed to constitute a full settlement and discharge of any and all obligations of the
Company to Executive arising out of this Agreement, Executive’s employment with the Company
and/or the termination of Executive’s employment with the Company, except for any vested
rights Executive may have under any insurance, stock option or equity compensation plan or
any other employee benefit plans sponsored by the Company. Executive further acknowledges
and agrees that as a condition to receiving any of the severance compensation pursuant to
Section 7.3, 7.5 or 7.6 of this Agreement, Executive will execute and deliver to the Company
a Release Agreement in form and substance reasonably satisfactory to the Company pursuant to
which Executive will release and waive any and all claims against the Company (and its
officers, directors, shareholders, employees and representatives) arising out of this
Agreement, Executive’s employment with the Company, and/or the termination of Executive’s
employment with the Company, including without limitation claims under all federal, state
and local laws; provided, however, that such Release Agreement shall not affect or
relinquish (a) any vested rights Executive may have under any insurance, stock option or
equity compensation plan, or other employee benefit plan sponsored by the Company, (b) any
claims for reimbursement of business expenses incurred prior to the employment
termination date, or (c) any rights to severance compensation under Sections 7.3, 7.5
or 7.6 of this Agreement.
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7.14. Suspension of Payments Upon Termination. If as of the date his employment
terminates, Executive is a “key employee” within the meaning of Section 416(i) of the Code,
without regard to paragraph 416(i)(5) thereof, and the Company has stock that is publicly
traded on an established securities market or otherwise, any deferred compensation payments
otherwise payable because of employment termination will be suspended until, and will be
paid to Executive on, the first day of the seventh month following the month in which
Executive’s last day of employment occurs. For purposes of this Section 7.14, “deferred
compensation” means compensation provided under a nonqualified deferred compensation plan as
defined in, and subject to, Section 409A of the Code.
8. Non-Disclosure. Executive acknowledges that during the course of Executive’s employment by
the Company Executive will be creating, making use of, acquiring, and/or adding to confidential
information relating to the business and affairs of the Company (and its affiliates), which
information will include, without limitation, procedures, methods, manuals, lists of customers,
suppliers and other contacts, marketing plans, business plans, financial data, and personnel
information. Executive covenants and agrees that Executive shall not, at any time during
Executive’s employment with the Company, or thereafter, directly or indirectly, use, divulge or
disclose for any purpose whatsoever any of the Company’s (or its affiliates’) confidential
information or trade secrets, except in the course of Executive’s work for and on behalf of the
Company (or its affiliates). Upon the termination of Executive’s employment with the Company, or
at the Company’s request, Executive shall immediately deliver to the Company any and all records,
documents, or electronic data (in whatever form or media), and all copies thereof, in Executive’s
possession or under Executive’s control, whether prepared by Executive or others, containing
confidential information or trade secrets relating to the Company (or its affiliates). Executive
acknowledges and agrees that his obligations under this Section shall survive the expiration or
termination of this Agreement and the cessation of his employment with the Company for whatever
reason.
9. Restrictive Covenants. Executive acknowledges that in connection with his employment with
the Company he has provided and will continue to provide executive-level services that are of a
unique and special value and that he has been and will continue to be entrusted with confidential
and proprietary information concerning the Company and its affiliates. Executive further
acknowledges that the Company and its affiliates are engaged in highly competitive businesses and
that the Company and its affiliates expend substantial amounts of time, money and effort to develop
trade secrets, business strategies, customer relationships, employee relationships and goodwill,
and Executive has benefited and will continue to benefit from these efforts. Therefore, as an
essential part of this Agreement, Executive agrees and covenants to comply with the following
restrictive covenants.
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9.1. Non-Competition. During Executive’s employment with the Company and for two (2)
years from the date of termination of employment, Executive will not, in
the Restricted Geographic Area, engage in any Competitive Business (a) in the same or
similar capacity or function to that in which Executive worked for the Company, (b) in any
executive level or senior management capacity, or (c) in any other capacity in which
Executive’s knowledge of the Company’s confidential information or the customer goodwill
Executive helped to develop on behalf of the Company would facilitate or support Executive’s
work for such competitor or competitive enterprise. For purposes of this Agreement, the
term “Restricted Geographic Area” means and includes: (w) Will and Xxxx Counties, Illinois;
(x) all counties contiguous to Will and Xxxx Counties, Illinois; (y) any county in which the
Company or any of its subsidiaries has an office or branch location; and (z) all counties
contiguous to the counties referred to in subpart (y) above. For purposes of this
Agreement, the term “Competitive Business” means any business that is traditionally engaged
in by a bank, a bank holding company or a financial holding company, or that provides
products and services similar to and competitive with the products and services provided by
the Company or any of its subsidiaries. Notwithstanding the foregoing, Executive may make
and retain investments in less than one percent of the equity of any entity engaged in a
Competitive Business, if such equity is listed on a national securities exchange or
regularly traded in an over-the-counter market.
9.2. Non-Solicitation of Customers. During Executive’s employment with the Company and
for two (2) years from the date of termination of employment, Executive will not provide,
sell, market or endeavor to provide, sell or market any Competing Products/Services to any
of the Company’s Customers, or otherwise solicit or communicate with any of the Company’s
Customers for the purpose of selling or providing any Competing Products/Services. For
purposes of this Agreement, the term “Competing Products/Services” means any products or
services similar to or competitive with the products or services offered by the Company or
any of its subsidiaries. For purposes of this Agreement, the term “Company’s Customers”
means any person or entity that has engaged in any banking services with, or has purchased
any products or services from, the Company or any of its subsidiaries at any time during the
Executive’s employment.
9.3. Non-Interference With Customers. During Executive’s employment with the Company
and for two (2) years from the date of termination of employment, Executive will not urge,
induce or seek to induce any of the Company’s Customers to terminate their business with the
Company or to cancel, reduce, limit or in any manner interfere with the Company’s Customers’
business with the Company.
9.4. Non-Interference With Contractors and Vendors. During the term of Executive’s
employment with the Company and for two (2) years from the date of termination of
employment, Executive will not urge, induce or seek to induce any of the Company’s
independent contractors, subcontractors, consultants, vendors or suppliers to terminate
their relationship with, or representation of, the Company or to cancel, withdraw, reduce,
limit, or in any manner modify any of such person’s or entity’s business with, or
representation of, the Company.
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9.5. Non-Solicitation of Employees. During the term of Executive’s employment with the
Company and for two (2) years from the date of termination of employment, Executive will not
solicit, recruit, hire, employ or attempt to hire or employ, or assist anyone in the
recruitment or hiring of, any person who is then an employee of the Company, or urge,
influence, induce or seek to induce any employee of the Company to terminate his/her
relationship with the Company.
9.6. Direct or Indirect Activities. Executive acknowledges and agrees that the
covenants contained in this Section 9 prohibit Executive from engaging in certain activities
directly or indirectly, whether on Executive’s own behalf or on behalf of any other person
or entity, and regardless of the capacity in which Executive is acting, including without
limitation as an employee, independent contractor, owner, partner, officer, agent,
consultant, or advisor.
9.7. Survival of Restrictive Covenants. Executive acknowledges and agrees that his
obligations under this Section 9 shall survive the expiration or termination of this
Agreement and the cessation of his employment with the Company for whatever reason.
9.8. Extension. In the event Executive violates any of the restrictive covenants
contained in this Section 9, the duration of such restrictive covenant shall automatically
be extended by the length of time during which Executive was in violation of such
restriction.
9.9. Severability; Modification of Restrictions. Although Executive and the Company
consider the restrictions contained in this Section 9 to be reasonable, particularly given
the competitive nature of the Company’s business and Executive’s position with the Company,
Executive and the Company acknowledge and agree that: (a) if any covenant, subsection,
portion or clause of this Section 9 is determined to be unenforceable or invalid for any
reason, such unenforceability or invalidity shall not affect the enforceability or validity
of the remainder of the Agreement; and (b) if any particular covenant, subsection, provision
or clause of this Section 9 is determined to be unreasonable or unenforceable for any
reason, including, without limitation, the time period, geographic area, and/or scope of
activity covered by any restrictive covenant, such covenant, subsection, provision or clause
shall automatically be deemed reformed such that the contested covenant, subsection,
provision or clause shall have the closest effect permitted by applicable law to the
original form and shall be given effect and enforced as so reformed to whatever extent would
be reasonable and enforceable under applicable law.
10. Remedies. Executive recognizes that a breach or threatened breach by Executive of Section
8 or Section 9 of this Agreement will give rise to irreparable injury to the Company and that money
damages will not be adequate relief for such injury. Notwithstanding Section 14.8 of this
Agreement, Executive agrees that the Company shall be entitled to obtain injunctive relief,
including, but not limited to, temporary restraining orders, preliminary injunctions and/or
permanent injunctions, without having to post any bond or other security, to
restrain or prohibit such breach or threatened breach, in addition to any other legal remedies
which may be available, including the recovery of money damages.
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11. No Additional Payment to Account for Excise Taxes. In the event it shall be determined
that any payment or distribution by the Company to or for the benefit of Executive (whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a
“Payment”) would be subject to the excise tax imposed by Section 4999 of the Code or any interest
or penalties are incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), then the Executive shall not be entitled to receive any additional payment in any
amount as a “gross up”, reimbursement or indemnity for such Excise Tax.
12. Assignment.
12.1. Assignment by Company. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and be binding upon any and all successors and
assigns of the Company, including without limitation by asset assignment, stock sale,
merger, consolidation or other corporate reorganization.
12.2. Non-Assignment by Executive. The services to be provided by Executive to the
Company hereunder are personal to Executive, and Executive’s duties may not be assigned by
Executive.
13. Notice. Any notice required or permitted under this Agreement shall be in writing and
either delivered personally or sent by nationally recognized overnight courier, express mail, or
certified or registered mail, postage prepaid, return receipt requested, at the following
respective address unless the party notifies the other party in writing of a change of address:
If to the Company:
Integra Bank Corporation
00 Xxxxxxxxx Xxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Chief Executive Officer
00 Xxxxxxxxx Xxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Chief Executive Officer
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If to Executive:
Xxxxxxx X. Xxxxxxx
0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
A notice delivered personally shall be deemed delivered and effective as of the date of
delivery. A notice sent by overnight courier or express mail shall be deemed delivered and
effective one (1) day after it is deposited with the postal authority or commercial carrier. A
notice sent by certified or registered mail shall be deemed delivered and effective two (2) days
after it is deposited with the postal authority.
14. Miscellaneous.
14.1. Entire Agreement. This Agreement supersedes any prior agreements or
understandings, oral or written, between the parties hereto, with respect to the subject
matter hereof, and constitutes the entire agreement of the parties with respect thereto.
14.2. Modification. This Agreement shall not be varied, altered, modified, canceled,
changed, or in any way amended except by mutual agreement of the parties in a written
instrument approved by the Board or its compensation committee.
14.3. Counterparts. This Agreement may be executed in one (1) or more counterparts,
each of which shall be deemed to be an original, but all of which together will constitute
one and the same Agreement.
14.4. Tax Withholding. The Company may withhold from any compensation or benefits
payable under this Agreement all federal, state, city, or other taxes as may be required
pursuant to any law or governmental regulation or ruling.
14.5. Contractual Rights to Benefits. Nothing herein contained shall require or be
deemed to require, or prohibit or be deemed to prohibit, the Company to segregate, earmark
or otherwise set aside any funds or other assets, in trust or otherwise, to provide for any
payments to be made or required hereunder.
14.6. No Waiver. Failure to insist upon strict compliance with any of the terms,
covenants or conditions of this Agreement shall not be deemed a waiver of such term,
covenant or condition, nor shall any waiver or relinquishment of any right or power
hereunder at any one or more times be deemed a waiver or relinquishment of such right or
power at any other time or times.
14.7. Governing Law; Choice of Forum. To the extent not preempted by federal law, the
provisions of this Agreement shall be construed and enforced in accordance with the laws of
the State of Indiana, notwithstanding any state’s choice-of-law or conflicts-of-law rules to
the contrary. The Company and Executive further acknowledge and agree that this Agreement
is intended, among other things, to supplement the provisions of the Uniform Trade Secrets
Act, as amended from time to time, and the duties Executive owes to the Company under the
common law, including, but not limited to, the duty of loyalty. The parties agree that any
legal action pursuant to Section 10 of this Agreement shall be commenced and maintained
exclusively before any appropriate state court of record in Vanderburgh County, Indiana, or
in the United States District Court for the Southern District of Indiana, Evansville
Division, and the parties
hereby submit to the jurisdiction and venue of such courts and waive any right to
challenge or otherwise object to personal jurisdiction or venue in any action commenced or
maintained in such courts.
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14.8. Arbitration of Disputes. Except as provided in Section 10 of this Agreement, any
controversy or claim arising out of or relating to this Agreement or the breach thereof,
shall be settled by binding arbitration in the City of Evansville, Indiana, in accordance
with the laws of the State of Indiana by three arbitrators, one of whom shall be appointed
by the Company, one by Executive and the third of whom shall be appointed by the first two
arbitrators. The arbitration shall be conducted in accordance with the rules of the
American Arbitration Association, except with respect to the selection of arbitrators which
shall be as provided in this Section. Judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof. The expenses of arbitration, and
the fees of the arbitrators, shall be paid by the party determined by the arbitrators as the
non-prevailing party. In addition, the prevailing party shall be entitled to recover its
costs, including reasonable attorneys’ fees, incurred in connection with the arbitration,
any proceeding under Section 10 and any subsequent enforcement of any arbitration award in
court.
14.9. Interpretation. This Agreement shall be interpreted and applied in a manner
consistent with the applicable standards for nonqualified deferred compensation plans
established by Section 409A of the Code and its interpretive regulations and other
regulatory guidance. To the extent that any terms of this Agreement would subject Executive
to gross income inclusion, interest, or additional tax pursuant to Section 409A of the Code,
those terms are to that extent superseded by, and shall be adjusted to the minimum extent
necessary to satisfy, the applicable Section 409A of the Code standards.
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IN WITNESS WHEREOF, Executive and the Company have executed this Agreement, intending it to be
effective as of the Effective Date.
INTEGRA BANK CORPORATION
By: |
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| Xxxxxxx X. Xxxxxxx | ||||
Name: |
||||
Title: |
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| “Company” | “Executive” |
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