Exhibit 10(q)
SENIOR OFFICER CHANGE IN CONTROL BENEFITS AGREEMENT
This Senior Officer Change in Control Benefits Agreement ("Agreement")
is made and entered into as of March 17, 2004, by and between Integra Bank
Corporation, an Indiana corporation (hereinafter referred to as the "Company"),
and Xxxxxxx Xxxxxxx (hereinafter referred to as "Employee").
W I T N E S S E T H
WHEREAS, Employee is a senior officer of the Company; and
WHEREAS, the Company believes that Employee will make valuable
contributions to the productivity and profitability of the Company; and
WHEREAS, the Company desires to encourage Employee to continue to make
such contributions and not to seek or accept employment elsewhere; and
WHEREAS, the Company, therefore, desires to assure Employee of certain
benefits in case of any termination or significant redefinition of the terms of
his employment with the Company subsequent to any Change in Control of the
Company;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained and the mutual benefits herein provided, the Company
and Employee hereby agree as follows:
1. The term of this Agreement shall be from the date hereof through
December 31, 2005; provided, however, that such term shall be automatically
extended for an additional year each year thereafter unless either party hereto
gives written notice to the other party not to so extend prior to November 30 of
the year for which notice is given, in which case no further automatic extension
shall occur.
2. As used in this Agreement, "Change in Control" of the Company means:
(A) The 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"), beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act as in
effect from time to time) of twenty-five percent (25%) or more of either (i)
the then outstanding shares of common stock of the Company or (ii) 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 directly from the Company (excluding an
acquisition by virtue of the exercise of a conversion privilege), (b) any
acquisition by the Company, (c) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or
-1-
any corporation controlled by the Company, or (d) any acquisition by any
corporation pursuant to a reorganization, merger or consolidation, if,
following such reorganization, merger or consolidation, the conditions
described in clauses (i), (ii) and (iii) of subsection (C) of this
definition are satisfied;
(B) Individuals who, as of the date hereof, constitute the Board of
Directors of the Company (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company's shareholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board;
(C) Approval by the shareholders of the Company of a reorganization,
merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation, (i) 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, (ii) 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 (iii) 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; or
(D) Approval by the shareholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other
disposition of all or substantially all of the assets of the Company, other
than to a corporation with respect to which following such sale or other
disposition (a) more than sixty percent (60%) of, respectively, the then
-2-
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 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, (b) 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 (c) 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.
3. The Company shall provide Employee with the benefits set forth in
Section 6 of this Agreement upon any termination of Employee's employment by the
Company within twelve (12) months following a Change in Control for any reason
except the following:
(A) Termination by reason of Employee's death.
(B) Termination by reason of Employee's "disability." For purposes
hereof, "disability" mean either (i) when Employee 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 Employee, because of injury, illness,
disease or bodily or mental infirmity, to perform the essential functions of
his or her job (with or without reasonable accommodation) for more than one
hundred twenty (120) days during any period of twelve (12) consecutive
months.
(C) Termination upon Employee reaching his or her normal retirement
date, which for purposes of this Agreement shall be deemed to be the end of
the month during which Employee reaches sixty-five (65) years of age.
(D) Termination for "cause." As used in this Agreement, the term
"cause" mean the occurrence of one or more of the following events: (i)
Employee's conviction for a felony or of any crime involving moral
turpitude; (ii) Employee's engaging in any illegal conduct or willful
misconduct in the performance of his employment duties for the Company (or
its affiliates); (iii) Employee's engaging in any fraudulent or dishonest
conduct in his dealings with, or on behalf of, the Company (or its
affiliates); (iv) Employee's failure or
-3-
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 Employee a written notice stating the instructions which
Employee has failed or refused to follow; (v) Employee's breach of any of
Employee's obligations under this Agreement; (vi) Employee's gross or
habitual negligence in the performance of his employment duties for the
Company (or its affiliates); (vii) Employee'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; (viii) Employee'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 Employee's employment with the Company; (ix) Employee's misuse of
alcohol or illegal drugs which interferes with the performance of Employee's
employment duties for the Company or which compromises the reputation or
goodwill of the Company; (x) Employee's intentional violation of any
applicable banking law or regulation in the performance of Employee's
employment duties for the Company; or (xi) Employee'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 Employee's employment with the Company.
4. The Company shall also provide Employee with the benefits set forth
in Section 6 of this Agreement upon any voluntary resignation of Employee if any
one of the following events occurs within twelve (12) months following a Change
in Control:
(A) Without Employee's express written consent, the assignment of
Employee to any duties which are fundamentally and significantly
inconsistent with his duties with the Company immediately prior to the
Change in Control or a fundamental and substantial reduction of his duties
or responsibilities from his duties or responsibilities immediately prior to
the Change in Control.
(B) A reduction by the Company in Employee's base salary from the level
of such salary immediately prior to the Change in Control.
(C) The failure by the Company to continue to provide Employee with
benefits substantially similar to those enjoyed by Employee or to which
Employee was entitled under any of the Company's incentive compensation or
bonus plan, principal pension, profit sharing, life insurance, medical,
dental, health and accident, or disability plans in which Employee was
participating prior to the Change in Control.
(D) The Company's requiring Employee to relocate other than any of the
metropolitan areas where the Company or its subsidiaries maintained offices
prior to the Change in Control.
5. Any termination by Company of Employee's employment as contemplated
by Section 3 hereof (except subsection 3(A)) or any resignation by Employee as
contemplated by
-4-
Section 4 hereof shall be communicated by a written notice to the other party
hereto. Any notice given by Employee pursuant to Section 4 or given by the
Company in connection with a termination as to which the Company believes it is
not obligated to provide Employee with benefits set forth in Section 6 hereof
shall indicate the specific provisions of this Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances claimed to provide a
basis for such termination.
6. Subject to the conditions and exceptions set forth in Section 3 and
Section 4 hereof, the following benefits, less any amounts required to be
withheld therefrom under any applicable federal, state or local income tax,
other tax, or social security laws or similar statutes, shall be paid to
Employee:
(A) Within thirty (30) days following such a termination, Employee
shall be paid, at his then-effective salary, for services performed through
the date of his termination. In addition, any earned but unpaid amount of
any bonus or incentive payment (which, for purposes of this Agreement, shall
mean that amount computed in a fashion consistent with the manner in which
Employee's bonus or incentive plan for the year preceding the year of
termination was computed, if Employee received a bonus or incentive payment
during such preceding year in accordance with a plan or program of the
Company, or, if not, then the total bonus or incentive payment received by
the Employee during such preceding year, in either case prorated through the
date of termination) shall be paid to Employee within thirty (30) days
following the termination of his employment.
(B) Within thirty (30) days following such a termination, Employee
shall be paid a lump sum payment of an amount equal to one (1) times
Employee's "Base Amount." For purposes hereof, Base Amount is defined as
Employee'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 Employee 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 Internal Revenue Code of 1986, as amended
("Code"), and the regulations and rulings of the Internal Revenue Service
promulgated thereunder. The payments to the Employee under this Section 6(B)
shall be reduced by the full amount that such payment, when added to all
other payments or benefits of any kind to the Employee by reason of the
Change in Control, constitutes an "excess parachute payment" within the
meaning of Section 280G of the Code.
(C) Employee acknowledges and agrees that payment in accordance with
subsections 6(A), 6(B) and 6(C) shall be deemed to constitute a full
settlement and discharge of any and all obligations of the Company to
Employee arising out of his employment with the Company and the termination
thereof, except for any vested rights Employee may then have under any
insurance,
-5-
pension, supplemental pension, thrift, employee stock ownership, or stock
option plans sponsored or made available by the Company.
7. In the event of a termination of Employee's employment by the
Company for any reason except those set forth in subsections 3(A) through 3(D)
prior to a Change in Control, the following benefits, less any amounts required
to be withheld therefrom under any applicable federal, state or local income
tax, or other social security laws or similar statutes, shall be paid to
Employee:
(A) For six (6) months following such a termination, Employee shall be
paid a monthly severance benefit equal to his or her salary for the
preceding year divided by 12.
(B) Employee acknowledges and agrees that payment in accordance with
subsection 7(A) shall be deemed to constitute a full settlement and
discharge of any and all obligations of the Company to Employee arising out
of his employment with the Company and the termination thereof, except for
any vested rights Employee may then have under any insurance, pension,
supplemental pension, thrift, employee stock ownership, or stock option
plans sponsored or made available by the Company.
8. Employee is not required to mitigate the amount of benefit payments
to be made by the Company pursuant to this Agreement by seeking other employment
or otherwise, nor shall the amount of any benefit payments provided for in this
Agreement be reduced by any compensation earned by Employee as a result of
employment by another employer or which might have been earned by Employee had
Employee sought such employment, after the date of termination of his employment
with the Company or otherwise.
9. Employee acknowledges that in connection with his employment with
the Company he has provided and will continue to provide 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. Employee 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 Employee has benefited and will continue to benefit from these
efforts. Therefore, as an essential part of this Agreement, Employee agrees and
covenants to comply with the following:
(A) During Employee's employment with the Company and during the
Restrictive Period, Employee will not, in the Restricted Geographic Area,
engage in any Competitive Business (i) in the same or similar capacity or
function to that in which Employee worked for the Company, (ii) in any
Employee level or senior management capacity, or (iii) in any other capacity
in which Employee's knowledge of the Company's confidential information or
the customer goodwill Employee helped to develop on behalf of the Company
would facilitate or support Employee's work for such competitor or
competitive enterprise. For purposes of this Agreement, the term
"Restrictive Period" shall mean twelve (12) months from the date of
termination of employment if Employee
-6-
is entitled to receive benefits under Section 6 or six (6) months from the
date of termination of employment in all other cases. For purposes of this
Agreement, the term "Restricted Geographic Area" means and includes: (w)
Vanderburgh County, Indiana; (x) all counties contiguous to Vanderburgh
County; (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, Employee 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.
(B) During Employee's employment with the Company and during the
Restrictive Period, Employee 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 Restrictive Period.
(C) During Employee's employment with the Company and during the
Restrictive Period, Employee 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.
(D) During the term of Employee's employment with the Company and
during the Restrictive Period, Employee 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.
(E) During the term of Employee's employment with the Company and
during the Restrictive Period, Employee 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.
(F) Employee acknowledges and agrees that the covenants contained in
this Section 9 prohibit Employee from engaging in certain activities
directly or indirectly, whether on Employee's own behalf or on behalf of any
other person or entity, and
-7-
regardless of the capacity in which Employee is acting, including without
limitation as an employee, independent contractor, owner, partner, officer,
agent, consultant, or advisor.
(G) Employee 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.
(H) In the event Employee 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 Employee was in
violation of such restriction.
(I) Although Employee 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 Employee's position with
the Company, Employee and the Company acknowledge and agree that: (i) 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 (ii) 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.
(J) Employee recognizes that a breach or threatened breach by Employee
of 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.
Employee 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.
10. Should Employee die while any amounts are payable to him hereunder,
this Agreement shall inure to the benefit of and be enforceable by Employee's
executors, administrators, heirs, distributees, devisees and legatees and all
amounts payable hereunder shall be paid in accordance with the terms of this
Agreement to Employee's devisee, legatee or other designee or if there be no
such designee, to his estate.
11. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been given when delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
-8-
If to Employee:
Xxxxxxx Xxxxxxx
0000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
If to the Company:
Integra Bank Corporation
00 Xxxxxxxxx Xxxxx Xxxxxx
P. O. Xxx 000
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Chief Executive Officer
or to such other address as any party may have furnished to the other party in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
12. The validity, interpretation, and performance of this Agreement
shall be governed by the laws of the State of Indiana. The parties agree that
all legal disputes regarding this Agreement will be resolved in Evansville,
Indiana, and irrevocably consent to service of process in such City for such
purpose.
13. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by Employee and the Company. No waiver by any party hereto at any time of
any breach by any other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or any
prior or subsequent time. No agreements or representation, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
any party which are not set forth expressly in this Agreement.
14. The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
15. This Agreement may be executed in two counterparts, each of which
shall be deemed an original, but which together will constitute one and the same
Agreement.
16. This Agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign or transfer this
Agreement or any rights or obligations hereunder, except as provided in Section
10 above. Without limiting the foregoing, Employee's right to receive payments
hereunder shall not be assignable or transferable, whether by pledge, creation
of a security interest or otherwise, other than a transfer by his Will or by the
laws of descent and distribution as set forth in Section 10 hereof, and in the
event of any attempted assignment or transfer contrary to this Section 16, the
Company shall have no liability to pay any amount so attempted to be assigned or
transferred.
-9-
17. Any benefits payable under this Agreement shall be paid solely from
the general assets of the Company. Neither Employee nor Employee's beneficiary
shall have interest in any specific assets of the Company under the terms of
this Agreement. This Agreement shall not be considered to create an escrow
account, trust fund or other funding arrangement of any kind or a fiduciary
relationship between Employee and the Company.
18. This Agreement supersedes any prior agreements or understandings,
written or oral, between the parties hereto with respect to the subject matter
hereof, and constitutes the entire agreement of the parties with respect
thereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year first above set forth.
INTEGRA BANK CORPORATION
By: /s/ Xxxxxxx X. Xxx
-----------------------------------------
Xxxxxxx X. Xxx, Chairman of the Board and
Chief Executive Officer
("Company")
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxxx Xxxxxxx
("Employee")
-10-
