CHANGE IN CONTROL BENEFITS AGREEMENT
Exhibit
10(d)
This
Change in Control Benefits Agreement ("Agreement") is made and entered into as
of May 22, 2007, by and between Integra Bank Corporation, an Indiana corporation
(hereinafter referred to as the "Company"), and ▇▇▇▇ ▇. Key (hereinafter
referred to as "Employee").
WITNESSETH
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,
2007; 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, 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: (i) 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; (ii) any
acquisition directly from the Company (excluding an acquisition by virtue of the
exercise of a conversion privilege), (iii) any acquisition by the Company,
(iv) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company, or (v) 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) below are satisfied;
(B) 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;
(C) 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;
(D) A
complete liquidation or dissolution of the Company; or
-2-
(E) The
sale or other disposition of all or substantially all of the assets of the
Company, other than any of the following dispositions: (i) 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 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; (ii) to a shareholder of the Company in exchange for or with
respect to its stock; (iii) 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 (iv) 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
clause (iii).
Despite
any other provision of this Section 2 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.
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.
-3-
(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 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.
-4-
(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 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 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.
-5-
(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, pension, supplemental
pension, thrift, employee stock ownership, or stock option plans sponsored or
made available by the Company.
(D) If
as of the date his employment terminates, Employee 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 Employee on, the first day of the seventh month following the month in
which Employee's last day of employment occurs. For purposes of this
subsection 6(D), "deferred compensation" means compensation provided under
a nonqualified deferred compensation plan as defined in, and subject to,
Section 409A of the Code.
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 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
twelve.
(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.
-6-
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 for one year from the date of
termination of employment (the “Restriction 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.
(B) During
the Restriction 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.
(C) During
the Restriction 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.
(D) During
the Restriction 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.
-7-
(E) 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 regardless
of the capacity in which Employee is acting, including without limitation as an
employee, independent contractor, owner, partner, officer, agent, consultant, or
advisor.
(F) 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.
(G) 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.
(H) 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.
(I) 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.
-8-
(J) In
the event Employee breaches any of the covenants contained in this
Section 9 following termination of employment, Employee immediately shall
(i) forfeit his right to receive (and the Company shall no longer be
obligated to pay) any severance compensation under this Agreement,
(ii) forfeit any stock options, stock appreciation and other rights granted
under any equity incentive compensation plans of the Company, regardless whether
such options or rights are vested, unvested, exercisable or unexercisable,
(iii) 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 Company stock options, stock appreciation rights and other rights that
were granted during the four (4) year period immediately preceding such
termination, (iv) disgorge and repay to the Company an amount equal to the
current market value of any restricted stock or other full value equity awards
which were granted to Employee within the four (4) year period immediately
preceding such termination and vested to Employee during the two (2) year period
immediately preceding such termination and (v) repay to the Company any
cash incentive or bonus payments paid to Employee within the two (2) year period
immediately preceding such termination. The Company and Employee
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 Employee's breach or threatened breach, of any
covenant set forth in this Section 9.
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:
If to
Employee:
▇▇▇▇ ▇.
Key
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
If to the
Company:
Integra
Bank Corporation
▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
P. O. ▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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.
-9-
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.
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 change in control or severance 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.
19. 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 Employee 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.
-10-
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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
|
|
▇▇▇▇▇▇▇
▇. ▇▇▇, Chairman of the Board and
|
|
|
Chief
Executive Officer
|
|
|
("Company")
|
|
| /s/ ▇▇▇▇ ▇. Key | |
| ("Employee") | |
-11-