Exhibit 10.7
CHANGE IN CONTROL BENEFITS AGREEMENT
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 Raymond D. Beck
(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,
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;

 

 

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(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

 

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(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.

 

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(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.

 

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(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 two 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.

 

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(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 twelve 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.

 

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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 two years 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.

 

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(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.
(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

 

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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:
Raymond D. Beck
470 Chesapeake Ave.
Ft. Thomas, Kentucky 41075
If to the Company:
Integra Bank Corporation
21 Southeast Third Street
P. O. Box 868
Evansville, Indiana 47705-0868
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.

 

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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.

 

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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:           Michael T. Vea, Chairman of the Board and        Chief
Executive Officer
(“Company”)          (“Employee”)
                       

 

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