EX-10.1






Exhibit 10.1




EMPLOYMENT AGREEMENT




THIS AGREEMENT is dated as of August 30, 2012 and shall become effective as of the
1st day of October, 2012 (the “Effective Date”), by and among Southwest Bancorp, Inc., a
bank holding company organized under the laws of the State of Oklahoma (the “Company”), the
Stillwater National Bank and Trust Company, a national bank organized under the laws of the United
States, and the Bank of Kansas, a state bank chartered under the laws of the State of Kansas (each,
a “Bank” and, collectively, the “Banks” and collectively with the Company, the “Employer”), and
Mark W. Funke (the “Executive”).



BACKGROUND:




The Company and the Banks each desire to employ the Executive as its President and Chief
Executive Officer on the terms and conditions set forth below and Executive desires to accept such
employment subject to such terms and conditions.



AGREEMENT:




In consideration of the above premises and the mutual agreements hereinafter set forth,
effective as of the Effective Date, the parties hereby agree as follows:



1. Duties.



1.1 Positions. The Executive shall be employed as the President and Chief Executive
Officer of the Company and the President and Chief Executive Officer of each of the Subsidiary
Banks and shall perform and discharge faithfully the duties and responsibilities which may
reasonably be assigned to the Executive from time to time in connection with the conduct of the
businesses. The duties and responsibilities of the Executive shall be commensurate with similar
positions at other publicly-traded community bank holding companies and community banks. The
Executive shall report directly to the Boards of Directors. During the Term, at appropriate
intervals and with the consent of the Executive, the Company and each Subsidiary Bank shall
nominate the Executive as a candidate for election or re-election to their respective Boards of
Directors, subject to any necessary regulatory non-objections.



1.2 Full-Time Status. In addition to the duties and responsibilities specifically
assigned to the Executive pursuant to Section 1.1 hereof, the Executive shall:  




(a) subject to Section 1.3, devote substantially all of the Executive’s time,
energy and skill during regular business hours to the performance of the duties of the
Executive’s employment (reasonable vacations and reasonable absences due to illness
excepted) and faithfully and industriously perform such duties;




(b) diligently follow and implement all reasonable and lawful management policies and
decisions communicated to the Executive by the Board of Directors; and




(c) timely prepare and forward to the Board of Directors all reports and accountings as
may be requested of the Executive.



1.3 Permitted Activities. The Executive shall devote substantially all of the
Executive’s entire business time, attention and energies to the Business of the Employer and shall
not during the Term be engaged (whether or not during normal business hours) in any other
significant business or professional activity, whether or not such activity is pursued for gain,
profit or other pecuniary advantage, but as long as the following activities do not unreasonably
interfere with the Executive’s obligations to the Employer, this shall not be construed as
preventing the Executive from:




(a) investing the Executive’s personal assets in any manner which will not require any
material services on the part of the Executive in the operation or affairs of the entity and
in which the Executive’s participation is primarily that of an investor; provided that such
investment activity following the Effective Date shall not result in the Executive owning
beneficially at any time one percent (1%) or more of the equity securities of any Competing
Business; or




(b) participating in civic and professional affairs and organizations and conferences,
preparing or publishing papers or books, or teaching or serving on the board of directors of
an entity so long as any such participation does not unreasonably interfere with the ability
of the Executive to effectively discharge the Executive’s duties hereunder; provided
further, that the Board of Directors may direct the Executive in writing to resign from any
such organization and/or cease such activities should the Board of Directors reasonably
conclude that continued membership and/or activities of the type identified would not be in
the best interests of the Employer.



2. Term.




(a) Subject to earlier termination in accordance with Subsection (b) below,
this Agreement shall remain in effect for the Term. If the Agreement is in effect at the
end of the Initial Term, the Term shall be renewed automatically for successive twelve-month
periods unless and until one party gives written notice to the other of its or the
Executive’s intent not to extend this Agreement with such written notice to be given not
less than ninety (90) days prior to the end of the Initial Term or any such twelve-month
period. In the event such notice of non-extension is properly given, this Agreement shall
terminate at the end of the remaining Term then in effect even if the Executive continues to
provide services to the Employer as an employee following the expiration of the Term and the
resulting termination of the Agreement.




(b) Notwithstanding the provisions of Subsection (a), the Executive shall be
employed on an at-will basis in that, at any time during the Term, the Employer and the
Executive may each effect an earlier termination of the Term and a resulting termination of
the Executive’s employment pursuant to Section 4.1 hereof.



3. Compensation. The Employer shall pay the Executive the following during the Term,
except as otherwise provided below:



3.1 Annual Base Salary. The Executive shall be compensated at an annual base rate of
Four Hundred and Twenty-Five Thousand and No/100 Dollars ($425,000.00) (the “Annual Base Salary”).
The Executive’s Annual Base Salary shall be payable in accordance with the Employer’s normal
payroll practices.



3.2 Signing Bonus. The Employer shall pay the Executive a one-time signing bonus
comprised of the following components:




(a) a payment in cash equal to Forty Thousand and No/100 Dollars ($40,000.00), payable
within thirty (30) days following the Effective Date; and




(b) a restricted stock award representing the opportunity to earn a number of shares of
Company common stock having a value equal to Four Hundred and Sixty Thousand and No/100
Dollars ($460,000.00) based on the per share closing price of Company common stock as of
today’s date as reported by the NASDAQ Stock Market. In determining the number of shares of
Company common stock subject to the restricted stock award by applying the foregoing
formula, the number of shares will be rounded to the nearest one hundred share increment.
The restricted stock award will be granted within forty-five (45) days of the Effective Date
and will vest one-hundred eighty (180) days after the grant date, provided the Executive
remains in the continuous employ of the Employer through such date, and will be subject to
such other general terms and conditions in the form of award employed by the Employer for
grants of this type. The restricted shares will be held in escrow by the Employer until
vested and will be delivered to the Executive as soon as practicable thereafter.



3.3 Annual Incentive Compensation.




(a) The Executive shall be eligible to receive annual bonus compensation, if any, as
may be determined by, and based on performance measures established by, the Board of
Directors upon the recommendation of the Compensation Committee of the Board of Directors
(the “Committee”) consistent with the Employer’s strategic planning process and in
consultation with the Executive, pursuant to any incentive compensation program as may be
adopted from time to time by the Board of Directors, based on recommendations by the
Committee (an “Annual Bonus”). The Executive shall be eligible for an Annual Bonus
opportunity equal to one hundred percent (100%) of Annual Base Salary.




(b) Any Annual Bonus earned shall be payable in cash and/or shares of Company common
stock, as determined by the Board of Directors, in the year following the year in which the
bonus is earned in accordance with the Employer’s normal practices for the payment of
short-term incentives, but not later than March 15th.




(c) Notwithstanding any provision of Subsections (a) and (b) above to the
contrary, a minimum Annual Bonus for each of calendar years 2012 and 2013 shall be payable
in the amount of Three Hundred Thousand and No/100 Dollars ($300,000.00), two-thirds of each
such minimum Annual Bonus shall be paid in cash and the remaining one-third shall be paid in
the form of a restricted stock award. In determining the number of shares of Company common
stock subject to each such restricted stock award, the per share closing price of Company
common stock shall be averaged over the period commencing with the thirtieth-day preceding
December 31 of the applicable calendar year (i.e., 2012 in the case of the first minimum
Annual Bonus and 2013 in the case of the second Annual Bonus) and ending on the thirtieth
day after such December 31 as such closing prices are reported by the NASDAQ Stock Market.
The number of shares subject to each restricted stock award will be rounded to the nearest
one hundred share increment. Each restricted stock award will be granted at the time annual
bonuses are paid for the applicable calendar year in accordance with the Employer’s normal
practices for the payment of short-term incentives, but not later than March
15th. Each restricted stock award will vest in full on the third anniversary of
the grant date, subject to the Executive’s continuing employment, and will be subject to
such other general terms and conditions in the form of award employed by the Employer for
grants of this type. The restricted shares will be held in escrow by the Employer until
vested and will be delivered to the Executive as soon as practicable thereafter.




(d) Commencing with calendar year 2014 and continuing through calendar year 2016, fifty
percent (50%) of the Executive’s Annual Bonus opportunity shall be subject to the following
performance conditions:



(1) no Subsidiary Bank has a Classified Asset Ratio (“CAR”), determined at
the end of the applicable calendar year greater than: (i) forty percent (40%) in
calendar year 2014; (ii) thirty-five percent (35%) in calendar year 2015; and
(iii) thirty-five percent (35%) in calendar year 2016. For purposes of this
Subsection (d), CAR is defined as: (Total Classified Loans + Other Real
Estate Owned) / (Tier 1 Capital + Allowance for Loan and Lease Losses);



(2) the Employer is not under any memorandum of understanding or formal
agreement with any regulator during the applicable calendar year or at any time
prior to the date the Annual Bonus is otherwise payable; and



(3) Total Shareholder Return for the applicable calendar year is in the top
twenty-fifth (25th) percentile of total shareholder returns for banks
in a mutually agreed upon peer group; provided, however, with respect to any
applicable calendar year, if the only criterion precluding payment of the portion
of the Annual Bonus subject to the conditions in this Subsection (d) is
the Total Shareholder Return condition and the Company’s Total Shareholder Return
for such calendar year exceeds the fiftieth (50th ) percentile, then a
percentage of the portion of the Annual Bonus subject to the conditions in this
Subsection (d) will be payable. The percentage payable shall be four
percent (4%) multiplied by the number of whole numbers above the fiftieth
(50th) percentile ranking that the Company achieves for its Total
Shareholder Return.



The fifty percent (50%) of each Annual Bonus opportunity that is subject to the provisions
of this Subsection (d) shall be forfeited if and to the extent the condition(s)
set forth in Clauses (1), (2) or (3) are not satisfied. The remaining fifty
percent (50%) of each such Annual Bonus opportunity for calendar years 2014 through 2016
shall be subject to such discretionary performance criteria as may be established by the
Committee pursuant to Subsection (a) above.




(e) The payment of any Annual Bonus shall be subject to any approvals or non-objections
required by any regulator of the Employer, and any other restrictions under applicable law.



3.4 Equity Compensation.




(a) As soon as practicable following the Effective Date, the Executive shall be granted
a one-time performance stock award entitling him to earn up to 138,600 shares of Company
common stock. The performance measure shall be Total Shareholder Return and continuing
employment shall be a service condition both during and for a three-year period following
the date the applicable performance measure is satisfied. The number of shares satisfying
the performance measure shall be based upon the level of Total Shareholder Return achieved
over each of the calendar years from 2013 through 2016 in accordance with the following
table:



	 	 	 
	Total Shareholder Return Achieved
	 	Performance Shares Satisfying

the Performance Measure

	 
	 	 

	20%

30%

40%

50%

60%

70%

80%

90%
	 	3,850

7,700

11,550

15,400

19,250

23,100

26,950

30,800








To the extent a Total Shareholder Return for any applicable calendar year is earned above
the threshold percentage level (i.e., twenty percent (20%)), any previously unearned
performance shares allocated to a lower percentage level under the table above shall be
deemed to have satisfied the performance measure for that calendar year. Once considered to
have met a performance measure for an applicable calendar year, performance shares are not
eligible to be earned again despite successive achievement of Total Shareholder Returns at
or above the threshold level. Performance shares granted pursuant to this Subsection
(a) will be held in escrow by the Employer until earned and vested. Performance shares
that have been earned shall be subject to a three-year vesting period commencing with the
last day of the calendar year for which the performance shares are considered to have been
earned Vested performance shares will be delivered to the Executive as soon as practicable
after the expiration of the vesting period. The performance stock award will be subject to
the Executive’s continuing employment and will be subject to such other general terms and
conditions in the form of award employed by the Employer for grants of this or similar type.




Notwithstanding the preceding provisions of this Subsection (a), the number of
performance shares that can be earned with respect to any applicable calendar year is capped
in accordance with the following table:



	 	 	 
	Applicable Calendar Year	 	Performance Share Cap
	2013	 	34,650
	2014

2015

2016

	 	69,300

103,950

138,600







Any performance shares that have met a performance measure for an applicable calendar year
that exceed the performance share cap for that calendar year may be earned in a subsequent
applicable calendar year if the performance measure attained for any such subsequent
applicable calendar year treat the performance shares as having been earned for that
subsequent applicable calendar year in accordance with the first table set forth in this
Subsection (a). The numbers set forth in the tables of this Subsection (a)
shall be adjusted to reflect any stock splits, stock dividends or similar events affecting
            shares of Company common stock.




(b) As soon as practicable following the first day of calendar years 2013 through 2016,
the Executive shall be granted an annual performance stock award each entitling him to earn
up to 14,400 shares of Company common stock. The performance measure shall be Return on
Average Equity and continuing employment shall be a service condition both during and for a
three-year period following the date the applicable performance measure is satisfied. The
number of shares satisfying the performance measure shall be based upon the percentage of
Return on Average Equity achieved for the calendar year for which the award is granted in
accordance with the following table:



	 	 	 
	Return on Average Equity

	 	Performance Shares Earned
	 

	 	 
	7.0%

7.5%

8.0%

8.5%

9.0%

9.5%

10.0%

	 	3,600

5,400

7,200

9,000

10,800

12,600

14,400







Performance shares granted pursuant to this Subsection (b) will be held in escrow by
the Employer until earned and vested. Performance shares that have been earned shall be
subject to a three-year vesting period commencing with the last day of the calendar year for
which the performance shares are considered to have been earned Vested performance shares
will be delivered to the Executive as soon as practicable after the expiration of the
vesting period. The performance stock award will be subject to the Executive’s continuing
employment and will be subject to such other general terms and conditions in the form of
award employed by the Employer for grants of this or similar type.




The numbers set forth in the tables of this Subsection (b) shall be adjusted to
reflect any stock splits, stock dividends or similar events affecting shares of Company
common stock.




(c) With respect to the performance stock awards contemplated under both
Subsections (a) and (b), each of the following conditions must be satisfied for any
performance shares to be earned under Subsection (a) with respect to a calendar year
even if the Total Shareholder Return performance measure for that calendar year is satisfied
and for any performance shares to be earned under Subsection (b) even if the Return
on Average Equity performance measure for that calendar year is satisfied:



(1) no Subsidiary Bank has a CAR, determined at the end of the applicable
calendar year greater than: (i) forty percent (40%) in calendar year 2014; (ii)
thirty-five percent (35%) in calendar year 2015; and (iii) thirty-five percent
(35%) in calendar year 2016;



(2) the Company, on a consolidated basis, and each Subsidiary Bank must
maintain a “common equity tier 1 capital ratio” (as defined by the Employer’s
banking regulators) of not less than the greater of (i) nine percent (9%) and (ii)
two percent (2%) more than the minimum standard set by the Employer’s banking
regulators, determined as of the last day of each applicable calendar year; and




(3) the Employer is not under any memorandum of understanding or formal
agreement with any regulator during the applicable calendar year.




If any one of the foregoing conditions is not satisfied for an applicable calendar year,
then no performance shares shall be considered earned with respect to that calendar year
with respect to the performance stock award under Subsection (a) and the annual
performance stock awarded under Subsection (b) for that calendar year shall be
forfeited.




(d) For calendar years from and after 2017, the Executive shall be eligible to
participate in equity awards on no less favorable a basis than similarly situated
executives.




(e) All shares of Company common stock issued to the Executive pursuant to the terms of
this Agreement shall be further subject to restrictions on transferability unless and until
the Executive holds fully earned and vested shares of Company common stock having a fair
market value that equals or exceeds three (3) times his then Annual Base Salary. Once the
Executive attains the threshold ownership level, any shares of Company common stock
exceeding the threshold ownership level shall not be subject to the transferability
restrictions. However, if once attained, the shares of Company common stock owned by the
Executive fall below the threshold ownership level (whether due to a decline in the value of
the shares or otherwise), the Executive shall be obligated to attain once again the
threshold ownership level, which obligation remains in effect throughout the Term. Any
            shares of Company common stock subject to awards granted after the date of any failure to
maintain the threshold ownership level shall be subject to the restrictions on
transferability contemplated by this Subsection (e) until the threshold ownership
level is once again attained. This transferability restriction, however, shall not preclude
the Executive from tendering back to the Company or selling to third parties a number of
            shares of Company common stock having a fair market value equal to the minimum required tax
withholding obligations resulting from earning and becoming vested in shares subject to
equity awards granted pursuant to this Agreement. For purposes of this Subsection
(e), the threshold ownership level shall be measured as of each December 31 during the
Term and the determination of the value of Company common stock for this purpose shall be
based on the per share closing price of Company common stock averaged over the thirty-day
period immediately preceding such December 31, as such closing prices are reported by the
NASDAQ Stock Market. If the target ownership level is satisfied as of any such December 31,
it shall be deemed satisfied until the immediately succeeding December 31.




(f) The Executive agrees to waive his right to any dividends otherwise payable on
            shares of Company common stock awarded pursuant to this Section 3.4 with respect to
record dates falling on dates prior to the date the underlying shares of Company common
stock are earned in accordance with the terms of the award(s).



3.5 Business and Professional Education Expenses; Memberships. Subject to the
reimbursement policies from time to time adopted by the Board of Directors and consistent with the
annual budget approved for the period during which an expense was incurred, the Employer
specifically agrees to reimburse the Executive for reasonable and necessary business expenses
incurred by the Executive in the performance of the Executive’s duties hereunder; provided,
however, that as a condition of any such reimbursement, the Executive shall submit verification of
the nature and amount of such expenses in accordance with such reimbursement policies and in
sufficient detail to comply with rules and regulations promulgated by the United States Treasury
Department. Examples of appropriate categories of expenses include membership in professional and
civic organizations, professional development, and customer entertainment. The Executive
acknowledges that the Employer makes no representation with respect to the taxability or
nontaxability of the benefits provided under this Section 3.5.



3.6 Paid Vacation. The Executive shall be entitled to no less than twenty-five (25)
days of paid vacation per calendar year, prorated for any partial calendar year of service. The
provisions of this Section 3.6 shall apply notwithstanding any less generous paid leave
policy then maintained by the Employer, but the use of Executive’s paid vacation leave shall
otherwise be determined in accordance with the Employer’s paid leave policy as in effect from time
to time.



3.7 Benefits. In addition to the benefits specifically described in this Agreement,
the Executive shall be entitled to such benefits as may be available from time to time to similarly
situated executives. All such benefits shall be awarded and administered in accordance with the
written terms of any applicable benefit plan or, if no written terms exist, the Employer’s standard
policies and practices relating to such benefit.



3.8 Withholding. The Employer may deduct from each payment of compensation hereunder
all amounts required to be deducted and withheld in accordance with applicable federal and state
income, FICA and other withholding requirements.



3.9 Reimbursement of Expenses; In-Kind Benefits. All expenses eligible for
reimbursements described in this Agreement must be incurred by the Executive during the Term of
this Agreement to be eligible for reimbursement. Any in-kind benefits provided by the Employer
must be provided during the Term of this Agreement. The amount of reimbursable expenses incurred,
and the amount of any in-kind benefits provided, in one taxable year shall not affect the expenses
eligible for reimbursement, or in-kind benefits provided, in any other taxable year. Each category
of reimbursement shall be paid as soon as administratively practicable, but in no event shall any
such reimbursement be paid after March 15th of the calendar year following the calendar
year in which the expense was incurred. Neither rights to reimbursement nor in-kind benefits are
subject to liquidation or exchanges for other benefits.



3.10 Clawback of Compensation. The Executive agrees to repay any compensation
previously paid or otherwise made available to the Executive under this Agreement that is subject
to recovery under any applicable law (including any rule of any exchange or service through which
the securities of the Company are then traded), including, but not limited to, the following
circumstances:




(a) where such compensation was in excess of what should have been paid or made
available because the determination of the amount due was based, in whole or in part, on
materially inaccurate financial information of the Employer where the Employer has been
required to prepare an accounting restatement due to material noncompliance of the Employer,
as a result of misconduct, with any financial reporting requirement under the federal
securities laws;




(b) where the Executive has committed, is substantially responsible for, or has
violated, the respective acts, omissions, conditions, or offenses outlined under 12 C.F.R.
Section 359.4(a)(4); and




(c) if a Subsidiary Bank becomes, and for so long as a Subsidiary Bank remains, subject
to the provisions of 12 U.S.C. Section 1831o(f), where such compensation exceeds the
restrictions imposed on the senior executive officers of such an institution.



The Executive agrees to return promptly any such compensation properly identified by the Employer
by written notice provided pursuant to Section 13. If the Executive fails to return such
compensation promptly, the Executive agrees that the amount of such compensation may be deducted
from any and all other compensation owed to the Executive by the Employer. If the Executive is
then employed by the Employer, the Executive acknowledges that the Employer may take appropriate
disciplinary action (up to, and including, Termination of Employment) if the Executive fails to
return such compensation. The Executive acknowledges the Employer’s rights to engage in any legal
or equitable action or proceeding in order to enforce the provisions of this Section 3.10.
The provisions of this Section 3.10 shall be modified to the extent, and remain in effect
for the period, required by applicable law.



3.11 Apportionment of Obligations. The obligations for the payment of the amounts
otherwise payable pursuant to this Section 3 shall be apportioned between the Company and
the Banks as they may agree from time to time in their sole discretion.



4. Termination; Suspension or Reduction of Benefits.



4.1 Termination of Employment. During the Term, the Termination of Employment of the
Executive and this Agreement may be effected immediately in the event of (a) a termination of the
Executive by the Employer for Cause; (b) a termination of the Executive by the Employer without
Cause; (c) a resignation by the Executive for Good Reason; (d) a resignation by the Executive for
Constructive Termination within twelve (12) months following a Change of Control; (e) a resignation
by the Executive without Good Reason; or (f) the Executive’s death or Disability. Notwithstanding
anything to the contrary in the preceding sentence, the Executive must give at least ninety (90)
days advance written notice prior to the Executive’s effective date of resignation pursuant to
Section 4.1(e).



4.2 Severance. If, during the Term, the Executive experiences a Termination of
Employment by the Employer without Cause pursuant to Section 4.1(b) or the Executive
resigns the Executive’s employment with the Employer (i) for Good Reason pursuant to Section
4.1(c), or (ii) for Constructive Termination within twelve (12) months following a Change of
Control pursuant to Section 4.1(d), then, upon such Termination of Employment, for a period
of twelve (12) months thereafter, the Employer will pay severance to the Executive, with the amount
of each monthly payment equal to the Applicable Fraction of the Annual Base Salary in effect as of
the effective date of the Termination of Employment. Monthly severance payments, or portions
thereof, shall be paid in accordance with the Employer’s regular payroll practices, commencing with
the first payroll date that is more than sixty (60) days following the date of the Executive’s
Termination of Employment. In addition, any service condition contained in any equity awards
outstanding in favor of the Executive shall be deemed to have been satisfied immediately prior to
the effective date of the Termination of Employment and shares of Company common stock subject to
any performance stock awards granted pursuant to Subsections (a) and (b) of Section
3.4 shall be earned if and to the extent applicable performance measures are attained and the
applicable conditions in Subsection (c) of Section 3.4 remain satisfied as of the fiscal
year ending with or within the twelve-month period immediately following the effective date of the
Termination of Employment.



4.3 Golden Parachute Limitations. Notwithstanding any provision of this Agreement to
the contrary, if any amount or benefit to be paid or provided under this Agreement or otherwise
payable to the Executive by the Employer would be an “Excess Parachute Payment,” within the meaning
of Section 280G of the Code, but for the application of this sentence, then the payments and
benefits to be paid or provided under this Agreement will be reduced to the minimum extent
necessary (but in no event to less than zero) so that no portion of any such payment or benefit, as
so reduced, constitutes an Excess Parachute Payment; provided, however, that the foregoing
reduction will be made only if and to the extent that such reduction would result in an increase in
the aggregate payment and benefits to be provided, determined on an after-tax basis (taking into
account the excise tax imposed pursuant to Section 4999 of the Code, any tax imposed by any
comparable provision of state law, and any applicable federal, state and local income and
employment taxes). Whether requested by the Executive or the Employer, the determination of
whether any reduction in such payments or benefits to be provided under this Agreement or otherwise
is required pursuant to the preceding sentence will be made at the expense of the Employer by the
Employer’s independent accountants. In the event the payments to the Executive are required to be
reduced pursuant to this Section 4.3, the portions of the payments that would be paid
latest in time will be reduced first and if multiple portions of the payments to be reduced are
paid at the same time, any non-cash payments will be reduced before any cash payments, and any
remaining cash payments will be reduced pro rata.



4.4 Effect of Termination of Employment.




(a) Upon Executive’s Termination of Employment hereunder for any reason, the Employer
shall have no further obligations to the Executive or the Executive’s estate with respect to
this Agreement, except for the payment of any compensation, benefits or other amounts earned
and owing under Section 3 through the effective date of the termination of the
Agreement and, if applicable, any payments set forth in Section 4.2.




(b) Notwithstanding any other provision of this Agreement to the contrary, as a
condition of the Employer’s provision of severance benefits in connection with the
Executive’s Termination of Employment pursuant to Section 4.2, the Executive must
execute within such period of time following Termination of Employment as is permitted by
the Employer (and not timely revoke during any revocation period provided pursuant to such
release) a release and non-disparagement agreement in substantially the form attached hereto
as Exhibit “A.” Any payments of severance shall accrue from the date of the Executive’s
Termination of Employment, with any accrued but unpaid severance being paid on the date of
the first payment as provided in Section 4.2.




(c) If the Executive is a member of the Board of Directors and the Executive’s
employment is terminated by the Employer or by the Executive pursuant to Section
4.1, the Executive shall immediately resign from the Executive’s position on the
Board(s) of Directors, effective no later than the date the Executive’s employment is
terminated.




(d) Notwithstanding any provision in the Agreement to the contrary, to the extent
necessary to avoid the imposition of tax on the Executive under Code Section 409A, any
payments that are otherwise payable to the Executive within the first six (6) months
following the effective date of Termination of Employment, shall be suspended and paid as
soon as practicable following the end of the six-month period following such effective date
if, immediately prior to the Executive’s Termination of Employment, the Executive is
determined to be a “specified employee” (within the meaning of Code Section
409A(a)(2)(B)(i)) of the Employer (or any related “service recipient” within the meaning of
Code Section 409A and the regulations thereunder). Any payments suspended by operation of
the foregoing sentence shall be paid as a lump sum within thirty (30) days following the end
of such six-month period. Payments (or portions thereof) that would be paid latest in time
during the six-month period will be suspended first.




(e) Notwithstanding any provision in this Agreement to the contrary, if the Employer
elects not to renew the Term of this Agreement at the end of the Initial Term or any
twelve-month anniversary thereof pursuant to Section 2(a), any service condition
contained in any equity awards outstanding in favor of the Executive shall be deemed to have
been satisfied immediately prior to the effective date of the Termination of Employment and
            shares of Company common stock subject to any performance stock awards awarded pursuant to
Subsections (a) and (b) of Section 3.4 shall be earned if and to the extent
applicable performance measures are attained and the applicable conditions in Subsection
(c) of Section 3.4 remain satisfied as of the fiscal year ending with or within
the twelve-month period immediately following the effective date of the Termination of
Employment.




4.5 Regulatory Limitations.




(a) FDIC Golden Parachute Limitations. Notwithstanding anything contained in
this Agreement to the contrary, no payments shall be made pursuant to Section 4 or
any other provision herein or otherwise in contravention of the requirements of Section
18(k) of the Federal Deposit Insurance Act (the “FDIA”) (12 U.S.C. 1828(k)) and Part 359 of
the FDIC Rules and Regulations, 12 C.F.R. 359 (collectively, the “FDIC Golden Parachute
Restrictions”). In the event any such payments become due and payable under this Agreement
at a time when such payments would constitute “golden parachute payments,” other than
“golden parachute payments” for which the concurrence or consent of the appropriate federal
banking agency has been received as contemplated by the FDIC Golden Parachute Restrictions,
the obligation on the part of the Employer to make any such payments shall become null and
void. In addition, nothing in the preceding sentence shall impose an obligation on the part
of the Employer to petition the FDIC (and/or other regulatory agency having jurisdiction
over the Employer) for its concurrence or consent.




(b) Other Bank Regulatory Limitations. If the Executive is removed from office
and/or permanently prohibited from participating in the conduct of the affairs of any
depository institution by an order issued under Section 8(e) or 8(g) of the FDIA (12 U.S.C.
1818(e) and (g)), the Employer shall have the right to terminate all obligations of the
Employer under this Agreement as of the effective date of such order, except for the payment
of Annual Base Salary due and owing under Section 3.1 on the effective date of said
order, and reimbursement under Section 3.5 of expenses incurred as of the effective
date of termination. If the Executive is suspended from office and/or temporarily
prohibited from participating in the conduct of a Subsidiary Bank’s affairs by a notice
served under Section 8(e) or 8(g) of the FDIA (12 U.S.C. 1818(e) and (g)), the Employer
shall have the right to suspend all obligations of the Employer under this Agreement as of
the date of service, unless stayed by appropriate proceedings. If the charges in the notice
are dismissed, the Employer shall reinstate prospectively (in whole or in part) any of its
obligations which were suspended. If the FDIC is appointed receiver or conservator under
Section 11(c) of the FDIA (12 U.S.C. 1821(c)) of the Company or any depositary institution
controlled by the Company, the Employer shall have the right to terminate all obligations of
the Employer under this Agreement as of the date of such receivership or conservatorship,
other than any rights of the Executive that vested prior to such appointment. If the
Employer is in default (as defined in Section 3(x)(1) of the FDIA), all obligations under
this Agreement shall terminate as of the date of default, but the vested rights of the
parties shall not be affected. If the FDIC provides open bank assistance under Section
13(c) of the FDIA (12 U.S.C. 1823(c)) to the Company or any depositary institution
controlled by the Company, but excluding any such assistance provided to the industry
generally, the Employer shall have the right to terminate all obligations of the Employer
under this Agreement as of the date of such assistance, other than any rights of the
Employee that vested prior to the FDIC action. If the FDIC requires a transaction under
Section 13(f) or 13(k) of the FDIA (12 U.S.C. 1823(f) and (k)) by the Company or any
depository institution controlled by the Company, the Employer shall have the right to
terminate all obligations of the Employer under this Agreement as of the date of such
transaction, other than any rights of the Employee that vested prior to the transaction.
Notwithstanding the foregoing provisions of this Section 4.5 (b), any vested rights
of the Executive may be subject to such modifications that are consistent with the authority
of the FDIC.




(c) Regulatory Approval. Notwithstanding the timing for the payment of monthly
severance amounts described in Section 4.2, no such payments shall be made or
commence, as applicable, that require the concurrence or consent of the appropriate federal
banking agency of the Employer pursuant to 12 C.F.R. Section 359 prior to the receipt of
such concurrence or consent. Any payments suspended by operation of this Section
4.5(c) shall be paid as a lump sum within thirty (30) days following receipt of the
concurrence or consent of the appropriate federal banking agency of the Employer or as
otherwise directed by such federal banking agency.




(d) State Banking Limitations. All obligations under this Agreement are
further subject to such conditions, restrictions, limitations and forfeiture provisions as
may separately apply pursuant to any applicable state banking laws.



5. Employer Information.



5.1 Ownership of Employer Information. All Employer Information received or
developed by the Executive or by the Employer while the Executive is employed by the Employer will
remain the sole and exclusive property of the Employer.



5.2 Obligations of the Executive. The Executive agrees:




(a) to hold Employer Information in strictest confidence;




(b) not to use, duplicate, reproduce, distribute, disclose or otherwise disseminate
Employer Information or any physical embodiments of Employer Information to any unauthorized
recipient; and




(c) in any event, not to take any action causing or fail to take any action necessary
in order to prevent any Employer Information from losing its character or ceasing to qualify
as Confidential Information or a Trade Secret;



provided, however, that none of the foregoing obligations shall preclude the Executive from making
any disclosures of Employer Information required by law. This Section 5 shall survive for
a period of two (2) years following termination of this Agreement for any reason with respect to
Confidential Information, and shall survive termination of this Agreement for any reason for so
long as is permitted by applicable law, with respect to Trade Secrets.



5.3 Delivery upon Request or Termination. Upon request by the Employer, and in any
event upon the Executive’s Termination of Employment with the Employer, the Executive will promptly
deliver to the Employer all property belonging to the Employer, including, without limitation, all
Employer Information then in the Executive’s possession or control.



6. No Appropriation. The Executive agrees that during the Executive’s employment by the
Employer hereunder, and for the duration of the Post-Termination Period, the Executive will not
(except on behalf of or with the prior written consent of the Employer) appropriate for his own
benefit or the benefit of a third party any banking opportunity properly belonging to the Employer
the usurpation of which constitutes a breach of the Executive’s fiduciary duty as an officer of the
Employer under applicable law.



7. Non-Solicitation of Customers. The Executive agrees that during the Executive’s
employment by the Employer hereunder, and in the event of the Termination of Employment, regardless
of the reason, for the duration of the Post-Termination Period, the Executive will not (except on
behalf of or with the prior written consent of the Employer) on the Executive’s own behalf or in
the service or on behalf of others, solicit, divert or appropriate or attempt to solicit, divert or
appropriate, any business from any of the Employer’s customers, including prospective customers
actively sought by the Employer, with whom the Executive has or had material contact during the
last two (2) years of the Executive’s employment with Employer, for purposes of providing products
or services that are competitive with those provided by the Employer.



8. Non-Solicitation of Employees. The Executive agrees that during the Executive’s
employment by the Employer hereunder, and in the event of the Termination of Employment, regardless
of the reason, for the duration of the Post-Termination Period, the Executive will not (except on
behalf of or with the prior written consent of the Employer) on the Executive’s own behalf or in
the service or on behalf of others, solicit, or recruit or attempt to solicit, or recruit, any
employee of the Employer with whom the Executive had material contact during the last two (2) years
of the Executive’s employment, whether or not such employee is a full-time employee or a temporary
employee of the Employer, such employment is pursuant to written agreement, for a determined
period, or at will.



9. Non-disparagement. The Executive agrees that during the Executive’s employment by the
Employer hereunder, and for a period of one (1) year thereafter, the Executive will not make any
untruthful statement (written or oral) that could reasonably be perceived as disparaging to the
Employer or any Affiliate. Employer agrees that during the Executive’s employment by the Employer
hereunder, and for a period of one (1) year thereafter, the members of their respective Boards of
Directors and all executive officers of the Company and the Subsidiary Banks (collectively, the
“Persons to be Advised”) will not make any untruthful statement (written or oral) that could
reasonably be perceived as disparaging to the Executive. Employer will advise the Persons to be
Advised that a non-disparagement agreement is in effect, and will use reasonable efforts to enforce
compliance with this non-disparagement agreement. Notwithstanding the foregoing agreement, the
parties hereto recognize and acknowledge that the Employer will not be liable for unauthorized
remarks by individuals employed by or otherwise associated with the Employer, other than the
Persons to be Advised and if the Persons to be Advised are required by any applicable law,
regulation, statute, subpoena, court order, or other compulsory process to disclose information
related to the Executive’s employment, such disclosure of truthful information shall not constitute
a breach of this Agreement. Moreover, this Section 9 shall not apply to any
communications: (a) between the Employer and its independent public auditors; (b) necessary to
comply fully with all applicable requirements and policies of federal and state laws; (c) necessary
to cooperate fully with any investigation or request for information from any state or federal
governmental agency, stock exchange, or regulatory organization; (d) necessary in the course of
preparing and filing appropriate tax returns or dealing with federal or state taxing authorities;
or (e) made in connection with any judicial or administrative proceeding or arbitration with
respect to which such communications are relevant.



10. Remedies. The Executive agrees that the covenants contained in Sections 5 through
9 of this Agreement are of the essence of this Agreement; that each of the covenants is
reasonable and necessary to protect the business, interests and properties of the Employer, and
that irreparable loss and damage will be suffered by the Employer should the Executive breach any
of the covenants. Therefore, the Executive agrees and consents that, in addition to all the
remedies provided by law or in equity, the Employer shall be entitled to a temporary restraining
order and temporary and permanent injunctions to prevent a breach or contemplated breach of any of
the covenants. If the Employer alleges that the Executive has materially breached any of the
Executive’s obligations pursuant to Sections 5, 6, 7, 8 and/or 9 and the Executive disputes such
allegation, the Employer may withhold any future payments owed to the Executive hereunder until the
dispute is finally resolved or determined by either mutual agreement of the parties or by
arbitration pursuant to Section 16. The Employer and the Executive agree that all remedies
available to the Employer shall be cumulative.



11. Severability. The parties agree that each of the provisions included in this Agreement
is separate, distinct and severable from the other provisions of this Agreement and that the
invalidity or unenforceability of any Agreement provision shall not affect the validity or
enforceability of any other provision of this Agreement. Further, if any provision of this
Agreement is ruled invalid or unenforceable by a court of competent jurisdiction because of a
conflict between the provision and any applicable law or public policy, the provision shall be
redrawn to make the provision consistent with, and valid and enforceable under, the law or public
policy.



12. No Set-Off by the Executive. The existence of any claim, demand, action or cause of
action by the Executive against the Employer whether predicated upon this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Employer of any of its rights hereunder.



13. Notice. All notices, requests, waivers and other communications required or permitted
hereunder shall be in writing and shall be either personally delivered, sent by reputable overnight
courier service or mailed by first class mail, return receipt requested, to the recipient at the
address below indicated:




	 	 	 	If to the Company:






Southwest Bancorp, Inc.




Attn: Chairman, Board of Directors



608 South Main Street



Stillwater, Oklahoma 74074




	 	 	 	If to the Stillwater National Bank and Trust Company:






Stillwater National Bank and Trust Company




Attn: Chairman, Board of Directors



608 South Main Street




Stillwater, Oklahoma 74074




	 	 	 	If to the Bank of Kansas:






Bank of Kansas




Attn: Chairman, Board of Directors



1002 Central Street




Harper, Kansas 67058




If to the Executive:




Mark W. Funke




4801 Oakdale Farm Road




Edmond, Oklahoma 73013



or such other address or to the attention of such other person as the recipient party shall have
specified by prior written notice to the sending party. All such notices, requests, waivers and
other communications shall be deemed to have been effectively given: (a) when personally delivered
to the party to be notified; (b) five (5) business days after deposit in the United States Mail
postage prepaid by certified or registered mail with return receipt requested at any time other
than during a general discontinuance of postal service due to strike, lockout, or otherwise (in
which case such notice, request, waiver or other communication shall be effectively given upon
receipt) and addressed to the party to be notified as set forth above; or (c) two (2) business days
after deposit with a national overnight delivery service, postage prepaid, addressed to the party
to be notified as set forth above with next-business-day delivery guaranteed. A party may change
that party’s notice address given above by giving the other party ten (10) days’ written notice of
the new address in the manner set forth above.



14. Successors; Assignment. The rights and obligations of the Employer under this
Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the
Employer, as applicable, including without limitation, a purchaser of all or substantially all the
assets of the Employer. If the Agreement is assigned pursuant to the foregoing sentence, the
assignment shall be by novation and the Employer shall have no further liability hereunder, and the
successor or assign, as applicable, shall become the “Employer” hereunder, but the Executive will
not be deemed to have experienced a Termination of Employment by virtue of such assignment. The
Agreement is a personal contract and the rights and interest of the Executive may not be assigned
by the Executive. This Agreement shall inure to the benefit of and be enforceable by the Executive
and the Executive’s personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees.



15. Waiver. A waiver by one party to this Agreement of any breach of this Agreement by any
other party to this Agreement shall not be effective unless in writing, and no waiver shall operate
or be construed as a waiver of the same or another breach on a subsequent occasion.



16. Arbitration. The parties agree that Executive’s employment and this Agreement relate
to interstate commerce, and that any and all disputes, claims or controversies between Executive
and the Employer which may arise out of or relate to Executive’s employment relationship or this
Agreement shall be settled by arbitration. This agreement to arbitrate shall survive the
termination of this Agreement. Any arbitration shall be before a single arbitrator in accordance
with the American Arbitration Association’s National Rules for the Resolution of Employment
Disputes pertaining to individually-negotiated contracts and shall be undertaken pursuant to the
Federal Arbitration Act. Arbitration will be held in Oklahoma City, Oklahoma unless the parties
mutually agree on another location. Unless parties mutually agree to self-administer the
arbitration or to use a different arbitration service, it will be administered by the Dallas, Texas
office of the American Arbitration Association. The decision of the arbitrator will be enforceable
in any court of competent jurisdiction. The parties agree that punitive, liquidated or indirect
damages shall not be awarded by the arbitrator unless such damages would have been awarded by a
court of competent jurisdiction. The arbitrator shall also have the discretion and authority to
award costs and attorney fees to the prevailing party or, alternatively, may order each party to
bear its own costs and attorney fees in connection with the arbitration to the extent permitted by
applicable law. Nothing in this Agreement to arbitrate, however, shall preclude the Employer from
obtaining injunctive relief from a court of competent jurisdiction prohibiting any breaches by
Executive of Sections 5 through 10 of this Agreement.



17. Applicable Law and Choice of Forum. This Agreement shall be construed and enforced
under and in accordance with the laws of the State of Oklahoma without regard to its conflicts of
law principles. The parties agree that any appropriate federal or state court located in, or
having jurisdiction over, Oklahoma County, Oklahoma shall have exclusive jurisdiction of any case
or controversy arising under or in connection with this Agreement shall be a proper forum in which
to adjudicate such case or controversy. The parties consent and waive any objection to the
jurisdiction or venue of such courts.



18. Interpretation. Words importing any gender include all genders. Words importing the
singular form shall include the plural and vice versa. The terms “herein,” “hereunder,” “hereby,”
“hereto,” “hereof” and any similar terms refer to this Agreement. Any captions, titles or headings
preceding the text of any article, section or subsection herein are solely for convenience of
reference and shall not constitute part of this Agreement or affect its meaning, construction or
effect.



19. Entire Agreement; Counterparts. This Agreement embodies the entire and final agreement
of the parties on the subject matter stated in this Agreement. No amendment or modification of
this Agreement shall be valid or binding upon the Employer or the Executive unless made in writing
and signed by all parties. All prior understandings and agreements relating to the subject matter
of this Agreement are hereby expressly terminated. This Agreement may be executed in one or more
counterparts each of which will be deemed to be an original but all of which together will
constitute one and the same instrument.



20. Rights of Third Parties. Nothing herein expressed is intended to or shall be construed
to confer upon or give to any person, firm or other entity, other than the parties hereto and their
permitted assigns, any rights or remedies under or by reason of this Agreement.



21. Survival. The obligations of the parties pursuant to Sections 3.10, 4 through 10,
16, 17 and 21, as applicable, shall survive the Executive’s Termination of Employment hereunder
for the period designated under each of those respective sections.



22. Representation Regarding Restrictive Covenants. The Executive represents that the
Executive is not and will not become a party to any non-competition or non-solicitation agreement
or any other agreement which would prohibit the Executive from entering into this Agreement or
providing the services for the Employer contemplated by this Agreement on or after the Effective
Date. In the event the Executive is subject to any such agreement, this Agreement shall be
rendered null and void and the Employer shall have no obligations to the Executive under this
Agreement.



23. Section 409A. It is the intent of the parties that any payment to which the Executive
is entitled under this Agreement be exempt from Section 409A of the Code, to the maximum extent
permitted under Section 409A. However, if any such amounts are considered to be “nonqualified
deferred compensation” subject to Section 409A, such amounts shall be paid and provided in a
manner, and at such time and form, as complies with the applicable requirements of Section 409A to
avoid the unfavorable tax consequences provided therein for non-compliance. Neither the Executive
nor the Employer shall intentionally take any action to accelerate or delay the payment of any
amounts in any manner which would not be in compliance with Section 409A without the consent of the
other party. For purposes of this Agreement, all rights to payments shall be treated as rights to
receive a series of separate payments to the fullest extent allowed by Section 409A. To the extent
that some portion of the payments under this Agreement may be bifurcated and treated as exempt from
Section 409A under the “short-term deferral” or “separation pay” exemptions, then such amounts may
be so treated as exempt from Section 409A. To the extent that the requirements of Section 409A are
determined to be applicable to any provision of this Agreement, such provision shall be construed
in a manner that complies with Section 409A and any provision required for compliance with Section
409A that is omitted from this Agreement shall be incorporated herein by reference and shall apply
retroactively, if necessary, and be deemed a part of this Agreement to the same extent as though
expressly set forth herein. If any provision of this Agreement would cause Executive to incur any
additional tax or interest under Section 409A, the Employer shall, upon Executive’s specific
request, use its reasonable business efforts to in good faith reform such provision to comply with
Section 409A; provided, that to the maximum extent practicable, the original intent and economic
benefit to Executive and the Employer of the applicable provision shall be maintained, but the
Employer shall have no obligation to make any changes that could create any additional economic
cost or loss of benefit to the Employer. The Employer shall not have any liability to Executive
with respect to tax obligations that result under any tax law and makes no representation with
respect to the tax treatment of the payments and/or benefits provided under this Agreement.



24. Primary Office. The Executive’s primary office or worksite shall be in the Oklahoma
City, Oklahoma metropolitan area (notwithstanding that the home office of the Company will remain
Stillwater, Oklahoma), subject to travel necessary for the performance of his duties hereunder.



25. No Mitigation. The Executive shall have no obligation to seek employment or otherwise
mitigate his damages under this Agreement and amounts payable to the Executive under this Agreement
shall not be reduced whether or not the Executive obtains other employment.



26. Indemnification and Insurance. The Employer shall, as provided for in the Company’s
Articles and Bylaws, defend, indemnify and hold harmless the Executive and the Executive’s heirs,
estate, executors and administrators against any costs, losses, claims, suits, proceedings, damages
or liabilities to which they may become subject to arising from, based on, or relating to the
Executive’s employment by the Employer or the Executive’s service as an officer or member of the
Board of Directors of the Employer or any Affiliate, including without limitation reimbursement for
any legal or other expenses reasonably incurred by the Executive in connection with investigating
and defending against any such costs, losses, claims, suits, proceedings, damages or liabilities.
The Employer shall provide to the Executive an opportunity to enter into an indemnification
agreement with the same substantive terms offered to other directors and officers. The Employer
shall maintain directors and officers liability insurance in commercially reasonable amounts (as
reasonably determined by the Board of Directors), and the Executive shall be covered under such
insurance to the same extent as other similarly situated executives of the Employer; provided,
however, that the Employer shall not be required to maintain such insurance coverage if the Board
of Directors determines that it is unavailable at reasonable cost, provided that the Executive is
given written notice of any such determination promptly after it is made.



27. Definitions. Whenever used in this Agreement, the following terms and their variant
forms shall have the meanings set forth below:




(a) “Affiliate” shall mean any entity which controls, is controlled by, or is
under common control with another entity. For this purpose, “control” means ownership of
more than fifty percent (50%) of the ordinary voting power of the outstanding equity
securities of an entity.




(b) “Agreement” shall mean this Agreement and any appendices incorporated
herein together with any amendments hereto made in the manner described in this Agreement.




(c) “Applicable Fraction” means one-fourth (1/4), if the
qualifying Termination of Employment occurs on or before December 31, 2014; one-sixth
(1/6), if the qualifying Termination of Employment occurs after
December 31, 2014 but on or before December 31, 2015; and one-twelfth
(1/12), if the qualifying Termination of Employment occurs after
December 31, 2015.




(d) “Board of Directors” shall mean the board of directors of the Company
and/or of the Subsidiary Banks, as the context requires and, where appropriate, includes any
committee thereof or other designee.




(e) “Business of the Employer” shall mean the business conducted by the
Employer, which is the business of commercial and consumer banking.




(f) “Cause” shall mean:




(1) a material breach of the terms of this Agreement by the Executive not cured
by the Executive within ten (10) business days after the Executive’s receipt of
Employer’s written notice thereof, including, without limitation, failure by the
Executive to perform in all material respects the Executive’s duties and
responsibilities in the manner and to the extent required under this Agreement;




(2) any act by the Executive of fraud against, material misappropriation from,
or material dishonesty to the Employer;




(3) conviction of the Executive of a crime involving breach of trust or moral
turpitude or any felony;




(4) conduct by the Executive that amounts to willful misconduct, gross and
willful insubordination, or gross neglect or inattention to the Executive’s duties
and responsibilities hereunder, including prolonged absences without the written
consent of the Board of Directors;




(5) conduct in material violation of the Employer’s written code of conduct as
the same may be in force from time to time not cured by the Executive within ten
(10) business days after the Executive’s receipt of Employer’s written notice
thereof;




(6) receipt of any form of notice, written or otherwise, that any regulatory
agency having jurisdiction over the Employer intends to institute any form of formal
regulatory action against the Executive; or




(7) Executive’s removal and/or permanent prohibition from participating in the
conduct of the Employer’s affairs by an order issued under Section 8(e)(4) or
8(g)(1) of the FDIA (12 U.S.C. 1818(e)(4) and (g)(1)).




(g) “Change of Control” means for purposes of this Agreement the occurrence of
any of the following events on or after the Effective Date:




(1) the date any entity or person, including a group as defined in
Section 13(d)(iii) of the Securities Exchange Act of 1934 shall become the
beneficial owner of, or shall have obtained voting control over, fifty
percent (50%) or more of the outstanding common shares of either the Company
or Stillwater National Bank and Trust Company (“SNB-Stillwater”);




(2) the date the shareholders of either the Company or SNB-Stillwater
approve a definitive agreement (i) to merge or consolidate either the
Company or SNB-Stillwater with or into another corporation in which either
the Company or SNB-Stillwater, respectively, is not the continuing or
surviving corporation or pursuant to which any common shares of either the
Company or SNB-Stillwater would be converted into cash, securities, or other
property of another, other than a merger of either the Company or
SNB-Stillwater in which holders of common shares immediately prior to the
merger have the same proportionate interest of common stock of the surviving
corporation immediately after the merger as immediately before, or (ii) to
sell or otherwise dispose of substantially all of the assets of either the
Company or SNB-Stillwater; or




(3) the date there shall have been change in a majority of the Board of
Directors of either the Company or SNB-Stillwater within a 12-month period
unless the nomination of each new director was approved by the vote of
two-thirds (2/3) of directors then still in office who were in office at the
beginning of the 12-month period.




(h) “Code” shall mean the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.




(i) “Competing Business” shall mean any entity (other than the Employer and its
Affiliates) that is conducting business that is the same or substantially the same as the
Business of the Employer.




(j) “Confidential Information” means data and information relating to the
business of the Employer and its Affiliates (which does not rise to the status of a Trade
Secret) which is or has been disclosed to the Executive or of which the Executive became
aware as a consequence of or through the Executive’s relationship to the Company and its
Affiliates and which has value to the Employer and its Affiliates and is not generally known
to its competitors. Confidential Information shall not include any data or information that
has been voluntarily disclosed to the public by the Employer or its Affiliates, provided
that such public disclosure shall not be deemed to be voluntary when made without
authorization by the Executive or any other employee of Employer, or that has been
independently developed and disclosed by others, or that otherwise enters the public domain
through lawful means.




(k) “Constructive Termination” shall mean any of the following which occurs
after the effective date of a Change of Control:




(1) the material reduction of the Executive’s Annual Salary, Annual Bonus
opportunity, opportunity to earn equity compensation, or other benefits, each as
provided in this Agreement;




(2) a material diminution in the Executive’s authority, duties or
responsibilities or a change in his position such that he ceases to hold the title
of, or serve in the role as, President and Chief Executive Officer of the Company or
any successor;




(3) the assignment of any duties materially inconsistent with the Executive’s
position (including status, offices, titles and reporting requirements), authority,
duties or responsibilities under this Agreement; or




(4) an involuntary relocation of the Executive’s primary office or worksite to
a place that is beyond a twenty (20) mile radius from 6301 Waterford Boulevard in
Oklahoma City, Oklahoma.




(l) “Disability” shall mean that the Executive suffers from a physical or
mental disability or infirmity that qualifies the Executive for disability benefits under
any accident and health plan maintained by the Employer that provides income replacement
benefits due to disability or, if the Employer does not maintain such a plan, the
Executive’s inability to perform the essential functions of the Executive’s job for a period
of ninety (90) or more days, with or without reasonable accommodation, as a result of a
physical or mental disability or infirmity, as reasonably determined by the Employer.




(m) “Employer Information” shall mean Confidential Information and Trade
Secrets.




(n) “Good Reason” shall mean any of the following which occurs on or after the
Effective Date:




(1) a material reduction of the Executive’s Annual Base Salary from its then
current rate, other than a reduction that also is applied to substantially all other
executive officers of the Employer if Executive’s reduction is substantially
proportionate to, or no greater than, the reduction applied to substantially all
other executive officers;




(2) a material diminution in the Executive’s authority, duties or
responsibilities or a change in his position such that he ceases to hold the title
of, or serve in the role as, President and Chief Executive Officer of the Company or
any successor;




(3) the assignment of any duties materially inconsistent with the Executive’s
position (including status, offices, titles and reporting requirements), authority,
duties or responsibilities under this Agreement;




(4) an involuntary relocation of the Executive’s primary office or worksite to
a place that is beyond a twenty (20) mile radius from 6301 Waterford Boulevard in
Oklahoma City, Oklahoma; or




(5) a material breach of the terms of this Agreement by the Employer;




provided, however, that for a Termination of Employment by the Executive to be for Good
Reason, the Executive must notify the Employer in writing of the event giving rise to Good
Reason within thirty (30) days following the occurrence of the event (or, if later, thirty
(30) days following the Executive’s knowledge of occurrence of the event), the event must
remain uncured after the expiration of thirty (30) days following the delivery of written
notice of such event to the Employer by the Executive, and the Executive must resign
effective no later than sixty (60) days following the Employer’s failure to cure the event
and must give at least thirty (30) days advance written notice prior to the Executive’s
effective date of resignation.




(o) “Initial Term” shall mean that period of time commencing on the Effective
Date and ending December 31, 2016, subject to any earlier Termination of Employment of the
Executive under this Agreement as provided for in Sections 2(b) and 4.1.




(p) “Post-Termination Period” shall mean twelve (12) months following the
effective date of the Executive’s Termination of Employment.




(q) “Return on Average Equity” shall mean the Company’s net income after tax
divided by average shareholders’ equity, determined by adding shareholder equity value at
the beginning and end of the applicable calendar year and dividing that result by two (2).




(r) “Subsidiary Bank” shall mean each subsidiary bank as may be wholly-owned by
the Company from time to time.




(s) “Term” shall mean the Initial Term and any subsequent extension periods,
subject to any earlier Termination of Employment of the Executive under this Agreement as
provided for in Sections 2(b) and 4.1.




(t) “Termination of Employment” shall mean a termination of the Executive’s
employment where either (1) the Executive has ceased to perform any services for the
Employer and all affiliated companies that, together with the Employer, constitute the
“service recipient” within the meaning of Code Section 409A (collectively, the “Service
Recipient”) or (2) the level of bona fide services the Executive performs for the Service
Recipient after a given date (whether as an employee or as an independent contractor)
permanently decreases (excluding a decrease as a result of military leave, sick leave, or
other bona fide leave of absence if the period of such leave does not exceed six months, or
if longer, so long as the Executive retains a right to reemployment with the Service
Recipient under an applicable statute or by contract) to no more than twenty percent (20%)
of the average level of bona fide services performed for the Service Recipient (whether as
an employee or an independent contractor) over the immediately preceding 36-month period (or
the full period of service if the Executive has been providing services to the Service
Recipient for less than 36 months).




(u) “Total Shareholder Return” shall mean the total return to a Company
shareholder, including any cash dividends paid, expressed as a percentage by comparing the
Ending Stock Price for calendar years 2013 through 2016 with the Beginning Stock Price using
the following formula: (Ending Stock Price plus cumulative cash dividends paid minus
Beginning Stock Price) divided by the Beginning Stock Price. For purposes of this
Subsection (u), the term “Beginning Stock Price” means the average per share closing
price of Company common stock, as reported by the NASDAQ National Market, over the last ten
(10) trading days immediately preceding today’s date, adjusted to reflect subsequent stock
splits, stock dividends and similar events affecting shares of Company common stock, and the
term “Ending Stock Price” means the average per share closing price of Company common stock,
as reported by the NASDAQ National Market, over the ten (10) trading days immediately
preceding and immediately following the date of the Company’s public release of fourth
quarter financial results for the applicable calendar year.




(v) “Trade Secrets” shall mean Employer or Affiliate information including, but
not limited to, technical or nontechnical data, formulas, patterns, compilations, programs,
devices, methods, techniques, drawings, processes, financial data, financial plans, product
plans or lists of actual or potential customers or suppliers which:




(1) derives economic value, actual or potential, from not being generally known
to, and not being readily ascertainable by proper means by, other persons who can
obtain economic value from its disclosure or use; and




(2) is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.



[Signatures are on the Following Page]




IN WITNESS WHEREOF, the Employer and the Executive have executed and delivered this
Agreement as of the date first shown above.




Southwest Bancorp, Inc.:



By:/s/ Priscilla Barnes



Signature



Priscilla Barnes



Print Name



Senior Executive Vice President and COO



Title




Stillwater National Bank and Trust Company:




By:/s/ Priscilla Barnes



Signature



Priscilla Barnes



Print Name



Senior Executive Vice President and COO



Title




Bank of Kansas:



By:/s/ Priscilla Barnes



Signature



Priscilla Barnes



Print Name



Senior Executive Vice President and COO



Title



Executive:



/s/ Mark W. Funke



Mark W. Funke



Exhibit “A”




SEVERANCE AGREEMENT AND

FULL AND FINAL RELEASE OF CLAIMS




This Severance Agreement and Full and Final Release of Claims (“Agreement”) is made and
entered into by and among Southwest Bancorp, Inc., a bank holding company organized under the laws
of the State of Oklahoma (the “Company”), the Stillwater National Bank and Trust Company, a
national bank organized under the laws of the United States, and the Bank of Kansas, a state bank
chartered under the laws of the State of Kansas (collectively, the “Employer”), and Mark W. Funke
(the “Executive”).



SEPARATION. Executive’s employment with the Employer will terminate on      
or such later date as may be determined by the parties (“Separation Date”). The parties
acknowledge that Executive’s termination from employment will result in a “Separation from Service”
as defined in Section 409A of the Internal Revenue Code. Executive further agrees that the
Executive hereby resigns as an officer and director of the Employer and any related or affiliated
entities as of the Separation Date.



CONSIDERATION. In consideration of the Executive’s decision to enter into this
Agreement, the Employer will (i) continue to employ Executive through the Separation Date, (ii) and
will provide Executive severance pay and treat equity awards in accordance with the terms of the
employment agreement between the Employer and the Executive dated     , 2012 (the
“Employment Agreement”), and (iii) otherwise satisfy all of the Employer’s obligations under the
Employment Agreement which survive the Executive’s Termination of Employment (as defined in the
Employment Agreement). Federal, state and local tax withholdings and other legal deductions may be
applied to the above consideration as determined by the Employer in its sole discretion.



Whether or not Executive executes this Agreement, the Employer will pay Executive any and all
wages for all hours worked up to and through the Separation Date within the appropriate time frame
required by applicable law. If Executive fails or refuses to execute this Agreement, or if
Executive revokes this Agreement as provided herein, Executive will not be entitled to the
consideration set forth above.



3. FULL AND FINAL RELEASE.



(a) In consideration of the payments being provided to Executive above, Executive, for
himself, his attorneys, heirs, executors, administrators, successors and assigns, fully, finally
and forever releases and discharges the Employer and all other affiliated companies, as well as its
and their successors, assigns, officers, owners, directors, agents, representatives, attorneys, and
employees (all of whom are referred to throughout this Agreement as the “Releasees”), of and from
all claims, demands, actions, causes of action, suits, damages, losses, and expenses, of any and
every nature whatsoever, as a result of actions or omissions occurring through the date Executive
signs this Agreement.



Specifically included in this waiver and release are, among other things, any and all claims
related to any severance pay plan, any and all claims related to Executive’s employment and
separation from employment or otherwise, including without limitation: (1) Title VII of the Civil
Rights Act of 1964, as amended by the Civil Rights Act of 1991; (2) the Americans with Disabilities
Act, as amended; (3) 42 U.S.C. § 1981; (4) the Age Discrimination in Employment Act (29 U.S.C. §§
621-624); (5) 29 U.S.C. § 206(d)(1); (6) Executive Order 11246; (7) Executive Order 11141;
(8) Section 503 of the Rehabilitation Act of 1973; (9) Executive Retirement Income Security Act
(ERISA); (10) the Occupational Safety and Health Act; (11) the Worker Adjustment and Retraining
Notification (WARN) Act; (12) the Family and Medical Leave Act; (13) the Ledbetter Fair Pay Act;
and (14) other federal, state and local discrimination laws, including the Oklahoma
Anti-Discrimination Act and 85 O.S. Section 341 under Oklahoma’s Workers’ Compensation Act.



Executive further acknowledges that Executive is releasing, in addition to all other claims,
any and all claims based on any tort, whistle-blower, personal injury, defamation, invasion of
privacy or wrongful discharge theory; retaliatory discharge theory; any and all claims based on any
oral, written or implied contract or on any contractual theory (including the Employment
Agreement); any claims based on a severance pay plan; and all claims based on any other federal,
state or local Constitution, regulation, law (statutory or common), or other legal theory, as well
as any and all claims for punitive, compensatory, and/or other damages, back pay, front pay, fringe
benefits and attorneys’ fees, costs or expenses.



(b) Nothing in this Agreement, however, is intended to waive Executive’s entitlement to
vested benefits under any 401(k) plan or other benefit plan provided by the Employer.
Furthermore, the parties specifically agree that this release does not cover, and Executive
expressly reserves, indemnification rights existing to the Executive as a current or former
director and/or officer of the Employer under the Articles and Bylaws of the Employer and pursuant
to applicable state law and in accordance with any D&O policy existing for former officers and
directors of the Employer. Finally, the above release does not waive claims that Executive could
make, if available, for unemployment or workers’ compensation or claims that cannot be released by
private agreement.



(c) Executive understands that this Agreement does not bar the Executive from filing a
complaint and/or charge with any appropriate federal, state, or local government agency or
cooperating with said agency in its investigation. Executive agrees, however, that the Executive
shall not be entitled to receive any relief or recovery (monetary or otherwise) in connection with
any complaint or charge brought against the Releasees, without regard as to who brought said
complaint or charge.



4. ADVICE OF COUNSEL. Executive acknowledges that the Executive has been and is
hereby advised by the Employer to consult with an attorney in regard to this matter. Executive
understands that Executive is responsible for the costs of any such legal services incurred in
connection with such consultation.



5. POST-EMPLOYMENT COOPERATION. Executive agrees to reasonably cooperate with the
Employer in the defense or prosecution of any claims or actions now in existence or which may be
brought in the future against or on behalf of the Employer which relate to events or occurrences
that transpired or which failed to transpire while Executive was employed by the Employer.
Executive also agrees to cooperate reasonably with the Employer in connection with any internal
investigation or review, or any investigation or review by any federal, state or local regulatory
authority, relating to events or occurrences that transpired or failed to transpire while Executive
was employed by the Employer. Executive’s reasonable cooperation in connection with such matters
shall include, but not be limited to, providing information to counsel, being available to meet
with counsel to prepare for discovery or trial and acting as a witness on behalf of the Employer at
a mutually convenient times. If the Executive is called upon to cooperate in connection with any
such matter, then the Executive shall be entitled to a fair and reasonable per diem fee and
reimbursement of any expenses incurred at the request of the Employer.



6. NO OTHER CLAIMS. Executive represents that Executive has not filed, nor assigned
to others the right to file, nor are there currently pending, any complaints, charges or lawsuits
against the Releasees with any governmental agency or any court or in any arbitration forum.



7. NON-ADMISSION OF LIABILITY OR WRONGFUL CONDUCT. This Agreement shall not be
construed as an admission by the Employer of any liability or acts of wrongdoing or discrimination,
nor shall it be considered to be evidence of such liability, wrongdoing, or discrimination.



8. RETURN OF PROPERTY. Executive acknowledges, understands, and agrees that Executive
will turn over to        all documents, files, memoranda, records, Employer Information
(as defined in the Employment Agreement), credit cards, records, books, manuals, computer
equipment, computer software, pagers, cellular phones, facsimile machines, PDAs, keys and
electronic keys or access cards into the building and any other equipment or documents, and all
other physical or electronic property of similar type that Executive received from the Employer
and/or that Executive used in the course of his employment with the Employer and that are the
property of the Employer. Executive agrees that Executive will not delete, destroy or erase any
data stored on or associated with such property, including but not limited to data stored on
computers, servers, phones, or other electronic devices. Executive further agrees to return to
     any and all hard copies of any documents which are the subject of a document
preservation notice or other legal hold and to notify        of the location of any
electronic documents which are subject to a legal hold.



9. CONFIDENTIALITY. The nature and terms of this Agreement are strictly confidential
and they have not been and shall not be disclosed by Executive at any time to any person (including
the Employer’s employees) except Executive’s lawyer, accountant, or immediate family without the
prior written consent of an officer of the Employer, except as necessary in any legal proceedings
directly related to the provisions and terms of this Agreement, to prepare and file income tax
forms, or pursuant to court order after reasonable notice to the Employer. Executive may disclose
that Executive is subject to an agreement not to disclose trade secrets and confidential
information where necessary to comply with such confidentiality agreement. Executive agrees that
Executive is responsible for informing these persons of the confidential nature of this Agreement
and that any breach of this confidentiality provision by any of these persons shall be deemed a
breach by Executive.



10. GOVERNING LAW. This Agreement shall be interpreted under the laws of the State of
Oklahoma.



11. SEVERABILITY. The provisions of this Agreement are severable, and if any part of
this Agreement except Paragraphs 3 or 5 are found by a court of law to be unenforceable, the
remainder of the Agreement will continue to be valid and effective, and the court is authorized to
amend relevant provisions of the Agreement to carry out the intent of the parties to the extent
legally permissible. If Paragraph 3 or 5 is found by a court of competent jurisdiction to be
unenforceable, the parties agree to seek a determination by the court as to the rights of the
parties, including whether Executive is entitled under those circumstances and the relevant law to
retain the benefits paid to Executive under this Agreement.



12. SOLE AND ENTIRE AGREEMENT. This Agreement and the Employment Agreement set forth
the entire agreement between the parties with respect to the subject matters covered by this
Agreement and the Employment Agreement; provided however, that any continuing obligations of
confidentiality, non-disparagement, non-appropriation and/or non-solicitation under any other
agreement shall survive. Any other prior agreements between or directly involving the parties
to the Agreement and the Employment Agreement with respect to the subject matters covered by this
Agreement and the Employment Agreement are superseded by the terms of this Agreement and the
Employment Agreement and thus are rendered null and void.



13. NO OTHER PROMISES. Executive affirms that the only consideration for his signing
this Agreement is that set forth in Paragraph 2, that no other promise or agreement of any kind has
been made to or with Executive by any person or entity to cause Executive to execute this document,
and that Executive fully understands the meaning and intent of this Agreement, including but not
limited to, its final and binding effect.



14. ACKNOWLEDGEMENTS.



(a) Executive acknowledges, understands and agrees that Executive has been notified of
Executive’s rights under the Family and Medical Leave Act (FMLA) and state leave laws. Executive
further acknowledges, understands and agrees that Executive has not been denied any leave requested
under the FMLA or applicable state leave laws and that, to the extent applicable, Executive has
been returned to Executive’s job, or an equivalent position, following any FMLA or state leave
taken pursuant to the FMLA or state laws.



(b) Executive acknowledges, understands and agrees that it is Executive’s obligation to make a
timely report, in accordance with the Employer’s policy and procedures, of any work related injury
or illness. Executive further acknowledges, understands and agrees that Executive has reported to
the Employer’s management personnel any work related injury or illness that occurred up to and
including Executive’s last day of employment.



15. NO VIOLATION OF THE LAW. Executive represents and acknowledges that, except as
set forth on Schedule I attached hereto, Executive is unaware of any conduct, actions or inactions
by the Employer or anyone employed by the Employer which would violate any federal, state or local
law, any common law, or any rule promulgated by any administrative body. Executive further
acknowledges that Executive has disclosed to        any relevant facts known to
Executive of any conduct which violates in any material respect any Employer policy or standard.



16. LEGALLY BINDING AGREEMENT. Executive understands and acknowledges that this
Agreement contains a full and final release of claims against the Employer; and that Executive has
agreed to its terms knowingly, voluntarily, and without intimidation, coercion or pressure.



17. ADVICE OF COUNSEL / CONSIDERATION AND REVOCATION PERIODS. Executive hereby
acknowledges and agrees that this Agreement and the termination of Executive’s employment and all
actions taken in connection therewith are in compliance with the Age Discrimination in Employment
Act and the Older Workers Benefit Protection Act and that the releases set forth herein shall be
applicable, without limitation, to any claims brought under these Acts. Executive acknowledges
that the Executive has been and is hereby advised by the Employer to consult with an attorney in
regard to this matter. Executive understands that Executive is responsible for the costs of any
such legal services incurred in connection with such consultation. Executive further acknowledges
that Executive has been given more than twenty-one (21) days from the time that Executive receives
this Agreement to consider whether to sign it. Executive shall have seven (7) days from the date
Executive signs this Agreement to revoke the Agreement. To revoke, Executive must ensure that
written notice is delivered to       , 608 South Main Street, Stillwater, Oklahoma 74074,
by the end of the day on the seventh calendar day after Executive signs this Agreement. If
Executive does not revoke this Agreement within seven (7) days of signing, this Agreement will
become final and binding on the day following such seven (7) day period.



[Signatures are on the Following Page]






1






This Agreement includes a release of all known and unknown claims through the date of this
Agreement. Executive should carefully consider all of its provisions before signing it.
Executive’s signature below indicates Executive’s understanding and agreement with all of the terms
in this Agreement.




Southwest Bancorp, Inc.



Date: By:



Full Name:       



Title:       ]




Stillwater National Bank and Trust Company



Date: By:



Full Name:       



Title:       




Bank of Kansas



Date: By:



Full Name:       



Title:       



Date:



Mark W. Funke



Schedule I





2