Document:

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (this “Agreement”) is by and among First Busey Corporation (“First Busey”), FirsTech, Inc. (“First Tech”), and together with First Busey, “Employer”) and Howard Mooney (“Executive,” and together with Employer, the “Parties”).

 

RECITALS

 

A.            The FirsTech is a wholly owned subsidiary of First Busey.

 

B.            Executive is currently employed by Employer pursuant to that certain employment agreement dated July 30, 2007, as subsequently amended (the “Prior Employment Agreement”);

 

C.            Employer has determined it to be in its best interests to enter into this Agreement pertaining to the employment of Executive as of and following the Effective Date (as defined below).

 

D.            Executive desires to be employed by Employer as of and following the Effective Date in accordance with the terms of this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements of the Parties contained herein, the Parties hereby agree as follows:

 

AGREEMENTS

 

Section 1.              Prior Employment Agreement. This Agreement supersedes all of the terms and conditions of the Prior Employment Agreement and any such Prior Employment Agreement shall become null and void as of the Effective Time, and the parties thereunder shall have no rights or interests therein.

 

Section 2.              Term with Automatic Renewal Provision.  This Agreement shall be effective as of February 1, 2014 (the “Effective Date”).  Subject to the terms of this Agreement, the term of this Agreement (the “Term”) and Executive’s employment hereunder shall be for a period of one (1) year commencing as of the Effective Date.  The Term shall automatically renew for one (1) additional year at the end of the then existing Term, unless either Party provides written notice to the other Party not less than ninety (90) days prior to the end of the then existing Term that such Party does not wish to extend the Term.

 

Section 3.              Employment.

 

(a)           Positions and Duties.  Subject to the terms of this Agreement, Executive shall devote Executive’s full business time, energies and talent to serving as the President and Chief Executive Officer of FirsTech and as the Chief Information Officer of First Busey, at the direction of the Chief Executive Officer of First Busey (the “CEO”).  Executive shall perform all duties assigned to Executive faithfully, loyally and efficiently, and shall have such duties, authority and responsibilities as may be assigned to Executive from time to time by the CEO, which duties, authority and responsibilities shall include those customarily held by such officer

 

 

of comparable companies, subject always to the charter and bylaw provisions and policies of Employer and the directions of the CEO.  Executive shall perform the duties required by this Agreement at Employer’s principal place of business unless the nature of such duties requires otherwise.  Notwithstanding the foregoing, during the Term, Executive may devote reasonable time to activities other than those required under this Agreement, including activities of a charitable, educational, religious or similar nature (including professional associations) to the extent such activities do not in any material way inhibit, prohibit, interfere with or conflict with Executive’s duties under this Agreement or conflict in any material way with the business of Employer.

 

(b)           Transfers.  The Board of Directors of First Busey (the “Board”) may, in its sole discretion, cause Executive’s employment to be transferred from Employer to any wholly-owned subsidiary of First Busey, in which case all references in this Agreement to “Employer” shall be deemed to refer to such subsidiary (and First Busey, if applicable).

 

Section 4.              Compensation and Benefits.  Subject to the terms of this Agreement, during the Term of this Agreement, Employer shall compensate Executive for Executive’s services as follows:

 

(a)           Base Compensation.  Executive’s annual base salary rate shall be Two Hundred and Thirty-Five Thousand Dollars ($235,000.00) (the “Base Salary”), which shall be payable in accordance with Employer’s normal payroll practices as are in effect from time to time.  Beginning in 2014 and annually thereafter, the Board shall review Executive’s Base Salary at such time as it reviews Employer’s executive compensation to determine whether Executive’s Base Salary should be maintained at its existing level or increased, with any increase being effective as determined by the Board.

 

(b)           Discretionary Performance Bonus.  Employer shall consider Executive for a bonus each year during the Term based on performance criteria established by the Board and/or the CEO and any other factors deemed by the Board to be appropriate.  Bonuses shall be awarded, if at all, in the sole discretion of the Board, and nothing in this Agreement shall require the payment of a bonus in any given year.  For purposes of this Agreement, bonuses shall be considered earned when all corporate action has been taken to determine such bonuses.  Payment of any such bonus shall be made as soon as practicable after it is earned, but in no event later than two and one-half (21⁄2) months following the end of the calendar year in which it is earned; provided that, Bonuses shall not be considered earned until the Board has made all determinations and taken all actions necessary to establish such bonuses.

 

(c)           Long Term Incentive Program.  Executive shall be eligible to participate in Employer’s long-term equity incentive program, as determined in the sole discretion of the Board (or an authorized committee thereof).

 

(d)           Profit Sharing Benefit.  Executive shall be eligible to receive an annual profit sharing benefit based on the combined amount of Executive’s Base Salary and, if applicable, Executive’s discretionary performance bonus, after Executive meets the eligibility requirements of the applicable profit sharing plan.  The Board shall decide the exact amount of

 

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this benefit annually in its sole discretion.  Employer shall contribute this benefit for the account of Executive to Employer’s tax-qualified retirement plan and/or any nonqualified deferred compensation plan that Employer establishes or maintains.  All such profit sharing benefit payments shall be determined and governed by the terms of the applicable plan.  Employer shall have no obligation to continue to maintain any particular benefit plan or arrangement and the profit sharing benefit described in this Section 4(d) may be amended or terminated by Employer at any time for any reason or no reason, provided such amendment or termination applies to all other similarly situated senior executives of Employer.

 

(e)           Reimbursement of Expenses.  Employer shall reimburse Executive for all travel, entertainment and other out-of-pocket expenses that Executive reasonably and necessarily incurs in the performance of Executive’s duties under this Agreement.  Executive shall document these expenses to the extent necessary to comply with all applicable laws and Employer policies.  Any reimbursement payments hereunder shall be made as soon as practicable, and when taxable to Executive, in no event later than two and one-half (21⁄2) months following the end of the year in which the corresponding expenses are incurred.

 

(f)            Other Benefits.  Executive shall be eligible to participate, subject to the terms thereof, in all Employer retirement plans and health, dental, life insurance and similar plans, as may be in effect from time to time with respect to similarly situated senior executives.  In addition to the foregoing benefits, Executive shall continue to be eligible to participate in Employer’s key life insurance program following the Effective Date (which entry date was September 1, 2003) with a death benefit amount of one million dollars ($1,000,000.00), subject to insurability and all other terms of such program.

 

(g)           Vacations.  Executive shall be subject to Employer’s general vacation policy as may be in effect from time to time, but shall accrue not less than twenty-five (25) days of paid vacation annually.

 

(h)           Withholding.  Employer may withhold any applicable federal, state and local withholding and other taxes from payments that become due or allowances that are provided to Executive.

 

Section 5.              Rights and Payments Upon Termination.  Either Party may terminate Executive’s employment under this Agreement pursuant to the terms of this Section 5.  Executive’s right to benefits and payments, if any, for periods after the effective date of Executive’s termination of employment with Employer (the “Termination Date”) shall be determined in accordance with this Section 5:

 

(a)           Termination Without Cause.  Either Party may terminate this Agreement and Executive’s employment hereunder for any reason by delivering written notice of termination to the other Party no fewer than thirty (30) days before the Termination Date (provided that such notice shall not be required in a Termination for Cause (as defined below)), which date shall be specified in the notice of termination.  Employer may provide for an earlier Termination Date, provided Employer pays to Executive the Base Salary that would have been earned during such notice period.  Any payment in lieu of notice pursuant to this Section 5(a)

 

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shall be made in a single lump sum on the first payroll date following the Termination Date.  If Executive voluntarily terminates Executive’s employment under this Agreement other than pursuant to Section 5(c) (Termination for Good Reason), then Employer shall be required to pay Executive the Accrued Amounts, and Employer shall have no further obligations to Executive under this Agreement.  “Accrued Amounts” shall be the following amounts as have accrued through the Termination Date: (i) earned but unpaid Base Salary, (ii) earned but unpaid bonus under Section 4(b), (iii) accrued but unpaid vacation pay; and (iv) provided Executive submits the required documentation in accordance with established policies and within thirty (30) days of the Termination Date, unreimbursed business expenses incurred during the Term.

 

(b)           Termination for Cause.  Employer may terminate this Agreement and Executive’s employment hereunder immediately for Cause by delivering written notice of termination to Executive (with such notice being delivered no less than thirty (30) days before the Termination Date in the event of a termination based on either a curable breach or failure under subsection (vii) below or subsection (viii) below).  “Cause” for termination shall exist if:  (i) Executive engages in one (1) or more unsafe or unsound banking practices or material violations of a law or regulation applicable to Employer or any subsidiary; (ii) Executive engages in any repeated violations of a policy of Employer after being warned in writing by the Board or the CEO not to violate such policy; (iii) Executive engages in any single violation of a policy of Employer if such violation materially and adversely affects the business or affairs of Employer; (iv) Executive fails to timely implement a direction or order of the Board or the CEO, unless such direction or order would violate the law; (v) Executive engages in a breach of fiduciary duty or act of dishonesty involving the affairs of Employer; (vi) Executive is removed or suspended from banking pursuant to Section 8(e) of the Federal Deposit Insurance Act or any other applicable state or federal law; (vii) Executive commits a material breach of Executive’s obligations under this Agreement, and if such breach is determined to be curable by the CEO or the Board, Executive fails to cure such breach during the thirty (30)-day notice period, if applicable; (viii) Executive materially fails to perform Executive’s duties to Employer with the degree of skill, care or competence expected by the Board or the CEO following written notice by the CEO or the Board, and if such failure is determined to be curable by the CEO or the Board, Executive fails to cure such failure during the thirty (30)-day notice period, if applicable; or (ix) Executive is found guilty of, or pleads nolo contendere to, a felony or an act of dishonesty in connection with the performance of Executive’s duties as an officer of Employer, or an act that disqualifies Executive from serving as an officer or director of Employer.  If Executive’s employment is terminated pursuant to this Section 5(b), then Employer shall be required to pay Executive the Accrued Amounts, and Employer shall have no further obligations to Executive under this Agreement.

 

(c)           Termination for Good Reason.  Prior to Executive’s termination for Good Reason (as defined below), Executive shall give Employer written notice of the occurrence of the event or condition that Executive believes constitutes a Good Reason within thirty (30) days of the initial existence of such event or condition, which written notice shall provide detailed facts, and not mere conclusions, to support Executive’s claim of termination for Good Reason.  If Employer determines that the events or conditions exist as alleged by Executive, and does not cure such events or conditions within thirty (30) days of Executive’s written notice, then this Agreement and Executive’s employment hereunder shall terminate on the thirtieth (30th) day

 

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following Executive’s written notice.  “Good Reason” means the occurrence of any one (1) or more of the following, without Executive’s prior consent:  (i) a material adverse change in the nature, scope or status of Executive’s position, authorities or duties from those in effect in accordance with Section 3(a) immediately following the Effective Date; (ii) a reduction in Executive’s Base Salary, unless such reduction applies to all similarly situated senior executives of Employer; (iii)  Employer changes the primary location of Executive’s employment to a place that is more than fifty (50) miles from Executive’s primary location of employment as of the Effective Date; or (iv) Employer otherwise commits a material breach of its obligations under this Agreement.

 

(d)           Termination upon Change in Control.  Following a Change in Control, this Agreement and Executive’s employment hereunder may be terminated in accordance with Section 5(a), (b), or (c) by delivering written notice of termination to the other Party no less than thirty (30) days before the Termination Date.

 

(i)            A “Change in Control” shall be deemed to have occurred upon the first to occur of the following:  (A) any “person” (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934 (the “1934 Act”)), other than a trustee or other fiduciary holding securities under an employee benefit plan of First Busey or a corporation owned directly or indirectly by the stockholders of First Busey in substantially the same proportions as their ownership of stock of First Busey, is or becomes a “beneficial owner” (within the meaning of Rule 13d-3 of the 1934 Act), directly or indirectly, of securities representing more than fifty percent (50%) of the combined voting power of the then outstanding voting securities of First Busey; (B) during any period of twelve (12) consecutive months, the individuals who at the beginning of such period constitute the Board (and any new director whose election by the Board or nomination for election by First Busey’s stockholders was approved by a vote of at least a majority of the directors when still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board; or (C) the consummation of (1) a merger or consolidation of First Busey with any other corporation, other than a merger or consolidation that would result in the voting securities of First Busey outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the total voting power represented by the voting securities of First Busey or such surviving entity outstanding immediately after such merger or consolidation; or (2) a complete liquidation or dissolution of, or an agreement for the sale or other disposition of all or substantially all of the assets of, First Busey.

 

(ii)           Notwithstanding Section 5(d)(i), a Change in Control shall not be deemed to have occurred if Executive agrees in writing that the transaction or event in question does not constitute a Change in Control for the purposes of this Agreement.

 

(e)           Termination upon Disability.  Employer shall not terminate this Agreement and Executive’s employment hereunder if Executive becomes “disabled” within the meaning of Employer’s then current employee disability program or, at Employer’s election, as determined by a physician selected by Employer, unless, as a result of such disability, Executive

 

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is unable to perform Executive’s duties with the requisite level of skill and competence for a period of six (6) consecutive months.  Thereafter, Employer may terminate this Agreement for Cause in accordance with Section 5(b).

 

(f)            Termination upon Death.  This Agreement shall terminate if Executive dies during the Term, effective on the date of Executive’s death.  Any payments that are owing to Executive under this Agreement or otherwise at the time of Executive’s death shall be made to whomever Executive may designate in writing as Executive’s beneficiary, or absent such a designation, to the executor or administrator of Executive’s estate.  Termination of this Agreement under this Section 5(f) shall be deemed to be a termination in accordance with Section 5(b).

 

(g)           Severance Benefits.  Employer shall pay severance benefits to Executive as follows:

 

(i)            If this Agreement and Executive’s employment hereunder are terminated by Employer without Cause pursuant to Section 5(a), or by Executive for Good Reason pursuant to Section 5(c), Employer shall pay Executive an amount equal to one hundred percent (100%) (or two hundred percent (200%) if the foregoing terminations occur within one (1) year after the occurrence of a Change in Control) of the sum of (A) Executive’s then applicable Base Salary, plus (B) the amount of the most recent performance bonus that Employer paid to Executive pursuant to Section 4(b) (the “Severance Payment”).  Employer shall also reimburse Executive for up to twelve (12) months (or eighteen (18) months if the foregoing terminations occur within one (1) year after the occurrence of a Change in Control) for continuing coverage under Employer’s health insurance pursuant to the health care continuation rules of the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), provided that Executive remains eligible for, and elects, such COBRA continuation for such period following the Termination Date, and provided, further, that, to the extent Executive paid a portion of the premium for such benefits while employed, Executive shall continue to pay such portion during the period of continuation hereunder, and any period of continuation hereunder shall be credited against Executive’s continuation rights under COBRA.

 

(ii)           Subject to Executive’s execution of an irrevocable general release and waiver of claims as required by Section 5(j), all payments that become due to Executive under this Section 5(g) shall be made in substantially equal installments in accordance with Employer’s regular payroll practices then in effect for a one (1)-year period (or two (2)-year period if following a Change in Control) beginning on the regular payroll date occurring on or closest before the sixtieth (60th) day following the Termination Date; provided, however, that if the Termination Date occurs on or after November 2nd in any year, such payments shall not commence until the first payroll date in January of the next year.  Employer shall be obligated to make all payments that become due to Executive under this Section 5(g) whether or not Executive obtains other employment following termination or takes steps to mitigate any damages that Executive claims to have sustained as a result of termination.  The payments provided for in this Section 5(g) are intended to supplement any compensation or other benefits that have accrued or vested with respect to Executive or for Executive’s account as of the Termination Date.

 

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(iii)         The Parties intend that no portion of any payment under this Agreement, or payments to or for the benefit of Executive under any other agreement or plan, be deemed to be an “Excess Parachute Payment” as defined in Section 280G of the Internal Revenue Code of 1986 (the “Code”).  The present value of any payments to or for the benefit of Executive in the nature of compensation, as determined by the legal counsel or certified public accountants for Employer in accordance with Code Section 280G(d)(4), receipt of which is contingent on a Change in Control, and to which Code Section 280G applies (in the aggregate “Total Payments”), shall be reduced, as necessary, such that the payment does not exceed an amount equal to one dollar ($1.00) less than the maximum amount that Employer may pay without loss of deduction under Code Section 280G(a), provided that any such reduction shall be in accordance with Code Section 409A.

 

(iv)          If Employer is not permitted to make any payments that may become due to Executive under this Section 5(g) because First Busey or FirsTech is not in compliance with any regulatory-mandated minimum capital requirements or if making the payments would cause the First Busey’s capital to fall below such minimum capital requirements, then Employer shall delay making such payments until the earliest possible date it could resume making the payments without violating such minimum capital requirements.  Further, if Employer is not permitted to make any payments that may become due to Executive under this Section 5(g) because of the operation of any other applicable law or regulation, then Employer shall delay making such payments until the earliest possible date it could resume making the payments without violating such applicable law or regulation.

 

(h)           Payment Equalization.  If Employer is paying, or in the case of a lump sum, has paid, Executive a Severance Payment pursuant to Section 5(g)(i), then Executive shall not seek or apply for unemployment compensation under the Illinois Unemployment Act 820 ILCS 405/100 et seq. or any other state or federal unemployment compensation law at any time prior to a date following the final payment made hereunder or with respect to the period during which such payments were or were to be made until the final payment is made.

 

(i)            Specified Employee.  If at the time of any payment hereunder Executive is considered to be a Specified Employee (as defined below) and such payment is required to be treated as deferred compensation under Code Section 409A, then, to the extent required by Code Section 409A, payments shall be delayed to the date that is six (6) months after the Termination Date.  For purposes of Code Section 409A, all installment payments of deferred compensation made hereunder, or pursuant to another plan or arrangement, shall be deemed to be separate payments and, accordingly, the aforementioned deferral shall only apply to separate payments that would occur during the six (6)-month deferral period and all other payments shall be unaffected.

 

(i)            All payments delayed pursuant to this Section 5(i) shall be accumulated and paid in a lump-sum, catch-up payment as of the first (1st) day of the seventh (7th) month following the Termination Date (or, if earlier, the date of death of Executive), with all such delayed payments being credited with interest (compounded monthly) for such period of delay equal to the prime rate in effect on the first (1st) day of such six (6)-month period.  Any portion of the benefits hereunder that were not otherwise due to be paid during the six (6)-month

 

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period following the Termination Date shall be paid to Executive in accordance with the payment schedule established herein.

 

(ii)           The term “Specified Employee” means any person who holds a position with Employer of senior vice president or higher and has compensation greater than that stated in Code Section 416(i)(1)(A)(i).  The determination of whether Executive is a Specified Employee shall be based upon the twelve (12)-month period ending on each December 31st (such twelve (12)-month period is referred to below as the “identification period”).  If Executive is determined to be a Specified Employee during the identification period, he shall be treated as a Specified Employee for purposes of this Agreement during the twelve (12)-month period that begins on the April 1st following the close of such identification period.  For purposes of determining whether Executive is a Specified Employee under Code Section 416(i), compensation shall mean Executive’s W-2 compensation as reported by Employer for a particular calendar year.

 

(j)            Release.  As a condition to Employer’s obligation to pay any severance benefit under Section 5(g), Executive shall execute a general release of, and waiver of claims against, Employer and its subsidiaries and affiliates, substantially in the form attached hereto as Exhibit A on or before the sixtieth (60th) day following the Termination Date.  For the avoidance of doubt, in order for such release to be deemed effective for purposes of this Agreement, any applicable revocation period with respect to such release and waiver must have expired on or before such sixtieth (60th) day.

 

Section 6.              Confidentiality.  Executive acknowledges that the nature of Executive’s employment shall require that Executive produce and have access to records, data, trade secrets and information that are not available to the public regarding Employer and its subsidiaries and affiliates (“Confidential Information”).  Executive shall hold in confidence and not directly or indirectly disclose any Confidential Information to third parties unless disclosure becomes reasonably necessary in connection with Executive’s performance of Executive’s duties hereunder, or the Confidential Information lawfully becomes available to the public from other sources, or Executive is authorized in writing by Employer to disclose it or Executive is required to make disclosure by a law or pursuant to the authority of any administrative agency or judicial body.  All Confidential Information and all other records, files, documents and other materials or copies thereof relating to the business of Employer or any of its subsidiaries or affiliates that Executive prepares or uses shall be the sole property of Employer.  Executive’s access to and use of Employer’s computer systems, networks and equipment, and all Employer information contained therein, shall be restricted to legitimate business purposes on behalf of Employer; any other access to or use of such systems, network and equipment is without authorization and is prohibited.  The restrictions contained in this Section 6 shall extend to any personal computers or other electronic devices of Executive that are used for business purposes relating to Employer. Executive shall not transfer any Employer information to any personal computer or other electronic device that is not otherwise used for any business purpose relating to Employer.  Executive shall promptly return all originals and copies of any Confidential Information and other records, files, documents and other materials to Employer if Executive’s employment with Employer is terminated for any reason.

 

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Section 7.              Non-Competition and Non-Solicitation Covenants.  The primary service area of Employer’s business in which Executive will actively participate extends separately to an area that encompasses a twenty-five (25)-mile radius from each banking and other office location of Employer and its subsidiaries and affiliates and a fifty (50)-mile radius from Employer’s main office in Champaign, Illinois (collectively, the “Restrictive Area”).  As an essential ingredient and in consideration of this Agreement and Executive’s employment by Employer, Executive shall not, for a period of one (1) year after termination of Executive’s employment with Employer for any reason and whether such termination of employment is during the Term or after the termination or expiration of the Term (the “Restrictive Period), directly or indirectly compete with the business of Employer, including by doing any of the following (the “Restrictive Covenant”):

 

(a)           engage or invest in, own, manage, operate, control, finance, participate in the ownership, management, operation or control of, be employed by, associate with or in any manner be connected with, serve as an employee, officer or director of or consultant to, lend his name or any similar name to, lend his credit to, or render services or advice to any person, firm, partnership, corporation, trust or other entity that owns or operates, a bank, savings and loan association, credit union or similar financial institution (a “Financial Institution”) with any office located, or to be located at an address identified in a filing with any regulatory authority, within the Restrictive Area; provided, however, that in the event a successor to First Busey succeeds to or assumes First Busey’s rights and obligations under this Agreement in connection with a Change in Control, this Section 7(a) shall apply only to the primary service areas of First Busey as they existed immediately before the Change in Control;

 

(b)           directly or indirectly, for himself or any Financial Institution: (i) induce or attempt to induce any officer of Employer or any of its subsidiaries or affiliates, or any employee who previously reported to Executive, to leave the employ of Employer or any of its subsidiaries or affiliates; (ii) in any way interfere with the relationship between Employer or any of its subsidiaries or affiliates and any such officer or employee; (iii) employ, or otherwise engage as an employee, independent contractor or otherwise, any such officer or employee; or (iv) induce or attempt to induce any customer, supplier, licensee or business relation of Employer of any of its subsidiaries or affiliates to cease doing business with Employer or any of its subsidiaries or affiliates or in any way interfere with the relationship between Employer or any of its subsidiaries or affiliates and any of their respective customers, suppliers, licensees or business relations, where Executive had personal contact with, or has accessed Confidential Information in the preceding twelve (12) months with respect to, such customers, suppliers, licensees or business relations; or

 

(c)           directly or indirectly, for himself or any Financial Institution, solicit the business of any person or entity known to Executive to be a customer of Employer or any of its subsidiaries or affiliates, where Executive, or any person reporting to Executive, had personal contact with such person or entity, with respect to products, activities or services that compete in whole or in part with the products, activities or services of Employer or any of its subsidiaries or affiliates.

 

The foregoing Restrictive Covenant shall not prohibit Executive from owning directly or

 

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indirectly capital stock or similar securities that are listed on a securities exchange or quoted on the National Association of Securities Dealers Automated Quotation System that do not represent more than one percent (1%) of the outstanding capital stock of any Financial Institution.

 

Section 8.              Remedies for Breach.  Executive has reviewed the provisions of this Agreement with legal counsel, or has been given adequate opportunity to seek such counsel, and Executive acknowledges that the covenants contained herein are reasonable with respect to their duration, geographical area and scope.  Executive further acknowledges that the restrictions contained in this Agreement are reasonable and necessary for the protection of the legitimate business interests of Employer, that they create no undue hardships, that any violation of these restrictions would cause substantial injury to Employer and its interests, that Employer would not have agreed to enter into this Agreement without receiving Executive’s agreement to be bound by these restrictions and that such restrictions were a material inducement to Employer to enter into this Agreement.  During the Restrictive Period, Employer shall have the right to communicate the existence and terms of this Agreement to any third party with whom Executive may seek or obtain future employment or other similar arrangement.  In addition, in the event of any violation or threatened violation of the restrictions contained in this Agreement, Employer, in addition to and not in limitation of, any other rights, remedies or damages available to Employer under this Agreement or otherwise at law or in equity, shall be entitled to preliminary and permanent injunctive relief to prevent or restrain any such violation by Executive and any and all persons directly or indirectly acting for or with him, as the case may be.  If Executive violates the Restrictive Covenant and Employer brings legal action for injunctive or other relief, Employer shall not, as a result of the time involved in obtaining such relief, be deprived of the benefit of the full period of the Restrictive Covenant.  Accordingly, the Restrictive Covenant shall be deemed to have the duration specified herein computed from the date the relief is granted but reduced by the time between the period when the Restrictive Period began to run and the date of the first violation of the Restrictive Covenant by Executive.

 

Section 9.              Indemnity; Other Protections.

 

(a)           Indemnification.  Employer shall indemnify Executive (and, upon Executive’s death, Executive’s heirs, executors and administrators) to the fullest extent permitted by law against all expenses, including reasonable attorneys’ fees, court and investigative costs, judgments, fines and amounts paid in settlement (collectively, “Expenses”) reasonably incurred by Executive in connection with or arising out of any pending, threatened or completed action, suit or proceeding in which Executive becomes involved by reason of Executive’s having been an officer or director of Employer.  The indemnification rights provided for herein are not exclusive and shall supplement any rights to indemnification that Executive may have under any applicable bylaw or charter provision of Employer, or any resolution of Employer or any applicable statute.

 

(b)           Advancement of Expenses.  In the event that Executive becomes a party, or is threatened to be made a party, to any pending, threatened or completed action, suit or proceeding for which Employer is permitted or required to indemnify Executive under this Agreement, any applicable bylaw or charter provision of Employer, any resolution of Employer,

 

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or any applicable statute, Employer shall, to the fullest extent permitted by law, advance all Expenses incurred by Executive in connection with the investigation, defense, settlement, or appeal of any threatened, pending or completed action, suit or proceeding, subject to receipt by Employer of a written undertaking from Executive to reimburse Employer for all Expenses actually paid by Employer to or on behalf of Executive in the event it shall be ultimately determined that Employer cannot lawfully indemnify Executive for such Expenses, and to assign to Employer all rights of Executive to indemnification under any policy of directors’ and officers’ liability insurance to the extent of the amount of Expenses actually paid by Employer to or on behalf of Executive.

 

(c)           Litigation.  Unless precluded by an actual or potential conflict of interest, Employer shall have the right to recommend counsel to Executive to represent Executive in connection with any claim covered by this Section 9.  Further, Executive’s choice of counsel, Executive’s decision to contest or settle any such claim and the terms and amount of the settlement of any such claim shall be subject to Employer’s prior written approval, which approval shall not be unreasonably withheld by Employer.

 

Section 10.            General Provisions.

 

(a)           Amendment.  Except as set forth explicitly herein, this Agreement may not be amended or modified except by written agreement signed by Executive and First Busey.

 

(b)           Successors; Assignment.  This Agreement shall be binding upon and inure to the benefit of Executive, Employer and their respective personal representatives, successors and assigns.  Except as set forth in Section 7(a), for the purposes of this Agreement, any successor or assign of Employer shall be deemed to be “Employer.”  Employer shall require any successor or assign of Employer or any direct or indirect purchaser or acquirer of all or substantially all of the business, assets or liabilities of Employer, whether by transfer, purchase, merger, consolidation, stock acquisition or otherwise, to assume and agree in writing to perform this Agreement and Employer’s obligations hereunder in the same manner and to the same extent as Employer would have been required to perform them if no such transaction had occurred.

 

(c)           Entire Agreement.  This Agreement constitutes the entire agreement between the Parties concerning the subject matter hereof, and supersedes all prior negotiations, undertakings, agreements and arrangements with respect thereto, whether written or oral.  The provisions of this Agreement shall be regarded as divisible and separate; if any provision is declared invalid or unenforceable, the validity and enforceability of the remaining provisions shall not be affected.  In the event any provision of this Agreement (including any provision of the Restrictive Covenant) is held to be overbroad as written, such provision shall be deemed to be amended to narrow the application of such provision to the extent necessary to make such provision enforceable according to applicable law.

 

(d)           Survival.  The provisions of Section 6 (Confidentiality), Section 7 (Non-Competition and Non-Solicitation Covenants), Section 8 (Remedies for Breach), Section 9 (Indemnity; Other Protections) and Section 10 (General Provisions) shall survive the expiration or termination of this Agreement for any reason.

 

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(e)           Governing Law and Enforcement.  This Agreement shall be construed and the legal relations of the Parties shall be determined in accordance with the laws of the State of Illinois without reference to the law regarding conflicts of law.

 

(f)            Arbitration.  Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration conducted at a location selected by Employer within fifty (50) miles from Champaign-Urbana, Illinois, in accordance with the rules of the American Arbitration Association.

 

(g)           Prevailing Party Legal Fees.  Should either Party initiate any action or proceeding to enforce this Agreement or any provision hereof, or for damages by reason of any alleged breach of this Agreement or of any provision hereof, or for a declaration of rights hereunder, the prevailing Party in any such action or proceeding shall be entitled to receive from the other Party all costs and expenses, including reasonable attorneys’ fees, incurred by the prevailing Party in connection with such action or proceeding; provided, however, that reasonable attorneys’ fees shall be limited to the fees of the last attorney to represent the Party and to the lesser of the fees incurred as a result of the reasonable hourly rate of the attorney or any contingent or other arrangement for the payment of legal fees.  The payment, if any, of costs and expenses to either Party under this Section 10(g) shall be made no later than two and one-half (21⁄2) months following the end of the year in which a final adjudication is made in the action or proceeding.

 

(h)           Waiver.  No waiver by either Party at any time of any breach by the other Party of, or compliance with, any condition or provision of this Agreement to be performed by the other Party shall be deemed a waiver of any similar or dissimilar provisions or conditions at the same time or any prior or subsequent time.

 

(i)            Notices.  Notices pursuant to this Agreement shall be in writing and shall be deemed given when received; and, if mailed, shall be mailed by United States registered or certified mail, return receipt requested, postage prepaid; and if to Employer, addressed to the principal headquarters of First Busey, attention: President and Chief Executive Officer; and if to Executive, to the address for Executive as most currently reflected in the corporate records or to such other address as Executive has most recently provided to Employer.

 

(j)            Code Section 409A.  To the extent any provision of this Agreement or action by Employer would subject Executive to liability for interest or additional taxes under Code Section 409A, it shall be deemed null and void, to the extent permitted by law and deemed advisable by Employer.  It is intended that this Agreement will comply with Code Section 409A, and this Agreement shall be administered accordingly, and interpreted and construed on a basis consistent with such intent.  Notwithstanding anything herein to the contrary, no termination or other similar payments and benefits hereunder shall be payable on account of Executive’s termination of employment unless Executive’s termination of employment constitutes a “separation from service” within the meaning of Section 409A.  To the extent any reimbursements or in-kind benefit payments under this Agreement are subject to Code Section 409A, such reimbursements and in-kind benefit payments shall be made in accordance with Treasury Regulation §1.409A-3(i)(1)(iv).  This Agreement may be amended to the extent

 

12

 

necessary (including retroactively) by Employer to maintain to the maximum extent practicable the original intent of this Agreement while avoiding the application of taxes or interest under Code Section 409A.  The preceding shall not be construed as a guarantee of any particular tax effect for Executive’s compensation and benefits and Employer does not guarantee that any compensation or benefits provided under this Agreement will satisfy the provisions of Code Section 409A.

 

(k)           Clawback.  Any amount or benefit received under this Agreement shall be subject to potential cancellation, recoupment, rescission, payback, or other action in accordance with the terms of any applicable Employer clawback policy (the “Policy”) or any applicable law, as may be in effect from time to time.  Executive acknowledges and consents to Employer’s application, implementation, and enforcement of (i) the Policy or any similar policy established by Employer that may apply to Executive and (ii) any provision of applicable law relating to cancellation, rescission, payback, or recoupment of compensation, as well as Executive’s express agreement that Employer may take such actions as may be necessary to effectuate the Policy, any similar policy, or applicable law, without further consideration or action.

 

(l)            Construction.  This Agreement shall be deemed drafted equally by the Parties.  Any presumption or principle that the language of this Agreement is to be construed against any Party shall not apply.  Whenever used in this Agreement, the singular includes the plural and vice versa (where applicable); the words “hereof,” “herein,” “hereto,” “hereby,” “hereunder,” and other words of similar import refer to this Agreement as a whole (including exhibits); all references to sections, schedules and exhibits are to sections, schedules and exhibits in or to this Agreement unless otherwise specified; the words “include,” “includes” and “including” means “include, without limitation,” “includes, without limitation” and “including, without limitation,” respectively; any reference to a document or set of documents, and the rights and obligations of the parties under any such documents, means such document or documents as amended from time to time, and any and all modifications, extensions, renewals, substitutions or replacements thereof; and references to a statute shall refer to the statute and any amendments and any successor statutes, and to all regulations promulgated under or implementing the statute, as amended, or its successors, as in effect at the relevant time.  The headings used in this Agreement are for convenience only, shall not be deemed to constitute a part hereof, and shall not be deemed to limit, characterize or in any way affect the construction or enforcement of the provisions of this Agreement.  This Agreement may be executed in any number of identical counterparts, any of which may contain the signatures of less than all Parties, and all of which together shall constitute a single agreement.  All remedies of any Party are cumulative and not alternative, and are in addition to any other remedies available at law, in equity or otherwise.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

 

 

	
FIRST   BUSEY CORPORATION and
    	
 
    	
EXECUTIVE
    
	
FIRSTECH, INC.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   VAN A. DUKEMAN
    	
 
    	
/s/   HOWARD MOONEY
    
	
 
    	
Van   A. Dukeman
    	
 
    	
Howard   Mooney
    
	
 
    	
President   and Chief Executive Officer of First Busey Corporation
    	
 
    	
 
    

 

Signature Page to Howard Mooney Employment Agreement

 

 

Exhibit A to Employment Agreement

 

AGREEMENT AND RELEASE

 

This Agreement and Release (this “Release”) is made and entered into as of                                                    (the “Release Date”), by and among First Busey Corporation (“First Busey”), Busey Bank (the “Bank” and together with First Busey, “Employer”) and                                                    (“Executive,” and together with Employer, the “Parties”).  In consideration of the mutual covenants hereinafter set forth, the Parties hereby agree as follows:

 

Section 1.              Separation.  Executive’s employment with Employer shall end effective                                                   .

 

Section 2.              Payment and Benefits.  In consideration of the promises made in this Release, First Busey has agreed to pay Executive the compensation and benefits as provided in that certain employment agreement made and entered into as of                                                   , by and among the Parties (the “Employment Agreement”).  Executive understands and acknowledges that the compensation and benefits provided under this Section 2 constitute an amount in excess of that to which Executive would be entitled without entering into this Release.  Executive acknowledges that such compensation and benefits are being provided by First Busey, in part, as consideration for Executive entering into this Release, including the release of claims and waiver of rights provided in Section 3 of this Release.

 

Section 3.              Release of Claims and Waiver of Rights.  Executive, on Executive’s own behalf and that of Executive’s heirs, executors, attorneys, administrators, successors and assigns, fully releases and discharges Employer, its predecessors, successors, subsidiaries, affiliates and assigns, and its and their directors, officers, trustees, employees, and agents, in their individual and official capacities, and the current and former trustees and administrators of any retirement or other benefit plan applicable to the employees or former employees of Employer, in their individual and official capacities (the “Released Parties”), from any and all liability, claims, demands and actions, including liability, claims, demands and actions arising under Employer’s policies and procedures, whether formal or informal; the United States or State of Illinois Constitutions; the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Illinois Human Rights Act; the Employee Retirement Income Security Act of 1974; the Age Discrimination in Employment Act; Executive Order 11246; and any other federal, state or local statute, ordinance or regulation with respect to employment, and in addition thereto, from any other liability, claims, demands and actions with respect to Executive’s employment with Employer or other association with Employer through the Release Date, including the termination of Executive’s employment with Employer, any right of payment for disability or any other statutory or contractual right of payment or any claim for relief on the basis of any alleged tort or breach of contract under the common law of the State of Illinois or any other state, including defamation, intentional or negligent infliction of emotional distress, breach of the covenant of good faith and fair dealing, promissory estoppel, and negligence.  Executive represents that Executive has not assigned or filed any claim, demand, action or charge against the Released Parties.  Executive further acknowledges that Executive is aware that statutes exist that render null and void releases and discharges of any claims, rights, demands, liabilities, actions and causes of action that are unknown to the releasing or discharging party at the time of execution of the release and discharge.  Executive hereby expressly waives, surrenders and

 

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agrees to forego any protection to which Executive would otherwise be entitled by virtue of the existence of any such statute in any jurisdiction, including the State of Illinois.

 

Section 4.              Covenant Not to Sue.  Executive shall not bring, file, charge, claim, sue or cause, assist, or permit to be brought, filed, charged or claimed any action, cause of action, or proceeding regarding or in any way related to any of the claims described in Section 3 of this Release; Executive’s release of claims and waiver of rights provided in Section 3 of this Release is, shall constitute and may be pleaded as, a bar to any such claim, action, cause of action or proceeding.  If any government agency or court assumes jurisdiction of any charge, complaint or cause of action covered by this Release, Executive shall not seek and shall not accept any personal equitable or monetary relief in connection with any investigation, civil action, suit or legal proceeding.

 

Section 5.              Mutual Non-Disparagement.  At all times following the signing of this Release, neither Party shall engage in any vilification of the other, and each Party shall refrain from making any false, negative, critical or disparaging statements, implied or expressed, concerning the other, including management style, methods of doing business, the quality of products and services, or role in the community.  Executive acknowledges that the only persons whose statements may be attributed to Employer for purposes of this covenant not to make disparaging statements shall be each member of the Board of Directors of Employer, the CEO and executive officers that report directly to the CEO.  The Parties shall do nothing that would damage the other’s business reputation or good will.

 

Section 6.              Representations by Executive.  Executive warrants that Executive is legally competent to execute this Release and that Executive has not relied on any statements or explanations made by Employer or its attorneys.  Moreover, Executive acknowledges that Executive has been afforded the opportunity to be advised by legal counsel regarding the terms of this Release, including the release of all claims and waiver of rights set forth in Section 3 of this Release.  Executive acknowledges that Executive has been offered [twenty-one (21)] days to consider this Release.  After being so advised, and without coercion of any kind, Executive freely, knowingly and voluntarily enters into this Release.  [Executive further acknowledges that Executive may revoke this Release within seven (7) days after Executive has signed this Release and further understands that this Release shall not become effective or enforceable until seven (7) days after Executive has signed this Release, as evidenced by the date set forth below Executive’s signature on this Release.  Any revocation of this Release by Executive must be in writing and addressed to the principal headquarters of First Busey, attention: President and Chief Executive Officer.  If sent by mail, any revocation must be postmarked within the seven (7)-day period and sent by certified mail, return receipt requested.]  In addition, Executive represents that Executive has returned all property of Employer that is in Executive’s possession, custody or control, including all documents, records and tangible property that are not publicly available and reflect, refer or relate to Employer or Employer’s business affairs, operations or customers, and all copies of the foregoing.

 

Section 7.              No Admissions.  Employer denies that it or any of its employees or agents have taken any improper action against Executive.  This Release shall not be admissible in any proceeding as evidence of improper action by Employer or any of its employees or agents.

 

A-2

 

Section 8.              Confidentiality.  Executive and Employer shall keep the existence and the terms of this Release confidential, except for Executive’s immediate family members or their legal or tax advisors in connection with services related hereto and except as may be required by law or in connection with the preparation of tax returns.

 

Section 9.              Non-Waiver.  Employer’s waiver of a breach of this Release by Executive shall not be construed or operate as a waiver of any subsequent breach by Executive of the same or of any other provision of this Release.

 

Section 10.            Restrictive Covenants.  Executive shall abide by the terms set forth in Sections 5 and 6 of the Employment Agreement.

 

Section 11.            Construction.  The terms set forth in Section 9 of the Employment Agreement shall apply to this Release, provided that the word “Release” shall take the place of the word “Agreement” in such Section 9, where applicable.

 

IN WITNESS WHEREOF, the Parties have executed this Release as of dates set forth below their respective signatures below.

 

 

	
FIRST   BUSEY CORPORATION and
    	
EXECUTIVE
    
	
BUSEY   BANK
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
[Name]
    	
[Name]
    
	
 
    	
President   and Chief Executive Officer of First Busey Corporation
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
Date:
    	
 
    

 

A-3Exhibit 10.2

 

FIRST BUSEY CORPORATION

 

EXECUTIVE DEFERRED COMPENSATION PLAN

 

(Effective December 16, 2008)

 

The purpose of this executive deferred compensation plan (the “Plan”) is to provide specified benefits to a select group of management or highly compensated employees who contribute materially to the continued growth, development and future business success of First Busey Corporation (the “Company”) and its Subsidiaries.  The Plan is intended to be an unfunded arrangement maintained by the Company and its Subsidiaries that employ the participants primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees of the Company or its Subsidiaries and is intended to be exempt from Sections 201, 301 and 401 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  This amendment and restatement of the Plan is effective as of December 16, 2008 and is intended to comply in its entirety with Section 409A, including pre-2005 deferrals.

 

Article 1
 Definitions

 

For purposes of this Plan, the following words and phrases shall have the following meanings:

 

1.1          “Administrator” means the Employee Benefits Committee of the Company or such other entity as determined by the Board.

 

1.2          “Board” means the Board of Directors of the Company.

 

1.3          “Change in Control” shall mean the earliest of the following dates:

 

1.3.1       Accretive Change in Ownership of Company’s Stock.  The date that any one person, or more than one person acting as a group (as defined below), acquires ownership of stock of the Company that, together with stock of the Company held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Company.  This subsection 1.3.1 applies only when there is a transfer of stock of the Company (or issuance of stock of the Company) and stock in the Company remains outstanding after such transaction.  Notwithstanding the foregoing, no Change in Control shall be deemed to have occurred pursuant to this subsection 1.3.1 solely because:

 

(a)           any one person, or more than one person acting as a group, who is considered to own more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Company, acquires additional stock of the Company;

 

 

(b)           a trustee or other fiduciary holding securities under one or more employee benefit plans maintained for employees of the Company acquires more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Company; or

 

(c)           any corporation which, immediately prior to such acquisition, is owned directly or indirectly by the shareholders of the Company, acquires more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Company, provided such shares are held by such shareholders in substantially the same proportion as the stock of the Company immediately prior to such acquisition.

 

1.3.2       Single Transaction Change in Effective Control.  The date that any one person, or more than one person acting as a group (as defined below), acquires (or has acquired during the twelve (12)-month period ending on the date of the most recent acquisition by such person or group) ownership of stock of the Company possessing thirty-three percent (33%) or more of the total voting power of the stock of the Company.  Notwithstanding the foregoing, no Change in Control shall be deemed to have occurred pursuant to this subsection 1.3.2 solely because:

 

(a)           a trustee or other fiduciary holding securities under one or more employee benefit plans maintained for employees of the Company acquires thirty-three percent (33%) or more of the total voting power of the stock of the Company; or

 

(b)           any corporation which, immediately prior to such acquisition, is owned directly or indirectly by the shareholders of the Company, acquires thirty-three percent (33%) or more of the total voting power of the stock of the Company, provided such shares are held by such shareholders in substantially the same proportion as the stock of the Company immediately prior to such acquisition.

 

1.3.3       Change in Board Membership.  The date a majority of members of the Board is replaced during any twelve (12)-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election.

 

1.3.4       Change in Ownership of the Company’s Assets.  The date that any one person, or more than one person acting as a group (as defined below), acquires (or has acquired during the twelve (12)-month period ending on the date of the most recent acquisition by such person or group) assets from the Company that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions.  For purposes of this subsection 1.3.4, “gross fair market value” means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

 

(a)           A transfer of assets by the Company is not treated as a Change in Control for purposes of this Section 1.3 if the assets are transferred to: (A) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock; (B) an entity, fifty percent (50 %)or more of the total value or voting power of 

 

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which is owned, directly or indirectly, by the Company; (C) a person, or more than one person acting as a group, that owns, directly or indirectly, fifty percent (50 %) or more of the total value or voting power of all the outstanding stock of the Company; or (D) an entity, at least fifty (50 %) percent of the total value or voting power of which is owned, directly or indirectly, by a person described in (C).

 

(b)           For purposes of subsection 1.3.4(a) and except as otherwise provided herein, a person’s status is determined immediately after the transfer of the assets.

 

1.3.5       Persons Acting as a Group.  For purposes of this Section 1.3, persons will be considered to be “acting as a group” if they are owners of a corporation (the “Transacting Corporation”) that enters into merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.  If a person, including an entity, owns stock in both the Transacting Corporation and the Company, such person is considered to be acting as a group with other shareholders only with respect to the ownership in the Transacting Corporation before the transaction giving rise to the Change in Control and not with respect to the ownership interest in the Company.

 

(a)           For purposes of subsections 1.3.1 above, persons will not be considered to be acting as a group solely because they purchase or own stock of the Company at the same time, or as a result of the same public offering.

 

(b)           For purposes of subsection 1.3.4 above, persons will not be considered to be acting as a group solely because they purchase assets of the Company at the same time.

 

The provisions of this Section 1.3 shall at all times be interpreted in accordance with and subject to the provisions of Treasury Regulations §1.409A-3(i)(5).

 

1.4          “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder from time to time.

 

1.5          “Company” means First Busey Corporation or its successors.

 

1.6          “Compensation” means the Participant’s salary and bonus paid during the Plan Year before reduction for amounts deferred under this Plan or salary reduction contributions under Code Section 401(k).  Compensation does not include expense reimbursement, any form of non-cash compensation or benefits, Employer contributions to a tax-qualified plan, group life insurance premiums or any other payments or benefits other than normal compensation. The Administrator shall have the continuing authority to determine in advance of any Plan Year, which elements (and any limits on such elements) of Compensation shall be eligible for deferral in that Plan Year.

 

1.7          “Deferral Account” means the bookkeeping account established by an Employer for each Participant as provided in Section 4.1 hereof.  The Deferral Account shall be utilized solely as a device for the determination and measurement of the amounts to be paid to the Participant pursuant to the Plan.  A Participant’s Deferral Account shall not constitute or be treated as a trust fund of any kind.

 

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1.8          “Deferrals” means that portion of a Participant’s Compensation that a Participant elects to defer in accordance with Section 3.1 hereof.

 

1.9          “Distribution Election Form”  means the separate written agreement, submitted to the Administrator, by which a Participant elects his or her form of payment.

 

1.10        “Early Benefit Date” means the later of (i) the first day of the month following a Participant’s 55th birthday or (ii) twelve (12) months after the Participant’s initial deferral into the Plan.

 

1.11        “Effective Date” means December 16, 2008; provided, however, that if any changes pursuant to the amendment and restatement of this Plan constitute a change in the form or timing of distributions under Section 409A, such changes shall be effective as of January 1, 2009, in accordance with the transition relief provided under Notice 2007-89.

 

1.12        “Election Form” means the separate written agreement, submitted to the Administrator, by which a Participant elects to participate in the Plan and to make Deferrals.

 

1.13        “Employer” means with respect to a Participant, the Company or a subsidiary, for whom the Participant provides services.

 

1.14        “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder from time to time.

 

1.15        “Interest Yield” means, with respect to any calendar month, 125% of the declared interest rate on Security Life Corp. III policies for the current calendar month as determined by Security Life of Denver (or any successor thereto), or, if such monthly rate is no longer published or no longer deemed appropriate by the Administrator, a substantially similar rate selected by the Administrator.  Reference to Security Life of Denver or any other life insurance company does not in any way alter the provisions of Section 4.3.

 

1.16        “Normal Benefit Date” means the later of (i) the first day of the month following the month in which a Participant reaches Normal Retirement Age, or (ii) twelve (12) months after the Participant’s initial deferral into the Plan.

 

1.17        “Normal Retirement Age” means the Participant’s sixty-fifth (65th) birthday.

 

1.18        “Participant” means any employee who is selected to participate in the Plan and:  (i) who elects to participate in the Plan, (ii) who signs an Election Form which is accepted by the Administrator, (iii) who commences participation in the Plan, (iv) who signs a Distribution Election Form which is accepted by the Administrator and (v) whose Plan participation has not terminated by reason of Separation from Service followed by complete distribution of the Participant’s Deferral Account.

 

1.19        “Plan Year” means January 1 to December 31.

 

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1.20        “Section 409A” means Code Section 409A and any U.S. Treasury department regulations and guidance promulgated thereunder, including such regulations and guidance promulgated after the Effective Date of the Plan as deemed appropriate by the Administrator.

 

1.21        “Separation from Service” means a termination which constitutes a “separation from service” as defined under Section 409A where the Participant ceases to be employed by an Employer for any reason whatsoever, other than by reason of a leave of absence which is approved by an Employer.  For purposes of the Plan, if there is a dispute over the employment status of the Participant or the date of the Participant’s Separation from Service, the Employer shall have the sole and absolute right to decide the dispute.

 

1.22        “Specified Employee”  means a Participant who holds a position within an Employer of senior vice president or higher and has Compensation greater than that stated in Code Section 416(i)(1)(A)(i).  The determination of whether a Participant is a Specified Employee will be based upon the twelve (12)-month period ending on each December 31st (such twelve (12)-month period is referred to below as the “identification period”).  If the Participant is determined to be a Specified Employee during the identification period he or she shall be treated as a Specified Employee for purposes of this Plan during the twelve (12)-month period that begins on the April 1st following the close of such identification period.  For purposes of determining whether an Executive is a Specified Employee under Code Section 416(i), compensation shall mean the Executive’s W-2 compensation as reported by the Employer for a particular calendar year.

 

1.23        “Subsidiary” means the term “subsidiary” as it is defined in Code Section 424(f).

 

1.24        “Unforeseeable Emergency” means an unanticipated emergency that is caused by an event beyond the control of the Participant that would result in severe financial hardship to the Participant resulting from (a) a sudden and unexpected illness or accident of the Participant or a dependent of the Participant, (b) a loss of the Participant’s property due to casualty, or (c) such other extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined in the sole discretion of the Administrator.

 

1.25        “Valuation Date” means the last day of each month or such other dates as may be determined by the Administrator for valuing Participant’s Deferral Accounts.

 

ARTICLE 2
 Participation and Deferrals

 

2.1          Commencement of Participation.  An eligible employee shall become a Participant in the Plan on the date the Participant’s Election Form first becomes effective or became effective with respect to previously existing deferral elections.  An eligible employee may elect to participate in the Plan with respect to any Plan Year by submitting an Election Form within the time period set forth in ARTICLE 3.  At the time of his or her commencement of participation in the Plan, a Participant must complete, sign and submit a Distribution Election Form with the Administrator.

 

2.2          Deferral Continuance Requirement.  A Participant’s Election Form shall continue in effect until the Participant delivers to the Administrator a written revocation or modification of 

 

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such election (as may be permitted herein) with respect to Compensation that relates to services yet to be performed in the following Plan Year.  Except as provided in Section 3.5, once an Election Form is in place for a calendar year it shall remain in effect for the entire calendar year.

 

ARTICLE 3
 Deferral Elections

 

3.1          Deferral Elections.

 

3.1.1       Forms.  Each Participant shall deliver an Election Form and a Distribution Election Form to the Administrator before any Deferrals may become effective.  The Election Form shall set forth the percentage of Compensation to be deferred and shall be effective to defer only Compensation earned after the date the Election Form is received by the Administrator.  Except as provided in Section 3.2, such Election Form shall be void with respect to any Deferrals, unless submitted and accepted by the Administrator before the beginning of the calendar year during which the amount to be deferred will be earned.  Subject to the limitations set forth in Sections 2.2 and 3.2, the Election Form shall remain effective until modified or revoked and will contain the following:

 

(a)                                 the Participant’s designation as to the percentage of Compensation to be deferred with respect to a given Plan Year;

 

(b)           the beneficiary or beneficiaries of the Participant; and

 

(c)           such other information as the Administrator may require.

 

3.1.2       Deferral Limitation.  A Participant may elect on an Election Form to defer a portion of his or her Compensation for the Plan Year following the calendar year in which the Election Form is submitted; or, pursuant to Section 3.2, in the case of a newly eligible employee, the portion of the calendar year remaining after submission of the Election Form to the Administrator.  The amount to be deferred may be restricted at the discretion of the Employer.

 

3.2          Initial Election.  The Participant shall make an initial deferral election under the Plan by filing with the Administrator a signed Election Form and a signed Distribution Election Form within thirty (30) days of the date on which the Participant is first eligible to participate in the Plan, taking into consideration the plan aggregation rules of Section 409A.  The completed Election Form shall be effective only with regard to Compensation earned or payable following the submission of the Election Form by the Administrator.

 

3.3          Performance-Based Compensation.  Notwithstanding the foregoing, with respect to any bonus eligible for deferral under the Plan that satisfies the requirements of “performance-based compensation” within the meaning of Section 409A, any election to defer such bonus must be made no later than six (6) months preceding the end of the performance period to which the bonus relates, or by such other date as the Company determines appropriate and consistent with the intent and purpose of Section 409A.

 

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3.4          Election Changes.  Upon the Administrator’s approval, the Participant may modify the percentage of Compensation to be deferred annually by filing a new Election Form with the Administrator prior to the beginning of the Plan Year in which the Compensation is to be deferred.  A modified Election Form shall not be effective until the Plan Year following the year in which the modified Election Form is received and approved by the Administrator.

 

3.5          Unforeseeable Emergency.  In the case of an Unforeseeable Emergency, a Participant’s deferrals as set forth on the Participant’s Election Form shall be cancelled, as permitted by Section 409A, and such additional Compensation shall be taken into account for determining the amount of payment needed to satisfy the unforeseeable emergency.

 

ARTICLE 4
 Deferral Accounts

 

4.1          Establishing and Crediting.  The Employer shall establish a Deferral Account on its books for each Participant and shall credit each Participant’s Deferral Account with the following amounts:

 

4.1.1       Deferrals.  The Compensation deferred by the Participant no later than the last day of the month in which such Compensation would have otherwise been paid to the Participant.

 

4.1.2       Discretionary Contribution.  For each Plan Year, the Employer, in its sole discretion, may, but is not required to, credit any amount it determines to Participants’ Deferral Accounts under the Plan, which amount shall be the discretionary contribution for that Plan Year.  The discretionary contribution, if any, shall be credited as of the last day of the Plan Year unless otherwise specified by the Company, as the case may be.  The Company may, in its sole discretion, provide terms and conditions on the discretionary contributions regarding vesting and forfeiture.

 

4.1.3       Interest.  On the last day of each month and continuing until all benefit payments under the Plan have been made, interest is to be credited based on the Interest Yield.  Interest earned shall be calculated as of each Valuation Date based upon the average daily balance of the Deferral Account since the preceding Valuation Date and shall be credited to the Participant’s Account at that time.

 

4.2          Statement of Accounts.  The Employer shall provide each Participant, within one hundred twenty (120) days after the close of each Plan Year, a statement setting forth the Participant’s Deferral Account balance.

 

4.3          Accounting Device Only.  The Deferral Accounts are solely a device for measuring amounts to be paid under the Plan.  The Deferral Accounts are not a trust fund of any kind.  The Participants shall be general unsecured creditors of the Employer for the payment of benefits.  The benefits represent the Employer’s mere promise to pay such benefits.  The Participant’s rights are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by any of the Participant’s creditors.

 

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4.4          Determination of Accounts.  Each Participant’s Deferral Account as of each Valuation Date shall consist of the balance of the Participant’s Deferral Account as of the immediately preceding Valuation Date, plus the Participant’s elective deferred Compensation credited, any Employer matching contributions, any qualified plan make-up credits, any Employer discretionary contributions and any interest earned, minus the amount of any distributions made since the immediately preceding Valuation Date.

 

ARTICLE 5
 Plan Benefits

 

5.1          In General.  No withdrawals or payments shall be made from the Deferral Accounts except as provided in this ARTICLE 5.

 

5.2          Plan Benefit.  Upon the Participant’s Separation from Service, other than death, the Employer shall pay to the Participant the benefit described in this Section 5.2 in lieu of any other benefit under the Plan.

 

5.2.1       Amount of Benefit.  The benefit under this Section 5.2.1 is a Participant’s Deferral Account balance as of the Valuation Date coincident with or next following his or her Separation from Service.  Notwithstanding the foregoing, if the Participant’s Separation from Service date is (i) prior to the Participant’s Early Benefit Date or Normal Benefit Date and (ii) prior to his or her attaining five (5) years of total service with the Company or Employer, the amount of the Participant’s benefit under this Section 5.2.1 shall be redetermined on a retroactive basis from the date to the Participant’s first deferral and the interest rate used in determining such amount shall be the “declared interest rate” or “similar rate” in Section 1.15, provided, however, that if a Participant is prevented from serving five (5) years or from reaching his or her Normal or Early Benefit Date because of his or her Separation from Service during the first twenty-four (24) months following a Change in Control of the Company or Employer, his or her entire account will be credited with the Interest Yield as if he or she had met the minimum requirement to so qualify.

 

5.2.2       Payment of Benefit.  The Employer shall pay a Participant’s benefit following his or her Separation from Service in either one hundred-twenty (120) or one-hundred-eighty (180) substantially equal monthly installments, as elected by the Participant on his or her Distribution Election Form, commencing on the first day of the month following such Participant’s Separation from Service, unless the Participant is a Specified Employee.  If the Participant does not have a valid election in place at the time of his or her Separation from Service, the Participant’s benefit will be paid in the form of one hundred-twenty (120) substantially equal monthly installments.  The Employer shall credit interest pursuant to Section 4.1.3 on the remaining account balance during any applicable installment period.

 

5.3          Unforeseeable Emergency.  Upon the Board’s determination (following petition by a Participant) that the Participant has suffered an Unforeseeable Emergency, the Employer shall distribute to the Participant all or a portion of such Participant’s Deferral Account balance, but in no event shall the distribution be greater than is necessary to relieve the financial hardship 

 

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after taking into account additional Compensation that will be available to the Participant following the cancellation of his or her deferral election.

 

5.4          De Minimus Payment.  Notwithstanding any provision of the Plan, Election Form or Distribution Election Form, to the contrary, if a Participant’s Deferral Account has a balance, along with any other nonqualified deferred compensation that must be aggregated with this Plan pursuant to Section 409A, at the time of his or her Separation from Service that is not greater than the applicable dollar limit under Code Section 402(g)(1)(B), the Participant’s balance in his or her Deferral Account (along with that of all other plans that must be aggregated pursuant to Section 409A) shall be distributed in a single lump sum.  If the payment is to be made pursuant to this Section, the payment shall be made on or before the later of:  (i) December 31st of the calendar year in which the Participant’s Separation from Service occurs; or (ii) the 15th day of the third month following the Participant’s Separation from Service.  Upon the date of payment pursuant to this Section 5.4, Participant shall have no further interest under the Plan or any similar deferred compensation arrangements, aggregated with this Plan pursuant to Section 409A.

 

5.5          Delayed Payment Date.  The Participants’ Deferral Account balances constitute “deferred compensation” under Section 409A and may be subject to a delayed payment date as provided in this Section 5.5.  If, as of the effective date of the Participant’s Separation from Service, the Company is publicly traded and the Participant is a Specified Employee, then, to the extent required pursuant to Section 409A, payment of any portion of Plan benefits that would otherwise have been paid to the Participant during the six-month period following the Participant’s Separation from Service and which would constitute deferred compensation under Section 409A (the “Delayed Payments”) shall be delayed until the date that is six (6) months and one day following Participant’s Separation from Service or, if earlier, the date of the Participant’s death (the “Delayed Payment Date”).  As of the Delayed Payment Date, the Delayed Payments plus interest (as provided in Section 4.1.3) for the period of delay, shall be paid to the Participant in a single lump sum.  Any portion of the Plan benefit that was not otherwise due to be paid during the six-month period following the Participant’s Separation from Service shall be paid to the Participant in accordance with the payment schedule set forth under the applicable distribution provision of the Plan.

 

5.6          Transition Rule.  In a manner that is consistent with Section 409A, the Administrator may solicit new distribution elections from Participants in order for Participants to change the method or timing of distributions of all amounts subject to Section 409A under the Plan, provided such elections are solicited and properly made prior to December 31, 2008.  In the event the Administrator elects to solicit new distribution elections under this Section, the failure by a Participant to submit a complete and timely distribution election will result in the application of the most recently submitted distribution election.

 

ARTICLE 6
 Death Benefits

 

6.1          Death Prior to Commencement of Payments.  If a Participant dies prior to the commencement of payments under the Plan, the Employer shall pay to such Participant’s beneficiary the benefit described in this Section 6.1 in lieu of any other benefit under the Plan.

 

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6.1.1       Amount of Benefit.  The benefit under Section 6.1 is the greater of (i) the minimum pre-retirement benefit stated on the Participant’s Election Form and payable as provided therein, or (ii) the Participant’s Deferral Account balance as of the Valuation Date coincident with or next following the Participant’s death.

 

6.1.2       Payment of Benefit.  The Employer shall pay a Participant’s benefit following his or her death in one hundred-twenty (120) substantially equal monthly installments commencing on the first day of the month following the Participant’s death.

 

6.2          Death During Installment Payout.  If a Participant dies after the installment payments have commenced under the Plan but before receiving all such payments, the Employer shall continue to pay the remaining benefits to the Participant’s beneficiary at the same time and in the same amounts they would have been paid to the Participant, had the Participant survived.

 

ARTICLE 7
 Beneficiaries

 

7.1          Beneficiaries.  Each Participant shall designate one or more persons (who may be any one or more members of such person’s family or other persons, administrators, trusts, foundations or other entities) as the Participant’s beneficiary under the Plan.  Such designation shall be made on a form prescribed by the Administrator.  Each Participant may at any time and from time to time, change any previous beneficiary designation, without notice to or consent of any previously designated beneficiary, by amending the Participant’s previous designation on a form prescribed by the Administrator.  Designations will only be effective if signed by the Participant and accepted by the Administrator during the Participant’s lifetime.  If (i) the beneficiary does not survive the Participant (or is otherwise unavailable to receive payment); (ii) the Participant names a spouse as a beneficiary and the marriage is subsequently dissolved; or (iii) if no beneficiary is validly designated, then the amounts payable under this Plan shall be paid to the Participant’s estate.  If more than one person is the beneficiary of a deceased Participant, each such person shall receive a pro rata share of any death benefit payable unless otherwise designated on the applicable form.  If a beneficiary who is receiving benefits dies, all benefits that were payable to such beneficiary shall then be payable to the estate of that beneficiary.

 

7.2          Lost Beneficiary.

 

7.2.1       All Participants and beneficiaries shall have the obligation to keep the Administrator informed of their current address until such time as all benefits due have been paid.

 

7.2.2       If a Participant or beneficiary cannot be located by the Administrator exercising due diligence, then, in its sole discretion, the Administrator may presume that the Participant or beneficiary is deceased for purposes of the Plan and all unpaid amounts (net of due diligence expenses) owed to the Participant or beneficiary shall be paid accordingly or, if a beneficiary cannot be so located, then such amounts shall be paid to the Participants’ or the beneficiary’s estate, as applicable.  Any such presumption of death shall be final, conclusive and binding on all parties.  Notwithstanding the 

 

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foregoing, if any such beneficiary is located within five (5) years from the date of any such forfeiture, such beneficiaries shall be entitled to receive the amount previously forfeited.

 

7.3          Facility of Payment.  If a benefit is payable to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of his or her property, the Employer may pay such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person.  The Employer may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit.  Such distribution shall completely discharge the Employer from all liability with respect to such benefit.

 

ARTICLE 8
 Claims and Review Procedures

 

8.1          Presentation of Claim.  Any Participant or beneficiary of a deceased Participant (such Participant or beneficiary being referred to below as a “Claimant”) may deliver to the Administrator a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan.  If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant.  All other claims must be made within one hundred-eighty (180) days of the date on which the event that caused the claim to arise occurred.  The claim must state with particularity the determination desired by the Claimant.

 

8.2          Notification of Decision.  The Administrator shall consider a Claimant’s claim within a reasonable time, but no later than ninety (90) days, unless, within such time, the Administrator notifies the Claimant in writing that an extension is required pursuant to Labor Regulation 2560.503-1 (up to ninety (90) days).  Once a decision is made, the Administrator shall notify the Claimant in writing:

 

8.2.1       That the Claimant’s requested determination has been made, and that the claim has been allowed in full; or

 

8.2.2       That the Administrator has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a manner calculated to the understood by the Claimant:

 

(a)           the specific reason(s) for the denial of the claim, or any part of it;

 

(b)           the specific reference(s) to pertinent provisions of the Plan upon which such denial was based;

 

(c)           a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and

 

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(d)           an explanation of the claim review procedure set forth in Section 8.3 below, including Claimants right to bring a civil action under Section 502(a) of ERISA as described in Section 8.5.

 

8.3          Review of a Denied Claim.  Within sixty (60) days after receiving a notice from the Administrator that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s’ duly authorized representative) may file with the Administrator a written request for a review of the denial of the claim.  Therefore, but not later than thirty (30) days after the review procedure began, the Claimant (or the Claimant’s duly authorized representative):

 

8.3.1       may review pertinent documents;

 

8.3.2       may submit written comments or other documents; and/or

 

8.3.3       may request a hearing, which the Administrator, in its sole discretion, may grant.

 

8.4          Decision on Review.  The Administrator shall render its decision on review promptly, and not later than sixty (60) days after the filing of a written request for review of the denial, unless a hearing is held or other special circumstances require additional time, in which case the Administrator’s decision must be rendered within one hundred-twenty (120) days after such date.  Such decision must be written in a manner calculated to be understood by the Claimant, and it must contain:

 

8.4.1       specific reasons for the decision;

 

8.4.2       specific reference(s) to the  pertinent Plan provisions upon which the decision was based; and

 

8.4.3       such other matters as the Administrator deems relevant.

 

8.5          Legal Action.  A Claimant’s compliance with the foregoing provisions of this ARTICLE 8 is a mandatory prerequisite to a Claimant’s right to commence any legal action brought pursuant to Section 502(a) of ERISA with respect to any claim for benefits under this Plan.

 

ARTICLE 9
 Funding

 

9.1          Prohibition Against Funding.  Should any investment be acquired in connection with the liabilities assumed under this Plan, it is expressly understood and agreed that the Participants and beneficiaries shall not have any rights with respect to, or claim against, such assets nor shall any such purchase be construed to create a trust of any kind or a fiduciary relationship between the Employer and the Participants, their beneficiaries or any other person.  Any such assets shall be and remain a part of the general, unpledged, unrestricted assets of the Employer, subject to the claims of its general creditors.  It is the express intention of the parties hereto that this arrangement shall be unfunded for tax purposes.  Each Participant and beneficiary shall be required to look to the provisions of this Plan and to the Employer itself for 

 

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enforcement of any and all benefits due under this Plan, and to the extent any such person acquires a right to receive payment under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Employer.  The Employer shall be designated the owner and beneficiary of any investment acquired in connection with its obligation under this Plan.

 

9.2          Deposits.  Notwithstanding Section 9.1, or any other provision of this Plan to the contrary, the Employer may deposit any amounts it deems appropriate to pay any or all of the benefits under this Plan to a ‘Rabbi Trust’ as established pursuant to Treasury Department Revenue Procedures 92-64 and 92-65.

 

ARTICLE 10
 Amendment and Termination

 

10.1        Authority to Amend or Terminate.  Except as otherwise provided in this ARTICLE 10, the Board shall have the sole authority to modify, amend or terminate this Plan; provided, however, that any modification or termination of this Plan shall not reduce, without the consent of a Participant, a Participant’s right to any amounts already credited to the Participant’s Deferral Account, or lengthen the time period for a distribution from an established Deferral Account, on the day before the effective date of such modification or termination.  Following such termination, payment of such credited amounts may be made in a single sum payment if the Company so designates, only to the extent permitted under Section 409A, or as may be required under Section 409A.  Any such decision to pay in a single sum shall apply to all Participants.

 

10.2        Required Action.  Notwithstanding the preceding paragraph, to the extent permitted by Section 409A, the Company may amend or terminate this Plan at any time if, pursuant to legislative, judicial or regulatory action, continuation of the Plan would (i) cause benefits to be taxable to the Participant prior to actual receipt, or (ii) result in significant financial penalties or other significantly detrimental ramifications to the Company or Employer (other than the financial impact of paying the benefits).

 

10.3        Residual Assets.  Any funds remaining after the termination of the Plan, and satisfaction of all liabilities to Participants and others, shall be returned to the Employer.

 

ARTICLE 11
 Section 409A

 

11.1        Section 409A.  The Participant’s Deferral Account balances constitute “deferred compensation” under Section 409A and are subject to the following:

 

11.1.1     All documents and agreements, or rules and regulations created by the Company or Employer pertaining to the Participant’s Deferral Accounts, shall provide for the required procedures under Section 409A, including the timing of deferral elections and the timing and method of payment distributions.

 

11.1.2     With respect to the Participant’s Deferral Account balances, it is the intention of the Company and Employer to operate the Plan at all times in conformity with the known rules, regulations and guidance promulgated under Section 409A, and the Company and Employer shall reserve the right (including the right to delegate such right) 

 

13

 

to unilaterally amend the Plan with respect to the Deferral Account balances, without the consent of the Participant, to maintain compliance with Section 409A.  A Participant’s acceptance of any benefits under the Plan constitutes acknowledgement and consent to such rights of the Company and Employer.

 

11.1.3     To the extent that any of the terms and conditions contained herein which were modified as part of this amendment and restatement constitute an amendment or modification of the time or manner of payment under a non-qualified deferred compensation plan (as defined under Section 409A), then to the extent necessary under the transitional guidance under Internal Revenue Service Notice 2007-86, this amendment and restatement constitutes an amendment to, and a new election under, such deferred compensation plan, in order to properly modify the time or manner of payment consistent with such guidance.

 

11.2        Distribution in the Event of Income Inclusion under Section 409A.  If any portion of a Participant’s Deferral Account under this Plan is required to be included in income by the Participant prior to receipt due to a failure of this Plan to meet the requirements of Section 409A, the Participant may petition the Employer for a distribution of that portion of his or her Deferral Account balance that is required to be included in his or her income.  Upon the grant of such a petition, which grant shall not be unreasonably withheld, the Employer shall distribute to the Participant immediately available funds in an amount equal to the portion of his or her Deferral Account balance required to be included in income as a result of the failure of the Plan to meet the requirements of Section 409A, which amount shall not exceed the Participant’s unpaid vested Deferral Account balance under the Plan.  If the petition is granted, such distribution shall be made within ninety (90) days of the date when the Participant’s petition is granted.  Such a distribution shall affect and reduce the Participant’s benefits to be paid under this Plan.

 

ARTICLE 12
 Miscellaneous

 

12.1        Administration.  The Administrator shall have powers which are necessary to administer the Plan, including but not limited to:

 

12.1.1     interpreting the provisions of the Plan;

 

12.1.2     establishing and revising the method of accounting for the Plan;

 

12.1.3     maintaining a record of benefit payments; and

 

12.1.4     establishing rules and prescribing any forms necessary or desirable to administer the Plan.

 

The Administrator may delegate to others certain ministerial aspects of the management and operation of the Plan, including the employment of advisors and the delegation of ministerial duties to qualified individuals and may, from time to time, consult with legal counsel who may be counsel to the Company.

 

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The decision or action of the Administrator with respect to any question arising out of or in connection with the administration, interpretation, and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Plan.

 

12.2        Status of Plan.  The Plan is intended to be a plan that is: (a) not qualified within the meaning of Code Section 401(a); (b) “unfunded and is maintained by the Company or Employer primarily for the purpose of providing deferred compensation for a select group of management and highly compensated employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1); and compliant in all respects with Section 409A.  The Plan shall be administered and interpreted to the extent possible in a manner consistent with that intent.

 

12.3        No Assignment.  Benefits or payments under this Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of the Participant or the Participant’s beneficiary, whether voluntary or involuntary, and any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber, attach or garnish the same shall not be valid, nor shall any such benefit or payment be in any way liable for or subject to the debts, contracts, liabilities, engagement or torts of any Participant or beneficiary, or any other person entitled to such benefit or payment pursuant to the terms of this Plan, except to such extent as may be required by law.  If any Participant or beneficiary or any other person entitled to a benefit or payment pursuant to the terms of this Plan becomes bankrupt or attempts to alienate, sell, transfer, assign, pledge, encumber, attach or garnish any benefit or payment under this Plan, in whole or in part, or if any attempt is made to subject any such benefit or payment, in whole or in part, to the debts, contracts, liabilities, engagements or torts of the Participant or beneficiary or any other person entitled to any such benefit or payment pursuant to the terms of this Plan, then such benefit or payment, in the discretion of the Administrator, shall cease and terminate with respect to such Participant or beneficiary, or any other such person.

 

12.4        No Rights to Remain a Participant.  Participation in this Plan shall not be construed to confer upon any Participant the legal right to be retained as a Participant, or give a Participant or beneficiary, or any other person, any right to any payment whatsoever, except to the extent of the benefits provided for hereunder.  Each Participant shall remain subject to removal as a Participant to the same extent as if this Plan had never been adopted or the Participant was not selected to participate.

 

12.5        No Effect on Employment Rights.  Participation in this Plan is not a contract for employment.  It does not give the Participant the right to remain an employee of the Company or Employer, nor does it interfere with the shareholders’ rights to replace the Participant.  It also does not require the Participant to remain an employee nor interfere with the Participant’s right to terminate employment at any time.

 

12.6        Inurement.  The Plan shall be binding upon and shall inure to the benefit of the Company, the Employer, its successors and assigns, and the Participant, the Participant’s successors, heirs, executors, administrators, and beneficiaries, and the Company shall require any acquirer in a Change in Control to expressly assume this Plan.

 

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12.7        Tax Withholding.  When payments are made under the Plan, the Employer shall have the right to deduct from each payment made under the Plan, to the maximum extent permissible under Section 409A, or any other compensation payable to a Participant or beneficiary, any required withholding taxes respecting such payments.  Prior to the date a Participant’s Deferral Account becomes payable, the Employer may deduct from the Participant’s Deferral Account, or from other compensation payable to the Participant, any required federal employment taxes imposes under Code Sections 3101, 3121(a) and 3121(v)(2) and any taxes required under any state, local and foreign laws, to the maximum extent permissible under Section 409A, in each case only to the extent such taxes are attributable to the Participant’s participation in the Plan.

 

12.8        Entire Agreement.  This Plan, along with the Participant’s Election Form and Distribution Election Form, constitute the entire agreement between the Company, the Employer and the Participant as to the subject matter hereof.  No rights are granted to the employee by virtue of this Plan other than those specifically set forth herein or in his or her Election Form or Distribution Election Form.

 

12.9        No Liability.  No liability shall attach to or be incurred by any officer or director of the Company or any Employer, or any Administrator under or by reason of the terms, conditions and provisions contained in this Plan, or for the acts or decisions taken or made thereunder or in connection therewith; and as a condition precedent to the establishment of this Plan or the receipt of benefits thereunder, or both, such liability, if any, is expressly waived and released by each Participant and by any and all persons claiming under or through any Participant or any other person.  Such waiver and release shall be conclusively evidenced by any act or participation in or the acceptance of benefits or the making of any election under this Plan.

 

12.10      Reorganization.  The Employer shall not merge or consolidate into or with another company, or reorganize, or sell substantially all of its assets to another company, firm, or person unless such succeeding or continuing company, firm, or person agrees to assume and discharge the obligations of the Employer under the Plan.

 

12.11      Named Fiduciary.  For purposes of ERISA, if applicable, the Company shall be the named fiduciary and plan administrator under the Plan.  The named fiduciary may delegate to others certain aspects of the management and operation responsibilities of the plan including the employment of advisors and the delegation of ministerial duties to qualified individuals.

 

12.12      Expenses.  All expenses incurred in the administration of the Plan, whether incurred by the Employer or the Plan, shall be paid by the Employer or the Company.

 

12.13      Insolvency.  Should the Company be considered insolvent, the Company, through its Board and chief executive officer, shall give immediate written notice of such to the Administrator of the Plan, if the Company is not the Administrator.  Upon receipt of such notice, the Employer shall cease to make any payments to Participants who were Participants or their beneficiaries and shall hold any and all assets attributable to the Employer for the benefit of the general creditors of the Employer.

 

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12.14      Company Determinations.  Any determinations, actions or decisions of the Company (including but not limited to, Plan amendments and Plan termination) shall be made by the Board or a properly delegated committee thereof in accordance with its established procedures.

 

12.15      Interpretation.  The provisions of this Plan shall be interpreted consistently with Section 409A, and to the extent inconsistent with such authority, shall be deemed to be modified to the extent necessary to make such provisions consistent with such authority.  In addition, all questions of interpretation, construction or application arising under or concerning the terms of this Plan shall be decided by the Administrator, in its sole and final discretion, whose decision shall be final, binding and conclusive upon all persons.

 

12.16      Severability and Interpretation of Provisions.  In the event that any of the provisions of this Plan or portion hereof, are held to be inoperative or invalid by any court of competent jurisdiction, or in the event that any legislation adopted by any governmental body having jurisdiction over the Company or Employer would be retroactively applied to invalidate this Plan or any provision hereof or cause the benefits hereunder to be taxable, then: (1) insofar as is reasonable, effect will be given to the intent manifested in the provisions held invalid or inoperative, and (2) the validity and enforceability of the remaining provisions will not be affected thereby.  In the event that the intent of any provision shall need to be construed in a manner to avoid taxability, such construction shall be made by the plan administrator in a manner that would manifest to the maximum extent possible the original meaning of such provisions.

 

12.17      Governing Law.  This Plan shall be governed by, construed and administered in accordance with the laws of the State of Illinois without regard to the conflict of laws provisions of any jurisdiction, except to the extent preempted by the laws of the United States of America.

 

12.18      Headings.  The Article headings contained herein are inserted only as a matter of convenience and for reference and in no way define, limit, enlarge or describe the scope or intent of this Plan, nor in any way shall they affect this Plan or the construction of any provision thereof.

 

12.19      Terms.  Capitalized terms shall have meanings as defined herein.  Singular nouns shall be read as plural, masculine pronouns shall be read as feminine, and vice versa, as appropriate.

 

[Signature Page to Follow]

 

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IN WITNESS WHEREOF, First Busey Corporation, by its appropriate officer duly authorized, has caused the Plan to be executed and adopted as of the 16 day of December, 2008.

 

 

FIRST BUSEY CORPORATION

 

 

	
By
    	
/s/   VAN A. DUKEMAN
    	
 
    
	
 
    	
Chief Executive Officer
    	
 
    

 

18

 

Exhibit To

First Busey Corporation

Executive Deferred Compensation Plan

Election Form 
  (For plan years beginning on or after January 1, 20      )

 

	
EMPLOYER:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
GENERAL INFORMATION
    	
 
    
	
 
    	
 
    	
 
    
	
EMPLOYEE’S NAME
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
(Last)
    	
 
    	
(First)
    	
 
    	
(M.I.)
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
HOME ADDRESS
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
CITY
    	
 
    	
 
    	
STATE
    	
 
    	
 
    	
ZIP
    	
 
    	
 
    
																		

 

SOCIAL SECURITY NUMBER            -      -              BIRTH DATE        /      /19

 

COMPENSATION DEFERRAL AGREEMENT

 

I agree that my Compensation earned during a plan year beginning on or after January 1, 20      , will be reduced by the amount or percentage I have indicated below, and that these dollars will be contributed to my Deferral Account.  This agreement will continue to be effective for subsequent plan years while I am employed unless I change or terminate it.  I will be only an unsecured creditor of the Employer as to amounts deferred, and may lose part or all of the deferred amount if the Company becomes insolvent.  I acknowledge that I have read this entire agreement, understand it and agree to its terms.

 

Select one of the following:

 

o I elect to defer                % of my salary paid during the plan year.

 

o I elect to defer                % of my bonus for the plan year.

 

o I decline participation.

 

NOTE:  The total amount of deferrals to this Plan cannot exceed         % of compensation in a Plan Year.

 

Check if applicable:

 

o The above is a change from my prior elections.

 

I may change or revoke this election by filing a new election with the Administrator in this format, but only for compensation earned in the tax year following the year in which my election is received by the Administrator.

 

DESIGNATION OF BENEFICIARIES

 

I designate the following as the beneficiary of any and all benefits under the terms of the First Busey Corporation Executive Deferred Compensation Plan which may be payable at the time my death:

 

[Add additional sheets as necessary]

 

Primary

 

	
Name
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Percentage              %   Relation
    
	
 
    	
(Last)
    	
 
    	
(First)
    	
 
    	
(M.I.)
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Percentage              %   Relation
    
	
 
    	
(Last)
    	
 
    	
(First)
    	
 
    	
(M.I.)
    	
 
    	
 
    

 

Contingent

 

	
Name
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Percentage              %   Relation
    
	
 
    	
(Last)
    	
 
    	
(First)
    	
 
    	
(M.I.)
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Percentage              %   Relation
    
	
 
    	
(Last)
    	
 
    	
(First)
    	
 
    	
(M.I.)
    	
 
    	
 
    

 

 

Note:  To name a trust as beneficiary, please provide the name of the trustee(s) and the exact name and date of the trust agreement.

 

I understand: (i) that I may change these beneficiary designations by filing a new written designation with the Administrator; and (ii) that the designations will be automatically revoked if the beneficiary predeceases me, or, if I have named my spouse as beneficiary and our marriage is subsequently dissolved.

 

Minimum Preretirement Death Benefit

 

The minimum pre-retirement death benefit payable to my designated beneficiary shall be $                     payable in 120 substantially equal monthly installments.

 

SIGNATURES

 

	
Participant
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Employer
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Date
    	
 
    
	
Its:
    	
 
    	
 
    	
 
    	
 
    

 

 

Exhibit To

First Busey Corporation

Executive Deferred Compensation Plan

Distribution Election Form

 

	
EMPLOYER:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
GENERAL INFORMATION
    	
 
    
	
 
    	
 
    	
 
    
	
EMPLOYEE’S NAME
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
(Last)
    	
 
    	
(First)
    	
 
    	
(M.I.)
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
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SOCIAL SECURITY NUMBER            -      -              BIRTH DATE        /      /19

 

FORM OF PAYMENT

 

I hereby elect to receive my payments as follows:

 

o 120 monthly installments.

 

o 180 monthly installments.

 

SIGNATURES

 

	
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Its:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00244-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00244-of-00352.parquet"}]]