Document:

exhibit41.htm

 

  

Exhibit 4.1

FIRST MIDWEST BANCORP, INC.

INDEMNIFICATION AGREEMENT

THIS AGREEMENT is entered into, effective as of April 3, 2012, between FIRST MIDWEST BANCORP, INC., a Delaware corporation (the “Company”), and  ____ (“Indemnitee”).

 

WHEREAS, it is essential to the Company and its Subsidiaries (as defined below) to retain and attract as directors, officers and employees the most capable persons available;

 

WHEREAS, Indemnitee is a director, officer, and/or employee of the Company or one or more of its Subsidiaries;

 

WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other claims currently being asserted against directors, officers and employees of corporations and banks; and

 

WHEREAS, in recognition of Indemnitee’s need for substantial protection against personal liability in order to enhance Indemnitee’s continued and effective service to the Company and/or its Subsidiaries, and in order to induce Indemnitee to provide services to the Company and/or its Subsidiaries as a director, officer and/or employee, the Company wishes to provide in this Agreement for the indemnification of and the advancing of Expenses (as defined below) to Indemnitee to the fullest extent (whether partial or complete) permitted by law and as set forth in this Agreement, and, to the extent insurance is maintained which includes Indemnitee as a covered party, for the coverage of Indemnitee under the Company’s directors’ and officers’ liability insurance policies.

 

NOW, THEREFORE, in consideration of the above premises and of Indemnitee’s continuing to serve the Company directly or, at its request, one or more of its Subsidiaries or an other enterprise (as defined below), and intending to be legally bound hereby, the parties agree as follows:

 

1. Certain Definitions.  For purposes of this Agreement, the following terms shall have the meanings set forth in this Section 1 (such meanings to be equally applicable in both the singular and plural forms of the term defined, unless the context requires otherwise).

 

(a) “Board” means the Board of Directors of the Company.

 

(b) “Business Day” means any day other than a day when banks are required or authorized to be closed for business in the State of Illinois.

 

(c) “Change in Control of the Company” means (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the “Beneficial Owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing twenty-five percent (25%) or more of the total voting power 

 

  

  

  

represented by the Company’s then outstanding Voting Securities, (ii) during any period of two consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in Sections 1(g)(i), 1(g)(iii) or 1(g)(iv)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then 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 thereof, (iii) the effective date of a merger or consolidation of the Company with any other Person, other than a merger or consolidation that would result in the Voting Securities of the Company 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 the Company, or such surviving entity outstanding immediately after such merger or consolidation, or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company (in one transaction or a series of transactions) of all or substantially all of the Company’s assets.

 

(d) “Company Business Combination” has the meaning set forth in Section 15 hereof.

 

(e) “Delaware Court” has the meaning set forth in Section 17 hereof.

 

(f) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

 

(g) “Expense Advance” has the meaning set forth in Section 2(c) hereof.

 

(h) “Expenses” means any expense, including without limitation, attorneys’ fees, retainers, court costs, transcript costs, fees and expenses of experts, including accountants and other advisors, travel expenses, duplicating costs, postage, delivery service fees, filing fees and all other disbursements or expenses of the types typically paid or incurred in connection with investigating, defending, being a witness in, or participating in (including on appeal), or preparing for any of the foregoing in, any Proceeding relating to any Indemnifiable Event, and any expenses of establishing a right to indemnification under Sections 2, 4 and/or 5 of this Agreement or any other right hereunder, in each case to the extent actually and reasonably incurred.

 

(i) “Indemnifiable Event” means, to the fullest extent permitted by law, any event or occurrence that takes place either prior to or after the execution of this Agreement, related to the fact that Indemnitee is or was a director, officer, employee or agent of the Company or any Subsidiary, is or was serving at the request of the Company or any Subsidiary as a director, officer, employee, trustee, agent, limited partner, member or fiduciary of another Person, including any other enterprise, or was a director, officer, employee or agent of a foreign or domestic corporation that was a predecessor corporation of the Company or any corporate Subsidiary or a foreign or domestic financial institution that was a predecessor of any Bank or of 

 

 

  

  

  

an other enterprise at the request of such predecessor corporation or financial institution, or related to anything done or not done by Indemnitee in any such capacity, whether or not the basis of the Proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent of the Company, any Bank or other Subsidiary, as described above.

 

(j) “Independent Counsel” means the legal counsel appointed in connection with Section 3.

 

(k) “other enterprise” shall include employee benefit plans; reference to “fines” shall include any excise tax assessed with respect to any employee benefit plan; reference to “serving at the request of the Company or a Subsidiary” shall include any service as a director, officer, employee or agent of the Company or any Subsidiary which imposes duties on, or involves services by, such director, officer, employee or agent with respect to any employee benefit plan, its participants or beneficiaries.

 

(l) “Person” means any individual or bank, corporation, partnership, joint venture, limited liability company, limited partnership, employee benefit plan, trust or other entity or enterprise, or any foreign, federal, state or local court, governmental agency or other body.

 

(m) “Prior Agreement” has the meaning set forth in Section 15 hereof.

 

(n) “Proceeding” means any threatened, pending or completed action, suit, arbitration, alternative dispute mechanism, inquiry, administrative or legislative hearing, investigation (formal or informal) or any other actual, threatened or completed proceeding, including any and all appeals, whether brought in the right of the Company or any other Person, whether civil, criminal, administrative, investigative or other, and in each case whether or not commenced prior to the date of this Agreement, that relates to an Indemnifiable Event, including without limitation any Bank Proceeding.

 

(o) “Reviewing Party” means the Person appointed in accordance with Section 3.

 

(p) “Subsidiary” means any Person (other than an individual) fifty percent (50%) or more of whose Voting Securities or equity interests are owned by the Company, directly or indirectly, at any time while Indemnitee is or was serving as a director, officer, employee and/or agent of such Person.

 

(q) “Voting Securities” means any securities of the Company or a Subsidiary that vote generally in the election of directors of the Company or such Subsidiary, respectively.

 

2. Agreement to Indemnify.

 

(a) General Agreement.  In the event Indemnitee was, is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a Proceeding by reason of (or arising in part out of) an Indemnifiable Event, the Company shall indemnify Indemnitee and hold Indemnitee harmless from and against any and 

 

 

  

  

 

all Expenses, liabilities or losses, judgments, fines, ERISA excise taxes and penalties, amounts paid or to be paid in settlement, any interest, assessments or other charges imposed thereon, and any federal, state, local or foreign taxes imposed as a result of the actual or deemed receipt of any payments under this Agreement, to the fullest extent permitted by applicable law, as the same exists or may hereafter be amended or interpreted (but in the case of any such amendment or interpretation, only to the extent that such amendment or interpretation permits the Company to provide broader indemnification rights than were permitted prior thereto).  The parties hereto intend that this Agreement shall provide for indemnification in excess of that expressly permitted by statute.  If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of amounts described in this Section 2(a), but not however, all of such amounts, the Company shall nonetheless indemnity Indemnitee for the portion thereof to which Indemnitee is entitled.

 

(b) Limitation on Obligation to Indemnity.  Notwithstanding anything in this Agreement to the contrary, Indemnitee shall not be entitled to indemnification or advancement of Expenses pursuant to this Agreement in connection with any Proceeding initiated by Indemnitee against the Company or any Subsidiary or any director or officer of the Company or any Subsidiary unless (i) the Company has joined in or the Board has consented to the initiation of such Proceeding, (ii) the Proceeding is one to enforce indemnification rights under Section 5 or contribution rights under Section 7, or (iii) the Proceeding is instituted after a Change in Control of the Company.

 

(c) Expense Advances.  If so requested by Indemnitee, the Company shall advance any and all Expenses to Indemnitee (an “Expense Advance”) within ten (10) Business Days after the receipt by the Company of a statement or statements from Indemnitee requesting such Expense Advance or Expense Advances, whether prior to or after final disposition of any Proceeding.  Expense Advances shall be made without regard to Indemnitee’s ability to repay the Expense Advances and without regard to Indemnitee’s ultimate entitlement to indemnification under the provisions of this Agreement. Indemnitee shall, and hereby undertakes to, repay the Expense Advance if and to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company.  Indemnitee shall make any such repayment promptly following written notice of any such determination.  Expense Advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement.  If Indemnitee has commenced legal proceedings in a court of competent jurisdiction in the State of Delaware to secure a determination that Indemnitee should be indemnified under applicable law, as provided in Section 4, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under this Agreement or applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or have lapsed).  Indemnitee’s obligation to reimburse the Company for Expense Advances shall be unsecured and no interest shall be charged thereon.

 

(d) Mandatory Indemnification.  Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful, in whole or in part, on the merits in defense of any Proceeding relating to an Indemnifiable Event or in defense of any issue or matter therein, Indemnitee shall be indemnified against all Expenses incurred in connection 

 

 

  

  

  

therewith to the fullest extent permitted by law.  If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter.

 

3. Reviewing Party.

 

        (a) Prior to a Change in Control.  Prior to a Change in Control of the Company, the Person (the “Reviewing Party”) who shall determine whether Indemnitee is entitled to indemnification in the first instance shall be (i) the Board acting by a majority vote of Disinterested Directors, whether or not such majority constitutes a quorum of the Board; (ii) a committee of Disinterested Directors designated by a majority vote of such directors, whether or not such majority constitutes a quorum; (iii) if there are no Disinterested Directors, or if the Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (iv) if so directed by the Board, by the stockholders of the Company.  If the Independent Counsel is the Reviewing Party, the Company shall seek legal advice only from Independent Counsel selected by the Company and approved by Indemnitee (which approval shall not be unreasonably withheld or delayed), and who is not presently and has not otherwise performed services for the Company, the Subsidiary or Indemnitee (other than in connection with indemnification matters) within three (3) years prior to the date of selection of such Independent  Counsel.  The Independent Counsel shall not include any Person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing any of the Company, such Subsidiary or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.  Such Independent Counsel, among other things, shall render its written opinion to the Company and to Indemnitee, as to whether and to what extent Indemnitee should be permitted to be indemnified under applicable law.  In any event, Indemnitee shall be entitled to a copy of such written opinion.  The Company agrees to pay the reasonable fees of the Independent Counsel and to indemnify fully such Independent Counsel against any and all expenses (including attorneys’ fees), claims, liabilities, losses and damages arising out of or relating to this Agreement or the engagement of such Independent Counsel hereto.

 

(b) After a Change in Control. After a Change in Control of the Company, the Reviewing Party shall be the Independent Counsel referred to below.  With respect to all matters arising from a Change in Control of the Company(other than a Change in Control of the Company approved by a majority of the directors on the Board who were directors immediately prior to such Change in Control of the Company) concerning the rights of Indemnitee to indemnity payments and Expense Advances under this Agreement, any other agreement or under applicable law or the Company’s certificate of incorporation or by-laws or a Subsidiary’s constituent documents now or hereafter in effect relating to indemnification for Indemnifiable Events, the Company shall seek legal advice only from Independent Counsel selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld or delayed), and who is not presently and has not otherwise performed services for the Company, such Subsidiary or Indemnitee (other than in connection with indemnification matters) within three (3) years prior to the date of selection of such Independent Counsel.  The Independent Counsel shall not include any Person who, under the applicable standards of 

 

 

  

  

  

professional conduct then prevailing, would have a conflict of interest in representing any of the Company, such Subsidiary or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.  Such Independent Counsel, among other things, shall render its written opinion to the Company andto Indemnitee, as to whether and to what extent Indemnitee should be permitted to be indemnified under applicable law.  In any event, Indemnitee shall be entitled to a copy of such written opinion.  The Company agrees to pay the reasonable fees of the Independent Counsel and to indemnify fully such Independent Counsel against any and all expenses (including attorneys’ fees), claims, liabilities, losses, and damages arising out of or relating to this Agreement or the engagement of such Independent Counsel pursuant hereto.

 

(c) Petition to Appoint Independent Counsel. If, within twenty (20) calendar days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 4(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection which shall have been made by Indemnitee to the Company’s selection of Independent Counsel or by Indemnitee to the Company’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a Person selected by the court or by such other Person as the court shall designate, and the Person with respect to whom all objections are so resolved or the Person so appointed shall act as Independent Counsel under Section 3(a) or (b) hereof, as the case may be.  The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 3(a) or (b) hereof, as the case may be, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 3(c), regardless of the manner in which such Independent Counsel was selected or appointed.

 

(d) Good Faith. Any Independent Counsel, member of the Board or stockholder of the Company shall act reasonably and in good faith in making a determination regarding Indemnitee’s entitlement to indemnification under this Agreement.  Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the Person or Persons making such determination shall be borne by the Company irrespective of the determination as to Indemnitee’s entitlement to indemnification), and the Company hereby indemnifies Indemnitee and agrees to hold Indemnitee harmless therefrom.

 

(e) Settlement or Other Disposition. The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty.  In the event that any Proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such Proceeding with or without payment of money or other consideration), it shall be presumed that Indemnitee has been successful on the merits or otherwise in such Proceeding.  Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

 

(f) Judgment. The termination of any Proceeding, or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself 

 

 

  

  

  

adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or any Subsidiary or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.

 

(g) Validity. The Company and each Subsidiary shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 3 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and the Company shall, and shall cause each Subsidiary to, stipulate in any such court that the Company and such Subsidiary is bound by all the provisions of this Agreement.

 

(h) Final Determination. Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

 

4. Indemnification Process and Appeal.

 

(a) Indemnification Procedure.  Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or an Expense Advance hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof.  The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding.  The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay in so notifying the Company shall not constitute a waiver by Indemnitee of any rights under this Agreement.  The Corporate Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.  Upon written request by Indemnitee for indemnification pursuant to this Section 4(a), a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto, shall be made by the Reviewing Party in accordance with Section 3(a) or 3(b), as the case may be.

 

(b) Suit to Enforce Rights.  If (i) no determination of entitlement to indemnification shall have been made within sixty (60) days after Indemnitee has made a demand in accordance with Section 4(a), (ii) payment of indemnification pursuant to Section 2(a) is not made within ten (10)  Business Days after a determination has been made that Indemnitee is entitled to indemnification, (iii) the Reviewing Party determines pursuant to Section 4(a) that Indemnitee is not entitled to indemnification under this Agreement, (iv) payment of indemnification pursuant to Section 2(d) is not made within ten (10) Business Days after a written request therefor, or (v) Indemnitee has not received an Expense Advance within Ten (10) Business Days after making such a request in accordance with Section 2(c), then Indemnitee shall have the right to enforce his indemnification and Expense Advance rights under this Agreement by commencing litigation in any court of competent jurisdiction in the State of Delaware seeking an initial determination by the court or challenging any determination by the 

 

 

  

  

Reviewing Party or any aspect thereof.  The Company hereby consents to service of process and to appear in any such proceeding.  Any determination by the Reviewing Party not challenged by Indemnitee on or before the first anniversary of the date of the Reviewing Party’s determination shall be binding on the Company and Indemnitee.  The remedy provided for in this Section 4 shall be in addition to any other right and remedies available to Indemnitee in law or equity.

 

(c) Defense to Indemnification, Burden of Proof and Presumptions.  To the maximum extent permitted by applicable law in making a determination with respect to entitlement to indemnification (or an Expense Advance) under this Agreement:

 

(i) the Reviewing Party shall presume that Indemnitee is entitled to indemnification (or an Expense Advance) under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 4(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by the Reviewing Party of any determination contrary to that presumption;

 

(ii) it shall be a defense to any action brought by Indemnitee against the Company to enforce this Agreement (other than an action brought to enforce a claim for Expenses incurred in defending a Proceeding in advance of its final disposition where the required undertaking has been tendered to the Company) that it is not permissible under applicable law for the Company to indemnify Indemnitee for the Indemnifiable Event asserted by Indemnitee;

 

(iii) in connection with any action brought pursuant to Section 4(c)(ii) as to whether Indemnitee is entitled to be indemnified hereunder, the burden of proving Indemnitee is not entitled to indemnification under this Agreement shall be on the Company;

 

(iv) neither the failure of the Reviewing Party or the Company (including its Board, Independent Counsel, or its stockholders) to have made a determination prior to the commencement of such action by Indemnitee that indemnification of the claimant is proper under the circumstances because Indemnitee has met the standard of conduct set forth in applicable law, nor an actual determination by the Reviewing Party or Company (including its Board, Independent Counsel or its stockholders) that Indemnitee had not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has met the applicable standard of conduct;

 

(v) for purposes of this Agreement, the termination of any claim, action, suit or proceeding, by judgment, order, settlement (whether with or without court approval), conviction, or upon a plea of nolo contendere or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law;

 

 

  

  

  

(vi) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Company or any Subsidiary, including financial statements (other than any such records, books or financial statements for whose preparation Indemnitee was primarily responsible), or on information supplied to Indemnitee by the officers of the Company or any Subsidiary in the course of their duties, or on the advice of legal counsel for the Company or any Subsidiary or on information or records given or reports made to the Company or any Subsidiary by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Company or any Subsidiary.  In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Company or any Subsidiary shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.  Whether or not the foregoing provisions of this Section 4(c)(vi) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and each Subsidiary.  Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

 

5. Indemnification for Expenses Incurred in Enforcing Rights.  Except to the extent prohibited by Section 14 hereof, the Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall advance such Expenses to Indemnitee on such terms and conditions as the Board deems appropriate, that are incurred by Indemnitee in connection with any claim asserted against or action brought by Indemnitee for:

 

(a) enforcement of this Agreement;

 

(b) indemnification of Expenses or Expense Advances by the Company under this Agreement or any other agreement or under applicable law or the Company’s certificate of incorporation or by-laws or a Subsidiary’s constituent documents now or hereafter in effect relating to indemnification for Indemnifiable Events; and/or

 

(c) recovery under directors’ and officers’ liability insurance policies maintained by the Company.

 

6. Defense of Proceeding.

 

(a) Defense.  With respect to any Proceeding as to which Indemnitee notifies the Company of the commencement thereof, the Company or any Subsidiary designated by the Company and that has legal standing to participate in such Proceeding will be entitled to participate in the Proceeding at its own expense and except as otherwise provided below, to the extent the Company or such Subsidiary so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee.  After notice from the Company or such Subsidiary to Indemnitee of its election to assume the defense of any Proceeding, the Company will not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with the defense of such Proceeding other than reasonable costs of investigation or as otherwise provided below.  Indemnitee shall have the right to employ Indemnitee’s own counsel in such Proceeding, but all Expenses related thereto 

 

 

  

  

  

incurred after notice from the Company or such Subsidiary of its assumption of the defense shall be at Indemnitee’s expense unless:  (i) the employment of counsel by Indemnitee has been authorized by the Company or such Subsidiary, (ii) Indemnitee has reasonably determined that there may be a conflict of interest between Indemnitee and the Company or such Subsidiary in the defense of the Proceeding, (iii) after a Change in Control of the Company, or (iv) neither the Company nor such Subsidiary shall within sixty (60) calendar days (or such shorter period of time as may be necessary to preserve any rights or defenses) in fact have employed counsel to assume the defense of such Proceeding, in each of which cases in clauses (i) through (iv) all Expenses of the Proceeding shall be borne by the Company; and (v) if the Company or such Subsidiary has employed counsel to represent Indemnitee and other current and former directors, officers and employees of the Company or such Subsidiary in the defense of a Proceeding, and a majority of such persons, including Indemnitee, reasonably object to such counsel selected by the Company or such Subsidiary pursuant to this Section 6(a), then such persons, including Indemnitee, shall be permitted to employ one (1) additional counsel of their choice and the reasonable fees and expenses of such counsel shall be at the expense of the Company; provided, however, that such counsel shall be chosen from amongst the list of counsel, if applicable, approved by any company with which the Company or such Subsidiary obtains or maintains directors’ and officers’ liability insurance, if required by the terms of such insurance.  In the event separate counsel is retained by an Indemnitee pursuant to this Section 6(a), the Company shall and shall cause such Subsidiary, if applicable, to cooperate fully with Indemnitee with respect to the defense of the Proceeding, including making documents, witnesses and other reasonable information related to the defense available to Indemnitee and such separate counsel pursuant to joint-defense agreements or confidentiality agreements, as appropriate.  Neither the Company nor such Subsidiary shall be entitled to assume the defense of any Proceeding brought by or on behalf of the Company or such Subsidiary, as to which Indemnitee shall have made the determination provided for in clause (ii) above or as to which the Indemnitee elects to assume the defense after the occurrence of either of the events described in clause (iii) above.

 

(b) Settlement of Claims.  The Company shall not be liable to indemnify Indemnitee under this Agreement or otherwise for any amounts paid in settlement of any Proceeding effected without the Company’s written consent; provided, however, that if a Change in Control of the Company has occurred, the Company shall be liable for indemnification of Indemnitee for amounts paid in settlement if the Independent Counsel has approved the settlement.  The Company shall not and shall not permit any Subsidiary to settle any Proceeding in any manner that would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent.  The Company shall not and shall not permit any Subsidiary, and Indemnitee shall not unreasonably withhold its consent, to any proposed settlement.  The Company shall not be liable to indemnify Indemnitee under this Agreement with regard to any judicial award in a Proceeding to the extent Indemnitee did not give the Company or a Subsidiary a reasonable and timely opportunity, at the Company’s or such Subsidiary’s expense, to participate in the defense of such Proceeding; provided, however, the Company’s liability hereunder to Indemnitee shall not be excused if participation in the Proceeding by the Company or such Subsidiary was barred by this Agreement or if the Company or any Subsidiary elected to undertake the defense of such Proceeding and subsequently failed to pursue such defense diligently and in good faith.

 

7. Contribution.

 

 

  

  

  

(a) Whether or not the indemnification provided in Section 2 hereof is available in respect of any Proceeding in which the Company or any Subsidiary is jointly liable with Indemnitee (or would be if joined in such Proceeding), to the fullest extent permitted by law, the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such Proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes, and shall cause such Subsidiary to waive and relinquish, any right of contribution it may have against Indemnitee.  The Company shall not, and shall not permit any Subsidiary to, enter into any settlement of any Proceeding in which the Company or a Subsidiary is jointly liable with Indemnitee (or would be if joined in such Proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee in such Proceeding to the fullest extent permitted by law.

 

(b) Without diminishing or impairing the obligations of the Company set forth in Section 7(a), if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any Proceeding in which the Company or a Subsidiary is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount of Expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company or any Subsidiary, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which such Proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company, such Subsidiary and all officers, directors or employees of the Company or such Subsidiary other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such Expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable law may require to be considered.  The relative fault of the Company or such Subsidiary and all officers, directors or employees of the Company or such Subsidiary, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.

 

(c) To the fullest extent permitted by law, the Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company or any Subsidiary, other than Indemnitee, who may be jointly liable with Indemnitee.

 

(d) To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any Proceeding, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order 

 

 

  

  

  

to reflect (i) the relative benefits received by the Company or any Subsidiary and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company or any Subsidiary (and their respective directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

 

8. Non-Exclusivity.  The rights of Indemnitee hereunder shall be in addition to any other rights Indemnitee may have under the laws of the State of Delaware, the Illinois Banking Act, the Company’s certificate of incorporation and by-laws, a Subsidiary’s constituent documents, applicable law or otherwise.  To the extent that a change in applicable law (whether by statute or judicial decision) permits greater indemnification by agreement than would be afforded currently under the Company’s certificate of incorporation, by-laws, applicable law or this Agreement, it is the intent of the parties that Indemnitee enjoy by this Agreement the greater benefits so afforded by such change.

 

       9. Liability Insurance.  The Company shall use its best efforts (a) to continue to maintain, and to cause its Subsidiaries to maintain, in effect directors’ and officers’ insurance policies and fiduciary liability insurance policies (collectively, “D&O Insurance Policies”) with terms, conditions, retentions and limits of liability that are at least as favorable as those contained in the Company’s and any Subsidiary’s D&O Insurance Policies as in effect as of the date hereof (D&O Insurance Policies containing such terms conditions, retentions and limits of liability, referred to herein as “Comparable D&O Insurance Policies”), and, for so long as Indemnitee serves as a director, officer or employee of the Company or any Subsidiary or other enterprise and for a period of six (6) years thereafter, to cause Indemnitee to be covered under such Comparable D&O Insurance Policies in accordance with their respective terms, and (b) for a period of not less than six (6) years following the occurrence of (i) a Change in Control of the Company or (ii) the Company ceasing to operate its business as a going concern, to maintain in effect Comparable D&O Insurance Policies, and, until the earlier of (x) such time as the Company is no longer required to maintain such Comparable D&O Insurance Policies pursuant to this clause (b) or (y) the sixth (6th) anniversary of Indemnitee ceasing to serve as a director, officer or employee of the Company or any Subsidiary or other enterprise, to cause Indemnitee to be covered under such Comparable D&O Insurance Policies in accordance with their respective terms.  In the event the Company or a Subsidiary, at any time it is required to maintain Comparable D&O Insurance Policies pursuant to the foregoing sentence, is not able to obtain Comparable D&O Insurance Policies, the Company shall be obligated to maintain and cause the Subsidiary to maintain D&O Insurance Policies with the best coverage then available for the time periods provided in, and otherwise in accordance with the terms of, the foregoing sentence. The Company and the Indemnitee shall cooperate fully to permit Indemnitee to purchase coverage regarding risks not covered by the D&O Insurance Policies or restricted by regulatory authorities or otherwise.

 

10. Period of Limitations.  No legal action shall be brought and no cause of action shall be asserted by or on behalf of the Company or any affiliate of the Company, including any Subsidiary, against Indemnitee, Indemnitee’s spouse, heirs, executors, or personal or legal representatives after the expiration of two (2) years from the date of accrual of such cause of action, or such longer period as may be required by federal or state law under the circumstances.  Any claim or cause of action of the Company or its affiliate shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such period; provided, 

 

 

  

  

  

however, that if any shorter period of limitations is otherwise applicable to any such cause of action the shorter period shall govern.

 

11. Duration of Agreement.  All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is an officer or director of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of any Subsidiary or other enterprise) and shall continue thereafter until the expiration of all applicable statutes of limitation to bring any potential Proceeding against Indemnitee arising out of such service, whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement.

 

12. Amendment of this Agreement.  No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto.  No waiver of any of the provisions of this Agreement shall operate as a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.  Except as specifically provided herein, no failure to exercise or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof.

 

13. Subrogation.  In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be reasonably necessary, at the Company’s expense, to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.

 

14. Exclusions.  The Company shall not be liable under this Agreement to make any payment in connection with any Proceeding (a) made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, by law or otherwise) of the amounts otherwise indemnifiable hereunder, or (b) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of state statutory law or common.

 

15. Binding Effect.  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and thereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all, substantially all or a substantial part, of the business and/or assets of the Company (a “Company Business Combination”), spouses, heirs and personal and legal representatives, as the case may be.  At or prior to the closing of any such Company Business Combination or First Midwest Bank Business Combination, as the case may be, the Company or First Midwest Bank shall require and cause any successor of such Company Business Combination, as the case may be, to all, substantially all, or a substantial part, of the business and/or assets of the Company or, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company, respectively, would be required to perform if no such succession had taken place.  This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as a director, officer, employee or agent of the Company, any Subsidiary or of any other enterprise at the Company’s request.  If this Agreement or sufficient portions hereof as to obviate the material 

 

 

  

  

  

benefits of this Agreement to the Indemnitee shall be held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable and the Indemnitee, and the Company and/or one or more Subsidiaries were parties to a directors’ and officers’ indemnification or similar agreement dated prior to the date hereof (the “Prior Agreement”), then this Agreement shall not supercede the Prior Agreement which shall remain in full force and effect.

 

16. Severability.  Subject to the last sentence of Section 15, if any provision (or portion thereof) of this Agreement shall be held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, the remaining provisions shall remain enforceable to the fullest extent permitted by law.  Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, void or unenforceable.

 

17. Governing Law and Consent to Jurisdiction.  This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict-of-laws rules.  The Company and Indemnitee hereby irrevocably and unconditionally (a) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (b) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (c) irrevocably appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801, as such party’s agent in the State of Delaware for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (d) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (e) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

 

18. Notices.  All notices, demands and other communications required or permitted hereunder shall be made in writing and shall be deemed to have been duly given if delivered by hand, against receipt, by reputable overnight delivery service, against receipt, or mailed, postage prepaid, certified or registered U.S. mail, return receipt requested, and addressed to the Company at:

 

First Midwest Bancorp, Inc.

One Pierce Place

Suite 1500

Itasca, IL  60143

Attention:  Corporate Secretary

 

  

  

  

and to Indemnitee at:

 

the address on file with the Company

 

Notice of change of address shall be effective only when given in accordance with this Section 18.  All notices complying with this Section 18 shall be deemed to have been received on the date of delivery or on the third (3rd) Business Day after mailing, as the case may be.

 

19. Security.  To the fullest extent permitted by applicable law, the Company may from time to time, but shall not be required to, provide such insurance, collateral, letters of credit or other security as the Board may deem appropriate to support or secure the Company obligations under this Agreement.

 

20. Interpretation.  The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole, as the same may from time to time be amended, modified or supplemented, and not to any particular section, subsection or clause contained in this Agreement unless otherwise specifically provided herein.  The words “including” and “include” and other words of similar import shall be deemed to be followed by the phrase “without limitation” and shall not be limited by any enumeration or otherwise.

 

 

 

 

 

 

 

 

 

 

[SIGNATURES FOLLOW]

  

  

  

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the day specified above.

 

	  	
COMPANY:

FIRST MIDWEST BANCORP, INC.

By:                                                                

Its:                                                              

	  	
INDEMNITEE:

 

 

 

[signature]

Printed Name:exhibit101.htm

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made by and between FIRST MIDWEST BANCORP, INC. (“Company”) and the undersigned executive (“Executive”),  effective as of ___________, 20, __ (“Effective Date”).

 

W I T N E S S E T H:

 

WHEREAS, Company is desirous of employing Executive as an executive of Company or its wholly owned subsidiary, FIRST MIDWEST BANK (the “Bank”) or another such subsidiary on the terms and conditions, and for the consideration, hereinafter set forth and Executive is desirous of accepting such employment on such terms and conditions and for such consideration;

 

WHEREAS, references herein to Executive’s employment by the Company, the Bank or another subsidiary, and references herein to payments of any nature to be made to Executive shall mean that either the Company will make such payments or it will cause the Bank or other applicable subsidiary (reference to “Employer” hereinafter shall mean the Company, the Bank or other subsidiary by which Executive is employed) to make such payments to Executive:

 

NOW, THEREFORE, for and in consideration of the mutual promises, covenants and obligations contained herein, Company and Executive agree as follows:

 

1. Employment and Term.

 

(a) Employment.  The Employer shall employ the Executive as ___________________, and the Executive shall so serve, for the term set forth in Paragraph 1(b).

 

(b) Term.  The term of the Executive’s employment under this Agreement shall commence on as of the Effective Date and end on _________, subject to the extension of such term as hereinafter provided and subject to earlier termination as provided in Paragraph 7 (the “period of employment”).  The term of this Agreement shall be extended automatically for one (1) additional year as of the second anniversary of the Effective Date and each anniversary date thereof unless, no later than ninety (90) days prior to any such renewal date (i) the Company or Employer gives written notice to the Executive, or (ii) the Executive gives written notice to the Employer, in accordance with Paragraph 15, that the term of this Agreement shall not be so extended.  Anything in this Agreement to the contrary, if at any time during the Executive’s period of employment under this Agreement there is a Change in Control (as defined in Paragraph 7), the term of this Agreement shall automatically extend to a date which is two (2) years from the date of the Change in Control (and shall be further extended pursuant to the foregoing provisions of this Paragraph 1(b), unless written notice to the contrary is given in accordance with this Paragraph 1(b)).

 

 

  

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2. Duties and Responsibilities.

 

(a) The duties and responsibilities of Executive shall be of an executive nature as shall be required by the Employer in the conduct of its business.  Executive’s powers and authority shall be as may be prescribed by the By-laws of the Employer and as may be delegated to Executive, together with the performance of such other duties and responsibilities as from time to time may be assigned to Executive consistent with Executive’s position(s).  Executive recognizes that during the period of employment hereunder, Executive owes an undivided duty of loyalty to the Employer, and agrees to devote his entire business time and attention to the performance of said duties and responsibilities.  Recognizing and acknowledging that it is essential for the protection and enhancement of the name and business of the Employer and the goodwill pertaining thereto, the Executive shall perform the duties under this Agreement professionally, in accordance with the applicable laws, rules and regulations and such standards, policies and procedures established by the Employer and the industry from time to time, including the Employer’s Corporate Code of Ethics and Standards of Conduct and, if applicable, Code of Ethics for Senior Financial Officers.  Executive will not perform any duties for any other business without the prior written consent of the Employer, and may engage in charitable, civic or community activities, provided that such duties or activities do not materially interfere with the proper performance of his duties under this Agreement.  During the period of employment, Executive agrees to serve without additional compensation as a director on the board of directors of the Employer, to which Executive may be elected or appointed.

 

(b) Notwithstanding anything herein to the contrary, Executive’s employment may be terminated by the Employer, subject to the terms and conditions of this Agreement.

 

3. Base Salary.  For services performed by the Executive for the Employer pursuant to this Agreement, the Employer shall pay the Executive a base salary at the rate of ____________________ (“Salary”) per year, payable in substantially equal installments in accordance with the Employer’s regular payroll practices.  Executive’s base salary shall be subject to review from time to time and the Employer may (but is not required to) increase the base salary, in its discretion, as it may authorize or determine.

 

4. Annual Bonuses.  For each fiscal year during the term of employment, the Executive shall be eligible to receive a bonus pursuant to the First Midwest Bancorp, Inc. Short Term Incentive Compensation Plan or any successor or replacement plan (“STIC”), with an annual target bonus amount, in accordance with the terms of such Plan, as adopted and administered by the Board of Directors of First Midwest Bancorp, Inc. (“Board”) for senior executives of the Employer, as such plan may be amended from time to time by the Board in its discretion.

 

5. Long-Term and Equity Incentive Compensation.  During the term of employment hereunder, the Executive shall be eligible to participate in the First Midwest Bancorp, Inc. Omnibus Stock and Incentive Plan, and in any other long-term and/or equity-based incentive compensation plan or program approved by the Board from time to time.

 

 

  

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6. Other Benefits.  In addition to the compensation described in Paragraphs 3, 4 and 5, above, the Executive shall also be entitled to the following:

 

(a) Participation in Benefit Plans.  The Executive shall be entitled to participate in all of the various retirement, welfare, fringe benefit, perquisites and expense reimbursement plans, programs and arrangements of the Employer as may be in effect from time to time to the extent the Executive is eligible for participation under the terms of such plans, programs and arrangements, including, but not limited to non-qualified retirement programs and deferred compensation plans.

 

(b) Vacation.  The Executive shall be entitled to such number of days of vacation with pay during each calendar year during the period of employment in accordance with the Employer’s applicable personnel policy as in effect from time to time.

 

7. Termination.  Unless earlier terminated in accordance with the following provisions of this Paragraph 7, the Employer shall continue to employ the Executive and the Executive shall remain employed by the Employer during the entire term of this Agreement as set forth in Paragraph 1(b).  Paragraph 7 hereof sets forth certain obligations of the Employer in the event that the Executive’s employment hereunder is terminated.  Certain capitalized terms used in this Paragraph 7 and in Paragraph 7 hereof are defined in Paragraph 7(d), below.

 

(a) Death or Disability.  Except to the extent otherwise provided in Paragraph 9 with respect to certain post-Date of Termination (as defined below) payment obligations of the Employer, this Agreement shall terminate immediately as of the Date of Termination in the event of the Executive’s death or in the event that the Executive becomes disabled.  The Executive will be deemed to be disabled upon the first to occur of (i) the end of a six (6)-consecutive month period, or the end of an aggregate period of nine (9) months out of any consecutive twelve (12) months, during which, by reason of physical or mental injury or disease, the Executive has been unable to perform substantially all of his usual and customary duties under this Agreement or (ii) the date that a reputable physician selected by the Employer determines in writing that the Executive will, by reason of physical or mental injury or disease, be unable to perform substantially all of the Executive’s usual and customary duties under this Agreement for a period of at least six (6) consecutive months.  If any question arises as to whether the Executive is disabled, upon reasonable request therefor by the Employer, the Executive shall submit to reasonable examination by a physician for the purpose of determining the existence, nature and extent of any such disability.  The Employer shall promptly provide the Executive with written notice of the results of any such determination of disability and of any decision of the Employer to terminate the Executive’s employment by reason thereof.  In the event of disability, until the Date of Termination, the base salary payable to the Executive under Paragraph 3 hereof shall be reduced dollar-for-dollar by the amount of disability benefits, if any, paid to the Executive in accordance with any disability policy or program of the Employer.

 

(b) Discharge for Cause.  In accordance with the procedures hereinafter set forth, the Employer may terminate the Executive’s employment hereunder for Cause.  Except to the extent otherwise provided in Paragraph 8 with respect to certain post-Date of Termination obligations of the Employer, this Agreement shall terminate immediately as of the Date of Termination in the event the Executive is terminated for Cause.  Any termination of the 

 

 

  

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Executive for Cause shall be communicated by a Notice of Termination to the Executive given in accordance with Paragraph 15 of this Agreement.

 

(c) Termination for Other Reasons.  The Employer may terminate the Executive’s employment without Cause by giving written notice to the Executive in accordance with Paragraph 15 at least thirty (30) days prior to the Date of Termination.  The Executive may resign from employment with or without Good Reason, without liability to the Employer, by giving written notice to the Employer in accordance with Paragraph 15 at least thirty (30) days prior to the Date of Termination; provided, however, that no resignation shall be treated as a resignation for Good Reason unless the written notice thereof is given within ninety (90) days after the occurrence which constitutes “Good Reason.”  Except to the extent otherwise provided in Paragraph 8 with respect to certain post-Date of Termination obligations of the Employer, this Agreement shall terminate immediately as of the Date of Termination in the event the Executive is terminated without Cause or resigns for any reason or no reason.

 

(d) Definitions.  For purposes of this Agreement, the following capitalized terms shall have the meanings set forth below:

 

(i) “Accrued Obligations” shall mean, as of the Date of Termination, the sum of (A) Executive’s base salary under Paragraph 3 through the Date of Termination to the extent not theretofore paid, (B) the amount of any other cash compensation earned by the Executive as of the Date of Termination to the extent not theretofore paid, (C) any vacation pay, expense reimbursements and other cash payments to which the Executive is entitled as of the Date of Termination to the extent not theretofore paid, (D) any grants and awards earned and vested but not yet paid under the Commission Program or any incentive compensation plan or program, and (E) all other benefits which have accrued and are vested as of the Date of Termination.  For the purpose of this Paragraph 7(d)(i), except as provided in the applicable plan, program or policy, amounts shall be deemed to accrue ratably over the period during which they are earned, but no discretionary compensation shall be deemed earned or accrued until it is specifically approved in accordance with the applicable plan, program or policy.

 

(ii) “Cause” shall mean (A) the Executive’s willful and continued (for a period of not less than fifteen (15) days after written notice thereof) failure to perform substantially the duties of his employment (other than as a result of physical or mental incapacity, or while on vacation); or (B) the Executive’s willfully engaging in illegal conduct, an act of dishonesty or gross misconduct related to the performance of Executive’s duties and responsibilities under the Agreement; or (C) the Executive’s conviction of a crime involving moral turpitude dishonesty, fraud, theft or financial impropriety, but specifically excluding any conviction based entirely on vicarious liability (with “vicarious liability” meaning liability based on acts of the Employer for which the Executive is charged solely as a result of his position with the Employer and in which Executive was not directly involved and did not have prior knowledge of such actions or intended actions); or (D) the Executive’s willful violation of a material requirement of any code of ethics or standards of conduct of the Employer applicable to Executive or Executive’s fiduciary duty to the Employer provided, however, that no act or failure to act, on the part of the Executive, shall be considered “willful” unless it is 

 

 

  

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done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Employer; and provided further that no act or omission by the Executive shall constitute Cause hereunder unless the Employer has given detailed written notice thereof to the Executive, and the Executive has failed to remedy such act or omission.

 

(iii) “Change in Control” shall mean:

 

(A) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than (i) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a subsidiary, or (ii) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing more than 25% of the total voting power of the then outstanding shares of capital stock of the Company entitled to vote generally in the election of directors (the “Voting Stock”), or

 

(B) During any period of two consecutive years, 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 the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then 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 thereof, or

 

(C) Consummation of a reorganization, merger or consolidation or the sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless (1) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Voting Stock immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the total voting power represented by the voting securities entitled to vote generally in the election of directors of the Company resulting from the Business Combination (including, without limitation, an entity which as a result of the Business Combination owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to the Business Combination of the Voting Stock of the Company, and (2) at least a majority of the members of the board of directors of the corporation resulting from the Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or action of the Board, providing for such Business Combination; or

 

(D) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company.

 

 

  

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The Employer has final authority to construe and interpret the provisions of the foregoing paragraphs (A), (B), (C) and (D) and to determine the exact date on which a change in control has been deemed to have occurred thereunder.

 

(iv) “Date of Termination” shall mean (A) in the event of a discharge of the Executive for Cause, the date the Executive receives a Notice of Termination, or any later date specified in such Notice of Termination, as the case may be, (B) in the event of a discharge of the Executive without Cause or a resignation by the Executive, the date specified in the written notice to the Executive (in the case of discharge) or the Employer (in the case of resignation), which date shall be no less than thirty (30) days from the date of such written notice, (C) in the event of the Executive’s death, the date of the Executive’s death, and (D) in the event of termination of the Executive’s employment by reason of disability pursuant to Paragraph 7(a), the date the Executive (or Executive’s legal representative) receives written notice of such termination.

 

(v) “Good Reason” shall mean the occurrence of any event, other than in connection with a termination of Executive’s employment, which results in a material diminution of Executive’s status, duties, authority, responsibilities or compensation from those contemplated by this Agreement, including, without limitation, any of the following actions without the Executive’s written consent (which, for this purpose, will not include consent given in Executive’s capacity as a director, officer or employee of an Employer):  (A) a significant change in the Executive’s title, or nature or scope of the Executive’s duties, from those described in Paragraphs 1(a) and 2(a), such that the title or duties are inconsistent with, and commonly (in the banking industry) considered to be of lesser authority, status or responsibility (provided, however, for purposes of this clause (A) in circumstances not involving or following a Change in Control, so long as the Executive remains an officer of the Employer at or above the salary grade level in effect prior to such action then no diminution or other change in status, duties, authority or responsibilities shall be deemed to occur), other than a significant change not occurring in bad faith and which is not remedied by the Employer promptly after receipt of written notice thereof given by the Executive in accordance with Paragraph 15, or (B) any material failure by the Employer to comply with any of the provisions of this Agreement, other than any failure not occurring in bad faith and which is remedied by the Employer promptly after receipt of written notice thereof given by the Executive in accordance with Paragraph 15; or (C) the Employer gives notice to the Executive pursuant to Paragraph 1(b) that the term of this Agreement shall not be extended upon the expiration of the then-current term; or (D) the Employer requires the Executive to be based at an office or location which is more than 80 miles from the Executive’s office as of the Effective Date or any renewal date of this Agreement.  In the event of a Change in Control, any good faith determination by the Executive that Good Reason exists shall be conclusive.

 

(vi) “Notice of Termination” shall mean a written notice which (A) indicates the specific termination provision in this Agreement relied upon, (B) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (C) if the Date of Termination is to be other than the date of receipt of such notice or the date otherwise specified on this Agreement, specifies the termination date.

 

 

  

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8. Obligations of the Employer Upon Termination.  The following provisions describe the post-Date of Termination obligations of the Employer to the Executive under this Agreement upon the termination of Executive’s employment and the Agreement.  However, except as explicitly provided in this Agreement, nothing in this Agreement shall limit or otherwise adversely affect any rights which the Executive may have under applicable law, under any other agreement with the Employer or any of its subsidiaries, or under any compensation or benefit plan, program, policy or practice of the Employer or any of its subsidiaries.

 

(a) Death, Disability, Discharge for Cause, or Resignation Without Good Reason.  In the event the Executive’s employment and this Agreement terminate pursuant to Paragraph 7(a) by reason of the death or disability of the Executive, or pursuant to Paragraph 7(b) by reason of the termination of the Executive by the Employer for Cause, or pursuant to Paragraph 7(c) by reason of the resignation of the Executive other than for Good Reason, the Employer shall pay to the Executive, or his heirs or estate, in the event of the Executive’s death, all Accrued Obligations in a lump sum in cash within thirty (30) days after the Date of Termination; provided, however, that any portion of the Accrued Obligations which consists of bonus, deferred compensation, incentive compensation, insurance benefits or other employee benefits shall be determined and paid in accordance with the terms of the relevant plan or policy as applicable to the Executive, including, where applicable, the forfeiture of such amounts upon a termination for Cause.

 

(b) Discharge Without Cause or Resignation with Good Reason.  In the event the Executive’s employment and this Agreement terminate pursuant to Paragraph 7(c) by reason of the termination of the Executive by the Employer other than for Cause or disability or by reason of the resignation of the Executive for Good Reason:

 

(i) The Employer shall pay all Accrued Obligations to the Executive in a lump sum in cash within thirty (30) days after the Date of Termination; provided, however, that any portion of the Accrued Obligations which consists of bonus, deferred compensation, incentive compensation, insurance benefits or other employee benefits shall be determined and paid in accordance with the terms of the relevant plan or policy as applicable to the Executive;

 

(ii) Within thirty (30) days after the Date of Termination, the Employer shall pay to the Executive a pro-rated bonus for the year during which the Executive’s employment terminated (“Termination Year”), based on the number of days elapsed during the Termination Year through the Date of Termination (“Service Days”).  The amount of the pro-rated bonus shall be calculated by multiplying the Executive’s target annual bonus (“Severance Target”) for the completed fiscal year immediately preceding the Termination Year, by a fraction, the numerator of which is the Service Days, and the denominator of which is 365;

 

(iii) Continuation for a period of six (6) months (the “Severance Period”) of his then current annual base salary, payable in substantially equal installments in accordance with the Employer’s regular payroll practices;

 

 

  

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(iv) Continuation for the Severance Period of the Executive’s right to maintain COBRA continuation coverage under the applicable plans at premium rates on the same “cost-sharing” basis as the applicable premiums paid for such coverage by active employees as of the Date of Termination; and

 

(v) Outplacement counseling, the scope and provider of which shall be selected by the Employer for a period beginning on the Date of Termination and ending on the date the Executive is first employed elsewhere or otherwise is providing compensated services of any type, whether as an employee, independent contractor, owner-employee or otherwise, provided that in no event shall such outplacement services be provided for a period greater than two (2) years.

 

In the event that upon the expiration of the Severance Period, Executive is not employed or otherwise providing compensated services of any type, whether as an employee, independent contractor, owner-employee or otherwise, and has not done so during the final ninety (90) days of the Severance Period, the Employer may, in its sole discretion (which discretion need not be applied in a consistent manner from one Executive to another), agree to extend the Severance Period for up to an additional six (6) months (the “Extended Severance Period”).  The payments to Executive described in subparagraph (iii) above and the reduced COBRA continuation premium described in subparagraph (iv) above shall continue during the Extended Severance Period, subject to earlier termination effective as of the first day of the month following the date on which the Executive becomes employed or provides compensated services of any type, whether as an employee, independent contractor, owner-employee or otherwise.  The Executive shall provide such information as the Employer may reasonably request to determine Executive’s continued eligibility for the payments and benefits provided by this Paragraph 8(b).

 

(c) Effect of Change in Control.  In the event that a Change in Control occurs and this Agreement thereafter terminates pursuant to Paragraph 7(c) by reason of the discharge of the Executive by the Employer other than for Cause or disability or by reason of the resignation of the Executive for Good Reason:

 

(i) The Employer shall pay all Accrued Obligations to the Executive in a lump sum in cash within thirty (30) days after the Date of Termination; provided, however, that any portion of the Accrued Obligations which consists of bonus, deferred compensation, incentive compensation, insurance benefits or other employee benefits shall be determined and paid in accordance with the terms of the relevant plan or policy as applicable to the Executive;

 

(ii) Within thirty (30) days after the Date of Termination, the Employer shall pay to the Executive a pro-rated bonus for the Termination Year. The amount of the pro-rated bonus shall be calculated by multiplying the Severance Target, by a fraction, the numerator of which is the Service Days, and the denominator of which is 365;

 

 

  

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(iii) The Employer shall pay the Executive a lump sum payment within thirty (30) days after such termination of employment in the amount of two (2) times the sum of the following:

 

(A) the amount of Executive’s annual base salary determined as of the Date of Termination, or the date immediately preceding the date of the Change in Control, whichever is greater; plus

 

(B) the average of the sum of the amounts earned by Executive under the annual bonus plan with respect to the three (3) calendar years immediately preceding the Termination Year, or if such sum would be greater, with respect to the three (3) calendar years immediately preceding the calendar year of the date of the Change in Control; plus

 

(C) the sum of:

(I) the value of the contributions that would have been expected to be made or credited by the Employer to, and benefits expected to be accrued under, the qualified and non-qualified employee pension benefit plans maintained by the Employer to or for the benefit of Executive based on annual base salary amount applicable under clause (iii)(A) above; plus

 

(II) the annual value of fringe benefits and perquisites described in Paragraph 6(a) above.

 

For purposes of paragraph (C)(I) above, the value of the contributions and accruals to or under the employee pension benefit plans shall be determined on the basis of the actual rate of contributions or accruals, as applicable, and the provisions of the plans as in effect during the calendar year immediately preceding the date of the Change in Control, or if the value so determined would be greater, during the calendar year immediately preceding the Date of Termination. The “annual value” of the fringe benefits and perquisites described in Paragraph 6(a) for purposes of paragraph (C)(II) above shall be 7.5% of the annual base salary amount applicable under clause (iii)(A) above.

 

Executive shall also be entitled to outplacement counseling from a firm selected by Employer for a period beginning on the date of termination of employment and ending on the date Executive is first employed or otherwise providing compensated services of any type, whether as an employee, independent contractor, owner-employee or otherwise, provided, that in no event shall Executive be entitled to out-placement counseling after the date which is two (2) years from the date of termination of employment.

 

Notwithstanding the foregoing, if a Change in Control occurs and this Agreement is terminated prior to the Change in Control pursuant to Paragraph 7(c) by reason of the discharge of the Executive by the Employer other than for Cause or disability or by reason of the resignation of the Executive for Good Reason, then Executive shall be deemed for purposes of this Paragraph 8(c) to have so terminated pursuant to Paragraph 7(c) immediately following the date the Change in Control occurs if it is reasonably demonstrated by Executive that such earlier 

 

 

  

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termination was (i) at the request of a third party who had taken steps reasonably calculated to effect the Change in Control, or (ii) otherwise arose, or the circumstances that precipitated the termination otherwise arose, in connection with or in anticipation of the Change in Control.

 

(d) Effect on Other Amounts.  The payments provided for in this Paragraph 8 shall be in addition to all other sums then payable and owing to Executive and shall be subject to applicable federal and state income and other withholding taxes and shall be in full settlement and satisfaction of all of Executive’s claims and demands.  Upon such termination of this Agreement, Employer shall have no rights or obligations under this Agreement, other than its obligations under this Paragraph 8, and Executive shall have no rights and obligations under this Agreement, other than Executive’s obligations under Paragraphs 12 and 13 hereof (to the extent applicable).

 

(e) Conditions.  Any payments of benefits made or provided pursuant to this Paragraph 8 are subject to the Executive’s:

 

(i) compliance with the provisions of Paragraphs12 and 13 hereof (to the extent applicable);

 

(ii) delivery to the Employer of an executed Release and Severance Agreement, which shall be substantially in the form attached hereto as Exhibit A, with such changes therein or additions thereto as needed under then applicable law to give effect to its intent and purpose; and

 

(iii) delivery to the Employer of a resignation from all offices, directorships and fiduciary positions with the Employer, its affiliates and employee benefit plans.

 

Notwithstanding the due date of any post-employment payments, any amounts due under this Paragraph 8 shall not be due until after the expiration of any revocation period applicable to the Release and Severance Agreement..

 

9. No Excise Tax Gross-Up; Possible Reduction of Payments.

 

(a) Any provision of this Agreement or any other compensation plan, program or agreement to which Executive is a party or under which Executive is covered to the contrary notwithstanding, Executive will not be entitled to any gross-up or other payment for golden parachute excise taxes that Executive may owe pursuant to Section 4999 of the Internal Revenue Code (the “Code”).

 

(b) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payments or distributions by the Employer to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (the “Payments”) (i) constitute parachute payments within the meaning of Section 280G of the Code, and (ii) but for this Paragraph 9 would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then such Payments shall be either: (A) delivered in 

 

 

  

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full, or (B) reduced (but not below zero) to the maximum amount that could be paid to the Employee without giving rise to the Excise Tax (the “Safe Harbor Cap”), whichever of the foregoing amounts, taking into account the applicable federal, state and local income and employment taxes and the Excise Tax (and any equivalent state or local excise taxes), results in the receipt by the Executive, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be subject to the Excise Tax.  The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payment under Paragraph 8(c)(iii).

 

(c) All determinations required to be made under this Paragraph 9, including the reduction of the Payments to the Safe Harbor Cap, if applicable, and the assumptions to be utilized in arriving at such determinations,  shall be made by the independent public accountants then regularly retained by the Employer for purposes of tax planning or such other nationally-recognized accounting or consulting firm as may be selected by the Employer (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Employer and the Executive within fifteen (15) business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Employer.  All fees and expenses of the Accounting Firm shall be borne solely by the Employer.  Any good faith determinations by the Accounting Firm shall be binding upon the Employer and the Executive.

 

(d) This subparagraph (d) shall apply to the Executive in the event of the reduction of the Executive's Payments to the Safe Harbor Cap. If it is established pursuant to a final decision of a court or an IRS proceeding which has been finally and conclusively resolved, that Payments have been made to the Executive by the Employer, which are in excess of the limitations provided in this Paragraph 9 (hereinafter referred to as “Excess Payments”), the Executive shall repay the Excess Payments to the Company within thirty (30) business days of a written demand from the Company, together with interest on the Excess Payments at the applicable federal rate (as defined in Code Section 1274(d)) from the date of the Executive’s receipt of such Excess Payment until the date of such repayment.  As a result of the uncertainty in the application of Code Section 4999 at the time of the determinations, it is possible that Payments which will not have been made by the Employer should have been made (an “Underpayment”).  In the event that it is determined by the Accounting Firm, the IRS, court order, or the Employer (which shall include the position taken by the Employer alone or together with its consolidated group) on its federal income tax return, that an Underpayment has occurred, the Employer shall pay an amount equal to such Underpayment to the Executive within thirty (30) business days of such decision together with interest on such amount at the applicable federal rate from the date such amount would have been paid to the Executive until the date of payment.

 

10. Section 409A of the Code.  It is intended that any amounts payable under this Agreement and the Employer’s and Executive’s exercise of authority or discretion hereunder shall be exempt from or comply with Section 409A of the Code (including the Treasury regulations and other published guidance relating thereto) so as not to subject Executive to the payment of any interest or additional tax imposed under Section 409A of the Code.  In furtherance of this intent, (a) if, due to the circumstances giving rise to any lump sum payment or payments under this Agreement, the date of payment or the commencement of such payments thereof must be delayed for six months in order to meet the requirements of Section 

 

 

  

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409A(a)(2)(B) of the Code applicable to “specified employees,” then such payment or payments shall be so delayed and paid upon expiration of such six month period and (b) each payment which is conditioned upon the Executive’s execution of a release and which is to be paid during a designated period that begins in a first taxable year and ends in a second taxable year shall be paid in the second taxable year.  With regard to any provision herein that provides for reimbursement of expenses or in-kind benefits: (i) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit, and (ii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year, provided that the foregoing shall not be violated with regard to expenses covered by Code Section 105(h) that are subject to a limit related to the period in which the arrangement is in effect.  Any expense or other reimbursement payment made pursuant to this Agreement or any plan, program, agreement or arrangement of the Employer referred to herein, shall be made on or before the last day of the taxable year following the taxable year in which such expense or other payment to be reimbursed is incurred.  To the extent that any Treasury regulations, guidance or changes to Section 409A would result in the Executive becoming subject to interest and additional tax under Section 409A of the Code, the Employer and Executive agree to amend this Agreement in order to bring this Agreement into compliance with Code Section 409A.

 

11. Dispute Resolution.  With respect to any dispute or controversy arising under or in connection with this Agreement, if the Executive is a prevailing party (as defined below), the Executive shall be entitled to recover all reasonable attorneys’ fees and expenses incurred in connection with the dispute or controversy.  A “prevailing party” is one who is successful on any material substantive issue in the action and achieves either a judgment in such party’s favor or some other affirmative recovery.

 

12. Confidential Information.  Executive shall not at any time during or following employment hereunder, directly or indirectly, disclose or use on Executive’s behalf or another’s behalf, publish or communicate, except in the course of the pursuit of the business of the Employer or any of its subsidiaries or affiliates any proprietary information or data of the Employer or any of its subsidiaries or affiliates, that the Employer may reasonably regard as confidential or proprietary.  Executive recognizes and acknowledges that all knowledge and information which Executive has or may acquire in the course of his employment, such as, but not limited to the business, developments, procedures, techniques, activities or services of the Employer or the business affairs and activities of any customer, prospective customer, individual, firm or entity doing business with the Employer are its sole valuable property, and shall be held by Executive in confidence and in trust for its sole benefit.  All records of every nature and description which come into Executive’s possession, whether prepared by him, or otherwise, shall remain the sole property of the Employer and upon termination of his employment for any reason, said records shall be left with the Employer as part of its property.

 

13. Restrictions.  Executive acknowledges that the Employer and its affiliates and subsidiaries by nature of their respective businesses have a legitimate and protectable interest in their clients, customers and employees with whom they have established significant relationships as a result of a substantial investment of time and money, and but for employment hereunder, Executive would not have had contact with such clients, customers and employees.  Executive agrees that during the period of employment with the Employer and for a period of one (1) year 

 

 

  

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after termination of employment for any reason (other than termination of employment by resignation for Good Reason or for any reason after a Change in Control) (the “Restriction Period”), Executive will not (except in his capacity as an employee of the Employer) directly or indirectly, for his own account, or as an agent, employee, director, owner, partner, or consultant of any corporation, firm, partnership, joint venture, syndicate, sole proprietorship or other entity that has a place of business (whether as a principal, division, subsidiary, affiliate, related entity, or otherwise) located within the Market Area (as hereinafter defined):

 

(a) solicit or attempt to solicit for the purpose of providing to, or provide to, any customer or any prospective customer of the Employer services or products of any kind that are offered or provided by the Employer, or assist any person, business or entity to do so; or

 

(b) induce, recruit, solicit or encourage any employee to leave the employ of the Employer, or induce, solicit, recruit, attempt to recruit any employee to accept employment with another person, business or entity, or employ or be employed with an employee, or assist any other person, business or entity to do so; or

 

(c) make, or cause to be made, any statement or disclosure that disparages the Employer, or any director, officer or employee of the Employer, or assist any other person, business or entity to do so.

 

For purposes of Paragraph 12 and this Paragraph 13, (i) “Employer” means the Company and all of its subsidiaries, (ii) “customer” means any business, entity or person which is or was a customer of the Employer at any time during the period of Executive’s employment and with respect to which Executive had contact or supervisory responsibility or about whom Executive had access to confidential information, other than any customer which had ceased to do business with the Employer at least six (6) months prior to Executive’s Date of Termination, (iii) “prospective customer” means any business, entity or person that was contacted by the Executive or known by the Executive to have been contacted within the six (6) month period prior to Executive’s Date of Termination by any officer of the Employer, for the purpose of soliciting or attempting to solicit to provide services or products to such business,(iv) “employee” means any person who is or was an employee of the Employer during the period of Executive’s employment, other than a former employee who has not been employed by the Employer for a period of at least three (3) months and who terminated his or her employment with the Employer without any inducement or attempted inducement, recruiting, solicitation or encouragement by Executive or by any other employee of the Employer subject to a similar covenant, (v) “Market Area” for purposes of clauses (a) and (b) above shall be an area encompassed within a twenty-five (25) mile radius surrounding any place of business of the Employer (existing or planned as of the Date of Termination), and for clause (c), shall mean the United States of America.

 

The foregoing provisions shall not be deemed to prohibit (i) Executive’s ownership, not to exceed ten percent (10%) of the outstanding shares, of capital stock of any corporation whose securities are publicly traded on a national or regional securities exchange or in the over-the-counter market or (ii) Executive serving as a director of other corporations and entities to the extent these directorships do not inhibit the performance of his duties hereunder or conflict with the business of the Employer.

 

 

  

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14. Remedies.

 

(a) Executive acknowledges that the restrictions and agreements herein provided are fair and reasonable, that enforcement of the provisions of Paragraphs 12 and 13 will not cause Executive undue hardship and that said provisions are reasonably necessary and commensurate with the need to protect the Employer and its legitimate and proprietary business interests and property from irreparable harm.  Executive acknowledges and agrees that (a) a breach of any of the covenants and provisions contained in Paragraphs 12 and 13 above, will result in irreparable harm to the business of the Employer, (b) a remedy at law in the form of monetary damages for any breach by Executive of any of the covenants and provisions contained in Paragraphs 12 and 13 is inadequate, (c) in addition to any remedy at law or equity for such breach, the Employer shall be entitled to institute and maintain appropriate proceedings in equity, including a suit for injunction to enforce the specific performance by Executive of the obligations hereunder and to enjoin Executive from engaging in any activity in violation hereof and (d) the covenants on Executive’s part contained in Paragraphs 12 and 13, shall be construed as agreements independent of any other provisions in this Agreement, and the existence of any claim, setoff or cause of action by Executive against the Employer, whether predicated on this Agreement or otherwise, shall not constitute a defense or bar to the specific enforcement by the Employer of said covenants.  In the event of a breach or a violation by Executive of any of the covenants and provisions of this Agreement, the running of the Restriction Period (but not of Executive’s obligation thereunder), shall be tolled during the period of the continuance of any actual breach or violation.

 

(b) The parties hereto agree that the covenants set forth in Paragraphs 12 and 13 are reasonable with respect to their duration, geographical area and scope.  If the final judgment of a court of competent jurisdiction declares that any term or provision of Paragraph 12 or 13 is invalid or unenforceable, the parties agree that the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration, or area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified after the expiration of the time within which the judgment may be appealed.

 

15. Notices.  Any notice or other communication required or permitted to be given hereunder shall be determined to have been duly given to any party (a) upon delivery to the address of such party specified below if delivered personally or by courier; (b) upon dispatch if transmitted by telecopy or other means of facsimile, provided a copy thereof is also sent by regular mail or courier; (c) within forty-eight (48) hours after deposit thereof in the U.S. mail, postage prepaid, for delivery as certified mail, return receipt requested, or (d) within twenty-four (24) hours after deposit thereof with a reputable overnight courier (charges prepaid), addressed, in any case to the party at the following address(es) or telecopy numbers:

 

(a) If to Executive, at the address set forth on the records of the Employer.

 

(b) If to the Employer:

 

 

  

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First Midwest Bancorp, Inc.

One Pierce Place

Suite 1500

Itasca, Illinois 60143

Attn:  Corporate Secretary

Fax No.:  (630) 875-7345

 

or to such other address(es) or facsimile number(s) as any party may designate by written notice in the aforesaid manner.

 

16. Directors and Officers Liability Coverage; Indemnification.  Executive shall be entitled to coverage under such directors and officers liability insurance policies maintained from time to time by the Company, Bank or any subsidiary for the benefit of its directors and officers.  The Company shall indemnify and hold Executive harmless, to the fullest extent permitted by the laws of the State of Delaware, from and against all costs, charges and expenses (including reasonable attorneys’ fees), and shall provide for the advancement of expenses incurred or sustained in connection with any action, suit or proceeding to which the Executive or his legal representatives may be made a party by reason of the Executive’s being or having been a director, officer or employee of the Company, Bank or any of its affiliates or employee benefit plans.  The provisions of this Paragraph 16 shall not be deemed exclusive of any other rights to which the Executive seeking indemnification may have under any by-law, agreement, vote of stockholders or directors, or otherwise.

 

17. Full Settlement; No Mitigation.  The Employer’s obligation to make the payments and provide the benefits provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Employer may have against the Executive or others.  In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not the Executive obtains other employment.

 

18. Payment in the Event of Death.  In the event payment is due and owing by the Employer to Executive under this Agreement upon the death of Executive, payment shall be made to such beneficiary as Executive may designate in writing, or failing such designation, then the executor of his estate, in full settlement and satisfaction of all claims and demands on behalf of Executive, shall be entitled to receive all amounts owing to Executive at the time of death under this Agreement.  Such payments shall be in addition to any other death benefits of the Employer and in full settlement and satisfaction of all severance benefit payments provided for in this Agreement.

 

19. No Conflicts.  Executive represents and warrants that the performance by Executive of Executive’s duties hereunder will not violate, conflict with, or result in a breach of any provision of any agreement to which Executive is a party, including any obligations to refrain from competition, solicitation of customers or employees, or to refrain from use of confidential information.  In the Executive’s work for the Employer, the Executive will be expected to abide by all such contractual commitments and not to make any unauthorized 

 

 

  

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disclosure or use, and the Executive will not disclose or make use, of any information in violation of any agreements with or rights of his prior employer or any other party.

 

20. Entire Understanding.  This Agreement constitutes the entire understanding between the parties relating to Executive’s employment hereunder and supersedes and cancels all prior written and oral understandings and agreements with respect to such matters, except to the extent to which Executive may have entered into certain split-dollar life insurance agreements, which agreement(s) shall remain in full force and effect, and except for the terms and provisions of any employee benefit or other compensation plans (or any agreements or awards thereunder), referred to in this Agreement, or as otherwise expressly contemplated by this Agreement.

 

21. Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the heirs and representatives of the Executive and the successors and assigns of the Company.  The Company shall require any successor (whether direct or indirect, by purchase, merger, reorganization, consolidation, acquisition of property or stock, liquidation, or otherwise) to all or a substantial portion of its assets, by agreement in form and substance reasonably satisfactory to the Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform this Agreement if no such succession had taken place.  Regardless of whether such an agreement is executed, this Agreement shall be binding upon any successor of the Company in accordance with the operation of law, and such successor shall be deemed the “Company” for purposes of this Agreement.

 

22. Tax Withholding.  The Employer shall provide for the withholding of any taxes required to be withheld by federal, state, or local law with respect to any payment in cash, shares of stock and/or other property made by or on behalf of the Employer to or for the benefit of the Executive under this Agreement or otherwise.  The Employer may, at its option:  (a) withhold such taxes from any cash payments owing from the Employer to the Executive, (b) require the Executive to pay to the Employer in cash such amount as may be required to satisfy such withholding obligations and/or (c) make other satisfactory arrangements with the Executive to satisfy such withholding obligations.

 

23. No Assignment.  Except as otherwise expressly provided herein, this Agreement is not assignable by any party and no payment to be made hereunder shall be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or other charge.

 

24. Execution in Counterparts.  This Agreement may be executed by the parties hereto in two (2) or more counterparts, each of which shall be deemed to be an original, but all such counterparts shall constitute one and the same instrument, and all signatures need not appear on any one counterpart.

 

25. Jurisdiction and Governing Law.  Jurisdiction over disputes with regard to this Agreement shall be exclusively in the courts of the State of Illinois, and this Agreement shall be construed and interpreted in accordance with and governed by the laws of the State of Illinois, without regard to the choice of laws provisions of such laws.

 

 

  

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26. Severability.  If any provision of this Agreement shall be adjudged by any court of competent jurisdiction to be invalid or unenforceable for any reason, such judgment shall not affect, impair or invalidate the remainder of this Agreement.  Furthermore, if the scope of any restriction or requirement contained in this Agreement is too broad to permit enforcement of such restriction or requirement to its full extent, then such restriction or requirement shall be enforced to the maximum extent permitted by law, and the Executive consents and agrees that any court of competent jurisdiction may so modify such scope in any proceeding brought to enforce such restriction or requirement.

 

27. Waiver.  The waiver of any party hereto of a breach of any provision of this Agreement by any other party shall not operate or be construed as a waiver of any subsequent breach.

 

28. Amendment; Effect of Termination.  No change, alteration or modification hereof may be made except in a writing, signed by each of the parties hereto.  The provisions of Paragraph 8 relating to post-Date of Termination obligations, and the provisions and obligations set forth in Paragraphs 9 through 30 shall survive termination of the Agreement pursuant to Paragraph 7.

 

29. Construction.  The language used in this Agreement will be deemed to be the language chosen by Employer and Executive to express their mutual intent and no rule of strict construction shall be applied against any person.  Wherever from the context it appears appropriate, each term stated in either the singular or plural shall include the singular and the plural, and the pronouns stated in either the masculine, the feminine or the neuter gender shall include the masculine, feminine or neuter.  The headings of the Paragraphs of this Agreement are for reference purposes only and do not define or limit, and shall not be used to interpret or construe the contents of this Agreement.

 

30. No Duplication.  Notwithstanding anything herein to the contrary, to the extent that any compensation or benefits are paid to or received by the Executive from the Company, Bank or any other subsidiary of Company or the Bank, such compensation or benefits shall be deemed to satisfy the obligations of the Company, Bank and all subsidiaries, such that Executive shall not be entitled to receive any compensation or benefits which are duplicative of such amounts previously paid to or received by Executive.

 

[Signature page follows]

 

  

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the day and year first above written.

 

	
ATTEST:

	
First Midwest Bancorp, Inc.

 

 

 

By:                                                              

Title:

	  	
EXECUTIVE:

 

 

 

 

  

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Exhibit A

 

to

 

Employment Agreement

 

RELEASE AND SEVERANCE AGREEMENT

 

THIS RELEASE AND SEVERANCE AGREEMENT is made and entered into this ____ day of _______________, _____ by and between First Midwest Bancorp, Inc., its subsidiaries and affiliates (collectively “FMBI”) and _______________ (hereinafter “EXECUTIVE”).

 

EXECUTIVE’S employment with FMBI terminated on ______________, ______; and EXECUTIVE has voluntarily agreed to the terms of this RELEASE AND SEVERANCE AGREEMENT in exchange for severance benefits under the Employment Agreement (“Employment Agreement”) to which EXECUTIVE otherwise would not be entitled.

 

NOW THEREFORE, in consideration for severance benefits provided under the Employment Agreement, EXECUTIVE on behalf of himself and his spouse, heirs, executors, administrators, children, and assigns does hereby fully release and discharge FMBI, its officers, directors, employees, agents, subsidiaries and divisions, benefit plans and their administrators, fiduciaries and insurers, successors, and assigns from any and all claims or demands for wages, back pay, front pay, attorney’s fees and other sums of money, insurance, benefits, contracts, controversies, agreements, promises, damages, costs, actions or causes of action and liabilities of any kind or character whatsoever, whether known or unknown, from the beginning of time to the date of these presents, relating to his employment or termination of employment from FMBI, including but not limited to any claims, actions or causes of action arising under the statutory, common law or other rules, orders or regulations of the United States or any State or political subdivision thereof including the Age Discrimination in Employment Act and the Older Workers Benefit Protection Act.

 

EXECUTIVE acknowledges that EXECUTIVE’S obligations pursuant to Paragraphs 12 and 13, to the extent applicable, of the Employment Agreement relating to the use or disclosure of confidential information shall continue to apply to EXECUTIVE.

 

This Release and Settlement Agreement supersedes any and all other agreements between EXECUTIVE and FMBI except agreements relating to proprietary or confidential information belonging to FMBI, and any other agreements, promises or representations relating to severance pay or other terms and conditions of employment are null and void.

 

This release does not affect EXECUTIVE’S right to any benefits to which EXECUTIVE may be entitled under any employee benefit plan, program or arrangement sponsored or provided by FMBI, including but not limited to the Employment Agreement and the plans, programs and arrangements referred to therein.

 

 

  

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EXECUTIVE and FMBI acknowledge that it is their mutual intent that the Age Discrimination in Employment Act waiver contained herein fully comply with the Older Workers Benefit Protection Act.  Accordingly, EXECUTIVE acknowledges and agrees that:

 

(a) The Severance benefits exceed the nature and scope of that to which he would otherwise have been legally entitled to receive.

 

(b) Execution of this Agreement and the Age Discrimination in Employment Act waiver herein is his knowing and voluntary act;

 

(c) He has been advised by FMBI to consult with his personal attorney regarding the terms of this Agreement, including the aforementioned waiver;

 

(d) He has had at least twenty-one (21)calendar days within which to consider this Agreement;

 

(e) He has the right to revoke this Agreement in full within seven (7) calendar days of execution and that none of the terms and provisions of this Agreement shall become effective or be enforceable until such revocation period has expired;

 

(f) He has read and fully understands the terms of this agreement; and

 

(g) Nothing contained in this Agreement purports to release any of EXECUTIVE’s rights or claims under the Age Discrimination in Employment Act that may arise after the date of execution.

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the date indicated above.

 

	  	
FIRST MIDWEST BANCORP, INC., for itself and its Subsidiaries

 

 

By:                                                              

Its:

	  	
EXECUTIVE

 

 

 

 

 

  

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