Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT, entered into as of the _____ day of ________________,
2004, by and between First Indiana Bank (the "Bank"), and
_________________________________ (the "Executive") (hereinafter collectively
referred to as "the parties").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Bank (the "Board") recognizes that
the possibility of a Change of Control (as hereinafter defined in Section 2) of
the Bank or its holding company, First Indiana Corporation (the "Company")
exists, and that the threat of or the occurrence of a Change of Control can
result in significant distractions of its key management personnel because of
the uncertainties inherent in such a situation; and
[WHEREAS, the Executive is becoming an employee of the Bank as of the date
hereof, to serve as the Bank's ________________________________________; and]
WHEREAS, the Board has determined that it is essential and in the best
interest of the Bank and the shareholders of the Company to retain the services
of the Executive in the event of a threat or occurrence of a Change of Control
and to ensure [his/her] continued dedication and efforts in such event without
undue concern for [his/her] personal financial and employment security; and
WHEREAS, the Bank and the Executive are parties to an Employment Agreement
dated __________________ (the "Prior Agreement") that addresses these issues;
and
WHEREAS, in order to induce the Executive to remain in the employ of the
Bank, particularly in the event of a threat of or the occurrence of a Change of
Control, the Bank desires to amend certain provisions of the Prior Agreement;
and
WHEREAS, the parties wish to incorporate such changes in this Agreement,
which restates and supersedes the Prior Agreement.
[WHEREAS, in order to induce the Executive to become and remain an
employee of the Bank, particularly in the event of a threat of or the
occurrence of a Change of Control, the Bank desires to enter into this
Agreement with the Executive.]
NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:
1. Employment Term.
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(a) The "Employment Term" shall commence on the first date during the
Protected Period (as defined in Section 1(c), below) on which a Change of
Control (as defined in Section 2, below) occurs (the "Effective Date") and shall
expire on the first anniversary of the Effective Date; provided, however, that
at the end of each day of the Employment Term the Employment Term shall
automatically be extended for one (1) day unless either the Bank or the
Executive shall have given written notice to the other at least thirty (30) days
prior thereto that the Employment Term shall not be so extended; and provided
further, that the Employment Term shall not be automatically extended beyond the
first day of the month following the month in which the Executive attains age
sixty-five (65).
(b) Notwithstanding anything contained in this Agreement to the contrary,
if the Executive's employment is terminated prior to the Effective Date and the
Executive reasonably demonstrates that such termination (i) was at the request
of a third party who has indicated an intention or taken steps reasonably
calculated to effect a Change of Control, or (ii) otherwise occurred in
connection with or in anticipation of a Change of Control, then for all purposes
of this Agreement, the Effective Date shall mean the date immediately prior to
the date of such termination of the Executive's employment.
(c) For purposes of this Agreement, the "Protected Period" shall be the
one year period commencing on the date hereof, provided, however, that at the
end of each day the Protected Period shall be automatically extended for one day
unless at least 30 days prior thereto the Bank shall have given written notice
to the Executive that the Protected Period shall not be so extended; and
provided, further, that notwithstanding any such notice by the Bank not to
extend, the Protected Period shall not end if prior to the expiration thereof
any third party has indicated an intention or taken steps reasonably calculated
to effect a Change of Control, in which event the Protected Period shall end
only after such third party publicly announces that it has abandoned all efforts
to effect a Change of Control.
2. Change of Control. For purposes of this Agreement, a "Change of
Control" shall mean the first to occur of the following:
(a) The acquisition by any individual, entity or "group" within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")(a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that the following acquisitions of common stock shall not
constitute a Change of Control: (i) any acquisition directly from the Company
(excluding an acquisition by virtue of the exercise of a conversion privilege by
one or more
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Persons acting in concert, and excluding an acquisition that would be a Change
of Control under subsection (c) of this Section 2), (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation or other entity
controlled by the Company, (iv) any acquisition by any corporation or other
entity pursuant to a reorganization, merger or consolidation which would not be
a Change of Control under subsection (c) of this Section 2; or (v) any
acquisition by an Exempt Person; or
(b) Individuals who, as of the date hereof, constitute the Company's Board
of Directors (the "Incumbent Board") cease for any reason to constitute at least
a majority of the Company's Board of Directors; provided, however, that any
individual becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened "election contest"
or other actual or threatened "solicitation" (as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act) of proxies or
consents by or on behalf of a person other than the Incumbent Board; or
(c) Consummation of any reorganization, merger, share exchange or
consolidation of the Company, unless, following such reorganization, merger,
share exchange or consolidation, (i) 75% or more of, respectively, the then
outstanding shares of common stock of the corporation or other entity resulting
from such reorganization, merger, share exchange or consolidation and the
combined voting power of the then outstanding voting securities of such
corporation or other entity entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger,
share exchange or consolidation in substantially the same proportions as their
ownership, immediately prior to such reorganization, merger, share exchange or
consolidation, (ii) no Person (excluding the Company, any Exempt Person, any
employee benefit plan (or related trust) of the Company or such corporation or
other entity resulting from such reorganization, merger, share exchange or
consolidation and any person beneficially owning, immediately prior to such
reorganization, merger, share exchange or consolidation, directly or indirectly,
20% or more of the Outstanding Company Common Stock or Outstanding Voting
Securities, as the case may be) beneficially owns, directly or indirectly, 20%
or more of, respectively, the then outstanding shares of common stock of the
corporation or other entity resulting from such reorganization, merger, share
exchange or consolidation or the combined voting power of the then outstanding
voting securities of such corporation or other entity, entitled to
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vote generally in the election of directors and (iii) at least a majority of the
members of the board of directors of the corporation or other entity resulting
from such reorganization, merger, share exchange or consolidation were members
of the Incumbent Board at the time of the execution of the initial agreement
providing for such reorganization, merger, share exchange or consolidation; or
(d) The consummation of (i) a complete liquidation or dissolution of the
Company or (ii) the sale or other disposition of all or substantially all of the
assets of the Company, other than to a corporation or other entity, with respect
to which following such sale or other disposition, (A) 75% or more of,
respectively, the then outstanding shares of common stock of such corporation or
other entity and the combined voting power of the then outstanding voting
securities of such corporation or other entity entitled to vote generally in the
election of directors is then beneficially owned, directly or indirectly, by all
or substantially all of the Persons who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately prior to such
sale or other disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (B) no Person
(excluding the Company, any Exempt Person, any employee benefit plan (or related
trust) of the Company or such corporation or other entity and any person
beneficially owning, immediately prior to such sale or other disposition,
directly or indirectly, 20% or more of the Outstanding Company Common Stock or
Outstanding Company Voting Securities, as the case may be) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of such corporation or other entity or the combined
voting power of the then outstanding voting securities of such corporation or
other entity entitled to vote generally in the election of directors and (C) at
least a majority of the members of the board of directors of such corporation or
other entity were members of the Incumbent Board at the time of the execution of
the initial agreement or action of the Board providing for such sale or other
disposition of assets of the Company; or
(e) The occurrence of one transaction or a series of transactions, which
has the effect of a divestiture by the Company of 25% or more of the combined
voting power of the outstanding voting securities of the Bank; or
(f) The occurrence of any sale, lease or other transfer, in one
transaction or a series of transactions, of all or substantially all of the
assets of the Bank (other than to the Company or one or more Exempt Persons).
2A. Exempt Person. For purposes of this Agreement, "Exempt Person" shall
mean (i) Xxxxxx X. XxXxxxxx; (ii) Xxxxxx X. XxXxxxxx; (iii) any Exempt
Descendant (as defined below); (iv) any corporation, partnership, trust or other
organization a majority of the beneficial ownership interest of which is owned
directly or indirectly by one or more of Xxxxxx X.
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XxXxxxxx, Xxxxxx X. XxXxxxxx or any Exempt Descendant; (v) any estate or other
successor-in-interest by operation of law of Xxxxxx X. XxXxxxxx, Xxxxxx X.
XxXxxxxx or any Exempt Descendant; and (vi) with reference to an issuer, any
group within the meaning of Rule 13d-5(b) under the Exchange Act, if the
majority of the shares of such issuer beneficially owned by such group is
attributable to shares of such issuer which would be considered beneficially
owned by individuals and entities described in (i) through (v) inclusive absent
the existence of the group. For purposes of this definition, "Exempt Descendant"
shall mean any child, grandchild or other descendant of Xxxxxx X. XxXxxxxx, or
any spouse of any such child, grandchild or other descendant, including in all
cases adoptive relationships.
3. Employment.
(a) During the Employment Term, the Bank agrees to continue to employ
the Executive, and the Executive agrees to remain in the employ of
the Bank, subject to the terms and conditions of this Agreement.
During the Employment Term, the Executive shall be employed as
_______________________________________ of the Bank or in another
executive capacity of similar or greater importance requiring the
performance of some or all of the same pr similar duties and
responsibilities. During the Employment Term, the Executive's
services shall be performed at the location where the Executive was
employed immediately preceding the Effective Date or at any office
or location less than 35 miles from such location, unless mutually
agreed to in writing by the parties.
(b) Excluding periods of vacation and sick leave to which the Executive
is entitled, during the Employment Term the Executive agrees to
devote full time attention to the business and affairs of the Bank
and its affiliated companies to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, provided
that the Executive may take reasonable amounts of time to (i) serve
on corporate, civil or charitable boards or committees, and (ii)
deliver lectures, fulfill speaking engagements or teach at
educational institutions, if such activities do not significantly
interfere with the performance of the Executive's responsibilities
hereunder. It is expressly understood and agreed that to the extent
any such activities have been conducted by the Executive during the
period of [his/her] employment with the Bank prior to the Effective
Date, the continued conduct of such activities (or the conduct of
activities similar in nature and scope) subsequent to the Effective
Date shall not thereafter be deemed to interfere with the
performance of the Executive's responsibilities hereunder.
4. Compensation.
(a) Base Salary. During the Employment Term, the Executive shall receive
an annual base salary ("Annual Base Salary"), which shall be paid at
a monthly rate, at least equal to 12 times the highest monthly base
salary paid or payable to the Executive by the Bank and its
affiliated companies in respect of the 12 month period immediately
preceding the month in which the Effective Date occurs. During the
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Employment Term, the Annual Base Salary shall be reviewed at least
annually and shall be increased at any time and from time to time as
shall be substantially consistent with increases in base salary
generally awarded in the ordinary course of business to other peer
executives of the Bank and its affiliated companies. Any increase in
Annual Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. Annual Base Salary
shall not be reduced after any such increase and the term Annual
Base Salary as utilized in this Agreement shall refer to Annual Base
Salary as so increased. As used in this Agreement, the term
"affiliated companies" shall include any company controlled by,
controlling or under common control with the Bank (including any
successor or assign treated as the Bank pursuant to Section 9(a)).
(b) Discretionary Bonuses. During the Employment Term, the Executive
shall be entitled to participate, equitably in relation to other
peer executives of the Bank and its affiliated companies, in any
incentive compensation plans or awards adopted or made, and in any
discretionary bonuses authorized or paid, by the Bank or its
affiliated companies. No other compensation provided for in this
Agreement shall be deemed a substitute for the Executive's right to
participate in any such incentive compensation plans and to receive
any such awards and bonuses.
(c) Savings and Retirement Plans. During the Employment Term, the
Executive shall be entitled to participate in all savings and
retirement plans, practices, policies and programs applicable
generally to other peer executives of the Bank and its affiliated
companies, but in no event shall such plans, practices, policies and
programs provide the Executive with savings opportunities and
retirement benefit opportunities, in each case, less favorable, in
the aggregate, than the most favorable of those provided by the Bank
and its affiliated companies for the Executive under such plans,
practices, policies and programs as in effect at any time during the
12 month period immediately preceding the Effective Date, or, if
more favorable to the Executive, those provided generally at any
time after the Effective Date to other peer executives of the Bank
and its affiliated companies.
(d) Benefit Plans. During the Employment Term (and thereafter to the
extent provided in the applicable plan, practice, policy or
arrangement), the Executive and [his/her] family shall be eligible
for participation in, and shall receive benefits pursuant to, all
benefit plans, practices, policies and arrangements that are
maintained or provided by the Bank or any of its affiliated
companies (including, without limitation, medical, prescription
drug, dental, disability, salary continuance, employee life, group
life, accidental death and travel accident insurance plans and
programs) and that are applicable generally to other peer executives
of the Bank or any of its affiliated companies and their families;
provided, however, that in no event shall such plans, practices,
policies and arrangements provide the Executive and [his/her] family
with benefits that are less favorable, in the aggregate, than those
provided under the most favorable of
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such plans, practices, policies and arrangements in effect for the
Executive and [his/her] family at any time during the 12 month
period immediately preceding the Effective Date or, if more
favorable to the Executive and [his/her] family, those provided
generally at any time after the Effective Date to other peer
executives of the Bank and its affiliated companies and their
families. The Executive and [his/her] family shall be entitled to
the following specific benefits, to the extent, as to each, the
benefit would not be provided under the preceding sentence or would
exceed the benefit provided under the preceding sentence:
(1) Defined Benefit Pension Benefits. The Executive and [his/her]
spouse or beneficiaries shall be entitled to defined benefit
pension benefits not less favorable, in the aggregate, than
the basic pension benefits provided for in the Bank's
qualified defined benefit pension plan and the supplemental
pension benefits provided for in the Executive's agreement
under the Bank's nonqualified supplemental executive benefit
plan, both as in effect on the date hereof, subject to the
terms of such plans and such agreement.
(e) Expenses. During the Employment Term, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the most favorable
policies, practices and procedures of the Bank and its affiliated
companies in effect for the Executive at any time during the 12
month period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Bank and its
affiliated companies.
(f) Fringe Benefits. During the Employment Term, the Executive shall be
entitled to fringe benefits (including but not limited to club dues)
in accordance with the most favorable plans, practices, programs and
policies of the Bank and its affiliated companies in effect for the
Executive at any time during the 12 month period immediately
preceding the Effective Date or, if more favorable to the Executive,
as in effect generally at any time thereafter with respect to other
peer executives of the Bank and its affiliated companies.
(g) Office and Support Staff. During the Employment Term, the Executive
shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal
secretarial and other assistance, at least equal to the most
favorable of the foregoing provided to the Executive by the Bank and
its affiliated companies at any time during the 12 month period
immediately preceding the Effective Date or, if more favorable to
the Executive, as provided generally at any time thereafter with
respect to other peer executives of the Bank and its affiliated
companies.
(h) Vacation and Sick Leave. During the Employment Term, the Executive
shall be entitled to paid vacation and sick leave (without loss of
pay) in accordance with the most favorable plans, policies, programs
and practices of the Bank and its
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affiliated companies as in effect for the Executive at any time
during the 12 month period immediately preceding the Effective Date
or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the
Bank and its affiliated companies.
5. Termination of Employment. During the Employment Term, the Executive's
employment hereunder may be terminated under the following circumstances:
(a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Term.
If the Bank determines in good faith that the Disability of the
Executive has occurred during the Employment Term (pursuant to the
definition of Disability set forth below), it may give to the
Executive written notice in accordance with Section 10 of this
Agreement of its intention to terminate the Executive's employment.
In such event, the Executive's employment with the Bank shall
terminate effective on the 30th day after receipt of such notice by
the Executive (the "Disability Effective Date"), provided that,
within 30 days after such receipt, the Executive shall not have
returned to full-time performance of the Executive's duties. For
purposes of this Agreement, "Disability" shall mean the absence of
the Executive from the Executive's duties with the Bank and its
affiliated companies on a full-time basis for 180 consecutive
business days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a physician
selected by the Bank or its insurers and acceptable to the Executive
or the Executive's legal representative, provided if the parties are
unable to agree, the parties shall request the Xxxx of the Indiana
University School of Medicine to choose such physician.
(b) Cause. The Bank may terminate the Executive's employment for
"Cause." For purposes of this Agreement, Cause shall mean: (i) a
substantial failure by the Executive to perform [his/her] duties
hereunder, other than a failure resulting from the Executive's
incapacity due to physical or mental illness; (ii) misappropriation
or embezzlement of corporate or customer funds; (iii) conviction of,
or a plea of guilty or nolo contendere to, a felony; (iv) a
significant violation of any statutory or common law duty of loyalty
to the Bank or any of its affiliated companies which results in
material injury to the Bank or any such affiliate; (v) the removal
or prohibition of the Executive from being an institution-affiliated
party by a final order of an appropriate federal banking agency
pursuant to section 8(e) of the Federal Deposit Insurance Act
("FDIA") or any other provision of applicable law. No failure to
perform by the Executive after Notice of Termination is given by the
Executive shall constitute Cause for purposes of this Agreement.
(c) Good Reason.
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(1) The Executive may terminate [his/her] employment for Good
Reason. For purposes of this Agreement, "Good Reason" shall
mean the occurrence after a Change of Control of any of the
events or conditions described in Subsections (i) through (vi)
hereof, other than an isolated, insubstantial and inadvertent
action that is not taken in bad faith and that is remedied by
the Bank and its affiliated companies promptly after receipt
of notice thereof given by the Executive:
(i) A material change in the character of the Executive's
position or job responsibilities, if the new position or
responsibilities are demeaning or unsuitable for a
person of the Executive's background, training and
experience;
(ii) Any involuntary reduction in the Executive's target
level of annual and long-term total compensation as in
effect immediately prior to the Effective Date;
(iii) Any failure by the Bank and its affiliated companies to
comply with any of the provisions of Section 4 of this
Agreement;
(iv) Any material breach by the Bank and its affiliated
companies of any provision of this Agreement;
(v) Any purported termination of the Executive's employment
for Cause by the Bank and its affiliated companies which
does not comply with the terms of Section 5(b) of this
Agreement; and
(vi) The failure of the Bank and its affiliated companies to
obtain an agreement, satisfactory to the Executive, from
any successor or assign of the Bank and its affiliated
companies, to assume and agree to perform this
Agreement, as contemplated in Section 9 hereof; and
(vii) The giving of notice by the Bank to the Executive
pursuant to Section 1(a) of this Agreement that
automatic extensions of the Employment Term will cease
as of a date sooner than eight months after such Change
of Control.
(2) Any event or condition described in Section 5(c)(1) which
occurs prior to the Effective Date but which the Executive
reasonably demonstrates (i) was at the request of a third
party who has indicated an intention or taken steps reasonably
calculated to effect a Change of Control, or (ii) otherwise
arose in connection with or in anticipation of a Change of
Control, shall constitute Good Reason for purposes of this
Agreement notwithstanding that it occurred prior to the
Effective Date.
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(3) The Executive's right to terminate [his/her] employment
pursuant to this Section 5(c) shall not be affected by
[his/her] incapacity due to physical or mental illness. The
Executive's continued employment or failure to give Notice of
Termination shall not constitute consent to, or a waiver of
rights with respect to, any circumstances constituting Good
Reason hereunder.
(d) Voluntary Termination. The Executive may voluntarily terminate
[his/her] employment hereunder at any time.
(e) Notice of Termination. Any purported termination by the Bank or by
the Executive (other than by death of the Executive) shall be
communicated by Notice of Termination to the other. For purposes of
this Agreement, a "Notice of Termination" shall mean a written
notice which (i) indicates the specific termination provision in
this Agreement relied upon, (ii) to the extent applicable, 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 (iii) the Termination Date. For
purposes of this Agreement, no such purported termination of
employment shall be effective without such Notice of Termination.
(f) Termination Date, Etc. "Termination Date" shall mean in the case of
the Executive's death, [his/her] date of death, or in the case of
the Executive's separation from the service of the Bank and its
affiliated companies at the end of the Employment Term, the date of
such separation, or in all other cases, the date specified in the
Notice of Termination, subject to the following:
(1) If the Executive's employment is terminated by the Bank, the
date specified in the Notice of Termination shall be at least
30 days after the date the Notice of Termination is given to
the Executive, provided, however, that in the case of
Disability, the Executive shall not have returned to the
full-time performance of [his/her] duties during such period
of at least 30 days;
(2) If the Executive's employment is terminated for Good Reason,
the date specified in the Notice of Termination shall not be
more than 60 days after the date the Notice of Termination is
given to the Bank; and
(3) In the event that within 30 days following the date of receipt
of the Notice of Termination, one party notifies the other
that a dispute exists concerning the basis for termination,
the Executive's employment hereunder shall not be terminated
except after the dispute is finally resolved and a Termination
Date is determined either by a mutual written agreement of the
parties, or by a binding and final judgment order or
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decree of a court of competent jurisdiction (the time for
appeal therefrom having expired and no appeal having been
perfected).
6. Obligations of the Bank Upon Termination.
(a) Good Reason; Other Than for Cause, Death or Disability. If, during
the Employment Term, the Bank shall terminate the Executive's
employment other than for Cause or Disability or the Executive shall
terminate employment for Good Reason:
(i) The Bank shall pay to the Executive in a lump sum in cash within
five days after the Termination Date the sum of the amounts
described in A, B, C, D and E below:
A. The sum of:
(1) The Executive's Annual Base Salary through the
Termination Date to the extent not theretofore paid; and
(2) A portion of the Executive's target annual bonus for the
calendar year that includes the Termination Date, such
portion being a fraction of such bonus, the numerator of
which is the number of days of such calendar year up to
and including the Termination Date, and the denominator
of which is 365; and
(3) Any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon)
and any accrued vacation pay, in each case to the extent
not theretofore paid.
The sum of the amounts described in Clauses (1), (2) and (3)
shall be hereinafter referred to as the "Accrued Obligations."
B. The amount equal to "x" times the sum of "y" plus "z",
where
"x"= the number of days remaining in the Employment Term
(determined under Section 1(a) as though such
termination had not occurred and, if neither the Bank
nor the Executive gave the other a notice of
non-extension prior to the Termination Date, as though
the Bank had given the Executive a notice of
non-extension on the Termination Date) divided by 365;
and
"y"= the Executive's Annual Base Salary (increased for this
purpose by any Section 401(k) deferrals, cafeteria plan
elections, or other deferrals that would have increased
the Executive's Annual Base
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Salary if paid in cash to the Executive when earned);
and
"z"= the Executive's target annual bonus for the calendar
year that includes the Termination Date.
C. With respect to each savings or retirement plan,
practice, policy or program described in Section 4(c), a
separate lump-sum supplemental retirement benefit equal
to the excess of "x" over "y", where
"x"= the actuarial equivalent of the benefit that would
be payable to the Executive under such plan,
practice, policy or program if the Executive's
employment continued for the remainder of the
Employment Term (determined under Section 1(a) as
though such termination had not occurred and, if
neither the Bank nor the Executive gave the other
a notice of non-extension prior to the Termination
Date, as though the Bank had given the Executive a
notice of non-extension on the Termination Date)
with annual compensation equal to the sum of
[his/her] Annual Base Salary plus [his/her] target
annual bonus for the calendar year that includes
the Termination Date, assuming for this purpose
that all accrued benefits and contributions are
fully vested; and
"y"= the actuarial equivalent of the Executive's actual
benefit (paid or payable), if any, under such
plan, practice, policy or program.
There shall be used, in determining the "x" actuarial
equivalent, the most favorable to the Executive
actuarial assumptions and employer contribution history
with respect to the applicable plan, practice, policy or
program during the 12 month period immediately preceding
the Effective Date. There shall be used, in determining
the "y" actuarial equivalent, the actuarial assumptions
utilized with respect to the applicable plan, practice,
policy or program during the 12 month period immediately
preceding the Effective Date).
D. With respect to each medical or dental employee welfare
benefit plan in which the Executive participates
immediately before the Termination Date, the amount
equal to the product of the excess of "x" over "y" times
"z" divided by 365 [(x-y)z/365], where
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"x"= the number of days after the Termination Date the
Executive and [his/her] spouse and eligible
dependents would have been entitled to participate
in said plan if [his/her] employment had continued
and said plan had remained in effect in the same
form for the remainder of the Employment Term
(determined under Section 1(a) as though such
termination had not occurred and, if neither the
Bank nor the Executive gave the other a notice of
non-extension prior to the Termination Date, as
though the Bank had given the Executive a notice
of non-extension on the Termination Date) and
[he/she] had continued to pay the same portion of
the cost of such participation as [he/she] paid
before; and
"y"= the number of days after the Termination Date the
Executive and [his/her] spouse and eligible
dependents will be entitled to participate in said
plan (assuming said plan remains in effect in the
same form and [he/she] continues to pay the same
portion of the cost of such participation as
[he/she] paid before); and
"z"= the premium paid or payable by the Bank (net of
any portion thereof paid or payable by the
Executive) attributable to the participation of
the Executive (and [his/her] spouse and eligible
dependents, if applicable) in said plan for the
last calendar year ending before the Termination
Date.
E. The amount equal to "x" times "y", where
"x"= the number of days remaining in the Employment
Term (determined under Section 1(a) as though such
termination had not occurred and, if neither the
Bank nor the Executive gave the other a notice of
non-extension prior to the Termination Date, as
though the Bank had given the Executive a notice
of non-extension on the Termination Date) divided
by 365; and
"y"= the club dues for the Executive paid by the Bank
or its affiliated companies attributable to the
last calendar year ending before the Effective
Date.
(ii) To the extent not theretofore paid or provided, the Bank shall
timely pay or provide to the Executive any other amounts or
benefits required to be paid or provided or which the
Executive is
13
eligible to receive pursuant to this Agreement or under any
plan, program, policy or practice or contract or agreement of
the Bank or any of its affiliated companies (such other
amounts and benefits shall be hereinafter referred to as the
"Other Benefits").
(b) Death. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Term, this Agreement shall
terminate without further obligations to the Executive's legal
representatives under this Agreement, except that after the
Termination Date the Bank and its affiliated companies shall pay or
provide the Accrued Obligations and the Other Benefits.
(c) Disability. If the Executive's employment is terminated by reason of
the Executive's Disability during the Employment Term, this
Agreement shall terminate without further obligations to the
Executive, except that the Bank and its affiliated companies shall
pay or provide the Accrued Obligations and the Other Benefits.
(d) Cause; Other Than for Good Reason. If the Executive's employment
shall be terminated for Cause during the Employment Term, or if the
Executive voluntarily terminates employment during the Employment
Term for other than Good Reason, this Agreement shall terminate
without further obligations to the Executive, except that the Bank
and its affiliated companies shall pay or provide the Accrued
Obligations and the Other Benefits.
(e) Expiration of Employment Term. If the Executive's employment
terminates at the expiration of the original or any extended
Employment Term, the Executive (or [his/her] family with respect to
amounts or benefits payable or provided to the Executive's family)
shall be entitled to the Accrued Obligations and the Other Benefits.
(f) Interest on Delinquent Payments. All amounts payable under this
Section 6 shall be paid to the Executive (or to the Executive's
estate or beneficiary, as applicable) in a lump sum, in cash, within
30 days after the Date of Termination, or within such lesser number
of days after the Date of Termination as may be provided elsewhere
with respect to certain of such amounts, or at the times provided in
Section 6(a)(ii) in the case of amounts payable under that section,
or at the time provided under the applicable plan, arrangement or
election in the case of other amounts payable under an employee
benefit plan or arrangement or pursuant to the Executive's election.
If any payment is not made on time (hereinafter a "Delinquent
Payment"), the Bank and its affiliated companies shall pay to the
Executive, in addition to the principal sum, interest on such
Delinquent Payment computed at the prime rate announced from time to
time for the banking offices of JPMorgan Chase & Co., or its
successor, in Indianapolis, Indiana, compounded monthly.
14
7. No Mitigation. In no event shall the Executive be obligated to seek
other employment to 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.
8. Trade Secrets. In consideration of the compensation and benefits to
provided by the Bank to the Executive under this Agreement, and to induce the
Bank to enter into this Agreement, the Executive agrees:
(a) The Executive shall not make any Unauthorized Disclosure, either
during the term of [his/her] employment hereunder or thereafter. For purposes of
this sub-section, "Unauthorized Disclosure" means
(i) the misappropriation by the Executive of any trade secret (as
defined in Indiana Code ss. 24-2-3-2) of the Bank, the Company
or an affiliate of either (herein referred to singly as a
"First Indiana Group Entity" or collectively as the "First
Indiana Group Entities"); or
(ii) the disclosure by the Executive to any person, or the use by
the Executive, of any non-public information regarding the
First Indiana Group Entities or their customers or employees
obtained by the Executive in connection with the performance
of [his/her] duties as a director, officer or employee of any
First Indiana Group Entity, excluding (A) any such disclosure
or use expressly consented to by the Bank or the Company, (B)
any such disclosure to a director, officer, employee,
representative or consultant of a First Indiana Group Entity
whom the Executive reasonably believes to be authorized to
possess such information, (C) any such disclosure or use prior
to [his/her] Termination Date that the Executive reasonably
considers necessary or appropriate in connection with the
performance of [his/her] duties as a director, officer or
employee of any First Indiana Group Entity, and (D) any such
disclosure that is needed in order for the Executive (I) to
assert any right or defend against any claim arising under
this Agreement or (II) to comply with any law, court order or
subpoena which the Executive reasonably believes to be
applicable and enforceable against him;
provided, however, that Unauthorized Disclosure shall not include the disclosure
or use by the Executive of non-public information that at the time of such
disclosure or use is generally available to or known by the public otherwise
then by reason of the Executive's disclosure thereof in violation of this
Agreement. It is understood and agreed that this sub-section is not intended to
prevent the Executive from using or exercising the skills and general knowledge
[he/she] has acquired or increased through [his/her] training or experience as a
director, officer or employee of any First Indiana Group Entity.
15
(b) During the term of [his/her] employment hereunder, the Executive shall
not provide any banking or bank-related services or solicit or engage in any
banking or bank-related business otherwise than on behalf of a First Indiana
Group Entity.
(c) On [his/her] Termination Date, to the extent [he/she] has not already
done so, the Executive will deliver to the First Indiana Group Entities any and
all First Indiana Information and Property (as herein defined) then in [his/her]
possession or subject to [his/her] control. For purposes of this sub-section,
the term "First Indiana Information and Property" means and includes (i) all
files, records, reports, memoranda and other documents, whether written or
electronic, that the Executive received, prepared, helped prepare, directed the
preparation of, maintained or kept in connection with [his/her] service as a
director, officer or employee of any First Indiana Group Entity, (ii) all door
and file keys, identification cards or badges, credit cards, computer hardware,
computer software, computer printers, computer access codes and similar items
issued or made available to the Executive in connection with [his/her] service
as a director, officer or employee of any First Indiana Group Entity, (iii) all
documents, whether written or electronic, containing any trade secrets (as
defined in Indiana Code ss. 24-2-3-2) of any First Indiana Group Entity and (iv)
all documents, whether written or electronic, containing non-public information
regarding any First Indiana Group Entity or its customers or employees, the use
or disclosure of which might be adverse to the best interests of such entity or
its business. The Executive expressly agrees and promises that [he/she] will not
retain any copies, duplicates, reproductions, or excerpts of any First Indiana
Information and Property. The Executive acknowledges that this obligation is
continuing and agrees promptly to deliver to the First Indiana Group Entities
any subsequently discovered First Indiana Information and Property and any
subsequently discovered copies, duplicates or reproductions of, or excerpts
from, First Indiana Information and Property. In the case of electronic data
contained in files residing on the Executive's personally-owned computers
(including any drives or disks associated therewith), the Executive may satisfy
[his/her] obligations under this sub-section by deleting all such files that can
be located easily and by deleting all other such files as and when they are
discovered. Notwithstanding anything else in this subparagraph (i), the
Executive may retain documents concerning any benefit plans or employment
policies from which [he/she] may be or become entitled to benefits and documents
concerning [his/her] rights under this Agreement.
(d) The Executive understands and agrees that a breach of this section
will permit the First Indiana Group Entities to pursue all legal and equitable
relief to which they are entitled as a result of such breach.
9. Successors and Assigns.
(a) This Agreement shall be binding upon and shall inure to the benefit
of the Bank and its successors and assigns. The Bank shall require
any successor or assign (whether direct or indirect, by purchase,
merger, share exchange, consolidation or otherwise), by agreement in
form and substance satisfactory to the Executive, to acknowledge
expressly that this Agreement is binding upon and enforceable
against the Bank in accordance with the terms hereof, and to become
jointly and severally obligated with the Bank to perform this
Agreement in the same manner
16
and to the same extent that the Bank would be required to perform if
no such succession or assignment had taken place. Unless otherwise
clearly indicated by the context, the term "Bank" as used herein
shall include such successors and assigns. The term "successors and
assigns" as used herein shall mean a corporation or other entity
acquiring all or substantially all of the assets and business of the
Bank (including this Agreement), whether by operation of law or
otherwise. In the event substantially all of the assets and business
of the Bank are acquired by another entity in a transaction or
series of transactions constituting a Change of Control, such term
shall include the entity acquiring such assets and thereafter
operating such business.
(b) Neither this Agreement nor any right or interest hereunder shall be
assignable or transferable by the Executive, [his/her] beneficiaries
or legal representatives, except by will or by the laws of descent
and distribution. This Agreement shall inure to the benefit of and
be enforceable by the Executive's legal representative.
10. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, if to the Bank, to First Indiana Bank, 000 Xxxxx Xxxxxxxxxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000, or if to the Executive, to the address set
forth below the Executive's signature, or to such other address as the party may
be notified, provided that all notices to the Bank shall be directed to the
attention of the Board with a copy to the Secretary of the Bank. All notices and
communications shall be deemed to have been received on the date of delivery
thereof or on the third business day after the mailing thereof, except that
notice of change of address shall be effective only upon receipt.
11. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Bank or any of its affiliated
companies for which the Executive may qualify. Amounts which are vested benefits
or which the Executive is otherwise entitled to receive under any plan or
program of the Bank or any of its affiliated companies shall be payable in
accordance with such plan or program, except as explicitly modified by this
Agreement.
12. Settlement of Claims. The Bank's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Bank or any of its affiliated companies may have against the Executive or
others.
13. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and the Bank. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or
17
conditions at the same or at any prior or subsequent time. No agreement or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement.
14. Employment. The Executive and the Bank acknowledge that, prior to the
Effective Date, the employment of the Executive by the Bank is "at will" and may
be terminated by either the Executive or the Bank at any time. If the
Executive's employment with the Bank terminates prior to the Effective Date,
then the Executive shall have no further rights under this Agreement.
15. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Indiana without giving
effect to the conflict of law principles thereof.
16. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
17. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof; provided, however, that this
Agreement shall not affect or operate to reduce any benefit or compensation
inuring to the Executive of a kind generally provided under a separate
agreement, understanding or arrangement and not expressly provided under this
Agreement.
18. Headings. The headings herein contained are for reference only and
shall not affect the meaning or interpretation of any provision of this
Agreement.
19. Modification. No provision of this Agreement may be modified, waived
or discharged unless such modification, waiver or discharge is agreed to in
writing signed by both the Executive and the Bank.
20. Arbitration. In the event of any disputes, differences, controversies
or claims arising out of, or in connection with, this Agreement, other than a
dispute in which the sole relief sought is an equitable remedy, such as a
temporary restraining order or a permanent or temporary injunction, the parties
shall be required to have the dispute, controversy, difference or claim settled
through binding arbitration pursuant to the American Arbitration Association's
rules of commercial arbitration which are then in effect. The location of all
arbitration proceedings shall be Indianapolis, Indiana. One arbitrator shall be
selected by the parties and shall be a current or former executive officer (vice
president or higher) of a publicly-traded corporation. In the event the parties
are unable mutually to agree upon a person to act as the arbitrator, or in the
event a mutually-agreed upon arbitrator shall fail to accept the appointment by
the parties, the parties jointly shall request from the American Arbitration
Association a list of the names of five persons who would be qualified to act as
an arbitrator under this section. The selection of the final arbitrator then
shall be achieved by each party alternately striking a name, with the Bank going
first, until one name remains. In the event the parties mutually agree that the
five names
18
submitted by the American Arbitration Association are unsatisfactory, they
jointly may request a second list of five names from the American Arbitration
Association and final selection shall be achieved through the procedure set out
herein. The decision of the arbitrator is final and binding upon both parties
and any award entered by the arbitrator shall be final, binding and
non-appealable and judgment may be entered thereon by either party in accordance
with the applicable law in any court of competent jurisdiction. The arbitrator
shall not have authority to modify any provision of this Agreement nor to award
a remedy for any difference, dispute, controversy or claim arising under this
Agreement other than a benefit specifically provided under or by virtue of this
Agreement. The Bank shall be responsible for all of the reasonable expenses of
the American Arbitration Association, the arbitrator and the conduct of the
selection and the arbitration procedures set forth in this clause, including
reasonable attorneys' fees and expenses incurred by either party which are
associated with the arbitration procedure through the time the final arbitration
decision or award is rendered. This arbitration provision shall be specifically
enforceable.
21. Withholding. The Bank shall be entitled to withhold from amounts paid
to the Executive hereunder any federal, estate or local withholding or other
taxes or charges which it is, from time to time, required to withhold. The Bank
shall be entitled to rely on an opinion of counsel if any question as to the
amount or requirement of any such withholding shall arise.
22. Limitation on Payments.
(a) Notwithstanding anything contained herein to the contrary, prior to
the payment of any amounts pursuant to Section 6(a) hereof, an independent
national accounting firm designated by the Bank (the "Accounting Firm") shall
compute whether there would be payable to the Executive any "excess parachute
payments," within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), taking into account the total "parachute
payments," within the meaning of Section 280G of the Code, payable or to be
provided to the Executive, whether by the Bank or any of its affiliates or by
any successor to the Bank or any such affiliate, and whether under this
Agreement or outside of this Agreement. If there would be any excess parachute
payments, the Accounting Firm will compute the net after-tax proceeds to the
Executive, taking into account the excise tax imposed by Section 4999 of the
Code, if (i) such parachute payments were reduced to the point that the total
thereof would not exceed three times the "base amount" as defined in Section
280G of the Code, less One Dollar ($1.00), or (ii) such parachute payments were
not reduced. If not reducing such parachute payments would result in a greater
after-tax amount to the Executive, such parachute payments shall not be reduced.
If reducing such parachute payments would result in a greater after-tax amount
to the Executive, they shall be reduced to such lesser amount. If such parachute
payments must be reduced, the Executive shall direct which of the payments are
to be reduced and the manner in which each is to be limited or modified. The
determination by the Accounting Firm shall be binding upon the Bank and its
affiliated companies and the Executive subject to the application of Section
22(c) hereof.
(b) As a result of various incentive or other plans, the Executive may be
entitled to receive various parachute payments over a period of several years.
In such event, the
19
Accounting Firm may need to update its Section 22(a) calculations one or more
times. In the event that all or a portion of a parachute payment is not made due
to the limitations of this Section 22, the Bank and its affiliated companies
shall not be relieved of liability for such amount but such parachute payment
shall be deferred and included in calculations with respect to subsequent
parachute payments.
(c) As a result of uncertainty in the application of section 280G of the
Code at the time of determinations by the Accounting Firm hereunder,
uncertainties in the valuation of future payments, and deferrals pursuant to
Section 6(a), it is possible that parachute payments will have been made by the
Bank and its affiliated companies which should not have been made (an
"Overpayment") or that additional parachute payments which will not have been
made by the Bank and its affiliated companies could have been made (an
"Underpayment"), consistent in each case with the other provisions of this
Section 22. In the event that the Accounting Firm, based upon the assertion of a
deficiency by the Internal Revenue Service against the Bank or any of its
affiliated companies or the Executive which the Accounting Firm believes has a
high probability of success, determines that an Overpayment has been made, such
Overpayment shall be treated for all purposes as a loan to the Executive which
the Executive shall repay to the Bank or such affiliated company, together with
interest at the applicable federal rate provided for in section 7872(f)(2)(A) of
the Code; provided, however, that no amount shall be payable by the Executive to
the Bank or such affiliated company if and to the extent that such payment would
not reduce the amount which is subject to taxation under section 4999 of the
Code. In the event that the Accounting Firm determines that an Underpayment has
occurred, such Underpayment shall promptly be paid or transferred by the Bank or
such affiliated company to or for the benefit of the Executive, together with
interest at the applicable federal rate provided for in section 7872(f)(2)(A) of
the Code.
(d) All fees, costs and expenses (including, but not limited to, the cost
of retaining experts) of the Accounting Firm shall be borne by the Bank and the
Bank shall pay such fees, costs and expenses as they become due. In performing
the computations required hereunder, the Accounting Firm shall assume that all
parachute payments to be made to the Executive will be subject to federal and
state income tax at the maximum rate in effect at the time the determination is
made unless the Executive provides the Accounting Firm with evidence that it is
more probable than not that one or more parachute payments will be taxable at a
lower rate, or lower rates, in which case the Accounting Firm shall assume that
such parachute payments will be taxed at the lower rate or rates.
(e) In the event this Agreement is subject to Section 18(k) of the FDIA at
the time any payment is to be made by the Bank to the Executive pursuant to this
Agreement or otherwise, such payment will be subject to, and conditioned upon,
its compliance with Section 18(k) of the FDIA and any regulations promulgated
thereunder.
23. Required Provisions.
(a) If the Executive is suspended or temporarily prohibited from
participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) or (g)(1) of the FDIA (12
20
U.S.C. 1818(e)(3) and (g)(1)), the Bank's obligations under this Agreement shall
be suspended as of the date of service unless stayed by appropriate proceedings.
If the charges in the notice are dismissed, the Bank may in its discretion (i)
pay the Executive all or part of the compensation withheld while its obligations
hereunder were suspended, and (ii) reinstate (in whole or in part) any of its
obligations which were suspended.
(b) If the Executive is removed and/or permanently prohibited from
participation in the conduct of the Bank's affairs by an order issued under
Section 8(e)(4) or (g)(1) of the FDIA (12 U.S.C. 1818(e)(4) or (g)(1)), all
obligations of the Bank under this Agreement shall terminate as of the effective
date of the order, but any vested rights of the contracting parties shall not be
affected.
(c) If the Bank is in default (as defined in Section 3(x)(1) of the FDIA),
all obligations under this Agreement shall terminate as of the date of default,
but any vested rights of the contracting parties shall not be affected.
(d) All obligations under this Agreement shall be terminated, except to
the extent it is determined that continuation of this Agreement is necessary for
the continued operation of the Bank: (i) by the Director of the Federal Deposit
Insurance Corporation (the "Director") or his or her designee, at the time the
Federal Deposit Insurance Corporation enters into an agreement to provide
assistance to or on behalf of the Bank under the authority contained in Section
13(c) of the FDIA; or (ii) by the Director or his or her designee at the time
the Director or his or her designee approves a supervisory merger to resolve
problems related to operation of the Bank or when the Bank is determined by the
Director to be in an unsafe or unsound condition. All rights of the parties that
have already vested, however, shall not be affected by such action.
IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed by
its duly authorized officers and the Executive has executed this Agreement as of
the day and year first above written.
FIRST INDIANA BANK
By: ___________________________________
_____________________, _______
"Bank"
ATTEST:
______________________
Secretary
_______________________________________
__________________________
"Executive"
Address: ______________________________
______________________________
21
