Exhibit 10(r)
OLD NATIONAL BANCORP
1999 EQUITY INCENTIVE PLAN
"PERFORMANCE-BASED" RESTRICTED STOCK AWARD AGREEMENT
THIS AWARD AGREEMENT (the "Agreement"), made and executed as of the 27th
day of January, 2005, between Old National Bancorp, an Indiana corporation (the
"Company"), and _____________________________, an officer or employee of the
Company or one of its Affiliates (the "Participant").
WITNESSETH:
WHEREAS, the Company has adopted the Old National Bancorp 1999 Equity
Incentive Plan (the "Plan") to further the growth and financial success of the
Company and its Affiliates by aligning the interests of Participants, through
the ownership of Shares and through other incentives, with the interests of the
Company's shareholders; to provide Participants with an incentive for excellence
in individual performance; and to promote teamwork among Participants; and
WHEREAS, it is the view of the Company that this goal can be achieved by
granting Restricted Stock to eligible officers and other key employees; and
WHEREAS, the Participant has been designated by the Compensation Committee
as an individual to whom Restricted Stock should be granted as determined from
the duties performed, the initiative and industry of the Participant, and his or
her potential contribution to the future development, growth and prosperity of
the Company;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the Company and the Participant agree as follows:
1. AWARD OF RESTRICTED STOCK. The Company hereby awards to the Participant
_______________________ (__________) Shares of performance-based Restricted
Stock (hereinafter, the "Restricted Stock"), subject to the terms and conditions
of this Agreement and the provisions of the Plan. All provisions of the Plan,
including defined terms, are incorporated herein and expressly made a part of
this Agreement by reference. The Participant hereby acknowledges that he or she
has received a copy of the Plan.
2. PERFORMANCE GOALS. Except as otherwise provided in Sections 4 and 5 of
this Agreement, the Restricted Stock will be treated as earned to the extent the
Performance Goals specified in EXHIBIT A are satisfied. To the extent the
Performance Goals are not satisfied (with the result that either no Shares or
less than all Shares of Restricted Stock have been earned), then the unearned
Shares will be forfeited, effective as of the last day of the Performance
Period, regardless of whether the Period of Restriction has otherwise lapsed
under Section 3 of this Agreement.
3. PERIOD OF RESTRICTION. The Period of Restriction shall begin on the
Grant Date and lapse, except as otherwise provided in Sections 2, 4 and 5 of
this Agreement, on March 31, 2008.
4. CHANGE IN CONTROL. Notwithstanding any other provision of this
Agreement, any Shares of Restricted Stock which have not been earned or are
subject to the Period of Restriction, shall be treated as fully earned and the
Period of Restriction shall lapse upon a Change in Control of the Company as
provided in Section 12.1 of the Plan.
5. TERMINATION OF SERVICE. Notwithstanding any other provision of this
Agreement, in the event of the Participant's Termination of Service due to
death, Disability or Retirement, the following shall apply:
(a) If the Participant's Termination of Service is due to death, the (i)
Period of Restriction shall lapse, and (ii) the Shares shall be
treated as earned, at the "Target" level specified in EXHIBIT A,
effective as of the date of death.
(b) If the Participant's Termination of Service is due to Disability or
Retirement, (i) he shall continue to be treated as a Participant,
(ii) the Period of Restriction shall lapse at the time specified in
Section 3 of this Agreement, and (iii) the Shares shall be treated
as earned to the extent the applicable Performance Goals are
satisfied; provided, however, that if the Participant dies prior to
the end of the Period of Restriction, then the provisions of
subsection (a) of this Section 5 shall apply.
Unless otherwise determined by the Committee in its sole discretion, in
the event of the Participant's Termination of Service for any other reason, any
Shares of Restricted Stock which have not been earned and/or with respect to
which the Period of Restriction has not lapsed, shall be forfeited effective as
of the date of the Participant's Termination of Service.
6. DIVIDENDS ON RESTRICTED STOCK. During the Period of Restriction, the
Participant shall be entitled to receive any cash dividends paid with respect to
the Shares of Restricted Stock, regardless of whether such Shares have been
earned or the Period of Restriction has not lapsed. All stock dividends paid
with respect to Shares of Restricted Stock shall be (a) added to the Restricted
Stock, and (b) subject to all of the terms and conditions of this Agreement and
the Plan.
7. VOTING RIGHTS. During the Period of Restriction, the Participant may
exercise all voting rights with respect to the Shares of Restricted Stock as if
he or she is the owner thereof.
8. PARTICIPANT'S REPRESENTATIONS. The Participant represents to the
Company that:
(a) The terms and arrangements relating to the grant of Restricted Stock
and the offer thereof have been arrived at or made through direct
communication with the Company or person acting in its behalf and
the Participant;
2
(b) The Participant has received a balance sheet and income statement of
the Company and as an officer or key employee of the Company:
(i) is thoroughly familiar with the Company's business affairs and
financial condition and
(ii) has been provided with or has access to such information (and
has such knowledge and experience in financial and business
matters that the Participant is capable of utilizing such
information) as is necessary to evaluate the risks, and make
an informed investment decision with respect to, the grant of
Restricted Stock; and
(c) The Restricted Stock is being acquired in good faith for investment
purposes and not with a view to, or for sale in connection with, any
distribution thereof.
9. INCOME AND EMPLOYMENT TAX WITHHOLDING. All required federal, state,
city and local income and employment taxes which arise on the satisfaction of
the Performance Goals and the lapse of the Period of Restriction shall be
satisfied through the (a) withholding of the Shares required to be issued under
Section 11, or (b) tendering by the Participant of Shares which are owned by the
Participant, as described in Section 6.6(a) of the Plan. The Fair Market Value
of the Shares to be withheld or tendered shall be equal to the dollar amount of
the Company's aggregate withholding tax obligations, calculated as of the day
prior to the day on which the Period of Restriction ends.
10. NONTRANSFERABILITY. Until the end of the Period of Restriction, the
Restricted Stock cannot be (i) sold, transferred, assigned, margined,
encumbered, bequeathed, gifted, alienated, hypothecated, pledged or otherwise
disposed of, whether by operation of law, whether voluntarily or involuntarily
or otherwise, other than by will or by the laws of descent and distribution; or
(ii) subject to execution, attachment or similar process. Any attempted or
purported transfer of Restricted Stock in contravention of this Section 10 or
the Plan shall be null and void ab initio and of no force or effect whatsoever.
11. ISSUANCE OF SHARES. At or within a reasonable period of time following
execution of this Agreement, the Company will issue, in book entry form, the
Shares representing the Restricted Stock.
As soon as administratively practicable following the date on which the
Shares of Restricted Stock are earned and the Period of Restriction lapses, the
Company will issue to the Participant or his Beneficiary the number of Shares of
Restricted Stock specified in EXHIBIT A, less any withholdings required by
Section 9 of this Agreement. In the event of the Participant's death before the
Shares are issued, such stock certificate will be issued to the Participant's
Beneficiary or estate in accordance with Section 14.7 of the Plan.
Notwithstanding the foregoing provisions of this Section 11, the Company
will not be required to issue or deliver any certificates for Shares prior to
(i) completing any registration or other qualification of the Shares, which the
Company deems necessary or advisable under any federal or state law or under the
rulings or regulations of the Securities and Exchange Commission or any other
governmental regulatory body; and (ii) obtaining any approval or other clearance
from any federal or state governmental agency or body, which the Company
3
determines to be necessary or advisable. The Company has no obligation to obtain
the fulfillment of the conditions specified in the preceding sentence. As a
further condition to the issuance of certificates for Shares, the Company may
require the making of any representation or warranty which the Company deems
necessary or advisable under any applicable law or regulation.
12. MITIGATION OF EXCISE TAX. Except to the extent otherwise provided in a
written agreement between the Company and the Participant, the Restricted Stock
issued hereunder is subject to reduction by the Committee for the reasons
specified in Section 14.10 of the Plan.
13. INDEMNITY. The Participant hereby agrees to indemnify and hold
harmless the Company and its Affiliates (and their respective directors,
officers and employees), and the Committee, from and against any and all losses,
claims, damages, liabilities and expenses based upon or arising out of the
incorrectness or alleged incorrectness of any representation made by the
Participant to the Company or any failure on the part of the Participant to
perform any agreements contained herein. The Participant hereby further agrees
to release and hold harmless the Company and its Affiliates (and their
respective directors, officers and employees) from and against any tax
liability, including without limitation, interest and penalties, incurred by the
Participant in connection with his or her participation in the Plan.
14. FINANCIAL INFORMATION. The Company hereby undertakes to deliver to the
Participant, at such time as they become available and so long as the Period of
Restriction has not lapsed and the Restricted Stock has not been forfeited, a
balance sheet and income statement of the Company with respect to any fiscal
year of the Company ending on or after the date of this Agreement.
15. CHANGES IN SHARES. In the event of any change in the Shares, as
described in Section 4.5 of the Plan, the Committee will make appropriate
adjustment or substitution in the Shares of Restricted Stock, all as provided in
the Plan. The Committee's determination in this respect will be final and
binding upon all parties.
16. EFFECT OF HEADINGS. The descriptive headings of the Sections and,
where applicable, subsections, of this Agreement are inserted for convenience
and identification only and do not constitute a part of this Agreement for
purposes of interpretation.
17. CONTROLLING LAWS. Except to the extent superseded by the laws of the
United States, the laws of the State of Indiana, without reference to the choice
of law principles thereof, shall be controlling in all matters relating to this
Agreement.
18. COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, each of which will be deemed an original, but all of which
collectively will constitute one and the same instrument.
IN WITNESS WHEREOF, the Company, by its officer thereunder duly
authorized, and the Participant, have caused this Restricted Stock Award
Agreement to be executed as of the day and year first above written.
4
PARTICIPANT
______________________
Printed Name
______________________
Signature
OLD NATIONAL BANCORP
By: /s/ Xxxxx X. Xxxxxx
-------------------
Xxxxx X. Xxxxxx
Executive Vice President
Chief Human Resources Officer
5
EXHIBIT A
GRANT DATE: January 27, 2005
SHARES OF RESTRICTED STOCK AWARDED: See Section 1 of the Agreement
PERFORMANCE PERIOD: January 1, 2005 through December 31, 2007
OVERVIEW
To continue its objective of focusing the executive officers on creation of
stockholder value, Old National Bancorp's Compensation Committee has approved a
3-year Performance Based Restricted Stock award to executive officers, which
could be earned on December 31, 2007 based on the collective results of three
performance factors measured against a comparator "Peer" group. The three
performance factors are:
1. Relative Total Shareholder Return (TSR)
2. Earnings Per Share (EPS) Growth
3. Book Value Per Share (BVPS) Growth
DEFINITION OF PERFORMANCE FACTORS
Relative Total Shareholder Return (TSR):
Relative TSR represents Common Stock price appreciation plus dividends paid
based on the 12 month average stock price for the period ending December 31,
2004 ("Calculation Period") compared to the 12 month average stock price for the
period ending December 31, 2007 ("Calculation Period"), for Old National and the
Peer Group. An index will be created to show the value of a $100 investment over
the performance period. The 12 month average stock price will be determined by
averaging the closing stock price of each calendar month during the "Calculation
Periods", including adjustments for cash and stock dividends.
Earnings Per Share (EPS) Growth:
EPS Growth represents the compound annual rate of change from December 31, 2004
through December 31, 2007 for the Peer Group compared to the Old National's
Earnings Per Share (EPS) Growth from December 31, 2004 through December 31,
2007. Old National's 2004 Earnings Per Share to be used for the growth
calculation was $1.29 (restated for various one time restructuring charges
recorded in 2004)
Book Value Per Share (BVPS) Growth:
BVPS growth represents the compound annual rate of increase from December 31,
2004 through December 31, 2007.
PERFORMANCE WEIGHTS
"Performance Weight" equals the relative importance of each performance measure
in evaluating performance relative to the peer group and determining the number
of Performance Based Restricted Shares earned. The following weight has been
assigned to each performance factor:
RELATIVE EPS BVPS
TSR GROWTH GROWTH
--- ------ ------
50% 25% 25%
6
PEER GROUP
The Peer Group for the 2004 Awards will include the following 30 banks. For
subsequent Award cycles, the Committee will reevaluate the makeup of the Peer
Group.
TICKER
PEER GROUP SYMBOL STATE
---------- ------ -----
First Horizon FHN TN
Hibernia Corp HIB LA
Colonial BancGroup CNB AL
Associated Banc Corp ASBC WI
Commerce Bancshares Inc CBSH MO
BOK Financial Corp BOKF OK
Sky Financial Group Inc SKYF OH
Mercantile Bankshares Corp MRBK MD
TCF Financial TCB MN
FirstMerit Corp FMER OH
BancorpSouth Inc BXS XX
Xxxxxx/Xxxxx Bankers Inc CFR TX
Valley National Bancorp VLY NJ
Xxxxxx Financial Corp FULT PA
UMB Financial Corp UMBF MO
South Financial Group Inc TSFG SC
Citizens Banking Corp CBCF MI
Whitney Holding Corp WTNY LA
Trustmark Corp TRMK MS
F N B Corp/FL FNB FL
First Midwest Bancorp Inc FMBI IL
Intl Bancshares Corp IBOC TX
Susquehanna Bancshares Inc SUSQ PA
Southwest Bancorp of Texas SWBT TX
Republic Bancorp RBNC MI
Xxxxx Financial IFC IN
AMCORE Financial AMFI IL
1st Source Corporation SRCE IN
First Merchants Corporation FRME IN
Integra Bank Corp. IBNK IN
Peer Group members may be removed in the event of a merger or acquisition.
7
CALCULATION OF PERFORMANCE
For each Performance Factor, the performance for Old National and the peer banks
will be determined and then ranked. Old National's rank will then be multiplied
times the Performance Weight for each Performance Factor, resulting in Old
National's Weighted Average Performance Rank. The Weighted Average Performance
Rank will be used to determine Old National's Relative Percentile Ranking. The
table below shows the percent of the Shares Awarded (Section 1 of Agreement)
that may be earned at various percentile rankings:
WEIGHTED AVERAGE
PERCENTILE RANK VS. % OF SHARES PERFORMANCE
PEER GROUP EARNED LEVEL
------------------- ----------- -----------
>= 75% 200% Maximum
70% 180%
65% 160%
60% 140%
55% 120%
50% 100% Target
45% 75%
40% 50%
35% 25% Threshold
< 35% 0%
If Old National's percentile ranking is between the points shown above, the
payout will be interpolated.
TIMING FOR AWARD DETERMINATION
Once performance for Old National and the Peer Group is known, and the
corresponding percentile ranking is calculated, one of the following scenarios
will occur:
- If Old National's percentile ranking is below the 35th percentile,
all Restricted Stock awarded (Section 1) will be forfeited.
- If Old National's percentile ranking is between the 35th percentile
and the 50th percentile, restrictions will lapse on 25% to 100% of
the Restricted Stock per the above schedule noted in the
"Calculation of Performance" section.
- If performance is above the 50th percentile, then all restrictions
will lapse on the Restricted Stock, and an additional unrestricted
grant will be issued for the appropriate number of shares.
Final determination of the results including action related to one of the above
scenarios will occur on or before March 31, 2008.
8
