EXHIBIT 10.24
TERMINATION BENEFITS AGREEMENT
This TERMINATION BENEFITS AGREEMENT (this "Agreement") is
made and
entered into as of _______________, 199___, by and between
MERIDIAN INSURANCE GROUP, INC., an Indiana corporation
(hereinafter referred to as the "Corporation") and
______________, a resident of the State of Indiana (hereinafter
referred to as "Employee").
RECITALS
A. Employee is now serving as a member of the executive
staff of the Corporation.
B. The Corporation believes that Employee has made valuable
contributions to the productivity and profitability of the
Corporation.
C. The Board of Directors of the Corporation has determined
that it is in the best interests of the Corporation and its
shareholders to assure that the Corporation will have the
continued undivided time, attention, loyalty, and dedication of
Employee, notwithstanding the possibility, threat or occurrence
of a Change in Control (as defined in Section 2 hereof) of the
Corporation.
D. The Board believes it is imperative to diminish the
inevitable distraction of
Employee by virtue of the personal uncertainties and risks
created by pending or threatened Change in Control and to
encourage Employee's full undivided time, attention, loyalty, and
dedication to the Corporation currently and in the event of any
threatened or pending Change in Control.
E. By this Agreement, the Board intends upon a Change in
Control to assure Employee with compensation and benefits
arrangements if his or her employment terminates as a result of a
Change in Control which are competitive with those of other
corporations similarly situated to the Corporation. Therefore,
in order to accomplish these objectives, the Board has caused the
Corporation to enter into this Agreement.
F. In reliance on this Agreement, Employee is willing to
continue his or her employment with the Corporation on the terms
agreed to by the Employee and Corporation from time to time.
AGREEMENT
In consideration of the foregoing and of the mutual
covenants herein contained and the mutual benefits herein
provided, the Corporation and Employee hereby agree as follows:
Section 1. Term. The initial term of this Agreement shall
be from the date hereof through December 31, 199__. The term of
this Agreement shall be automatically extended for an additional
year on December 31, 199__ (that is, to a term extending through
December 31, 199__) and on December 31 of each year thereafter
unless either party hereto gives written notice to the other
party not to so extend prior to November 30 of the year for which
notice is given, in which case no further automatic extension
shall occur. In addition, if a Change in Control of the
Corporation (as defined in Section 2 below) shall occur during
the term of this Agreement, then the term of this Agreement shall
automatically be extended to a date one year following the
consummation of the Change in Control.
Section 2. Change in Control Defined. As used in this
Agreement, "Change in Control" of the Corporation means:
(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 as in effect from time
to time) of fifty percent (50%) or more of either (i) the then
outstanding shares of common stock of the Corporation or (ii) the
combined voting power of the then outstanding voting securities
of the Corporation entitled to vote generally in the election of
directors; provided, however, that the following acquisitions
shall not constitute a Change in Control: (i) any acquisition by
the Corporation, (ii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the
Corporation or any corporation controlled by or under common
control with the Corporation, or (iii) any acquisition by
Meridian Mutual Insurance Company ("Meridian Mutual"); or
(B) Individuals who, as of the date hereof, constitute the
Board of Directors of the Corporation (the "Incumbent Board")
cease for any reason to constitute at least a majority of the
Board of Directors of the Corporation (the "Board"); provided,
however, that any individual becoming a director subsequent to
the date hereof whose election or nomination for election by the
Corporation'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 (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the
Board; or
(C) So long as Meridian Mutual owns twenty-five percent
(25%) or more of either (i) the then outstanding shares of common
stock of the Corporation or (ii) the combined voting power of the
then outstanding voting securities of the Corporation entitled to
vote generally in the election of directors: individuals who, as
of the date hereof, constitute the Board of Directors of Meridian
Mutual (the "Incumbent Mutual Board") cease for any reason to
constitute a majority of the Board of Directors of Meridian
Mutual(the "Mutual Board"); provided, however, that any individual
becoming a Director of the Mutual Board subsequent to the date
hereof whose election, or nomination for election by Meridian
Mutual's policyholders, was approved by a vote of at least a
majority of the Directors then comprising the Incumbent Mutual
Board shall be considered as though such individual were a
member of the Incumbent Mutual 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 of proxies or
consents by or on behalf of a Person other than the Mutual Board;
or
(D) Approval by the shareholders of the Corporation of (i)
a reorganization, merger, consolidation or share exchange, in
each case, unless, following such transaction the conditions
specified in clauses (a), (b) and (c) of this Section 2(D) are
satisfied, or (ii) a complete liquidation or dissolution of the
Corporation or the sale or other disposition of all or
substantially all of the assets of the Corporation, other than to
a corporation with respect to which following such transaction
the conditions specified in clauses (a), (b) or (c) of this
Section 2(D) are satisfied. Such conditions are: (a) more than
sixty percent (60%) of, respectively, the then outstanding shares
of common stock of the corporation resulting from such
transaction and the combined voting power of the then outstanding
voting securities of such corporation 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 Corporation common stock and outstanding Corporation
voting securities immediately prior to such transaction in
substantially the same proportions as their ownership,
immediately prior to such transaction, of the outstanding
Corporation stock and outstanding Corporation voting securities,
as the case may be, (b) no Person (excluding the Corporation, any
employee benefit plan or related trust of the Corporation or such
corporation resulting from such transaction and any Person
beneficially owning, immediately prior to such transaction,
directly or indirectly, twenty-five percent (25%) or more of the
outstanding Corporation common stock or outstanding voting
securities, as the case may be) beneficially owns, directly or
indirectly, twenty-five percent (25%) or more of, respectively,
the then outstanding shares of common stock of the corporation
resulting from such transaction or the combined voting power of
the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors, and (c)
at least a majority of the members of the board of directors of
the corporation resulting from such transaction were members of
the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such transaction.
Section 3. Termination of Employment. The Corporation
shall provide Employee with the payment and benefits set forth in
Section 4 of this Agreement upon any termination of Employee's
employment with the Corporation (whether such termination of
employment is initiated by the Corporation or by Employee) that
occurs within the one-year period following a Change in Control,
unless such termination of employment occurs for any of the
following reasons:
(A) Termination by reason of Employee's death.
(B) Termination by reason of Employee's "disability". For
purposes hereof, "disability" shall be deemed to conform to the
definition thereof contained in the Corporation's benefit plan
applicable immediately prior to the Change in Control as defined
in Section 2 of this Agreement.
(C) Termination upon Employee reaching normal retirement
date, which for purposes of this Agreement shall be deemed to
conform to the definition thereof contained in the Corporation's
benefit plan applicable immediately prior to the Change in
Control as defined in Section 2 of this Agreement.
(D) Termination for "cause". As used in this Agreement,
the term "cause" means Employee's conviction for fraud or a
felony involving the Corporation or for theft of corporate
assets.
Section 4. Payments and Benefits. Except for a termination
of employment for a reason specified in subsections (A), (B), (C)
or (D) of Section 3 hereof, the following payments and benefits,
less any amounts required to be withheld therefrom under any
applicable federal, state or local income tax, other tax, or
social security laws or similar statutes, shall be paid to
Employee upon any termination of Employee's employment with the
Corporation that occurs during the term of this Agreement and
within the one-year period following a Change in Control:
(A) Within thirty (30) days following such a termination,
Employee shall be paid: (i) at his or her then-effective salary,
for services performed through the date of termination, and (ii)
any earned and unpaid amount of any bonus or incentive payment
(for example, any bonus earned but not yet paid under the
Corporation's executive bonus compensation plan with respect to
the calendar year preceding the year in which the termination of
employment occurs).
(B) Within thirty (30) days following such a termination,
Employee shall be paid a lump sum payment of an amount equal to
two (2) times Employee's "Base Amount." For purposes hereof,
Base Amount is defined as Employee's average includable
compensation paid by the Corporation for the five (5) most recent
taxable years ending before the date on which the Change in
Control occurs. The definition, interpretation and calculation
of the dollar amount of Base Amount shall be in a manner
consistent with and as required by the provisions of Section 280G
of the Internal Revenue Code of 1986, as amended ("Code"), and
the regulations and rulings of the Internal Revenue Service
promulgated thereunder.
Employee acknowledges that payment in accordance with this
Section 4 shall be deemed to constitute a full settlement and
discharge of any and all obligations of the Corporation or
Meridian Mutual to Employee arising out of his or her employment
with the Corporation and the termination thereof, except for any
vested rights Employee may then have under any insurance, pension,
supplemental pension, thrift, employee stock ownership, stock
option plans or other benefit plans sponsored or made available
by the Corporation or Meridian Mutual.
Section 5. Legal Expenses. The Corporation is aware that
upon the occurrence of a Change in Control the Board of Directors
or a shareholder of the Corporation may then cause or attempt to
cause the Corporation to refuse to comply with its obligations
under this Agreement, or may cause or attempt to cause the
Corporation to institute, or may institute, litigation seeking to
have this Agreement declared unenforceable, or may take or
attempt to take other action to deny Employee the benefits
intended under this Agreement. In these circumstances, the
purpose of this Agreement could be frustrated. It is the intent
of the Corporation that Employee not be required to incur the
expenses associated with the enforcement of his or her rights
under this Agreement by litigation or other legal action, nor be
bound to negotiate any settlement of his or her rights hereunder,
because the cost and expense of such legal action or settlement
would substantially detract from the benefits intended to be
extended to Employee hereunder. Accordingly, if following a
Change in Control it should appear to Employee that the
Corporation has failed to comply with any of its obligations
under this Agreement or in the event that the Corporation or any
other person takes any action to declare this Agreement void or
unenforceable, or institutes any litigation or other legal action
designed to deny, diminish or to recover from Employee the
benefits entitled to be provided to the Employee hereunder, and
that Employee has complied with all of his or her obligations
under this Agreement, the Corporation irrevocably authorizes
Employee from time to time to retain counsel of his or her
choice, at the expense of the Corporation as provided in this
Section 5, to represent Employee in connection with the
initiation or defense of any litigation or other legal action,
whether such action is by or against the Corporation or any
director, officer, shareholder, or other person affiliated with
the Corporation, in any jurisdiction. Notwithstanding any
existing or prior attorney-client relationship between the
Corporation and such counsel, the Corporation irrevocably consents
to Employee entering into an attorney-client relationship with such
counsel, and in that connection the Corporation and Employee agree
that a confidential relationship shall exist between Employee and
such counsel. The reasonable fees and expenses of counsel selected
from time to time by Employee as hereinabove provided shall be paid
or reimbursed to Employee by the Corporation on a regular, periodic
basis upon presentation by Employee of a statement or statements
prepared by such counsel in accordance with its customary practices,
up to a maximum aggregate amount of Two Hundred Thousand Dollars
($200,000). Any legal expenses incurred by the Corporation by reason
of any dispute between the parties as to enforceability of or the terms
contained in this Agreement as provided by this Section 5, notwithstanding
the outcome of any such dispute, shall be the sole responsibility of
the Corporation, and the Corporation shall not take any action to
seek reimbursement from Employee for such expenses.
Notwithstanding any limitation contained in this Section 5 to the
contrary, Employee shall be entitled to payment or reimbursement
of legal expenses in excess of Two Hundred Thousand Dollars
($200,000) if the expenses were incurred as a result of a dispute
under this Agreement in which Employee obtains a final judgment
in his or her favor from a court of competent jurisdiction or his
or her claim is settled by the Corporation prior to the rendering
of a judgment by such a court.
Section 6. No Mitigation. Employee is not required to
mitigate the amount of benefit payments to be made by the
Corporation pursuant to this Agreement by seeking other
employment or otherwise, nor shall the amount of any benefit
payments provided for in this Agreement be reduced by any
compensation earned by Employee as a result of employment by
another employer or which might have been earned by Employee had
Employee sought such employment, after the date of termination of
his or her employment with the Corporation or otherwise.
Section 7. Employee's Covenants. In order to induce the
Corporation to enter into this Agreement, Employee hereby agrees
as follows:
(A) Employee shall keep confidential and not improperly
divulge for the benefit of any other party any of the
Corporation's confidential information or business secrets
including, but not limited to, confidential information and
business secrets relating to such matters as the Corporation's
finances, operations and customer lists. All of the
Corporation's confidential information and business secrets shall
be the sole and exclusive property of the Corporation.
In the event of a breach or threatened breach by Employee of the
provisions of this Section 7, the Corporation shall be entitled
to an injunction restraining Employee from committing or
continuing such breach. Nothing herein contained shall be
construed as prohibiting the Corporation from pursuing any other
remedies available to it for such breach or threatened breach
including the recovery of damages from Employee. The covenants
of this Section 7 shall run not only in favor of the Corporation
and its successors and assigns, but also in favor of its
subsidiaries and their respective successors and assigns and
shall survive the termination of this Agreement.
Section 8. Successors to Corporation. The Corporation
shall require any successor (whether direct or indirect, by
purchase, merger, consolidation, share exchange or otherwise) to
all or substantially all of the business and/or assets of the
Corporation, by agreement in form and substance satisfactory to
Employee, to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Corporation
would be required to perform it if no such succession had taken
place. Failure of the Corporation to obtain such agreement prior
to the effectiveness of any such succession shall be a breach of
this Agreement and shall entitle Employee to compensation from
the Corporation in the same amount and on the same terms as
Employee would be entitled hereunder if he or she were to
terminate his or her employment pursuant to Section 3 hereof,
except that for purposes of implementing the foregoing, the date
on which succession becomes effective shall be deemed the date of
termination of Employee's employment with the Corporation. As
used in this Agreement, "Corporation" shall mean corporation as
hereinbefore defined and any successor to the business or assets
of it as aforesaid which executes and delivers the agreement
provided for in this Section 8 or which otherwise becomes bound
by all of the terms and provisions of this Agreement by operation
of law.
Section 9. Effect of Employees Death. Should Employee die
while any amounts are payable to him or her hereunder, this
Agreement shall inure to the benefit of and be enforceable by
Employee's executors, administrators, heirs, distributees,
devisees and legatees and all amounts payable hereunder shall be
paid in accordance with the terms of this Agreement to Employee's
devisee, legatee or other designee or if there be no such
designee, to Employee's estate.
Section 10. Notices. For purposes of this Agreement,
notices and all other communications provided for herein shall be
in writing and shall be deemed to have been given when delivered
or mailed by United States registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to Employee:
If to Corporation: Meridian Insurance Group, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Corporate Secretary
or to such other address as any party may have furnished to the
other party in writing in accordance herewith, except that
notices of change of address shall be effective only upon
receipt.
Section 11. Governing Law. The validity, interpretation,
and performance of this Agreement shall be governed by the laws
of the State of Indiana. The parties agree that all legal
disputes regarding this Agreement will be resolved in
Indianapolis, Indiana, and irrevocably consent to service of
process in such City for such purpose.
Section 12. Waivers. No provision of this Agreement may
be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing signed by
Employee and the Corporation. No waiver by any party hereto at
any time of any breach by any 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 conditions at the same or any
prior or subsequent time. No agreements or representation, oral
or otherwise, express or implied, with respect to the subject
matter hereof have been made by any party which are not set forth
expressly in this Agreement.
Section 13. Partial Invalidity. The invalidity or
unenforceability of any provisions of this Agreement shall not
affect the validity or enforceability of any other provision of
this Agreement, which shall remain in full force and effect.
Section 14. Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an
original but all of which together will constitute one and the
same Agreement.
Section 15. Assignment. This Agreement is personal in
nature and neither of the parties hereto shall, without the
consent of the other, assign or transfer this Agreement or any
rights or obligations hereunder, except as provided in Section 8
and Section 9 above. Without limiting the foregoing, Employee's
right to receive payments hereunder shall not be assignable or
transferable, whether by pledge, creation of a security interest
or otherwise, other than a transfer by his or her Will or by the
laws of descent and distribution as set forth in Section 8
hereof, and in the event of any attempted assignment or transfer
contrary to this Section 15, the Corporation shall have no
liability to pay any amount so attempted to be assigned or
transferred.
Any benefits payable under this Agreement shall be paid
solely from the general assets of the Corporation. Neither
Employee nor Employee's beneficiary shall have interest in any
specific assets of the Corporation under the terms of this
Agreement. This Agreement shall not be considered to create an
escrow account, trust fund or other funding arrangement of any
kind or a fiduciary relationship between Employee and the
Corporation.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed and delivered as of the day and year first written
above.
MERIDIAN INSURANCE GROUP, INC.
("Corporation")
By:________________________________
EMPLOYEE
___________________________________