CHANGE-IN-CONTROL SEVERANCE AGREEMENT
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THIS AGREEMENT entered into and effective this 26th day of February, 2001,
by and between Ameriana Bank & Trust (the "Bank") and Xxxxx X. Xxxxxx (the
"Employee").
WHEREAS, the Employee has heretofore been employed by the Bank as a senior
officer pursuant to a written employment agreement and the Bank deems it to be
in its best interest to enter into this Agreement as an incentive to the
Employee to continue as a senior officer of the Bank; and
WHEREAS, it is intended that this Agreement shall replace any prior
agreement between the parties; and
WHEREAS, the parties desire by this writing to set forth their
understanding as to their respective rights and obligations in the event a
change of control occurs with respect to the Bank or Ameriana Bancorp (the
"Company").
NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the undersigned parties AGREE as follows:
1. Defined Terms
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When used anywhere in the Agreement, the following terms shall have
the meaning set forth herein.
(a) "Change in Control" shall mean any one of the following events:
(i) the acquisition of ownership, holding or power to vote more than 25% of the
Bank's or the Company's voting stock, (ii) the acquisition of the ability to
control the election of a majority of the Bank's or the Company's directors,
(iii) the acquisition of a controlling influence over the management or policies
of the Bank or the Company by any person or by persons acting as a "group"
(within the meaning of Section 13(d) of the Securities Exchange Act of 1934), or
(iv) during any period of two consecutive years, individuals (the "Continuing
Directors") who at the beginning of such period constitute the Board of
Directors of the Bank or the Company (the "Existing Board") cease for any reason
to constitute at least two-thirds thereof, provided that any individual whose
election or nomination for election as a member of the Existing Board was
approved by a vote of at least two-thirds of the Continuing Directors then in
office shall be considered a Continuing Director. Notwithstanding the foregoing,
ownership or control of the Bank by the Company itself shall not constitute a
Change in Control. Further, "Change in Control" shall not include the
acquisition of securities by an employee benefit plan of the Bank or the
Company. For purposes of this paragraph only, the term "person" refers to an
individual or a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or any other
form of entity not specifically listed herein.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and as interpreted through applicable rulings and regulations
in effect from time to time.
(c) "Code Section 280G Maximum" shall mean product of 2.99 and her
"base amount" as defined in Code Section 280G(b)(3).
(d) "Good Reason" shall mean any of the following events, which has
not been consented to in advance by the Employee in writing: (i) the requirement
that the Employee move her personal residence, or perform her principal
executive functions, more than thirty (30) miles from her primary office as of
the date of the Change in Control; (ii) a material reduction in the Employee's
base compensation as in effect on the date of the Change in Control or as the
same may be increased from time to time; (iii) the failure by the Bank or the
Company to continue to provide the Employee with compensation and benefits
provided for on the date of the Change in Control, as the same may be increased
from time to time, or with benefits substantially similar to those provided to
him under any of the employee benefit plans in which the Employee now or
hereafter becomes a participant, or the taking of any action by the Bank or the
Company which would directly or indirectly reduce any of such benefits or
deprive the Employee of any material fringe benefit enjoyed by him at the time
of the Change in Control; (iv) the assignment to the Employee of duties and
responsibilities materially different from those normally associated with her
position; (v) a material diminution or reduction in the Employee's
responsibilities or authority (including reporting responsibilities) in
connection with her employment with the Bank or the Company; or (vi) a material
reduction in the secretarial or other administrative support of the Employee.
(e) "Just Cause" shall mean, in the good faith determination of the
Bank's Board of Directors, the Employee's personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of any law, rule
or regulation (other than traffic violations or similar offenses) or final
cease-and-desist order, or material breach of any provision of this Agreement.
The Employee shall have no right to receive compensation or other benefits for
any period after termination for Just Cause. No act, or failure to act, on the
Employee's part shall be considered "willful" unless she has acted, or failed to
act, with an absence of good faith and without a reasonable belief that her
action or failure to act was in the best interest of the Bank and the Company.
(f) "Protected Period" shall mean the period that begins on the date
six months before a Change in Control and ends on the later of the first annual
anniversary of the Change in Control or the expiration date of this Agreement.
2. Trigger Events
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The Employee shall be entitled to collect the severance benefits set
forth in Section 4 of this Agreement in the event that (i) the Employee
voluntarily terminates employment for any reason within the 30-day period
beginning on the date of a Change in Control, (ii) the Employee voluntarily
terminates employment within 90 days of an event that both occurs during the
Protected Period and constitutes Good Reason, or (iii) the Bank, the Company, or
their successor(s) in interest terminate the Employee's employment for any
reason other than Just Cause during the Protected Period.
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3. Amount of Severance Benefit
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If the Employee becomes entitled to collect severance benefits
pursuant to Section 3 hereof, the Bank shall pay the Employee a severance
benefit equal to the difference between the Code Section 280G Maximum and the
sum of any other "parachute payments" as defined under Code Section 280G(b)(2)
that the Employee receives on account of the Change in Control. Said sum shall
be paid in one lump sum within ten (10) days of the later of the date of the
Change in Control and the Employee's last day of employment with the Bank or the
Company.
In the event that the Employee and the Bank agree that the Employee
has collected an amount exceeding the Code Section 280G Maximum, the parties may
jointly agree in writing that such excess shall be treated as a loan ab initio
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which the Employee shall repay to the Bank, on terms and conditions mutually
agreeable to the parties, together with interest at the applicable federal rate
provided for in Section 7872(f)(2)(B) of the Code.
4. Term of the Agreement. This Agreement shall remain in effect for the
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period commencing on the Effective Date and ending on the earlier of (i) the
date 36 months after the Effective Date, and (ii) the date on which the Employee
terminates employment with the Bank; provided that the Employee's rights
hereunder shall continue following the termination of this employment with the
Bank under any of the circumstances described in Section 3 hereof. Additionally,
on each annual anniversary date from the Effective Date, the term of this
Agreement shall be extended for an additional one-year period beyond the then
effective expiration date provided the Board of Directors of the Bank determines
in a duly adopted resolutions that the performance of the Employee has met the
requirements and standards of the respective Boards, and that this Agreement
shall be extended.
5. Termination or Suspension Under Federal Law.
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(a) Any payments made to the Employee pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with 12 U.S.C.
Section 1828(k) and any regulations promulgated thereunder.
(b) If the Employee is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Sections 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act ("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 the vested rights of
the parties shall not be affected.
(c) If the Bank is in default (as defined in Section 3(x)(1) of FDIA),
all obligations under this Agreement shall terminate as of the date of default;
however, this Paragraph shall not affect the vested rights of the parties.
(d) All obligations under this Agreement shall terminate, except to
the extent that continuation of this Agreement is necessary for the continued
operation of the Bank: (i) by the Director of the Office of Thrift Supervision
("Director of OTS"), or his or her designee, at the time that the Federal
Deposit Insurance Corporation ("FDIC") or the Resolution Trust Corporation
enters into an agreement to provide assistance to or on behalf of the Bank under
the authority contained in Section 13(c) of FDIA; or (ii) by the Director of the
OTS, or his or her designee, at the time that the Director of the OTS, or his or
her
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designee approves a supervisory merger to resolve problems related to operation
of the Bank or when the Bank is determined by the Director of the OTS to be in
an unsafe or unsound condition. Such action shall not affect any vested rights
of the parties.
(e) If a notice served under Section 8(e)(3) or (g)(1) of the FDIA (12
U.S.C. 1818(e)(3) and (g)(1)) suspends and/or temporarily prohibits the Employee
from participating in the conduct of the Bank's affairs, the Bank's obligations
under this Agreement shall be suspended as of the date of such service, unless
stayed by appropriate proceedings. If the charges in the notice are dismissed,
the Bank shall (i) pay the Employee all or part of the compensation withheld
while its contract obligations were suspended, and (ii) reinstate (in whole or
in part) any of its obligations which were suspended.
6. Expense Reimbursement.
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In the event that any dispute arises between the Employee and the Bank
as to the terms or interpretation of this Agreement, whether instituted by
formal legal proceedings or otherwise, including any action that the Employee
takes to enforce the terms of this Agreement or to defend against any action
taken by the Bank or the Company, the Employee shall be reimbursed for all costs
and expenses, including reasonable attorneys' fees, arising from such dispute,
proceedings or actions, provided that the Employee shall obtain a final
judgement in favor of the Employee in a court of competent jurisdiction or in
binding arbitration under the rules of the American Arbitration Association.
Such reimbursement shall be paid within ten (10) days of Employee's furnishing
to the Bank and the Company written evidence, which may be in the form, among
other things, of a cancelled check or receipt, of any costs or expenses incurred
by the Employee.
7. Successors and Assigns.
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(a) This Agreement shall inure to the benefit of and be binding upon
any corporate or other successor of the Bank or Company which shall acquire,
directly or indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the Bank or Company.
(b) Since the Bank is contracting for the unique and personal skills
of the Employee, the Employee shall be precluded from assigning or delegating
her rights or duties hereunder without first obtaining the written consent of
the Bank.
8. Amendments. No amendments or additions to this Agreement shall be
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binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.
9. Applicable Law. Except to the extent preempted by Federal law, the
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laws of the State of Indiana shall govern this Agreement in all respects,
whether as to its validity, construction, capacity, performance or otherwise.
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10. Severability. The provisions of this Agreement shall be deemed
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severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
11. Entire Agreement. This Agreement including the recitals, together with
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any understanding or modifications thereof as agreed to in writing by the
parties, shall constitute the entire agreement between the parties hereto and
shall supercede any prior agreement between the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first hereinabove written.
ATTEST: AMERIANA BANK & TRUST
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxx
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Secretary Its: President
WITNESS:
/s/ Xxxx Driver /s/ Xxxxx X. Xxxxxx
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Employee
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