Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT, entered into as of the ____ day of ________________, 2004,
by and between First Indiana Corporation (the "Company"), 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 Company (the "Board") recognizes
that the possibility of a Change of Control (as hereinafter defined in Section
2) 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 Company as of the
date hereof, to serve as the Company's __________________________________; and]
WHEREAS, the Board has determined that it is essential and in the best
interest of the Company and its shareholders 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 Company 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
Company, particularly in the event of a threat of or the occurrence of a Change
of Control, the Company 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 Company, particularly in the event of a threat of or the
occurrence of a Change of Control, the Company 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 third 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 Company 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 Company 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 Company 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 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
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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 Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; 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 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
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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 First Indiana Bank (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. 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.
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3. Employment.
(a) During the Employment Term, the Company agrees to continue to employ
the Executive, and the Executive agrees to remain in the employ of the Company,
subject to the terms and conditions of this Agreement. During the Employment
Term, the Executive shall be employed as __________________ of the Company or in
such other executive capacity as may be mutually agreed to in writing by the
parties. During the Employment Term, the Executive shall help direct the
Company's investment in First Indiana Bank and shall function as, and have the
title of, __________________ of the Bank. During the Employment Term, the
Executive's position (including status, offices, titles and reporting
requirements), authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of those held or
assigned at any time during the 12 month period immediately preceding the
Effective Date, and 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) The Company may assign to the Executive the responsibility of serving
not only as __________________ of the Company but also as __________________ of
one or more of its affiliates. When performing services for an affiliate, the
Executive shall do so, at the Company's option, either as an employee of the
Company or as a direct employee of the affiliate. Although part or all of the
Executive's compensation and benefits may be paid or provided by affiliates, the
Company shall be and remain ultimately liable for the performance of its
obligations hereunder, and it shall be considered for purposes of Sections 6 and
23 that all of the Executive's compensation and benefits are paid or provided by
the Company.
(c) 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 Company 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 Company
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 Company and its affiliated companies in respect of the
12 month period immediately preceding the month in
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which the Effective Date occurs. During the 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 Company 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 Company (including any successor or
assign treated as the Company 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 Company and its affiliated companies, in any incentive compensation plans or
awards adopted or made, and in any discretionary bonuses authorized or paid, by
the Company 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 Company 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
Company 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 Company 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 Company 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 Company 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 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 Company and its
affiliated companies and their
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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 Company's qualified defined benefit pension plan and the
supplemental pension benefits provided for in the Executive's agreement
under the Company's nonqualified supplemental executive benefit plan, both
as in effect on the date hereof, subject to the terms of such plans and
such agreement.
[(2) Death Benefit. The Executive's beneficiaries shall be entitled to
death benefits not less favorable, in the aggregate, than the death
benefits provided for in the Executive's agreement under the Company's
supplemental executive benefit plan as in effect on the date hereof,
subject to the terms of 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 Company 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 Company 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 Company 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 Company 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 Company 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 Company 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 Company and its affiliated companies as in effect for the Executive at any
time during the 12 month period immediately preceding the
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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 Company 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
Company 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 11 of this Agreement of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the Company 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 Company 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 Company 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 Company may terminate the Executive's employment for
"Cause." A termination for Cause is a termination evidenced by a resolution
adopted in good faith by a majority of the Board that the Executive (i)
willfully, deliberately and continually failed to substantially perform
[his/her] duties under Section 3, above (other than a failure resulting from the
Executive's incapacity due to physical or mental illness) which failure
constitutes gross misconduct, and results in and was intended to result in
demonstrable material injury to the Company or any of its affiliated companies,
monetary or otherwise, or (ii) committed acts of fraud and dishonesty
constituting a felony, as determined by a final judgment or order of a court of
competent jurisdiction, and resulting or intended to result in gain to or
personal enrichment of the Executive at the Company's expense, provided,
however, that no termination of the Executive's employment shall be for Cause as
set forth in (i), above, until (a) the Executive shall have had at least 60 days
to cure any conduct or act alleged to provide Cause for termination after a
written notice of demand has been delivered to the Executive specifying in
detail the manner in which the Executive's conduct violates this Agreement, and
(b) the Executive shall have been provided an opportunity to be heard by the
Board (with the assistance of the Executive's counsel if the Executive so
desires). No act, or failure to act, on the Executive's part, shall be
considered "willful" unless [he/she] has acted or failed to act in bad faith and
without a reasonable belief that [his/her] action or failure to act was in the
best interest of the Company and its affiliated companies. Notwithstanding
anything contained in this Agreement to the contrary, no failure to perform by
the Executive after Notice of Termination is given by the Executive shall
constitute Cause for purposes of this Agreement.
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(c) Good Reason.
(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 (ix) hereof:
(i) A change in the Executive's status, title, position or
responsibilities (including reporting responsibilities) which, in
the Executive's reasonable judgment, does not represent a
promotion from [his/her] status, title, position or
responsibilities as in effect immediately prior thereto; the
assignment to the Executive of any duties or responsibilities
which, in the Executive's reasonable judgment, are inconsistent
with [his/her] status, title, position or responsibilities in
effect immediately prior to such assignment; or any removal of the
Executive from or failure to reappoint or reelect [him/her] to any
position, except in connection with the termination of [his/her]
employment for Disability, Cause, as a result of [his/her] death
or by the Executive other than for Good Reason;
(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) A failure by the Company and its affiliated companies, through
incentive or bonus arrangements, to provide the Executive with
incentive compensation opportunities comparable to those it
provided to the Executive in respect of the three fiscal years
immediately preceding the fiscal year in which the Effective Date
occurs;
(iv) Any failure by the Company and its affiliated companies to comply
with any of the provisions of Section 4 of this Agreement;
(v) The insolvency or the filing (by any party, including the
Company) of a petition for bankruptcy of the Company;
(vi) Any material breach by the Company and its affiliated companies of
any provision of this Agreement;
(vii) Any purported termination of the Executive's employment for Cause
by the Company and its affiliated companies which does not comply
with the terms of Section 5(b) of this Agreement;
(viii) The failure of the Company and its affiliated companies to obtain
an agreement, satisfactory to the Executive, from any successor or
assign of the Company and its affiliated companies, to assume and
agree to perform this Agreement, as contemplated in Section 9
hereof; and
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(ix) The giving of notice by the Company 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 24 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.
(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.
(4) For purposes of this Section 5(c), any good faith determination of
Good Reason made by the Executive shall be conclusive.
(d) Voluntary Termination. The Executive may voluntarily terminate
[his/her] employment hereunder at any time.
(e) Notice of Termination. Any purported termination by the Company 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 Company 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 Company, 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;
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(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 Company; 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 decree of a court of
competent jurisdiction (the time for appeal therefrom having expired and
no appeal having been perfected).
6. Obligations of the Company Upon Termination.
(a) Good Reason; Other Than for Cause, Death or Disability. If, during the
Employment Term, the Company shall terminate the Executive's employment other
than for Cause or Disability or the Executive shall terminate employment for
Good Reason:
(i) The Company 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, and D 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
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"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 Company
nor the Executive gave the other a notice of
non-extension prior to the Termination Date, as though
the Company 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 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 Company
nor the Executive gave the other a notice of
non-extension prior to the Termination Date, as though
the Company 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,
12
policy or program during the 12 month period immediately
preceding the Effective Date).
D. 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 Company
nor the Executive gave the other a notice of
non-extension prior to the Termination Date, as though
the Company 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 Company or
its affiliated companies attributable to the last
calendar year ending before the Effective Date.
(ii) Executive shall be entitled to continue [his/her] participation, or
[his/her] participation and that of any of [his/her] eligible
dependants, in each medical or dental employee welfare benefit plan
of the Company in which the Executive participates, or the Executive
and such dependants participate, immediately before the Termination
Date. Such right of participation shall continue for the remainder
of the Employment Term (determined under Section 1(a) as though such
termination had not occurred and, if neither the Company nor the
Executive gave the other a notice of non-extension prior to the
Termination Date, as though the Company had given the Executive a
notice of non-extension on the Termination Date). Such right to
continue participation in a plan shall be subject to the payment by
the Executive of such part or all of the premiums for such
participation as [he/she] would have had to pay by means of payroll
withholdings or otherwise had [he/she] remained an active employee
of the Company at [his/her] Annual Base Salary in effect immediately
prior to the Termination Date, such payment to be made directly to
the Company at or before the time it would have been withheld from
[his/her] pay or otherwise become payable had [his/her] active
employment continued. Such right to continue participation in a plan
also shall be to subject to the right of the Company to amend or
replace the plan from time to time after the Termination Date and
thereby change the benefits or coverage options, the amount or share
of premiums payable by participants or the deductibles or
co-payments that must be satisfied or paid by participants;
provided, however, that no such amendment or replacement shall apply
to the Executive unless it applies to participants generally,
including other peer executives
13
who continue active employment with the Company.
(iii) To the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible
to receive pursuant to this Agreement or under any plan, program,
policy or practice or contract or agreement of the Company 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 Company 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 Company
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 Company 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 Sections 6(a)(ii) and 6(a)(iii) in the case
of amounts payable under those sections, 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 Company 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
14
time for the banking offices of JPMorgan Chase & Co., or its successor, in
Indianapolis, Indiana, compounded monthly.
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 Company to the Executive under this Agreement, and to induce the
Company 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 Company, the Bank
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 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
15
or employee of any First Indiana Group Entity.
(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 Company and its successors and assigns. The Company 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
16
this Agreement is binding upon and enforceable against the Company in accordance
with the terms hereof, and to become jointly and severally obligated with the
Company to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform if no such succession or assignment had
taken place. Unless otherwise clearly indicated by the context, the term
"Company" 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 Company
(including this Agreement), whether by operation of law or otherwise. In the
event substantially all of the assets and business of First Indiana 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 (or the ultimate corporate
parent of such entity if such entity is a corporate subsidiary).
(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. Fees and Expenses. From and after the Effective Date, the Company and
its affiliated companies shall pay all legal fees and related expenses
(including the costs of experts, evidence and counsel) reasonably incurred by
the Executive as they become due as a result of (i) the Executive's termination
of employment (including all such fees and expenses, if any, incurred in
contesting or disputing any such termination of employment), (ii) the
Executive's hearing before the Board as contemplated in Section 5(b) of this
Agreement, (iii) the Executive's seeking to obtain or enforce any right or
benefit provided by this Agreement or by any other plan or arrangement
maintained by the Company or any of its affiliated companies under which the
Executive is or may be entitled to receive benefits, or (iv) any contest by a
taxing authority of the Executive's tax treatment of any amounts received under
this Agreement or any other agreement with or plan of the Company or any of its
affiliated companies to the extent such tax treatment is consistent with the
determinations made by the Accounting Firm under Section 23.
11. 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 Company, to First Indiana Corporation, 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 Company shall be
directed to the attention of the Board with a copy to the Secretary of the
Company. 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.
12. 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
17
program provided by the Company 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 Company or any
of its affiliated companies shall be payable in accordance with such plan or
program, except as explicitly modified by this Agreement.
13. Settlement of Claims. The Company'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 Company or any of its affiliated companies may have against the Executive or
others.
14. 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 Company. 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 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.
15. Employment. The Executive and the Company acknowledge that, prior to
the Effective Date, the employment of the Executive by the Company and its
affiliated companies is "at will" and may be terminated by either the Executive
or the Company at any time. If the Executive's employment with the Company and
its affiliated companies terminates prior to the Effective Date, then the
Executive shall have no further rights under this Agreement.
16. 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.
17. 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.
18. 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.
19. Headings. The headings herein contained are for reference only and
shall not affect the meaning or interpretation of any provision of this
Agreement.
18
20. 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 Company.
21. 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 Company
going first, until one name remains. In the event the parties mutually agree
that the five names 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 Company 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.
22. Withholding. The Company and its affiliated companies 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 Company and its affiliated companies 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.
19
23. 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 Company (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 Company or any of its affiliates or by
any successor to the Company 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 Company and its
affiliated companies and the Executive subject to the application of Section
23(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 Accounting Firm may need to update its Section 23(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 23, the
Company 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
Company 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 Company and its affiliated companies could have been made (an
"Underpayment"), consistent in each case with the other provisions of this
Section 23. In the event that the Accounting Firm, based upon the assertion of a
deficiency by the Internal Revenue Service against the Company 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 Company 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
20
payable by the Executive to the Company 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 Company 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 Company and
the Company 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 Federal
Deposit Insurance Act (the "FDIA") at the time any payment is to be made by the
Company 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.
IN WITNESS WHEREOF, the Company 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 CORPORATION
By: ___________________________________
________________, ___________
"Company"
ATTEST:
_____________________
Secretary
_______________________________________
______________________
"Executive"
Address: ______________________________
______________________________
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