Exhibit 10.1
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement") is made and entered into and effective as
of the 1st day of January, 1998, between OLD NATIONAL BANCORP, an Indiana
corporation and registered bank holding company under the Bank Holding Company
Act of 1956, as amended (the "Company"), and
_______________________________________.
WITNESSETH:
WHEREAS, the Company desires to assure continuity of its management, to enable
its executives to devote their full attention to management responsibilities
and, when faced with a possible change in control, to help the Board of
Directors assess options and advise as to the best interest of the Company and
its shareholders without being influenced by the uncertainties of their own
situations, and to demonstrate to executives the interests of the Company in
their well-being and fair treatment in the event of a change in control; and
WHEREAS, the Company desires to assure Executive that he will receive certain
benefits in the case of his termination or a significant change in the terms of
his employment as a result of a change in control of the Company; and
WHEREAS, to that end, the Company and Executive entered into an Agreement on the
1st day of January, 1996, which Agreement has been extended annually by mutual
agreement of the Company and Executive; and
WHEREAS, the Board of Directors of the Company approved changes to the Agreement
at its January 22, 1998 Board Meeting; and
WHEREAS, to effectuate the changes, the Company desires to enter into a new
Agreement with Executive on substantially the same terms and conditions as the
previous Agreement with the additional benefits as authorized by the Board of
Directors.
NOW, THEREFORE, in consideration of the premises and of the mutual promises and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
Executive agree as follows:
1. Term
The term of this Agreement shall begin on January 1, 1998, and continue
for a two (2) year period ending December 31, 1999, unless terminated as
hereinafter provided. This Agreement shall be subject to an annual review
and may be extended for successive one (1) year terms by mutual agreement
of the parties; provided the Company shall give the Executive notice of
its intent to renew or not renew this Agreement no later than twelve (12)
months prior to the expiration of the initial term or any additional term
hereunder; and, provided further, if the Company shall fail to so provide
said notice, this Agreement shall automatically continue for one (1)
additional year.
2. Benefits Upon a Change in Control
a. The Company shall provide Executive with the benefits set forth in
Section 2(d) hereof upon any termination of Executive's employment
by the Company during the one (1) year period following a change in
control (as defined below) which occurs during the term of this
Agreement for any reason except the following:
(i) Termination for Cause
"Cause" shall be defined as (A) action by Executive involving
willful misconduct or gross negligence materially injurious to
the Company, (B) the requirement or direction of a federal or
state regulatory agency having jurisdiction over the Company,
(C) conviction of Executive of the commission of any criminal
offense involving dishonesty or breach of trust, or (D) any
intentional breach by Executive of a material term, condition
or covenant of this Agreement. Notwithstanding the foregoing,
Executive shall not be deemed to have been terminated for
cause unless there shall have been delivered to Executive a
copy of a notice of termination from the Company accompanied
by a resolution duly adopted by a majority of the Directors
then in office, finding that in the good faith opinion of the
Directors, the termination of Executive's employment is for
cause, specifying the particulars thereof in detail, and
granting an opportunity, following a reasonable period of
time, for Executive, together with his counsel, to be heard
before the Board of Directors;
(ii) Disability of the Executive, as determined under the policies
and procedures of the Company as in effect immediately prior
to such change in control. Termination pursuant to this
Section 2(a)(ii) shall not affect any rights which Executive
may have under any disability policy or program of the
Company;
(iii) Voluntary retirement of the Executive in accordance with
policies and procedures of the Company in effect immediately
prior to the change in control; or
(iv) Death of the Executive.
b. The Company shall also provide Executive with the benefits set forth
in Section 2(d) if a change in control occurs during the term of
this Agreement and Executive terminates his employment during the
one (1) year period following the change in control after the
happening of one or more of the following events:
(i) Without the express written consent of Executive, the
assignment of Executive to any duties materially inconsistent
with his positions, duties, responsibilities, or status with
the Company immediately prior to the change in control or a
substantial reduction of his duties or responsibilities, or
any removal of Executive from, or any failure to reelect
Executive to, any positions held by the Executive prior to the
change in control;
(ii) A reduction by the Company in the compensation or benefits of
Executive in effect immediately prior to the change in
control, or any failure to include Executive in any incentive,
bonus or benefit plans as may be offered by the Company from
time to time;
(iii) A requirement that without his consent Executive be based
anywhere other than Evansville, Indiana, except for required
travel pertaining to the Company's business in accordance
with the Company's management practices in effect prior to
a change in control;
(iv) Any purported termination of Executive's employment for cause
as defined in Section 2(a)(i) above or for disability without
grounds;
(v) Any failure of the Company to obtain the assumption of the
obligation to perform this Agreement by any successor as
contemplated in Section 9(b) hereof; or
(vi) Any material breach by the Company of any of the provisions of
this Agreement or any failure by the Company to carry out any
of its obligations hereunder.
c. In addition to the rights the Executive has under the provisions of
Sections 2(a) and 2(b) above, the Executive shall have the exclusive
right, within the thirty (30) days immediately following the one (1)
year period after a change in control occurs, to elect to resign and
terminate his employment with the Company for any reason, and at
such time Executive shall be entitled to receive all compensation
and benefits set forth in Section 2(d) of this Agreement.
d. Subject to Sections 2(a), 2(b) and 2(c) above, the Company shall pay
to Executive the amounts provided in (i), (ii), (iii), (iv) and (v)
below at the time and in the manner provided, less any withholding
therefrom under applicable federal, state, or local income tax,
other tax, or social security laws or similar statutes.
(i) Within thirty (30) days of his date of termination under
Section 2(a), 2(b) or 2(c), the Company shall pay to
Executive a lump sum single payment in cash or cash equivalent
funds, equal to the aggregate of the following:
(a) Executive's base salary, at his then-effective annual
rate, through the date of termination of his employment
plus any amounts due to Executive under the accrued
vacation program of the Company due to him through the
date of termination; plus
(b) An amount computed by the actuary for Old National
Bancorp Employees' Retirement Plan (the "Plan") based on
the actuarial assumptions for the Plan and the Plan's
actuarial equivalency determination procedures as in
effect on the date of the Executive's termination of
employment with the Company, equal to the present value
of the Executive's Accrued Benefit as defined in the
Plan computed as if the Executive had remained in the
employ of the Company for two (2) years after his
termination of employment and had received the same
compensation from the Company for determining benefits
under the Plan, as defined in Section 4.01 thereof,
being paid to him at the time of his termination of
employment for that two (2) year period, and assuming
Credited Service as defined in the Plan continues for
that two (2) year period, minus the present value of the
Executive's Accrued Benefit under the Plan as computed
on the date of termination.
(c) An amount computed by the actuary for Old National
Bancorp Pension Restoration Plan (the "Restoration
Plan") based on the actuarial assumptions for the
Restoration Plan and the Restoration Plan's actuarial
equivalency determination procedures as in effect on the
date of the Executive's termination of employment with
the Company, equal to the present value of the
Executive's Accrued Benefit as defined in the
Restoration Plan computed as if the Executive had
remained in the employ of the Company for two (2) years
after his termination of employment and had received the
same compensation from the Company for determining
benefits under the Plan, as defined in Section 4
thereof, being paid to him at the time of his
termination of employment for that two (2) year period,
and assuming Credited Service as defined in the
Restoration Plan continues for that two (2) year period,
minus the present value of the Executive's Accrued
Benefit under the Restoration Plan as computed on the
date of termination.
(d) An amount equal to the Company descretionary and
matching contribution that would have been made on
behalf of the Executive to the OLD NATIONAL BANCORP
EMPLOYEE STOCK OWNERSHIP PLAN (the "ESOP Plan") at the
end of each ESOP Plan Year, had the Executive been in
the employ of the Company for two (2) consecutive Plan
years after his termination of employment and had
received the same compensation from the Company for
determining benefits under the ESOP Plan, being paid to
him at the time of his termination of employment for the
two (2) year period, and assuming Credited Service as
defined in the ESOP Plan continues for that two (2) year
period.
(e) An amount equal to the Company descretionary and
matching contribution that would have been made on
behalf of the Executive to the SUPPLEMENTAL DEFERRED
COMPENSATION PLAN FOR SELECTED EXECUTIVE EMPLOYEES OF
OLD NATIONAL BANCORP AND SUBSIDIARIES (the "Supplemental
Plan") at the end of each Supplemental Plan Year, had
the Executive been in the employ of the Company for two
(2) consecutive Plan years after his termination of
employment and had received the same compensation from
the Company for determining benefits under the
Supplemental Plan, being paid to him at the time of his
termination of employment for the two (2) year period,
and assuming Credited Service as defined in the
Supplemental Plan continues for that two (2) year
period.
(ii) Within thirty (30) days of his date of termination under
Sections 2(a) and (b) or within thirty (30) days of his
election to resign and terminate employment under Section
2(c), the Company shall further pay to Executive a lump sum
single cash payment equal to two (2) times the average annual
base salary paid to the Executive by the Company in the three
(3) year period prior to the date of termination.
(iii) Within thirty (30) days of his date of termination under
Sections 2(a)and (b) or within thirty (30) days of his
election to resign and terminate employment under Section
2(c), the Company shall cause to be vested in the
Executive's name those awarded but unvested shares which
are held in the Executive's account in the Old National
Bancorp Restricted Stock Plan, including the shares awarded
to Executive but not yet earned in the year in which
Executive's employment is terminated.
(iv) Within thirty (30) days of his date of termination under
Sections 2(a) and (b) or within thirty (30) days of his
election to resign and terminate employment under Section
2(c), the Company shall further cause to be paid to Executive
in a lump sum single cash payment all the amounts the
Executive is entitled to receive under the Company's Short
Term Incentive Plan ("STIP") in the year in which Executive's
employment is terminated. For purposes of determining the
STIP amount to be paid to Executive, the Company will use the
Executive's then current annualized salary multiplied by the
greater of the following percentages:
(a) An amount that is the result of averaging the
Executive's STIP percentage for the prior two plan
years; or
(b) The Executive's projected STIP percentage as approved by
the Company's Compensation Committee at the time of any
merger announcement.
(v) In addition, the Company shall maintain in full force and
effect for the continued benefit of the Executive for two (2)
years following the date of termination, all employee welfare
plans (i.e., life and disability insurance, medical plan, and
the spending account) and programs in which the Executive was
entitled to participate immediately prior to the date of
termination provided that the Executive's continued
participation is possible under the general terms and
provisions of such plans and programs. In the event that the
Executive's participation in any such plan or program is
barred or unavailable, the Company shall arrange to provide
the Executive with benefits substantially similar to those
which the Executive would otherwise have been entitled to
receive under such plans and programs from which his continued
participation is barred or rendered unavailable. Executive's
rights to such benefits shall be reduced to the extent that
Executive is eligible for comparable benefits supplied by a
subsequent employer.
Provided, however, if the aggregate present value of the above
payments which may be considered a "parachute payment" within
the meaning of Section 280G of the Internal Revenue Code of
1986, as amended ("Code") shall equal or exceed three (3)
times the Executive's base amount ("Base Amount"), as such
term is defined in Section 280G of the Code, then such
aggregate payment shall be reduced to the highest payment
which is not three (3) times such Base Amount. The sole
purpose of the limitation imposed by this provision is to
preclude the amount payable pursuant to this Section 2(d) from
being characterized as an "excess parachute payment" under
Section 280G of the Code. It is the intention of the parties
that this subsection be interpreted and construed in a manner
so as to allow the greatest dollar payment to Executive
without such payment being classified as an "excess parachute
payment," as such term is defined by Section 280G of the Code.
The Company and Executive agree that any dispute under this
Section 2(d) of the application of the limitation of Section
280G of the Code shall be resolved by an opinion of competent
counsel selected by and acceptable to the Company and
Executive. Counsel's fee for the opinion required herein
shall be paid by the Company.
e. For the purposes of this Agreement, a "change in control" shall
mean:
(i) a change in Chief Executive Officer of the Company;
(ii) any merger, consolidation, share exchange, or other
combination or reorganization involving the Company,
irrespective of which party is the surviving entity, excluding
any merger, consolidation, share exchange, or other
combination involving the Company solely in connection with
the acquisition by the Company of any subsidiary;
(iii) any sale, lease, exchange, transfer, or other disposition
of all or any substantial part of the assets of the Company;
(iv) any acquisition or agreement to acquire by any person or
entity, directly or indirectly, beneficial ownership of
twenty-five percent (25%) or more of the outstanding voting
stock of the Company;
(v) during any period of two (2) consecutive years during the term
hereof, individuals who at the date of this Agreement
constitute the Board of Directors of the Company cease for any
reason to constitute at least a majority thereof, unless the
election of each Director at the beginning of such Director's
term has been approved by Directors representing at least
two-thirds of the Directors then in office who were Directors
on the date of this Agreement;
(vi) a majority of the Board of Directors or a majority of the
shareholders of the Company approve, adopt, agree to
recommend, or accept any agreement, contract, offer, or other
arrangement providing for any of the transactions described
above;
(vii) any series of transactions resulting in any of the
transactions described above; or
(viii) any other set of circumstances which the Board of
Directors deems to constitute a change in control of the
Company.
f. Any termination of Executive's employment for the reasons set forth
in Section 2(a) (except for reason of Executive's death) or by
Executive for the reasons set forth in Sections 2(b) and 2(c) shall
be communicated by written "Notice of Termination" to the other
party, delivered in a manner provided in Section 13 hereof. Any
"Notice of Termination" given by Executive pursuant to Sections 2(b)
and 2(c), or given by the Company in connection with a termination
as to which the Company believes it is not obligated to provide
Executive with the benefits set forth in Section 2(d), shall
indicate the specific provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for such termination. "Date of
termination" for the purposes of this Agreement shall mean the date
on which such "Notice of Termination" is given.
3. Payment of Certain Costs of Executive
If a dispute arises regarding a termination of Executive's employment
subsequent to a change in control or the interpretation or enforcement of
this Agreement and Executive obtains a final judgment in his favor from a
court of competent jurisdiction or his claim is settled by the Company
prior to the rendering of a judgment by such a court, all legal fees and
expenses incurred by Executive in contesting or disputing any such
termination or seeking to obtain or enforce any right or benefit provided
for in this Agreement or in otherwise pursuing his claim will be paid by
the Company, to the extent permitted by law.
4. Moving Expenses
In the event of a termination of Executive's employment subsequent to a
change in control, Executive shall be reimbursed by the Company for any
moving expenses incurred by him in relocating to the place of subsequent
employment in the event such cost is not paid by the subsequent employer.
Such expenses shall include reasonable selling expenses of his residence.
Such expenses shall be reimbursed within thirty (30) days of Executive's
submission of an itemized listing of the same to the Company.
5. Surrender of Company Records
Upon termination of Executive's employment for any reason, he shall
immediately surrender to the Company all Company records, notes,
documents, forms, manuals, or other written or printed material, and all
copies thereof, in his possession or control, which pertains to the
business of the Company and which would not be available publicly.
Executive agrees that all of the foregoing shall be and remain the sole
and exclusive property of the Company.
6. Covenant of Confidentiality
Executive shall keep confidential and not improperly divulge for the
benefit of another party or use for his own benefit, the Company's
confidential information including, but not limited to, business secrets
relating to the Company's finances, operations, and customer lists. All
of the Company's confidential information shall be the sole and exclusive
property of the Company.
7. Termination
This Agreement shall automatically terminate without notice prior to any
change in control if the Executive shall resign, retire, become
permanently and totally disabled, voluntarily take another position
requiring a substantial portion of his time, or die.
8. Severability
In case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal, or unenforceable in any respect,
such invalidity, illegality, or unenforceability shall not affect any
other provision of this Agreement, but this Agreement shall be construed
as if such invalid, illegal, or unenforceable provision or provisions had
never been contained herein.
9. Parties Bound
a. All provisions of this Agreement shall inure to the benefit of and
be binding upon the parties hereto, their heirs, personal
representatives, successors, and assigns.
b. The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business or assets of the Company, by
agreement in form and substance satisfactory to Executive, to
expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of any
such succession shall be deemed a material breach of this Agreement.
c. If Executive should die while any amounts are payable to him
hereunder, this Agreement shall inure to the administrators, heirs,
distributees, devisees, and legatees, and all amounts payable
hereunder shall then be paid in accordance with the terms of this
Agreement to Executive's devisee, legatee, or other designee or, if
there be no such designee, to his estate.
10. Effect and Modification
This Agreement comprises the entire agreement between the parties with
respect to the subject matter hereof and supersedes all earlier agreements
relating to the subject matter hereof; provided that this Agreement is not
intended to and shall not be deemed to be in lieu of any rights, benefits,
and privileges to which Executive may be entitled as an Executive of the
Company under any retirement, pension, profit sharing, stock ownership,
stock option, insurance, or hospital plan, or other plans, benefits,
programs, and policies which may now be in effect or which may hereafter
be adopted. It is understood that Executive shall have the same rights
and privileges to participate in such plans, benefits, programs, and
policies as any other Executive during his period of employment. No
statement or promise, except as herein set forth, has been made with
respect to the subject matter of this Agreement. The headings of the
individual sections herein are for convenience only and shall not be
deemed to be a substantive part of this Agreement. No modification or
amendment hereof shall be effective unless in writing and signed by
Executive and the Company.
11. Non-Waiver
The failure or refusal of either party to enforce all or any part of, or
the waiver by either party of any breach of this Agreement shall not be a
waiver of that party's continuing or subsequent rights under this
Agreement, nor shall such failure or refusal or waiver have any effect
upon the subsequent enforceability of this Agreement.
12. Governing Law
This Agreement is being delivered in and shall be governed by the laws of
the State of Indiana.
13. Notice
Any notice, request, instruction, or other document to be given hereunder
to any party shall be in writing and delivered by hand, telegram,
facsimile transmission, registered or certified United States mail, return
receipt requested, or other form of receipted delivery, with all expenses
of delivery prepaid, as follows:
If to Executive: If to Company:
Old National Bancorp
Xxxx Xxxxxx Xxx 000
Xxxxxxxxxx, Xxxxxxx 00000
ATTENTION: Board of Directors
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first above written.
EXECUTIVE
__________________________________________________________
OLD NATIONAL BANCORP
__________________________________________________________
