Exhibit 10.5
FIRST INDIANA CORPORATION
SUPPLEMENTAL BENEFIT PLAN
PLAN AGREEMENT
THIS AGREEMENT is made as of the first day of June, 2004, by and between
First Indiana Corporation (hereinafter referred to as the "Employer") and Xxxxxx
X. Xxxxxxxxxx, (hereinafter referred to as the "Employee").
WITNESSETH:
WHEREAS, the Board of Directors of the Employer has determined that it is
desirable and in the best interest of the Employer to maintain a Supplemental
Benefit Plan; and
WHEREAS, the Employee has been selected to become a participant of said
Plan, and the Employee elects to so participate.
IT IS THEREFORE AGREED:
1. Benefits. The Employee shall be eligible to receive any and all
benefits to which he is entitled under the terms of the Plan.
2. Vesting. The Employee shall be vested with respect to the "excess
plan portion" of his monthly retirement benefits under the Plan to
the same extent he is vested with respect to benefits payable under
the DB Pension Plan. He shall become fully vested with respect to
his other benefits under the Plan and this Agreement (the remainder
of his monthly retirement benefit) at the time specified in the Plan
or, if earlier, when he has completed five years of service with the
Employer and its affiliates, provided he remains in the service of
the Employer and its affiliates until such time. For purposes of the
Plan and this Agreement, the Employee's years of service with the
Employer and its affiliates shall be determined in the same manner
as it is determined for vesting purposes under the DB Pension Plan.
3. Individualized Retirement Benefit. The Employee's retirement benefit
shall not be paid in the form provided for in Section 4.2 of the
Plan but instead shall be paid as a fixed-term variable annuity. The
term of such annuity shall begin on the date of the Employee's
termination of employment and shall end on the later of: (i) the
last December 31 occurring within five years after such termination,
or (ii) the last December 31 occurring within the Employee's
remaining life expectancy, determined as of such termination, based
on the life expectancy tables then used for purposes of determining
actuarial equivalence under the DB Pension Plan. Distributions shall
be made annually, with the first such distribution being made as of
the December 31 next following the Employee's termination of
employment, and with subsequent distributions being made as of each
December 31 thereafter, until the benefit has been distributed
fully. The amount
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of each distribution shall be determined as though an amount equal
to the lump sum actuarial equivalent of the Employee's base
retirement benefit (payable in the monthly amount determined in
accordance with Section 4.1 of the Plan) were set aside on the date
of the Employee's termination of employment and then were invested
at the Employee's direction, with each distribution being calculated
as a fraction of such hypothetical investment fund, the numerator of
which is one, and the denominator of which is the excess of the
total number of distributions to be made over the number of
distributions previously made, and with each distribution being
deducted from the balance of the fund on the date as of which it is
made. The amounts of such distributions shall be determined not only
with regard to the earnings, gains and losses of such hypothetical
investment fund but also with regard to the brokerage commissions
and transaction costs incurred in the investment thereof. The
Employee or his beneficiary may direct the investment of the
hypothetical investment fund. All such directions, and all changes
in such directions, shall be made in writing to the Company. The
Employee or his beneficiary may not direct the investment of the
hypothetical investment fund in any asset which cannot be liquidated
readily or which does not have a readily ascertainable fair market
value. If or to the extent the Employee or his beneficiary fails to
direct the investment of the hypothetical investment fund, it shall
be deemed to be invested in such money fund as the Committee from
time to time shall designate. It is contemplated that the Employer,
in order to hedge part or all of its liability for payment of the
Employee's retirement benefit, may establish an actual investment
account and invest the same in such a manner as to mirror the
hypothetical investment fund. The right of the Employee and his
beneficiary to direct the investment of the hypothetical investment
fund shall be subject to such reasonable rules and procedures as the
Committee may adopt to enable the Employer to hedge its liability in
this manner.
4. Arbitration. In the event of any disputes, differences,
controversies or claims arising out of, or in connection with, the
Employee's rights under the Plan or 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 to
mutually 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 shall jointly request from
the American Arbitration Association a list of the names of five
persons qualified to act as an arbitrator under this clause. The
selection of the final arbitrator then shall be achieved by each
party alternately striking a name, with the Employer 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
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Association and final selection shall be achieved through the
procedure set out herein. The decision of the arbitrator shall be
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 the
Plan or this Agreement nor to award a remedy for any difference,
dispute, controversy or claim arising under the Plan or this
Agreement other than a benefit specifically provided under or by
virtue of the Plan or this Agreement. The Employer 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 section,
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.
4. Limitation on Payments.
(a) Notwithstanding anything contained herein to the contrary,
prior to the payment of any amounts pursuant to the Plan or
this Agreement, an independent national accounting firm
designated by the Employer (the "Accounting Firm") shall
compute whether there would be payable to the Employee 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 Employee, whether by the Employer or any of
its affiliates or by any successor to the Employer or any such
affiliate, and whether under the Plan or this Agreement or
under any other plan, practice or agreement. If there would be
any excess parachute payments, the Accounting Firm will
compute the net after-tax proceeds to the Employee, 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 Employee, such parachute
payments shall not be reduced. If reducing such parachute
payments would result in a greater after-tax amount to the
Employee, they shall be reduced to such lesser amount. If such
parachute payments must be reduced, the Employee 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 Employer and the
Employee subject to the application of subsection (c) of this
section.
(b) As a result of various incentive or other plans, the Employee
may be entitled to receive various parachute payments over a
period of several years. In such event,
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the Accounting Firm may need to update its calculations under
subsection (a) of this section 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 4, the Employer 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 and uncertainties in the valuation of future
payments, it is possible that parachute payments will have
been made by the Employer which should not have been made (an
"Overpayment") or that additional parachute payments which
will not have been made by the Employer could have been made
(an "Underpayment"), consistent in each case with the other
provisions of this Section 4. In the event that the Accounting
Firm, based upon the assertion of a deficiency by the Internal
Revenue Service against the Employer or the Employee 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 Employee
which the Employee shall repay to the Employer, 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 payable by the Employee to the Employer 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 Employer to or for the benefit of
the Employee, 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 Employer and the Employer 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 Employee
will be subject to federal and state income tax at the maximum
rate in effect at the time the determination is made unless
the Employee 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.
taxes will be paid for state and federal purposes at the
highest possible marginal tax rates which could be applicable
to the Employee in the year of receipt of the payments, unless
the Employee agrees otherwise.
(e) In the event the Plan or this Agreement is subject to Section
18(k) of the Federal
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Deposit Insurance Act (the "FDIA") at the time any payment is
to be made by the Bank to the Executive pursuant to the Plan
or 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, this Agreement has been made as of the date herein
above written.
Employer:
FIRST INDIANA CORPORATION
By:_________________________
Xxxxxx X. XxXxxxxx, Chairman
EMPLOYEE:
_____________________________
Xxxxxx X. Xxxxxxxxxx
_____________________________
Street Address or P. O. Box
_____________________________
City, State, Zip
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