Exhibit 10 (b)
CHANGE OF CONTROL AGREEMENT
THIS CHANGE OF CONTROL AGREEMENT (the "Agreement") is made as of the 1st day of
January, 2004, between OLD NATIONAL BANCORP, an Indiana corporation and
registered financial holding company under the Bank Holding Company Act of 1956,
as amended (the "Company"), and ______________ of the Company (the "Executive").
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 (as hereinafter defined), to
help the Board of Directors of the Company 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;
WHEREAS, to that end, the Company desires to assure Executive that he will
receive certain benefits in the case of the Executive's termination or a
significant change in the terms of the Executive's employment as a result of a
Change in Control; 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
in Control, the Company desires to enter into this Agreement with the Executive.
NOW, THEREFORE, in consideration of the premises contained herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Executive and the Company agree as follows:
Section 1. Term
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The term of this Agreement shall begin on January 1, 2004, and shall continue
until terminated as hereinafter provided.
Section 2. Benefits Upon a Change in Control
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(a) The Company shall provide the Executive with the benefits set forth in
Section 2(c) hereof upon any termination of the Executive's employment by
the Company during the two (2) year period following the first Change in
Control which occurs during the term of this Agreement for any reason
except the following:
(i) Termination of the Executive for Cause (as hereinafter defined) by the
Company. For purposes of the Agreement, "Cause" shall be defined as
(A) action by the 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 the Executive of the commission of
any criminal offense involving dishonesty or breach of trust, (D) any
material violation of any portions of the Company's Code of Ethics
which continues after written notice to the Executive that the
continuation of such conduct will result in the termination of the
Executive's employment with the Company for Cause, or (E) any
intentional breach by the Executive of a material term, condition or
covenant of this Agreement. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for Cause unless
there shall have been delivered to the 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 the
Executive's employment is for Cause, specifying the particulars
thereof in detail, and granting an opportunity, following a reasonable
period of time, for the Executive, together with the Executive's
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 the Change
in Control. Termination pursuant to this Section 2(a)(ii) shall not
affect any rights which the 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) Except in connection with the termination of the Executive's employment for
reasons set forth in Section 2(a)(i)-(iv) hereof, the Company shall also
provide the Executive with the benefits set forth in Section 2(c) hereof if
a Change in Control occurs during the term of this Agreement and the
Executive terminates the Executive's employment during the two (2) 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 the Executive, the assignment
of the Executive to any duties materially inconsistent with the
Executive's positions, duties, responsibilities (including reporting
responsibilities), title, or status with the Company immediately prior
to the Change in Control or a substantial reduction of the Executive's
duties or responsibilities, or any removal of the Executive from, or
any failure to reelect the 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 the
Executive in effect immediately prior to the Change in Control, or any
failure to include the Executive in any incentive, bonus or other
employee welfare or benefit plans as may be offered by the Company
from time to time to other similarly situated executives of the
Company;
(iii) A requirement the Executive be based at any location other than
within a fifty (50) mile radius of the location at which the Executive
was based immediately prior to the Change in Control, 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 or with the prior written consent of the Executive;
(iv) Any purported termination of the Executive's employment for Cause as
defined in Section 2(a)(i) hereof 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
7(b) hereof; or
(vi) Any material breach by the Company of any of the provisions of this
Agreement or any other material written agreement between the Company
and the Executive or any failure by the Company to carry out any of
its obligations hereunder or thereunder.
(c) Subject to Sections 2(a) and 2(b) hereof, within thirty (30) days of the
date of termination under Section 2(a) or 2(b) hereof, the Company shall
pay to the Executive the amounts provided in subsections (i) and (ii)
below, less any withholding therefrom under applicable federal, state, or
local income tax, other tax, or social security laws or similar statutes.
(i) A lump sum single payment in cash or cash equivalent funds in an
amount equal to the aggregate of the following:
(A) The Executive's base salary, at the then-effective annual rate,
through the last day of employment of the Executive, to the
extent not theretofore paid, plus any amounts due to the
Executive under any insurance, health, retirement, profit
sharing, or other employee welfare or benefit plan or the accrued
vacation program of the Company due to the Executive through the
last day of employment of the Executive; plus
(B) a lump sum single cash payment equal to 2.999 times (2 times for
Xxxxx X. Xxxxx) the Base Amount (as defined in Section 280G of
the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder).
(ii) To the extent that any payment made to the Executive pursuant to
Section 2(a) or 2(b) hereof constitutes an "excess parachute payment,"
as such term is defined in Section 280G(b)(1) of the Internal Revenue
Code of 1986, as amended, or the Executive becomes subject to any
excise tax as a result of the acceleration of unvested stock options,
the Company shall pay to the Executive a lump sum single payment in
cash or cash equivalent funds in an amount equal to (x) the aggregate
dollar amount of excise taxes and any surtax the Executive becomes
obligated to pay on such "excess parachute payments", divided by (y)
one (1) minus the sum of the maximum marginal federal income tax rate
(for married individuals filing jointly) plus the maximum marginal
state income tax rate plus the maximum marginal local income tax rate
plus the excise tax rate applicable for the year in which the
Executive receives the payment provided under this Section 2(c)(ii),
it being the intent of this Section, that if the Executive incurs any
such excise tax or surtax with respect to the payments, such payments
to him shall be grossed up in full for such excise tax and surtax, so
that the amount he retains, after paying all applicable federal
income, surtaxes and excise taxes due with respect to payments to him
under this Section is the same as the amount he would have retained if
Section 280G of the Code and any applicable surtax had not been
applicable.
(d) "Change in Control" means the first occurrence of any of the following
events:
(i) the acquisition by any person, entity or "group" (as defined in
Section 13(d) of the Act), other than the Company, a subsidiary, and
any employee benefit plan of the Company or a subsidiary, of 25% or
more of the combined voting power of the Corporation's then
outstanding voting securities;
(ii) the persons who were serving as the members of the Board of Directors
immediately prior to the commencement of a proxy contest relating to
the election of directors or a tender or exchange offer for voting
securities of the Company (the "Incumbent Directors") shall cease to
constitute at least a majority of the Board of Directors (or the board
of directors of any successor to the Company) at any time within one
year of the election of directors as a result of such contest or the
purchase or exchange of voting securities of the Corporation pursuant
to such offer, provided that any director elected to the Board of
Directors, or nominated for election, by a majority of the Incumbent
Directors then still in office and whose nomination or election was
not made at the request or direction of the person(s) initiating such
contest or making such offer shall be deemed to be an Incumbent
Director for purposes of this clause (ii);
(iii) consummation of a merger, reorganization or consolidation of the
Company, as a result of which persons who were shareholders of the
Company immediately prior to such merger, reorganization or
consolidation, do not, immediately thereafter, own, directly or
indirectly and in substantially the same proportions as their
ownership of the stock of the Corporation immediately prior to the
merger, reorganization or consolidation, more than 50% of the combined
voting power entitled to vote generally in the election of directors
of (x) the merged, reorganized or consolidated company or (y) an
entity that, directly or indirectly, owns more than 50% of the
combined voting power entitled to vote generally in the election of
directors of the company described in subclause (x);
(iv) the shareholders of the Company approve a sale, transfer or other
disposition of all or substantially all of the assets of the
Corporation, which is consummated and immediately following which the
persons who were shareholders of the Company immediately prior to such
sale, transfer or disposition, do not own, directly or indirectly and
in substantially the same proportions as their ownership of the stock
of the Company immediately prior to the sale, transfer or disposition,
more than 50% of the combined voting power entitled to vote generally
in the election of directors of (x) the entity or entities to which
such assets are sold or transferred or (y) an entity that, directly or
indirectly, owns more than 50% of the combined voting power entitled
to vote generally in the election of directors of the entities
described in subclause (x);and
(v) the shareholders of the Company approve a liquidation of the Company.
(e) Any termination of the Executive's employment for the reasons set forth in
Section 2(a) hereof (except for reason of the Executive's death) or by the
Executive for the reasons set forth in Sections 2(b) hereof shall be
communicated by written "Notice of Termination" to the other party,
delivered in a manner provided in Section 6(k) hereof. Any "Notice of
Termination" given by the Executive pursuant to Section 2(b) hereof, or
given by the Company in connection with a termination as to which the
Company believes it is not obligated to provide the Executive with the
benefits set forth in Section 2(c) hereof, 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.
Section 3. Payment of Certain Costs of the Executive
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If a dispute arises regarding a termination of the Executive's employment
subsequent to a Change in Control or the interpretation or enforcement of this
Agreement and the Executive obtains a final judgment in favor of the Executive
from a court of competent jurisdiction or the claim is settled by the Company
prior to the rendering of a judgment by such a court, all legal fees and
expenses incurred by the 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 the claim will be paid by the Company,
to the extent permitted by law.
Section 4. Covenant of Confidentiality; Surrender of Records
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(a) The Executive shall keep confidential and not improperly divulge for the
benefit of another party or use for the benefit of the Executive, 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. The covenants on the part of the
Executive contained in this Agreement are essential terms and conditions to
the benefits to be received by the Executive in the event of a Change in
Control, and shall be construed as independent of any other non-compete and
non-solicitation agreement or employment agreement entered into between the
Executive and the Company (each a "Prior Agreement"). This Agreement shall
not terminate, modify, amend or otherwise change any Prior Agreement and
such terms and conditions of any Prior Agreement shall remain in full force
and effect.
(b) Upon termination of the Executive's employment for any reason, the
Executive shall immediately surrender (or purge as it relates to electronic
copies) to the Company all Company records, notes, documents, forms,
manuals, or other written or printed material (including material in
electronic format), and all copies thereof, in the possession or control of
the Executive, which pertains to the business of the Company and which
would not be available publicly. The Executive agrees that all of the
foregoing shall be and remain the sole and exclusive property of the
Company.
Section 5. Termination
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This Agreement shall automatically terminate without notice to the Executive
upon the termination of the Executive's employment with the Company for any
reason prior to any Change in Control. This Agreement shall not create or
constitute an agreement, contract, understanding, commitment or arrangement for
the employment of the Executive by the Company. Accordingly, the Company
understands, acknowledges and agrees that the Executive has the right to
terminate the Executive's employment with the Company at any time for any
reason. Likewise, the Executive understands, acknowledges and agrees that the
Company has the right to terminate the Executive's employment with the Company
at any time for any reason. If the Executive's employment is terminated prior to
a Change in Control 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 in Control, or
(ii) otherwise occurred in connection with or in anticipation of a Change in
Control, then for all purposes of this Agreement, the Executive shall be deemed
to have been terminated by the Company following a Change in Control and shall
be entitled to the benefits set forth in Section 2(c) hereof.
Section 6. Miscellaneous
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(a) Binding Effect; Assignment. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that neither party hereto may assign this
Agreement without the prior written consent of the other party. Upon the
Executive's death, this Agreement shall inure to the benefit of and be
enforceable by the Executive's executors, administrators, representatives,
heirs, distributees, devisees, and legatees and all amounts payable
hereunder shall be paid to such persons or the estate of the Executive.
Because this Agreement is personal in nature, the Executive's right to
receive compensation and benefits hereunder shall not be assignable or
transferable, whether by pledge, creation of a security interest, or
otherwise and, in the event of any attempted assignment or transfer
contrary to this subsection, the Company shall have no liability to pay any
amounts so attempted to be assigned or transferred.
(b) Waiver; Amendment. No provision or obligation of this Agreement may be
waived or discharged unless such waiver or discharge is agreed to in
writing and signed by the Company and the Executive. The waiver by any
party hereto of a breach of or noncompliance with any provision of this
Agreement shall not operate or be construed as a continuing waiver or a
waiver of any other or subsequent breach or noncompliance hereunder. Except
as expressly provided otherwise herein, this Agreement may be amended,
modified, or supplemented only by a written agreement executed by the
Company and the Executive.
(c) Headings. The headings in this Agreement have been inserted solely for ease
of reference and shall not be considered in the interpretation,
construction, or enforcement of this Agreement.
(d) Severability. All provisions of this Agreement are severable from one
another, and the unenforceability or invalidity of any provision of this
Agreement shall not affect the validity or enforceability of the remaining
provisions of this Agreement; provided, however, that should any judicial
body interpreting this Agreement deem any provision to be unreasonably
broad in time, territory, scope, or otherwise, the parties intend for the
judicial body, to the greatest extent possible, to reduce the breadth of
the provision to the maximum legally allowable parameters rather than
deeming such provision totally unenforceable or invalid.
(e) Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but such counterparts shall together
constitute one and the same agreement.
(f) Governing Law; Jurisdiction; Venue; Waiver of Jury Trial. This Agreement
shall be governed by and construed in accordance with the laws of the State
of Indiana, without reference to the choice of law principles or rules
thereof. The parties hereto irrevocably consent to the jurisdiction and
venue of the state court for the State of Indiana located in Evansville,
Indiana, or the Federal District Court for the Southern District of
Indiana, Evansville Division, located in Vanderburgh County, Indiana, and
agree that all actions, proceedings, litigation, disputes, or claims
relating to or arising out of this Agreement shall be brought and tried
only in such courts. EACH OF THE PARTIES WAIVES ANY RIGHTS THAT IT MAY HAVE
TO BRING A CAUSE OF ACTION IN ANY COURT OR IN ANY PROCEEDING INVOLVING A
JURY TO THE MAXIMUM EXTENT PERMITTED BY LAW.
(g) Entire Agreement. This Agreement constitutes the entire and sole agreement
between the Company and the Executive or any other party or parties with
respect to the Executive's employment following a Change in Control, and
there are no other agreements or understanding either written or oral with
respect thereto.
(h) Construction. The rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement. Whenever in this Agreement a singular
word is used, it also shall include the plural wherever required by the
context and vice-versa. All reference to the masculine, feminine, or neuter
genders shall include any other gender, as the context requires.
(i) Review and Consultation. The Company and the Executive hereby acknowledge
and agree that each (i) has read this Agreement in its entirety prior to
executing it, (ii) understands the provisions and effects of this
Agreement, (iii) has consulted with such attorneys, accountants, and
financial and other advisors as it or he has deemed appropriate in
connection with their respective execution of this Agreement, and (iv) has
executed this Agreement voluntarily. THE EXECUTIVE HEREBY UNDERSTANDS,
ACKNOWLEDGES, AND AGREES THAT THIS AGREEMENT HAS BEEN PREPARED BY LEGAL
COUNSEL TO THE COMPANY AND THAT HE HAS NOT RECEIVED ANY ADVICE, COUNSEL, OR
RECOMMENDATION WITH RESPECT TO THIS AGREEMENT FROM SUCH COUNSEL.
(j) Successors. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, share exchange, combination,
or otherwise) to all or substantially all of the business, assets, or
voting securities of the Company, by written agreement in form and in
substance reasonably satisfactory to the Executive, to expressly assume and
agree to perform this Agreement in the same manner and extent, and upon the
same terms and conditions, 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 a
material intentional breach of this Agreement and shall entitle the
Executive to terminate the Executive's employment with the Company pursuant
to Section 2(b)(v) hereof. As used in this Agreement, the "Company" shall
mean the Company as hereinbefore defined and any successor to its business,
assets, or voting securities as aforesaid. The Company as referred to in
this Agreement shall also be deemed to include the affiliates of the
Company which employ the Executive.
(k) Notices. For purposes of this Agreement, notices, and all other
communications provided for herein shall be in writing and shall be deemed
to have been given (i) if hand delivered, upon delivery to the party, or
(ii) if mailed, two (2) days following deposit of the notice or
communication with the United States Postal Service by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
If to the Company: Old National Bancorp
Attn: General Counsel
P. O. Xxx 000
Xxxxxxxxxx, Xxxxxxx 00000
or to such other address as either party hereto may have furnished to the other
party in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
IN WITNESS WHEREOF, the parties hereto have entered into, executed, and
delivered this Agreement as of the day and year first above written.
EXECUTIVE
_______________________________
OLD NATIONAL BANCORP
By:____________________________
