EMPLOYMENT AGREEMENT
THIS AGREEMENT, entered into as of the 1st day
of May, 1997, by and between First Indiana Bank (the
"Bank"), and Named Executive (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 Bank
(the "Board") recognizes that there exists the possibility of a
Change of Control (as hereinafter defined in Section 2) of
the Bank or its holding company, First Indiana Corporation
(the "Company"), 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 Board has determined that it is
essential and in the best interest of the Bank 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 continued dedication and efforts in such event
without undue concern for his personal financial and
employment security; and
WHEREAS, in order to induce the Executive to
remain in the employ of the Bank, particularly in the event
of a threat of or the occurrence of a Change of Control, the
Bank 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.
(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 first 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
Bank 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
1 (10k page 137)
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 Bank 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 Bank 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 25% 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 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; provided further, that the
applicable percentage shall be reduced from 25% to 20% in
the event of the occurrence of one transaction or a series of
transactions which results in the beneficial ownership by
Exempt Persons of less than 15% of the Outstanding
Company Common Stock or the Outstanding Company
Voting Securities; or
(b) Individuals who, as of the date hereof,
constitute the Company's Board of Directors (the
"Incumbent Board") cease for any reason to constitute at
least a majority of the Company's Board of Directors;
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
2 (10k page 138)
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) Approval by the shareholders of the Company of
a reorganization, merger or consolidation, 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, 25%
or more of the Outstanding Company Common Stock or
Outstanding Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 25% 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;
provided however, that the applicable percentage for
purposes of clause (ii) of this subsection (c) shall be reduced
from 25% to 20% in the event of the occurrence of one
transaction or a series of transactions which results in the
beneficial ownership by Exempt Persons of less than 15% of
the Outstanding Company Common Stock or the
Outstanding Company Voting Securities; or
(d) Approval by the shareholders of the Company
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 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
3 (10k page 139)
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, 25% or more of the Outstanding
Company Common Stock or Outstanding Company Voting
Securities, as the case may be) beneficially owns, directly or
indirectly, 25% 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; provided
however, that the applicable percentage for purposes of
subclause (ii)(B) of this subsection (d) shall be reduced from
25% to 20% in the event of the occurrence of one
transaction or a series of transactions which results in the
beneficial ownership by Exempt Persons of less than 15% of
the Outstanding Company Common Stock or the
Outstanding Company Voting Securities; 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 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); or
(g) The occurrence of one transaction or a series of
transactions which results in the beneficial ownership by
Exempt Persons (determined without regard to clause (vi)
of Section 2A) of less than 20% of the outstanding voting
securities of The Somerset Group, Inc. ("Somerset"), at any
time when Somerset beneficially owns 10% or more of the
combined voting power of the outstanding voting securities
of the Company.
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; (vi) The Somerset Group, Inc., so long as it is
controlled by one or more individuals and entities described
in (i) through (v) inclusive; and (vii) 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
4 (10k page 140)
considered beneficially owned by individuals and entities described
in (i) through (vi) 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.
3. Employment.
(a) During the Employment Term, the Bank agrees
to continue to employ the Executive, and the Executive
agrees to remain in the employ of the Bank, subject to the
terms and conditions of this Agreement. During the
Employment Term, the Executive shall be employed as
(list current position of Named Executive) or in such other
executive capacity as may be mutually agreed to in writing
by the parties. 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) 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 Bank 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 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 Bank and its affiliated
companies in respect of the 12 month period immediately
preceding the month in 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 Bank and its affiliated companies. Any increase in
Annual Base Salary shall not serve to limit or reduce any
other obligation to the Executive under
5 (10k page 141)
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 Bank
(including any successor or assign treated as the Bank
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 Bank
and its affiliated companies, in any incentive compensation
plans or awards adopted or made, and in any discretionary
bonuses authorized or paid, by the Bank 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 Bank 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 Bank 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 Bank 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
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 Bank
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
Bank 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 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 family at any time during the 12
month period immediately preceding the Effective Date or,
if more favorable to the Executive and his family, those
provided generally at any time after the Effective Date to
other peer executives of the Bank and its affiliated
companies and their families. The Executive and his 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:
6 (10k page 142)
(1) Defined Benefit Pension Benefits. The
Executive and his 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 Bank's qualified defined
benefit pension plan and the supplemental pension
benefits provided for in the Executive's agreement
under the Bank's nonqualified supplemental
executive benefit plan, both as in effect on the date
hereof, subject to the terms of such plans and 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 Bank 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 Bank
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
Bank 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 Bank 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 Bank 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
Bank 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 Bank and its affiliated companies as 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 Bank
and its affiliated companies.
(i) Restrictions. As of the Effective Date, all
restrictions limiting the exercise, transferability or other
incidents of ownership of any outstanding award, including
but not limited to restricted stock, options, stock
appreciation rights, or other property or rights of the
Company or the Bank granted to the Executive shall lapse,
and such awards shall become fully vested and be held by
the Executive free and clear of all such restrictions. This
provision shall apply to all such property or rights
notwithstanding the provisions of any other plan or
agreement, unless the effect of the application of this
provision to a particular right or property would result in such
7 (10k page 143)
right or property failing to qualify for favorable tax
treatment under the particular section of the Internal
Revenue Code for which it was designed to qualify, or
would result in the loss of favorable securities law treatment
for participants under the plan pursuant to which the award
was granted.
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
Bank 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 10 of this Agreement of its intention to terminate
the Executive's employment. In such event, the Executive's
employment with the Bank 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 Bank 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 Bank 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 Board at any time may terminate
the Executive's employment for Cause [as defined in 12
C.F.R. 563.39(b)(1) of the regulations of the Office of
Thrift Supervision]. Any such termination shall be
evidenced by written notice thereof to the Executive, which
shall set forth all facts relied upon as constituting Cause.
No failure to perform by the Executive after Notice of
Termination is given by the Executive shall constitute Cause
for purposes of this Agreement.
(c) Good Reason.
(1) The Executive may terminate his 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 (vi) 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 status, title,
position or responsibilities as in effect
immediately prior thereto; the assignment to
the Executive of any duties or
8 (10k page 144)
responsibilities which, in the Executive's reasonable
judgment, are inconsistent with his 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 to any position,
except in connection with the termination of
his employment for Disability, Cause, as a
result of his 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 Bank 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 Bank 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 Bank) of a petition for
bankruptcy of the Bank;
(vi) Any material breach by the Bank and its
affiliated companies of any provision of this
Agreement;
(vii) Any purported termination of the Executive's
employment for Cause by the Bank and its
affiliated companies which does not comply
with the terms of Section 5(b) of this
Agreement; and
(viii) The failure of the Bank and its affiliated
companies to obtain an agreement,
satisfactory to the Executive, from any
successor or assign of the Bank and its
affiliated companies, to assume and agree to
perform this Agreement, as contemplated in
Section 9 hereof.
(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
employment pursuant to this Section 5(c) shall not
be affected by his incapacity due to physical or
mental illness. The Executive's continued
employment or failure to give Notice of Termination
shall not constitute
9 (10k page 145)
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 employment hereunder at any time.
(e) Notice of Termination. Any purported
termination by the Bank 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 date of death,
or in the case of the Executive's separation from the service
of the Bank 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 Bank, 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 duties during such period of at
least 30 days;
(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 Bank;
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 Bank Upon Termination.
10 (10k page 146)
(a) Good Reason; Other Than for Cause, Death or
Disability. If, during the Employment Term, the Bank shall
terminate the Executive's employment other than for Cause
or Disability or the Executive shall terminate employment
for Good Reason:
(i) The Bank 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, D and E below:
A. The sum of:
(1) The Executive's Annual Base
Salary through the
Termination Date to the
extent not theretofore paid;
and
(2) 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) and (2) shall be
hereinafter referred to as the
"Accrued Obligations."
B. The amount equal to "x"
times "y", where
"x"= the number of days remaining
in the Employment Term
(determined under Section 1
as though such termination
had not occurred and, if
neither the Bank nor the
Executive gave the other a
notice of non-extension prior
to the Termination Date, as
though the Bank 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).
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 as though such
11 (10k page 147)
termination had not occurred
and, if neither the Bank nor
the Executive gave the other
a notice of non-extension
prior to the Termination
Date, as though the Bank had
given the Executive a notice
of non-extension on the
Termination Date) with
annual compensation equal to
the Annual Base Salary,
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, policy or program
during the 12 month period
immediately preceding the Effective
Date).
D. With respect to each medical
or dental employee welfare
benefit plan in which the
Executive participates
immediately before the
Termination Date, the amount
equal to the product of the
excess of "x" over "y" times
"z" divided by 365 [(x-y)z/365], where
"x"= the number of days after the
Termination Date the
Executive and his spouse and
eligible dependents would
have been entitled to
participate in said plan if his
employment had continued
and said plan had remained in
effect in the same form for the
remainder of the Employment
Term (determined under
Section 1 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) and he had continued
to pay the same portion of the
cost of such participation as
he paid before; and
"y"= the number of days after the
Termination Date the
Executive and his spouse and
eligible dependents will be
entitled to participate in said
plan (assuming said plan
remains in effect in the same
form and he continues to pay
the same portion of the cost
of such participation as he
paid before); and
12 (10k page 148)
"z"= the premium paid or payable
by the Company (net of any
portion thereof paid or
payable by the Executive)
attributable to the
participation of the Executive
(and his spouse and eligible
dependents, if applicable) in
said plan for the last calendar
year ending before the
Termination Date.
E. The amount equal to "x" times "y", where
"x"= the number of days remaining
in the Employment Term
(determined under Section 1
as though such termination
had not occurred and, if
neither the Bank nor the
Executive gave the other a
notice of non-extension prior
to the Termination Date, as
though the Bank 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 Bank
or its affiliated companies
attributable to the last
calendar year ending before
the Effective Date.
(ii) To the extent not theretofore paid or
provided, the Bank 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 Bank
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 Bank 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 Bank
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 Bank and its affiliated companies shall pay
or provide the Accrued Obligations and the Other Benefits.
13 (10k page 149)
(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 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, in the case of
amounts payable under an employee benefit plan or
arrangement or pursuant to the Executive's election, at the
time provided under such plan, arrangement or election. If
any payment is not made on time (hereinafter a "Delinquent
Payment"), the Bank 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 as
announced from time to time by NBD Bank, N. A., of
Indianapolis, Indiana, or its successor, 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. Unauthorized Disclosure. The Executive shall
not make any Unauthorized Disclosure. For purposes of this
Agreement, "Unauthorized Disclosure" shall mean
disclosure by the Executive without the consent of the
Board to any person, other than an employee of the Bank or
any of its affiliated companies or a person to whom
disclosure is reasonably necessary or appropriate in
connection with the performance by the Executive of his
duties as an executive of the Bank or any of its affiliated
companies or as may be legally required, of any confidential
information obtained by the Executive while in the employ
of the Bank and its affiliated companies (including, but not
limited to, any confidential information with respect to any
of the customers or methods of operation of the Bank or
any of its affiliated companies) the disclosure of which he
knows or has reason to believe will be materially injurious
to the Bank and its affiliated companies; provided, however,
that such term shall not include the use or disclosure by the
Executive, without consent, of any information known
generally to the public (other than as a result of disclosure
by him in violation of this Section 8) or any information not
otherwise considered confidential by a reasonable person
engaged in the same business as that conducted by the Bank
and its affiliated companies. In no event shall an asserted
violation of this Section 8 constitute a basis for deferring or
withholding any amounts otherwise payable to the
Executive under this Agreement.
9. Successors and Assigns.
(a) This Agreement shall be binding upon and shall
inure to the benefit of the Bank and its successors and assigns.
The Bank shall require any successor or assign (whether direct or
14 (10k page 150)
indirect, by purchase, merger, share
exchange, consolidation or otherwise), by agreement in
form and substance satisfactory to the Executive, to
acknowledge expressly that this Agreement is binding upon
and enforceable against the Bank in accordance with the
terms hereof, and to become jointly and severally obligated
with the Bank to perform this Agreement in the same
manner and to the same extent that the Bank would be
required to perform if no such succession or assignment had
taken place. Except for purposes of Sections 1(b), 1(c), 2,
10 and 14, the term "Bank" 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 Bank (including this Agreement), whether by operation
of law or otherwise. In the event substantially all of the
assets and business of the 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.
(b) Neither this Agreement nor any right or interest
hereunder shall be assignable or transferable by the
Executive, his 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. 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 Bank, to First Indiana
Bank, 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 Bank
shall be directed to the attention of the Board with a copy to
the Secretary of the Bank. 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.
11. 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 program provided by the Bank 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 Bank or any of its affiliated companies shall be
payable in accordance with such plan or program, except as
explicitly modified by this Agreement.
12. Settlement of Claims. The Bank'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 Bank or any of its affiliated companies may
have against the Executive or others.
15 (10k page 151)
13. 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 Bank. 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.
14. Employment. The Executive and the Bank
acknowledge that, prior to the Effective Date, the
employment of the Executive by the Bank is "at will" and
may be terminated by either the Executive or the Bank at
any time. If the Executive's employment with the Bank
terminates prior to the Effective Date, then the Executive
shall have no further rights under this Agreement.
15. 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.
16. 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.
17. 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 elsewhere provided and not otherwise expressly
provided in this Agreement.
18. Headings. The headings herein contained are
for reference only and shall not affect the meaning or
interpretation of any provision of this Agreement.
19. 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 Bank.
20. Withholding. The Bank 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
Bank 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.
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
16 (10k page 152)
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 Bank 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 Bank 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. Limitation on Payments.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event that it shall be determined that
any payment or distribution by the Bank to or for the benefit
of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise (a "Payment"), would constitute an "excess
parachute payment" within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the
"Code"), the aggregate present value of amounts payable or
distributable to or for the benefit of the Executive pursuant
to this Agreement (such payments or distributions pursuant
to this Agreement are hereinafter referred to as "Agreement
Payments") shall be reduced (but not below zero) to the
Reduced Amount. The "Reduced Amount" shall be an
amount expressed in present value which maximizes the
aggregate present value of Agreement Payments without
causing any Payment to be subject to tax under Section
4999 of the Code. For purposes of this Section 22, present
value shall be determined in accordance with Section
280G(d)(4) of the Code.
17 (10k page 153)
(b) All determinations to be made under this
Section 22 shall be made by an independent national
accounting firm designated by the Bank (the "Accounting
Firm"), which firm shall provide its determinations and any
supporting calculations both to the Bank and the Executive
within 10 days after the date for payment of any Agreement
Payment subject to reduction under this section. Any such
determination by the Accounting Firm shall be binding upon
the Bank and the Executive. The Executive shall then have
the right to determine which of the Agreement Payments
shall be eliminated or reduced in order to produce the
Reduced Amount in accordance with the requirements of
this section. Within five days after this determination, the
Bank shall pay (or cause to be paid) or distribute (or cause
to be distributed) to or for the benefit of the Executive such
amounts as are then due to the Executive under this
Agreement.
(c) As a result of the uncertainty in the application
of Section 280G of the Code, it is possible that Agreement
Payments will have been made by the Bank which should
not have been made ("Overpayment") or that additional
Agreement Payments which have not been made by the
Bank could have been made ("Underpayment"), in each
case, consistent with the calculations required to be made
hereunder. From time to time as the Bank or the Executive
shall deem appropriate, the Accounting Firm shall review
the determinations made by it pursuant to subsection (b) of
this section, and the Bank and the Executive shall cooperate
and provide all information necessary for such review. In
the event that the Accounting Firm determines that an
Overpayment has been made, any such Overpayment shall
be treated for all purposes as a loan to the Executive which
the Executive shall repay to the Bank together with interest
from the date of payment under this Agreement at the
applicable Federal rate provided for in Section 7872(f)(2) of
the Code (the "Federal Rate"); provided, however, that no
amount shall be payable by the Executive to the Bank if and
to the extent such payment would not reduce the amount
which is subject to tax under Section 4999 of the Code. In
the event that the Accounting Firm determines that an
Underpayment has occurred, any such Underpayment shall
be promptly paid by the Bank to or for the benefit of the
Executive together with interest from the date of payment
under this Agreement at the Federal Rate.
(d) All of the fees and expenses of the Accounting
Firm in performing the determinations referred to in
subsections (b) and (c) above shall be borne solely by the
Bank. The Bank agrees to indemnify and hold harmless the
Accounting Firm of and from any and all claims, damages
and expenses resulting from or relating to its determinations
pursuant to subsections (b) and (c) above, except for claims,
damages or expenses resulting from the gross negligence or
willful misconduct of the Accounting Firm.
(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 Bank 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.
18 (10k page 154)
23. Required Provisions.
(a) If the Executive is suspended and/or temporarily
prohibited from participating in the conduct of the Bank's
affairs by a notice served under Section 8(e)(3) or (g)(1) of
the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(3)
and (g)(1)), the Bank's obligations under this Agreement
shall be suspended as of the date of service unless stayed by
appropriate proceedings. If the charges in the notice are
dismissed, the Bank may in its discretion (i) pay the
Executive all or part of the compensation withheld while its
contract obligations were suspended, and (ii) reinstate (in
whole or in part) any of its obligations which were
suspended.
(b) If the Executive is removed and/or permanently
prohibited from participation in the conduct of the Bank's
affairs by an order issued under Section 8(e)(4) or (g)(1) of
the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(4) or
(g)(1)), all obligations of the Bank under this Agreement
shall terminate as of the effective date of the order, but
vested rights of the contracting parties shall not be affected.
(c) If the Bank is in default (as defined in
Section 3(x)(1) of the Federal Deposit Insurance Act), all
obligations under this Agreement shall terminate as of the
date of default, but this paragraph shall not affect any vested
rights of the contracting parties.
(d) All obligations under this Agreement shall be
terminated, except to the extent it is determined that
continuation of this Agreement is necessary for the
continued operation of the Bank: (i) by the Director of the
Federal Deposit Insurance Corporation (the "Director") or
his or her designee, at the time the Federal Deposit
Insurance Corporation enters into an agreement to provide
assistance to or on behalf of the Bank under the authority
contained in Section 13(c) of the Federal Deposit Insurance
Act; or (ii) by the Director or his or her designee at the time
the Director or his or her designee approves a supervisory
merger to resolve problems related to operation of the Bank
or when the Bank is determined by the Director to be in an
unsafe or unsound condition. All rights of the parties that
have already vested, however, shall not be affected by such
action.
IN WITNESS WHEREOF, the Bank has caused this
Agreement to be executed by its duly authorized officer and
the Executive has executed this Agreement as of the day
and year first above written.
FIRST INDIANA BANK
By: ___________________________________
Xxxx X. Xxxxxx, Xx., President
"Bank"
19 (10k page 155)
ATTEST:
_______________________________
Secretary
______________________________________
Named Executive
"Executive"
Address: ______________________________
______________________________
20 (10k page 156)
