[Note: This form of agreement was entered into by First Indiana
Corporation and each of Xxxxxx X. XxXxxxxx, Xxxxx XxXxxxxx, and Xxxx
X. Xxxxxx, Xx. The agreements are identical except for the positions
held at the Company and the Bank (references to such are noted) and
for the clause in section 1(a) which reads "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)", which does NOT appear in Xxxxxx X. XxXxxxxx'x
agreement]
EMPLOYMENT AGREEMENT
THIS AGREEMENT, entered into as of the 1st day of
May, 1997, by and between First Indiana Corporation (the
"Company"), 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 Company (the
"Board") recognizes that the possibility of a Change of Control
(as hereinafter defined in Section 2) exists and that the threat of or
the occurrence of a Change of Control can result in significant
distractions of its key management personnel because of the
uncertainties inherent in such a situation; and
WHEREAS, the Board has determined that it is essential
and in the best interest of the Company and its shareholders to
retain the services of the Executive in the event of a threat or
occurrence of a Change of Control and to ensure his 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 Company, particularly in the event of a threat of
or the occurrence of a Change of Control, the Company desires to
enter into this Agreement with the Executive.
NOW, THEREFORE, in consideration of the respective
agreements of the parties contained herein, it is agreed as follows:
1. Employment Term.
(a) The "Employment Term" shall commence on the first
date during the Protected Period (as defined in Section 1(c),
below) on which a Change of Control (as defined in Section 2,
below) occurs (the "Effective Date") and shall expire on the third
anniversary of the Effective Date; provided, however, that at the
end of each day of the Employment Term the Employment Term
shall automatically be extended for one (1) day unless either the
Company or the Executive shall have given written notice to the
other at least thirty (30) days prior thereto that the Employment
Term shall not be so extended and provided, further, that the
Employment Term shall not be automatically extended beyond the
first day of the month following the month in which the Executive
attains age sixty-five (65).
(b) Notwithstanding anything contained in this Agreement
to the contrary, if the Executive's employment is terminated prior
to the Effective Date and the Executive reasonably demonstrates
that such termination (i) was at the request of a third party who
has indicated an intention or taken steps reasonably calculated to
effect a Change of Control, or (ii) otherwise occurred in
connection with or in anticipation of a Change of Control, then for
all purposes of this
1 (10k page 117)
Agreement, the Effective Date shall mean the date immediately
prior to the date of such termination of the Executive's
employment.
(c) For purposes of this Agreement, the "Protected
Period" shall be the one year period commencing on the date
hereof, provided, however, that at the end of each day the
Protected Period shall be automatically extended for one day
unless at least 30 days prior thereto the Company shall have given
written notice to the Executive that the Protected Period shall not
be so extended; and provided, further, that notwithstanding any
such notice by the Company not to extend, the Protected Period
shall not end if prior to the expiration thereof any third party has
indicated an intention or taken steps reasonably calculated to
effect a Change of Control, in which event the Protected Period
shall end only after such third party publicly announces that it has
abandoned all efforts to effect a Change of Control.
2. Change of Control. For purposes of this Agreement, a
"Change of Control" shall mean the first to occur of the following:
(a) The acquisition by any individual, entity or "group"
within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act")(a "Person") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 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
Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
either an actual or threatened "election
2 (10k page 118)
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 other disposition in substantially
the same proportion as their ownership, immediately prior to
3 (10k page 119)
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 First Indiana 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 First Indiana 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 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
4 (10k page 120)
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 Company agrees to
continue to employ the Executive, and the Executive agrees to
remain in the employ of the Company, subject to the terms and
conditions of this Agreement. During the Employment Term, the
Executive shall be employed as [insert name of position held
currently] of the Company or in such other executive capacity as
may be mutually agreed to in writing by the parties. During the
Employment Term, the Executive shall be responsible for
overseeing the Company's investment in First Indiana Bank and
shall function as, and have the titles of, [insert current title(s)]
of said Bank. During the Employment Term, the Executive's
position (including status, offices, titles and
reporting requirements), authority, duties and responsibilities shall
be at least commensurate in all material respects with the most
significant of those held or assigned at any time during the 12
month period immediately preceding the Effective Date, and the
Executive's services shall be performed at the location where the
Executive was employed immediately preceding the Effective
Date or at any office or location less than 35 miles from such
location, unless mutually agreed to in writing by the parties.
(b) The Company may assign to the Executive the
responsibility of serving not only as [insert current title] of the Company
but also as [insert position or title] of one or more of its
affiliates. When performing services for an affiliate, the Executive
shall do so, at the Company's option, either as an employee of the
Company or as a direct employee of the affiliate. Although part
or all of the Executive's compensation and benefits may be paid or
provided by affiliates, the Company shall be and remain ultimately
liable for the performance of its obligations hereunder, and it shall
be considered for purposes of Sections 6 and 23 that all of the
Executive's compensation and benefits are paid or provided by the
Company.
(c) Excluding periods of vacation and sick leave to which
the Executive is entitled, during the Employment Term the
Executive agrees to devote full time attention to the business and
affairs of the Company and its affiliates 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.
5 (10k page 121)
(a) Base Salary. During the Employment Term, the
Executive shall receive an annual base salary ("Annual Base
Salary"), which shall be paid at a monthly rate, at least equal to 12
times the highest monthly base salary paid or payable to the
Executive by the Company and its affiliated companies in respect
of the 12 month period immediately preceding the month in which
the Effective Date occurs. During the Employment Term, the
Annual Base Salary shall be reviewed at least annually and shall be
increased at any time and from time to time as shall be
substantially consistent with increases in base salary generally
awarded in the ordinary course of business to other peer
executives of the Company and its affiliated companies. Any
increase in Annual Base Salary shall not serve to limit or reduce
any other obligation to the Executive under this Agreement.
Annual Base Salary shall not be reduced after any such increase
and the term Annual Base Salary as utilized in this Agreement
shall refer to Annual Base Salary as so increased. As used in this
Agreement, the term "affiliated companies" shall include any
company controlled by, controlling or under common control with
the Company (including any successor or assign treated as the
Company pursuant to Section 9(a)).
(b) Discretionary Bonuses. During the Employment
Term, the Executive shall be entitled to participate, equitably in
relation to other peer executives of the Company and its affiliated
companies, in any incentive compensation plans or awards
adopted or made, and in any discretionary bonuses authorized or
paid, by the Company or its affiliated companies. No other
compensation provided for in this Agreement shall be deemed a
substitute for the Executive's right to participate in any such
incentive compensation plans and to receive any such awards and
bonuses.
(c) Savings and Retirement Plans. During the
Employment Term, the Executive shall be entitled to participate in
all savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and
its affiliated companies, but in no event shall such plans, practices,
policies and programs provide the Executive with savings
opportunities and retirement benefit opportunities, in each case,
less favorable, in the aggregate, than the most favorable of those
provided by the Company and its affiliated companies for the
Executive under such plans, practices, policies and programs as in
effect at any time during the 12 month period immediately
preceding the Effective Date, or, if more favorable to the
Executive, those provided generally at any time after the Effective
Date to other peer executives of the Company and its affiliated
companies.
(d) Benefit Plans. During the Employment Term (and
thereafter to the extent provided in the applicable plan, practice,
policy or arrangement), the Executive and his family shall be
eligible for participation in, and shall receive benefits pursuant to,
all benefit plans, practices, policies and arrangements that are
maintained or provided by the Company or any of its affiliated
companies (including, without limitation, medical, prescription
drug, dental, disability, salary continuance, employee life, group
life, accidental death and travel accident insurance plans and
programs) and that are applicable generally to other peer
executives of the Company or any of its affiliated companies and
their families; provided, however, that in no event shall such plans,
practices, policies and arrangements provide the Executive and his
family with benefits that are less
6 (10k page 122)
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 Company
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:
(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 Company's qualified defined benefit pension plan and
the supplemental pension benefits provided for in the
Executive's agreement under the Company's nonqualified
supplemental executive benefit plan, both as in effect on
the date hereof, subject to the terms of such plans and
such agreement.
(2) Death Benefit. The Executive's beneficiaries shall be
entitled to death benefits not less favorable, in the
aggregate, than the death benefits provided for in the
Executive's agreement under the Company's supplemental
executive benefit plan as in effect on the date hereof,
subject to the terms of such agreement.
(e) Expenses. During the Employment Term, the
Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Executive in accordance with
the most favorable policies, practices and procedures of the
Company and its affiliated companies in effect for the Executive at
any time during the 12 month period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company and its affiliated companies.
(f) Fringe Benefits. During the Employment Term, the
Executive shall be entitled to fringe benefits (including but not
limited to club dues) in accordance with the most favorable plans,
practices, programs and policies of the Company and its affiliated
companies in effect for the Executive at any time during the 12
month period immediately preceding the Effective Date or, if
more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company
and its affiliated companies.
(g) Office and Support Staff. During the Employment
Term, the Executive shall be entitled to an office or offices of a
size and with furnishings and other appointments, and to exclusive
personal secretarial and other assistance, at least equal to the most
favorable of the foregoing provided to the Executive by the
Company and its affiliated companies at any time during the 12
month period immediately preceding the Effective Date or, if
more favorable to the Executive, as provided generally at any time
thereafter with respect to other peer executives of the Company
and its affiliated companies.
7 (10k page 123)
(h) Vacation and Sick Leave. During the Employment
Term, the Executive shall be entitled to paid vacation and sick
leave (without loss of pay) in accordance with the most favorable
plans, policies, programs and practices of the Company and its
affiliated companies as in effect for the Executive at any time
during the 12 month period immediately preceding the Effective
Date or, if more favorable to the Executive, as in effect generally
at any time thereafter with respect to other peer executives of the
Company and its affiliated companies.
(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 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 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 Company determines in good faith that
the Disability of the Executive has occurred during the
Employment Term (pursuant to the definition of Disability set
forth below), it may give to the Executive written notice in
accordance with Section 11 of this Agreement of its intention to
terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate
effective on the 30th day after receipt of such notice by the
Executive (the "Disability Effective Date"), provided that, within
30 days after such receipt, the Executive shall not have returned
to full-time performance of the Executive's duties. For purposes
of this Agreement, "Disability" shall mean the absence of the
Executive from the Executive's duties with the Company and its
affiliated companies on a full-time basis for 180 consecutive
business days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable
to the Executive or the Executive's legal representative, provided
if the parties are unable to agree, the parties shall request the Xxxx
of the Indiana University School of Medicine to choose such
physician.
(b) Cause. The Company may terminate the Executive's
employment for "Cause." A termination for Cause is a termination
evidenced by a resolution adopted in good faith by a majority of
the Board that the Executive (i) willfully, deliberately and
continually failed to substantially perform his duties under Section
3, above (other than a failure resulting from the Executive's incapacity
due to physical or mental illness) which failure constitutes gross
8 (10k page 124)
misconduct, and results in and was intended to
result in demonstrable material injury to the Company or any of its
affiliated companies, monetary or otherwise, or (ii) committed
acts of fraud and dishonesty constituting a felony, as determined
by a final judgment or order of a court of competent jurisdiction,
and resulting or intended to result in gain to or personal
enrichment of the Executive at the Company's expense, provided,
however, that no termination of the Executive's employment shall
be for Cause as set forth in (i), above, until (a) the Executive shall
have had at least 60 days to cure any conduct or act alleged to
provide Cause for termination after a written notice of demand
has been delivered to the Executive specifying in detail the manner
in which the Executive's conduct violates this Agreement, and (b)
the Executive shall have been provided an opportunity to be heard
by the Board (with the assistance of the Executive's counsel if the
Executive so desires). No act, or failure to act, on the Executive's
part, shall be considered "willful" unless he has acted or failed to
act in bad faith and without a reasonable belief that his action or
failure to act was in the best interest of the Company and its
affiliated companies. Notwithstanding anything contained in this
Agreement to the contrary, no failure to perform by the Executive
after Notice of Termination is given by the Executive shall
constitute Cause for purposes of this Agreement.
(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 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 Company and its affiliated
companies, through incentive or bonus
arrangements, to provide the Executive with
incentive compensation opportunities comparable
to those it provided to the Executive in respect of
the three fiscal years immediately preceding the
fiscal year in which the Effective Date occurs;
9 (10k page 125)
(iv) Any failure by the Company and its affiliated
companies to comply with any of the provisions of
Section 4 of this Agreement;
(v) The insolvency or the filing (by any party,
including the Company) of a petition for
bankruptcy of the Company;
(vi) Any material breach by the Company and its
affiliated companies of any provision of this
Agreement;
(vii) Any purported termination of the Executive's
employment for Cause by the Company and its
affiliated companies which does not comply with
the terms of Section 5(b) of this Agreement; and
(viii) The failure of the Company and its affiliated
companies to obtain an agreement, satisfactory to
the Executive, from any successor or assign of the
Company and its affiliated companies, to assume
and agree to perform this Agreement, as
contemplated in Section 9 hereof.
(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 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 Company or by the Executive (other than by death of the
Executive) shall be communicated by Notice of Termination to the
other. For purposes of this Agreement, a "Notice of Termination"
shall mean a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the
extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated, and (iii)
10 (10k page 126)
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
Company and its affiliated companies at the end of the
Employment Term, the date of such separation, or in all other
cases, the date specified in the Notice of Termination, subject to
the following:
(1) If the Executive's employment is terminated by the
Company, the date specified in the Notice of Termination
shall be at least 30 days after the date the Notice of
Termination is given to the Executive, provided, however,
that in the case of Disability, the Executive shall not have
returned to the full-time performance of his 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 Company; and
(3) In the event that within 30 days following the date of
receipt of the Notice of Termination, one party notifies the
other that a dispute exists concerning the basis for
termination, the Executive's employment hereunder shall
not be terminated except after the dispute is finally
resolved and a Termination Date is determined either by a
mutual written agreement of the parties, or by a binding
and final judgment order or decree of a court of competent
jurisdiction (the time for appeal therefrom having expired
and no appeal having been perfected).
6. Obligations of the Company Upon Termination.
(a) Good Reason; Other Than for Cause, Death or
Disability. If, during the Employment Term, the Company shall
terminate the Executive's employment other than for Cause or
Disability or the Executive shall terminate employment for Good
Reason:
(i) The Company shall pay to the Executive in a lump
sum in cash within five days after the Termination
Date the sum of the amounts described in A, B, C,
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
11 (10k page 127)
(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 Company nor the
Executive gave the other a notice of
non-extension prior to the
Termination Date, as though the
Company had given the Executive a
notice of non-extension on the
Termination Date) divided by 365;
and
"y"= the Executive's Annual Base Salary
(increased for this purpose by any
Section 401(k) deferrals, cafeteria
plan elections, or other deferrals
that would have increased the
Executive's Annual Base Salary if
paid in cash to the Executive when
earned).
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 termination had not
occurred and, if neither the
Company nor the Executive gave
the other a notice of non-extension
prior to the Termination Date, as
though the Company had given the
Executive a notice of non-extension
on the Termination Date) with
annual compensation equal to the
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
12 (10k page 128)
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
13 (10k page 129)
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
"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 Company nor the
Executive gave the other a notice of
non-extension prior to the
Termination Date, as though the
Company had given the Executive a
notice of non-extension on the
Termination Date) divided by 365;
and
"y"= the club dues for the Executive paid
by the Company or its affiliated
companies attributable to the last
calendar year ending before the
Effective Date.
(ii) To the extent not theretofore paid or
provided, the Company shall timely pay or
provide to the Executive any other amounts
or benefits required to be paid or provided
or which the Executive is eligible to receive
pursuant to this Agreement or under any
plan, program, policy or practice or
contract or agreement of the Company or
any of its affiliated companies (such other
amounts and benefits shall be hereinafter
referred to as the "Other Benefits").
(b) Death. If the Executive's employment is terminated by
reason of the Executive's death during the Employment Term, this
Agreement shall terminate without further obligations to the
Executive's legal representatives under this Agreement, except
that after the Termination Date the Company and its affiliated
companies shall pay or provide the Accrued Obligations and the
Other Benefits.
(c) Disability. If the Executive's employment is
terminated by reason of the Executive's Disability during the
Employment Term, this Agreement shall terminate without further
obligations to the Executive, except that the Company and its
affiliated companies shall pay or provide the Accrued Obligations
and the Other Benefits.
(d) Cause; Other Than for Good Reason. If the
Executive's employment shall be terminated for Cause during the
Employment Term, or if the Executive voluntarily terminates
employment during the Employment Term for other than Good
Reason, this Agreement shall terminate without further obligations
to the Executive, except that the Company and its affiliated
companies shall pay or provide the Accrued Obligations and the
Other Benefits.
(e) Expiration of Employment Term. If the Executive's
employment terminates at the expiration of the original or any
extended Employment Term, the Executive (or his 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
14 (10k page 130)
payment is not made on time (hereinafter a "Delinquent
Payment"), the Company and its affiliated companies shall pay to
the Executive, in addition to the principal sum, interest on such
Delinquent Payment computed at the prime rate 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 Company 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 Company 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 Company 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 Company or any
of its affiliated companies) the disclosure of which he knows or
has reason to believe will be materially injurious to the Company
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 Company 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 Company and its successors and assigns. The
Company shall require any successor or assign (whether direct or
indirect, by purchase, merger, share exchange, consolidation or
otherwise), by agreement in form and substance satisfactory to the
Executive, to acknowledge expressly that this Agreement is
binding upon and enforceable against the Company in accordance
with the terms hereof, and to become jointly and severally
obligated with the Company to perform this Agreement in the
same manner and to the same extent that the Company would be
required to perform if no such succession or assignment had taken
place. Except for purposes of Sections 1(b), 1(c), 2, 11 and 15,
the term "Company" as used herein shall include such successors
and assigns. The term "successors and assigns" as used herein
shall mean a corporation or other entity acquiring all or
substantially all of the assets and business of the Company
(including this Agreement), whether by operation of law or
otherwise. In the event substantially all of the assets and business
of First Indiana Bank are acquired by another entity in a
transaction or series of
15 (10k page 131)
transactions constituting a Change of Control, such term shall include the
entity acquiring such assets and thereafter operating such business (or the
ultimate corporate parent of such entity if such entity is a corporate
subsidiary).
(b) Neither this Agreement nor any right or interest
hereunder shall be assignable or transferable by the Executive, his
beneficiaries or legal representatives, except by will or by the laws
of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by the Executive's legal
representative.
10. Fees and Expenses. From and after the Effective
Date, the Company and its affiliated companies shall pay all legal
fees and related expenses (including the costs of experts, evidence
and counsel) reasonably incurred by the Executive as they become
due as a result of (i) the Executive's termination of employment
(including all such fees and expenses, if any, incurred in contesting
or disputing any such termination of employment), (ii) the
Executive's hearing before the Board as contemplated in Section
5(b) of this Agreement, (iii) the Executive's seeking to obtain or
enforce any right or benefit provided by this Agreement or by any
other plan or arrangement maintained by the Company or any of
its affiliated companies under which the Executive is or may be
entitled to receive benefits, or (iv) any contest by a taxing
authority of the Executive's tax treatment of any amounts
received under this Agreement or any other agreement with or
plan of the Company or any of its affiliated companies to the
extent such tax treatment is consistent with the determinations
made by the Accounting Firm under Section 23.
11. Notice. For the purposes of this Agreement, notices
and all other communications provided for in the Agreement
(including the Notice of Termination) shall be in writing and shall
be deemed to have been duly given when personally delivered or
sent by certified mail, return receipt requested, postage prepaid, if
to the Company, to First Indiana Corporation, 000 Xxxxx
Xxxxxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000, or if to the
Executive, to the address set forth below the Executive's
signature, or to such other address as the party may be notified,
provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the
Company. All notices and communications shall be deemed to
have been received on the date of delivery thereof or on the third
business day after the mailing thereof, except that notice of
change of address shall be effective only upon receipt.
12. Non-Exclusivity of Rights. Nothing in this
Agreement shall prevent or limit the Executive's continuing or
future participation in any benefit, bonus, incentive or other plan
or program provided by the Company or any of its affiliated
companies for which the Executive may qualify. Amounts which
are vested benefits or which the Executive is otherwise entitled to
receive under any plan or program of the Company or any of its
affiliated companies shall be payable in accordance with such plan
or program, except as explicitly modified by this Agreement.
13. Settlement of Claims. The Company's obligation to
make the payments provided for in this Agreement and otherwise
to perform its obligations hereunder shall not be affected by any
circumstances, including, without limitation, any set-off,
counterclaim, recoupment, defense or
16 (10k page 132)
other right which the Company or any of its affiliated companies may have
against the Executive or others.
14. Miscellaneous. No provision of this Agreement may
be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by the
Executive and the Company. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar
or dissimilar provisions or conditions at the same or at any prior
or subsequent time. No agreement or representations, oral or
otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not expressly set
forth in this Agreement.
15. Employment. The Executive and the Company
acknowledge that, prior to the Effective Date, the employment of
the Executive by the Company and its affiliated companies is "at
will" and may be terminated by either the Executive or the
Company at any time. If the Executive's employment with the
Company and its affiliated companies terminates prior to the
Effective Date, then the Executive shall have no further rights
under this Agreement.
16. Governing Law. This Agreement shall be governed
by and construed and enforced in accordance with the laws of the
State of Indiana without giving effect to the conflict of law
principles thereof.
17. Severability. The provisions of this Agreement shall
be deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the other
provisions hereof.
18. Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto and supersedes all
prior agreements, if any, understandings and arrangements, oral or
written, between the parties hereto with respect to the subject
matter hereof.
19. Headings. The headings herein contained are for
reference only and shall not affect the meaning or interpretation of
any provision of this Agreement.
20. Modification. No provision of this Agreement may be
modified, waived or discharged unless such modification, waiver
or discharge is agreed to in writing signed by both the Executive
and the Company.
21. Arbitration. In the event of any disputes, differences,
controversies or claims arising out of, or in connection with, this
Agreement, other than a dispute in which the sole relief sought is
an equitable remedy, such as a temporary restraining order or a
permanent or temporary injunction, the parties shall be required to
have the dispute, controversy, difference or claim settled through
binding arbitration pursuant to the American Arbitration
Association's rules of commercial arbitration which are then in
effect. The location of all arbitration proceedings shall
17 (10k page 133)
be Indianapolis, Indiana. One arbitrator shall be selected by the
parties and shall be a current or former executive officer (vice
president or higher) of a publicly-traded corporation. In the event
the parties are unable mutually to agree upon a person to act as
the arbitrator, or in the event a mutually-agreed upon arbitrator
shall fail to accept the appointment by the parties, the parties
jointly shall request from the American Arbitration Association a
list of the names of five persons who would be qualified to act as
an arbitrator under this section. The selection of the final
arbitrator then shall be achieved by each party alternately striking
a name, with the Company going first, until one name remains. In
the event the parties mutually agree that the five names submitted
by the American Arbitration Association are unsatisfactory, they
jointly may request a second list of five names from the American
Arbitration Association and final selection shall be achieved
through the procedure set out herein. The decision of the
arbitrator is final and binding upon both parties and any award
entered by the arbitrator shall be final, binding and non-appealable
and judgment may be entered thereon by either party in
accordance with the applicable law in any court of competent
jurisdiction. The arbitrator shall not have authority to modify any
provision of this Agreement nor to award a remedy for any
difference, dispute, controversy or claim arising under this
Agreement other than a benefit specifically provided under or by
virtue of this Agreement. The Company shall be responsible for
all of the reasonable expenses of the American Arbitration
Association, the arbitrator and the conduct of the selection and
the arbitration procedures set forth in this clause, including
reasonable attorneys' fees and expenses incurred by either party
which are associated with the arbitration procedure through the
time the final arbitration decision or award is rendered. This
arbitration provision shall be specifically enforceable.
22. Withholding. The Company and its affiliated
companies shall be entitled to withhold from amounts paid to the
Executive hereunder any federal, estate or local withholding or
other taxes or charges which it is, from time to time, required to
withhold. The Company and its affiliated companies shall be
entitled to rely on an opinion of counsel if any question as to the
amount or requirement of any such withholding shall arise.
23. Limitation on Payments.
(a) Notwithstanding anything contained herein to the
contrary, prior to the payment of any amounts pursuant to Section
6(a) hereof, an independent national accounting firm designated
by the Company (the "Accounting Firm") shall compute whether
there would be payable to the Executive any "excess parachute
payments," within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), taking into
account the total "parachute payments," within the meaning of
Section 280G of the Code, payable or to be provided to the
Executive, whether by the Company or any of its affiliates or by
any successor to the Company or any such affiliate, and whether
under this Agreement or outside of this Agreement. If there
would be any excess parachute payments, the Accounting Firm
will compute the net after-tax proceeds to the Executive, taking
into account the excise tax imposed by Section 4999 of the Code,
if (i) such parachute payments were reduced to the point that the
total thereof would not exceed three times the "base amount" as
defined in Section 280G of the Code, less One Dollar ($1.00), or (ii)
18 (10k page 134)
such parachute payments were not reduced. If not reducing
such parachute payments would result in a greater after-tax
amount to the Executive, such parachute payments shall not be
reduced. If reducing such parachute payments would result in a
greater after-tax amount to the Executive, they shall be reduced to
such lesser amount. If such parachute payments must be reduced,
the Executive shall direct which of the payments are to be reduced
and the manner in which each is to be limited or modified. The
determination by the Accounting Firm shall be binding upon the
Company and its affiliated companies and the Executive subject to
the application of Section 23(c) hereof.
(b) As a result of various incentive or other plans, the
Executive may be entitled to receive various parachute payments
over a period of several years. In such event, the Accounting
Firm may need to update its Section 23(a) calculations one or
more times. In the event that all or a portion of a parachute
payment is not made due to the limitations of this Section 23, the
Company and its affiliated companies shall not be relieved of
liability for such amount but such parachute payment shall be
deferred and included in calculations with respect to subsequent
parachute payments.
(c) As a result of uncertainty in the application of section
280G of the Code at the time of determinations by the Accounting
Firm hereunder, uncertainties in the valuation of future payments,
and deferrals pursuant to Section 6(a), it is possible that parachute
payments will have been made by the Company and its affiliated
companies which should not have been made (an "Overpayment")
or that additional parachute payments which will not have been
made by the Company and its affiliated companies could have
been made (an "Underpayment"), consistent in each case with the
other provisions of this Section 23. In the event that the
Accounting Firm, based upon the assertion of a deficiency by the
Internal Revenue Service against the Company or any of its
affiliated companies or the Executive which the Accounting Firm
believes has a high probability of success, determines that an
Overpayment has been made, such Overpayment shall be treated
for all purposes as a loan to the Executive which the Executive
shall repay to the Company or such affiliated company, together
with interest at the applicable federal rate provided for in section
7872(f)(2)(A) of the Code; provided, however, that no amount
shall be payable by the Executive to the Company or such
affiliated company if and to the extent that such payment would
not reduce the amount which is subject to taxation under section
4999 of the Code. In the event that the Accounting Firm
determines that an Underpayment has occurred, such
Underpayment shall promptly be paid or transferred by the
Company or such affiliated company to or for the benefit of the
Executive, together with interest at the applicable federal rate
provided for in section 7872(f)(2)(A) of the Code.
(d) All fees, costs and expenses (including, but not limited
to, the cost of retaining experts) of the Accounting Firm shall be
borne by the Company and the Company shall pay such fees, costs
and expenses as they become due. In performing the
computations required hereunder, the Accounting Firm shall
assume that all parachute payments to be made to the Executive
will be subject to federal and state income tax at the maximum
rate in effect at the time the determination is made unless the
Executive provides the Accounting Firm with evidence that it
19 (10k page 135)
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 Executive in the year of receipt of the
payments, unless the Executive agrees otherwise.
(e) In the event this Agreement is subject to Section 18(k)
of the Federal Deposit Insurance Act (the "FDIA") at the time any
payment is to be made by the Company to the Executive pursuant
to this Agreement or otherwise, such payment will be subject to,
and conditioned upon, its compliance with Section 18(k) of the
FDIA and any regulations promulgated thereunder.
IN WITNESS WHEREOF, the Company has caused this
Agreement to be executed by its duly authorized officer and the
Executive has executed this Agreement as of the day and year first
above written.
FIRST INDIANA CORPORATION
By: ___________________________________
Xxxx X. Xxxxxx, Xx., President
"Company"
[Xxxxxx X. XxXxxxxx signed on behalf
of the Company in Xxxx X. Xxxxxx, Xx.'s
agreement]
ATTEST:
_______________________________
Secretary
______________________________________
Named Executive
"Executive"
Address: ______________________________
______________________________
20 (10k page 136)
