Exhibit 10.6
AMENDED AND RESTATED CHANGE IN CONTROL
AGREEMENT
This
Amended and Restated Change in Control Agreement (“
Agreement ”) is made and entered into
as of this 1st day of October, 2007, but effective as of
August 15, 2006, by and between Lincoln Bank, an Indiana
commercial bank whose address is 905 Southfield Drive,
Plainfield, Indiana 46168 (which, together with any successor
thereto which executes and delivers the assumption agreement
provided for in Section 11(a) hereof or which otherwise
becomes bound by the terms and provisions of this Agreement by
operation of law, is hereinafter referred to as the “
Bank ”), and Doug Bennett whose
residence address is 2517 Caray Court, Bloomington, Indiana
47401 (the “ Employee
”).
Whereas,
the Employee is currently serving as Senior Vice President,
Business Development, of the Bank; and
Whereas,
the Bank is a wholly-owned subsidiary of Lincoln Bancorp, a
publicly traded corporation organized under Indiana law (the
“ Holding Company ”);
and
Whereas,
the Board of Directors of the Bank recognizes that, as is the
case with publicly held corporations generally, the
possibility of a change in control of the Holding Company may
exist and that such possibility, and the uncertainty and
questions which it may raise among management, may result in
the departure or distraction of key management personnel to
the detriment of the Bank, the Holding Company and its
shareholders; and
Whereas,
the Board of Directors of the Bank believes it is in the best
interests of the Bank to enter into this Agreement with the
Employee in order to assure continuity of management of the
Bank and to reinforce and encourage the continued attention
and dedication of the Employee to his or her assigned duties
without distraction in the face of potentially disruptive
circumstances arising from the possibility of a change in
control of the Holding Company, although no such change is now
contemplated;
Whereas,
the current Special Termination Agreement dated as of January
1, 2007, between the Bank and Employee needs to be revised to
address certain tax changes made under Section 409A of the
Internal Revenue Code of 1986, as amended, and the parties
wish to restate that agreement to make such changes;
and
Whereas,
the Board of Directors of the Bank has approved and authorized
the execution of this Agreement with the Employee to take
effect as stated in Section 1 hereof;
Now,
Therefore, in consideration of the foregoing and of the
respective covenants and agreements of the parties herein
contained, it is agreed as follows:
1.
Term of Agreement .
The term of this Agreement shall be deemed to have
commenced as of August 15, 2006 (the “ Effective
Date ”), and shall continue until January 1, 2008.
Prior to January 1, 2008, and at each anniversary date thereafter,
the Board of Directors may review this Agreement and, in its
discretion, authorize extension thereof for an additional one-year
period.
2.
Payments to the Employee Upon Change in Control
.
(a)
Upon
the occurrence of a change in control of the Bank or the Holding
Company (as herein defined) at any time during the term of this
Agreement followed within 12 months by the involuntary or voluntary
termination of the Employee’s employment with the Bank,
whether or not such termination occurs during the term of this
Agreement, the provisions of Section 3 shall apply.
(b)
A
“ change in control ” shall mean any
of the following:
(i) a change in the ownership of the Bank or the Holding
Company, which shall occur on the date that any one person, or more
than one person acting as a group, acquires ownership of stock of
the Bank or the Holding Company that, together with stock held by
such person or group, constitutes more than fifty percent (50%) of
the total fair market value or total voting power of the stock of
the Bank or the Holding Company. Such acquisition may
occur as a result of a merger of the Holding Company or the Bank
into another entity which pays consideration for the shares of
capital stock of the Holding Company or the Bank in the merger or
as a result of a merger of another entity into the Holding Company
or the Bank if the entity’s shareholders as a group acquire
or receive over 50% of the total fair market value or total voting
power of the stock of the entity resulting from the
merger. However, if any one person, or more than one
person acting as a group, is considered to own more than fifty
percent (50%) of the total fair market value or total voting power
of the stock of the Bank or the Holding Company, the acquisition of
additional stock by the same person or persons is not considered to
cause a change in the ownership of the Bank or the Holding Company
(or to cause a change in the effective control of the Bank or the
Holding Company (within the meaning of subsection
(ii)). An increase in the percentage of stock owned by
any one person, or persons acting as a group, as a result of a
transaction in which the Bank or the Holding Company acquires its
stock in exchange for property will be treated as an acquisition of
stock for purposes of this subsection. This subsection
applies only when there is a transfer of stock of the Bank or the
Holding Company (or issuance of stock of the Bank or the Holding
Company) and stock in the Bank or the Holding Company remains
outstanding after the transaction.
(ii) a change in the effective control of the Bank or the
Holding Company, which shall occur only on the date new directors
are added to the Holding Company’s board of directors as a
result of a merger transaction involving the Holding Company or the
Bank, respectively, and as a result of such replacement the Holding
Company’s or the Bank’s directors, respectively, before
the merger constitute 50% or less of the total directors of the
Holding Company or the Bank immediately following the merger;
provided, however , that this provision shall not apply if
another corporation is a majority shareholder of the Holding
Company. If any one person, or more than one person
acting as a group, is considered to effectively control the Bank or
the Holding Company, the acquisition of additional control of the
Bank or the Holding Company by the same person or persons is not
considered to cause a change in the
effective
control of the Bank or the Holding Company (or to cause a
change in the ownership of the Bank or the Holding Company
within the meaning of subsection (i) of this
section).
(iii) a change in the ownership of a substantial portion of
the Bank’s assets, which shall occur on the date that any one
person, or more than one person acting as a group, acquires (or has
acquired during the 12 month period ending on the date of the most
recent acquisition by such person or persons) assets from the Bank
that have a total gross fair market value equal to or more than
forty percent (40%) of the total gross fair market value of all of
the assets of the Bank immediately before such acquisition or
acquisitions. For this purpose, gross fair market value
means the value of the assets of the Bank, or the value of the
assets being disposed of, determined without regard to any
liabilities associated with such assets. No change in
control event occurs under this subsection (iii) when there is a
transfer to an entity that is controlled by the shareholders of the
Bank immediately after the transfer. A transfer of
assets by the Bank is not treated as a change in the ownership of
such assets if the assets are transferred to –
1)
a
shareholder of the Bank (immediately before the asset transfer) in
exchange for or with respect to its stock;
2)
an
entity, 50 percent or more of the total value or voting power of
which is owned, directly or indirectly, by the Bank.
3)
a
person, or more than one person acting as a group, that owns,
directly or indirectly, 50 percent or more of the total value or
voting power of all the outstanding stock of the Bank;
or
4)
an
entity, at least 50 percent of the total value or voting power of
which is owned, directly or indirectly, by a person described in
paragraph (iii).
For
purposes of this subsection (iii) and except as otherwise
provided in paragraph 1) above, a person’s status is
determined immediately after the transfer of the
assets.
(iv) For purposes of this section, persons will not be
considered to be acting as a group solely because they purchase or
own stock of the same corporation at the same time, or as a result
of the same public offering. Persons will be considered
to be acting as a group if they are owners of a corporation that
enters into a merger, consolidation, purchase or acquisition of
stock, or similar business transaction with the Bank or the Holding
Company.
(c)
The
Employee’s employment under this Agreement may be terminated
at any time by the Board of Directors of the Bank. If
the Employee’s employment is terminated for any reason prior
to a change in control, no benefits shall be payable under this
Agreement.
(d)
The
Employee’s employment under this Agreement may be terminated
at any time by the Board of Directors of the Bank. The
terms “ involuntary termination ” or
“ involuntarily terminated ” in this
Agreement shall refer to the termination of the
employment
of Employee without his or her express written
consent. In addition, a material diminution of
or interference with the Employee’s duties,
responsibilities and benefits shall be deemed and shall
constitute an involuntary termination of employment to the
same extent as express notice of such involuntary
termination. By way of example and not by way of
limitation, any of the following actions, if unreasonable and
materially adverse to the Employee, shall constitute such
diminution or interference unless consented to in writing by
the Employee: (1) the requirement that the Employee perform
his or her principal employment duties more than thirty-five
(35) miles from his or her primary office as of the date of
the change in control; (2) a material reduction in the
Employee’s salary, perquisites, contingent benefits or
vacation time as in effect on the date of the change in
control as the same may be changed by mutual agreement from
time to time, unless part of an institution-wide reduction;
(3) the assignment to the Employee of duties and
responsibilities materially different from those normally
associated with his or her position as referenced in this
Agreement; or (4) a material diminution or reduction in the
Employee’s responsibilities or authority (including
reporting responsibilities) in connection with his or her
employment with the Bank.
3.
Payments Upon a Change in Control .
(a)
If
during the term of this Agreement there is a change in control of
the Bank or the Holding Company and within 12 months following such
change in control there is an involuntary termination of the
Employee’s employment with the Bank, other than for cause,
whether or not such termination occurs during the term of this
Agreement, the Bank shall pay to the Employee in a lump sum in cash
within 25 business days after the date of severance of employment
an amount equal to 100 percent of the Employee’s “base
amount” of compensation, as defined in Section 280G(b)(3) of
the Internal Revenue Code of 1986, as amended (“
Code ”).
(b)
If
during the term of this Agreement there is a change in control, and
within 12 months following such change in control there is an
involuntary termination of the Employee’s employment, whether
or not such termination occurs during the term of this Agreement,
the Bank shall cause to be continued life, health and disability
coverage substantially identical to the coverage maintained by the
Bank for the Employee prior to his severance. Subject to
applicable federal and state laws, such coverage shall cease upon
the earlier of the Employee’s obtaining similar coverage by
another employer or twelve (12) months from the date of the
Employee’s termination. In the event the Employee
obtains new employment and receives less coverage for life, health
or disability, the Bank shall provide coverage substantially
identical to the coverage maintained by the Bank for the Employee
prior to termination for the balance of the twelve (12) month
period.
(c)
If
during the term of this Agreement there is a change in control of
the Bank
