THIS EMPLOYMENT AGREEMENT
(the “Agreement”),
entered into and effective as of the 1st day of January, 2009 (the
“Effective Date”), by and between First Financial Bank,
N.A. (the “Bank”) and Norman L. Lowery (the
“Employee”).
WHEREAS , the Employee has heretofore been employed by
the Bank as its President and Chief Executive Officer and has
performed valuable services for the Bank; and
WHEREAS , the Board of Directors of the Bank (the
“Board”) believes it is in the best interest of the
Bank to enter into this Agreement with the Employee in order to
assure continuity of management of the Bank to reinforce and
encourage the continued attention and dedication of the Employee to
his assigned duties; and
WHEREAS , the parties desire, by this writing, to set
forth the continuing employment relationship between the Bank and
the Employee.
NOW, THEREFORE , in consideration of the premises contained
herein and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Employee and the
Bank agree as follows:
1. Employment . The Employee is
employed as the President and Chief Executive Officer of the Bank.
The Employee shall render such administrative and management
services for the Bank as are currently rendered and as are
currently performed by persons situated in a similar executive
capacity. The Employee shall also promote, by entertainment or
otherwise, as and to the extent permitted by law, the business of
the Bank. The Employee’s other duties shall be such as the
Board may, from time to time, reasonably direct, including normal
duties as an officer of the Bank. During the term of this
Agreement, the Employee shall be nominated and elected to serve as
a Director of the Bank or of any successor to the Bank.
2. Base Compensation . The Bank
agrees to pay the Employee during the term of this Agreement a base
salary at the rate of $485,508.83 per annum, payable in cash not
less frequently than monthly. Such base salary shall be effective
and calculated commencing as of the Effective Date. The Bank may
consider and declare from time to time increases in the base salary
it pays the Employee. Prior to a Change in Control (as hereinafter
defined), the Bank may also declare decreases in the base salary it
pays the Employee if the operating results of the Bank are
significantly less favorable than those for the fiscal year ending
December 31, 2001, and the Bank makes similar decreases in the
base salary it pays to other executive officers of the Bank. After
a Change in Control, the Bank shall consider and declare salary
increases in base salary based upon the following
standards:
(b) Adjustments to the base salaries of
other senior management personnel;
(c) Past performance of the Employee;
and
(d) The contribution which the Employee
makes to the business and profits of the Bank during the term of
this Agreement.
3. Bonuses . The Employee shall
participate in any year end bonus granted to other employees by the
Board. The Employee shall further participate in an equitable
manner with all other senior management employees of the Bank in
any discretionary bonuses that the Board may award from time to
time to the Bank’s senior management employees. No other
compensation provided for in this Agreement shall be deemed a
substitute for the Employee’s right to participate in such
discretionary bonuses.
(a) Participation in Retirement, Medical and
Other Benefit Plans . During the term of this Agreement, the
Employee shall be eligible to participate in the following benefit
plans; group hospitalization, disability, health, dental, sick
leave, retirement, supplemental retirement, pension, 401(k),
employee stock ownership plan, and all other present or future
qualified and/or nonqualified plans provided by the Bank generally,
or to executive officers of the Bank, which benefits, taken as a
whole, must be at least as favorable as those in effect on the
Effective Date, unless the continued operation of such plans or
changes in the accounting, legal or tax treatment of such plans
would adversely affect the Bank’s operating results or
financial condition in a material way, and the Board concludes that
modifications to such plans are necessary to avoid such adverse
effects and such modifications apply consistently to all employees
of the Bank participating in the affected plans. In addition, the
Employee shall be eligible to participate in any fringe benefits
which are or may become available to the Bank’s senior
management employees, including, for example, any stock option or
incentive compensation (including, but not limited to the First
Financial Corporation 2001 Long-Term Incentive Plan and 2005
Long-Term Incentive Plan (“LTIP”)) or performance-based
plans, any insurance programs (including, but not limited to, any
group and executive life insurance programs), and any other
benefits which are commensurate with the responsibilities and
functions to be performed by the Employee under this Agreement. All
the employee benefits referenced in this subsection 4(a) are
collectively referred to hereinafter as “Employee
Benefits.”
(b) Benefits After Retirement . Upon
retirement of the Employee during the term of this Agreement, the
Bank agrees to continue, at no greater cost to Employee than is
generally allocated to all employees, full coverage for the
Employee, his spouse and his children living in his household under
the health, life and disability plans as adopted by the Bank which
shall be no less favorable than those in effect on the Effective
Date of this Agreement. The Bank agrees to continue such health
coverage until both the Employee and his spouse are eligible for
coverage by Medicare. When both the Employee and his spouse become
eligible for Medicare coverage, the Bank agrees to pay for
supplemental coverage for both the Employee and his spouse until
the death of the Employee and his spouse. The Employee shall be
entitled to a life insurance policy on his life in the maximum
amount established by the group life insurance plan from time to
time which amount shall be no less than the limit on the Effective
Date of three times his annual salary (subject to a $350,000
maximum), provided at the Bank’s cost. The Employee shall
also be entitled to a life insurance policy on his life in the
amount established by the Bank’s insurance program for
executive officers from time to time. The Bank shall continue to
pay to the Employee the annual premiums, which are required to keep
the life insurance policy in force, on behalf of the Employee
pursuant to the Bank’s insurance program for executive
officers.
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(c) Expenses and Membership . The
Employee shall be reimbursed for all reasonable out-of-pocket
business expenses which he shall incur in connection with his
services under this Agreement, upon substantiation of such expenses
in accordance with the policies of the Bank. In addition, the
Employee shall be reimbursed for all reasonable out-of-pocket
expenses incurred by him to satisfy his continuing legal education
requirements for his license to practice law in the State of
Indiana. So long as the Employee is employed by the Bank pursuant
to this Agreement, the Employee shall be entitled to continue his
memberships in the American, Indiana and Terre Haute Bar
Associations, the American Association for Justice and the Indiana
Trial Lawyers Association and the Country Club of Terre Haute, and
Bank shall continue to pay or reimburse the Employee for the dues
and assessments for such memberships.
(d) Automobile . So long as the Employee
is employed by the Bank pursuant to this Agreement, the Employee
shall be entitled to continue to use a Bank-owned automobile of
commensurate quality and value as that presently used by him on the
same terms and conditions in effect with respect to such use on the
Effective Date of this Agreement. The Bank shall provide and pay
the premiums for full insurance coverage on the automobile. Such
insurance coverage shall be no less than the coverage provided on
the Effective Date of this Agreement. The Bank shall also pay for
the cost of maintenance and repair of the automobile. All benefits
referenced in this subsection 4(d) are collectively referred to
hereinafter as “Automobile Benefits.”
(e) Vacation, Sick Leave and Disability .
The Employee shall be entitled to 30 days vacation annually and
shall be entitled to the same sick leave and disability leave as
other employees of the Bank.
The Employee shall not receive any additional
compensation from the Bank on account of his failure to take a
vacation or sick leave, and the Employee shall not accumulate
unused vacation or sick leave from one fiscal year to the next,
except in either case to the extent authorized by the Board or
permitted for other employees of the Bank.
In addition to the aforesaid paid vacations, the
Employee shall be entitled, without loss of pay, to absent himself
voluntarily from the performance of his employment with the Bank
for such additional periods of time and for such valid and
legitimate reasons as the Board may in its discretion determine and
to attend the continuing legal education seminars contemplated by
subsection 4(c) hereof. Further, the Board may grant to the
Employee a leave or leaves of absence, with or without pay, at such
time or times and upon such terms and conditions as such Board in
its discretion may determine.
(f) Other Policies . All other matters
relating to the employment of the Employee by the Bank not
specifically addressed in this Agreement shall be subject to the
general policies regarding employees of the Bank as in effect from
time to time.
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5. Term of Employment . The Bank
hereby employs the Employee, and the Employee hereby accepts such
employment under the terms of this Agreement, for the period
commencing on the Effective Date and ending sixty months thereafter
(or such earlier date as is determined in accordance with
Section 8). Additionally, on each annual anniversary date from
the Effective Date, the Employee’s term of employment shall
be extended for an additional one-year period beyond the then
effective expiration date, provided the Board determines in a duly
adopted resolution that this Agreement shall be extended. Only
those members of the Board who have no personal interest in this
Agreement shall discuss and vote on the approval, subsequent review
and extension of this Agreement. The initial term of this Agreement
and all extensions thereof are hereinafter referred to individually
and collectively as the “Term.”
(i) During the period of his employment
hereunder and except for illnesses, reasonable vacation periods,
and reasonable leaves of absence, the Employee shall devote all of
his full business time, attention, skill and efforts to the
faithful performance of his duties hereunder; provided, however,
from time to time, the Employee may serve on the Boards of
Directors of, and hold any other offices or positions in, companies
or organizations, and may perform legal services either directly or
as a result of an of counsel or analogous position with a law firm
for clients which will not present any conflict of interest with
the Bank or any of its subsidiaries or affiliates, or unfavorably
affect the performance of Employee’s duties pursuant to this
Agreement, or will not violate any applicable statute or
regulation. “Full business time” is hereby defined as
that amount of time usually devoted to like companies by similarly
situated executive officers. During the term of his employment
under this Agreement, the Employee shall not engage in any business
or activity contrary to the business affairs or interests of the
Bank, or be gainfully employed in any other position or job other
than as provided above.
(ii) Nothing contained in this Section
shall be deemed to prevent or limit the Employee’s right to
invest in the capital stock or other securities of any business
dissimilar from that of the Bank, or, solely as a passive or
minority investor, in any business.
(b) Nonsolicitation . The Employee hereby
understands and acknowledges that, by virtue of his position with
the Bank, he will have advantageous familiarity and personal
contacts with the Bank’s customers, wherever located, and the
business, operations and affairs of the Bank. Accordingly, while
the Employee is employed by the Bank and for a period of one year
after termination of the Employee’s employment with the Bank
for any reason (whether with or without cause or whether by the
Bank or the Employee) or the expiration of the Term, the Employee
shall not, directly or indirectly, or individually or jointly,
(i) solicit any non-legal business of any party which is a
customer of the Bank at the time of such termination or any party
which was a customer of the Bank during the one year period
immediately preceding such termination, (ii) request or advise any
customers or suppliers of the Bank to terminate, reduce, limit or
change their business or relationship with the Bank, or
(iii) induce, request or attempt to influence any employee of
the Bank to terminate his employment with the Bank, unless such
actions are taken in connection with Employee engaging in the
practice of law.
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For purposes of this Agreement, the term
“solicit” means any direct or indirect communication of
any kind whatsoever, regardless of by whom initiated, which
encourages or requests any person or entity, in any manner, to
cease doing business with the Bank.
(c) Noncompetition . During the period of
his employment hereunder, and for a period of two years following
the termination hereof, the Employee shall not, directly or
indirectly:
(i) As owner, officer, director,
stockholder, investor, proprietor, organizer or otherwise, engage
in the same trade or business as the Bank, as conducted on the date
hereof, which would conflict with the interests of the Bank or in a
trade or business competitive with that of the Bank, which would
conflict with the interests of the Bank, as conducted on the date
hereof; or
(ii) Offer or provide employment (whether
such employment is with the Employee or any other business or
enterprise), either on a full-time or part-time or consulting
basis, to any person who then currently is, or who within one
(1) year prior to such offer or provision of employment has
been, a management-level employee of the Bank. This subsection
6(c)(ii) shall only apply in the event the Employee voluntarily
terminates his employment with the Bank.
The restrictions contained in this paragraph
upon the activities of the Employee following termination of
employment shall be limited to the following geographic areas
(hereinafter referred to as “Restricted Geographical
Area”):
(1) Terre Haute, Indiana; and
(2) The thirty mile radius of Terre Haute,
Indiana.
Nothing contained in this Section 6 shall
prevent or restrict the Employee from engaging in the practice of
law, including within the Restricted Geographical Area. In
addition, nothing contained in this subsection shall prevent or
limit the Employee’s right to invest in the capital stock or
other securities of any business dissimilar from that of the Bank,
or, solely as a passive or minority investor, in any
business.
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If the Employee does not comply with the
provisions of this Section, the two year period of non-competition
provided herein shall be tolled and deemed not to run during any
period(s) of noncompliance, the intention of the parties being to
provide two full years of non-competition by the Employee after the
termination or expiration of this Agreement.
(d) Nondisclosure . The term
“Confidential Information” as used herein shall mean
any and all customer lists, computer hardware, software and related
material, trade secrets (as defined in I.C. 24-2-3-2), know-how,
skills, knowledge, ideas, knowledge of customer’s commercial
requirements, pricing methods, sales and marketing techniques,
dealer relationships and agreements, financial information,
intellectual property, codes, research, development, research and
development programs, processes, documentation, or devices used in
or pertaining to the Bank’s business (i) which relate in
any way to the Bank’s business, products or processes; or
(ii) which are discovered, conceived, developed or reduced to
practice by the Employee, either alone or with others either during
the Term, at the Bank’s expense, or on the Bank’s
premises.
(i) During the course of his services
hereunder the Employee may become knowledgeable about, or become in
possession of, Confidential Information. If such Confidential
Information were to be divulged or become known to any competitor
of the Bank or to any other person outside the employ of the Bank,
or if the Employee were to consent to be employed by any competitor
of the Bank or to engage in competition with the Bank, the Bank
would be irreparably harmed. In addition, the Employee has or may
develop relationships with the Bank’s customers which could
be used to solicit the business of such customers away from the
Bank. The Bank and the Employee have entered into this Agreement to
guard against such potential harm.
(ii) The Employee shall not, directly or
indirectly, use any Confidential Information for any purpose other
than the benefit of the Bank or communicate, deliver, exhibit or
provide any Confidential Information to any person, firm,
partnership, corporation, organization or entity, except as
required in the normal course of the Employee’s service as a
consultant or as an employee of the Bank. The covenant contained in
this subsection shall be binding upon the Employee during the Term
and following the termination hereof until either (i) such
Confidential Information becomes obsolete; or (ii) such
Confidential Information becomes generally known in the
Bank’s trade or industry by means other than a breach of this
covenant.
(iii) The Employee agrees that all
Confidential Information and all records, documents and materials
relating to such Confidential Information, shall be and remain the
sole and exclusive property of the Bank.
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(e) Remedies . The Employee agrees that
the Bank will suffer irreparable damage and injury and will not
have an adequate remedy at law in the event of any breach by the
Employee of any provision of this Section. Accordingly, in the
event the Bank seeks, under law or in equity, a temporary
restraining order, permanent injunction or a decree of specific
performance of the provisions of this Section, no bond or other
security shall be required. The Bank shall be entitled to recover
from the Employee, reasonable attorneys’ fees and expenses
incurred in any action wherein the Bank successfully enforces any
of the provisions of this Section against the breach or threatened
breach of those provisions by the Employee. The remedies described
in this Section are not exclusive and are in addition to all other
remedies the Bank may have at law, in equity, or
otherwise.
(i) The Employee and the Bank acknowledge
and agree that in the event of termination of the Employee’s
employment for any reason whatsoever, the Employee can obtain other
engagements or employment of a kind and nature similar to that
contemplated herein outside the Restricted Geographical Area and
that the issuance of an injunction to enforce the provisions of
this Section will not prevent him from earning a
livelihood.
(ii) The covenants on the part of the
Employee contained in this Section are essential terms and
conditions to the Bank entering into this Agreement, and shall be
construed as independent of any other provision in this
Agreement.
(f) Surrender of Records . Upon
termination of the Employee’s employment for any reason, the
Employee shall immediately surrender to the Bank any and all
computer hardware, software and related materials, records, notes,
documents, forms, manuals, photographs, instructions, lists,
drawings, blueprints, programs, diagrams or other written or
printed material (including any and all copies made at any time
whatsoever) in his possession or control which pertain to the
business of the Bank or its affiliates including any Confidential
Information in the Employee’s personal notes, address books,
calendars, rolodexes, personal data assistants, etc.
7. Standards . The Employee shall
perform his duties under this Agreement in accordance with such
reasonable standards as the Board may establish from time to time.
The Bank will provide the Employee with the working facilities and
staff commensurate with his position or positions and necessary or
advisable for him to perform his duties.
8. Termination and Termination Pay
. Subject to Section 10 hereof, the Employee’s
employment hereunder may be terminated under the following
circumstances:
(a) Death . The Employee’s
employment shall terminate upon his death during the Term of this
Agreement, in which event the Employee’s estate or designated
beneficiaries shall be entitled to receive the base salary,
bonuses, vested rights, and Employee Benefits due the Employee
through the last day of the calendar month in which his death
occurred. Any benefits payable under insurance, health, retirement,
bonus, incentive (including, but not limited to, the LTIP),
performance or other plans as a result of the Employee’s
participation in such plans through such date shall be paid when
and as due under those plans.
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(i) The Bank may terminate the
Employee’s employment, as a result of the Employee’s
Disability, in a manner consistent with the Bank’s and the
Employee’s rights and obligations under the Americans with
Disabilities Act or other applicable state and federal laws
concerning disability. For the purpose of this Agreement,
“Disability” means the Employee is:
(1) Unable to engage in any substantial
gainful activity by reason of any medically determinable physical
or mental impairment which can be expected to result in death or
can be expected to last for a continuous period of not less than
12 months, or
(2) By reason of any medically determinable
physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits for
a period of not less than three months under an accident and health
plan covering employees of the Employer.
(ii) During any period that the Employee
shall receive disability benefits and to the extent that the
Employee shall be physically and mentally able to do so, he shall
furnish such information, assistance and documents so as to assist
in the continued ongoing business of the Bank.
(iii) In the event of Employee’s
termination of employment by the Bank due to Disability, the
Employee shall be entitled to receive the base salary, bonuses,
vested rights, and Employee Benefits due the Employee through his
date of termination. Any benefits payable under insurance, health,
retirement, bonus, incentive (including, but not limited to, the
LTIP), performance or other plans as a result of Employee’s
participation in such plans through such date of termination shall
be paid when and as due under those plans.
(c) Just Cause . The Board may, by
written notice to the Employee, immediately terminate his
employment at any time, for Just Cause. The Employee shall have no
right to receive any base salary, bonuses or other Employee
Benefits, except as provided by law, whatsoever for any period
after his termination for Just Cause. However, the vested rights of
the Employee as of his date of termination shall not be affected.
Any benefits payable under insurance, health, retirement, bonus,
incentive (including, but not limited to, the LTIP), performance or
other plans as a result of Employee’s participation in such
plans through such date of termination shall be paid when and as
due under those plans. Termination for “Just Cause”
shall mean termination because of:
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(i) An intentional act of fraud,
embezzlement, theft, or personal dishonesty; willful misconduct, or
breach of fiduciary duty involving personal profit by the Employee
in the course of his employment or director service. No act or
failure to act shall be deemed to have been intentional or willful
if it was due primarily to an error in judgment or negligence. An
act or failure to act shall be considered intentional or willful if
it is not in good faith and if it is without a reasonable belief
that the action or failure to act is in the best interest of the
Bank;
(ii) Intentional wrongful damage by the
Employee to the business or property of the Bank, causing material
harm to the Bank;
(iii) Breach by the Employee of any
confidentiality or non-disclosure agreement in effect from time to
time with the Bank;
(iv) Gross negligence or insubordination by
the Employee in the performance of his duties; or
(v) Removal or permanent prohibition of the
Employee from participating in the conduct of Bank’s affairs
by an order issued under Section 8(e)(4) or 8(g)(1) of the
Federal Deposit Insurance Act, 12 USC 1818(e)(4) and
(g)(1).
Notwithstanding the foregoing, in the event of
termination for Just Cause there shall be delivered to the Employee
a copy of a resolution duly adopted by the affirmative vote of not
less than a majority of the entire membership of the Board at a
meeting of the Board called and held for that purpose (after
reasonable notice to the Employee and an opportunity for the
Employee, together with the Employee’s counsel, to be heard
before the Board), such meeting and the opportunity to be heard to
be held prior to, or as soon as reasonably practicable following,
termination, but in no event later than 60 days following such
termination, finding that in the good faith opinion of the Board
the Employee was guilty of conduct constituting Just Cause and
specifying the particulars thereof in detail. If, following such
meeting, the Employee is reinstated, he shall be entitled to
receive the base salary, bonuses, all Employee Benefits, and all
other fringe benefits provided for under this Agreement for the
period following termination and continuing through reinstatement
as though he was never terminated.
(d) Without Just Cause . The Board may,
by written notice to the Employee, immediately terminate his
employment at any time for a reason other than Just Cause, in which
event the Employee shall be entitled to receive the following
compensation and benefits (unless such termination occurs within
the time period set forth in subsection 10(a) hereof, in which
event the benefits and compensation provided for in Section 10
shall apply):
(i) The base salary provided pursuant to
Section 2 hereof as in effect on the date of termination,
through the Expiration Date of this Agreement as determined
pursuant to Section 5 hereof (including any renewal or
extension of this Agreement) (the “Expiration
Date”);
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(ii) An amount equal to the bonuses
received by or payable to the Employee in the calendar year prior
to the calendar year in which the Employee is terminated, for each
year remaining through the Expiration Date; and
(iii) Cash reimbursement to the Employee in
an amount equal to the cost to the Employee (demonstrated by
submission to the Bank of invoices, bills, or other proof of
payment by the Employee) of (A) all health insurance premiums
for the Employee, his spouse and child living in the
Employee’s household and Medicare supplement insurance, and
life insurance (all as described in subsection 4(b)); (B) all
other Employee Benefits (all as defined in subsection 4(a)
excluding payments under the LTIP which will be made in accordance
with the terms and conditions of the LTIP); and
(C) professional and club dues, the cost of Employee’s
continuing legal education requirements (as described in subsection
4(c)), all Automobile Benefits (as defined in subsection 4(d)) and
other benefits which the Employee would otherwise have been
eligible to participate in or receive, through the Expiration Date,
based upon the benefit levels substantially equal to those that the
Bank provided for the Employee at the date of the Employee’s
termination of employment. The Employee shall also be entitled to
receive an amount necessary to provide any cash payments received
under this subsection 8(d)(iii) net of all income and payroll taxes
that would not have been payable by the Employee had he continued
participation in the benefit plan or program instead of receiving
cash reimbursement.
Notwithstanding the foregoing, but only to the
extent required under federal banking law, the amount payable under
subsection 8(d) shall be reduced to the extent that on the date of
the Employee’s termination of employment, the present value
of the benefits payable under subsections 8(d)(i), (ii) and
(iii) exceed any limitation on severance benefits that is
imposed by the Office of the Comptroller of the Currency (the
“OCC”) on such benefits.
All amounts payable to the Employee under
subsections 8(d)(i) and (ii) shall be paid in one lump sum
within ten days of such termination
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