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Exhibit 10.2
CPP COMPENSATION LIMITATION
AGREEMENT
1st Source Corporation (the “
Company ”) anticipates entering into a Securities
Purchase Agreement (the “ Investment Agreement
”), with the United States Department of Treasury (the
“ Treasury ”) that provides for the
Company’s participation in the Treasury’s TARP Capital
Purchase Program (the “ CPP ”). If the
Company does not participate or ceases at any time to participate
in the CPP, this letter shall be of no further force and
effect.
For the Company to participate in the CPP and as
a condition to the closing of the investment contemplated by the
Investment Agreement, the Company is required to establish
specified standards for incentive compensation to its senior
executive officers and to make changes to its compensation
arrangements. To comply with these requirements, and in
consideration of the benefits that you will receive as a result of
the Company’s participation in the CPP, you agree as
follows:
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No Golden
Parachute Payments . The Company is prohibiting any Golden
Parachute Payment to you during any “CPP Covered
Period.” A “CPP Covered Period” is any
period during which (A) you are a Senior Executive Officer and (B)
the Treasury holds an equity or debt position acquired from the
Company in the CPP.
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Recovery of
Bonus and Incentive Compensation . Any bonus and incentive compensation
paid to you during a CPP Covered Period is subject to recovery or
“clawback” by the Company if the payments were based on
materially inaccurate financial statements or any other materially
inaccurate performance metric criteria.
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Compensation
Program Amendments . You and the Company hereby agree
and consent to any amendments required to be made to the
Company’s compensation, bonus, incentive, deferred
compensation and other benefit plans, arrangements and agreements
(including golden parachute, severance, change in control and
employment agreements) (collectively, “ Benefit Plans
”) to give effect to Provisions 1 and 2 above. For
reference, possible affected Benefit Plans are set forth in
Appendix A
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