|
Exhibit
10.7
FORM OF
FIRST SAVINGS BANK,
F.S.B.
EMPLOYEE SEVERANCE
COMPENSATION PLAN
The primary purpose of the
First Savings Bank, F.S.B. Employee Severance Compensation Plan
(the “Plan”) is to ensure the successful continuation
of the business of First Savings Bank, F.S.B. (the
“Bank”) and the fair and equitable treatment of the
Bank’s employees following a Change in Control (as defined
below).
Subject to paragraph C below,
any employee of the Bank with at least one year of service as of
his or her termination date shall be eligible to receive a Change
in Control Severance Benefit (as defined below) if, within the
period beginning on the effective date of a Change in Control and
ending on the first anniversary of such date, (i) the
employee’s employment with the Bank is involuntarily
terminated or (ii) the employee terminates employment with the
Bank voluntarily after being offered continued employment in a
position that is not a Comparable Position (as defined
below).
| C. |
Limitations on Eligibility for Change in Control
Severance Benefits or Management Restructuring Benefits
. |
(1) No employee shall be
eligible for a Change in Control Severance Benefit if (a) his
or her employment is terminated for “Cause,”
(b) he or she is offered a Comparable Position and declines to
accept such position, or (c) the employee is, at the time of
termination of employment, a party to an individual employment
agreement or change in control agreement with the Bank and/or First
Savings Financial Group, Inc. (the
“Company”).
(2) For purposes of this
Plan, a termination of employment for “Cause” shall
include termination because of the employee’s personal
dishonesty, incompetence, willful misconduct, breach of fiduciary
duty involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule, or regulation
(other than traffic violations or similar offenses) or final
cease-and-desist order, or material breach of any provision of the
Plan.
(3) For purposes of this
Plan, a “Comparable Position” shall mean a position
that would (a) provide the employee with base compensation and
benefits that are comparable in the aggregate to those provided to
the employee prior to the Change in Control; (b) provide the
employee with an opportunity for variable bonus compensation that
is comparable to the opportunity provided to the employee prior to
the Change in Control; (c) be in a location that would not
require the employee to increase his or her daily one-way commuting
distance by more than thirty-five (35) miles as compared to
the employee’s commuting distance immediately prior to the
Change in Control; and (d) have job skill requirements and
duties that are comparable to the requirements and duties of the
position held by the employee prior to the Change in
Control.
1
| D. |
Definitions of Change in Control . |
For purposes of this Plan
“Change in Control” means a change in control as
defined in Internal Revenue Section 409A of the Code and
rules, regulations, and guidance of general application thereunder
issued by the Department of the Treasury, including:
(a) Change in
ownership : a change in ownership of the Company occurs on
the date any one person or group accumulates ownership of Company
stock constituting more than 50% of the total fair market value or
total voting power of Company stock,
(b) Change in effective
control : (x) any one person or more than one person
acting as a group acquires within a 12-month period ownership of
Company stock possessing 30% or more of the total voting power of
Company stock, or (y) a majority of the Company’s board
of directors is replaced during any 12-month period by directors
whose appointment or election is not endorsed in advance by a
majority of the Company’s board of directors, or
(c) Change in ownership
of a substantial portion of assets : a change in ownership
of a substantial portion of the Company’s assets occurs if in
a 12-month period any one person or more than one person acting as
a group acquires from the Company assets having a total gross fair
market value equal to or exceeding 40% of the total gross fair
market value of all of the Company’s assets immediately
before the acquisition or acquisitions. For this purpose, gross
fair market value means the value of the Company’s assets, or
the value of the assets being disposed of, determined without
regard to any liabilities associated with the assets.
| E. |
Determination of the Change in Control Severance
Benefit . |
(1) The Change in Control
Severance Benefit payable to an eligible employee under this Plan
shall be determined under the following schedule:
(a) An eligible Employee who
does not receive a benefit pursuant to paragraph (b) of this
Paragraph shall receive a Change in Control Severance Benefit equal
to the product of (i) the employee’s years of service
from his or her hire date (including partial years and years prior
to the adoption of this plan) through the termination date and
(ii) an amount equal to two (2) weeks of the
employee’s Base Compensation (as defined below). A
“year of service” shall mean each 12-month period of
service following an employee’s hire date determined without
regard the number of hours worked during such period(s). The taking
of a leave of absence shall not eliminate a period of time from
being a year of service if such period of time otherwise qualifies
as a year of service. Further if a particular 12-month period of
time would not otherwise qualify under the Plan as a year of
service because one hour of service is not credited during each
month of such period due to the taking of a leave of absence, then
such period of time shall be deemed to be a year of service for all
other sections of this Plan. For purposes of this Plan, a
“leave of absence” means (i) the taking of an
authorized or approved leave of absence under the provisions of the
federal Family and Medical Leave Act (“FMLA”),
(ii) any state law providing qualitatively similar benefits as
the FMLA, or (iii) a leave of absence authorized under the
policies of the Bank. The minimum payment to an eligible employee
under this paragraph shall be an amount equal to two (2) weeks
of Base Compensation and the maximum payment to an eligible
employee shall be an amount equal to twenty-six (26) months of
Base Compensation.
2
(b) The Change in Control
Severance Benefit shall be paid in a lump sum not later than five
(5)&
| 
