Exhibit 10.1
CONFIDENTIAL SEPARATION
AGREEMENT AND RELEASE
This CONFIDENTIAL SEPARATION
AGREEMENT AND RELEASE (“Agreement”) is entered into on
the 21st day of February, 2008 by and between MainSource Financial
Group, Inc. and its related affiliates
(“MainSource” or “Employer”) and James L.
Saner, Sr. (“Employee”).
RECITALS
WHEREAS, Employee’s last day
of active employment with MainSource was February 8, 2008
(“Separation Date”);
WHEREAS, the parties wish to
amicably terminate the employment and other corporate relationships
between them; and
WHEREAS, MainSource will pay
separation compensation to Employee in accordance with the terms
and conditions described below.
NOW, THEREFORE, in consideration of
the above recitals, the payment by MainSource of the separation
compensation described below, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, MainSource and Employee hereby agree as
follows:
Section 1
.
Termination
. Employee’s positions as an
employee, officer, and director of MainSource terminated as of
February 8, 2008.
Section 2
.
Separation
Compensation . As
consideration for Employee granting the release of claims
contemplated by Section 5 below and Employee’s agreement
to abide by the terms of this Agreement, Employee shall be entitled
to the following separation compensation:
(a)
Employee shall receive separation
pay in the total amount of $487,500.00, less all required taxes and
withholdings, to be paid in equal installments beginning on the
first regular bi-weekly payroll period occurring after the
“Effective Date”, through December 31, 2008 and no
later. Employee shall be responsible for and pay all applicable
taxes relating to such payments, and MainSource shall be authorized
to deduct and withhold all taxes and other appropriate amounts
required by law. Employee acknowledges and agrees that the
separation pay set forth in this subsection is equal to eighteen
(18) months of his current base salary. As further defined below in
Section 4, the term “Effective Date” is the day
immediately after the expiration of the seven-day revocation period
calculated from the date Employee executes this
Agreement.
(b)
Employee also shall be eligible to
participate in MainSource’s group health plans in accordance
with the provisions of the Consolidated Omnibus Budget
Reconciliation Act (“COBRA”) or other applicable laws.
MainSource shall pay all employer and employee portions of the
premiums for Employee and
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Employee’s spouse for an
eighteen (18) month period; provided, however, that if Employee
obtains employment with comparable insurance coverage, then
MainSource’s obligations to pay for the COBRA premiums shall
cease on the date Employee becomes covered by another
entity.
(c)
Within thirty (30) days of the
Effective Date, Employee also shall receive title, free and clear,
to the company automobile currently assigned to Employee. The fair
market value of the automobile shall be taxable income to Employee.
Employee shall be responsible for and pay all applicable taxes,
fees, and other expenses relating to such transfer to title and
property.
(d)
Within thirty (30) days of the
Effective Date, Mainsource also shall pay in full Employee’s
personal country club membership for 2008. Employee shall be solely
responsible for all other expenses, fees, and other assessments
arising from his use of the country club membership.
(e)
Within thirty (30) days of the
Effective Date, and if otherwise permitted under policy terms,
MainSource shall assist Employee in converting the current Basic
Life Insurance Policy maintained for Employee’s benefit to a
personal life insurance policy for Employee; provided, however,
that after the conversion of the policy, Employee shall be solely
responsible for the payment of all insurance premiums, fees, and
other expenses associated with the policy which thereafter become
due. Employee also acknowledges and agrees that MainSource shall
retain its status as the owner and the sole beneficiary of the bank
owned life insurance policy (“BOLI”) currently in
effect and Employee waives any right, title, and interest he has,
if any, relating to or arising under the BOLI.
(f)
Within thirty (30) days of the
Effective Date, MainSource and Employee shall take action to
provide for the full vesting of any currently unvested stock
options to which Employee may be entitled by amending all existing
Option Agreements to state that Employee may exercise fully-vested
options until the expiration of the option term stated in the
Option Agreements; provided, however, that if Employee does not
exercise such vested stock options within three (3) months
after the Effective Date, then the options shall automatically
become Non-Qualified Options, instead of Incentive Stock Options,
and shall be taxed at ordinary income tax rates at the time of
exercise.
(g)
Notwithstanding anything herein to
the contrary, the parties agree that in the event Employee violates
the terms of Sections 3, 5, or 7 of this Agreement,
(i) Employee shall not be entitled to any further separation
compensation and benefits provided by Section 2 of this
Agreement or otherwise, (ii) MainSource’s obligations
with respect to such payments or any other obligation to Employee
shall terminate, shall be deemed fully and finally discharged and
shall be of no further force or effect, and (iii) in addition
to any other damages or claims which
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MainSource may have against
Employee, Employee shall repay to MainSource all amounts paid to or
on behalf of Employee under Section 2, including, but not
limited to the fair market value for property or rights Employee
received under Section 2, hereof, unless otherwise
prohibited by law.
(h)
All sums paid under this Agreement
shall be paid on or before March 15, 2009.
(i)
Employee acknowledges and agrees
that he has received all other wages and compensation due to him
through the Separation Date including, but not limited to, salary,
accrued but unused PTO time, and payment of the value of eighteen
(18) months of the Employer’s contribution towards
Employee’s HSA account in the amount of $1,620.00. Further,
Employer acknowledges it is responsible to and agrees to deposit
into Employee’s account in the MainSource Financial
Group, Inc. 401(k) and Employee Stock Ownership Plan
(“Plan”) (i) all non-discretionary employer
matching contributions through the Separation Date; and
(ii) the amount of the Employer’s discretionary
contribution for the 2007 and 2008 tax years attributable to
Employee according to the terms of the Plan as applied to all plan
participants.
Section 3
.
Certain Agreements by the
Employee . Employee
understands and agrees as follows:
(a)
Employee is not entitled to, nor is
MainSource obligated to pay, any separation or severance payment
other than in accordance with this Agreement and that the amounts
payable to Employee in Section 2 are above and beyond any sum
or value to which Employee is otherwise entitled;
(b)
Employee shall keep the terms of
this Agreement confidential except that he may share the financial
information with his spouse, tax advisors, and attorneys, if any;
and
(c)
Employee shall take no action that
interferes with or that damages or may tend to damage any of
MainSource’s property or operations, MainSource’s
customers or accounts, or MainSource’s reputation in the
general community.
Section 4
.
Notice of Rights under the Age
Discrimination in Employment Act. Employee understands and agrees that he is
covered by the provisions of the Age Discrimination in Employment
Act (“ADEA”) and the Older Workers Benefit Protection
Act (“OWBPA”). Employee acknowledges that he has been
advised to seek legal counsel before signing this Agreement.
Employee further acknowledges that he has been advised that he has
a period of twenty-one (21) days from receipt of this Agreement in
which to review and execute this Agreement (“Review
Period”). Employee also acknowledges that he was advised
that, after executing this Agreement, he has an additional seven
(7) days within which to revoke this Agreement
(“Revocation Period”). Employee’s signature below
shall constitute and be considered a waiver of any days remaining
in the Review Period. The terms of this Agreement (including, but
not limited to, Section 2 of this Agreement relating to the
Separation
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Compensation and Section 5 of this
Agreement relating to the release of claims) shall become binding
and effective upon the execution of this Agreement by MainSource
and Employee and upon the expiration of the Revocation Period
(“Effective Date”). Employee understands and agrees
that if he revokes this Agreement as provided above, the Separation
Compensation described in Section 2 of this Agreement shall be
forfeited by Employee and shall not be paid by MainSource, and this
Agreement shall thereafter not be enforceable or binding upon
either MainSource or Employee.
Section 5
.
Complete Release by
Employee . Employee
hereby forever releases and discharges, and covenants not
to
