|
Exhibit 10.6
EXECUTIVE SEVERANCE AGREEMENT
THIS EXECUTIVE SEVERANCE AGREEMENT ("Agreement") is entered into
as of the 16 th day of
January, 2001 by and between MainSource Financial Group (the
"Company"), an Indiana corporation, and Daryl R. Tressler
("Executive").
R E C I T A L S:
B.
The Company recognizes that, as is the case with many publicly held
corporations, the possibility of a change in control may arise and
that such possibility may result in the departure or distraction of
management personnel to the detriment of the Company and its
shareholders;
C.
The Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company and its
shareholders to secure Executive’s continued services and to
ensure Executive’s continued and undivided dedication to his
duties in the event of any threat or occurrence of a Change in
Control (as defined in Section 1) of the Company; and
D.
The Board has authorized the Company to enter into this
Agreement.
NOW, THEREFORE , for and in consideration of the premises
and the mutual covenants and agreements herein contained, and
intending to be legally bound hereby, the Company and Executive
hereby agree as follows:
A G R E E M E N T:
1. Definitions . As used in this Agreement, the following
terms shall have the respective meanings set forth below:
(a) " Bonus Amount " means the annual incentive bonus
earned by Executive from the Company during the last completed
fiscal year of the Company immediately preceding Executive’s
Date of Termination (annualized in the event Executive was not
employed by the Company for the whole of any such fiscal year).
(b) " Cause " means (i) the willful and
continued failure of Executive to perform substantially his duties
with the Company (other than any such failure resulting from
Executive’s incapacity due to physical or mental illness or
any such failure subsequent to Executive being delivered a Notice
of Termination without Cause by the Company or delivering a Notice
of Termination for Good Reason to the Company) after a written
demand for substantial performance is delivered to Executive by the
Board that specifically identifies the manner in which the Board
believes that Executive has not substantially performed
Executive’s duties, (ii) the willful engaging by Executive in
illegal conduct or gross misconduct that is demonstrably and
materially injurious to the Company, or (iii) the conviction of
Executive of, or a plea by Executive of nolo contendre to, a
felony. For purpose of this paragraph (b), no act or failure to act
by Executive shall be considered "willful" unless done or omitted
to be done by Executive in bad faith and without reasonable belief
that Executive’s action or omission was legal, regulatory
compliant, and in the best interests of the Company. Any act, or
failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board, based upon the advice of counsel for the
Company or upon the instructions of the Company’s chief
executive officer or another senior officer of the Company, shall
be conclusively presumed to be done, or omitted to be done, by
Executive in good faith and in the best interests of the Company.
Cause shall not exist unless and until the Company has delivered to
Executive a copy of a resolution duly adopted by three-fourths
(3/4) of the entire Board (excluding Executive if Executive is a
Board member) at a meeting of the Board called and held for such
purpose (after reasonable notice to Executive and an opportunity
for Executive, together with counsel, to be heard before the
Board), finding that in the good faith opinion of the Board an
event set forth in clauses (i) or (ii) has occurred and specifying
the particulars thereof in detail. The Company must notify
Executive of any event constituting Cause within ninety (90) days
following the Company’s knowledge of its existence or such
event shall not constitute Cause under this Agreement.
(c) " Change in Control " means the occurrence of any one
of the following events:
(i) individuals who, on January 16, 2001, constitute the Board
(the "Incumbent Directors") cease for any reason to constitute at
least a majority of the Board, provided that any person becoming a
director subsequent to January 16, 2001, whose election or
nomination for election was approved by a vote of at least
two-thirds of the Incumbent Directors then on the Board (either by
a specific vote or by approval of the proxy statement of the
Company in which such person is named as a
2
nominee for director, without written objection
by such Incumbent Directors to such nomination) shall be deemed to
be an Incumbent Director; provided, however, that no individual
elected or nominated as a director of the Company initially as a
result of an actual or threatened election contest with respect to
directors or any other actual or threatened solicitation of proxies
by or on behalf of any person other than the Board shall be deemed
to be an Incumbent Director;
(ii) any "person" (as such term is defined in Section 3(a)(9) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and as used in Sections 13(d)(3) and 14(d)(2) of the
Exchange Act) is or becomes a "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined
voting power of the Company’s then outstanding securities
eligible to vote for the election of the Board (the "Company Voting
Securities"); provided, however, that the event described in this
paragraph (ii) shall not be deemed to be a Change in Control by
virtue of any of the following acquisitions: (A) by the Company or
any Subsidiary, (B) by any employee benefit plan sponsored or
maintained by the Company or any Subsidiary, or by any employee
stock benefit trust created by the Company or any Subsidiary, (C)
by any underwriter temporarily holding securities pursuant to an
offering of such securities, (D) pursuant to a Non-Qualifying
Transaction (as defined in paragraph (iii)), (E) pursuant to any
acquisition by Executive or any group of persons including
Executive (or any entity controlled by Executive or any group of
persons including Executive); or (F) a transaction (other than one
described in (iii) below) in which Company Voting Securities are
acquired from the Company, if a majority of the Incumbent Directors
approves a resolution providing expressly that the acquisition
pursuant to this clause (F) does not constitute a Change in Control
under this paragraph (ii);
(iii) the consummation of a merger, consolidation, share
exchange or similar form of corporate transaction involving the
Company or any of its Subsidiaries that requires the approval of
the Company’s shareholders, whether for such transaction or
the issuance of securities in the transaction (a "Business
Combination"), unless immediately following such Business
Combination: (A) more than 40% of the total voting power of (x) the
corporation resulting from the consummation of such Business
Combination (the "Surviving Corporation") or (y) if applicable, the
ultimate parent corporation that directly or indirectly has
beneficial ownership of 100% of the voting securities eligible to
elect directors of the Surviving Corporation (the "Parent
Corporation"), is represented by Company Voting Securities that
were outstanding immediately prior to such Business Combination
(or, if applicable, represented by shares into which
3
such Company Voting Securities were converted
pursuant to such Business Combination), and such voting power among
the holders thereof is in substantially the same proportion as the
voting power of such Company Voting Securities among the holders
thereof immediately prior to the Business Combination, (B) no
person (other than any employee benefit plan sponsored or
maintained by the Surviving Corporation or the Parent Corporation
or any employee stock benefit trust created by the Surviving
Corporation or the Parent Corporation) is or becomes the beneficial
owner, directly or indirectly, of 25% or more of the total voting
power of the outstanding voting securities eligible to elect
directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) and (C) at least one-half
of the members of the board of directors of the Parent Corporation
(or, if there is no Parent Corporation, the Surviving Corporation)
were Incumbent Directors at the time of the Board’s approval
of the execution of the initial agreement providing for such
Business Combination (any Business Combination which satisfies all
of the criteria specified in (A), (B) and (C) above shall be deemed
to be a "Non-Qualifying Transaction"); or
(iv) the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or a sale of all or
substantially all of the Company’s assets.
Notwithstanding the foregoing, a Change in Control of the
Company shall not be deemed to occur solely because any person
acquires beneficial ownership of more than 25% of the Company
Voting Securities as a result of the acquisition of Company Voting
Securities by the Company that reduces the number of Company Voting
Securities outstanding; provided, that if after such acquisition by
the Company such person becomes the beneficial owner of additional
Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such
person, a Change in Control of the Company shall then occur.
(d) " Date of Termination " means (1) the effective date
on which Executive’s employment by the Company terminates as
specified in a prior written notice by the Company or Executive, as
the case may be, to the other, delivered pursuant to Section 10, or
(2) if Executive’s employment by the Company terminates by
reason of death, the date of death of Executive.
(e) " Disability " means termination of Executive’s
employment by the Company due to Executive’s absence from
Executive’s duties with the Company on a full-time basis for
at least one hundred eighty (180) consecutive days as a result of
Executive’s incapacity due to physical or mental illness.
4
(f) " Good Reason " means, without
Executive’s express written consent, the occurrence of any of
the following events after a Change in Control:
(i) (A) any change in the duties or responsibilities (including
reporting responsibilities) of Executive that is inconsistent in
any material and adverse respect with Executive’s positions,
duties, responsibilities or status with the Company immediately
prior to such Change in Control (including any material and adverse
diminution of such duties or responsibilities);
(ii) (A) a reduction by the Company in Executive’s rate of
annual base salary as in effect immediately prior to such Change in
Control, or as the same may be increased from time to time
thereafter, or (B) the failure by the Company to pay Executive an
annual bonus in respect of the year in which such Change in Control
occurs or any subsequent year in an amount greater than or equal to
the annual bonus earned for the year prior to the year in which
such Change in Control occurs, provided that Executive has met any
requisite performance criteria threshold necessary to the payment
of such annual bonus in respect of the year in which such Change in
Control occurs or such subsequent year.
(iii) any requirement of the Company that Executive (A) be based
anywhere more than thirty (30) miles from the office where
Executive is located at the time of the Change in Control or
(B)endure overnight travel on Company business to an extent
substantially greater than the travel obligations of Executive
immediately prior to such Change in Control;
(iv) the failure of the Company to (A) continue in effect any
employee benefit plan, compensation plan, welfare benefit plan or
material fringe benefit plan in which Executive is participating
immediately prior to such Change in Control or the taking of any
action by the Company that would adversely affect Executive’s
participation in or reduce Executive’s benefits under any
such plan, unless Executive is permitted to participate in other
plans providing Executive with the same benefits that the party
effecting the Change in Control (or, if applicable, its Parent
Corporation) provides to its most senior executive officers (or, in
the case of a Parent Corporation, the most senior executive
officers of its principal banking or financial services subsidiary)
or (B) provide Executive with paid time-off in accordance with the
most favorable time-off policies of the Company and its affiliated
companies as in effect for Executive immediately prior to such
Change in Control, including the crediting of all service for which
Executive had
5
been credited under such vacation policies prior
to the Change in Control; or
(v) the failure of the Company to obtain the assumption (and, if
applicable, guarantee) agreement from any successor (and
Parent Corporation) as contemplated in Section 9(b).
Notwithstanding anything herein to the contrary, termination of
employment by Executive for any reason during the 30-day period
commencing six (6) months after the date of a Change in Control
shall constitute Good Reason.
An isolated, insubstantial and inadvertent action taken in good
faith and which is remedied by the Company within ten (10) days
after receipt of notice thereof given by Executive shall not
constitute Good Reason. Executive’s right to terminate
employment for Good Reason shall not be affected by
Executive’s incapacities due to mental or physical illness
and Executive’s continued employment shall not constitute
consent to, or a waiver of rights with respect to, any event or
condition constituting Good Reason; provided, however, that
Executive must provide notice of termination of employment within
one-hundred twenty (120) days following Executive’s knowledge
of an event constituting Good Reason or such event shall not
constitute Good Reason under this Agreement.
(g) " Qualifying Termination " means a termination
of Executive’s employment (i) by the Company other than for
Cause or (ii) by Executive for Good Reason. Termination of
Executive’s employment on account of death, Disability or
Retirement shall not be treated as a Qualifying Termination.
(h) " Retirement " means the termination of
Executive’s employment on or after the first of the month
coincident with or following Executive’s attainment of age
65, or such later date as may be provided in a written agreement
between the Company and the Executive.
(i) " Subsidiary " means any corporation or other entity
in which the Company has a direct or indirect ownership interest of
50% or more of the total combined voting power of the then
outstanding securities or interests of such corporation or other
entity entitled to vote generally in the election of directors or
in which the Company has the right to receive 50% or more of the
distribution of profits or 50% of the assets upon liquidation or
dissolution.
(j) " Termination Period " means the period of time
beginning with a
6
Change in Control and ending two (2) years
following such Change in Control. Notwithstanding anything in this
Agreement to the contrary, if (i) Executive’s employment is
terminated prior to a Change in Control for reasons that would have
constituted a Qualifying Termination if they had occurred following
a Change in Control; (ii) Executive reasonably demonstrates that
such termination (or Good Reason event) was at the request of a
third party who had indicated an intention or taken steps
reasonably calculated to effect a Change in Control; and (iii) a
Change in Control involvin
| 
