<PAGE>
EXHIBIT 10.16
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (this "Agreement"), dated as of ______,
19___,
by and between National Processing, Inc.,
an Ohio corporation (the "Company"),
and ___________________ (the "Executive").
This Agreement supersedes any other
Severance Agreement between the Company and
the Executive.
WITNESSETH:
WHEREAS, the Executive is a senior executive of the Company and/or
a
Subsidiary (as defined below) and has made
and is expected to continue to make
major contributions to the profitability,
growth and financial strength of the
Company;
WHEREAS, the Company recognizes that, as is the case of most
companies,
the possibility of a Change in Control
exists;
WHEREAS, the Company desires to assure itself of both present
and
future continuity of management and desires
to establish certain minimum
severance benefits for certain of its
senior executive officers and other key
employees, including the Executive,
applicable in the event of a Change in
Control;
WHEREAS, the Company wishes to ensure that its senior executives
and
other key employees are not practically
disabled from discharging their duties
in respect of a proposed or actual
transaction involving a Change in Control;
and
WHEREAS, the Company desires to provide additional inducement for
the
Executive to continue to remain in the
ongoing employ of the Company.
NOW, THEREFORE, the Company and the Executive agree as follows:
1. CERTAIN DEFINED TERMS: In addition to terms defined
elsewhere
herein, the following terms have the
following meanings when used in this
Agreement with initial capital letters:
(a) "Base Pay" means the Executive's annual base salary at a
rate not less than the Executive's annual fixed or base
compensation as
in effect for Executive immediately prior to the occurrence of a
Change
in Control or such higher rate as may be in effect from time to
time.
(b) "Cause" means that, prior to any termination pursuant to
Section 3(a) hereof, the Executive shall have committed:
(i) an intentional act of fraud, embezzlement or theft in
connection with his/her duties or in the course of his/her
employment
with the Company or any Subsidiary;
<PAGE>
(ii) intentional wrongful damage to property of the Company or
any Subsidiary;
(iii) intentional wrongful disclosure of secret processes or
confidential information of the Company or any Subsidiary; or
(iv) intentional wrongful engagement in any Competitive
Activity;
and any such act shall have been harmful to the Company. For
purposes
of this Agreement, no act or failure to act on the part of the
Executive shall be deemed "intentional" if it was due primarily to
an
error in judgment or negligence, but shall be deemed "intentional"
only
if done or omitted to be done by the Executive not in good faith
and
without reasonable belief that his/her action or omission was in
the
best interest of the Company. Nothing herein will limit the right
of
the Executive or his/her beneficiaries to contest the validity
or
propriety of any such determination.
(c) "Change in Control" means the occurrence during the Term
of either of the following events:
(i) The Company is merged, consolidated or
reorganized into or with another corporation or other legal
person
other than NCC, a successor of NCC (direct or indirect, by
purchase,
merger, consolidation, reorganization or otherwise) ("Successor"),
or
an affiliate of NCC or of a Successor and as a result of such
merger,
consolidation or reorganization less than fifty percent of the
combined
voting power of the then outstanding securities of such
resulting
corporation or person immediately after such transaction are held
by
NCC, a Successor or an affiliate of NCC or of a Successor; or
(ii) The Company sells or otherwise transfers all or
substantially all of its assets or the Company causes or permits
the
sale or transfer of all or substantially all of the assets of
any
Subsidiary that has assets equal to or greater than eighty percent
of
the total assets of the Company, as reported on a consolidated
basis,
to another corporation or other legal person, and as a result of
such
sale or transfer less than fifty percent of the combined voting
power
of the then outstanding Voting Stock of such corporation or
person
immediately after such sale or transfer is held by NCC, a Successor
or
an affiliate of NCC or of a Successor, provided, however, that a
Change
in Control of NCC determined by the standards set forth herein
or
otherwise shall not constitute a Change in Control of the
Company.
(d) "Competitive Activity" means the Executive's
participation, without the written consent of an officer of the
Company, in the management of any business enterprise if such
enterprise engages in competition with the Company.
"Competitive
Activity" will not include (i) the mere ownership of securities in
any
such enterprise
and the exercise of rights appurtenant thereto, (ii)
participation in the management of any
2
<PAGE>
such enterprise other than in connection with the competitive
operations of such enterprise or (iii) participation in the
management
of any such enterprise which has been authorized by the Board
of
Directors of the Company.
(e) "Employee Benefits" means the perquisites, benefits and
service credit for benefits as provided under any and all
employee
retirement income and welfare benefit policies, plans, programs
or
arrangements in which Executive is entitled to participate,
including
without limitation any stock option, stock purchase, stock
appreciation
savings, pension, supplemental executive retirement, or other
retirement income or welfare benefit, deferred compensation,
incentive
compensation, group or other life, health medical/hospital or
other
insurance (whether funded by actual insurance or self-insured by
the
Company), disability, salary continuation, expense reimbursement
and
other employee benefit policies, plans, programs or arrangements
that
may now exist or any equivalent successor policies, plans, programs
or
arrangements that may be adopted hereafter, providing
perquisites,
benefits and service credit for benefits at least as great in
the
aggregate as are payable thereunder prior to a Change in
Control.
(f) "Incentive Pay" means an annual amount equal to not less
than the highest aggregate annual bonus, incentive or other
payments of
cash compensation (including, without limitation, payments made
pursuant to Company's long-term incentive plan and short-term
incentive
plan, if any), in addition to Base Pay, made or to be made in
regard to
services rendered in any calendar year during the three calendar
years
immediately preceding the year in which the Change in Control
occurred
pursuant to any bonus, incentive, profit-sharing, performance,
discretionary pay or similar agreement, policy, plan, program
or
arrangement (whether or not funded), or any successor thereto
providing
benefits at least as great as the benefits payable thereunder prior
to
a Change in Control.
(g) "NCC" means National City Corporation, a Delaware
corporation that as of the date of this Agreement owns ____% of
the
Voting Stock.
(h) "Severance Period" means the period of time commencing on
the date of an occurrence of a Change in Control and continuing
until
the earliest of (i) the third anniversary of the occurrence of
the
Change in Control (ii) the Executive's death, or (iii) the
Executive's
attainment of age 65;
(i) "Subsidiary" means an entity in which Company directly or
indirectly beneficially owns 50% or more of the outstanding
Voting
Stock.
(j) "Term" means the period commencing as of the date hereof
and expiring as of the later of (i) the close of business on
______,
19__, or (ii) the expiration of the Severance Period; PROVIDED,
HOWEVER, that (A) commencing on _________, 19__ and each
_________
thereafter, the Term of this Agreement will automatically be
extended
for an additional year unless, not later than ____________ of
the
immediately preceding year, the Company or the Executive shall
have
given notice that it or the Executive, as the case
3
<PAGE>
may be, does not wish to have the Term extended and (B) except
as
otherwise provided in the last sentence of Section 7, if, prior to
a
Change in Control, the Executive ceases for any reason to be an
employee of the Company or any Subsidiary, thereupon without
further
action the Term shall be deemed to have expired and this Agreement
will
immediately terminate and be of no further effect. For purposes of
this
Section 1(j), the Executive shall not be deemed to have ceased to
be an
employee of the Company or any Subsidiary by reason of the transfer
of
Executive's employment between the Company and any Subsidiary, or
among
any Subsidiaries.
(k) "Voting Stock" means the then outstanding securities
entitled to vote generally in the election of directors of the
Company.
2. OPERATION OF AGREEMENT: This Agreement will be effective and
binding
immediately upon its execution, but,
anything in this Agreement to the contrary
notwithstanding, this Agreement will not be
operative unless and until a Change
in Control occurs, whereupon without
further action this Agreement shall become
immediately operative.
3. TERMINATION FOLLOWING A CHANGE IN CONTROL: (a) In the event
the
Company, a Subsidiary or a successor of the
Company (direct or indirect, by
purchase, merger, consolidation,
reorganization or otherwise) terminates the
Executive's employment during the Severance
Period, the Executive will be
entitled to the severance compensation
provided by Section 4; PROVIDED, HOWEVER,
that the Executive shall not be entitled to
the severance compensation provided
by Section 4 hereof only upon the
occurrence of one or more of the following
events:
(i) The Executive's death occurring prior to
termination of his/her employment;
(ii) Prior to the termination of his/her employment,
the Executive becomes permanently disabled within the meaning of,
and
begins actually to receive disability benefits pursuant to, the
long-term disability plan in effect for, or applicable to,
Executive
immediately prior to the Change in Control; or
(iii) Cause.
(b) In the event of the occurrence of a Change in Control, the
Executive may terminate employment with the Company and any
Subsidiary
during the Severance Period with the right to severance
compensation as
provided in Section 4 upon the occurrence of one or more of the
following events (regardless of whether any other reason for
such
termination exists or has occurred, including without limitation
other
employment):
(i)
Failure to elect or reelect or otherwise to
maintain the Executive in the office or the position, or a
substantially equivalent or higher level office or position, of or
with
the Company and/or a Subsidiary, as the case may be, which the
Executive
4
<PAGE>
held immediately prior to a Change in Control, or the removal
of the Executive as a Director of the Company (or any successor
thereto) if the Executive shall have been a Director of the
Company
immediately prior to the Change in Control;
(ii) (I) A significant adverse change in the nature
or scope of the authorities, powers, functions, responsibilities
or
duties attached to the position with the Company and any
Subsidiary
which the Executive held immediately prior to the Change in
Control;
(II) a reduction in the aggregate of the Executive's Base Pay and
the
formula for determining Incentive Pay received from the Company and
any
Subsidiary; or (III) the termination or denial of the
Executive's
rights to Employee Benefits or a reduction in the scope or
value
thereof, which situation is not remedied within 10 calendar days
after
written notice to the Company from the Executive;
(iii) A determination by the Executive (which
determination will be conclusive and binding u
