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Exhibit 10.6
FORM OF KEY EMPLOYEE
SEVERANCE
AGREEMENT FOR EXECUTIVE
OFFICERS
The attached form is
identical for the following
Executive
Officers:
Paul Weaver
Michael Barker
Jonathan R. West
Brian K. Fike
Douglas Iverson
KEY
EMPLOYEE
SEVERANCE
AGREEMENT
This Agreement is entered
into as of the 1st day of December, 2007, by and between the
FEDERAL HOME LOAN BANK OF INDIANAPOLIS, a corporation organized
under the laws of the United States (the “Bank”) and
_______________ (the “Executive”).
WHEREAS, the Bank recognizes
the valuable services that the Executive will provide and desires
to be assured that the Executive will continue her active
participation in the business of the Bank; and
WHEREAS, the Executive
desires assurance that, in the event of any consolidation, change
in control or reorganization of the Bank, she will continue to have
the responsibility and status she has earned, either with the Bank
or with a successor to the Bank;
NOW, THEREFORE, in
consideration of the promises and the mutual agreements herein
contained, the Bank and the Executive hereby agree as
follows:
1.
Definitions.
“Bank” shall mean
the Federal Home Loan Bank of Indianapolis and any other entity
within the definition of “Bank” in Section 6(a)
hereof.
“Cause” shall
mean (i) the continued failure of the Executive to perform her
duties with the Bank (other than any such failure resulting from
Disability), after a demand for performance, pursuant to a
resolution of the Bank’s Board of Directors, is delivered to
the Executive by the Chair of the Board of Directors of the Bank,
which specifically identifies the manner in which the Executive has
not performed her duties, (ii) the personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated
duties, or willful violation of any law, rule or regulation (other
than routine traffic violations or similar offenses); or
(iii) the removal of the Executive for cause by the Federal
Housing Finance Board pursuant to 12 U.S.C. 1422b(a)(2), or by any
successor agency to the Federal Housing Finance Board pursuant to a
similar statute.
“Compensated
Termination” shall have the meaning set forth in
Section 2(a).
“Disability”
shall mean, as a result of the Executive’s incapacity due to
physical or mental illness, the Executive shall have been absent
from her duties with the Bank for an aggregate of twelve
(12) out of fifteen (15) consecutive months and, within
thirty (30) days after a Notice of Termination is thereafter
given by the Bank to the Executive, the Executive shall not have
returned to the full-time performance of the Executive’s
duties.
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“Good Reason”
shall mean any of the following:
(a) during the period
(1) beginning with the earliest to occur of the following
three dates, as applicable: (A) twelve (12) months prior
to the execution of a definitive agreement regarding a
Reorganization of the Bank or (B) if a Reorganization has been
mandated by federal statute, rule, regulation or directive, twelve
(12) months prior to the effective date of such Reorganization
or (C) twelve (12) months prior to the adoption of a plan
or proposal for the liquidation or dissolution of the Bank, and
(2) ending twenty-four (24) months after the effective
date of such Reorganization,
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(i) |
a material change in the Executive’s status, position,
job title or principal duties and responsibilities as a key
employee of the Bank which does not represent a promotion from the
Executive’s status and position as in effect as of the date
hereof (“Position”), or |
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(ii) |
the assignment to the Executive of any duties or
responsibilities (or removal of any duties or responsibilities),
which assignment or removal is materially inconsistent with such
Position, or |
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(iii) |
any removal of the Executive from such Position (including,
without limitation, all demotions and harassing assignments),
except in connection with the termination of the Executive’s
employment for Cause or Disability, or as a result of the
Executive’s death; |
(b) within twenty-four
(24) months after the effective date of a Reorganization of
the Bank, (a) a reduction by the Bank in the Executive’s
base salary as in effect immediately prior to such Reorganization,
or (b) the Bank’s (or its successor’s) failure to
increase (within 12 months of the Executive’s last increase
in base salary) the Executive’s base salary after a
Reorganization of the Bank in an amount which is not less than 50%
of the average percentage increase in base salary for all officers
of the Bank effected in the preceding twelve
(12) months;
(c) within twenty-four
(24) months after the effective date of a Reorganization of
the Bank, (a) any failure by the Bank to continue in effect
any plan or arrangement, including, without limitation, benefit and
incentive plans, in which the Executive is participating
immediately prior to such Reorganization (hereinafter referred to
as “Plans”), unless such Plans have been replaced with
similar benefits that are not materially less than the
Executive’s benefits under such Plans, or (b) the taking
of any action by the Bank which would adversely affect the
Executive’s participation in or materially reduce the
Executive’s benefits under any such Plan or in or under
fringe benefits enjoyed by the Executive immediately prior to the
time of such Reorganization of the Bank;
(d) any material breach by
the Bank of any provisions of this Agreement or any other agreement
with the Executive; or
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(e) any failure by the Bank
or its successors and assigns to obtain the assumption of this
Agreement by any successor or assign of the Bank.
“Notice of
Termination” shall mean a written notice which shall indicate
those specific termination provisions in this Agreement upon which
the Bank or the Executive, as the case may be, has relied for such
termination and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so
indicated.
“Payment Determination
Date” shall have the meaning set forth in
Section 2(b).
“Reorganization”
of the Bank shall mean the occurrence at any time of any of the
following events:
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(i) |
The Bank is merged or consolidated with or reorganized into or
with another bank or other entity, or another bank or other entity
is merged or consolidated into the Bank; |
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(ii) |
The Bank sells or transfers all, or substantially all of its
business and/or assets to another bank or other entity;
or |
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(iii) |
The liquidation or dissolution of the Bank. |
“Retirement”
shall mean the planned and voluntary termination by the Executive
of her employment on or after reaching the earliest retirement age
permitted by the Bank’s qualified retirement
plans.
2. Compensated
Termination.
(a) Compensated
Termination . If the Executive incurs a Compensated Termination
while the Executive is employed by the Bank or within twenty-four
(24) months after the effective date of a Reorganization of
the Bank (whether the Executive is then employed by the Bank or a
successor to the Bank as a result of such Reorganization), the
Executive shall be entitled to the benefits provided in
Section 4(a). For purposes of this Agreement, a
“Compensated Termination” means termination of the
Executive’s employment under either of the following
circumstances:
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(i) |
By the Executive for Good Reason; or |
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(ii) |
By the Bank, or by its successor in a Reorganization, without
Cause at any time during the period (1) beginning with the
earliest to occur of the following three dates, as applicable
(A) twelve (12) months prior to the execution of a
definitive agreement regarding a Reorganization, or (B) if a
Reorganization has been mandated by federal statute, rule,
regulation or directive, twelve (12) months prior to the
effective date of such Reorganization, or (C) twelve
(12) months prior to the adoption of a plan or proposal for
the liquidation or dissolution of the Bank, and (2) ending
twenty-four (24) months after the effective date of such
Reorganization. |
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(b) Payment Determination
Date . “Payment Determination Date,” for purposes
of determining when a payment resulting from a Compensated
Termination must be made pursuant to Section 4(a), shall mean
the effective date of the termination of the Executive’s
employment with the Bank if such termination is a
“Compensated Termination.”
(c) Non-Compensated
Termination . For the avoidance of doubt, none of the following
events shall result in any payment to the Executive for a
Compensated Termination under Section 4(a):
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(i) |
The termination of employment by the Executive without Good
Reason; |
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(ii) |
The termination of the Executive’s employment for Cause
by the Bank or its successor in a Reorganization; |
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(iii) |
The termination of the Executive’s employment Without
Cause by the Bank or its successor in a Reorganization,
(1) prior to the date which is the earliest to occur of the
following three dates, as applicable: (A) twelve
(12) months prior to the execution of a definitive agreement
regarding a Reorganization of the Bank or (B) if a
Reorganization has been mandated by federal statute, rule,
regulation or directive, twelve (12) months prior to the
effective date of such Reorganization or (C) twelve
(12) months prior to the adoption of a plan or proposal for
the liquidation or dissolution of the Bank, or (2) more than
twenty-four (24) months after the effective date of a
Reorganization; |
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(iv) |
The termination of the Executive’s employment by the Bank
or its successor in a Reorganization for Disability; |
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(v) |
The death of the Executive; or |
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(vi) |
The Retirement of the Executive. |
3. Termination of
Employment.
(a) Termination by the
Bank . The Bank may terminate the employment of the Executive
as follows:
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(i) |
For Cause
upon the adoption of a resolution by the affirmative vote of not
less than a majority of the entire membership of the Bank’s
Board of Directors at a meeting of the Board (after reasonable
notice to the Executive and an opportunity for the Executive,
together with counsel, to be heard by the Board), finding that in
the good faith
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opinion of the Board the
Executive was guilty of conduct set forth in the definition of
“Cause” in Section 1 hereof and specifying the
particulars thereof in detail. A vote of the Board is not required
if the Executive is removed for cause by the Federal Housing
Finance Board pursuant to 12 U.S.C. 1422b(a)(2);
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(iii) |
Upon the Disability of the Executive; and |
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(iv) |
Upon the death of the Executive. |
(b) Termination by
Executive . The Executive may terminate her employment with the
Bank as follows:
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(ii) |
Without Good Reason; or |
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(iii) |
Upon the Executive’s Retirement, in which case the
Executive shall be entitled to all benefits under any retirement
plan of the Bank and other plans to which the Executive is a
party. |
(c) Preservation of
Compensated Termination . The provisions of Sections 3(a) and
3(b) are included in this Agreement for clarification of the rights
of termination of the employment relationship between the Bank and
the Executive, but such provisions shall not prejudice the
Executive’s right to receive payments or bene
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