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EXHIBIT 10.1 -- First Merchants Corporation
Supplemental Executive Retirement Plan
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SECTION 1. ESTABLISHMENT AND PURPOSE
A. Establishment. First Merchants Corporation (the "Employer"), hereby
establishes a non-qualified supplemental executive retirement plan for
certain executives, as designated and described herein, which shall be known
as the FIRST MERCHANTS CORPORATION SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(the "Plan").
B. Purpose. The purpose of the Plan is to enable the Employer to attract,
retain, and motivate key executive employees of high caliber, and to provide
equitable retirement and survivor benefits for certain key executive
employees, their surviving spouses and designated beneficiaries.
SECTION 2. DEFINITIONS
For purposes of this Plan, certain words or phrases used herein will have the
following meanings:
A. "Board of Directors" means the Board of Directors of First Merchants
Corporation.
B. "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
C. "Compensation Committee" means the Employer's Compensation and Human
Resources Committee.
D. "Executive" means a key executive Employee that is designated to
participate in the Plan under Section 3 below.
E. "Non-qualified SERP Benefit" means the difference between (1) and (2),
where (1) is the Retirement Benefit that would have been paid the Executive from
the Pension Plan at the Executive's Normal, Early, Late or Disability Retirement
Date (whichever is applicable) if there were no compensation limit imposed under
Code Section 401(a)(17) and if Final Average Monthly Plan Compensation did not
exclude bonuses for purposes of determining the Standard Benefit Formula, and
(2) is the Retirement Benefit payable to the Executive under the Pension Plan at
the Executive's Normal, Early, Late or Disability Retirement Date (whichever is
applicable).
F. "Pension Plan" means the First Merchants Corporation Retirement Pension
Plan, as amended, a qualified pension plan under Section 401(a) of the Internal
Revenue Code of 1986, as amended.
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G. "Term Certain Expiration Date" means the 15th anniversary of the event,
retirement or death, which causes payment of benefits under this Plan to
commence.
H. The following terms will have the same meanings as they have under the
Pension Plan: "Employee," "Employer," "Final Average Monthly Plan
Compensation," "Normal, Early, Late, or Disability Retirement Date,"
"Retirement Benefit," "Normal, Early, Late, or Disability Retirement
Benefit," "Optional Form of Payment," and "Standard Benefit Formula."
SECTION 3. DESIGNATION OF EXECUTIVES PARTICIPATING IN PLAN
The Compensation Committee shall have the sole discretion, from time to time,
to designate Employees to participate in the Plan as covered Executives.
This designation shall be by resolution of the Compensation Committee and
shall be limited to management or highly compensated Employees. The
Compensation Committee shall notify each Employee so designated in writing.
Covered Executives, their spouses and designated beneficiaries shall be
entitled to benefits under this Plan if the Executive is employed by the
Employer on his or her 65th birthday, Early Retirement Date, Disability
Retirement Date or death, whichever occurs earliest.
SECTION 4. RETIREMENT BENEFIT
If an Executive retires on his or her Normal, Early, Late or Disability
Retirement Date, the Executive shall receive each year thereafter, in the
manner described in Section 6, an amount equal to the Non-qualified SERP
Benefit for the Executive's lifetime. If the Executive's Retirement Benefit
under the Pension Plan commences at a time other than his or her Normal
Retirement Date or in an Optional Form of Payment, the amount of the
Non-qualified SERP Benefit shall be adjusted using the same actuarial factors
and assumptions (except as otherwise provided in Section 7 of this Plan) used
to calculate the Retirement Benefit payable to the Executive under the
Pension Plan.
SECTION 5. PRE-RETIREMENT SURVIVOR BENEFIT
If a covered Executive dies while still actively employed by the Employer,
and if the Executive is survived by the Executive's spouse, the Executive's
spouse shall receive each year until the Term Certain Expiration Date, in the
manner described in Section 6, the Non-qualified SERP Benefit otherwise
payable to the Executive under this Plan, determined as if the Executive had
retired on the date immediately preceding the date of the Executive's death.
If the Executive is not survived by the Executive's spouse, or if the spouse
does not live until the Term Certain Expiration Date, the person(s)
designated under Section 8 shall receive each year, in the manner described
in Section 6, an amount equal to such Benefit.
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SECTION 6. MANNER OF PAYING BENEFITS
Within 30 days following the death or retirement of the Executive, a monthly
benefit payment shall be commence equal to the yearly benefit payable under
Section 4 or 5 of this Plan.
SECTION 7. FIFTEEN YEAR TERM CERTAIN
Benefits on behalf of a covered Executive, whether payable as a Normal,
Early, Late, or Disability Retirement Benefit, or as a Pre-retirement
Survivor Benefit or other death benefit payable to a designated beneficiary,
shall be made at least through the Term Certain Expiration Date, without any
actuarial reduction on account of such guaranteed payment. At any time, in
the discretion of the Compensation Committee, the commuted value of the
future benefits payable under the Plan on behalf of any recipient may be
computed and paid in one lump sum.
SECTION 8. DESIGNATION OF BENEFICIARY
An Executive, or subsequent to the Executive's death, the Executive's spouse,
may designate the person(s) to receive the benefits payable under this Plan
if the Executive and the Executive's spouse do not live to receive the
benefits through the Term Certain Expiration Date. If such designation is
not made, or if no designated beneficiary is then living, such benefit shall
be paid to the Executive's spouse, if then living, or if not, to the
Executive's descendants, PER STIRPES, who are then living, or if there are no
such descendants then living, to the Executive's estate.
SECTION 9. EARLY, LATE OR DISABILITY RETIREMENT
The Compensation Committee may grant to a covered Executive, while in the
employ of the Employer, early, late or disability retirement under this Plan,
if such Executive is eligible for and elects an Early, Late or Disability
Retirement Benefit under the Pension Plan. The Compensation Committee, in
its sole discretion, may provide that retirement benefits under this Plan
shall begin at any time after the granting of early, late or disability
retirement, rather than at the Executive's Normal Retirement Date, and the
Term Certain Expiration Date shall terminate on the 15th anniversary of the
commencement of retirement benefits.
SECTION 10. TERMINATION OF EMPLOYMENT
If an Executive's employment with the Employer is terminated prior to his or
her Normal Retirement Date, either by the Employer or by the Executive, and
either with or without cause, no benefits shall be paid under any provision
of this Plan, unless the Compensation Committee, in its sole discretion,
shall provide that the benefits will be paid regardless of the termination of
the Executive's employment. However, early or disability retirement or death
shall not be deemed to be a termination of employment for purposes of this
Section.
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SECTION 11. PROHIBITION OF COMPETITIVE EMPLOYMENT
If, during the period of an Executive's employment with the Employer or while
the Executive is receiving benefits under this Plan, a covered Executive
engages in competitive activities without the Employer's written consent, no
further benefits shall be payable under any provision of this Plan. For
purposes of this Section, "competitive activities" shall mean engaging,
directly or indirectly (including providing consulting services), in a
business similar to any business of the Employer or any of its subsidiaries,
or owning, managing, operating, controlling, being employed by, participating
in, having any financial interest in, or being connected in any manner with
the ownership, management, operation or conduct of, any such similar business.
SECTION 12. TITLE TO LIFE INSURANCE
If life insurance is purchased to provide the Employer with funds to make
benefit payments under this Plan to or on behalf of a covered Executive, the
owner and beneficiary of such life insurance contract shall at all times be
the Employer or, if the Employer establishes a "rabbi trust" in connection
with this Plan, the trustee of such trust. If the Employer is the owner and
beneficiary of the life insurance contract, it shall have the unrestricted
right to use all amounts and to exercise all options and privileges
thereunder without the knowledge or consent of the Executive, his or her
designated beneficiary, or any other person, it being expressly agreed that
neither the Executive nor any such beneficiary or other person shall have any
right, title or interest whatsoever in or to any such contract. If the
trustee of a "rabbi trust" is the owner and beneficiary of the life insurance
contract, the respective rights and interests of the Employer, the trustee,
the Executive, his or her designated beneficiary, and other persons, shall be
governed by the terms of the trust agreement and the life insurance contract.
SECTION 13. PAYMENTS ARE NOT SECURED
Except as provided in the "rabbi trust" agreement, if any, established by the
Employer in connection with this Plan, (a) the Executive, his or her
designated beneficiary and any other person or persons having or claiming a
right to payment of benefits hereunder, or to any interest under this Plan,
shall rely solely on the unsecured promise of the Employer, and (b) nothing
herein shall be construed to give the Executive, his or her designated
beneficiary or any other person or persons any right, title, interest or
claim in or to any specific asset, fund, reserve, account or property of any
kind whatsoever owned by the Employer or in which it may have any right,
title or interest now or in the future, but the Executive shall have the
right to enforce his or her claim against the Employer in the same manner as
any unsecured creditor.
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SECTION 14. NON-ASSIGNABILITY OF BENEFITS
Neither the Executive, nor his or her designated beneficiary, nor any other
person entitled to any payment hereunder, shall have power to transfer,
assign, anticipate, mortgage or otherwise encumber any right to receive a
payment in advance of the time such payment is due under the provisions of
this Plan, and any attempted transfer, assignment, anticipation, mortgage or
encumbrance shall be void. No payment hereunder shall be subject to seizure
for the payment of public or private debts, judgments, alimony or separate
maintenance, or be transferable by operation of law in the event of
bankruptcy, insolvency or otherwise.
SECTION 15. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Compensation Committee, which shall
have sole authority to construe and interpret the Plan and issue such rules
and regulations as it deems appropriate. The Compensation Committee shall
have the duty and responsibility of deciding questions of eligibility,
determining the amount, manner and time of payment of any benefits hereunder,
and distributing the benefits to covered Executives, their spouses and/or
beneficiaries; provided, however, the Compensation Committee may appoint or
employ individuals to assist in the administration of the Plan and any other
agents it deems advisable, including legal and actuarial counsel. The
Compensation Committee's interpretations, determinations, rules and
regulations, and calculations shall be final and binding on all persons and
parties concerned. If a covered Executive, spouse or beneficiary desires a
review of any benefit determination made by the Compensation Committee, he or
she shall follow the claims review procedure described in Section 6.06 of the
Pension Plan (except that such appeal shall be to the Compensation Committee
rather than to the committee responsible for administering the Pension Plan,
if different).
SECTION 16. AMENDMENT
This Plan may be amended at any time or from time to time by the Board of
Directors of the Employer. Any amendment shall not reduce the benefit of any
covered Executive, or any person receiving benefits under this Plan, without
the written consent of the affected person. The failure of either the
Employer or any covered Executive to enforce any of the provisions hereof
shall not be deemed a waiver thereof. No provision of this Plan shall be
deemed to have been waived or modified unless such waiver or modification
shall be in writing and signed by the party or parties affected by such
waiver or modification. The Employer reserves the right to terminate the
Plan at any time by action of the Board of Directors. The termination of
this Plan shall not affect the benefits of any Executive, Executive's spouse
or designated beneficiary covered by the Plan, prior to termination.
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SECTION 17. NON-GUARANTEE OF EMPLOYMENT
This Plan shall not be construed as giving any Executive the right to be
retained as an Employee of the Employer for any period.
SECTION 18. BINDING EFFECT AND GOVERNING LAW
This Plan shall be binding upon the Executive and the Executive's spouse,
beneficiaries, heirs, executors, administrators, personal representatives,
successors and assigns, and upon the Employer and its successors and assigns.
Except as preempted by ERISA or any other applicable federal law, the Plan
shall be construed, enforced and administered, and the validity thereof shall
be determined, in accordance with the laws of the State of Indiana.
This Plan was adopted by the Board of Directors of First Merchants
Corporation on February 11, 1997, and shall be effective as of March 1, 1997.
First Merchants Corporation
By: /s/ Stefan S. Anderson
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Title: President
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Schedule A to First Merchants Corporation
Supplemental Executive Retirement Plan
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The Corporation's Supplemental Executive Retirement Plan covers the following
executives:
Offices with the Corporation
Name and Subsidiary Banks
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Stefan S. Anderson President and Chief Executive Officer,
Corporation; Chief Executive Officer,
First Merchants Bank, N.A.
Michael L. Cox Executive Vice President, Chief
Operating Officer, Corporation;
Chief Operating Officer,
First Merchants Bank, N.A.
Ted J. Montgomery Senior Vice President, Corporation;
Chief Executive Officer, The Union
County National Bank of Liberty
Roger W. Gilcrest Executive Vice President, First
Merchants Bank, N.A.
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