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EXHIBIT 10(j)
1ST SOURCE CORPORATION
1998 PERFORMANCE COMPENSATION PLAN
SECTION 1
PURPOSE
The purpose of the 1st Source Corporation ("Company") 1998 Performance
Compensation Plan ("Plan") is to promote the interests of the Company and its
shareholders through the (i) attraction and retention of executive officers and
other key employees ("Employees") essential to the success of the Company and
its subsidiaries; (ii) motivation of Employees using performance-related
incentives linked to longer range performance goals and the interests of Company
shareholders; and (iii) enabling of the Employees to share in the long term
growth and success of the Company.
SECTION 2
ADMINISTRATION
The Plan will be administered by the Executive Compensation Committee
("Committee") of the Board of Directors of the Company, which will consist of
two or more members.
The Committee will have the sole, final and conclusive authority to
administer, construe and interpret the Plan. All members of the Committee must
be non-employee, outside directors as defined in applicable IRS Regulations.
SECTION 3
ELIGIBILITY
The Committee in its sole and complete discretion will select full-time
Employees of the Company and its subsidiaries, who in its opinion, can
contribute significantly to the growth and profitability of, or perform services
of major importance to, the Company and its subsidiaries. No non-employee
director of the Company will be eligible to participate under the Plan. No
member of the Committee will be eligible to participate under the Plan.
SECTION 4
GRANTS AND AWARDS
Any awards made to Employees under the Plan will be performance-based
compensation ("Awards") subject to the attainment of pre-established objective
performance goals, including one or more of the following criteria: (i) net
income; (ii) pre-tax income; (iii) earnings per share; (iv) return on
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equity; (v) return on assets; (vi) Economic Value Added and/or increase in
Economic Value Added; (vii) increase in the market price of the Company's common
stock; (viii) total shareholder return (stock price appreciation plus
dividends); and (ix) the performance of the Company in any of the items
mentioned in clauses (i) through (viii) in comparison to the average performance
of companies combined into a Company-constructed peer group.
All performance measures, formulas and determination of eligibility for a
performance period will be established by the Committee in writing no later than
ninety (90) days after the beginning of the performance period or by such other
date as may be permitted under Section 162(m) of the Internal Revenue Code of
1986 and the regulations. Performance measures may be based on one or more of
the business criteria listed herein. No Award to any single Employee will exceed
$5 million in one calendar year. No performance measures will allow for any
discretion by the Committee to increase any Award, but discretion to lower
Awards is permissible. The payment of any Award under the Plan to an Employee
with respect to a relevant performance period will be contingent upon
certification by the Committee prior to any such payment that the applicable
performance measure(s) relating to the Award have been satisfied. Payment of the
award will not be conditioned upon it being deductible by the Company.
Notwithstanding any other provision of the Plan, the Committee may impose such
conditions on any Award, and the Board may amend the plan in any such respects,
as may be required to satisfy the requirements of Section 162(m) of the Internal
Revenue Code (or any successor or similar rule relating thereto).
If an Employee's employment with the Company is terminated by reason of death
or total and permanent disability that occurs before the end of a Performance
Period, the Employee will be entitled to a pro rata award based upon the number
of days elapsed at the time of termination. The amount of any Award due a
deceased Employee will be paid to the beneficiary designated by the Employee in
writing to the Company, or if none, the Employee's Estate.
SECTION 5
NO EMPLOYMENT CONTRACT
The Plan is not and is not intended to be an employment contract with respect
to any of the Employees, and the Company's rights to continue or to terminate
the employment relationship of any Employee will not be affected by the Plan.
SECTION 6
AMENDMENT AND TERMINATION
The Board of Directors of the Company may amend, suspend or terminate the Plan
or any portion thereof at any time, but it may not adversely affect the
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rights of any Employee under an award. Any material amendment will require
shareholder approval.
SECTION 7
INDEMNITY
Each person who is or will have been a member of the Board of Directors or the
Committee will be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred in connection with or resulting from any claim, action, suit, or
proceeding to which such person may be a party or in which they may be involved
by reason of any action taken or failure to act under the Plan and against and
from any and all amounts paid by such persons in settlement thereof with the
Company's approval, or paid in satisfaction of a judgment in any such action,
suit or proceeding against them, provided they will give the Company an
opportunity, at its own expense, to handle and defend the same before they
undertake to handle and defend it on their behalf. The foregoing right of
indemnification will not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company Articles of Incorporation
or Code of By-Laws, as a matter of law, or otherwise, or any power that the
Company may have to indemnify them or hold them harmless.
SECTION 8
EXPENSES OF PLAN
The expenses of administering the Plan will be borne by the Company.
SECTION 9
SUCCESSORS
The Plan will be binding upon the successors and assigns of the Company.
SECTION 10
TAX WITHHOLDING
The Company will have the right to withhold from the payment of any Award the
amount of any federal, state or local taxes which the Company is required to
withhold.
SECTION 11
GOVERNING LAW AND NOTICE
The Plan, and its rules, rights, agreements and regulations, will be
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governed, construed, interpreted and administered solely in accordance with the
laws of the State of Indiana. In the event any provision of the Plan will be
held invalid, illegal or unenforceable, in whole or in part, for any reason,
such determination will not affect the validity, legality or enforceability of
any remaining provision, portion of provision or Plan overall, which will remain
in full force and effect as if the Plan has been absent the invalid, illegal or
unenforceable provision or portion thereof.
Unless otherwise specifically provided herein, any notice to be given to the
Committee under the Plan will be given in writing and will be deemed delivered
for all purposes of the Plan if personally delivered to a member of the
Committee or mailed to such Committee addressed to the Company by postpaid,
certified United States mail.
SECTION 12
EFFECTIVE DATE AND DURATION OF PLAN
The Plan was adopted on February 19, 1998, by the Executive Committee of the
Board of Directors of the Company and will be effective as of that date, subject
to shareholder approval at the annual shareholders meeting of the Company to be
held in South Bend, Indiana, on April 16, 1998. The Plan will have no
termination date, unless otherwise required by law or otherwise terminated by
the Committee.