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Exhibit 10.8 - Material Contract
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT has been made and entered into as of the 1st
day of January 1997, among HORIZON BANCORP, an Indiana corporation (the
"Company"), HORIZON BANK, N.A., a national banking association (the "Bank"), and
THOMAS P. MCCORMICK, President and Chief Administrative Officer of the Company
and the Bank (the "Executive").
Section 1. Employment; Period of Employment
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(a) The Company and the Bank jointly and severally hereby agree to
employ the Executive, and the Executive hereby agrees to become employed by the
Company and the Bank, upon and subject to the terms and conditions set forth
herein.
(b) The Company and the Bank shall employ the Executive on a full-time
basis, during the Period of Employment, which shall be deemed to have commenced
on the date of this Agreement and which shall end on December 31, 1999, except
as provided below. The Period of Employment shall be automatically extended for
one (1) additional year on December 31, 1997, and on each subsequent December
31, unless any party gives written notice of termination of such automatic
termination at least thirty (30) days prior thereto, in which event the Period
of Employment shall terminate at the end of the period in effect at the time
such notice is given.
Section 2. Position, Duties, Responsibilities
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(a) The Executive shall serve, during the Period of Employment, as an
employee of the Company and of the Bank with such duties and responsibilities as
the Executive shall have with the Company and the Bank on the date of this
Agreement. At all times during the Period of Employment, the Executive shall
hold a position with functions, duties and responsibilities at least equal in
responsibility, scope and importance to those of his position on the date of
this Agreement.
(b) Throughout the Period of Employment, the Executive shall devote his
full time and undivided attention during normal business hours to the business
and affairs of the Company and the Bank, except for reasonable vacations and
illness or incapacity, but nothing in this Agreement shall preclude the
Executive from engaging in charitable and community activities, and from
managing his personal investments, provided that such activities do not
materially interfere with the regular performance of his duties and
responsibilities under this Agreement.
(c) The office of the Executive shall be located in the executive
office section of the principal offices of the Company and the Bank in Michigan
City and the Executive shall not be required to locate his office elsewhere
without his prior written consent, nor shall he be required to be absent
therefrom on travel status or otherwise more than a total of twenty (20) working
days in any calendar year nor more than ten (10) consecutive days at any one
time, without his prior written consent.
Section 3. Compensation and Related Matters
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(a) For all services rendered by the Executive in any capacity during
the Period of Employment, including, without limitation, services as an
executive officer, director or member of any committee of the Company or the
Bank or of any other subsidiary, division or affiliate of the Company or the
Bank, the Executive shall be paid as compensation:
(1) A base salary, payable not less often than semi-monthly, equal to
ONE HUNDRED NINETY THOUSAND DOLLARS ($190,000.00) with such increases
in such salary, commencing no later than January 1, 1998, as shall be
awarded from time to time in accordance with the published compensation
survey figures for comparable sized institutions used in the salary
administration program applicable to executives of the Company and the
Bank, and in no event less than the median amount reported by the most
recent Cole Survey or similar study for the comparable position with
banks of comparable assets;
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(2) Executive performance awards, stock options or appreciation rights,
bonuses, or other incentive grants ("Incentive Compensation Awards") at
least in equal amount, and of substantially the same kind, as those
awarded to any other executive of the Company or the Bank during the
Period of Employment, under any executive compensation plan existing on
the date of this Agreement as contained in the attached Exhibit A,
Schedule of Benefits, or any such plan that may hereafter be adopted
for the benefit of executives of the Company or the Bank generally; and
(3) Any other personal benefits or perquisites including, but not
limited to, social or business club memberships, and the use of any
other Company or Bank facility ("Nonpecuniary Benefits") to the same
extent and in the same manner as provided to the Executive on the date
of this Agreement as contained in the attached Exhibit A, Schedule of
Benefits, and to the same extent and in the same manner as provided to
any other executive of the Company or the Bank, and as provided
hereafter for the benefit of executives of the Company or the Bank
generally.
(b) Any increase in salary pursuant to clause (1) of paragraph (a) of
this Section or any Incentive Compensation Awards or Nonpecuniary Benefits shall
in no way diminish any other obligation of the Company or the Bank under this
Agreement.
(c) During the Period of Employment the Executive shall be entitled to
participate in any employee welfare benefit program, including any group
hospitalization or medical plan, health care plan, dental care plan, life or
other insurance or death benefit plan, or other similar plan or program in which
and to the maximum extent that any other executive of the Company or the Bank
may from time to time be entitled to participate. The Executive shall also be
entitled to participate in a retirement plan, pension plan, deferred
compensation plan, thrift plan, employee stock ownership plan, stock bonus plan
or similar plan or program in which and to the maximum extent that any other
executive of the Company or the Bank may from time to time be entitled to
participate. The Company and the Bank shall not thereafter make any changes in
such plans or programs or in any Incentive Compensation Award program which
would adversely affect the Executive's rights or benefits thereunder, unless
such change occurs pursuant to a change applicable to all executives of the
Company and the Bank and does not result in a proportionately greater reduction
in the rights of or benefits to the Executive as compared with any other
executive of the Company or the Bank.
(d) During the Period of Employment, the Executive shall be entitled to
the normal benefits attendant to his position, including, without limitation, an
office, secretarial and clerical staff, as well as to reimbursement, upon proper
accounting, of reasonable expenses and disbursements incurred by him in the
course of his duties.
(e) The Executive shall be entitled to the number of vacation days in
each calendar year and to compensation in respect of earned but unused vacation
or personal days, determined in accordance with the Company's and the Bank's
vacation plan or plans. The Executive shall also be entitled to all paid
holidays given by the Company and the Bank to their executives.
Section 4. Termination by the Company or the Bank for Cause
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(a) The Executive's employment under this Agreement may be terminated
by the Company and the Bank without a breach by the Company or the Bank of their
obligations under this Agreement only for "Cause" or for death or disability as
described in Section 5. For purposes of this Agreement, the Company and the Bank
shall have "cause" to terminate the Executive's employment during the Period of
Employment upon the happening of any of the following:
(1) The willful and continued failure of the Executive to substantially
perform his duties hereunder (other than any such failure resulting
from the Executive's incapacity due to physical or mental illness),
after demand for substantial performance is delivered to the Executive
by the Company or the Bank specifically identifying the manner in which
the Company or the Bank believes the Executive has not substantially
performed his duties; or
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(2) Any act that constitutes on the part of the Executive common law
fraud, dishonesty, or a felony, and which resulted in, or was intended
to result in, a benefit to the Executive at the expense of the Company
or the Bank, or conviction of a felony or crime of moral terpitude.
(b) For purposes of this Section, no act, or failure to act, on the
Executive's part shall be considered "willful" unless done, or omitted to be
done, by him not in good faith and without reasonable belief that his action or
omission was in the best interest of the Company or the Bank.
(c) Termination for Cause shall be effective only upon the vote of not
less than a majority of the directors of the Company and the Bank then in
office, after reasonable notice to and an opportunity for the Executive,
together with his counsel, to be heard before a meeting of not less than a
majority of the Board of Directors of both the Company and Bank then in office,
and delivery to the Executive of a Notice of Termination stating that in the
good faith opinion of such directors the Executive was guilty of conduct
constituting Cause and specifying the particulars thereof in detail. The
effective date of the Executive's termination shall be referred to as the
"Termination Date." Should the respective Board of Directors deem it advisable,
the Executive may be relieved of all powers, duties and responsibilities pending
a determination of cause provided that all compensation and benefits due to
Executive shall continue pending such determination. In the event the Executive
is terminated for cause, then the Company or the Bank shall continue to pay the
Executive's base salary for a period of six (6) months thereafter together with
continuation of any hospitalization or medical plan, health care plan, dental
care plan, life or other insurance or death benefit plan unless such termination
for cause was based upon Section 4 (a) (2).
Section 5. Death or Disability
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If, during the Employment Period, the Executive shall die, the
obligations imposed by this Agreement shall cease and terminate. In the event
Executive shall become disabled and thereby prevented from performing his duties
and responsibilities on a full-time basis, then his compensation shall be
adjusted as follows, to-wit:
(a) If disability occurs, the Executive shall be entitled to receive
his full salary, together with all other distributions, bonuses and benefits as
provided in Section 3 above, for nine (9) months, less any disability insurance
payments that are made to him under any policy of insurance in existence and
paid for by the Company or Bank. After nine (9) months, the Executive's base
salary shall be discontinued, provided that nothing herein contained shall
interfere with his right to receive disability insurance payments under the
terms of any disability insurance then in existence and paid for by the Company
or Bank.
(b) In administering this Agreement during any period of disability,
the following shall be applicable:
(1) The term "disability" whenever used in this Agreement shall mean
substantial inability to perform the services required under this
Agreement. When disabled , the Executive shall be excused from
rendering services to or for the Company and Bank. On termination of
such disability, the Executive shall be obligated to render the
services required by this Agreement. If, after discontinuation of his
base salary by reason of disability, the Executive returns to the
employ of the Company or Bank in the same capacity as prior to the
disability, he shall commence again to receive his full compensation
and other benefits as provided in this Agreement.
(2) During the period that the Executive is disabled and before the
expiration of nine (9) consecutive months of such disability, the
Company and the Bank shall not have the right to terminate this
Agreement.
(3) If following a period of disability, the Executive shall be able to
provide the services required in this Agreement and does so provide
such services in accordance with the provisions of this Agreement for a
continuous period of six (6) months or more, any subsequent disability
resulting from or contributed to by the same cause or causes shall be
regarded as a new period of disability and the Executive's rights under
this Section (5) shall commence again as if the same were a new
disability.
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(4) If following a period of disability, the Executive provides the
services required under this Agreement for a continuous period of less
than six (6) months , then any subsequent disability occurring within
six (6) months of the return to service resulting from or contributed
to by the same cause or causes shall be deemed a continuation of the
previous disability and the entire period of disability shall be
treated as a single period.
(5) A medical certification shall be required to establish disability
and such certification shall be provided following an examination of
the Executive by a duly qualified and licensed doctor of medicine
appointed by the Company and Bank.
In the event a disability occurs for a continuous period of nine (9)
months or more, then the Board of Directors of the Company and the Bank, upon
the vote of not less than the majority of the Board of Directors of the Company
and not less than a majority of the Directors of the Bank, respectively, then in
office, may terminate the Executive by reason of disability. Termination by
reason of disability shall be effective ten (10) days following the delivery of
notice of termination to the Executive setting forth each Board's finding of
disability and the reasons therefore accompanied by a current medical
certification of the Executive's inability to substantially perform the services
required by this Agreement.
Section 6. Termination by the Executive for Good Reason
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(a) In the event that the Executive should reasonably determine in good
faith that his status, functions, duties or responsibilities with either the
Company or the Bank have diminished subsequent to the execution of this
Agreement, and shall resign for that reason from his employment with both the
Company and the Bank during the Employment Period, the Executive shall be
considered to have resigned for Good Reason and, subject to the notice
requirement of Section 6 (b) hereof, shall be entitled to receive all of the
payments and enjoy all of the benefits specified in Section 7 hereof. Good
Reason shall also include the breach by the Company or the Bank of any of the
material terms, provisions, duties and responsibilities set forth in this
Agreement.
(b) The Executive shall be required to give a thirty (30) day Notice to
the Company and the Bank of his intent to resign for Good Reason. This Notice
shall include a statement of all reasons, including any breach of the terms of
this Agreement, for such resignation. The Company and/or the Bank shall have
thirty (30) days in which to cure any breach and remedy any reason for such
resignation. Failure by the Executive to provide the Notice required by this
section shall result in forfeiture by the Executive of all rights, payments and
benefits granted under Section 7 hereof.
Section 7. Severance Benefits
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(a) In the event of the termination of the employment of the Executive
for a reason other than Cause or death or disability, subject to the notice
requirement of Section 6 (b) hereof where the Executive terminates his
employment for Good Reason, the severance benefits provided for by this
Agreement shall constitute the entire obligation of the Company and the Bank to
the Executive and shall constitute full settlement of any claim under law or in
equity that he might otherwise assert against the Company or the Bank or any of
their employees or Directors on account of such termination. Such amounts are
liquidated damages for the failure of the Company and the Bank to perform their
obligations under this Agreement and severance pay and are not a penalty.
(b) If the employment of the Executive is terminated by the Company
or the Bank for a reason other than Cause or death or disability or by the
Executive for Good Reason:
(1) The Company and the Bank shall pay the Executive in cash within ten
(10) business days following his Termination Date an amount equal to
the Executive's annual base salary at the highest rate during the
twelve (12) months preceding the Termination Date multiplied by (i)
three in the event of termination by the Company or the Bank of the
Executive for a reason other than Cause or death or disability, or (ii)
two in the event of termination by the Executive for Good Reason. The
Company and the Bank shall withhold from this and all other benefits
payable under this Agreement all Federal, State, City, County or other
taxes as shall be required pursuant to any law or governmental
regulation or ruling.
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(2) Until the expiration of the Period of Employment, the Company will
maintain, and will cause the Bank to maintain, in full force and effect
for the continued benefit of the Executive (and his dependents as of
the Termination Date), each employee welfare benefit plan, including
any group hospitalization plan, health care plan, dental care plan,
life or other insurance or death benefit plan, or other similar present
group employee benefit plan or program, in which the Executive was
entitled to participate immediately prior to the Termination Date,
unless an essentially equivalent and no less favorable benefit is
provided by the Company and the Bank. If the terms of any employee
welfare benefit plan of the Company or the Bank do not permit continued
participation by the Executive following the Termination Date, then the
Company and the Bank shall arrange to provide to the Executive a
benefit substantially similar to, and no less favorable than, the
benefit he was entitled to receive under such plan at the end of the
period of coverage. The Executive shall have the option to have
assigned to him at no cost and with no apportionment of prepaid
premiums any assignable insurance policy owned by the Company or the
Bank and relating specifically to the Executive;
(3) If the Termination Date is prior to the date of normal retirement
as that term is defined in any defined benefit pension plan of the
Company or the Bank that may then be in effect, the Company and the
Bank will pay the Executive an amount equal to the difference between
the monthly annuity thereafter paid under the pension plan and that
which would have been paid under the pension plan had the Executive
remained in the employ of the Company and the Bank until the end of the
Employment Period; and
(4) The Company and the Bank shall pay for the benefit of the Executive
reasonable expenses for a period not to exceed one (1) year associated
with outplacement in a comparable position through a professional
placement firm.
Although the parties to this Agreement do not believe payments made
pursuant to this Section 7 would constitute "parachute payments" under Section
280G of the Internal Revenue Code, no payment shall be made to the Executive
hereunder to the extent such payment would constitute a non-deductible "excess
parachute payment" under Section 280G of the Internal Revenue Code of 1954, as
amended, or similar provisions then in effect.
Section 8. Mitigation
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The Executive shall not be required to mitigate the amount of any
payment provided for in Section 7 by seeking other employment of otherwise, nor
shall the amount of any payment provided for in Section 7 be reduced by any
compensation earned by the Executive as a result of employment by another
employer after the Date of Termination, or otherwise.
Section 9. Legal Expenses
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In the event that the Executive institutes any legal action to enforce
his rights under, or to recover damages for breach of this Agreement, the
Executive, if he is the prevailing party, shall be entitled to recover from the
Company of the Bank actual expenses for attorney's fees and disbursements
incurred by him.
Section 10. Confidentiality
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(a) The Executive agrees not to disclose, either while in the Company's
or the Bank's employ or at any time thereafter, to any person not employed by
the Company or the Bank, or not engaged to render services to the Company or the
Bank, any confidential information obtained by him while in the employ of the
Company or the Bank, including, without limitation, any of the Company's or the
Bank's customers or trade secrets; provided, however, that this provision shall
not preclude the Executive from use or disclosure of information known generally
to the public or of information not considered confidential by persons engaged
in the business conducted by the Company or the Bank or from disclosure required
by law or Court order.
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(b) The Executive agrees that all records and copies of the records
pertaining to the financial affairs, operations, customers and business of the
Company and the Bank and their affiliates, subsidiaries and divisions, including
but not limited to, customer lists and trade secrets, that are made or received
by the Executive in the course of his employment by the Company or the Bank
shall be the property of the Company of the Bank, and agrees to keep such
documents subject to the Company's or the Bank's custody and control and to
surrender to the Company or the Bank such of those documents as are still in his
possession at the termination of his employment. The Executive agrees not to
disclose or give possession of such documents or records to anyone except
authorized representatives of the Company or the Bank. The Executive further
agrees to return to the Company or the Bank at the Company's or the Bank's main
office any and all such documents or records and other property of the Company
or the Bank promptly upon termination of his employment.
Section 11. Non-Competition Agreement
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For a period of one (1) year immediately following the termination,
with or without cause, or expiration of this agreement, the Executive shall not,
within a radius of thirty (30) miles from the then present principal place of
business of the Company and Bank, directly or indirectly, manage, operate,
control, be employed by, participate in, or be connected in any manner with the
management, operation, or control of any bank holding company, state or national
bank, savings and loan association, or financial institution engaging in a
business substantially similar to the type of business then conducted by the
Company and Bank at the time of termination or expiration of this agreement,
provided that nothing contained in this clause shall be construed to prevent or
prohibit Executive from acquisition or sale of shares, bonds, notes or other
securities in other financial institutions so long as such ownership, whether
direct or beneficially held, does not violate the provisions contained in this
section. In the event of the Executive's actual or threatened breach of the
provisions of this section, the Company and Bank shall be entitled to an
injunction restraining the Executive therefrom. Nothing contained herein shall
be construed as prohibiting the Company and Bank from pursuing any other
available remedies for such breach or threatened breach, including the recovery
of damages from the Executive, together with attorneys' fees and costs incurred
in the enforcement of this section.
Section 12. Notices
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All notices, requests, demands and other communications provided for by
this Agreement shall be in writing and shall be sufficiently given if and when
mailed in the continental United States by registered or certified mail or
personally delivered to the party entitled thereto at the address stated below
or to such changed address as the addressee may have given by a similar notice:
To the Company and the Bank:
Horizon Bancorp/Horizon Bank
515 Franklin Square
Michigan City, IN 46360
Attention: Corporate Secretary
To the Executive: Mr. Thomas P. McCormick
3521 Pottawattomie
Michigan City, IN 46360
Any such notice delivered in person shall be deemed to have been
received on the date of delivery.
Section 13. General Provisions
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(a) No right or interest to or in any payments shall be assignable by
the Executive; provided, however, that this provision shall not preclude him
from designating one or more beneficiaries to receive any amount that may be
payable after his death and shall not preclude the legal representative of his
estate from assigning any right hereunder to the person or persons entitled
thereto under his will or, in the case of intestacy, to the person or persons
entitled thereto under the laws of intestacy applicable to his estate. The term
"beneficiaries" as used in this Agreement shall mean a beneficiary or
beneficiaries so designated to receive any such amount or, if no beneficiary has
been so designated, the legal representative of the Executive's estate.
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(b) No right, benefit or interest hereunder shall be subject to
anticipation, alienation, sale, assignment, encumbrance, charge, pledge or
hypothecation, in respect of any claim, debt or obligation, or to execution,
attachment, levy or similar process, or assignment by operation of law. Any
attempt, voluntary or involuntary, to effect any action specified in the
immediately preceding sentence shall, to the full extent permitted by law, be
null, void and of no effect.
(c) In the event of the Executive's death, reference in this Agreement
to the Executive shall be deemed, where appropriate, to refer to his legal
representative or to his beneficiary or beneficiaries.
(d) The titles to sections in this Agreement are intended solely for
convenience and no provision of this Agreement is to be construed by reference
to the title of any section.
(e) This Agreement shall be binding upon and shall inure to the benefit
of the Executive, his heirs and legal representative and the Company, the Bank
and their successors as provided in Section 15 hereof.
(f) No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof, have been made by either
party which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Indiana.
Section 14. Amendment of Modification; Waiver
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No provision of this Agreement may be amended, modified or waived
unless such amendment, modification or waiver shall be authorized by the Boards
of Directors of the Company and the Bank or any authorized committee of the
Boards of Directors and shall be agreed to in writing, signed by the Executive
and by an officer of the Company and the Bank thereunto duly authorized. Except
as otherwise specifically provided in this Agreement, no waiver by either party
hereto of any breach by the other party hereto of any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of a
similar or dissimilar provision or condition at the same or at any prior or
subsequent time.
Section 15. Severability
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In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, or in the event that
any party hereto is determined not to be bound hereby, the remaining provisions
and portions of this Agreement and the obligations of the other parties to this
Agreement shall be unaffected thereby and shall remain in full force and effect
to the fullest extent permitted by law.
Section 16. Successors to the Company or the Bank
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Except as otherwise provided herein, this Agreement shall be binding
upon and inure to the benefit of the Company, the Bank and any successor of the
Company or the Bank, including, without limitation, any corporation or
corporations acquiring directly or indirectly all or substantially all of the
assets of the Company or the Bank whether by merger, consolidation, sale or
otherwise (and such successor shall thereafter be deemed "the Company" or "the
Bank" for the purposes of this agreement), but shall not otherwise be assignable
by the Company or the Bank. The Company and the Bank shall require any
successor, by agreement in form and substance satisfactory to the Executive, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company and the Bank would be required to perform it if
no such succession had taken place. Failure of the Company and the Bank to
obtain such agreement prior to the effectiveness of any such succession shall be
a breach of this Agreement and shall entitle the Executive to terminate his
employment for Good Reason, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination.
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Section 17. Counterparts
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This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together will
constitute the same instrument.
IN WITNESS WHEREOF, the Company, the Bank and the Executive have
executed this Agreement as of the date and year first above written.
HORIZON BANCORP
By:
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Larry E. Reed
Chairman
ATTEST:
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Diana E. Taylor, Secretary
HORIZON BANK
By:
-------------------------
Larry E. Reed
Chairman
ATTEST:
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Diana E. Taylor, Secretary
"EXECUTIVE"
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Thomas P. McCormick
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EXHIBIT A
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SCHEDULE OF BENEFITS
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Thomas P. McCormick
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1. Country Club Membership, personal and business use:
a. Pottawattomie Country Club
b. Long Beach Country Club
c. Others as desired and prudent
2. Luncheon Club Memberships, personal and business use:
a. As desired and prudent
3. Service Club Memberships
a. As desired and prudent
4. Inclusion in annual incentive compensation programs as approved by the Board
for management.
5. Inclusion in general benefit programs for medical, disability, life
insurance, etc., as approved by the Board and management for employees.
6. Inclusion in the ESOP, 401K, SERP, Stock Option Plan or any similar plan(s)
approved and as administered by the Board of Directors.
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