First Financial Corp 8-K, filed Aug 7, 2024
First Financial Corp (THFF)
About this 8-K
First Financial Corp filed this 8-K on August 7, 2024, reporting on events of July 31, 2024.
Items reported
- Item 5.02: Director or officer change, or executive pay
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
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(Exact name of registrant as specified in its charter)
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(Registrant's telephone number, including area code) | ||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On July 31, 2024, First Financial Corporation (the “Corporation”) and its wholly-owned subsidiary, First Financial Bank (the “Bank”) (collectively, the “Employers”), entered into a new employment agreement (the “Agreement”) with each of, Rodger A. McHargue, Senior Vice President and Chief Financial Officer of the Corporation and the Bank, Stephen P. Panagouleas, Senior Vice President and Chief Credit Officer of the Corporation and the Bank, and Mark A. Franklin, Senior Vice President and Chief Lending Officer of the Corporation and the Bank. The Agreements are effective as of July 1, 2024 and have substantially similar terms.
Under the terms of each Agreement, the Corporation or the Bank, as applicable, have agreed to employ the executive for an initial term of twenty-four (24) months in his current position. Upon timely notice to the executive from the compensation committee of the board of directors of the Corporation, each executive’s term of employment under the agreement may be extended for additional one-year periods.
Effective January 1, 2024, for Rodger A. McHargue and Mark A. Franklin, and effective July 1, 2024 for Stephen P. Panagouleas, each executive will receive an annual base salary set forth below, which may be increased, or under certain conditions decreased, from time to time as determined by the Corporation or the Bank, as applicable, and will participate in bonus opportunities provided to executive officers and other senior management of the Company as well as fringe benefit plans and benefits available to senior management or to employees of the Company generally.
NameAnnual
Base Salary ($)
Rodger A. McHargue360,000
Stephen P. Panagouleas295,000
Mark A. Franklin296,928
Each Agreement contains terms governing payments the executive would be entitled to receive in the event his employment is terminated, as follows:
| ● | If the executive’s employment terminates due to death, “disability” or for “just cause” (as such terms are defined in the Agreement), or if the executive voluntarily terminates his employment, then the executive will be entitled to receive the base salary, bonuses, vested rights, and other benefits due to him through the date of termination. Any benefits payable under insurance, health, retirement, bonus or other plans as a result of his participation in such plans through such date will be paid when and as due under those plans. |
| ● | If the executive’s employment is terminated without just cause or if he terminates his employment for good reason, and such termination does not occur within 12 months after a change in control (as such terms are defined in the Agreement), then the executive will be entitled to receive an amount equal to the sum of his base salary and bonuses through the end of the then-current term of the Agreement. The executive would also receive cash reimbursements in an amount equal to the cost of obtaining all employee and other benefits that he would have otherwise been eligible to participate in or receive through the term of the Agreement. |
| ● | If, as a result of a “change in control” (as such term is defined in the Agreement), the executive is entitled to receive an amount that is the product of 2.00 times the sum of (i) his base salary in effect as of the date of the change in control; (ii) an amount equal to the bonuses received by or payable to him in or for the calendar year prior to the year in which the change in control occurs: and (iii) cash reimbursements in an amount equal to his cost of obtaining for a period of two years, beginning on the date of termination, all benefits which he was eligible to participate in or receive. If, as a result of change in control, the executive becomes entitled to any payments that are determined to be payments subject to excise taxes under Internal Revenue Code Sections 280G and 4999, then his severance benefit will be equal to the greater of (i) his benefit under the Agreement reduced to the maximum amount payable such that when it is aggregated with payments and benefits under all other plans and arrangements it will not result in an “excess parachute payment” under Internal Revenue Code Section 280G, or (ii) his benefit under the Agreement without reduction, if such benefit results in a greater net |
| after-tax amount after taking into account any excise taxes imposed under Internal Revenue Code Section 280G due to the benefit payment. |
The Agreement also includes confidentiality and non-solicitation provisions, as well as non-compete provisions that prohibit the executive, during his employment and for a period of one year following his or her termination, from directly or indirectly competing against the Corporation or the Bank, as applicable, within a 75- mile radius of Terre Haute, Indiana, for Messrs. McHargue and Panagouleas, and Bloomington, Indiana for Mr. Franklin, provided such radius shall be 50 miles in the event of employee’s separation from service by the Company without just cause or by the employee for good reason.
The foregoing description is a summary only and is qualified in its entirety by the full text of the Agreement, which are filed as Exhibits 10.1 through 10.3 to this Form 8-K and is incorporated herein by reference..
.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits Exhibit No. | Description |
10.1 | |
10.2 | |
10.3 | |
104 | Cover page interactive data file (embedded with the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| First Financial Corporation |
| |
Dated August 7, 2024 | |
| /s/ Rodger A. McHargue |
| Rodger A. McHargue |
| Secretary/Treasurer and Chief Financial Officer |
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “Agreement”), entered into on the ___ day of July, 2024 and effective as of the 1st day of July, 2024 (the “Effective Date”), by and between First Financial Bank, N.A. (the “Bank”), a national banking association organized under the laws of the United States of America, First Financial Corporation (the “Corporation”), a corporation formed under the laws of the State of Indiana and a financial holding company (jointly referred to herein as the “Company”) and Rodger A. McHargue (the “Employee”), a resident of the State of Indiana.
WHEREAS, the Employee has heretofore been employed by the Bank as its Senior Vice President and Chief Financial Officer and by the Corporation as its Senior Vice President and Chief Financial Officer and has performed valuable services for both the Bank and the Corporation; and
WHEREAS, the Company desires to enter into this Agreement with the Employee in order to assure continuity of management and to reinforce and encourage the continued attention and dedication of the Employee to his assigned duties; and
WHEREAS, the parties desire, by this writing, to set forth the continuing employment relationship between the Company and the Employee.
NOW, THEREFORE, in consideration of the premises contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Employee and the Company agree as follows:
In addition to the aforesaid paid vacations, the Employee shall be entitled, without loss of pay, to absent himself voluntarily from the performance of his employment with the Company for such additional periods of time and for such valid and legitimate reasons as the Company may determine including time for professional development and continuing education seminars. Further, the Company may grant to the Employee a leave or leaves of absence, with or without pay, at such time or times and upon such terms and conditions as the board of directors of the Bank or the Corporation in its discretion may determine.
For the purposes of this Agreement, “Separation of Service” shall mean the Employee dies, retires or otherwise experiences a “Termination of Employment” with the Company (as defined below). Provided, however, a Separation from Service does not occur if the Employee is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the Employee retains a right to reemployment with the Company under an applicable statute or by contract. For purposes of this Agreement, a leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Employee will return to perform services for the Bank or Corporation. If the period of leave exceeds six (6) months and the Employee does not retain the right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six (6) month period. Notwithstanding the foregoing, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six (6) months, where such impairment causes the Employee to be unable to perform the duties of his position of employment or any substantially similar position of employment, a twenty-nine (29) month period of absence may be substituted for such six (6) month period. The Employee shall incur a “Termination of Employment” for purposes of this Agreement when a termination of employment has occurred under Treasury Regulation 1.409A-1(h)(1)(ii).
For the purposes of this Agreement, the term “Business of the Company” shall mean the financial services provided by the Company, including commercial, mortgage and
consumer lending, lease financing, trust account, depositor, investment and financial planning services.
For purposes of this Agreement, the term “solicit” means any direct or indirect communication of any kind whatsoever, regardless of by whom initiated, which encourages or requests any person or entity, in any manner, to terminate, reduce, limit, or otherwise adversely change their business relationship with the Company.
The restrictions contained in this subsection 6(c) shall be limited to the following geographic areas (hereinafter referred to as “Restricted Geographical Area”):
Nothing contained in this subsection shall prevent or limit the Employee’s right to invest in the capital stock or other securities of any business dissimilar from that of the Bank or the Corporation, or, solely as a passive or minority investor, in any business.
If the Employee does not comply with the provisions of this Section, the one-year period of non-competition provided herein shall be tolled and deemed not to run during any period(s) of noncompliance, the intention of the parties being to provide one full year of non-competition by the Employee after the termination or expiration of this Agreement.
Nothing in this Section 6, or any other provision of the Agreement, is intended or shall be construed to prohibit, limit or restrict Employee from reporting conduct to, providing information to, or participating in any investigation or proceeding brought or conducted by, any federal, state or local governmental agency, or self-regulatory organization without notice to or consent from the Company. In addition, the Defend Trade Secrets Act of 2016 immunizes Employee against criminal and civil liability under Federal or state trade secret laws under certain circumstances if Employee discloses a trade secret for the purpose of reporting a suspected violation of law. Such immunity is available if Employee discloses the trade secret in confidence, directly or indirectly to a federal, state or local government official or to Employee’s lawyer, and solely for the purpose of reporting or investigating a suspected violation of law, or discloses the trade secret in a document filed in a legal proceeding, so long as the document is filed under seal.
Notwithstanding the foregoing, in the event of Separation from Service for Just Cause there shall be delivered to the Employee a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the disinterested directors of the Bank and the Corporation at meetings of the boards called and held for that purpose (after reasonable notice to the Employee and an opportunity for the Employee, together with the Employee’s counsel, to be heard before the boards), such meetings and the opportunity to be heard to be held prior to, or as soon as reasonably practicable following Separation from Service, but in no event later than sixty (60) days following such Separation from Service, finding that in the good faith opinion of the boards the Employee was guilty of conduct constituting Just Cause and specifying the particulars thereof in detail. If, following such meetings, the Employee is reinstated, he shall be entitled to receive the base salary, bonuses, vested rights, Employee Benefits and Expense Reimbursement Benefits for the period following Separation from Service and continuing through reinstatement as though he never experienced a Separation from Service.
Notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under subsection 8(d) shall be reduced to the extent that on the date of the Employee’s Separation from Service, the present value of the benefits payable under subsection 8(d) exceeds any limitation on severance benefits that is imposed by the Office of the Comptroller of the Currency (the “OCC”) on such benefits.
All amounts payable to the Employee under subsections 8(d)(i) through 8(d)(iv) shall be paid in one lump sum within ten (10) days of such Separation from Service.
For purposes of this Agreement, “Good Reason” means the occurrence of any of the following events, which has not been consented to in advance by the Employee in writing (unless such voluntary Separation from Service occurs within the time period set forth in subsection 10(b) hereof, in which event the benefits and compensation provided for in Section 10 shall apply):
Notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under this subsection shall be reduced to the extent that on the date of the Employee’s Separation from Service, the present value of the benefits payable under subsections 8(d)(ii), 8(d)(iii), and 8(d)(iv) exceed any limitation on severance benefits that is imposed by the OCC on such benefits.
The amount payable to the Employee under subsections 10(a)(i)(1) or (2) above shall be paid in one lump sum within ten (10) days of such Separation from Service.
For purposes of subsections 10(a)(ii)(1) and (2), persons will not be considered to be acting as a group solely because they purchase or own stock of the Bank or the Corporation at the same time, or as a result of the same public offering. However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock or similar business transaction with the Bank or the Corporation. If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock or similar transaction, such shareholder is considered to be acting as a group with other shareholders only with respect to the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.
However, there is no Change in Control under this subsection when there is a transfer to an entity that is controlled by the shareholders of the Bank or Corporation immediately after the transfer. A transfer of assets by the Bank or Corporation is not treated as a change in the ownership of such assets if the assets are transferred to: (A) a shareholder of the Bank or Corporation (immediately before the asset transfer) in exchange for or with respect to its stock, (B) an entity, fifty (50) percent or more of the total value or voting power of which is owned, directly or indirectly, by the Bank or Corporation; (C) a person, or group of persons, that owns, directly or indirectly, fifty (50) percent or more of the total value or voting power of all the outstanding stock of the Bank or Corporation, or (D) an entity, at least fifty (50) percent of the total value or voting power of which is owned, directly or indirectly, by a person described in (C). For purposes of this subsection, except as otherwise provided, a person’s status is determined immediately after the transfer of the assets. For example, a transfer to a company in which the Bank or Corporation has no ownership interest before the transaction, but which is a majority-owned subsidiary of the Bank or Corporation after the transaction, is not treated as a change in the ownership of the assets of the transferor Bank or Corporation.
For purposes of this subsection 10(a)(ii)(3), persons will not be considered to be acting as a group solely because they purchase assets of the Bank or Corporation at the same time. However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of assets, or similar business transaction with the Bank or Corporation. If a person, including an entity shareholder, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of assets, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only to the extent of the ownership
in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.
Notwithstanding the foregoing, the acquisition of Bank or Corporation stock by any retirement plan sponsored by the Bank or an affiliate of the Bank will not constitute a Change in Control. Additionally, notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under subsection 10(a)(i) shall be reduced to the extent that on the date of the Employee’s Separation from Service, the amount payable under subsection 10(a)(i) exceeds any limitation on severance benefits that is imposed by the OCC.
The Employee shall thereupon be entitled to receive the Accrued Benefits and the lump sum payment described in subsection 10(a)(i) of this Agreement within ten (10) days of such Separation from Service.
For purposes of this subsection 10(b), “Good Reason” means, the occurrence of any of the following events, which has not been consented to in advance by the Employee in writing:
Notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under subsection 10(b) shall be reduced to the extent that on the date of the Employee’s Separation from Service, the amount payable under subsection 10(b) exceeds any limitation on severance benefits that is imposed by the OCC.
Should the Employee fail to obtain a final judgment in favor of the Employee and a final judgment or arbitration decision is entered in favor of the Company and if decided by arbitration, the arbitrator, pursuant to subsection 10(d)(ii), determines the Employee to be responsible for the Company’s expenses, then the Company shall be reimbursed for all costs and expenses, including reasonable attorneys’ fees arising from such dispute, proceedings or actions. Such reimbursement shall be paid within ten (10) days of the Company furnishing to the Employee written evidence, which may be in the form, among other things, of a canceled check or receipt, of any costs or expenses incurred by the Company.
or to such other address as either party hereto may have furnished to the other party in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
IN WITNESS WHEREOF, the parties have executed this Agreement on this ____ day of July, 2024.
ATTEST | FIRST FINANCIAL BANK, N.A. |
| |
ATTEST | FIRST FINANCIAL CORPORATION |
| EMPLOYEE |
THIS EMPLOYMENT AGREEMENT (the “Agreement”), entered into on the ___ day of July, 2024 and effective as of the 1st day of July, 2024 (the “Effective Date”), by and between First Financial Bank, N.A. (the “Bank”), a national banking association organized under the laws of the United States of America, First Financial Corporation (the “Corporation”), a corporation formed under the laws of the State of Indiana and a financial holding company (jointly referred to herein as the “Company”) and Stephen P. Panagouleas (the “Employee”), a resident of the State of Indiana.
WHEREAS, the Employee has heretofore been employed by the Bank as its Vice President and Central Credit Administration Manager and has performed valuable services for the Bank ;
WHEREAS, effective July 1, 2024, the Employee will be employed by the Bank as its Senior Vice President and Chief Credit Officer and by the Corporation as its Senior Vice President and Chief Credit Officer; and
WHEREAS, the Company desires to enter into this Agreement with the Employee in order to assure continuity of management and to reinforce and encourage the continued attention and dedication of the Employee to his assigned duties; and
WHEREAS, the parties desire, by this writing, to set forth the continuing employment relationship between the Company and the Employee.
NOW, THEREFORE, in consideration of the premises contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Employee and the Company agree as follows:
In addition to the aforesaid paid vacations, the Employee shall be entitled, without loss of pay, to absent himself voluntarily from the performance of his employment with the Company for such additional periods of time and for such valid and legitimate reasons as the Company may determine including time for professional development and continuing education seminars. Further, the Company may grant to the Employee a leave or leaves of absence, with or without pay, at such time or times and upon such terms and conditions as the board of directors of the Bank or the Corporation in its discretion may determine.
For the purposes of this Agreement, “Separation of Service” shall mean the Employee dies, retires or otherwise experiences a “Termination of Employment” with the Company (as defined below). Provided, however, a Separation from Service does not occur if the Employee is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the Employee retains a right to reemployment with the Company under an applicable statute or by contract. For purposes of this Agreement, a leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Employee will return to perform services for the Bank or Corporation. If the period of leave exceeds six (6) months and the Employee does not retain the right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six (6) month period. Notwithstanding the foregoing, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six (6) months, where such impairment causes the Employee to be unable to perform the duties of his position of employment or any substantially similar position of employment, a twenty-nine
(29) month period of absence may be substituted for such six (6) month period. The Employee shall incur a “Termination of Employment” for purposes of this Agreement when a termination of employment has occurred under Treasury Regulation 1.409A-1(h)(1)(ii).
For the purposes of this Agreement, the term “Business of the Company” shall mean the financial services provided by the Company, including commercial, mortgage and consumer lending, lease financing, trust account, depositor, investment and financial planning services.
For purposes of this Agreement, the term “solicit” means any direct or indirect communication of any kind whatsoever, regardless of by whom initiated, which encourages or requests any person or entity, in any manner, to terminate, reduce, limit, or otherwise adversely change their business relationship with the Company.
The restrictions contained in this subsection 6(c) shall be limited to the following geographic areas (hereinafter referred to as “Restricted Geographical Area”):
Nothing contained in this subsection shall prevent or limit the Employee’s right to invest in the capital stock or other securities of any business dissimilar from that of the Bank or the Corporation, or, solely as a passive or minority investor, in any business.
If the Employee does not comply with the provisions of this Section, the one-year period of non-competition provided herein shall be tolled and deemed not to run during any period(s) of noncompliance, the intention of the parties being to provide one full year of non-competition by the Employee after the termination or expiration of this Agreement.
Nothing in this Section 6, or any other provision of the Agreement, is intended or shall be construed to prohibit, limit or restrict Employee from reporting conduct to, providing information to, or participating in any investigation or proceeding brought or conducted by, any federal, state or local governmental agency, or self-regulatory organization without notice to or consent from the Company. In addition, the Defend Trade Secrets Act of 2016 immunizes Employee against criminal and civil liability under Federal or state trade secret laws under certain circumstances if Employee discloses a trade secret for the purpose of reporting a suspected violation of law. Such immunity is available if Employee discloses the trade secret in confidence, directly or indirectly to a federal, state or local government official or to Employee’s lawyer, and solely for the purpose of reporting or investigating a suspected violation of law, or discloses the trade secret in a document filed in a legal proceeding, so long as the document is filed under seal.
Notwithstanding the foregoing, in the event of Separation from Service for Just Cause there shall be delivered to the Employee a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the disinterested directors of the Bank and the Corporation at meetings of the boards called and held for that purpose (after reasonable notice to the Employee and an opportunity for the Employee, together with the Employee’s counsel, to be heard before the boards), such meetings and the opportunity to be heard to be held prior to, or as soon as reasonably practicable following Separation from Service, but in no event later than sixty (60) days following such Separation from Service, finding that in the good faith opinion of the boards the Employee was guilty of conduct constituting Just Cause and specifying the particulars thereof in detail. If, following such meetings, the Employee is reinstated, he shall be entitled to receive the base salary, bonuses, vested rights, Employee Benefits, Expense Reimbursement Benefits and Motor Vehicle Benefits for the period following Separation from Service and continuing through reinstatement as though he never experienced a Separation from Service.
Notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under subsection 8(d) shall be reduced to the extent that on the date of the Employee’s Separation from Service, the present value of the benefits payable under subsection 8(d) exceeds any limitation on severance benefits that is imposed by the Office of the Comptroller of the Currency (the “OCC”) on such benefits.
All amounts payable to the Employee under subsections 8(d)(i) through 8(d)(iv) shall be paid in one lump sum within ten (10) days of such Separation from Service.
For purposes of this Agreement, “Good Reason” means the occurrence of any of the following events, which has not been consented to in advance by the Employee in writing (unless such voluntary Separation from Service occurs within the time period set forth in
subsection 10(b) hereof, in which event the benefits and compensation provided for in Section 10 shall apply):
Notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under this subsection shall be reduced to the extent that on the date of the Employee’s Separation from Service, the present value of the benefits payable under subsections 8(d)(ii), 8(d)(iii), and 8(d)(iv) exceed any limitation on severance benefits that is imposed by the OCC on such benefits.
The amount payable to the Employee under subsections 10(a)(i)(1) or (2) above shall be paid in one lump sum within ten (10) days of such Separation from Service.
For purposes of subsections 10(a)(ii)(1) and (2), persons will not be considered to be acting as a group solely because they purchase or own stock of the Bank or the Corporation at the same time, or as a result of the same public offering. However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock or similar business transaction with the Bank or the Corporation. If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock or similar transaction, such shareholder is considered to be acting as a group with other shareholders only with respect to the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.
However, there is no Change in Control under this subsection when there is a transfer to an entity that is controlled by the shareholders of the Bank or Corporation immediately after the transfer. A transfer of assets by the Bank or Corporation is not treated as a change in the ownership of such assets if the assets are transferred to: (A) a shareholder of the Bank or Corporation (immediately before the asset transfer) in exchange for or with respect to its stock, (B) an entity, fifty (50) percent or more of the total value or voting power of which is owned, directly or indirectly, by the Bank or Corporation; (C) a person, or group of persons, that owns, directly or indirectly, fifty (50) percent or more of the total value or voting power of all the outstanding stock of the Bank or Corporation, or (D) an entity, at least fifty (50) percent of the total value or voting power of which is owned, directly or indirectly, by a person described in (C). For purposes of this subsection, except as otherwise provided, a person’s status is determined immediately after the transfer of the assets. For example, a transfer to a company in which the Bank or Corporation has no ownership interest before the transaction, but which is a majority-owned subsidiary of the Bank or Corporation after the transaction, is not treated as a change in the ownership of the assets of the transferor Bank or Corporation.
For purposes of this subsection 10(a)(ii)(3), persons will not be considered to be acting as a group solely because they purchase assets of the Bank or Corporation at the same time. However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of assets, or similar business transaction with the Bank or Corporation. If a person, including an entity shareholder, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of assets, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only to the extent of the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.
Notwithstanding the foregoing, the acquisition of Bank or Corporation stock by any retirement plan sponsored by the Bank or an affiliate of the Bank will not constitute a Change in Control. Additionally, notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under subsection 10(a)(i) shall be reduced to the extent that on the date of the Employee’s Separation from Service, the amount payable under subsection 10(a)(i) exceeds any limitation on severance benefits that is imposed by the OCC.
The Employee shall thereupon be entitled to receive the Accrued Benefits and the lump sum payment described in subsection 10(a)(i) of this Agreement within ten (10) days of such Separation from Service.
For purposes of this subsection 10(b), “Good Reason” means, the occurrence of any of the following events, which has not been consented to in advance by the Employee in writing:
Notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under subsection 10(b) shall be reduced to the extent that on the date of the Employee’s Separation from Service, the amount payable under subsection 10(b) exceeds any limitation on severance benefits that is imposed by the OCC.
Should the Employee fail to obtain a final judgment in favor of the Employee and a final judgment or arbitration decision is entered in favor of the Company and if decided by arbitration, the arbitrator, pursuant to subsection 10(d)(ii), determines the Employee to be responsible for the Company’s expenses, then the Company shall be reimbursed for all costs and expenses, including reasonable attorneys’ fees arising from such dispute, proceedings or actions. Such reimbursement shall be paid within ten (10) days of the Company furnishing to the Employee written evidence, which may be in the form, among other things, of a canceled check or receipt, of any costs or expenses incurred by the Company.
or to such other address as either party hereto may have furnished to the other party in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
IN WITNESS WHEREOF, the parties have executed this Agreement on this ____ day of July, 2024.
ATTEST | FIRST FINANCIAL BANK, N.A. |
| |
ATTEST | FIRST FINANCIAL CORPORATION |
| EMPLOYEE |
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “Agreement”), entered into on the ___ day of July, 2024 and effective as of the 1st day of July, 2024 (the “Effective Date”), by and between First Financial Bank, N.A. (the “Bank”), a national banking association organized under the laws of the United States of America, First Financial Corporation (the “Corporation”), a corporation formed under the laws of the State of Indiana and a financial holding company (jointly referred to herein as the “Company”) and Mark A. Franklin (the “Employee”), a resident of the State of Indiana.
WHEREAS, the Employee has heretofore been employed by the Bank as its Senior Vice President and Chief Lending Officer and by the Corporation as its Senior Vice President and Chief Lending Officer and has performed valuable services for both the Bank and the Corporation; and
WHEREAS, the Company desires to enter into this Agreement with the Employee in order to assure continuity of management and to reinforce and encourage the continued attention and dedication of the Employee to his assigned duties; and
WHEREAS, the parties desire, by this writing, to set forth the continuing employment relationship between the Company and the Employee.
NOW, THEREFORE, in consideration of the premises contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Employee and the Company agree as follows:
In addition to the aforesaid paid vacations, the Employee shall be entitled, without loss of pay, to absent himself voluntarily from the performance of his employment with the Company for such additional periods of time and for such valid and legitimate reasons as the Company may determine including time for professional development and continuing education seminars. Further, the Company may grant to the Employee a leave or leaves of absence, with or without pay, at such time or times and upon such terms and conditions as the board of directors of the Bank or the Corporation in its discretion may determine.
For the purposes of this Agreement, “Separation of Service” shall mean the Employee dies, retires or otherwise experiences a “Termination of Employment” with the Company (as defined below). Provided, however, a Separation from Service does not occur if the Employee is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the Employee retains a right to reemployment with the Company under an applicable statute or by contract. For purposes of this Agreement, a leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Employee will return to perform services for the Bank or Corporation. If the period of leave exceeds six (6) months and the Employee does not retain the right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six (6) month period. Notwithstanding the foregoing, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than
six (6) months, where such impairment causes the Employee to be unable to perform the duties of his position of employment or any substantially similar position of employment, a twenty-nine (29) month period of absence may be substituted for such six (6) month period. The Employee shall incur a “Termination of Employment” for purposes of this Agreement when a termination of employment has occurred under Treasury Regulation 1.409A-1(h)(1)(ii).
For the purposes of this Agreement, the term “Business of the Company” shall mean the financial services provided by the Company, including commercial, mortgage and consumer lending, lease financing, trust account, depositor, investment and financial planning services.
For purposes of this Agreement, the term “solicit” means any direct or indirect communication of any kind whatsoever, regardless of by whom initiated, which encourages or requests any person or entity, in any manner, to terminate, reduce, limit, or otherwise adversely change their business relationship with the Company.
The restrictions contained in this subsection 6(c) shall be limited to the following geographic areas (hereinafter referred to as “Restricted Geographical Area”):
Nothing contained in this subsection shall prevent or limit the Employee’s right to invest in the capital stock or other securities of any business dissimilar from that of the Bank or the Corporation, or, solely as a passive or minority investor, in any business.
If the Employee does not comply with the provisions of this Section, the one-year period of non-competition provided herein shall be tolled and deemed not to run during any period(s) of noncompliance, the intention of the parties being to provide one full year of non-competition by the Employee after the termination or expiration of this Agreement.
Nothing in this Section 6, or any other provision of the Agreement, is intended or shall be construed to prohibit, limit or restrict Employee from reporting conduct to, providing information to, or participating in any investigation or proceeding brought or conducted by, any federal, state or local governmental agency, or self-regulatory organization without notice to or consent from the Company. In addition, the Defend Trade Secrets Act of 2016 immunizes Employee against criminal and civil liability under Federal or state trade secret laws under certain circumstances if Employee discloses a trade secret for the purpose of reporting a suspected violation of law. Such immunity is available if Employee discloses the trade secret in confidence, directly or indirectly to a federal, state or local government official or to Employee’s lawyer, and solely for the purpose of reporting or investigating a suspected violation of law, or discloses the trade secret in a document filed in a legal proceeding, so long as the document is filed under seal.
Notwithstanding the foregoing, in the event of Separation from Service for Just Cause there shall be delivered to the Employee a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the disinterested directors of the Bank and the Corporation at meetings of the boards called and held for that purpose (after reasonable notice to the Employee and an opportunity for the Employee, together with the Employee’s counsel, to be heard before the boards), such meetings and the opportunity to be heard to be held prior to, or as soon as reasonably practicable following Separation from Service, but in no event later than sixty (60) days following such Separation from Service, finding that in the good faith opinion of the boards the Employee was guilty of conduct constituting Just Cause and specifying the particulars thereof in detail. If, following such meetings, the Employee is reinstated, he shall be entitled to receive the base salary, bonuses, vested rights, Employee Benefits, Expense Reimbursement Benefits and Motor Vehicle Benefits for the period following Separation from Service and continuing through reinstatement as though he never experienced a Separation from Service.
Notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under subsection 8(d) shall be reduced to the extent that on the date of the Employee’s Separation from Service, the present value of the benefits payable under subsection 8(d) exceeds any limitation on severance benefits that is imposed by the Office of the Comptroller of the Currency (the “OCC”) on such benefits.
All amounts payable to the Employee under subsections 8(d)(i) through 8(d)(iv) shall be paid in one lump sum within ten (10) days of such Separation from Service.
For purposes of this Agreement, “Good Reason” means the occurrence of any of the following events, which has not been consented to in advance by the Employee in writing (unless such voluntary Separation from Service occurs within the time period set forth in subsection 10(b) hereof, in which event the benefits and compensation provided for in Section 10 shall apply):
Notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under this subsection shall be reduced to the extent that on the date of the Employee’s Separation from Service, the present value of the benefits payable under subsections 8(d)(ii), 8(d)(iii), and 8(d)(iv) exceed any limitation on severance benefits that is imposed by the OCC on such benefits.
The amount payable to the Employee under subsections 10(a)(i)(1) or (2) above shall be paid in one lump sum within ten (10) days of such Separation from Service.
For purposes of subsections 10(a)(ii)(1) and (2), persons will not be considered to be acting as a group solely because they purchase or own stock of the Bank or the Corporation at the same time, or as a result of the same public offering. However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock or similar business transaction with the Bank or the Corporation. If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock or similar transaction, such shareholder is considered to be acting as a group with other shareholders only with respect to the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.
However, there is no Change in Control under this subsection when there is a transfer to an entity that is controlled by the shareholders of the Bank or Corporation immediately after the transfer. A transfer of assets by the Bank or Corporation is not treated as a change in the ownership of such assets if the assets are transferred to: (A) a shareholder of the Bank or Corporation (immediately before the asset transfer) in exchange for or with respect to its stock, (B) an entity, fifty (50) percent or more of the total value or voting power of which is owned, directly or indirectly, by the Bank or Corporation; (C) a person, or group of persons, that owns, directly or indirectly, fifty (50) percent or more of the total value or voting power of all the outstanding stock of the Bank or Corporation, or (D) an entity, at least fifty (50) percent of the total value or voting power of which is owned, directly or indirectly, by a person described in (C). For purposes of this subsection, except as otherwise provided, a person’s status is determined immediately after the transfer of the assets. For example, a transfer to a company in which the Bank or Corporation has no ownership interest before the transaction, but which is a majority-owned subsidiary of the Bank or Corporation after the transaction, is not treated as a change in the ownership of the assets of the transferor Bank or Corporation.
For purposes of this subsection 10(a)(ii)(3), persons will not be considered to be acting as a group solely because they purchase assets of the Bank or Corporation at the same time. However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of assets, or similar business transaction with the Bank or Corporation. If a person, including an entity shareholder, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of assets, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only to the extent of the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.
Notwithstanding the foregoing, the acquisition of Bank or Corporation stock by any retirement plan sponsored by the Bank or an affiliate of the Bank will not constitute a Change in Control. Additionally, notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under subsection 10(a)(i) shall be reduced to the extent that on the date of the Employee’s Separation from Service, the amount payable under subsection 10(a)(i) exceeds any limitation on severance benefits that is imposed by the OCC.
The Employee shall thereupon be entitled to receive the Accrued Benefits and the lump sum payment described in subsection 10(a)(i) of this Agreement within ten (10) days of such Separation from Service.
For purposes of this subsection 10(b), “Good Reason” means, the occurrence of any of the following events, which has not been consented to in advance by the Employee in writing:
Notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under subsection 10(b) shall be reduced to the extent that on the date of the Employee’s Separation from Service, the amount payable under subsection 10(b) exceeds any limitation on severance benefits that is imposed by the OCC.
Should the Employee fail to obtain a final judgment in favor of the Employee and a final judgment or arbitration decision is entered in favor of the Company and if decided by arbitration, the arbitrator, pursuant to subsection 10(d)(ii), determines the Employee to be responsible for the Company’s expenses, then the Company shall be reimbursed for all costs and expenses, including reasonable attorneys’ fees arising from such dispute, proceedings or actions. Such reimbursement shall be paid within ten (10) days of the Company furnishing to the Employee written evidence, which may be in the form, among other things, of a canceled check or receipt, of any costs or expenses incurred by the Company.
or to such other address as either party hereto may have furnished to the other party in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
IN WITNESS WHEREOF, the parties have executed this Agreement on this ____ day of July, 2024.
ATTEST | FIRST FINANCIAL BANK, N.A. |
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ATTEST | FIRST FINANCIAL CORPORATION |
| EMPLOYEE |