Date of Report (Date of earliest event reported):
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(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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(Address of principal executive offices)
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(Zip Code)
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(
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(Registrant’s telephone number, including area code)
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N/A
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(Former name or former address, if changed since last report)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Executive
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Title
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Craig M. Dwight
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Chairman & Chief Executive Officer of Horizon and Bank
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James D. Neff
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President of Horizon and Bank
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Mark E. Secor
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Chief Financial Officer of Horizon; Executive Vice President & Chief Financial Officer of Bank
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Kathie A. DeRuiter
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Executive Vice President & Senior Operations Officer of Bank
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Dennis J. Kuhn
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Executive Vice President of Horizon; Executive Vice President & Chief Commercial Banking Officer of Bank
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Todd A. Etzler
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Corporate Secretary & General Counsel of Horizon; Senior Vice President, Corporate Secretary & General Counsel of Bank
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Key Terms and Conditions
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Description
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Application to Executives
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Term
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• Begins January 1, 2020
• Terminates immediately upon executive’s
termination for any reason before a change in control
• Upon a change in control, the term is fixed
at 1 year
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• Same for all
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Effect on Employment
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• Not an employment agreement. Executives
remain “at will” employees, terminable at any time for any reason
• Executives entitled to certain notice and
cure rights and procedures in the event the Bank seeks to terminate an executive for cause (both before and after a change in control)
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• Dwight and Neff have separate employment
agreements governing their employment relationship
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Effect of a Change in Control
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• If a change in control occurs, and if
executive experiences a “Qualifying Termination” during the 6 months before or the year after a change in control, then executive is entitled to certain severance benefits (provided all other conditions are met)
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• Same general right for all (see Severance Benefits below for specific severance benefit differences)
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Two Types of “Qualifying Termination”
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• Bank terminates executive for any reason
except for “cause”; Cause generally means breach and wrongdoing by executive, in which case executive does not receive severance benefits
• Executive resigns for “good reason”; Good
reason generally means that the executive’s quality of work life and/or compensation has been impaired by required relocations or reductions in position, responsibility, benefits, and salary
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• Same for all
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Additional Conditions to Receipt of the Severance Benefits
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• Executive must sign and deliver a release
• Executive must be and remain in compliance
with restrictive covenants relating to non-disclosure of confidential information, return of property, non-solicitation of certain of Bank’s customers and employees, and non-competition with Bank in certain areas
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• Same general condition for all (see Restrictive Covenants below for specific variations among executives in duration of restrictive covenants)
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Double Trigger Change in Control Severance Benefits
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• Normal payroll. Base salary earned through the date of termination
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• Same for all
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• Base salary multiple. A lump sum amount equal to the executive’s then-current base salary multiplied by the executive’s individual multiple
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• Multiples
o Dwight 2.99
o Neff 2.99
o Secor 2.00
o DeRuiter 2.00
o Kuhn 2.00
o Etzler 1.00
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• Cash bonus multiple. An amount equal to the average of executive’s total cash bonuses in the 2 years preceding termination multiplied by the executive’s individual multiple
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• Multiples
o Dwight 2.99
o Neff 2.00
o Secor 2.00
o DeRuiter 1.00
o Kuhn 1.00
o Etzler 1.00
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• Continued participation in group health and life insurance benefits. Subject to certain conditions, continued coverage for the executive’s individual benefit continuation term
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• Benefit continuation term
o Dwight 35 months
o Neff 24 months
o Secor 24 months
o DeRuiter 12 months
o Kuhn 12 months
o Etzler 12 months
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• Vested incentive compensation. All amounts vested or accrued prior to termination under incentive compensation plans in accordance with their terms
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• Same for all
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• Partial year bonus. An amount equal to the partial year bonus executive would have earned under an existing bonus plan in the year of a change in control, based on then-current financial results
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• Same for all
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Key Terms and Conditions | Description | Application to Executives |
Restrictive Covenants: Non-Disclosure and Return of Property
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• Executive will not discuss or use
confidential information in competition or for executive’s own benefit while employed and at all times thereafter
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• Same for all
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Restrictive Covenants: Non-Solicitation of Customers and Employees
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• In general, executive will not solicit or
divert Bank customers and employees over which executive had responsibility in the one year preceding termination or for which executive has confidential information
• Restriction applies during the term of the
Change in Control Agreement and for an individually prescribed period after termination
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• Individual periods of restriction
o Dwight 2 years
o Neff 2 years
o Secor 2 years
o DeRuiter 2 years
o Kuhn 2 years
o Etzler 1 year
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Restrictive Covenants: Non-Competition
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• Executive is restricted from directly or
indirectly competing with Bank during executive’s employment
• In general, for an individually prescribed
period after termination, executive may not compete with Bank using the information gained from executive’s employment in the geographic regions where the executive served and performed services
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• Individual periods of restriction
o Dwight 2 years
o Neff 2 years
o Secor 2 years
o DeRuiter 2 years
o Kuhn 2 years
o Etzler 1 year
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Successors and Assigns
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• Bank will require any successor to assume
the Change in Control Agreement
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• Same for all
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Key Terms andConditions
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Description
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Term
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• Three-year term begins January 1, 2020
Dwight/Neff Differences
• Dwight term ends January 1, 2023
• Neff term is a rolling 3-year term that will
be extended annually for another year unless Horizon delivers notice to Neff that it will not be extended
• On January 1, 2025, Neff becomes an
employee-at-will, and either Horizon or Neff can terminate the relationship for any reason, or no reason, and without notice
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Salary & Benefits
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• Entitled to a base salary to be reviewed and
potentially increased annually (but not decreased) by the Compensation Committee of the Board of Directors
• Entitled to participate in all incentive
compensation and benefit programs generally available to executive officers
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Termination Provisions
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• Horizon can terminate the executive for
“Cause,” which includes any of the following actions by the executive:
o Intentional acts of fraud, embezzlement,
dishonesty;
o Intentional damage causing material harm to
Horizon;
o Material breach of the employment agreement
or the Change in Control Agreement
o Gross negligence or insubordination
o Violation of certain banking laws resulting
in the loss of right to work for a depository institution
• Both Dwight and Neff have the right to
terminate the employment relationship for “Good Reason,” which includes, among other reasons, the following:
o Office move more than 30 miles from home
o Reductions of 10% or more in salary or total
compensation, including benefit plan rights (unless institution-wide reductions and proportionate to other executive officers)
o Assignment of materially different duties,
reduced responsibilities, or removal from current position or title
• Both Dwight and Neff are required to provide
a 60-day written notice before terminating the relationship without “Good Reason”
• Horizon can terminate the executive and the
agreement for reasons related to the federal and state banking regulations, including situations in which the executive might be prohibited from engaging in banking under the Federal Deposit Insurance Act, or the Bank is found in default or
in financial trouble under the Federal Deposit Insurance Act
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Special Compensation Rights Upon Certain Terminations
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• In the event Horizon terminates the executive
without “Cause” or the executive resigns for “Good Reason,” the executive is entitled to the following payments:
o Base salary through date of termination
o An amount equal to the then-current annual
base salary (Dwight receives this amount multiplied by two)
o Dwight: An amount equal to cash bonuses for the prior two
calendar years
Neff: An amount equal to the average of cash bonuses for the prior two calendar years
o Continued participation in group health and
life insurance programs for a year (Dwight receives two years), or cash reimbursement in equivalent amount (subject to a ceiling of 110% of Horizon’s standard cost for providing the benefits)
o Vested and accrued incentive compensation and
matching contributions
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Limitations on Payments
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• All payments to the executives are subject to
FDIC restrictions on golden parachutes and indemnification, as well as subject to Internal Revenue Code Section 409A requirements and the deductibility limits of Internal Revenue Code Section 280G
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Conditions to Payments
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• Executives must sign a release of claims in
favor of Horizon within 60 days following termination. The release must remain unrevoked during all revocation right periods.
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(d) Exhibits
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|||||
EXHIBIT INDEX
|
|||||
Exhibit No.
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Description
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Location
|
|||
10.1
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Attached
|
|||
10.2
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Attached
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|||
10.3
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Attached
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|||
10.4
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Attached
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|||
10.5
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Attached
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10.6
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Attached
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10.7
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Attached
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10.8
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Attached
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Date: January 6, 2020
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HORIZON BANCORP, INC.
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By
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/s/ Mark E. Secor | |
Mark E. Secor,
|
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Executive Vice President & Chief Financial Officer
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