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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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:
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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 Norman D. Lowery, President and Chief Executive Officer of the Corporation and the Bank. The Agreement is effective as of July 1, 2024. It supersedes the employment agreement dated January 1, 2024 between the Employers and Mr. Lowery.
Under the terms of the Agreement, the Employers have agreed to employ Mr. Lowery for an initial term of twenty-four (24) months in his current position as President and Chief Executive Officer of the Corporation and the Bank. Under the terms of the Agreement, the Compensation Committee must take affirmative action to extend the term of the Agreement for an additional one-year period.
Mr. Lowery is entitled to an annual base salary of $650,000.00, which may be increased from time to time as determined by the boards of directors of the Employers, and is entitled to participate in other bonus and fringe benefit plans available to other executive officers or employees of the Employers generally.
If the Employers terminate Mr. Lowery’s employment for “just cause,” death or “disability” (as such terms are defined in the Agreement), then Mr. Lowery is entitled to receive the base salary, bonuses, vested rights, and other benefits due him through the date of his termination. Any benefits payable under insurance, health, retirement, bonus, incentive, performance or other plans as a result of his participation in such plans through such date of termination will be paid when and as due under those plans.
If the Employers terminate Mr. Lowery’s employment 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 Mr. Lowery is 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. He would also receive cash reimbursements in an amount equal to his cost of obtaining all benefits which he would have been eligible to participate in or receive through the term of the Agreement.
If Mr. Lowery’s employment is terminated for other than just cause or is constructively discharged and this occurs within 12 months following a change in control, then Mr. Lowery is entitled to receive an amount equal to the greater of the compensation and benefits described in the previous paragraph if the termination did not occur within 12 months following a change in control; or, the product of 2.99 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 three years, beginning on the date of termination, all benefits which he was eligible to participate in or receive. Mr. Lowery would also be entitled to the payment provided for in this paragraph if a change in control occurs that was not approved by a majority of the board of directors of the Corporation.
If Mr. Lowery qualifies as a “key employee” (as defined in the Agreement) at the time of his separation from service, then the Corporation may not make certain payments earlier than six months following the date of his separation from service (or, if earlier, the date of his death). In this event, payments to which Mr. Lowery would otherwise be entitled during the first six months following the date of his separation from service will be accumulated and paid to Mr. Lowery on the first day of the seventh month following his separation from service. Mr. Lowery is currently considered a “key employee” for this purpose.
If, as a result of a change in control, Mr. Lowery becomes entitled to any payments which are determined to be payments subject to Internal Revenue Code Section 280G, then his 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 after taking into account the amount of the excise tax imposed under Internal Revenue Code Section 280G due to the benefit payment.
The Agreement also includes standard confidentiality and non-solicit provisions and a non-compete provision pursuant to which Mr. Lowery is prohibited, during his employment and for a period of one year following his termination, from
directly or indirectly competing against the Employers within a 75-mile radius of Terre Haute, Indiana, provided such radius shall be 50 miles in the event of employee’s separation from service by the Corporation 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 is filed as Exhibit 10.1 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 | |
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 (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 Norman D. Lowery (the “Employee”), a resident of the State of Indiana.
WHEREAS, the Employee has heretofore been employed by the Bank as its President and Chief Executive Officer and by the Corporation as its President and Chief Executive 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:
(iii)Upon retirement or other Separation from Service on or after attaining age 65, during the Term of this Agreement, the Company agrees to pay or reimburse the Employee or his spouse for full Medicare and supplemental Medicare coverage (which may be Medicare Advantage, or a combination of Medicare and a Medicare or Medigap supplement, or such other available coverage as Employee or his spouse may elect), at no cost to the Employee or his spouse, at the best level of coverage available which shall include prescription drug coverage for both the Employee and his spouse, until the death of the Employee and his spouse. The Company’s obligation to pay or reimburse the Employee and his spouse for insurance coverage as described in this subsection 4(a)(iii) is hereafter referred to as the “Health Coverage Benefits”.
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 all Employee Benefits, Life Insurance 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)(v) 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 |
Document and Entity Information |
Jul. 31, 2024 |
---|---|
Document and Entity Information [Abstract] | |
Document Type | 8-K |
Document Period End Date | Jul. 31, 2024 |
Entity File Number | 0-16759 |
Entity Registrant Name | FIRST FINANCIAL CORPORATION |
Entity Incorporation, State or Country Code | IN |
Entity Tax Identification Number | 35-1546989 |
Entity Address State Or Province | IN |
Entity Address, Address Line One | One First Financial Plaza |
Entity Address, City or Town | Terre Haute |
Entity Address, Postal Zip Code | 47807 |
City Area Code | 812 |
Local Phone Number | 238-6000 |
Title of 12(b) Security | Common Stock, par value $0.125 per share |
Trading Symbol | THFF |
Security Exchange Name | NASDAQ |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0000714562 |
Amendment Flag | false |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
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