Employment Agreement of Joel Gorelick


    

      Exhibit
        10.1

       

       

      EMPLOYMENT
        AGREEMENT

       

      This
        Agreement, made and dated as of July 20, 2006, by and between Peoples Bank,
        SB,
        an Indiana savings bank (“Employer”) and Joel Gorelick, a resident of Lake
        County, Indiana (“Employee”).

       

      W
        I T N E
        S S E T H:

       

      WHEREAS,
        Employee is employed by Employer as its President and Chief Administrative
        Officer and has made valuable contributions to the profitability and financial
        strength of Employer;

       

      WHEREAS,
        Employer desires to encourage Employee to continue to make valuable
        contributions to Employer’s business operations and not to seek or accept
        employment elsewhere;

       

      WHEREAS,
        Employee desires to be assured of a secure compensation from Employer for
        his
        services over a defined term;

       

      WHEREAS,
        Employer desires to assure the continued services of Employee on behalf of
        Employer on an objective and impartial basis and without distraction or conflict
        of interest in the event of an attempt by any person to obtain control of
        Employer or NorthWest Indiana Bancorp (the “Holding Company”), the Indiana
        corporation which owns all of the issued and outstanding capital stock of
        Employer;

       

      WHEREAS,
        Employer recognizes that when faced with a proposal for a change of control
        of
        Employer or the Holding Company, Employee will have a significant role in
        helping the Boards of Directors assess the options and advising the Boards
        of
        Directors on what is in the best interests of Employer, the Holding Company,
        and
        its shareholders, and it is necessary for Employee to be able to provide
        this
        advice and counsel without being influenced by the uncertainties of his own
        situation;

       

      WHEREAS,
        Employer desires to provide fair and reasonable benefits to Employee on the
        terms and subject to the conditions set forth in this Agreement;

       

      WHEREAS,
        Employer desires reasonable protection of its confidential business and customer
        information which it has developed over the years at substantial expense
        and
        assurance that Employee will not compete with Employer for a reasonable period
        of time after termination of his employment with Employer, except as otherwise
        provided herein; and

       

      WHEREAS,
        Employer’s Board of Directors has approved this Agreement.

       

      NOW,
        THEREFORE, in consideration of these premises, the mutual covenants and
        undertakings herein contained and the continued employment of Employee by
        Employer as its President and Chief Administrative Officer, Employer and
        Employee, each intending to be legally bound, covenant and agree as
        follows:

       

      1.  Upon
        the
        terms and subject to the conditions set forth in this Agreement, Employer
        employs Employee as Employer’s President and Chief Administrative Officer, and
        Employee accepts such employment.

       

      2.  Employee
        agrees to serve as Employer’s President and Chief Administrative Officer and to
        perform such duties in that office as may reasonably be assigned to him by
        Employer’s Chief Executive Officer; provided, however, that such duties shall be
        performed in or from the offices of Employer currently located at Munster,
        Indiana, and shall be of the same character as those previously performed
        by
        Employee and generally associated with the office held by Employee. Employee
        also agrees to continue to serve as a member of the Board of Directors of
        Employer and NorthWest Indiana

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      Bancorp
        if elected. Employee shall render services to Employer as President and Chief
        Administrative Officer in substantially the same manner and to substantially
        the
        same extent as Employee rendered his services to Employer before the date
        hereof. While employed by Employer, Employee shall devote substantially all
        his
        business time and efforts to Employer’s business during regular business hours
        and shall not engage in any bank or bank-related business for any other person.
        For purposes of this Agreement, “bank-related business” shall mean the sale of
        insurance and securities products, personal financial and tax planning, trust
        services and any for-profit business conducted by Employer during the term
        of
        this Agreement other than making loans and accepting deposits.

       

      3.  The
        term
        of this Agreement shall begin on the date hereof (the “Effective Date”) and
        shall end on the date which is three years following such date; provided,
        however, that such term shall be extended automatically for an additional
        year
        on each anniversary of the Effective Date, unless either party hereto gives
        written notice to the other party not to so extend within ninety (90) days
        prior
        to such anniversary, in which case no further automatic extension shall occur
        and the term of this Agreement shall end two years subsequent to the anniversary
        as of which the notice not to extend for an additional year is given (such
        term,
        including any extension thereof shall herein be referred to as the “Term”).
        Notwithstanding the foregoing, this Agreement shall automatically terminate
        (and
        the Term of this Agreement shall thereupon end) without notice when Employee
        attains 65 years of age.

       

      4.  Employee
        shall receive an annual salary of $202,000 (“Base Compensation”) payable at
        regular intervals in accordance with Employer’s normal payroll practices now or
        hereafter in effect. Employer may consider and declare increases in the salary
        it pays Employee and thereby increases in his Base Compensation at the time
        or
        times it considers such increases for other executive officers of the Employer.
        Prior to a Change of Control, Employer may also declare decreases in the
        salary
        it pays Employee if the operating results of Employer are significantly less
        favorable than those for the fiscal year ending December 31, 2005, and Employer
        makes similar decreases in the salary it pays to all other executive officers
        of
        Employer. After a Change in Control, Employer shall consider and declare
        salary
        increases based upon the following standards:

       

      Inflation;

       

      Adjustments
        to the salaries of other senior management personnel; and

       

      Past
        performance of Employee and the contribution which Employee makes to the
        business and profits of Employer during the Term.

       

      Any
        and
        all increases or decreases in Employee’s salary pursuant to this section shall
        cause the level of Base Compensation to be increased or decreased by the
        amount
        of each such increase or decrease for purposes of this Agreement. The increased
        or decreased level of Base Compensation as provided in this section shall
        become
        the level of Base Compensation for the remainder of the Term of this Agreement
        until there is a further increase or decrease in Base Compensation as provided
        herein.

       

      5.  Employee,
        as of the date hereof, is entitled to the insurance benefits described on
        Exhibit
        A
        hereto.
        So long as Employee is employed by Employer pursuant to this Agreement, he
        shall
        be included as a participant in all present and future employee benefit,
        retirement, and compensation plans generally available to employees of Employer,
        consistent with his Base Compensation and his position as President and Chief
        Administrative Officer of Employer, including, without limitation, Employer’s or
        the Holding Company’s stock option and incentive plan, Employees’ Savings and
        Profit Sharing Plan, and hospitalization, major medical, dental, disability
        and
        group life insurance plans, each of which Employer agrees to continue in
        effect
        on terms no less favorable than those currently in effect as of the date
        hereof
        (as permitted by law) during the Term of this Agreement unless prior to a
        Change
        of Control the operating results of Employer are significantly less favorable
        than those for the fiscal year ending December 31, 2005, and any changes
        made to
        these programs are applicable to all other executive officers of Employer,
        and
        unless (either before or after a Change of Control) changes in the accounting,
        legal, or

       


      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      


      tax
        treatment of such plans would adversely affect Employer’s operating results or
        financial condition in a material way, and the Board of Directors of Employer
        or
        the Holding Company concludes that modifications to such plans need to be
        made
        to avoid such adverse effects. Notwithstanding the limitations of any health
        benefit plan maintained by the Employer, the Employer agrees to pay the costs
        of
        any necessary physical examinations and the costs of all diagnostic testing
        incurred by the Employee on his own behalf.

       

      6.  So
        long
        as Employee is employed by Employer pursuant to this Agreement, Employee
        shall
        receive reimbursement from Employer for all reasonable business expenses
        incurred in the course of his employment by Employer, upon submission to
        Employer of written vouchers and statements for reimbursement. Employee shall
        attend, upon the prior approval of the Employer’s Chief Executive Officer, those
        professional meetings, conventions, and/or similar functions that he deems
        appropriate and useful for purposes of keeping abreast of current developments
        in the industry and/or promoting the interests of Employer. So long as Employee
        is employed by Employer pursuant to this Agreement, Employer shall provide
        Employee with the full time use of an automobile of a make and model selected
        by
        the Employee, not more than three years old, commensurate with his position
        and
        as approved by the Compensation Committee of the Employer’s Board of Directors.
        Employer shall pay or reimburse Employee for maintenance and insurance costs
        relating to such automobile and shall reimburse Employee on a pro rata basis
        based on business use for costs of gasoline for such automobile. So long
        as
        Employee is employed by Employer pursuant to the terms of this Agreement,
        Employer shall continue in effect vacation policies applicable to Employee
        no
        less favorable from his point of view than those written vacation policies
        in
        effect on the date hereof. Any vacation time not taken during any calendar
        year
        may be taken at any time during the next three succeeding calendar years,
        at the
        conclusion of which any unused vacation time will expire, unless otherwise
        agreed to by the Employer’s Compensation Committee. So long as Employee is
        employed by Employer pursuant to this Agreement, Employee shall be entitled
        to
        office space and working conditions no less favorable from his point of view
        than were in effect for him on the date hereof.

       

      7.  Subject
        to the respective continuing obligations of the parties, including but not
        limited to those set forth in subsections 9(a), 9(b), 9(c) and 9(d) hereof,
        Employee’s employment by Employer may be terminated prior to the expiration of
        the Term of this Agreement as follows:

       

      (a)  Employer,
        by action of its Board of Directors and upon written notice to Employee,
        may
        terminate Employee’s employment with Employer immediately for cause. For
        purposes of this subsection 7(a), “cause” shall be defined as (a) the Employee’s
        commission of an act materially and demonstrably detrimental to the goodwill
        of
        the Employer or any of its subsidiaries, which act constitutes gross negligence
        or willful misconduct by the Employee in the performance of his material
        duties
        to the Employer not authorized, directed or expressly ratified by Employer’s
        Board of Directors or its Chief Executive Officer, or (b) the Employee’s
        conviction of a felony involving moral turpitude, but specifically excluding
        any
        conviction based entirely on vicarious liability. No act or failure to act
        will
        be considered “willful” unless it is done, or omitted to be done, by the
        Employee in bad faith or without reasonable belief that his action or omission
        was in the best interests of the Employer. In addition, no act or omission
        will
        constitute “cause” unless the Employer has given detailed written notice thereof
        to the Employee and, where remedial action is feasible, he then fails to
        remedy
        the act or omission within a reasonable time after receiving such
        notice.

       

      (b)  Employer,
        by action of its Board of Directors may terminate Employee’s employment with
        Employer without cause at any time; provided, however, that the “date of
        termination” for purposes of determining benefits payable to Employee under
        subsection 8(b) hereof shall be the date which is 60 days after Employee
        receives written notice of such termination.

       


      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      


      


       

      (c)  Employee,
        by written notice to Employer, may terminate his employment with Employer
        immediately for cause. For purposes of this subsection 7(c), “cause” shall be
        defined as (i) any action by Employer’s Board of Directors to remove the
        Employee as President and Chief Administrative Officer of Employer, except
        where
        the Employer’s Board of Directors properly acts to remove Employee from such
        office for “cause” as defined in subsection 7(a) hereof, (ii) any action by
        Employer’s Board of Directors to materially limit, increase, or modify
        Employee’s duties as President and Chief Administrative Officer of Employer,
        including any action relating to his office or work environment which results
        in
        a material diminution of his position and/or duties, (iii) any failure of
        Employer to obtain the assumption of the obligation to perform this Agreement
        by
        any successor or the reaffirmation of such obligation by Employer, as
        contemplated in section 20 hereof; or (iv) any material breach by Employer
        of a
        term, condition or covenant of this Agreement.

       

      (d)  Employee,
        upon sixty (60) days written notice to Employer, may terminate his employment
        with Employer without cause.

       

      (e)  Employee’s
        employment with Employer shall terminate in the event of Employee’s death or
        disability. For purposes hereof, “disability” shall be defined as Employee’s
        inability by reason of illness or other physical or mental incapacity to
        perform
        the duties required by his employment for any consecutive One Hundred Eighty
        (180) day period, provided that notice of any termination by Employer because
        of
        Employee’s “disability” shall have been given to Employee prior to the full
        resumption by him of the performance of such duties.

       

      8.  In
        the
        event of termination of Employee’s employment with Employer pursuant to section
        7 hereof, compensation shall continue to be paid by Employer to Employee
        as
        follows:

       

      (a)  In
        the
        event of termination pursuant to subsection 7(a) or 7(d), compensation provided
        for herein (including Base Compensation) shall continue to be paid, and Employee
        shall continue to participate in the employee benefit, retirement, and
        compensation plans and other perquisites as provided in sections 5 and 6
        hereof,
        through the date of termination specified in the notice of termination. Any
        benefits payable under insurance, health, retirement and bonus plans as a
        result
        of Employee’s participation in such plans through such date shall be paid when
        due under those plans. The date of termination specified in any notice of
        termination pursuant to subsection 7(a) shall be no later than the last business
        day of the month in which such notice is provided to Employee.

       

      (b)  In
        the
        event of termination pursuant to subsection 7(b) or 7(c), compensation provided
        for herein (including Base Compensation) shall continue to be paid, and Employee
        shall continue to participate in the employee benefit, retirement, and
        compensation plans and other perquisites as provided in sections 5 and 6
        hereof,
        through the date of termination specified in the notice of termination. Any
        benefits payable under insurance, health, retirement and bonus plans as a
        result
        of Employee’s participation in such plans through such date shall be paid when
        due under those plans. In addition, Employee shall be entitled to continue
        to
        receive from Employer his Base Compensation at the rates in effect at the
        time
        of termination (1) for three additional l2-month periods if the termination
        follows a Change of Control or (2) for the remaining Term of the Agreement
        if
        the termination does not follow a Change of Control. In addition, during
        such
        periods, Employer will maintain in full force and effect for the continued
        benefit of Employee each employee welfare benefit plan and each employee
        pension
        benefit plan (as such terms are defined in the Employee Retirement Income
        Security Act of 1974, as amended) in which Employee was entitled to participate
        immediately prior to the date of his termination, unless an essentially
        equivalent and no less favorable benefit is provided by a subsequent employer
        of
        Employee. If the terms of any employee welfare benefit plan or employee pension
        benefit plan of Employer do not permit continued participation by Employee,
        Employer will arrange to provide

       


      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      


      to
        Employee 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.

       

      (c)  In
        the
        event of termination pursuant to subsection 7(e), compensation provided for
        herein (including Base Compensation) shall continue to be paid, and Employee
        shall continue to participate in the employee benefit, retirement, and
        compensation plans and other perquisites as provided in sections 5 and 6
        hereof,
        (i) in the event of Employee’s death, through the date of death, or (ii) in the
        event of Employee’s disability, through the date of proper notice of disability
        as required by subsection 7(e). Any benefits payable under insurance, health,
        retirement and bonus plans as a result of Employer’s participation in such plans
        through such date shall be paid when due under those plans. In addition,
        in the
        event this Agreement terminates because of Employee’s disability, Employee shall
        be entitled to receive his Base Compensation for a period of 12 months following
        such termination, reduced dollar for dollar by the amount of disability payments
        paid to Employee for periods following such termination in accordance with
        any
        disability policy or program of Employer.

       

      9.  In
        order
        to induce Employer to enter into this Agreement, Employee hereby agrees as
        follows:

       

      (a)  While
        Employee is employed by Employer and for a period of three years after
        termination of such employment for reasons other than those set forth in
        subsections 7(b) or (c) of this Agreement, Employee shall not divulge or
        furnish
        any trade secrets (as defined in IND. CODE § 24-2-3-2) of Employer or any
        confidential information acquired by him while employed by Employer concerning
        the policies, plans, procedures or customers of Employer to any person, firm
        or
        corporation, other than Employer or upon its written request, or use any
        such
        trade secret or confidential information directly or indirectly for Employee’s
        own benefit or for the benefit of any person, firm or corporation other than
        Employer, since such trade secrets and confidential information are confidential
        and shall at all times remain the property of Employer.

       

      (b)  For
        a
        period of three years after termination of Employee’s employment by Employer for
        reasons other than those set forth in subsections 7(b) or (c) of this Agreement,
        Employee shall not directly or indirectly provide banking or bank-related
        services to, or solicit the banking or bank-related business of, any customer
        of
        Employer at the time of such provision of services or solicitation which
        Employee served either alone or with others while employed by Employer in
        any
        city, town, borough, township, village or other place in which Employee
        performed services for Employer while employed by it, or assist any actual
        or
        potential competitor of Employer to provide banking or bank-related services
        to,
        or solicit the banking or bank-related business of, any such
        customer.

       

      (c)  While
        Employee is employed by Employer and for a period of one year after termination
        of Employee’s employment by Employer for reasons other than those set forth in
        subsections 7(b) or (c) of this Agreement, Employee shall not, directly or
        indirectly, as principal, agent, or trustee, or through the agency of any
        corporation, partnership, trade association, agent or agency, engage within
        a
        radius of fifteen (15) miles of Employer’s main office in any banking or
        bank-related business which competes with the business of Employer as conducted
        during Employee’s employment by Employer.

       

      (d)  If
        Employee’s employment by Employer is terminated for reasons other than those set
        forth in subsections 7(b) or (c) of this Agreement, Employee will turn over
        immediately thereafter to Employer all business correspondence, letters,
        papers,
        reports, customers’ lists, financial statements, credit reports or other
        confidential information or documents of Employer or its affiliates in the
        possession or control of Employee, all of which writings are and will continue
        to be the sole and exclusive property of Employer or its
        affiliates.

       


      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      


      


       

      If
        Employee’s employment by Employer is terminated during the Term of this
        Agreement for reasons set forth in subsections 7(b) or (c) of this Agreement,
        Employee shall have no obligations to Employer with respect to trade secrets,
        confidential information or noncompetition under this section 9.

       

      10.  Any
        termination of Employee’s employment with Employer as contemplated by section 7
        hereof, except in the circumstances of Employee’s death, shall be communicated
        by written “Notice of Termination” by the terminating party to the other party
        hereto. Any “Notice of Termination” pursuant to subsections 7(a), 7(c) or 7(e)
        shall indicate the specific provisions of this Agreement relied upon and
        shall
        set forth in reasonable detail the facts and circumstances claimed to provide
        a
        basis for such termination.

       

      11.  For
        purposes of this Agreement, a “Change of Control” shall mean:

       

      (a)  The
        acquisition by any “person” (within the meaning of Section 13(d)(3) or
        14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
        provided, however, that “person” shall not include the Employee, members of the
        Employee’s immediate family, or any trust of which the beneficial owners are the
        Employee or members of his immediate family) of beneficial ownership (within
        the
        meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of
        either (i) the then outstanding shares of capital stock of the Employer or
        the Holding Company (the “Outstanding Employer (or Holding Company, as
        appropriate) Capital Stock”) or (ii) the combined voting power of the then
        outstanding voting securities of the Employer or the Holding Company entitled
        to
        vote generally in the election of directors (the “Employer (or Holding Company,
        as applicable) Voting Securities”); provided, however, that (x) any
        acquisition by or from the Holding Company or any of its subsidiaries,
        (y) any acquisition by any employee benefit plan (or related trust)
        sponsored or maintained by the Holding Company or any of its subsidiaries
        or
        (z) any acquisition by any corporation with respect to which, following
        such acquisition, more than 65% of the then outstanding shares of capital
        stock
        of such corporation and the combined voting power of the then outstanding
        voting
        securities of such corporation entitled to vote generally in the election
        of
        directors is then beneficially owned, directly or indirectly, by all or
        substantially all of the individuals and entities who were the beneficial
        owners, respectively, of the Outstanding Employer (or Holding Company, as
        appropriate) Capital Stock and Employer (or Holding Company, as appropriate)
        Voting Securities immediately prior to such acquisition, in substantially
        the
        same proportion as their ownership, immediately prior to such acquisition,
        of
        the Outstanding Employer (or Holding Company, as appropriate) Capital Stock
        and
        Employer (or Holding Company, as appropriate) Voting Securities, as the case
        may
        be, shall not constitute a Change of Control; or

       

      (b)  Individuals
        who, as of the Effective Date constituted the Board of Directors of the Employer
        (or Holding Company, as appropriate) (the “Incumbent Board”) cease for any
        reason to constitute at least a majority of such Board; provided, however,
        that
        any individual who becomes a member of the respective Board subsequent to
        such
        date whose election, or nomination for election by the stockholders of the
        Employer or the Holding Company, as appropriate, was approved by a vote of
        at
        least a majority of the directors then comprising the Incumbent Board shall
        be
        deemed to be a member of the Incumbent Board; but provided further, that
        no
        individual whose election or initial assumption of office as a director occurs
        as a result of an actual or threatened election contest (as such terms are
        used
        in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act)
        with respect to the election or removal of directors, or any other actual
        or
        threatened solicitation of proxies or consents by or on behalf of any person
        other than the Board of Directors of the Employer (or Holding Company, as
        appropriate), shall be deemed to be a member of the Incumbent Board;
        or

       

      (c)  Consummation
        of a reorganization, merger or consolidation (a “Business Combination”) with
        respect to which all or substantially all of the individuals and entities
        who
        were the respective beneficial owners of the Outstanding Employer (or Holding
        Company, as appropriate) Capital Stock and Employer (or Holding Company,
        as
        appropriate) Voting Securities

       


      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      


      immediately
        prior to such Business Combination do not, following such Business Combination,
        beneficially own, directly or indirectly, more than 65% of, respectively,
        the
        then outstanding shares of capital stock and the combined voting power of
        the
        then outstanding voting securities entitled to vote generally in the election
        of
        directors, as the case may be, of the corporation resulting from the Business
        Combination, in substantially the same proportion as their ownership immediately
        prior to such Business Combination of the Outstanding Employer (or Holding
        Company, as appropriate) Capital Stock and Employer (or Holding Company,
        as
        appropriate) Voting Securities, as the case may be; or

       

      (d)  Consummation
        of a sale or other disposition of all or substantially all of the assets
        of the
        Employer (or Holding Company, as appropriate) other than to a corporation
        with
        respect to which, following such sale or disposition, more than 65% of,
        respectively, the then outstanding shares of capital stock and the combined
        voting power of the then outstanding voting securities entitled to vote
        generally in the election of directors is then owned beneficially, directly
        or
        indirectly, by all or substantially all of the individuals and entities who
        were
        the beneficial owners, respectively, of the Outstanding Employer (or Holding
        Company, as appropriate) Capital Stock and Employer (or Holding Company,
        as
        appropriate) Voting Securities immediately prior to such sale or disposition,
        in
        substantially the same proportion as their ownership of the Outstanding Employer
        (or Holding Company, as appropriate) Capital Stock and Employer (or Holding
        Company, as appropriate) Voting Securities, as the case may be, immediately
        prior to such sale or disposition; or

       

      (e)  A
        complete liquidation or dissolution of the Employer or the Holding
        Company.

       

      Any
        other
        provision of this Agreement to the contrary notwithstanding, “Change of Control”
shall not include any transaction described in subparagraphs (a), (c) or
        (d) of this paragraph 11 where, in connection with such transaction, the
        Employee or any party acting in concert with the Employee substantially
        increases his or its, as the case may be, ownership interest in the Employer
        or
        the Holding Company or a successor to the Employer or the Holding
        Company.

       

      12.  If
        Employee is suspended and/or temporarily prohibited from participating in
        the
        conduct of Employer’s affairs by a notice served under section 8(3)(3) or (g)(1)
        of the Federal Deposit Insurance Act (12 U.S.C. § 1818(e)(3) and (g)(1)),
        Employer’s obligations under this Agreement shall be suspended as of the date of
        service, unless stayed by appropriate proceedings. If the charges in the
        notice
        are dismissed, Employer shall (i) pay Employee all or part of the compensation
        withheld while its obligations under this Agreement were suspended and (ii)
        reinstate (in whole or in part) any of its obligations which were
        suspended.

       

      13.  If
        Employee is removed and/or permanently prohibited from participating in the
        conduct of Employer’s affairs by an order issued under section 8(e)(4) or (g)(1)
        of the Federal Deposit Insurance Act (12 U.S.C. § 1818(e)(4) or (g)(1)),
        all obligations of Employer under this Agreement shall terminate as of the
        effective date of the order, but vested rights of the parties to the Agreement
        shall not be affected.

       

      14.  If
        Employer is in default (as defined in section 3(x)(1) of the Federal Deposit
        Insurance Act), all obligations under this Agreement shall terminate as of
        the
        date of default, but this provision shall not affect any vested rights of
        Employer or Employee.

       

      15.  All
        obligations under this Agreement may be terminated except to the extent
        determined that the continuation of the Agreement is necessary for the continued
        operation of Employer: (i) by the Director of the Indiana Department of
        Financial Institutions, or his or her designee (the “Director”), at the time the
        Federal Deposit Insurance Corporation enters into an agreement to provide
        assistance to or on behalf of Employer under the authority contained in Section
        13(c) of the Federal Deposit Insurance Act; or (ii) by the Director at the
        time
        the Director approves a supervisory merger to resolve problems related to
        operation of Employer or when Employer is determined by the Board to be in
        an
        unsafe and unsound

       


      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      


      condition.
        Any rights of the parties that have already vested, however, shall not be
        affected by such action.

       

      16.  (a)     
        Anything
        in this Agreement to the contrary notwithstanding, in the event it shall
        be
        determined that any payment or distribution by the Employer to or for the
        benefit of the Employee (whether paid or payable or distributed or distributable
        pursuant to the terms of this Agreement or otherwise) (a “Payment”) would be
        nondeductible (in whole or part) by the Employer for Federal income tax purposes
        because of Section 280G of the Internal Revenue Code of 1986, as amended
        (the
“Code”), then the aggregate present value of amounts payable or distributable to
        or for the benefit of the Employee pursuant to this Agreement (such amounts
        payable or distributable pursuant to this Agreement are hereinafter referred
        to
        as “Agreement Payments”) shall be reduced to the Reduced Amount. The “Reduced
        Amount” shall be an amount, not less than zero, expressed in present value which
        maximizes the aggregate present value of Agreement Payments without causing
        any
        Payment to be nondeductible by the Employer because of Section 280G of the
        Code.
        For purposes of this Section 16, present value shall be determined in accordance
        with Section 280G(d)(4) of the Code.

       

      (b)  All
        determinations required to be made under this Section 16 shall be made by
        the
        Employer’s independent auditors, or at the election of such auditors by such
        other firm or individuals of recognized expertise as such auditors may select
        (such auditors or, if applicable, such other firm or individual, are hereinafter
        referred to as the “Advisory Firm”) and such services shall be paid for by the
        Employer. The Advisory Firm shall within ten business days of the date of
        termination of the Employee’s employment by the Employer or the Holding Company
        resulting in benefit payments hereunder (the “Date of Termination”), or at such
        earlier time as is requested by the Employer, provide to both the Employer
        and
        the Employee an opinion (and detailed supporting calculations) that the Employer
        has substantial authority to deduct for federal in-come tax purposes the
        full
        amount of the Agreement Payments and that the Employee has substantial authority
        not to report on his or her federal income tax return any excise tax imposed
        by
        Section 4999 of the Code with respect to the Agreement Payments. Any such
        determination and opinion by the Advisory Firm shall be binding upon the
        Employer and the Employee. The Employee shall determine which and how much,
        if
        any, of the Agreement Payments shall be eliminated or reduced consistent
        with
        the requirements of this Section 16, provided that, if the Employee does
        not
        make such determination within ten business days of the receipt of the
        calculations made by the Advisory Firm, the Employer shall elect which and
        how
        much, if any, of the Agreement Payments shall be eliminated or reduced
        consistent with the requirements of this Section 16 and shall notify the
        Employee promptly of such election. Within five business days of the earlier
        of
        (i) the Employer’s receipt of the Employee’s determination pursuant to the
        immediately preceding sentence of this Agreement or (ii) the Employer’s election
        in lieu of such determination, the Employer shall pay to or distribute to
        or for
        the benefit of the Employee such amounts as are then due the Employee under
        this
        Agreement. The Employer and the Employee shall cooperate fully with the Advisory
        Firm, including without limitation providing to the Advisory Firm all
        information and materials reasonably requested by it, in connection with
        the
        making of the determinations required under this Section 16.

       

      (c)  As
        a
        result of uncertainty in application of Section 280G of the Code at the time
        of
        the initial determination by the Advisory Firm hereunder, it is possible that
        Agreement Payments will have been made by the Employer which should not have
        been made (“Overpayment”) or that additional Agreement Payments will not have
        been made by the Employer which should have been made (“Underpayment”), in each
        case, consistent with the calculations required to be made hereunder. In
        the
        event that the Advisory Firm, based upon the assertion by the Internal Revenue
        Service against the Employee of a deficiency which the Advisory Firm believes
        has a high probability of success, determines that an Overpayment has been
        made,
        any such Overpayment paid or distributed by the Employer to or for the benefit
        of Employee shall be treated for all purposes as a loan ab initio which the
        Employee shall repay to the Employer together with interest at the applicable
        federal rate provided for in Section 7872(f)(2) of the Code; provided, however,
        that no such loan shall be deemed to have been made and no amount shall be
        payable by the Employee to the Employer if and to the extent such deemed
        loan
        and

       


      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      


      payment
        would not either reduce the amount on which the Employee is subject to tax
        under
        Section 1 and Section 4999 of the Code or generate a refund of such taxes.
        In
        the event that the Advisory Firm, based upon controlling precedent or other
        substantial authority, determines that an Underpayment has occurred, any
        such
        Underpayment shall be promptly paid by the Employer to or for the benefit
        of the
        Employee together with interest at the applicable federal rate provided for
        in
        Section 7872(f)(2) of the Code.

       

      17.  If
        a
        dispute arises regarding the termination of Employee pursuant to section
        7
        hereof or as to the interpretation or enforcement of this Agreement and Employee
        obtains a final judgment in his favor pursuant to an arbitration award or
        in a
        court of competent jurisdiction or his claim is settled by Employer prior
        to the
        rendering of an arbitration award or a judgment by such a court, all reasonable
        legal fees and expenses incurred by Employee in contesting or disputing any
        such
        termination or seeking to obtain or enforce any right or benefit provided
        for in
        this Agreement or otherwise pursuing his claim shall be paid by Employer,
        to the
        extent permitted by law.

       

      18.  Should
        Employee die after termination of his employment with Employer while any
        amounts
        are payable to him hereunder, this Agreement shall inure to the benefit of
        and
        be enforceable by Employee’s executors, administrators, heirs, distributees,
        devisees and legatees and all amounts payable hereunder shall be paid in
        accordance with the terms of this Agreement to Employee’s devisee, legatee or
        other designee or, if there is no such designee, to his estate.

       

      19.  For
        purposes of this Agreement, notices and all other communications provided
        for
        herein shall be in writing and shall be deemed to have been given when delivered
        or mailed by United States registered or certified mail, return receipt
        requested, postage prepaid, addressed as follows:

       

      
        	
                 

              	
                If
                  to Employee:

              	
                Joel
                  Gorelick

                8589
                  W. 85th Street

                Schererville,
                  IN 46375

              
	
                 

              	 	 
	
                 

              	
                If
                  to Employer:

              	
                Peoples
                  Bank, SB

                9204
                  Columbia Avenue

                Munster,
                  IN 46321

                Attn:
                  David A. Bochnowski

              


      

      


      or
        to
        such 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.

       

      20.  The
        validity, interpretation, and performance of this Agreement shall be governed
        by
        the laws of the State of Indiana, except as otherwise required by mandatory
        operation of federal law.

       

      21.  Employer
        shall require any successor (whether direct or indirect, by purchase, merger,
        consolidation or otherwise) to all or substantially all of the business or
        assets of Employer, by agreement in form and substance satisfactory to Employee
        to expressly assume and agree to perform this Agreement in the same manner
        and
        same extent that Employer would be required to perform it if no such succession
        had taken place. Failure of Employer to obtain such agreement prior to the
        effectiveness of any such succession shall be a material intentional breach
        of
        this Agreement and shall entitle Employee to terminate his employment with
        Employer pursuant to subsection 7(c) hereof. As used in this Agreement,
“Employer” shall mean Employer as hereinbefore defined and any successor to its
        business or assets as aforesaid.

       

      22.  Except
        as
        to any controversy or claim which the Employee elects, by written notice
        to the
        Employer, to have adjudicated by a court of competent jurisdiction, any
        controversy or claim arising out of or relating to this Agreement or the
        breach
        hereof shall be settled by arbitration at a mutually agreed

       


      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      


      site
        in
        accordance with the laws of the State of Indiana. The arbitration shall be
        conducted in accordance with the rules of the American Arbitration Association.
        The costs and expenses of the arbitrator(s) shall be borne by the Employer.
        The
        award of the arbitrator(s) shall be binding upon the parties. Judgment upon
        the
        award rendered by the arbitrator(s) may be entered in any court having
        jurisdiction.

       

      23.  No
        provision of this Agreement may be modified, waived or discharged unless
        such
        waiver, modification or discharge is agreed to in writing signed by Employee
        and
        Employer. No waiver by either party hereto at any time of any breach by the
        other party hereto of, or compliance with, any condition or provision of
        this
        Agreement to be performed by such other party shall be deemed a waiver of
        dissimilar provisions or conditions at the same or any prior subsequent time.
        No
        agreements or representation, 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.

       

      24.  The
        invalidity or unenforceability of any provisions of this Agreement shall
        not
        affect the validity or enforceability of any other provisions of this Agreement
        which shall remain in full force and effect.

       

      25.  This
        Agreement may be executed in one or more counterparts, each of which shall
        be
        deemed an original but all of which together shall constitute one and the
        same
        agreement.

       

      26.  This
        Agreement is personal in nature and neither party hereto shall, without consent
        of the other, assign or transfer this Agreement or any rights or obligations
        hereunder except as provided in section 17 and section 20 above. Without
        limiting the foregoing, Employee’s right to receive compensation hereunder shall
        not be assignable or transferable, whether by pledge, creation of a security
        interest or otherwise, other than a transfer by his will or by the laws of
        descent or distribution as set forth in section 17 hereof, and in the event
        of
        any attempted assignment or transfer contrary to this paragraph, Employer
        shall
        have no liability to pay any amounts so attempted to be assigned or
        transferred.

       

      IN
        WITNESS WHEREOF, the parties have caused the Agreement to be executed and
        delivered as of the day and year first above set forth.

       

      


      
        	
                 

              	
                PEOPLES
                  BANK, SB

              
	 	 	 
	 	
                By:

              	
              
	 	 	
                David
                  A. Bochnowski, Chairman and Chief Executive Officer

              
	 	 	 
	 	 	
                “Employer”

                 

                 

                 

              
	 	 	
              
	 	 	
                Joel
                  Gorelick

              
	 	 	 
	 	 	
                “Employee”

              


      


      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      


      


      The
        undersigned, NorthWest Indiana Bancorp, sole shareholder of Employer, agrees
        that if it shall be determined for any reason that any obligations on the
        part
        of Employer to continue to make any payments due under this Agreement to
        Employee is unenforceable for any reason, NorthWest Indiana Bancorp, agrees
        to
        honor the terms of this Agreement and continue to make any such payments
        due
        hereunder to Employee pursuant to the terms of this Agreement.

       

      


       

      
        	 	
                NORTHWEST
                  INDIANA BANCORP

                 

              
	 	
                By:

              	
              
	 	 	
                David
                  A. Bochnowski, Chairman and Chief Executive Officer

                 

              


      

      


       

      
        
          11

        

        
          
          

          
            

          

        

        
          
          

        

      

      



      
        	
                Exhibit
                  A

              
	 	 	 	 	 	 
	 	 	 	 	 	 
	
                Benefits
                  Provided and Paid by Peoples Bank

              	 	 	 
	
                for
                  Joel Gorelick

              	 	 	 	 	 
	 	 	 	 	 	 
	
                Company

              	 	
                Benefit
                  Type

              	
                Coverage

              	 
	 	 	 	 	 	 
	
                Principal
                  Financial Group

              	 	
                Group
                  Life Insurance

              	
                $
                  91,000.00

              	 
	
                Policy
                  No. N31368-9

              	 	
                AD&D
                  Insurance

              	
                $
                  91,000.00

              	 
	 	 	 	 	 	 
	
                Assurant
                  Employee Benefits

              	
                Group
                  Life Insurance

              	
                $
                  400,000.00

              	
                (maximum
                  benefit under insurance plan)

              
	
                Policy
                  No. 54075/Cert. #48

              	 	
                AD&D
                  Insurance

              	
                $
                  400,000.00

              	
                (maximum
                  benefit under insurance plan)

              
	 	 	 	 	 	 
	
                Assurant
                  Employee Benefits

              	
                Short-Term
                  Disability

              	
                $
                  400.00

              	
                /week
                  beginning 14th day of disability

                (maximum
                  benefit under Plan)**

              
	
                Policy
                  No. 54075/Cert. #48

              	 	
                Long-Term
                  Disability 

              	
                $
                  5,000

              	
                /month
                  beginning 27th week of disability

                (maximum
                  benefit under Plan)

              
	 	 	 	 	 	 
	
                Mass
                  Mutual Life Insurance

              	
                Endorsement
                  Split

              	
                $
                  150,000.00

              	 
	
                Policy
                  No. 0064755

              	 	
                Dollar
                  Plan

              	 	 	 
	
                New
                  York Life Insurance

              	 	 	 	 	 
	
                Policy
                  No. 56608626

              	 	 	 	 	 
	 	 	 	 	 	 
	
                New
                  York Life Insurance

              	 	
                Endorsement
                  Split

              	
                $
                  75,000.00

              	 
	
                Policy
                  No. 56612181

              	 	
                Dollar
                  Plan

              	 	 	 
	 	 	 	 	 	 
	
                 

                **
                  Note to short-term disability. The Bank funds a separate supplemental
                  disability plan that would pay Joel his weekly wages over
                  the $400 insurance benefit for a maximum period of 26 weeks. This
                  would
                  entitle him to 100% of his pre-weekly disability earnings
                  for a maximum disability period of 26
                  weeks.