nib_8k1229ex102.htm


    EXHIBIT
10.2

    


     

    EMPLOYMENT
AGREEMENT

     

    This
Agreement, made and dated as of December 29, 2008, by and between Peoples Bank
SB, an Indiana savings bank (“Employer”) and Joel Gorelick, a resident of Lake
County, Indiana (“Employee”), but effective as of July 20,
2006.

     

    This
Agreement amends and restates the prior Employment Agreement between the
Employer and the Employee dated July 20, 2006 (the “Prior
Agreement”).  It has been amended and restated for compliance with the
final regulations under Section 409A of the Internal Revenue Code of 1986,
as amended.

     

    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 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.

     

    (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 21 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” means the Employee (i)
is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than twelve (12) months; or (ii) is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months,
receiving income replacement benefits for a period of not less than three (3)
months under an accident and health plan covering employees of the
Employer.

     

    8.           In
the event of the Employee’s Termination of 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 of Employment pursuant to subsection 7(a) or in the
event of Termination of Employment pursuant to subsection 7(d) other than during
the one year period immediately following a Change of Control, 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 of Employment pursuant to subsection 7(b) or 7(c) other
than during the one year period immediately following a Change of Control,
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 rate in effect at the time of termination for the remaining
Term of the Agreement, payable at such time and in such manner as employees of
the Employer are paid generally.  In addition, during such period,
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 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.  Any such substitute benefit shall be provided at the same
time as the benefit it replaces.

     

    (c)           In
the event of the Employee’s death or disability 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 payable at the
same time and in the same manner as other employees are paid generally, 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.

     

    (d)           In
the event of Termination of Employment pursuant to subsection 7(b), 7(c), or
7(d) within one year after a Change of Control, 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
receive from Employer an amount equal to three (3) times his Base Compensation
at the rate in effect at the time of termination payable in a lump sum within
thirty (30) days after his Termination of Employment.  In addition,
for three years after such Termination of Employment, 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 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.  Any such substitute benefit shall be provided at the same
time as the benefit it replaces.

     

    (e)           The
Employee shall have a “Termination of Employment” if there is a termination of
services provided by the Employee to the Employer, whether voluntarily or
involuntarily, other than by reason of death or disability, as determined by the
Employer’s Board of Directors in accordance with Treas. Reg.
§1.409A-1(h).  In determining whether an Employee has experienced a
Termination of Employment, the following provisions shall apply:

     

    (1)           To
the extent the Employee provides services to the Employer solely as an employee,
except as otherwise provided in part (3) of this subsection, a Termination of
Employment shall occur when the Employee has experienced a termination of
employment with the Employer.  The Employee shall be considered to
have experienced a termination of employment when the facts and circumstances
indicate that the Employee and the Employer reasonably anticipate that either
(i) no further services will be performed for the Employer after a certain date,
or (ii) that the level of bona fide services the Employee will perform for the
Employer after such date (whether as an employee or as an independent
contractor) will permanently decrease to less than 50% of the average level of
bona fide services performed by the Employee (whether as an employee or an
independent contractor) over the immediately preceding 36-month period (or the
full period of services to the Employer if the Employee has been providing
services to the Employer less than 36 months).

     

    If the
Employee is on military leave, sick leave, or other bona fide leave of absence,
the employment relationship between the Employee and the Employer shall be
treated as continuing intact, provided that the period of such leave does not
exceed 6 months, or if longer, so long as the Employee retains a right to
reemployment with the Employer under an applicable statute or by
contract.  If the period of a military leave, sick leave, or other
bona fide leave of absence exceeds 6 months and the Employee does not retain a
right to reemployment under an applicable statute or by contract, the employment
relationship shall be considered to be terminated for purposes of this Agreement
as of the first day immediately following the end of such 6-month
period.  In applying the provisions of this paragraph, a leave of
absence shall be considered a bona fide leave of absence only if there is a
reasonable expectation that the Employee will return to perform services for the
Employer. 

     

    (2)           If
the Employee provides services to the Employer as an independent contractor,
except as otherwise provided in part (3) of this subsection, a Termination of
Employment shall occur upon the expiration of the contract (or in the case of
more than one contract, all contracts) under which services are performed for
the Employer, provided that the expiration of such contract(s) is determined by
the Employer’s Board of Directors to constitute a good-faith and complete
termination of the contractual relationship between the Employee and the
Employer. 

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (3)           If
the Employee provides services to the Employer as both an employee and an
independent contractor, a Termination of Employment generally shall not occur
until the Employee has ceased providing services for the Employer as both as an
employee and as an independent contractor, as determined in accordance with the
provisions set forth in parts (1) and (2) of this subsection,
respectively.  Similarly, if the Employee either (i) ceases providing
services for the Employer as an independent contractor and begins providing
services for the Employer as an employee, or (ii) ceases providing services for
the Employer as an employee and begins providing services for the Employer as an
independent contractor, the Employee will not be considered to have experienced
a Termination of Employment until the Employee has ceased providing services for
the Employer in both capacities, as determined in accordance with the applicable
provisions set forth in parts (1) and (2) of this subsection.

     

    Notwithstanding
the foregoing provisions in this part (3), if an Employee provides services for
the Employer as both an employee and as a director, to the extent permitted by
Treas. Reg. §1.409A-1(h)(5) the services provided by the Employee as a director
shall not be taken into account in determining whether the Employee has
experienced a Termination of Employment as an employee, and the services
provided by the Employee as an employee shall not be taken into account in
determining whether the Employee has experienced a Termination of Employment as
a director.

     

    (4)           For
the purpose of determining whether the Employee has experienced a Termination of
Employment, the term “Employer” shall mean:

     

    (i)           The
entity for which the Employee performs services and with respect to which the
legally binding right to compensation deferred or contributed under this
Agreement arises; and

     

    (ii)           All
other entities with which the entity described above would be aggregated and
treated as a single employer under Code Section 414(b) (controlled group of
corporations) and Code Section 414(c) (a group of trades or businesses, whether
or not incorporated, under common control), as applicable.  In order
to identify the group of entities described in the preceding sentence, an
ownership threshold of at least 50% shall be substituted for the 80% minimum
ownership threshold that appears in, and otherwise must be used when applying,
the applicable provisions of (A) Code Section 1563 for determining a controlled
group of corporations under Code Section 414(b), and (B) Treas. Reg. §1.414(c)-2
for determining the trades or businesses that are under common control under
Code Section 414(c).

     

    (f)           To
the extent the Employee is a “specified employee” (as defined below) as of his
Termination of Employment, payments due to the Employee as a result of his
Termination of Employment shall begin no sooner than six months after the
Employee’s Termination of Employment; provided, however, that any payments not
made during the six month period described in this subsection (f) shall be made
in a single lump sum as soon as within fifteen (15) days after the expiration of
such six month period.  For purposes of this Agreement, the term
“specified employee” shall have the meaning set forth in Treasury Reg. Section
1.409A-1(i) and shall include, without limitation, (1) an officer of the
Employer or the Holding Company having annual compensation greater than $130,000
(as adjusted for inflation under the Code), (2) a five percent owner of the
Employer or the Holding Company, or (3) a one percent owner of the Employer or
the Holding Company having annual compensation of more than
$150,000.  The

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    determination
of whether the Employee is a “specified employee” shall be made by the Employer
in good faith applying the applicable Treasury regulations.

     

    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.

     

    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 any of the
following:

     

    (a)           a
change in the ownership of the Employer or the Holding Company, which shall
occur on the date that any one person, or more than one person acting as a
group, acquires ownership of stock of the Employer or the Holding Company that,
together with stock held by such person or group, constitutes more than fifty
percent (50%) of the total fair market value or total voting power of the stock
of the Employer or the Holding Company.  Such acquisition may occur as
a result of a merger of the Holding Company or the Employer into another entity
which pays consideration for the shares of capital stock of the merging Holding
Company or Employer.  However, if any one person, or more than one
person acting as a group, is considered to own more than fifty percent (50%) of
the total fair market value or total voting power of the stock of the Employer
or the Holding Company, the acquisition of additional stock by the same person
or persons is not considered to cause a change in the ownership of the Employer
or the Holding Company (or to cause a change in the effective control of the
Employer or the Holding Company (within the meaning of subsection
(b)).  An increase in the percentage of stock owned by any one person,
or persons acting as a group, as a result of a transaction in which the Employer
or the Holding Company acquires its stock in exchange for property will be
treated as an acquisition of stock for purposes of this
subsection.  This subsection applies only when there is a transfer of
stock of the Employer or the Holding Company (or issuance of stock of the
Employer or the Holding Company) and stock in the Employer or the Holding
Company remains outstanding after the transaction.

     

    (b)           a
change in the effective control of the Employer or the Holding Company, which
shall occur only on either of the following dates:

     

    (1)           the
date any one person, or more than one person acting as a group acquires (or has
acquired during the 12 month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the Employer or the
Holding Company possessing thirty percent (30%) or more of the total voting
power of the stock of the Employer or the Holding Company.

     

    (2)           the
date a majority of members of the Holding Company’s board of directors is
replaced during any 12 month period by directors whose appointment or election
is not endorsed by a majority of the members of the Holding Company’s board of
directors before the date of the appointment or election; provided, however,
that this provision shall not apply if another corporation is a majority
shareholder of the Holding Company.

     

    If any
one person, or more than one person acting as a group, is considered to
effectively control the Employer or the Holding Company, the acquisition of
additional control of the Employer or the Holding Company by the same person or
persons is not considered to cause a change in the effective control of the
Employer or the Holding Company (or to cause a change in the ownership of the
Employer or the Holding Company within the meaning of subsection (a) of this
section).

     

    (c)           a
change in the ownership of a substantial portion of the Employer’s assets, which
shall occur on the date that any one person, or more than one person acting as a
group, acquires (or has acquired during the 12 month period ending on the date
of the most recent acquisition by such person or persons) assets from the
Employer that have a total gross fair market value equal to or more than forty
percent (40%) of the total gross fair market value of all of the assets of the
Employer immediately before such acquisition or acquisitions.  For
this purpose, gross fair market value means the value of the assets of the
Employer, or the value of the

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    assets
being disposed of, determined without regard to any liabilities associated with
such assets.  No change in control occurs under this subsection (c)
when there is a transfer to an entity that is controlled by the shareholders of
the Employer immediately after the transfer.  A transfer of assets by
the Employer is not treated as a change in the ownership of such assets if the
assets are transferred to –

     

    (1)           a
shareholder of the Employer (immediately before the asset transfer) in exchange
for or with respect to its stock;

     

    (2)           an
entity, 50 percent or more of the total value or voting power of which is owned,
directly or indirectly, by the Employer.

     

    (3)           a
person, or more than one person acting as a group, that owns, directly or
indirectly, 50 percent or more of the total value or voting power of all the
outstanding stock of the Employer; or

     

    (4)           an
entity, at least 50 percent of the total value or voting power of which is
owned, directly or indirectly, by a person described in paragraph
(c).

     

    For
purposes of this subsection (c) and except as otherwise provided in paragraph
(1) above, a person’s status is determined immediately after the transfer of the
assets.

     

    (d)           For
purposes of this section, persons will not be considered to be acting as a group
solely because they purchase or own stock of the same corporation at the same
time, or as a result of the same public offering.  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 Employer or the Holding Company; provided,
however, that they will not be considered to be acting as a group if they are
owners of an entity that merges into the Employer or the Holding Company where
the Employer or the Holding Company is the surviving corporation.

     

    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 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 in­come 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 Agreement
Payments shall be eliminated or reduced consistent with the requirements of this
Section 16 by eliminating or reducing those Agreement Payments in a manner that
produces the greatest economic advantage to the Employee and if elimination of
reduction of two or more specific Agreement Payments produce the same economic
advantage, they shall be adjusted or reduced pro rata.  Within five
business days of the determination pursuant to the immediately preceding
sentence of this Agreement, 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 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 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.

     

    27.           Upon
the inclusion of any amount into the Employee’s income as a result of the
failure of this Agreement to comply with the requirements of Section 409A of the
Code, a payment not to exceed the amount that shall be included in income shall
be made as soon as is administratively practicable following the discovery of
the failure of the Agreement to comply with Section 409A of the Code and
the regulations promulgated thereunder.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    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:

            	/s/
      David A. Bochnowski
	 
      	 
      	
              David
      A. Bochnowski, Chairman and Chief Executive Officer

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              “Employer”

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	/s/
      Joel Gorelick
	 
      	
              Joel
      Gorelick

            
	 
      	 
      	 
      
	 
      	
              “Employee”

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    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:

            	/s/
      David A. Bochnowski
	 
      	 
      	
              David
      A. Bochnowski, Chairman and Chief Executive
  Officer

            


    

    


    


     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    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
Policy No. 0064755

            	 	
              Endorsement
      Split Dollar Plan

            	 	
              $150,000.00

            	 	 
      
	
              New
      York Life Insurance
Policy
      No. 56608626

            	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      
	
              New
      York Life Insurance

              Policy
      No. 56612181

            	 	
              Endorsement
      Split Dollar Plan

            	 	
              $  75,000.00

            	 	 
      


    

    


    
      	
              **

            	
              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.