Document:

Exhibit 10.1

 

FIRST INTERNET BANCORP
 2006 STOCK OPTION PLAN

 

1.                                      PURPOSE

 

The purpose of this 2006 Stock Option Plan (the “Plan”) is to advance the interests of First Internet Bancorp (the “Corporation”) and its subsidiaries, by stimulating the efforts of directors and key employees on behalf of the Corporation, heightening the desire of those individuals to continue in the service of the Corporation or its subsidiaries and assisting the Corporation and its subsidiaries in competing effectively with other enterprises for the services of new directors and key employees necessary for the continued improvement of operations.  This Plan permits the grant of incentive stock options as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), as well as options which are not incentive stock options pursuant to Code Section 422.

 

2.                                      DEFINITIONS

 

(a)                                 “Arm’s Length Transaction” means a transaction negotiated and bargained for in the ordinary course of business, in good faith, between unrelated parties, each acting in its own self interest.

 

(b)                                 “Board” means the Board of Directors of the Corporation.

 

(c)                                  “Change in Control” means:

 

(i)                                     The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of the Corporation (the “Outstanding Corporation Common Shares”) or (ii) the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the “Outstanding Corporation Voting Securities”); provided, however, that the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Corporation (excluding an acquisition by virtue of the exercise of a conversion privilege), (ii) any acquisition by the Corporation, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any corporation controlled by the Corporation or (iv) any acquisition by any corporation pursuant to a reorganization, merger or consolidation, if, following such reorganization, merger or

 

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consolidation, the conditions described in clauses (A), (B) and (C) of subsection (iii) of this Section 2(c) are satisfied; or

 

(ii)                                  Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Corporation’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

 

(iii)                               Approval by the shareholders of the Corporation of a reorganization, merger or consolidation, in each case, unless, following such reorganization, merger or consolidation, (A) more than 60% of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation 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 Corporation Common Shares Outstanding Corporation Voting securities immediately prior to such reorganization, merger or consolidation in substantially the same proportions as their ownership, immediately prior to such reorganization, merger or consolidation, of the Outstanding Corporation Common Shares and outstanding Corporation Voting Securities, as the case may be, (B) no Person (excluding the Corporation, any employee benefit plan (or related trust) of the Corporation or such corporation resulting from such reorganization merger or consolidation and any Person beneficially owning immediately prior to such reorganization, merger or consolidation, directly or indirectly, 20% or more of the Outstanding Corporation Common Shares or Outstanding Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or 

 

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consolidation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (C) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; or

 

(iv)                              Approval by the shareholders of the Corporation of (A) a complete liquidation or dissolution of the Corporation or (B) the sale or other disposition of all or substantially all of the assets of the Corporation, other than to a corporation, with respect to which following such sale or other disposition, (1) more than 60% of, respectively, the then outstanding shares of common 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 Corporation Common Shares and Outstanding Corporation Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership immediately prior to such sale or other disposition, of the Outstanding Corporation Common Shares and outstanding Corporation Voting Securities, as the case may be, (2) no Person (excluding the Corporation and any employee benefit plan (or related trust) of the Corporation or such corporation and any Person beneficially owning, immediately prior to such sale or other disposition directly or indirectly, 20% or more of the Outstanding Corporation Common Shares or Outstanding Corporation Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common 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 and (C) at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Corporation.

 

(d)                                 “Committee” means the Compensation Committee of the Board of Directors, which shall consist of not less than two persons appointed by the Board, or the full Board if no committee is appointed.

 

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(e)                                  “Common Shares” means shares of the Corporation’s common stock, no par value, or the number and kind of shares of stock or other securities which shall be substituted or adjusted for such shares as provided in Section 7.  Such shares may be authorized and unissued shares of the Corporation’s common stock.

 

(f)                                   “Disability” means a physical condition arising from an illness or injury which renders an individual incapable of performing work pursuant to the terms of Code Section 22(3).  The Committee shall make the final determination as to an individual’s Disability, and that determination shall be conclusive on all of the parties.

 

(g)                                  “Fair Market Value” means, if the stock is not then Publicly Traded, $10 per Common Share until such time as Common Shares have been traded in an Arm’s Length Transaction.  After an Arm’s Length Transaction, the Fair Market Value shall be the most recent price per Common Share at which Common Shares have been traded in an Arm’s Length Transaction provided that such Transaction has occurred within a six-month period.  If no Arm’s Length Transaction has occurred within a six-month period, the Fair Market Value will be the price per Common Share most recently determined by the Committee or the Board within such six month period taking the following factors into consideration: the price at which one could reasonably expect such stock to be sold for cash in an Arm’s Length Transaction; the most recent transactions involving shares of such stock; the Corporation’s net worth; prospective earning power and dividend-paying capacity; the goodwill of the Corporation’s business; the Corporation’s industry position; the industry’s economic outlook; the values of securities of issuers whose stock is Publicly Traded and which are engaged in the banking business; the absence of a public market for such stock and such other matters as the Committee or Board deems appropriate.  The determination by the Committee or the Board of the Fair Market Value shall, if not unreasonable, be conclusive and binding notwithstanding the possibility that other persons might make a different, and also reasonable, determination.  In no event shall the Fair Market Value be less than the book value of a Common Share at the end of the most recent fiscal year quarter.

 

If the stock is then Publicly Traded, the Fair Market Value is the closing price of the stock as of the day in question (or, the nearest preceding trading day if the day in question is not a trading day) as reported with respect to the market in which shares of such stock are then traded, or, if no such closing prices are reported, on the basis of the mean between the high bid and low asked prices that day on the principal market or quotation system on which shares of such stock are then quoted, or, if not so quoted, as furnished by a professional 

 

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securities dealer making a market in such stock selected by the Board or the Committee.

 

(h)                                 “Misconduct” means acts of embezzlement, fraud, dishonesty, nonpayment of any obligation owed to the Corporation or a subsidiary, breach of fiduciary duty or deliberate disregard of the Corporation’s or a subsidiary’s rules resulting in loss, damage or injury to the Corporation or a subsidiary, or the making of an unauthorized disclosure of any the Corporation’s or a subsidiary’s trade secret or confidential information, engaging in any conduct constituting unfair competition, inducing any of the Corporation’s or a subsidiary’s customers to breach a contract with the Corporation or a subsidiary or inducing any principal for whom the Corporation or a subsidiary acts as agent to terminate such agency relationship.  In determining whether an optionee has committed an act of Misconduct, the Committee shall act fairly and shall give the optionee an opportunity to appear and present evidence on his or her behalf at a hearing before the Committee of the Board of Directors.

 

(i)                                     “Plan” means the First Internet Bancorp 2006 Stock Option Plan.

 

(j)                                    “Publicly Traded” means traded in the over-the-counter market with Common Shares prices reported by the National Association of Securities Dealers through its NASDAQ system or any successor system, or listed or admitted to trading on the New York Stock Exchange or any other national securities exchange.

 

(k)                                 “Retirement” means retirement from active employment, or retirement from service in the case of a director, with the Corporation or a subsidiary at or after age 65.  The determination of the Committee as to an individual’s Retirement shall be conclusive on all parties.

 

3.                                      ELIGIBLE PARTICIPANTS

 

Directors and key employees of the Corporation and its subsidiaries who, in the Committee’s judgment, are largely responsible through their judgment, interest, ability and special efforts for the successful conduct of the Corporation’s or its subsidiaries’ operations are eligible to receive options granted under this Plan by the Committee from time to time.

 

4.                                      EFFECTIVE DATE AND TERMINATION OF PLAN

 

This Plan was adopted by the Board of Directors and its shareholders and will become effective on March 17, 2006. The Plan shall terminate when all shares of stock subject to options granted under this Plan shall have been acquired through

 

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exercise of such options or on March 16, 2016, whichever is earlier or at such earlier time as the Board of Directors may determine.  Termination of the Plan will not affect the rights and obligations arising under options theretofore granted and then in effect.

 

5.                                      SHARES SUBJECT TO THE PLAN AND TO OPTIONS

 

The maximum number of Common Shares of Corporation that may be subject to awards under the Plan is Four Hundred Thousand (400,000), subject to adjustment pursuant to Section 7.  In no event shall the aggregate number of Common Shares for which any one individual participating in the Plan may be granted stock options exceed 75,000 shares per calendar year, subject to adjustment pursuant to Section 7. All or any shares of stock subject to an option which for any reason terminates unexercised may again be made subject to an option under the Plan.

 

6.                                      GRANT, TERMS AND CONDITIONS OF OPTIONS

 

Options may be granted at any time and from time to time prior to the termination of the Plan.  No optionee shall have any rights as a shareholder with respect to any Common Shares subject to option hereunder until said Shares have been issued.  Each option shall be evidenced by a written stock option agreement which will expressly identify the option as an incentive stock option or as a nonqualified stock option.  Options granted pursuant to the Plan need not be identical but each option is subject to the terms of the Plan and must contain and be subject to the following terms and conditions:

 

(a)                                 Price.  The purchase price under each option granted to optionees shall be established by the Committee.  In no event will the option price of a stock option be less than 100% of the Fair Market Value of the stock on the date of grant.  The option price must be paid in full at the time of the exercise.  The price may be paid in cash or cash equivalents or, if the Common Shares are publicly traded, in Common Shares held by the optionee for the period of time necessary to qualify as mature shares as defined by current accounting guidance and valued at Fair Market Value having an aggregate value on the date of exercise equal to the option price, or in any combination of the foregoing.

 

(b)                                 Duration and Exercise or Termination of Option.  Each option granted to an optionee shall be exercisable in such manner and at such times as the Committee shall determine.  Each option grant shall become exercisable in a series of three equal and successive annual installments of 33 1/3% of the number of options granted, with the first 33 1/3% vesting at the end of one year measured from the grant date of the option.  Each option granted must 

 

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expire within a period of ten (10) years from the grant date.  An optionee’s stock option agreement may provide for accelerated exercisability in the event of the optionee’s death, Disability or Retirement or other events in accordance with policies established by the Committee and may provide for expiration prior to the end of its terms in the event of the termination of the optionee’s service.

 

Except as otherwise provided in this Plan, the following provisions shall govern the exercise period applicable to any options held by the optionee at the time of cessation of service or death:

 

(i)                                     Should the optionee cease to remain in service for any reason other than death or Disability, then the period during which each outstanding option held by such optionee is to remain exercisable shall be limited to the three (3)-month period following the date of such cessation of service.

 

(ii)           Should such service terminate by reason of Disability, then the period during which each outstanding option held by the optionee is to remain exercisable shall be limited to the twelve (12)-month period following the date of such cessation of service.

 

(iii)          Should the optionee die while holding one or more outstanding options, then the period during which each such option is to remain exercisable shall be limited to the twelve (12)-month period following the date of the optionee’s death.  During such limited period, the option may be exercised by the personal representative of the optionee’s estate or by the person or persons to whom the option is transferred pursuant to the optionee’s will or in accordance with the laws of descent and distribution.

 

(iv)                              Should the optionee’s service be terminated for Misconduct, then all outstanding options held by the optionee shall terminate immediately and cease to be outstanding.

 

(v)                                 Under no circumstances shall any such option be exercisable after the specified expiration date of the option term.

 

(vi)                              During the applicable post-service exercise period, the option may not be exercised in the aggregate for more than the number of vested shares for which the option is exercisable on the date of the optionee’s cessation of service.  Upon the expiration of the applicable exercise period or (if earlier) upon the expiration of the option term, the option shall terminate and cease to be exercisable for any vested 

 

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shares for which the option has not been exercised.  However, the option shall, immediately upon the optionee’s cessation of service for any reason, terminate and cease to be outstanding with respect to any option shares for which the option is not at that time exercisable or in which the optionee is not otherwise at that time vested.

 

(c)                                  Transferability of Option.  Each option shall be transferable only by will or the laws of descent and distribution following the optionee’s death.

 

(d)                                 Modification or Assumption of Options. The Committee may modify, extend or assume outstanding options (whether granted by the Corporation or by another issuer) in return for the grant of new options for the same or a different number of shares and at the same or a different exercise price.

 

(e)                                  Incentive Options.  Options granted under the Plan that are intended to be incentive options will be subject to the following additional terms and conditions.

 

(i)                                     Dollar Limitation.  To the extent that the aggregate Fair Market Value of Common Shares (determined as of the respective date or dates of grant) underlying incentive options which are exercisable for the first time by any individual during any calendar year under the Plan (or any other plan of the Corporation, a parent or subsidiary corporation or predecessor thereof) exceeds the sum of $100,000 (or such greater amount as may be permitted under the Code), whether by reason of acceleration or otherwise, such options will not be treated as incentive options.  In making such a determination, options will be taken into account in the order in which they were granted.

 

(ii)           10% Shareholder.  If any optionee to whom an incentive option is to be granted pursuant to the provisions of the Plan is, on the date of grant, the owner of stock (determined with application of the ownership attribution rules of Code Section 424(d)) possessing more than ten percent (10%) of the total combined voting power of all classes of stock of his or her employer corporation or of its parent or subsidiary corporation (“10% Shareholder”), then the following special provisions will apply to the option granted to such individual:

 

(iii)          The option price per share of the stock subject to such incentive option will not be less than one hundred ten percent (110%) of the Fair Market Value of the option shares on the date of grant; and

 

(iv)                              The option will not have a term in excess of five years from the date of grant.

 

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(g)                                  Other Terms and Conditions.  Options may also contain such other provisions, which shall not be inconsistent with any of the foregoing terms, as the Committee shall deem appropriate.  No option, however, nor anything contained in the Plan shall confer upon any optionee any right to continue in the Corporation’s or a subsidiary’s employ or service nor limit in any way the Corporation’s or a subsidiary’s right to terminate his or her employment or service at any time.

 

7.                                      ADJUSTMENT OF AND CHANGES IN THE STOCK

 

(a)                                 Should any change be made to the Common Shares issuable under the Plan by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Shares as a class, without the Corporation’s receipt of consideration, then appropriate adjustments shall be made to (i) the maximum number and/or class of securities issuable under the Plan, (ii) the maximum number and/or class of securities for which any one individual participating in the Plan may be granted stock options in the aggregate per calendar year, (iii) the number and/or class of securities and price per share in effect under each option outstanding under the Plan.  Such adjustments to the outstanding options are to be effected in a manner which precludes the enlargement or dilution of rights and benefits under the Plan.  The adjustments determined by the Committee or the Board shall be final, binding and conclusive.

 

(b)                                 No right to purchase fractional shares shall result from any adjustment in options pursuant to this Section 7.  In case of any such adjustment, the shares subject to the option shall be rounded down to the nearest whole share.  Notice of any adjustment shall be given by the Corporation to each optionee which shall have been so adjusted and such adjustment (whether or not notice is given) shall be effective and binding for all purposes of the Plan.

 

8.                                      CHANGE IN CONTROL

 

(a)                                       In connection with any Change in Control, the Common Shares at the time subject to each outstanding option under this Plan but not otherwise vested shall automatically vest in full so that each such option shall, immediately prior to the specified effective date for the Change in Control, become fully exercisable for all of the Common Shares at the time subject to that option and may be exercised for all or any portion of those shares as fully vested Common Shares.  Each option so accelerated shall remain exercisable for fully-vested shares until the expiration or sooner termination of the option term.

 

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(b)                                 The portion of any incentive option accelerated in connection with a Change in Control shall remain exercisable as an incentive option only to the extent the applicable one hundred thousand dollar limitation is not exceeded.  To the extent such dollar limitation is exceeded, the accelerated portion of such option shall be exercisable as a non-statutory option under the Federal tax laws.

 

(c)                                  The outstanding options shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

 

9.                                      THE CORPORATION’S RIGHT OF FIRST PURCHASE

 

So long as the stock of the class subject to this Plan has not been Publicly Traded for at least ninety days, any stock issued on exercise of any option granted under this Plan shall be subject to the Corporation’s right of first purchase.  By virtue of that right, such stock may not be transferred during the optionee’s lifetime to any person other than members of the optionee’s immediate family, a partnership whose members are the optionee and/or members of the optionee’s immediate family, or a trust for the benefit of the optionee and/or members of the optionee’s immediate family, unless such transfer occurs within fifteen days following the expiration of thirty days after the Corporation has been given a written notice which correctly identified the prospective transferee or transferees and which offered the Corporation an opportunity to purchase such stock at its Fair Market Value in cash and such offer was not accepted within thirty days after the Corporation’s receipt of the notice.

 

10.                               LISTING OR QUALIFICATION OF STOCK

 

In the event that the Board of Directors determines in its discretion that the listing or qualification of the Plan shares on any securities exchange or under any applicable law or governmental regulation is necessary as a condition to the issuance of such shares under the option, the option may not be exercised in whole or in part unless such listing, qualification, consent or approval has been unconditionally obtained.

 

11.                               ADMINISTRATION AND AMENDMENT OF THE PLAN

 

The Plan shall be administered by the Committee.  The Committee shall be appointed by the Board of Directors, and shall serve at its pleasure.  The Board shall fill vacancies on the Committee and may from time to time remove or add members.  The Board of Directors may amend or terminate the Plan as desired, without further action by the Corporation’s shareholders except to the extent required by applicable 

 

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law, provided such amendment does not adversely affect the rights and obligations with respect to options outstanding at the time of the amendment.

 

12.                               TIME OF GRANTING OPTIONS

 

The effective date of each option granted hereunder shall be the date on which the grant was made.  Within a reasonable time thereafter, the Corporation will execute and deliver a written option agreement to the optionee.

 

13.                               WITHHOLDING

 

To the extent required by applicable federal, state, local or foreign law, an optionee shall make arrangements satisfactory to the Corporation or a subsidiary, as applicable, for the satisfaction of any withholding tax obligations that arise by reason of an option exercise or any sale of shares.  The Corporation shall not be required to issue shares until such obligations are satisfied.  The Committee may, in its sole discretion, permit these obligations to be satisfied by having the Corporation or a subsidiary withhold a portion of the shares of stock that otherwise would be issued to him or her upon exercise of the option, or to the extent permitted, by tendering shares previously acquired.

 

11Exhibit 10.2

 

FIRST INTERNET BANCORP

2011 DIRECTORS’ DEFERRED STOCK PLAN

 

1.                                      Purpose.

 

The purpose of this First Internet Bancorp 2011 Directors’ Deferred Stock Plan (the “Plan”) is to assist First Internet Bancorp (the “Company”) in recruiting and retaining highly qualified directors and to strengthen the commonality of interest between directors and shareholders by providing for the receipt by the directors of the Company of all or a portion of their Director Fees (as defined below) in the form of Deferred Stock Rights (as defined below).  Any rights created under this Plan shall be mere unsecured contractual rights of participants and their beneficiaries against the Company.  The Plan is unfunded, and any payments will be made from treasury shares or general assets of the Company.  However, nothing in this Plan shall prohibit the Company from establishing a rabbi trust to fund the benefits provided under this Plan.

 

2.                                      Administration.

 

The Plan will be administered by a committee of not less than two outside directors of the Company, or if no committee is appointed, by the Board (the “Committee”).  The Committee’s construction and interpretation of the terms and provisions of the Plan shall be final and conclusive. All questions of interpretation of the Plan shall be determined by the Committee and such determination shall be final and binding upon all persons having an interest in the Plan.  No Committee member shall be liable for any action or determination under the Plan made in good faith. In the event the Company’s common stock, no par value (“Common Stock”) becomes Publicly Traded, the Committee will comprise two outside directors as defined in Rule 16b-3 promulgated under Section 16 of the Exchange Act of 1934.

 

3.                                      Participation in the Plan.

 

All directors of the Company who are not employees of the Company or under separate contract with the Company (“Eligible Directors”) shall be eligible to be granted Deferred Stock Rights under the Plan.  The Company will maintain an account for each of the Eligible Directors who receives Deferred Stock Rights under the Plan, which account will be maintained even after the Eligible Director ceases to provide services as a Director, and until the Eligible Director’s Account in the Plan has been distributed in accordance with the provisions of Section 6(e) of the Plan.  During the period of time the Company maintains an account for an Eligible Director, the Eligible Director will be participating in the Plan.

 

4.                                      Stock Subject to the Plan.

 

The maximum number of shares which may be issued under the Plan and any predecessor plan is 120,000 shares of the Company’s Common Stock, no par value, subject to adjustment as provided in Section 10.

 

 

5.                                      Election of Deferred Stock Right.

 

If a Director elects before January 1 of each calendar year, he or she will receive as of January 1 of each year, Deferred Stock Rights based on the dollar amount of the Directors Fees to be earned during that calendar year divided by the Fair Market Value of the shares of Common Stock on the Valuation Date.

 

(a)                                 “Director Fees” means the amount that a director is entitled to receive as an annual retainer for serving as a director for a calendar year, as determined from time to time by the Board of Directors.  An Eligible Director will be entitled to receive 1/12 of his or her annual retainer for each full calendar month during which the Eligible Director serves as a Director during the applicable calendar year.

 

(b)                                 “Deferred Stock Rights” represent the right to receive a specified number of shares of Common Stock from the Company on a later date as elected by the Eligible Director in accordance with Section 6 of the Plan.

 

(c)                                  “Valuation Date” shall be January 1 of the calendar year in which the Directors Fees are earned.

 

6.                                      Terms, Conditions and Form of Deferred Stock Rights.

 

Each election to receive Deferred Stock Rights granted under the Plan shall be evidenced by a written agreement in such form as the Committee shall from time to time approve (“Election Form”), which agreement shall comply with and be subject to the following terms and conditions:

 

(a)                                 Amount of Deferral.  With respect to each calendar year, an Eligible Director may elect to defer a specified dollar amount or percentage of his or her Director Fees for that calendar year (“Deferral Amount”) by filing an Election Form prior to the beginning of such calendar year. An Eligible Director shall have the right to elect to defer each calendar year.  If the Eligible Director does not file a new Election Form prior to the beginning of a calendar year, the Election Form on file will remain effective for that calendar year.  An Eligible Director may change the dollar amount or percentage of his or her Director Fees to be deferred (or reduce such amount or percentage to zero) by filing a subsequent Election Form with the Committee.  Any such change shall be effective as of the first day of the calendar year immediately succeeding the calendar year in which such Election Form is filed with the Committee. The Deferred Stock Rights shall be paid out in shares of Common Stock as set forth in Section 6(e).

 

(b)                                 Deferred Stock Rights.  Subject to Section 14, effective as of each Valuation Date of each calendar year (or as soon thereafter as reasonably practicable) commencing on or after January 1, 2011, each Eligible Director then in office who has elected to defer all or part of his/her Director Fees will be granted a Deferred Stock Right in respect of the Deferral Amount, valued as of the 

 

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Valuation Date.  Any Eligible Director who is first elected other than at an annual meeting of shareholders shall be entitled to receive a Deferred Stock Right for the Deferral Amount (appropriately prorated) provided such election is made within thirty (30) days from the date the Eligible Director is elected.  The Valuation Date will be the January 1 of the year in which the Director is elected.  For the 2011 Plan Year, each Eligible Director will be entitled to receive a Deferred Stock Right, if he or she so elects within thirty (30) days from the adoption date of this Plan.

 

(c)                                  Accounts.  Promptly following each Valuation Date, the Company shall establish an account for each Eligible Director who elected to receive a Deferred Stock Right (“Account”).  The Company shall credit to each Eligible Director’s Account a number of units equal to the number of whole shares determined by dividing the Deferral Amount for the calendar year by the Fair Market Value (defined below) on the Valuation Date. The Eligible Director’s Account shall also be credited with such dividends as would have been paid if the units credited to such account had been held in Company Common Stock on the dividend payment date.  Such hypothetical dividends shall be accounted for as additional Deferred Stock Rights based on the Fair Market Value on the Valuation Date in the year for which the dividends were paid.  To the extent that the application of the foregoing formula would result in the issuance of fractional shares, no fractional shares shall be issued, but instead, the Company shall maintain a separate non-interest-bearing account for each Eligible Director (“Sub-Account”), which Sub-Account shall be credited with the amount of any Deferral Amounts not convertible into whole shares of Common Stock which amounts shall be combined with Deferral Amounts that are paid for the next following calendar year.  When whole shares of Common Stock are issued by the Company to the Eligible Director for any calendar year, the amounts in such Sub-Accounts shall be reduced by that amount which results in the issuance of the maximum number of whole shares of Common Stock to such Eligible Director.  The Company shall pay any and all fees and commissions incurred in connection with the payment of Deferred Amounts to an Eligible Director in shares of Common Stock.

 

(d)                                 Calculation of Payment.  For Eligible Directors who have elected to have the Director Fees paid in the form of Deferred Stock Rights, the number of shares underlying the Deferred Stock Rights granted to any Eligible Director shall be equal to the whole number (with any fractional interests rounded up to the next highest whole number) obtained by dividing the Director Fees (including an annual retainer of $15,000 in 2010, and as adjusted from time to time by the Board of Directors) by the Fair Market Value of the Common Stock on the Valuation Date.

 

The Fair Market Value is the closing price of the stock as of the day in question (or, the nearest preceding trading day if the day in question is not a trading day) as reported with respect to the market in which shares of such stock are then traded, or, if no such closing prices are reported, on the basis of the mean between the high bid and low asked prices that day on the principal market or quotation system on which shares of such stock are then quoted, or, if not so quoted, as furnished by a professional securities dealer making a market in such stock selected by the Board or the Committee.  In no event shall the Fair Market Value be less than the average value of the Common 

 

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Stock traded on the over-the-counter Bulletin Board (www.otcbb.com symbol FIBP) during the prior month ended December 31.  The determination by the Committee or the Board of the Fair Market Value shall, if not unreasonable, be conclusive and binding notwithstanding the possibility that other persons might make a different, and also reasonable, determination.

 

“Publicly Traded” means traded in the over-the-counter market with Common Stock prices reported by the National Association of Securities Dealers through its NASDAQ system or any successor system, or listed or admitted to trading on the New York Stock Exchange or any other national securities exchange.

 

(e)                              Mid-Year Termination.  If a Director terminates service as a Director during the calendar year, he or she shall forfeit any Deferred Stock Rights attributable to Director Fees that have not yet been earned.

 

(f)                                   Time of Payment.  Subject to Section 7, each Eligible Director who elects to receive Deferred Stock Rights may elect in the Election Form submitted to the Company prior to the beginning of a calendar year or, if newly eligible, within 30 days of his or her initial eligibility date to receive payment of his or her Deferred Stock Rights earned during that calendar year upon (i) the date upon which the grantee ceases to serve as a director of the Company for any reason including, but not limited to death, disability as defined within the American Jobs Creation Act of 2004 and the underlying laws and regulations, removal or resignation (“Separation from Service”); however, if the Company is Publicly Traded at the time of Separation of Service, payment of the Deferred Stock Rights will be delayed six (6) months after the date of Separation of Service, or (ii) the date the Eligible Director attains age 65.

 

(g)                                  Form of Payment.  Eligible Directors will be paid in shares of Common Stock in the proportion of one share of Common Stock for one Deferred Stock Right (any fractions shall be converted to and paid in cash).

 

(h)                                 Special Distributions.  Notwithstanding any other provision of this Section 6, an Eligible Director may elect to receive a distribution (“Special Distribution”) of part or all of his or her Account balance in one or more distributions if (and only if) the Committee determines, in its discretion, that the Eligible Director has experienced an unforeseeable emergency, as defined within the American Jobs Creation Act of 2004 and the underlying laws and regulations, that is caused by an event beyond the control of the Eligible Director and that would result in severe financial hardship to the Eligible Director if the early distribution were not permitted.  Upon such Special Distribution, the amount of the Eligible Director’s Account balance subject to such distribution is reduced by ten percent (10%).  Any distribution made pursuant to such an election shall be made within sixty (60) days of the date such election is submitted to the Committee. The remaining ten percent (10%) of the portion of the electing Eligible Director’s Account balance subject to such distribution shall be forfeited.

 

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(i)                                     Payment Upon Death.  In the event of an Eligible Director’s death, the shares of Common Stock issuable to the Eligible Director under Deferred Stock Rights shall be issued to the legal representative or legatee of the Eligible Director.  In the alternative, an Eligible Director may elect to designate a beneficiary to receive his or her shares issuable under Deferred Stock Rights in the event of such Eligible Director’s death.  In order to designate a beneficiary or beneficiaries, such director must complete and deliver to the Company a written form (the “Beneficiary Form”) on which he or she makes such designation. Such a designation will become effective when received by the Company.  If the Eligible Director dies without making a designation, the shares underlying Deferred Stock Rights shall be issued to the legal representative or legatee of the Eligible Director’s estate.

 

7.                                      Change in Control.

 

The following provisions of this Section 7 will become effective upon a Change in Control. No portion of this Section 7 will apply to any transaction or event referred to herein to the extent it is inconsistent with applicable state or federal law.  Notwithstanding any other provision of this Plan to the contrary, upon the occurrence of a Change in Control, the benefit provided by this Section 7 shall be the exclusive benefit provided under this Plan to the Eligible Directors (and to their spouses and beneficiaries), and accordingly, each such person shall not be entitled to any other benefits under this Plan.  Upon receipt of his or her benefit under this Section 7, a person shall cease being an Eligible Director in the Plan.

 

(a)                                 Effective on a Change in Control, each Eligible Director’s Account (including all contributions and earnings as of that date) shall be paid to the Eligible Director and/or beneficiary, as applicable, by the Committee as soon as administratively practicable following the Change in Control in the form of a lump sum cash payment.

 

(b)                                 “Change in Control” shall mean (i) the direct or indirect acquisition by any person, entity or group of persons, within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934 (“Act”), or any comparable successor provisions of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Act) of securities possessing more than 30 percent (30%) of the total combined voting power of the Company’s outstanding securities pursuant to a tender or exchange offer made directly to the Company’s shareholders which the Board of Directors does not recommend such shareholders to accept or (ii) the approval by the shareholders of the Company of a reorganization, merger, or consolidation, in each case, with respect to which persons who were shareholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than 50 percent (50%) of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated Company’s then outstanding securities, (iii) a liquidation or dissolution of the Company, or (iv) the sale of all or substantially all of the Company’s assets.

 

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8.                                      Assignments.

 

Each Deferred Stock Right granted under the Plan by its terms shall not be transferable by the grantee otherwise than by will or by the laws of descent and distribution, or pursuant to a qualified domestic relations order (as defined in Section 414(p) of the Internal Revenue Code of 1986, as amended or replaced from time to time).

 

9.                                      Limitation of Rights.

 

(a)                                 No Right to Continue as Director.  Neither the Plan, nor the granting of a Deferred Stock Right nor any other action taken pursuant to the Plan, shall constitute or be evidence of any agreement or understanding, expressed or implied, that the Company will retain a director for any period of time.

 

(b)                                 No Shareholder Rights.  Except as specifically set forth in this Plan, a grantee shall have no rights as a shareholder with respect to the Common Stock covered by his or her Deferred Stock Right until the date of the issuance to him or her of a stock certificate covering the shares underlying such Deferred Stock Rights, and no adjustment will be made for rights for which the record date is prior to the date such certificate is issued.  Any voting rights with respect to shares covered by a Deferred Stock Right shall be exercised by the Committee, or, if a rabbi trust is established, by the trustee.

 

10.                               Adjustment Provisions.

 

(a)                                 Recapitalizations.  If, through or as a result of any merger, consolidation, sale of all or substantially all of the assets of the Company, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction, (i) the outstanding shares of Common Stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of the Company, or (ii) additional shares or new or different shares or other securities of the Company or other non-cash assets of the Company are distributed with respect to such shares of Common Stock or other securities, an appropriate and proportionate adjustment, as determined by the Committee in its sole discretion, may be made in (x) the maximum number and kind of shares reserved for issuance under the Plan, (y) the number and kind of shares or other securities subject to any then outstanding Deferred Stock Rights under the Plan, and (z) the price for each share subject to any then outstanding Deferred Stock Rights under the Plan.  In the event of any other extraordinary dividend or distribution, whether in stock, cash or other property, or a spinoff, split up or other extraordinary transaction, the number of shares issuable under this Plan shall be subject to such adjustment as the Committee or the Board may deem appropriate, and the number of shares issuable pursuant to any Deferred Stock Rights theretofore granted and the price of such Deferred Stock Rights shall be subject to such adjustment as the Committee or the Board may deem appropriate with a view toward preserving the value of such Deferred Stock Rights.

 

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(b)                                 Successors.  The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business and/or assets of the Company expressly to assume and to agree to perform this Plan in the same manner and to the same extent the Company would be required to perform if no such succession had taken place. This Plan shall be binding upon and inure to the benefit of the Company and any successor of or to the Company, including without limitation any persons acquiring directly or indirectly all or substantially all of the business and/or assets of the Company whether by sale, merger, consolidation, reorganization or otherwise (and such successor shall thereafter be deemed the “Company” for the purpose of this Plan), and the heirs, beneficiaries, executors and administrators of each Eligible Director.

 

11.                               Amendment of the Plan.

 

The Board may at any time amend or discontinue the Plan and the Committee may at any time amend or cancel any outstanding Deferred Stock Rights for any purpose, including, but not limited to satisfying changes in law or for any other lawful purpose, but no such action shall adversely affect rights under any outstanding Deferred Stock Rights without the holder’s consent.

 

12.                               Notice.

 

Any written notice to the Company required by any of the provisions of the Plan shall be addressed to the Secretary of the Company at 9200 Keystone Crossing, Suite 800, Indianapolis, Indiana 46240 and sent by first class mail/certified mail/overnight courier and shall become effective when it is received by the Secretary, Assistant Secretary, or his or her designees.

 

13.                               Effective Date and Duration of the Plan.

 

(a)                                 Effective Date.  The Plan shall become effective on the date set forth below. Amendments to the Plan shall become effective when adopted by the Board of Directors, unless otherwise provided.  No shareholder approval is required to implement this Plan.

 

(b)                                 Termination.  The Plan shall terminate upon the date on which all shares available for issuance, and all cash payable under, the Plan shall have been issued and paid pursuant to the Deferred Stock Rights granted under the Plan.

 

14.                               Miscellaneous

 

(a)                                 Investment Representations.  The Company may require any person to whom a Deferred Stock Right is granted, as a condition of such Deferred Stock Right, to give written assurances in substance and form satisfactory to the Company to the effect that such person is acquiring the Common Stock subject to the Deferred Stock Right for his or her own account for investment and not with any present intention of selling or otherwise distributing the same, and to 

 

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such other effects as the Company deems necessary or appropriate in order to comply with federal and applicable state securities laws.

 

(b)                                 Compliance with Securities Laws.  Each Deferred Stock Right shall be subject to the requirements that if, at any time, counsel to the Company shall determine that the listing, registration or qualification of the shares subject to such Deferred Stock Rights upon any securities exchange or under any state or federal law is necessary as a condition of, or in connection with, the issuance or purchase of shares thereunder, such shares may not be issued unless such listing, registration, qualification, consent or approval, or satisfaction of such condition shall have been effected or obtained on conditions acceptable to the Board of Directors.  Nothing herein shall be deemed to require the Company to apply for or to obtain listing, registration or qualification, or to satisfy such condition.

 

(c)                                  Withholding Taxes.  The Company shall have no withholding obligations with respect to Deferred Stock Rights or the issuance of Common Stock under this Plan and each Eligible Director will be responsible for taxes owed under the Plan.  The Company will issue the required information return on Form 1099 as appropriate.

 

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