Document:

Exhibit 10.1

 

EMPLOYMENT
AGREEMENT

 

This is an
Employment Agreement (“Agreement”) entered into between EQUITABLE RESOURCES,
INC. (“Equitable” or the “Company”) and JOHANNA G. O’LOUGHLIN (“Ms. O’Loughlin”).

 

WHEREAS, Ms. O’Loughlin
has agreed to step down from the position of Senior Vice President and General
Counsel as of March 14, 2008 (at which time her status as an officer of
Equitable will cease) and from the position of Corporate Secretary as of March 31,
2008; and

 

WHEREAS, in order
to facilitate a smooth transition to her successor, Ms. O’Loughlin has
agreed to assume the position of Special Counsel to Equitable for the remainder
of calendar year 2008; and

 

WHEREAS, Ms. O’Loughlin
will retire from Equitable as of January 2, 2009.

 

NOW, THEREFORE, in
consideration of the respective representations, acknowledgements, covenants
and agreements of the parties set forth herein, and intending to be legally
bound, the parties agree as follows:

 

1.             The term of this
Agreement is from March 15, 2008 through January 1, 2009.  During that period, Ms. O’Loughlin will
hold the position of Special Counsel and, through March 31, 2008,
Corporate Secretary for Equitable. 
Effective January 2, 2009, Ms. O’Loughlin will retire from
Equitable, at which time her employment with Equitable will terminate.

 

2.             Beginning April 21,
2008, Ms. O’Loughlin will also become Of Counsel to Reed Smith LLP and
will work out of Reed Smith’s Pittsburgh office.  At Reed Smith, Ms. O’Loughlin will be
provided by Reed Smith with an office, shared administrative support,
malpractice insurance, and computer/email access.  While at Reed Smith during the period from April 21,
2008 through December 31, 2008, Ms. O’Loughlin is expected to provide
approximately 800 hours of her time to Equitable, not to exceed 100 hours in
any individual month (or 40 hours in any individual week), subject to scheduled
vacation or other leave, including medical leave in connection with surgery
scheduled March 17.  During that
period, Ms. O’Loughlin agrees to cooperate in good faith with the
transition to her successor (Lewis B. Gardner, Esq.), to report directly
to Mr. Gardner during this period to fulfill her hourly service
obligation, and to comply with Mr. Gardner’s reasonable requests and
direction, making herself available on reasonable notice from him.  It is Equitable’s present intention to
request the full number of hours described herein, but if the full number of
hours is not requested during the period of the Agreement, the Agreement shall
nevertheless remain in full force and effect.

 

3.             In light of her dual
roles at Equitable and Reed Smith and because she will have an office,
administrative support and computer/email access at Reed Smith, Ms. O’Loughlin
will not have an office nor will she have unrestricted access to Equitable’s
facilities or Equitable’s email or other computer systems as of the close of
business on March 14, 2008.  Ms. O’Loughlin
also confirms that as of March 14, 2008, she has returned to the Company
all credit cards, keys, computers, computer software, disks, cellular phone
equipment, PDAs, files, manuals, books, 

 

 

records,
correspondence, notes, photos or photo reproductions, tape recordings and any
other property of Equitable, whether in electronic format or “hard” copy.

 

4.             For the remainder of
calendar year 2008, Equitable shall continue to pay Ms. O’Loughlin’s base
salary at her current annual salary rate of $270,000, to be paid in bi-weekly
payments.  During that same period,
Equitable shall also continue Ms. O’Loughlin as a participant in Equitable’s
health and welfare benefits programs based upon her current elections and at
the current employee co-payments.

 

5.             It is understood and
agreed that Ms. O’Loughlin is not eligible to receive a bonus payment
under the 2008 Short-Term Incentive Plan (“2008 STIP”) and/or the 2008
Executive Short-Term Incentive Plan (“2008 ESTIP”).

 

6.             Assuming Ms. O’Loughlin
remains employed by Equitable through December 31, 2008 under the terms of
this Agreement, Ms. O’Loughlin shall remain a participant in, and she or
her estate (in the event of her death or her becoming Disabled as defined in
the 2005 EPIP prior to January 1, 2009) will receive 100% of the 2005 EPIP
(“Executive Performance Incentive Program”) payment, contingent upon
achievement of the performance criteria set forth therein and paid at the same
time as paid to all other participants. 
Her financial rewards under the EPIP remain subject to the terms and
conditions of the EPIP, as it may be amended from time to time.  The Compensation Committee of the Board of
Directors has reviewed and approved this Agreement, including Ms. O’Loughlin’s
continuing participation in the EPIP. 
Copies of the unanimous written consents executed by the members of the
Compensation Committee are attached as Exhibit A.

 

7.             It is agreed that Ms. O’Loughlin
may attend one or more professional conferences during the term of this
Agreement and Equitable shall reimburse Ms. O’Loughlin for the cost of
travel, lodging and meals in connection with conference(s), up to a total amount
not to exceed Ten Thousand Dollars ($10,000).

 

8.             Equitable shall
reimburse Ms. O’Loughlin for her parking expenses at her new work location
during the period from April 21, 2008 through December 31, 2008.

 

9.             Equitable will copy Ms. O’Loughlin’s
contact list from her Equitable computer and provide the copy to Ms. O’Loughlin
on a computer disk.  Ms. O’Loughlin,
by March 14, 2008, will designate for Equitable’s review other materials
(of a purely personal nature) of which she would like to have a copy.

 

10.           Ms. O’Loughlin
agrees not to act as an employment reference for any active employee of
Equitable during the term of this Agreement.

 

11.           Ms. O’Loughlin
agrees not to reapply or to seek to become reemployed by Equitable or any of
Equitable’s subsidiaries or affiliates at any time in the future.

 

12.           It is understood and
agreed that an internal announcement regarding the above described changes in
Equitable’s Law Department will be made on a mutually agreeable date, 

 

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and the content of
that announcement will be substantially similar to the language appearing on Exhibit B
hereto.

 

13.           Ms. O’Loughlin’s
employment cannot be terminated prior to January 2, 2009 for any reason
other than Cause (as defined below).

 

(a)                                  Solely
for purposes of this Agreement, “Cause” shall mean:  

(i) commission of an act of moral turpitude or fraud; (ii) willful
engagement in conduct which is demonstrably injurious to the Company and/or its
reputation; or (iii) the willful refusal to fulfill her responsibilities
described in paragraph 2 above or any other willful violation(s) of
her contractual obligations to the Company, including her contractual
obligations set forth elsewhere in this Agreement.

 

(b)                                 The
definition of “other cause” under the 2005 EPIP shall be construed the same as
the definition of “Cause” herein with respect to any termination of Ms. O’Loughlin’s
employment prior to January 2, 2009.

 

14.           Ms. O’Loughlin
agrees not to make any negative or disparaging comments to the media, to any
employees or former employees of Equitable, or to any other members of the
public regarding Equitable or regarding any of Equitable’s directors or
officers.

 

15.           Ms. O’Loughlin acknowledges and agrees that her employment with
Equitable necessarily involved her knowledge of and access to confidential and
proprietary information pertaining to the business of the Company and its
subsidiaries and affiliates. 
Accordingly, she agrees that during the term of this Agreement and after
the effective date of her termination from employment, she will not, directly
or indirectly, without the express written permission of the Company (unless
directed by applicable legal authority having jurisdiction over her) disclose
or use, or knowingly permit to be disclosed or used, for the benefit of
herself, any person, corporation or other entity other than the Company and its
subsidiaries (a) any information concerning any financial matters,
customer relationships, competitive status, supplier matters, internal
organizational matters, current or future plans, or other business affairs of
or relating to the Company and its subsidiaries; (b) any management,
operational, trade, technical or other secrets or any other proprietary
information or other data of the Company or its subsidiaries; or (c) any
other information related to the Company or its subsidiaries which has not been
published and is not generally known outside of the Company.  Ms. O’Loughlin acknowledges that all of
the foregoing constitutes confidential and proprietary information, which is
the exclusive property of the Company.

 

16.           In consideration for
certain additional payments and benefits described below and as requested by Ms. O’Loughlin,
Ms. O’Loughlin agrees that the covenants as to non-competition and
non-solicitation contained in Section 2 of the NonCompete Agreement
between Equitable and Ms. O’Loughlin dated December 1, 1999 shall
remain in effect during the remainder of Ms. O’Loughlin’s employment with
Equitable and for a period of three (3) years after the termination of her
employment.  It is understood and agreed
that the covenant as to 

 

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non-competition
applies only to Ms. O’Loughlin’s activities other than as an
attorney-at-law.  The additional payments
and benefits are as follows:

 

(a)           Continued
medical and prescription drug coverage based upon Ms. O’Loughlin’s current
elections and active employee co-payments until Ms. O’Loughlin reaches the
age of 65.  (It is understood and agreed
that beginning in 2009, the Company’s annual health savings contribution will
cease);

 

(b)           The
supplemental medical savings account equal to $1,000 per year for a period of
five years following Ms. O’Loughlin’s termination from employment;

 

(c)           Financial
planning services from the team of Metz Lewis and Hawthorn (or equivalent tax
preparer) to be paid directly by the Company for a period of five years
following Ms. O’Loughlin’s termination from employment;

 

(d)           Reimbursement
for home internet and Blackberry (or equivalent PDA device) service for a
period of five years following termination from employment;

 

(e)           Continued
access to the EQT Help Desk for a period of five years following termination
from employment;

 

(f)            Reimbursement
for Duquesne Club dues for a period of five years following termination from
employment; and

 

(g)           Reimbursement
for Pittsburgh Golf Club dues for a period of five years following termination
from employment.

 

All other benefits not explicitly listed herein shall cease as of January 2,
2009.

 

The perquisites and expense reimbursements provided herein shall be
payable on the date(s) provided in Equitable’s standard payroll and
reimbursement procedures with respect to such perquisites and expense
reimbursements.  Notwithstanding the
foregoing sentence, to the extent reimbursed, all reimbursement payments with
respect to expenses incurred within a particular year shall be made no later
than the end of Ms. O’Loughlin’s taxable year following the taxable year
in which the expense was incurred; provided, further that, if Ms. O’Loughlin
is a “Specified Employee” of Equitable under Section 409A of the Internal
Revenue Code at the time of her separation from service, no such payments or
reimbursements may be made to her or on Ms. O’Loughlin’s behalf until the
first day following the six month anniversary of her separation from
service.  The amount of reimbursable
expenses incurred in one taxable year of Ms. O’Loughlin shall not affect
the amount of reimbursable expenses in a different taxable year, and such
reimbursement shall not be subject to liquidation or exchange for another
benefit.

 

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To the extent any such benefits provided in section (a) of
this paragraph cannot be provided on a non-taxable basis to Ms. O’Loughlin
and the provision thereof would cause any part of the monthly benefits to be
subject to additional taxes and interest under section 409A of the Code,
then the provision of such benefits shall be deferred to the first day
following the six-month anniversary of her separation from service.

 

17.           It is understood and
agreed that because Ms. O’Loughlin will be transferring to a work location
other than 225 North Shore Drive for the remainder of 2008, she will not be
obliged to pay the membership fee specified in the Fitness Center Agreement for
the entire year of 2008 but only for the pro rata portion of 2008 while she was
working at 225 North Shore Drive.

 

18.           In consideration for
Equitable’s commitments herein, Johanna G. O’Loughlin, on behalf of herself,
her heirs, representatives, estates, successors and assigns, does hereby
irrevocably and unconditionally release and forever discharge Equitable
Resources, Inc., its predecessors, subsidiaries, affiliates, and benefit
plans, and their past, present and future officers, directors, trustees,
administrators, agents and employees, as well as the heirs, successors and
assigns of any of such persons or such entities (hereinafter severally and
collectively called “Releasees”) from any and all manner of suits, actions,
causes of action, damages and claims, known and unknown, that Ms. O’Loughlin
has or may have against any of the Releasees for any acts, practices or events
up to and including the date she signs this Agreement and the continuing effects
thereof, except for the performance of the provisions of this Agreement, it
being the intention of Ms. O’Loughlin to effect a general release of all
such claims.  This release includes any
and all claims under any possible legal, equitable, contract, tort, or
statutory theory, including but not limited to any claims under Title VII of
the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment
Act, the Older Workers Benefit Protection Act, the Americans With Disabilities
Act, the Civil Rights Act of 1991, the Pennsylvania Human Relations Act, the
City of Pittsburgh Human Relations Ordinance, and other federal, state, and
local statutes, ordinances, executive orders, regulations and other laws
prohibiting discrimination in employment, the federal Employee Retirement
Income Security Act of 1974, and state, federal or local law claims of any
other kind whatsoever (including common law tort and contract claims) arising
out of or in any way related to Ms. O’Loughlin’s employment with Equitable
or her separation from employment with Equitable.  Ms. O’Loughlin also specifically
releases all Releasees from any and all claims or causes of action for the
fees, costs and expenses of any and all attorneys who have at any time or are
now representing her in connection with this Agreement or in connection with
any matter released in this Agreement.

 

19.           Equitable shall provide
Ms. O’Loughlin with outplacement services from the firm of Challenger,
Gray & Christmas for the twelve month period following the termination
of her employment with Equitable if she executes and delivers to Equitable on January 2,
2009 a Supplemental Release in the form attached hereto as Exhibit C.  Equitable shall pay or reimburse Ms. O’Loughlin
for reasonable costs incurred for such outplacement services, provided such
expenses must be incurred before the end of her second taxable year following
the taxable year in which her separation from service occurs and must be
reimbursed before the end of her third taxable year following the taxable year
in which her separation from service occurs.

 

5

 

20.           The parties understand
that this Agreement does not prohibit Ms. O’Loughlin from filing an
administrative charge of alleged employment discrimination under Title VII of
the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Americans With Disabilities Act or the Equal Pay Act.  Ms. O’Loughlin, however, waives her
right to monetary or other recovery should any federal, state or local
administrative agency pursue any claims on her behalf arising out of or
relating to her employment with and/or separation from employment with
Equitable.  This means that by signing
this Agreement, Ms. O’Loughlin will have waived any right she had to
obtain a recovery if an administrative agency pursues a claim against Equitable
or any of the Releasees based on any actions taken by any of the releasees up
to the dates of the signing of this Agreement and the Supplemental Release, and
that Ms. O’Loughlin will have released the Releasees of any and all claims
of any nature arising up to the dates of the signing of this Agreement and the
Supplemental Release.

 

21.           Ms. O’Loughlin
expressly warrants that she was advised to consult with an attorney prior to
executing this Agreement.  She
acknowledges that she has been afforded the opportunity to consider this
Agreement for a period of at least twenty one calendar days, which is a
reasonable period of time, that she has carefully read this Agreement, that she
understands completely its contents and that she has executed the same of her
own free will, act and deed.  If Ms. O’Loughlin
signs this Agreement in less than twenty one calendar days, she acknowledges
that she has thereby waived her right to the full twenty one day period.

 

22.           Ms. O’Loughlin
will have a period of seven calendar days following her execution of this
Agreement to revoke it, and this Agreement will not be effective or enforceable
prior to the expiration of that seven-day revocation period.  If Ms. O’Loughlin does not advise
Charlene Petrelli, Vice President and Chief Human Resources Officer, 225 North
Shore Drive, Pittsburgh, PA 15212 in writing that she revokes this Agreement
within seven calendar days of her execution of it, she understand that this
Agreement will be effective and enforceable.

 

23.           The provisions of this
Agreement are severable.  To the extent
that any provision of this Agreement is deemed unenforceable in any court of
law, the parties intend that such provision be construed by such court in a
manner to make it enforceable.

 

24.           This Agreement shall be
binding upon and inure to the benefit of the successors and assigns of the
Company.

 

25.           This Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania without regard to conflict of law principles.

 

26.           This Agreement contains
the entire agreement between the parties and it supersedes all prior agreements
and understandings between Equitable and Ms. O’Loughlin with respect to
the subject matters hereof (oral or written), including but not limited to the
Change of Control Agreement dated September 1, 2002 and the Non Compete
Agreement dated December 1, 1999, except that it is understood and agreed
that the covenants as to non-competition and non-solicitation contained in Section 2
of the Non Compete Agreement remain in effect as modified herein, along with
the “Certain Remedies” provisions in Section 5 of that Non Compete
Agreement.  Accordingly, upon execution
of this Agreement, Ms. O’Loughlin understands and 

 

6

 

agrees that she
will have no continuing rights under the Change of Control Agreement or the Non
Compete Agreement except as expressly stated herein, and that otherwise those
agreements shall have no further force or effect.

 

27.           This Agreement may not
be changed, amended, or modified except by a written instrument signed by both
parties.

 

IN WITNESS
WHEREOF, the parties have executed this Agreement on the dates set forth below.

 

 

	
  EQUITABLE
  RESOURCES, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Charlene Petrelli

  	
   

  	
  /s/

  	
   Johanna G.
  O’Loughlin

  
	
   

  	
       Charlene Petrelli

  	
   

  	
   

  	
   Johanna G. O’Loughlin

  
	
   

  	
   

  	
   

  
	
  Vice President &
  Chief Human Resources Officer

  	
   

  	
  March 14, 2008

  
	
  Title

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  March 14, 2008

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  

 

7

 

ORGANIZATIONAL
ANNOUNCEMENT

 

The following communication is being sent on behalf of
Murry Gerber – Chairman & Executive Officer:

 

Johanna G. O’Loughlin – Senior Vice President, General
Counsel & Corporate Secretary – has announced her intention to retire
from Equitable Resources, effective January 2, 2009.  On behalf of the Board of Directors and
management team of the company, I want to express our gratitude for Johanna’s
12 years of service.

 

Lewis B. Gardner is promoted to the position of Vice
President & General Counsel, effective March 17, 2008, reporting
to me.  Lew joined Equitable in March 2003
as Director, Employee & Labor Relations.  He earned a Bachelor of Arts degree in
history at Duke University and a Juris Doctor degree in law at Wake Forest
University.

 

To effect a smooth transition in the Law Department,
Johanna will assume the role of Special Counsel to Equitable for the remainder
of 2008.  She will also become Of Counsel
to the law firm of Reed Smith LLP, and will have her office and administrative
support located in Reed Smith’s Pittsburgh Office.

 

Please join me in wishing Johanna well in her new role
and congratulating Lew on his promotion.

 

EXHIBIT B

 

 

SUPPLEMENTAL
RELEASE

 

I, Johanna G. O’Loughlin, on behalf of myself, my
heirs, representatives, estates, successors and assigns, do hereby irrevocably
and unconditionally release and forever discharge Equitable Resources, Inc.,
its predecessors, subsidiaries, affiliates, and benefits plans, and their past,
present and future officers, directors, trustees, administrators, agents and
employees, as well as the heirs, successors and assigns of any of such persons
or such entities (hereinafter severally and collectively called “Releasees”)
from any and all claims, known and unknown, that I have or may have against any
of the Releasees for any acts, practices or events occurring during the period
from the date I signed the 2008 Employment Agreement (copy attached) up to and
including the date I sign this Supplemental Release.  This Supplemental Release includes any and
all claims under any possible legal, equitable, contract, tort, or statutory
theory, including but not limited to any claims under Title VII of the Civil
Rights Act of 1964, as amended, the Age Discrimination in Employment Act, the
Older Workers Benefit Protection Act, the Civil Rights Act of 1991, the
Americans With Disabilities Act, the Pennsylvania Human Relations Act, the City
of Pittsburgh Human Relations Ordinance, and other federal, state and local
statutes, ordinances, executive orders, regulations and other laws prohibiting
discrimination in employment, the federal Employee Retirement Income Security
Act of 1974, and state, federal or local law claims of any other kind whatsoever,
including claims for the fees, costs and expenses of any and all attorneys who
have at any time or are now representing me in connection with this
Supplemental Release or in connection with any matter released in this
Supplemental Release.  It is understood,
however, that this release does not include claims regarding performance of the
aforementioned Employment Agreement.

 

 

	
   

  	
  /s/ 

  	
   Johanna G.
  O’Loughlin

  
	
   

  	
   

  	
   Johanna G. O’Loughlin

  
	
   

  	
   

  
	
   

  	
  March 14, 2008

  
	
   

  	
  Date

  

 

EXHIBIT CExhibit 10.1

CHANGE IN
CONTROL AGREEMENT

 

 

THIS CHANGE IN CONTROL
AGREEMENT (“Agreement”) is entered into as of the 1st day of March, 2008 by and between MAINSOURCE FINANCIAL GROUP, INC. (the
“Company”), an Indiana corporation, and
Jeffrey C. Smith (“Executive”).

 

R E C I T A
L S:

 

WHEREAS, the Company considers the
establishment and maintenance of a sound and vital management to be essential
to protecting and enhancing the best interests of the Company and its
shareholders; and

 

WHEREAS, the Company recognizes
that, as is the case with many publicly held corporations, the possibility of a
change in control may arise and that such possibility may result in the
departure or distraction of management personnel to the detriment of the
Company and its shareholders; and

 

WHEREAS, the Board of
Directors of the Company (the “Board”) has determined that it is in the best
interests of the Company and its shareholders to secure Executive’s continued
services and to ensure Executive’s continued and undivided dedication to his
duties in the event of any threat or occurrence of a Change in Control (as
defined in Section 1) of the Company; and

 

WHEREAS, the Board has
authorized the Company to enter into this Agreement;

 

NOW, THEREFORE, for and in
consideration of the premises and the mutual covenants and agreements herein
contained, and intending to be legally bound hereby, the Company and Executive
hereby agree as follows:

 

A G R E E M
E N T:

 

1.             Definitions.  As used in this Agreement, the following
terms shall have the respective meanings set forth below:

 

(a)   “Bonus Amount” means the annual incentive bonus earned by
Executive from the Company during the last completed fiscal year of the Company
immediately preceding Executive’s Date of Termination (annualized in the event
Executive was not employed by the Company for the whole of any such fiscal
year).

 

(b)   “Cause” means (i) the willful and continued failure of
Executive to perform substantially his duties with the Company (other than any
such failure resulting from Executive’s incapacity due to physical or mental
illness or any such failure subsequent to Executive being delivered a Notice of
Termination without Cause by the Company or delivering a Notice of Termination
for Good Reason to the Company) after a written demand for substantial
performance is delivered to Executive by the Board that specifically identifies
the manner in which the Board 

 

 

believes that Executive has
not substantially performed Executive’s duties, (ii) the willful engaging
by Executive in illegal conduct or gross misconduct that is demonstrably and
materially injurious to the Company, or (iii) the conviction of Executive
of, or a plea by Executive of nolo contendre to, a felony.  For purpose of this paragraph (b), no act or
failure to act by Executive shall be considered “willful” unless done or
omitted to be done by Executive in bad faith and without reasonable belief that
Executive’s action or omission was legal, regulatory compliant, and in the best
interests of the Company.  Any act, or
failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board, based upon the advice of counsel for the Company or upon
the instructions of the Company’s chief executive officer or another senior
officer of the Company, shall be conclusively presumed to be done, or omitted
to be done, by Executive in good faith and in the best interests of the
Company.  Cause shall not exist unless
and until the Company has delivered to Executive a copy of a resolution duly
adopted by three-fourths (3/4) of the entire Board (excluding Executive if
Executive is a Board member) at a meeting of the Board called and held for such
purpose (after reasonable notice to Executive and an opportunity for Executive,
together with counsel, to be heard before the Board), finding that in the good
faith opinion of the Board an event set forth in clauses (i) or (ii) has
occurred and specifying the particulars thereof in detail. The Company must
notify Executive of any event constituting Cause within ninety (90) days
following the Company’s knowledge of its existence or such event shall not
constitute Cause under this Agreement.

 

(c)    “Change in Control” means the occurrence of any one of the
following events:

 

(i)       individuals who, on January 1, 2008,
constitute the Board (the “Incumbent Directors”) cease for any reason to
constitute at least a majority of the Board, provided that any person becoming
a director subsequent to January 1, 2008, whose election or nomination for
election was approved by a vote of at least two-thirds of the Incumbent
Directors then on the Board (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a nominee for
director, without written objection by such Incumbent Directors to such nomination)
shall be deemed to be an Incumbent Director; provided, however, that no
individual elected or nominated as a director of the Company initially as a
result of an actual or threatened election contest with respect to directors or
any other actual or threatened solicitation of proxies by or on behalf of any
person other than the Board shall be deemed to be an Incumbent Director;

 

(ii)      any “person” (as such term is defined in Section 3(a)(9) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as
used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or
becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 25% or
more of the combined voting power of the Company’s then outstanding securities
eligible to vote for the election of the Board (the “Company Voting
Securities”); provided, however, that the event described in this paragraph (ii) shall
not be deemed to be a Change in Control by virtue of any of the following
acquisitions: (A) by the Company or any Subsidiary, (B) by any
employee benefit plan sponsored or maintained by the Company or any Subsidiary,
or by any employee stock benefit trust created by the Company or any Subsidiary,
(C) by any underwriter temporarily holding securities pursuant to an
offering of such securities, (D) pursuant to a Non-Qualifying Transaction
(as defined in paragraph (iii)), (E) pursuant to any acquisition by
Executive or any group of persons including 

 

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Executive (or any entity
controlled by Executive or any group of persons including Executive); or (F) a
transaction (other than one described in (iii) below) in which Company
Voting Securities are acquired from the Company, if a majority of the Incumbent
Directors approves a resolution providing expressly that the acquisition
pursuant to this clause (F) does not constitute a Change in Control under
this paragraph (ii);

 

(iii)     the consummation of a merger,
consolidation, share exchange or similar form of corporate transaction
involving the Company or any of its Subsidiaries that requires the approval of
the Company’s shareholders, whether for such transaction or the issuance of
securities in the transaction (a “Business Combination”), unless immediately
following such Business Combination: (A) more than 40% of the total voting
power of (x) the corporation resulting from the consummation of such
Business Combination (the “Surviving Corporation”), or (y) if applicable,
the ultimate parent corporation that directly or indirectly has beneficial
ownership of 100% of the voting securities eligible to elect directors of the
Surviving Corporation (the “Parent Corporation”), is represented by Company
Voting Securities that were outstanding immediately prior to such Business
Combination (or, if applicable, represented by shares into which such Company
Voting Securities were converted pursuant to such Business Combination), and
such voting power among the holders thereof is in substantially the same
proportion as the voting power of such Company Voting Securities among the
holders thereof immediately prior to the Business Combination, (B) no
person (other than any employee benefit plan sponsored or maintained by the Surviving
Corporation or the Parent Corporation or any employee stock benefit trust
created by the Surviving Corporation or the Parent Corporation) is or becomes
the beneficial owner, directly or indirectly, of 25% or more of the total
voting power of the outstanding voting securities eligible to elect directors
of the Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) and (C) at least one-half of the members of the board of
directors of the Parent Corporation (or, if there is no Parent Corporation, the
Surviving Corporation) were Incumbent Directors at the time of the Board’s
approval of the execution of the initial agreement providing for such Business
Combination (any Business Combination which satisfies all of the criteria
specified in (A), (B) and (C) above shall be deemed to be a
“Non-Qualifying Transaction”); or

 

(iv)     the shareholders of the Company approve a
plan of complete liquidation or dissolution of the Company or a sale of all or
substantially all of the Company’s assets.

 

Notwithstanding the foregoing, a Change in
Control of the Company shall not be deemed to occur solely because any person
acquires beneficial ownership of more than 25% of the Company Voting Securities
as a result of the acquisition of Company Voting Securities by the Company that
reduces the number of Company Voting Securities outstanding; provided, that if
after such acquisition by the Company such person becomes the beneficial owner
of additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person, a
Change in Control of the Company shall then occur.

 

(d)   “Date of Termination” means (i) the effective date on
which Executive’s employment by the Company terminates as specified in a prior
written notice by the Company or Executive, as the case may be, to the other,
delivered pursuant to Section 10, or (ii) if Executive’s employment
by the Company terminates by reason of death, the date of death of Executive.

 

3

 

(e)    “Disability” means termination of Executive’s employment
by the Company due to Executive’s absence from Executive’s duties with the
Company on a full-time basis for at least one hundred eighty (180) consecutive
days as a result of Executive’s incapacity due to physical or mental
illness.  The determination of Disability
shall be made by a physician mutually agreed upon by both the Executive and the
Company.

 

(f)    “Good Reason” means, without Executive’s express written
consent, the occurrence of any of the following events after a Change in
Control:

 

(i)       any change in the duties or
responsibilities (including reporting responsibilities) of Executive that is
inconsistent in any material and adverse respect with Executive’s positions,
duties, responsibilities or status with the Company immediately prior to such
Change in Control (including any material and adverse diminution of such duties
or responsibilities);

 

(ii)      (A) a reduction by the Company in
Executive’s rate of annual base salary as in effect immediately prior to such
Change in Control, or as the same may be increased from time to time
thereafter, or (B) the failure by the Company to pay Executive an annual
bonus in respect of the year in which such Change in Control occurs or any
subsequent year in an amount greater than or equal to the annual bonus earned
for the year prior to the year in which such Change in Control occurs, provided
that Executive has met any requisite performance criteria threshold necessary
to the payment of such annual bonus in respect of the year in which such Change
in Control occurs or such subsequent year.

 

(iii)     any requirement of the Company that
Executive (A) be based anywhere more than thirty (30) miles from the
office where Executive is located at the time of the Change in Control, or
(B)endure overnight travel on Company business to an extent substantially
greater than the travel obligations of Executive immediately prior to such
Change in Control;

 

(iv)     the failure of the Company to (A) continue
in effect any employee benefit plan, compensation plan, welfare benefit plan or
material fringe benefit plan in which Executive is participating immediately
prior to such Change in Control or the taking of any action by the Company that
would adversely affect Executive’s participation in or reduce Executive’s
benefits under any such plan, unless Executive is permitted to participate in
other plans providing Executive with the same benefits that the party effecting
the Change in Control (or, if applicable, its Parent Corporation) provides to
its most senior executive officers (or, in the case of a Parent Corporation,
the most senior executive officers of its principal banking or financial
services subsidiary), or (B) provide Executive with paid time-off in
accordance with the most favorable time-off policies of the Company and its
affiliated companies as in effect for Executive immediately prior to such
Change in Control, including the crediting of all service for which Executive
had been credited under such vacation policies prior to the Change in Control;
or

 

(v)      the failure of the Company to obtain the
assumption (and, if applicable, guarantee) agreement from any successor (and
Parent Corporation) as contemplated in Section 9(b).

 

4

 

Notwithstanding anything herein to the
contrary, termination of employment by Executive for any reason during the
30-day period commencing six (6) months after the date of a Change in
Control shall constitute Good Reason.

 

An isolated, insubstantial
and inadvertent action taken in good faith and which is remedied by the Company
within ten (10) days after receipt of notice thereof given by Executive
shall not constitute Good Reason. Executive’s right to terminate employment for
Good Reason shall not be affected by Executive’s incapacities due to mental or
physical illness and Executive’s continued employment shall not constitute
consent to, or a waiver of rights with respect to, any event or condition
constituting Good Reason; provided, however, that Executive must provide notice
of termination of employment within one-hundred twenty (120) days following
Executive’s knowledge of an event constituting Good Reason or such event shall
not constitute Good Reason under this Agreement.

 

(g)    “Qualifying Termination” means a termination of
Executive’s employment (i) by the Company other than for Cause, or (ii) by
Executive for Good Reason.  Termination
of Executive’s employment on account of death, Disability or Retirement shall not
be treated as a Qualifying Termination.

 

(h)   “Retirement” means the termination of Executive’s
employment on or after the first of the month coincident with or following
Executive’s attainment of age 65, or such later date as may be provided in a
written agreement between the Company and the Executive.

 

(i)     “Subsidiary” means any corporation or other entity in
which the Company has a direct or indirect ownership interest of 50% or more of
the total combined voting power of the then outstanding securities or interests
of such corporation or other entity entitled to vote generally in the election
of directors or in which the Company has the right to receive 50% or more of
the distribution of profits or 50% of the assets upon liquidation or
dissolution.

 

(j)    “Termination Period” means the period of time beginning
with a Change in Control and ending eighteen (18) months years following such
Change in Control. Notwithstanding anything in this Agreement to the contrary,
if (i) Executive’s employment is terminated prior to a Change in Control
for reasons that would have constituted a Qualifying Termination if they had
occurred following a Change in Control; (ii) Executive reasonably
demonstrates that such termination (or Good Reason event) was at the request of
a third party who had indicated an intention or taken steps reasonably
calculated to effect a Change in Control; and (iii) a Change in Control
involving such third party (or a party competing with such third party to
effectuate a Change in Control) does occur, then for purposes of this
Agreement, the date immediately prior to the date of such termination of
employment or event constituting Good Reason shall be treated as a Change in
Control.  For purposes of determining the
timing of payments and benefits to Executive under Section 4, the date of
the actual Change in Control shall be treated as Executive’s Date of
Termination under Section l(d).

 

2.             Obligation of Executive.  In the event of a tender or exchange offer,
proxy contest, or the execution of any agreement that, if consummated, would
constitute a Change in Control, 

 

5

 

Executive agrees not to voluntarily leave the
employ of the Company that may employ Executive, other than as a result of
Disability, Retirement or an event that would constitute Good Reason if a
Change in Control had occurred, until the Change in Control occurs or, if
earlier, such tender or exchange offer, proxy contest, or agreement is
terminated or abandoned.

 

3.             Term of Agreement.  This Agreement shall be effective on the date
hereof and shall continue in effect until the Company shall have given eighteen
(18) months written notice of cancellation; provided, that, notwithstanding the
delivery of any such notice, this Agreement shall continue in effect for a
period of eighteen (18) months after a Change in Control, if such Change in
Control shall have occurred during the term of this Agreement.  Notwithstanding anything in this Section to
the contrary, this Agreement shall terminate if Executive or the Company
terminates Executive’s employment prior to a Change in Control except as
provided in Section 1(j).

 

4.             Payments Upon Termination of
Employment.

 

(a)   Qualifying Termination — Cash Payment.  If during the Termination Period the employment
of Executive shall terminate pursuant to a Qualifying Termination, then the
Company shall provide to Executive, subject to the provisions of Section 11
hereunder:

 

(i)       within twenty (20) days following the
Date of Termination a lump-sum cash amount equal to the sum of (A) Executive’s
base salary through the Date of Termination and any bonus amounts that have
become payable, to the extent not theretofore paid or deferred, (B) a pro
rata portion of Executive’s annual bonus for the fiscal year in which Executive’s
Date of Termination occurs in an amount at least equal to (x) Executive’s
Bonus Amount, multiplied by (y) a fraction, the numerator of which is the
number of days in the fiscal year in which the Date of Termination occurs
through the Date of Termination and the denominator of which is three hundred
sixty-five (365), and reduced by (z) any amounts paid from the Company’s
annual incentive plan for the fiscal year in which Executive’s Date of
Termination occurs and (C) any accrued vacation pay, to the extent not
theretofore paid; plus

 

(ii)      within twenty (20) days following the Date
of Termination, a lump-sum cash amount equal to the sum of (1) one and
one-half (1.5) Executive’s highest annual rate of base salary during the
12-month period immediately prior to Executive’s Date of Termination, plus (2) one
and one —half (1.5) times Executive’s Bonus Amount;  provided, however, that if Executive’s Date
of Termination is within eighteen months (18)
of the earliest date on which termination by the Executive could
otherwise be considered a Retirement (“Retirement Date”), such sum shall be
multiplied by a fraction (“Adjustment Fraction”), the numerator of which is
equal to the number of full months from the Date of Termination to the
Retirement Date, and the denominator of which is equal to 18.

 

(b)   Qualifying Termination — Continued Coverage.  If during the Termination Period the
employment of Executive shall terminate pursuant to a Qualifying Termination,
the Company shall continue to provide, for a period of eighteen (18) months  following Executive’s Date of Termination,
Executive (and Executive’s dependents, if applicable) with the same level of
medical, dental, accident, disability and life insurance benefits upon
substantially the same terms and 

 

6

 

conditions (including
contributions required by Executive for such benefits) as existed immediately
prior to Executive’s Date of Termination (or, if more favorable to Executive,
as such benefits and terms and conditions existed immediately prior to the
Change in Control); provided, however, that if Executive’s Date of Termination
is within eighteen (18) months of Executive’s Retirement Date, the number of
years of continued benefits coverage (as described in this Section 4(b))
shall be equal to the product of (x) one, and (y) the Adjustment
Fraction; provided, further, if Executive cannot continue to participate in the
Company plans providing such benefits, the Company shall otherwise provide such
benefits on the same after-tax basis as if continued participation had been
permitted.  Notwithstanding the
foregoing, in the event Executive becomes reemployed with another employer and
becomes eligible to receive welfare benefits from such employer, the welfare
benefits described herein shall be secondary to such benefits during the period
of Executive’s eligibility, but only to the extent that the Company reimburses
Executive for any increased cost and provides any additional benefits necessary
to give Executive the benefits provided hereunder.  The Executive’s accrued benefits as of the
Date of Termination under the Company’s employee benefit plans shall be paid to
Executive in accordance with the terms of such plans.

 

(c)    Qualifying Termination — SERP Accrual. If during the
Termination Period the employment of Executive shall terminate pursuant to a
Qualifying Termination, the Company shall provide Executive with one (1) additional
year of service credit under all non-qualified retirement plans and excess
benefit plans in which the Executive participated as of his Date of
Termination; provided, however, that if Executive’s Date of Termination is
within eighteen (18) months of Executive’s Retirement Date, the number of years
of additional service credit (as described in this Section 4(c)) shall be
equal to the product of (x) one and one-half (1.5), and (y) the
Adjustment Fraction.

 

(d)   Qualifying Termination — Voluntary Reduction of Payments.
If during the Termination Period the employment of Executive shall terminate
pursuant to a Qualifying Termination, Executive shall have the right to direct
that the Company reduce the amounts which it is otherwise required to pay to
Executive under Section 4 of this Agreement to the Safe Harbor Cap (as
defined in Section 5(a) of this Agreement).

 

(e)    Other than Qualifying Termination. If during the
Termination Period the employment of Executive shall terminate other than by
reason of a Qualifying Termination, then the Company shall pay to Executive
within thirty (30) days following the Date of Termination, a lump-sum cash
amount equal to the sum of (1) Executive’s base salary through the Date of
Termination and any bonus amounts that have become payable, to the extent not
theretofore paid or deferred, and (2) any accrued vacation pay, to the
extent not theretofore paid. The Company may make such additional payments, and
provide such additional benefits, to Executive as the Company and Executive may
agree in writing. The Executive’s accrued benefits as of the Date of
Termination under the Company’s employee benefit plans shall be paid to
Executive in accordance with the terms of such plans.

 

(f)    Suspension of Payments to Specified Employees.  To the extent such suspension is required by Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”) or Treasury
Regulations issued pursuant to Section 409A of the Code, if an amount is
payable to the 

 

7

 

Executive due to a
Qualifying Termination, and if at the time of the Qualifying Termination the
Executive is a “Specified Employee,” payment of all amounts under Section 4(a)(ii) and
Section 5, to the extent such payments constitute deferred compensation
for purposes of Section 409A of the Code, will be suspended for six months
following the date of the Qualifying Termination.  The Executive will receive payment of such
amounts on the first day following the six-month suspension period with
interest on any delayed payment at the 30-year Treasury Bond rate as published
in the Midwest Edition of the Wall Street Journal.

 

(i)       A “Specified Employee” means an
individual who is a “Key Employee” of the Company at a time when the Company’s
stock is publicly traded on an established securities market.  The Executive will be a Specified Employee on
the first day of the fourth month following any “Identification Date” on which
the Executive is a Key Employee.

 

(ii)      The Executive is a “Key Employee” if at
any time during the 12-month period ending on an Identification Date the
Executive is: (A) an officer of the Company having annual compensation
greater than $140,000 (as adjusted in the same manner as under Section 415(d) of
the Code except that the base period will be the calendar quarter beginning July 1,
2001, and any increase under this sentence which is not a multiple of $5,000
will be rounded to the next lower multiple of $5,000); (B) a five-percent
owner of the Company; or (C) a one-percent owner of the Company having an
annual compensation greater than $150,000. 
For purposes of determining whether an Executive is an officer under
clause (A), nor more than 50 employees (or, if lesser, the greater of three or
ten percent of the employees) will be treated as officers, and those categories
of employees listed in Section 414(q)(5) of the Code will be
excluded.

 

(iii)     The “Identification Date” for purposes of
this Agreement is December 31 of each calendar year.

 

5.             Certain Additional Payments by the
Company.

 

(a)   Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment, award, benefit or distribution
(or any acceleration of any payment, award, benefit or distribution) by the
Company (or any affiliated entity) or any entity that effectuates a Change in
Control (or any of its affiliated entities) to or for the benefit of Executive
(whether pursuant to the terms of this Agreement or otherwise, but determined
without regard to any additional payments required under this Section 5)
(the “Payments”) would be subject to the excise tax imposed by Section 4999
of the Code, or any interest or penalties are incurred by Executive with
respect to such excise tax (such excise tax, together with any such interest
and penalties, are hereinafter collectively referred to as the “Excise Tax”),
then the Company shall pay to Executive an additional payment (a “Gross-Up
Payment”) in an amount such that after payment by Executive of all taxes
(including any Excise Tax) imposed upon the Gross-Up Payment, Executive retains
an amount of the Gross-Up Payment equal to the sum of (i) the Excise Tax
imposed upon the Payments, and (ii) the product of any deductions
disallowed because of the inclusion of the Gross-up Payment in Executive’s
adjusted gross income and the highest applicable marginal rate of federal
income taxation for the calendar year in which the Gross-up Payment is to be
made. Such Gross-Up Payment will be made at the same time payment is made to
the Executive pursuant to Section 4(a)(ii).  For 

 

8

 

purposes of determining the
amount of the Gross-up Payment, the Executive shall be deemed to (A) pay
federal income taxes at the highest marginal rates of federal income taxation
for the calendar year in which the Gross-up Payment is to be made, (B) pay
applicable state and local income taxes at the highest marginal rate of
taxation for the calendar year in which the Gross-up Payment is to be made, net
of the maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes and (C) have otherwise allowable
deductions for federal income tax purposes at least equal to the Gross-up
Payment.

 

Notwithstanding the foregoing provisions of
this Section 5(a), if it shall be determined that Executive is entitled to
a Gross-Up Payment, but that the Payments would not be subject to the Excise
Tax if the Payments were reduced by an amount that is less than 5% of the
portion of the Payments that would be treated as “parachute payments” under Section 28OG
of the Code, then the amounts payable to Executive under this Agreement shall
be reduced (but not below zero) to the maximum amount that could be paid to
Executive without giving rise to the Excise Tax (the “Safe Harbor Cap”), and no
Gross-Up Payment shall be made to Executive. The reduction of the amounts
payable hereunder, if applicable, shall be made by reducing first the payments
under Section 4(a)(ii), unless an alternative method of reduction is
elected by Executive. For purposes of reducing the Payments to the Safe Harbor
Cap, only amounts payable under this Agreement (and no other Payments) shall be
reduced. If the reduction of the amounts payable hereunder would not result in
a reduction of the Payments to the Safe Harbor Cap, no amounts payable under
this Agreement shall be reduced pursuant to this provision.

 

(b)   Subject to the provisions of Section 5(a), all determinations
required to be made under this Section 5, including whether and when a
Gross-Up Payment is required, the amount of such Gross-Up Payment, the
reduction of the Payments to the Safe Harbor Cap and the assumptions to be
utilized in arriving at such determinations, shall be made by the public
accounting firm that is retained by the Company as of the date immediately
prior to the Change in Control (the “Accounting Firm”), which shall provide
detailed supporting calculations both to the Company and Executive within
fifteen (15) business days of the receipt of notice from the Company or the
Executive that there has been a Payment, or such earlier time as is requested
by the Company (collectively, the “Determination”). In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change in Control, Executive may appoint another
regionally or nationally recognized public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company and the Company shall enter into any
agreement requested by the Accounting Firm in connection with the performance
of the services hereunder. The Gross-up Payment under this Section 5 with
respect to any Payments shall be made no later than thirty (30) days following
such Payment. If the Accounting Firm determines that no Excise Tax is payable
by Executive, it shall furnish Executive with a written opinion to such effect,
and to the effect that failure to report the Excise Tax, if any, on Executive’s
applicable federal income tax return will not result in the imposition of a
negligence or similar penalty. In the event the Accounting Firm determines that
the Payments shall be reduced to the Safe Harbor Cap, it shall furnish
Executive with a written opinion to such effect. The Determination by the
Accounting Firm shall be binding upon the Company and Executive. As a result of
the uncertainty in the application of Section 4999 of the Code at the time
of the Determination, it is 

 

9

 

possible that Gross-Up
Payments which will not have been made by the Company should have been made
(“Underpayment”) or Gross-up Payments are made by the Company which should not
have been made (“Overpayment”), consistent with the calculations required to be
made hereunder. In the event that the Executive thereafter is required to make
payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of
the Code) shall be promptly paid by the Company to or for the benefit of
Executive. In the event the amount of the Gross-up Payment exceeds the amount
necessary to reimburse the Executive for his Excise Tax, the Accounting Firm
shall determine the amount of the Overpayment that has been made and any such
Overpayment (together with interest at the rate provided in Section 1274(b)(2) of
the Code) shall be promptly paid by Executive (to the extent he has received a
refund if the applicable Excise Tax has been paid to the Internal Revenue
Service) to or for the benefit of the Company. Executive shall cooperate, to
the extent his expenses are reimbursed by the Company, with any reasonable
requests by the Company in connection with any contests or disputes with the
Internal Revenue Service in connection with the Excise Tax.

 

6.             Withholding
Taxes.  The Company may withhold from
all payments due to Executive (or his beneficiary or estate) hereunder all
taxes that, by applicable federal, state, local or other law, the Company is
required to withhold therefrom.

 

7.             Reimbursement of Expenses.  If any contest or dispute shall arise under
this Agreement involving termination of Executive’s employment with the Company
or involving the failure or refusal of the Company to perform fully in
accordance with the terms hereof, the Company shall reimburse Executive, on a
current basis, for all reasonable legal fees and expenses, if any, incurred by
Executive in connection with such contest or dispute (regardless of the result
thereof), together with interest in an amount equal to the prime rate as
published in the Wall Street Journal from time to time in effect, but in
no event higher than the maximum legal rate permissible under applicable law,
such interest to accrue from the date the Company receives Executive’s
statement for such fees and expenses through the date of payment thereof,
regardless of whether or not Executive’s claim is upheld by an arbitration
panel.

 

8.             Scope of Agreement.  Nothing in this Agreement shall be deemed to
entitle Executive to continued employment with the Company or its Subsidiaries,
and if Executive’s employment with the Company shall terminate prior to a
Change in Control, Executive shall have no further rights under this Agreement
(except as otherwise provided hereunder); provided, however, that any
termination of Executive’s employment during the Termination Period shall be
subject to all of the provisions of this Agreement.

 

9.             Successors; Binding Agreement.

 

(a)   This Agreement shall not be
terminated by any Business Combination. In the event of any Business
Combination, the provisions of this Agreement shall be binding upon the
Surviving Corporation, and such Surviving Corporation shall be treated as the
Company hereunder.

 

10

 

(b)   The Company agrees that in connection with any Business
Combination, it will cause any successor entity to the Company unconditionally
to assume (and for any Parent Corporation in such Business Combination to
guarantee), by written instrument delivered to Executive (or his beneficiary or
estate), all of the obligations of the Company hereunder. Failure of the
Company to obtain such assumption and guarantee prior to the effectiveness of
any such Business Combination that constitutes a Change in Control shall be a
breach of this Agreement and shall constitute Good Reason hereunder and shall
entitle Executive to compensation and other benefits from the Company in the
same amount and on the same terms as Executive would be entitled hereunder if
Executive’s employment were terminated following a Change in Control by reason
of a Qualifying Termination. For purposes of implementing the foregoing, the
date on which any such Business Combination becomes effective shall be deemed
the date Good Reason occurs, and shall be the Date of Termination if requested
by Executive.

 

(c)   This Agreement shall inure
to the benefit of and be enforceable by Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Executive shall die while any amounts would be
payable to Executive hereunder had Executive continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to such person or persons appointed in writing by
Executive to receive such amounts or, if no person is so appointed, to
Executive’s estate.

 

10.           Notice.

 

(a)   For purposes of this
Agreement, all notices and other communications required or permitted hereunder
shall be in writing and shall be deemed to have been dully given when delivered
or five (5) days after deposit in the United States mail, certified and
return receipt requested, postage prepaid, addressed as follows:

 

	
  If to Executive:

  	
   

  	
  At the address set forth below the signatory

  
	
   

  	
   

  	
   

  
	
  If to the Company:

  	
   

  	
  MainSource Financial Group, Inc.

  
	
   

  	
   

  	
  2205 N. State Road 3 Bypass

  
	
   

  	
   

  	
  Greensburg, Indiana 47240

  
	
   

  	
   

  	
  Attn: Chairman of the Board

  

 

or to such other address as either party may
have furnished to the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt.

 

11

 

(b)   A written notice of
Executive’s date of termination by the Company or Executive, as the case may
be, to the other, shall (i) indicate the specific termination provision in
this Agreement relied upon, (ii) to the extent applicable, set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive’s employment under the provision so indicated and (iii) specify
the Date of Termination (which date shall not be less than fifteen (15) days
(thirty (30), if termination is by the Company for Disability) nor more than
sixty (60) days after the giving of such notice).  The failure by Executive or the Company to
set forth in such notice any fact or circumstance that contributes to a showing
of Good Reason or Cause shall not waive any right of Executive or the Company
hereunder or preclude Executive or the Company from asserting such fact or
circumstance in enforcing Executive’s or the Company’s rights hereunder.

 

11.           Full Settlement; Resolution of
Disputes.  The
Company’s obligation to make any payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall be in lieu of and in full
settlement of all other severance payments to Executive under any other
severance or employment agreement between Executive and the Company, and any
severance plan of the Company.  The
Company’s obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action that the
Company may have against Executive or others. 
In no event shall Executive be obligated to seek other employment or
take other action by way of mitigation of the amounts payable to Executive
under any of the provisions of this Agreement and, except as provided in Section 4(b),
such amounts shall not be reduced whether or not Executive obtains other
employment.  Any dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration in Indianapolis, Indiana by three arbitrators in accordance with
the rules of the American Arbitration Association then in effect.  The results of the arbitration will be
binding on both parties and may not be appealed.  Judgment may be entered on the arbitrators’
award in any court having jurisdiction. 
The Company shall bear all costs and expenses arising in connection with
any arbitration proceeding pursuant to this Section.

 

12.           Employment with Subsidiaries.  Employment with the Company for purposes of
this Agreement shall include employment with any Subsidiary.

 

13.           Survival.  The respective obligations and benefits
afforded to the Company and Executive as provided in Sections 4 (to the extent
that payments or benefits are owed as a result of a termination of employment
that occurs during the term of this Agreement), 5 (to the extent that Payments are
made to Executive as a result of a Change in Control that occurs during the
term of this Agreement), 6, 7, 9(c) and 11 shall survive the termination
of this Agreement.

 

14.           Governing Law; Validity.  The interpretation, construction and
performance of this Agreement shall be governed by and construed and enforced
in accordance with the internal laws of the State of Indiana without regard to
the principle of conflicts of laws.  The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which other provisions shall remain in full force and effect.

 

15.           Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.

 

12

 

16.           Miscellaneous.  No provision of this Agreement may be
modified or waived unless such modification or waiver is agreed to in writing
and signed by Executive and by a duly authorized officer of the Company.  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 similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time. 
Except as set forth in Sections l(b) and l(f), the failure by
Executive or the Company to insist upon strict compliance with any provision of
this Agreement or to assert any right Executive or the Company may have
hereunder shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement. 
Except as otherwise specifically provided herein, the rights of, and
benefits payable to, Executive, his estate or his beneficiaries pursuant to
this Agreement are in addition to any rights of, or benefits payable to,
Executive, his estate or his beneficiaries under any other employee benefit
plan or compensation program of the Company.

 

IN WITNESS
WHEREOF, the Company has caused this Agreement to be executed by a duly
authorized officer of the Company and Executive has executed this Agreement, in
each case as of the day and year first set forth above.

 

	
   

  	
   

  	
  MAINSOURCE FINANCIAL GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Robert E. Hoptry

  
	
   

  	
   

  	
  Robert E. Hoptry, President and

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Jeffrey C. Smith

  
	
   

  	
   

  	
  Jeffrey C. Smith

  
	
   

  	
   

  	
  612 A. West Briarwood Way

  
	
   

  	
   

  	
  Greensburg, Indiana 47240

  

 

 

13

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