UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
______________________________
DATE OF REPORT (Date of earliest event reported): March 9, 2006
______________________________
FIRST MERCHANTS CORPORATION
(Exact Name of Registrant as Specified in its Charter)
_______________________________
INDIANA 0-17071 35-1544218
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
200 East Jackson Street
P.O. Box 792
Muncie, IN 47305-2814
(Address of Principal Executive Offices, including Zip Code)
(765) 747-1500
(Registrant's Telephone Number, including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
(a) On February 14, 2006, First Merchants Corporation (the
"Corporation") amended the Change of Control Agreement (the "Amendment")
with Mark K. Hardwick, Executive Vice President and Chief Financial Officer
of the Corporation. The Amendment changes the "Compensation Upon
Termination" section within item 4.(B) to provide for a lump sum severance
payment to Mr. Hardwick, in cash, equal to two and ninety-nine hundredths
(2.99), times the sum of the defined base salary rate and bonus as per the
Agreement. The salary multiple utilized in his previous change of control
agreement was 2.00. A copy of the Agreement, as amended, is attached hereto
as Exhibit 10.1.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) None
(b) None
(c) Exhibits.
Exhibit 10.1 Change of Control Agreement, as amended, between
First Merchants Corporation and Mark K. Hardwick,
dated February 14, 2006.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FIRST MERCHANTS CORPORATION
(Registrant)
By: /s/ Mark K. Hardwick
--------------------------------------------
Mark K. Hardwick
Executive Vice President and
Chief Financial Officer
(Principal Financial and Chief
Accounting Officer)
Dated: March 9, 2006
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EXHIBIT INDEX
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Exhibit No. Description
----------- -----------
10.1 Change of Control Agreement, as amended, between
First Merchants Corporation and Mark K. Hardwick,
dated February 14, 2006.
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First Merchants Corporation
Exhibit No. 10.1
CHANGE OF CONTROL AGREEMENT
(AS AMENDED)
This Agreement is made and entered into as of February 14, 2006,
by and between First Merchants Corporation, an Indiana corporation (hereinafter
referred to as "Corporation"), with its principal office located at 200 East
Jackson Street, Muncie, Indiana, and Mark K. Hardwick (hereinafter referred to
as "Executive"), of Yorktown, Indiana.
WHEREAS, the Corporation considers the continuance of proficient
and experienced management to be essential to protecting and enhancing the best
interests of the Corporation and its shareholders; and
WHEREAS, the Corporation desires to assure the continued services
of the Executive on behalf of the Corporation; and
WHEREAS, the Corporation recognizes that if faced with a proposal
for a Change of Control, as hereinafter defined, the Executive will have a
significant role in helping the Board of Directors assess the options and
advising the Board of Directors on what is in the best interests of the
Corporation and its shareholders; and it is necessary for the Executive to be
able to provide this advice and counsel without being influenced by the
uncertainties of the Executive's own situation; and
WHEREAS, the Corporation desires to provide fair and reasonable
benefits to the Executive on the terms and subject to the conditions set forth
in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings herein contained and the continued employment of the Executive by
the Corporation as its Executive Vice President and Chief Financial Officer, the
Corporation and the Executive, each intending to be legally bound, covenant and
agree as follows:
1. Term of Agreement.
This Agreement shall continue in effect through December 31, 2006; provided, however, that commencing on
December 31, 2006 and each December 31 thereafter, the term of this Agreement shall automatically be extended for
one additional year unless, not later than October 31, 2006 or October 31 immediately preceding any December 31
thereafter, the Corporation shall have given the Executive notice that it does not wish to extend this Agreement;
and provided further, that if a Change of Control of the Corporation, as defined in Section 2, shall have
occurred during the original or extended term of this Agreement, this Agreement shall continue in effect for a
period of not less than twenty-four (24) months beyond the month in which such Change of Control occurred.
2. Definitions.
For purposes of this Agreement, the following definitions shall apply:
A. Cause: "Cause" shall mean:
(1) professional incompetence;
(2) willful misconduct;
(3) personal dishonesty;
(4) breach of fiduciary duty involving personal profit;
(5) intentional failure to perform stated duties;
(6) willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease and desist orders; and
(7) any intentional material breach of any term, condition or covenant of this
Agreement.
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(B) Change of Control: "Change of Control" shall mean:
(1) any person (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 ["Exchange Act"]), other than the Corporation, is or
becomes the Beneficial Owner (as defined in Rule 13d-3 under the Exchange Act)
directly or indirectly of securities of the Corporation representing
twenty-five percent (25%) or more of the combined voting power of the
Corporation's then outstanding securities;
(2) persons constituting a majority of the Board of Directors of the Corporation
were not directors of the Corporation for at least the twenty-four (24)
preceding months;
(3) the stockholders of the Corporation approve a merger or consolidation of the
Corporation with any other corporation, other than (a) a merger or
consolidation which would result in the voting securities of the Corporation
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the combined voting power
of the voting securities of the Corporation or such surviving entity
outstanding immediately after such a merger or consolidation, or (b) a merger
or consolidation effected to implement a recapitalization of the Corporation
(or similar transaction) in which no person acquires fifty percent (50%) or
more of the combined voting power of the Corporation's then outstanding
securities; or
(4) the stockholders of the Corporation approve a plan of complete liquidation of
the Corporation or an agreement for the sale or disposition by the Corporation
of all or substantially all of the Corporation's assets.
(C) Date of Termination: "Date of Termination" shall mean the date stated in the Notice
of Termination (as hereinafter defined) or thirty (30) days from the date of delivery
of such notice, as hereinafter defined, whichever comes first.
(D) Disability: "Disability" shall mean the definition of such term as used in the
disability policy then in effect for the Corporation, and a determination of full
disability by the Corporation; provided that in the event there is no disability
insurance then in force, "disability" shall mean incapacity due to physical or mental
illness which will have caused the Executive to have been unable to perform his duties
with the Corporation on a full time basis for one hundred eighty (180) consecutive
calendar days.
(E) Notice of Termination: "Notice of Termination" shall mean a written notice,
communicated to the other parties hereto, which shall indicate the specific
termination provisions of this Agreement relied upon and set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provisions so indicated.
(F) Retirement: "Retirement" shall mean termination of employment by the Executive in
accordance with the Corporation's normal retirement policy generally applicable to its
salaried employees in effect at the time of a Change of Control.
3. Termination.
(A) General. If any of the events described in Section 2 constituting a Change in Control
of the Corporation shall have occurred, the Executive shall be entitled to the
benefits described in Section 4 upon the subsequent termination of the Executive's
employment during the term of this Agreement, unless such termination is (a) because
of the death or Disability of the Executive, (b) by the Corporation for Cause, or (c)
by the Executive other than on account of Constructive Termination (as hereinafter
defined).
(B) If, following a Change of Control, the Executive's employment shall be terminated for
Cause, the Corporation shall pay him his salary through the Date of Termination at the
rate in effect on the date of the Notice of Termination, and the Corporation shall
have no further obligations under this Agreement. If, following a Change of Control,
the Executive's employment shall be terminated as a result of death or Disability,
compensation to the Executive shall be made pursuant to the Corporation's then
existing policies on death or Disability, and the Corporation shall have no further
obligations under this Agreement. If, following a Change of Control, the Executive's
employment is terminated by and at the request of the Executive as a result of
Retirement, compensation to the Executive shall be made pursuant to the Corporation's
normal retirement policy generally applicable to its salaried employees at the time of
the Change of Control, and the Corporation shall have no further obligations under
this Agreement.
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(C) Constructive Termination. The Executive shall be entitled to terminate his employment
upon the occurrence of Constructive Termination. For purposes of this Agreement,
"Constructive Termination" shall mean, without the Executive's express written consent,
the occurrence, after a Change of Control of the Corporation, of any of the following
circumstances:
(1) the assignment to the Executive of any duties inconsistent (unless in the
nature of a promotion) with the position in the Corporation that the Executive
held immediately prior to the Change of Control of the Corporation, or a
significant adverse reduction or alteration in the nature or status of the
Executive's position, duties or responsibilities or the conditions of the
Executive's employment from those in effect immediately prior to such Change
of Control;
(2) a reduction in the Executive's annual base salary, as in effect immediately
prior to the Change of Control of the Corporation or as the same may be
adjusted from time to time, except for across-the-board salary reductions
similarly affecting all management personnel of the Corporation;
(3) the Corporation requires the Executive to be relocated anywhere other than its
offices in Muncie, Indiana;
(4) the taking of any action to deprive the Executive of any material fringe
benefit enjoyed by him at the time of the Change of Control, or the failure to
provide him with the number of paid vacation days to which he is entitled on
the basis of years of service with the Corporation and in accordance with the
Corporation's normal vacation policy in effect at the time of the Change of
Control;
(5) the failure to continue to provide the Executive with benefits substantially
similar to those enjoyed by the Executive under any of the Corporation's life
insurance, medical, health and accident, or disability plans in which the
Executive was participating at the time of the Change of Control of the
Corporation, or the taking of any action which would directly or indirectly
materially reduce any of such benefits; or
(6) the failure of the Corporation to continue this Agreement in effect, or to
obtain a satisfactory agreement from any successor to assume and agree to
perform this Agreement, as contemplated in Section 5 hereof.
4. Compensation Upon Termination.
Following a Change of Control, if his employment by the Corporation shall be terminated by the Executive
on account of Constructive Termination or by the Corporation other than for Cause, death, Disability, or
Retirement (by and at the request of the Executive), then the Executive shall be entitled to the benefits
provided below:
(A) No later than the fifth day following the Date of Termination, the Corporation shall
pay to the Executive his full base salary through the Date of Termination, at the rate
in effect at the time Notice of Termination is given, plus all other amounts to which
the Executive is entitled under any incentive, bonus or other compensation plan of the
Corporation in effect at the time such payments are due;
(B) In lieu of any further salary payments to the Executive for periods subsequent to the
Date of Termination, no later than the fifth day following the Date of Termination,
the Corporation shall pay to the Executive a lump sum severance payment, in cash,
equal to two and ninety-nine hundredths (2.99) times the sum of (a) the Executive's
annual base salary rate as in effect on the date of the Notice of Termination, and (b)
the largest bonus received by the Executive during the two (2) years immediately
preceding the Date of Termination under the Corporation's Management Incentive Plan
covering the Executive;
(C) During the period beginning with the Executive's Date of Termination and continuing
until the earlier of (a) the second anniversary of such Date of Termination, or (b)
Executive's sixty-fifth (65th) birthday, the Corporation shall arrange to provide the
Executive with life, disability, accident and health insurance benefits substantially
similar to those which the Executive was receiving immediately prior to the Notice of
Termination and shall pay the same percentage of the cost of such benefits as the
Corporation was paying on the Executive's behalf on the date of such Notice;
(D) In lieu of shares of common stock of the Corporation ("Corporation Shares") issuable
upon the exercise of outstanding options ("Options"), if any, granted to the Executive
under any Corporation stock option plan (which Options shall be cancelled upon the
making of the payment referred to below), the Executive shall receive an amount in
cash equal to the product of (a) the excess of the higher of the closing price of
Corporation Shares as reported on the NASDAQ National Market System, the American
Stock Exchange or the New York Stock Exchange, wherever listed, on or nearest the Date
of Termination or the highest per share price for Corporation Shares actually paid in
connection with any Change of Control of the Corporation, over the per share exercise
price of each Option held by the Executive (whether or not then fully exercisable),
times (b) the number of Corporation Shares covered by each such Option;
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(E) If the payments or benefits, if any, received or to be received by the Executive
(whether under this Agreement or under any other plan, arrangement, or agreement
between the Executive and the Corporation), in connection with termination or
Constructive Termination of the Executive's employment following a Change of Control,
constitute an "excess parachute payment" within the meaning of ss.280G of the Internal
Revenue Code ("Code"), the Corporation shall pay to the Executive, no later than the
fifth day following the Date of Termination, an additional amount (as determined by
the Corporation's independent public accountants) equal to the excise tax, if any,
imposed on the "excess parachute payment" under ss.4999 of the Code; provided, however,
if the amount of such excise tax is finally determined to be more or less than the
amount paid to the Executive hereunder, the Corporation (or the Executive if the
finally determined amount is less than the original amount paid) shall pay the
difference between the amount originally paid and the finally determined amount to the
other party no later than the fifth day following the date such final determination is
made;
(F) The Corporation shall pay to the Executive all reasonable legal fees and expenses
incurred by the Executive as a result of such termination (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination or in
seeking to obtain or enforce any right or benefit provided by this Agreement), unless
the decision-maker in any proceeding, contest, or dispute arising hereunder makes a
formal finding that the Executive did not have a reasonable basis for instituting such
proceeding, contest, or dispute;
(G) The Corporation shall provide the Executive with individual out-placement services in
accordance with the general custom and practice generally accorded to an executive of
the Executive's position.
5. Successors; Binding Agreement.
(A) The Corporation shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of the Corporation to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Corporation would be required to
perform it if no such succession had taken place. Failure of the Corporation to
obtain such assumption and agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle the Executive to compensation
from the Corporation in the same amount and on the same terms to which the Executive
would be entitled hereunder if the Executive terminates his employment on account of
Constructive Termination following a Change of Control of the Corporation, except that
for the purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination. As used in this Agreement,
"the Corporation" shall mean the Corporation and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement, by operation
of law or otherwise.
(B) This Agreement shall inure to the benefit of and be enforceable by the Executive and
his personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive should die while any amount
would still be payable to the Executive hereunder had the Executive continued to live,
all such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the devisee, legatee or other designee or, if there is
no such designee, to his estate.
6. Miscellaneous.
No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by the Executive and such officer as may be specifically designated
by the Corporation. No waiver by either party hereto at the 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. No
agreement or representations, oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed by the laws of the State of
Indiana without regard to its conflicts of law principles. All references to a section of the Exchange Act or
the Code shall be deemed also to refer to any successor provisions to such section. Any payments provided for
hereunder shall be paid net of any applicable withholding required under federal, state or local law. The
obligations of the Corporation under Section 4 shall survive the expiration of the term of this Agreement.
7. Validity.
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 shall remain in full force and effect.
8. Counterparts.
This Agreement may be executed in several counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same instrument.
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9. Arbitration.
Any dispute or controversy arising under or in connection with this Agreement shall be settled
exclusively by arbitration, conducted before a panel of three (3) arbitrators in Muncie, Indiana in accordance
with the rules of the American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that the Executive shall be entitled to
seek specific performance of his right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement.
10. Entire Agreement.
This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter
contained herein and supersedes all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee or representative of any party
hereto; and any prior agreement of the parties hereto in respect of the subject matter contained herein is hereby
terminated and cancelled.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by their duly authorized
officers, and the Executive has hereunder subscribed his name, as of the day and year first above written.
"CORPORATION" "EXECUTIVE"
FIRST MERCHANTS CORPORATION
By ______________________________ By ______________________________
Michael L. Cox, Mark K. Hardwick
President & Chief Executive Officer
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