Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On July 26, 2022, First Financial Corporation (the “Corporation”) and its wholly-owned subsidiary, First Financial Bank (the “Bank”) (collectively, the “Employers”), entered into a new employment agreement (the “Agreement”) with each of Norman D. Lowery, Senior Vice President and Chief Operating Officer of the Corporation and the Bank, Rodger A. McHargue, Senior Vice President and Chief Financial Officer of the Corporation and the Bank, Steven H. Holliday, Senior Vice President and Chief Credit Officer of the Corporation and the Bank, and Mark A. Franklin, Senior Vice President and Chief Lending Officer of the Corporation and the Bank. The Agreements are effective as of July 1, 2022 and have substantially similar terms.
Under the terms of each Agreement, the Company or the Bank, as applicable, have agreed to employ the executive for an initial term of twenty-four (24) months in his current position. Upon timely notice to the executive from the compensation committee of the board of directors of the Corporation, each executive’s term of employment under the agreement may be extended for additional one-year periods.
Effective January 1, 2022, each executive will receive an annual base salary set forth below, which may be increased, or under certain conditions decreased, from time to time as determined by the Company or the Bank, as applicable, and will participate in bonus opportunities provided to executive officers and other senior management of the Company as well as fringe benefit plans and benefits available to senior management or to employees of the Company generally.
| | | | | |
| Name | Annual |
| Base Salary ($) |
| |
| Norman D. Lowery | 361,300 |
| Rodger A. McHargue | 314,222 |
| Steven H. Holliday | 274,000 |
| Mark A. Franklin | 274,000 |
Each Agreement contains terms governing payments the executive would be entitled to receive in the event his employment is terminated, as follows:
•If the executive’s employment terminates due to death, “disability” or for “just cause” (as such terms are defined in the Agreement), or if the executive voluntarily terminates his employment, then the executive will be entitled to receive the base salary, bonuses, vested rights, and other benefits due to him through the date of termination. Any benefits payable under insurance, health, retirement, bonus or other plans as a result of his participation in such plans through such date will be paid when and as due under those plans.
•If the executive’s employment is terminated without just cause or if he terminates his employment for good reason, then the executive will be entitled to receive a cash severance payment in an amount equal to (i) one times his base salary plus (ii) the bonuses received by or payable to the executive in the prior calendar year. The executive would also receive cash reimbursements in an amount equal to the cost of obtaining all employee and other benefits that he would have otherwise been eligible to participate in or receive through the first anniversary of the executive’s termination date.
•If, as a result of a “change in control” (as such term is defined in the Agreement), the executive becomes entitled to any payments that are determined to be payments subject to excise taxes under Internal Revenue Code Sections 280G and 4999, hen his severance benefit will be equal to the greater of (i) his benefit under the Agreement reduced to the maximum amount payable such that when it is aggregated with payments and benefits under all other plans and arrangements it will not result in an “excess parachute payment” under Internal Revenue Code Section 280G, or (ii) his benefit under the Agreement without reduction, if such benefit results in a greater net after-tax amount after taking into account any excise taxes imposed.
The Agreement also includes confidentiality and non-solicitation provisions, as well as non-compete provisions that prohibit the executive, during his employment and for a period of one year following his or her termination, from directly or indirectly competing against the Company or the Bank, as applicable, within a 30- mile radius of Terre Haute, Indiana, except in the event
of a termination without “just cause” or for “good reason” for Norman D. Lowery, Rodger A. McHargue, and Steven H. Holliday. The Agreement also includes confidentiality and non-solicitation provisions, as well as non-compete provisions that prohibit the executive, during his employment and for a period of one year following his or her termination, from directly or indirectly competing against the Company or the Bank, as applicable, within a 30- mile radius of Bloomington, Indiana, except in the event of a termination without “just cause” or for “good reason” for Mark A. Franklin.
The foregoing description is a summary only and is qualified in its entirety by the full text of the Agreement, which are filed as Exhibits 10.1 through 10.4 to this Form 8-K and is incorporated herein by reference.