HORIZON BANCORP, INC. Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. OnDecember 31, 2019 ,Horizon Bancorp, Inc. ("Horizon") and its wholly owned banking subsidiaryHorizon Bank ("Bank") entered into amended and restated employment agreements withCraig M. Dwight , Chairman and Chief Executive Officer of Horizon and the Bank, and withJames D. Neff , President of Horizon and the Bank, each becoming effective onJanuary 1, 2020 . In addition, on that same date, the Bank entered into new or amended Change in Control Agreements with each of its named executive officers and certain other senior executive officers, with each of these agreements also becoming effective onJanuary 1, 2020 . The Board of Directors approved these new agreements to advance Horizon's commitment to use only double trigger mechanisms for change-in-control compensation, an intent described by Horizon in its proxy statement for the 2019 Annual Meeting of Shareholders, filed with theSecurities and Exchange Commission onMarch 15, 2019 . Horizon also satisfied other goals with the new agreements, including the standardization of change-in-control terms and conditions for all executives and the elimination of all modified single trigger compensation awards upon a change in control. The standardization was accomplished by, among other things, eliminating change-in-control provisions from the employment agreements ofMr. Dwight andMr. Neff , and offering them the same change in control agreement offered to the other executives. Although certain time periods and compensation levels vary among the executives under their respective change in control agreements, as a result of their varying ranks and responsibilities, the basic provisions, terms and conditions are the same for all. A brief description of the terms and conditions of the Change in Control Agreements and the Amended and Restated Employment Agreements follows. Change in Control Agreements The following executives have entered into a new or amended and restated Change in Control Agreement with the Bank: Executive Title Craig M. Chairman & Chief Executive Officer ofHorizon and Bank Dwight James D. President ofHorizon and Bank Neff Mark E. Chief Financial Officer of Horizon; Executive Vice President Secor & Chief Financial Officer of Bank Kathie A. Executive Vice President & Senior Operations Officer ofBank DeRuiter Dennis J. Executive Vice President of Horizon; Executive Vice President Kuhn & Chief Commercial Banking Officer of Bank Todd A. Corporate Secretary & General Counsel of Horizon; Senior Vice Etzler President, Corporate Secretary & General Counsel ofBank 2
--------------------------------------------------------------------------------
The table below includes a brief description of the key operative provisions of
the Change in Control Agreement and illustrates any variations in benefits among
the executives.
Key Terms and Description Application to
Conditions Executives
Term • Begins January 1, 2020 • Same for all
• Terminates immediately upon
executive's termination for any reason
before a change in control
• Upon a change in control, the term is
fixed at 1 year
Effect on • Not an employment agreement. • Dwight and Neff
Employment Executives remain "at will" employees, have separate
terminable at any time for any reason employment
• Executives entitled to certain notice agreements governing
and cure rights and procedures in the event their employment
the Bank seeks to terminate an executive relationship
for cause (both before and after a change
in control)
Effect of a • If a change in control occurs, and if • Same general
Change in executive experiences a "Qualifying right for all (see
Control Termination" during the 6 months before or Severance Benefits
the year after a change in control, then below for specific
executive is entitled to certain severance severance benefit
benefits (provided all other conditions are differences)
met)
Two Types of • Bank terminates executive for any • Same for all
"Qualifying reason except for "cause"; Cause generally
Termination" means breach and wrongdoing by executive,
in which case executive does not receive
severance benefits
• Executive resigns for "good reason";
Good reason generally means that the
executive's quality of work life and/or
compensation has been impaired by required
relocations or reductions in position,
responsibility, benefits, and salary
Additional • Executive must sign and deliver a • Same general
Conditions to release condition for all
Receipt of the • Executive must be and remain in (see Restrictive
Severance compliance with restrictive covenants Covenants below for
Benefits relating to non-disclosure of confidential specific variations
information, return of property, among executives in
non-solicitation of certain of Bank's duration of
customers and employees, and restrictive
non-competition with Bank in certain areas covenants)
Double Trigger • Normal payroll. Base salary earned • Same for all
Change in through the date of termination
Control
Severance
Benefits
• Base salary multiple. A lump sum • Multiples
amount equal to the executive's o Dwight 2.99
then-current base salary multiplied by the o Neff 2.99
executive's individual multiple o Secor 2.00
o DeRuiter 2.00
o Kuhn 2.00
o Etzler 1.00
• Cash bonus multiple. An amount equal • Multiples
to the average of executive's total cash o Dwight 2.99
bonuses in the 2 years preceding o Neff 2.00
termination multiplied by the executive's o Secor 2.00
individual multiple o DeRuiter 1.00
o Kuhn 1.00
o Etzler 1.00
• Continued participation in group • Benefit
health and life insurance benefits. Subject continuation term
to certain conditions, continued coverage o Dwight 35 months
for the executive's individual benefit o Neff 24 months
continuation term o Secor 24 months
o DeRuiter 12
months
o Kuhn 12 months
o Etzler 12 months
• Vested incentive compensation. All • Same for all
amounts vested or accrued prior to
termination under incentive compensation
plans in accordance with their terms
• Partial year bonus. An amount equal to • Same for all
the partial year bonus executive would have
earned under an existing bonus plan in the
year of a change in control, based on
then-current financial results
3--------------------------------------------------------------------------------
Key Terms and Description Application to
Conditions Executives
Restrictive • Executive will not discuss or use • Same for all
Covenants: confidential information in competition or
Non-Disclosure for executive's own benefit while employed
and Return of and at all times thereafter
Property
Restrictive • In general, executive will not solicit • Individual
Covenants: or divert Bank customers and employees over periods of
Non-Solicitation which executive had responsibility in the restriction
of Customers and one year preceding termination or for which o Dwight 2 years
Employees executive has confidential information o Neff 2 years
• Restriction applies during the term of o Secor 2 years
the Change in Control Agreement and for an o DeRuiter 2 years
individually prescribed period after o Kuhn 2 years
termination o Etzler 1 yearRestrictive • Executive is restricted from directly • Individual Covenants: or indirectly competing with Bank during periods of Non-Competition executive's employment
restriction
• In general, for an individually o Dwight 2 years
prescribed period after termination, o Neff 2 years
executive may not compete with Bank using o Secor 2 years
the information gained from executive's o DeRuiter 2 years
employment in the geographic regions where o Kuhn 2 years
the executive served and performed services o Etzler 1 yearSuccessors and • Bank will require any successor to • Same for all Assigns assume the Change in Control Agreement
4
--------------------------------------------------------------------------------
Amended and Restated Employment Agreements BothMr. Dwight andMr. Neff have entered into new Amended and Restated Employment Agreements with Horizon and the Bank. The table below includes a brief description of the key operative provisions of the Amended and Restated Employment Agreements and notes circumstances in which the rights and benefits ofMr. Dwight andMr. Neff may differ. Key Terms Description andConditions Term • Three-year term begins January 1, 2020 Dwight/Neff Differences • Dwight term ends January 1, 2023 • Neff term is a rolling 3-year term that will be extended annually for another year unless Horizon delivers notice to Neff that it will not be extended • On January 1, 2025, Neff becomes an employee-at-will, and either Horizon or Neff can terminate the relationship for any reason, or no reason, and without notice
Salary & Benefits • Entitled to a base salary to be reviewed and potentially
increased annually (but not decreased) by the Compensation
Committee of the Board of Directors
• Entitled to participate in all incentive compensation and
benefit programs generally available to executive officers
Termination • Horizon can terminate the executive for "Cause," which
Provisions includes any of the following actions by the executive:
o Intentional acts of fraud, embezzlement, dishonesty;
o Intentional damage causing material harm to Horizon;
o Material breach of the employment agreement or the Change
in Control Agreement
o Gross negligence or insubordination
o Violation of certain banking laws resulting in the loss of
right to work for a depository institution
• Both Dwight and Neff have the right to terminate the
employment relationship for "Good Reason," which includes,
among other reasons, the following:
o Office move more than 30 miles from home
o Reductions of 10% or more in salary or total compensation,
including benefit plan rights (unless institution-wide
reductions and proportionate to other executive officers)
o Assignment of materially different duties, reduced
responsibilities, or removal from current position or title
• Both Dwight and Neff are required to provide a 60-day
written notice before terminating the relationship without
"Good Reason"
• Horizon can terminate the executive and the agreement for
reasons related to the federal and state banking regulations,
including situations in which the executive might be
prohibited from engaging in banking under the Federal Deposit
Insurance Act, or the Bank is found in default or in financial
trouble under the Federal Deposit Insurance Act
Special • In the event Horizon terminates the executive without
Compensation "Cause" or the executive resigns for "Good Reason," the
Rights Upon executive is entitled to the following payments:
Certain o Base salary through date of termination
Terminations o An amount equal to the then-current annual base salary
(Dwight receives this amount multiplied by two)
o Dwight: An amount equal to cash bonuses for the prior two
calendar years
Neff: An amount equal to the average of cash bonuses for
the prior two calendar years
o Continued participation in group health and life insurance
. . .© Edgar Online, source
