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
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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
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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 year
Restrictive • 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 year
Successors and • Bank will require any successor to • Same for all Assigns assume the Change in Control Agreement
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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 . . .
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