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): April 29, 2005
______________________________
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))
Item 1.01. Entry into a Material Definitive Agreement.
(a) On May 2, 2005, First Merchants Corporation (the "Corporation")
entered into a Change of Control Agreement (the "Agreement") with Shawn
Blackburn, its recently appointed Senior Vice President and Director of
Administration Services. The Agreement provides for certain payments to be
made to Mr. Blackburn upon certain "Changes in Control" of the Corporation.
A copy of the Agreement is attached hereto as Exhibit 10.1.
Item 5.02. Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers.
(b) Roger M. Arwood has informed the Corporation that he intends to
resign from his positions as Executive Vice President and Chief Operating
Officer of the Corporation, effective May 20, 2005. Mr. Arwood is resigning
so that he may pursue other opportunities.
Item 9.01. Financial Statements and Exhibits.
(c) (10.1) Change of Control Agreement between First Merchants
Corporation and Shawn Blackburn, dated May 2, 2005.
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.
DATE: May 4, 2005.
FIRST MERCHANTS CORPORATION
By: /s/ Larry R. Helms
Larry R. Helms,
Senior Vice President
EXHIBIT INDEX
10.1 Change of Control Agreement between First Merchants
Corporation and Shawn Blackburn, dated May 2, 2005.
Exhibit 10.1
CHANGE OF CONTROL AGREEMENT
This Agreement is made and entered into as of May 2, 2005, 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 Shawn Blackburn (hereinafter
referred to as "Executive"), of Carmel, 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 Senior Vice President and Director of
Administration Services, 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, 2005;
provided, however, that commencing on December 31, 2005 and each December
31 thereafter, the term of this Agreement shall automatically be extended
for one additional year unless, not later than October 31, 2005 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.
(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.
(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 (2.00) 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;
(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.
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 /s/ Michael L. Cox By /s/ Shawn Blackburn
Michael L. Cox, Shawn Blackburn
President & Chief Executive Officer