FIRST MERCHANTS CORP (Form: 8-K, Received: 09/29/2020 08:03:41)

0000712534false00007125342020-09-252020-09-25

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (Date of earliest event reported): September 25, 2020

Commission File Number 0-17071

FIRST MERCHANTS CORPORATION

(Exact name of registrant as specified in its charter)


Indiana			35-1544218
(State or other jurisdiction of incorporation)			(IRS Employer Identification No.)

200 East Jackson Street

Muncie, IN 47305-2814

(Address of principal executive offices, including zip code)

(Registrant's telephone number, including area code)

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12 (b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.125 stated value per share	FRME	Nasdaq Global Select Market

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.

(b) On September 29, 2020, First Merchants Corporation (the “Company”) announced several changes to its executive management group as part of an ongoing executive succession plan, including the upcoming retirement of the Company’s current President and Chief Executive Officer, Michael C. Rechin, effective January 1, 2021. Mr. Rechin will retire as President and Chief Executive Officer, but will retain his position on the Company’s Board of Directors. Mr. Rechin will also continue to serve in a management consulting role pursuant to a Consulting Agreement (the “Consulting Agreement”) with the Company. The term of the Consulting Agreement begins on January 1, 2021 and continues for two years. Mr. Rechin’s duties under the Consulting Agreement will be to provide part-time consulting services as an independent contractor at the request of the Company’s Chief Executive Officer or President which services may include: advice and assistance with implementing mergers and acquisitions, identifying M&A prospects, investor relations, customer relations and customer lead generation, development and relationship building, and other related and similar services. His annual compensation will be $100,000 during 2021 and $50,000 during 2022 payable in equal monthly installments. The Company will also continue to allow Mr. Rechin use of his current company vehicle, continue payment of his club dues during the term and pay healthcare insurance premiums for Mr. Rechin and his spouse until eligibility for Medicare. Mr. Rechin will also be subject to a non-competition restriction that continues during the term of the Consulting Agreement and for a period of twelve months thereafter. The foregoing description of the Consulting Agreement is subject to, and qualified in its entirety by, the full text of the Consulting Agreement, which is attached hereto as Exhibit 10.1 to this Current Report and is incorporated herein by reference.

(c) Mr. Rechin’s retirement will be coupled with several changes to the Company’s executive management group. Specifically, at a meeting of the Company’s Board of Directors (the “Board”) held on September 25, 2020, the Board made the following appointments among its existing executive officers, each to become effective as of January 1, 2021: (i) Mark K. Hardwick will assume the position of Chief Executive Officer and will become the Company’s principal executive officer; (ii) Michael J. Stewart will assume the position of President; and (iii) Michele M. Kawiecki will assume the position of Executive Vice President and Chief Financial Officer and will be the Company’s principal financial and accounting officer. Each of these appointments will be until the next annual meeting of the Board of Directors or otherwise until their successors are duly appointed and qualified.

Additional information relating to the background and business experience for each of Hardwick, Stewart and Kawiecki (each, an “Executive Officer” and collectively, the “Executive Officers”) is set forth in the Company’s Definitive Proxy Statement on Schedule 14A, filed with the Securities and Exchange Commission on April 1, 2020 (the “Company’s 2020 Proxy Statement”), under the heading “Information About Our Executive Officers”, which information is incorporated herein by reference.

Other than existing compensatory arrangements, with respect to the new appointments: (i) there are no additional arrangements or understandings between an Executive Officer and any other person; (ii) no additional material plan, contract or arrangement has been entered into with an Executive Officer, and no such plan, contract or arrangement with an Executive Officer has been materially amended; and (iii) no grant of any additional award to an Executive Officer or modification of an existing award has been made. Moreover, none of the Executive Officers has a family relationship with any director or other executive officer of the Company or any person nominated or chosen by the Company to become a director or executive officer. Also, none of the Executive Officers has a direct or indirect material interest in any transaction that would require reporting under Item 404(a) of Regulation S-K.

ITEM 8.01 OTHER EVENTS.

On September 29, 2020, the Company issued a press release announcing the changes to its executive management group described in Item 5.02 above. A copy of the press release has been filed as Exhibit 99.1 to this Current Report and is incorporated by reference herein.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.


Exhibit 10.1			Consulting Agreement between Michael C. Rechin and First Merchants Corporation, effective January 1, 2021
Exhibit 99.1			Press Release of First Merchants Corporation, dated September 29, 2020
Exhibit 104			Cover Page Interactive Data File (embedded within the Inline XBRL document)

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: September 29, 2020

FIRST MERCHANTS CORPORATION

By: /s/ Mark K. Hardwick

Executive Vice President,

Chief Financial Officer and Chief Operating Officer

CONSULTING AGREEMENT This Consulting Agreement ("Agreement") is entered into this __ day of September, 2020, by and between Michael C. Rechin ("Rechin") and First Merchants Corporation ("FMC"). WHEREAS, Rechin will retire as FMC's President and Chief Executive Officer, and as the President and Chief Executive Officer of FMC's wholly-owned subsidiary, First Merchants Bank, on December 31, 2020 ("Retirement Date"); and WHEREAS, FMC desires to engage Rechin to provide certain services to FMC as a nonemployee consultant for a period of two (2) years following his retirement; and WHEREAS, Rechin has agreed to provide these services to FMC as a nonemployee consultant, subject to the terms and conditions set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual understandings, promises and covenants contained herein, Rechin and FMC hereby agree as follows: · 1. Consulting Services. FMC hereby engages Rechin as a nonemployee consultant during the term of this Agreement, to provide such consulting services as may be requested either by FM C's Chief Executive Officer or President (but no one else) and agreed to by Rechin from time to time ("Services"), including, e.g., advice and assistance with implementing mergers and acquisitions, identifying M&A prospects, investor relations, customer relations and customer lead generation, development and relationship building, and other related and similar services. In his capacity as a consultant, Rechin shall report directly to FMC's Chief Executive Officer. Rechin shall not act as an agent of FMC without the prior consent of FM C's Chief Executive Officer. The level of Services that Rechin performs under this Agreement shall not exceed twenty percent (20%) of the average level of services that he performed as an employee of FMC during the thirty-six (36) month period immediately preceding his Retirement Date. The parties intend that Rechin shall have separated from service as an employee of FMC as of his Retirement Date, as defined in IRS Reg. §1,409A-l(h)(ii). 2. Term. The term of this Agreement shall commence on January 1, 2021 and expire without further notice on December 31, 2022 ("Term"). 3. Compensation for Services. As consideration for his Services, FMC shall compensate Rechin as follows: (a) FMC shall pay Rechin the sum of One Hundred Thousand Dollars ($100,000) during the first calendar year of the Term, and Fifty Thousand Dollars ($50,000) during the second calendar year of the Term, payable in equal monthly installments; while performing these Services, FMC shall also reimburse Rechin for his reasonable out-of-pocket travel and other expenses, under FMC's standard policies and procedures, incurred on behalf of and at the request of FMC's Chief Executive Officer; (b) if Rechin elects COBRA continuation coverage under FMC's

healthcare plan following his retirement for his (and his immediate family's) benefit, FMC shall pay one hundred percent (100%) of the premi urns for such coverage for the maximum period allowed by statute; thereafter, FMC shall obtain and pay one hundred percent (100%) of the premiums for the same (or as similar as possible) coverage for Rechin ( and his spouse) under another healthcare plan until Rechin ( and his spouse) become eligible for Medicare; (c) during the Term, FMC shall provide Rechin administrative and secretarial assistance for work related to his Services, ( d) during the Term, FMC shall provide Rechin the automobile that FMC has made available for Rechin' s use as of his Retirement Date, including the insurance coverage on that automobile, (e) during the Term, FMC shall pay the membership dues in a country club where Rechin has a membership as of his Retirement Date, and (f) during the Term, FMC shall continue to give Rechin access to his FMC email account for him to use for personal emails and emails for work related to his Services. Except as specifically set forth herein, other than payment of the retirement benefits to which Rechin is entitled as a participant in FMC's retirement plans, Rechin's employment benefits shall cease as of his Retirement Date, or as otherwise provided under FMC's benefit plans. Rechin shall be solely responsible for the payment of all applicable federal, state and local income taxes, social security and Medicare taxes, unemployment, worker's compensation and other insurance contributions, and any other payroll taxes or payroll deductions with respect to the compensation payable to Rechin for his Services under this Agreement. FMC and Rechin agree that FMC will not provide an office to Rechin after his Retirement Date. 4. Senior Management Incentive Compensation Program ("SMICP"). In February or March 2021, FMC shall pay Rechin the cash amount that he will have earned for 2020 under the SMICP, as determined by FMC's Compensation and Human Resources Committee. Rechin shall not be eligible to participate in the SMICP for 2021. 5. Change of Control Agreement. The Change of Control Agreement presently in effect between Rechin and FMC shall terminate as of his Retirement Date. 6. Service on Board of Directors. Rechin's current term as an FMC Director is set to expire as of the 2022 annual shareholder meeting. Rechin may continue that service as a paid Director following the Retirement Date. As with other Directors, FMC's Nominating and Governance Committee will consider whether or not to continue that service following the expiration of his current term. While Rechin is serving as an FMC Director, he shall also be nominated and elected annually to serve as a Director of First Merchants Bank. 7. Confidentiality and Non-Solicitation. The Confidentiality and Non- Solicitation Agreement presently in effect between Rechin and FMC shall remain in effect following the Retirement Date. The provisions of Part I of that agreement, concerning confidentiality, shall continue to apply permanently; and the provisions of Part II of that agreement, concerning non-solicitation, shall continue to apply during the Term of this Agreement and for a period of twelve (12) months after the expiration of the Term. 2

8. Agreement Not to Compete. During the Term of this Agreement and for a period of twelve (12) months after the expiration of such Term, Rechin shall not, without FMC's prior written consent, directly or indirectly, engage in any employment or business activity, whether as an owner, director, manager, employee, independent contractor, consultant, partner, shareholder, joint venturer, or otherwise, which directly or indirectly competes with the business of FMC or any of its subsidiaries, as it is currently conducted or under development as of the Retirement Date. Rechin further agrees to notify FMC, in writing, before Rechin obtains employment with, performs work for, or engages in any business activity on behalf of any company, person or entity in the financial services industry or any related industry. If Rechin engages in any activity in violation of this Paragraph 8, Rechin hereby agrees that FMC shall be entitled to equitable relief (e.g. an injunction) to prevent any such activity by Rechin. FMC's rights and remedies hereunder shall be cumulative (and not alternative). FMC's rights and remedies with respect to Rechin's agreement not to compete, as set forth in this Paragraph 8, are independent of any other provision of this Agreement and shall survive the termination of this Agreement. The existence of any claim or cause of action of Rechin against FMC, whether predicated on this Agreement or otherwise, shall not constitute a defense to FMC's right to enforce this restriction on competitive activity. 9. Termination for Cause. Rechin's engagement by FMC as a nonemployee consultant under this Agreement shall terminate immediately, without any further payment or financial obligation by FMC to Rechin of any kind, in the event that FMC's Board of Directors determines that: (a) there is "Cause" for such termination, as that term is defined in the Change of Control Agreement presently in effect between Rechin and FMC; (b) Rechin has violated the Confidentiality and Non-Solicitation Agreement referred to in Paragraph 7 of this Agreement or the Agreement Not to Compete set forth in Paragraph 8 of this Agreement; or ( c) Rechin has engaged in any conduct that violates FMC's Code of Business Conduct applicable to its employees and directors and that is sufficiently serious to warrant such termination. In the event that Rechin's engagement as a consultant is terminated in accordance with this paragraph 9, he shall also submit his written resignation as an FMC Director and a First Merchants Bank Director to the Chair of the Board of Directors, effective immediately. 10. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their heirs, administrators, representatives, successors and assigns. 11. Applicable Law. This Agreement is made and entered into in the State of Indiana and shall in all respects be interpreted, enforced and governed under the laws of that State. 12. Entire Agreement. This Agreement sets forth the entire agreement between the parties and fully supersedes any and all prior agreements or understandings between the parties pertaining to the subject matter hereof. In the event this Agreement is ever held to be invalid or unenforceable (in whole or in part) as to any provision or as to 3

any particular circumstances, it shall remain fully valid and enforceable as to all other provisions and circumstances. IN WITNESS WHEREOF, the parties have duly executed this Agreement on the day and year first set forth above. FIRST MERCHANTS CORPORATION /2) __, By:L-~ C Charles E. Schalliol, Chair of the Bo d of Directors ,)t/~ C £ ~ Michael C. Rechin ' 4

N / E / W / S R / E / L / E / A / S / E

FOR IMMEDIATE RELEASE

Karen Evens, Vice President/Director of Marketing

http://www.firstmerchants.com/

SOURCE: First Merchants Corporation (NASDAQ: FRME), Muncie, Indiana

First Merchants President & CEO Michael C. Rechin announces retirement

COO/CFO Mark Hardwick to become CEO; CBO Michael Stewart to become President; SVP Michele Kawiecki to become CFO

After more than 13 years of leading significant growth and success for First Merchants Corporation (NASDAQ - FRME), President & CEO Michael C. Rechin announced today he will retire from his position effective December 31, 2020. Rechin will remain on the First Merchants Board of Directors and will serve as an advisor to First Merchants going forward.

Charles Schalliol, Chairman of the Board of Directors, stated, “Mike’s retirement caps an outstanding period in which he led First Merchants Corporation to unprecedented growth and success. On Mike’s watch, First Merchants grew from $3 billion in assets to $13 billion, with income growth to match. Forbes has recognized and ranked First Merchants as one of the five best banks in the country in each of the last three years.”

Succeeding Rechin will be Mark Hardwick, current COO and CFO, who will become CEO, and Michael Stewart, current Chief Banking Officer, who will become President. Michele Kawiecki, current Senior Vice President of Finance, will become CFO. All leadership changes will be effective January 1, 2021.

“It has been a great privilege to lead First Merchants Corporation,” said Rechin. “The management team we’ve developed is well prepared to take First Merchants to the next level as Mark, Mike and Michele have all earned their next leadership responsibilities. My wife Debbie and I consider Indiana home. We plan to stay for the foreseeable future, and I will continue to assist the new leadership team.”

Mark Hardwick joined First Merchants in November 1997 as corporate controller and was promoted to CFO in April of 2002. In June of 2007, Hardwick assumed all leadership duties related to operations, technology and risk management for the corporation. In 2016, his title expanded to include COO, broadening his responsibilities to oversight of internal audits, facilities and corporate social responsibility.

“This is a tremendous opportunity, and I want to thank Mike Rechin and the Board of Directors for believing in my ability to lead First Merchants,” said Hardwick. “I plan to continue building on the foundation Mike laid and prepare First Merchants to enhance the digital banking experience and community connectivity. Mike Stewart and I are aligned on taking First Merchants to the next level.”

Mike Stewart joined First Merchants in 2008 and leads revenue generating activities in his current role. Prior to First Merchants, Stewart served in executive roles with National City Bank in Indiana.

“I look forward to working closely with Mark and the Board to continue First Merchants’ positive trajectory,” said Stewart. “First Merchants has experienced tremendous growth during the past decade, and we will continue that model. Over the course of my 32-year banking career, I have had the privilege to work for Mike for 23 of those. We have enjoyed a strong partnership and perspective of First Merchants growth that I intend to continue with our First Merchants teammates. Our success stems from the success of our clients and communities, and we will maintain our focus on exceptional service.”

Michele Kawiecki joined First Merchants in 2015 having previously served as Senior Vice President of Capital Management and Assistant Treasurer at UMB Financial Corporation in Kansas City, Missouri.

“I’ve had the pleasure of working closely with our leadership team during the past several years,” said Kawiecki. “We are completely aligned with our goals and strategies moving forward, and I very much look forward to beginning my new role.”

Schalliol added, “All three announced promotions are part of a long planned succession process by Mike Rechin and the Board of Directors. The Board believes strongly that these management changes will position First Merchants well to continue to be a leading regional bank. We thank Mike Rechin for his tenure of superb leadership.”

About First Merchants Corporation

First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana. The Corporation has one full-service bank charter, First Merchants Bank. The Bank also operates as First Merchants Private Wealth Advisors (as a division of First Merchants Bank). First Merchants Corporation’s common stock is traded on the NASDAQ Global Select Market System under the symbol FRME. Quotations are carried in daily newspapers and can be found on the company’s website (www.firstmerchants.com).

FIRST MERCHANTS and the Shield Logo are federally registered trademarks of First Merchants Corporation.