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Consulting Agreement

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Sectors: Banking
Governing Law: Indiana, View Indiana State Laws
Effective Date: April 14, 1998
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CONSULTING AGREEMENT


This CONSULTING AGREEMENT (the "Agreement") is entered into this 14th day of April, 1998, between ERNESTINE M. RACLIN ("Raclin") and 1ST SOURCE CORPORATION ("1ST Source").


RECITALS


A. Effective April 16, 1998, Ernestine M. Raclin is retiring after long and distinguished service as Chairman of the Board of 1ST Source and its bank subsidiary.


B. Because Raclin possesses valuable experience, knowledge, and expertise concerning the operations, customers, markets, business plans, and other matters of vital importance to 1ST Source and its subsidiaries, 1ST Source desires to ensure its continued and exclusive access to that experience, knowledge, and expertise by entering into a consulting arrangement with her.


C. Raclin desires to make herself available as a consultant to 1ST Source.


D. 1ST Source and Raclin desire to set forth in writing the terms and conditions of the consulting relationship.


AGREEMENT


In consideration of the premises and the following mutual undertakings, the parties agree as follows:


1. Consulting Relationship. Effective April 16, 1998, Raclin shall provide consulting services to 1ST Source under the terms of this Agreement.


2. Term. Raclin's consulting relationship under this Agreement shall commence as of April 16, 1998, and shall continue through April 15, 2008, unless and until otherwise terminated pursuant to Paragraph 6 (the "Term").


3. Responsibilities of Raclin.


3.1 Consultant. As requested by 1ST Source, Raclin,
shall use her best efforts to consult with the Board of
Directors and executive officers of 1ST Source, to foster
existing and potential customer relationships for the benefit
of


2


1ST Source, to represent the interests of 1ST Source in civic,
banking, and other business organizations, and otherwise to
make available her experience, knowledge, and expertise for
the benefit of 1ST Source. Raclin shall be available to
provide up to 400 hours of service per calendar year under the
terms of this Agreement.


3.2 Independent Contractor. Raclin shall perform her
services under this Agreement as an independent contractor.
Except as otherwise provided in this Agreement, she shall have
the sole discretion and responsibility for the selection of
procedures, processes, personnel, materials, working hours,
and other incidents of performance of services. So long as
Raclin performs services in accordance with this Agreement and
complies with the restrictive covenants of Paragraph 7,
nothing shall prevent her from performing services for other
noncompeting businesses or entities.


3.3 Taxes. Raclin shall be solely responsible for all
tax obligations with respect to consulting fees received under
this Agreement.


3.4 Authority and Responsibilities. Raclin's specific
responsibilities shall be assigned, from time to time, by the
Chairman and Chief Executive Officer of 1ST Source. Except as
expressly provided by the terms of a particular assignment,
Raclin shall not have the authority to bind 1ST Source.


4. Consulting Fees and Support Services. For the first five years of the Term, Raclin shall receive an annual consulting fee of $150,000, payable monthly or as the parties may from time to time agree; for the remainder of the Term, Raclin shall receive an annual consulting fee of $100,000. In addition, 1ST Source shall provide Raclin the following:


4.1 Office Facilities and Clerical Services. To
assist Raclin in performing consulting services under this
Agreement, 1ST Source shall provide Raclin with an office
suite and clerical services.


2


3


4.2 Other Support Services. To assist her in
performing consulting services under this Agreement, 1ST
Source shall make available to Raclin the use of its corporate
aircraft for up to 50 hours per calendar year. 1ST Source
shall also provide, at its expense, memberships in one country
club and one business club located in the area of South Bend,
Indiana, or other geographic area in which a membership can
reasonably be used for the benefit of 1ST Source.


4.3 Expense Reimbursement. 1ST Source shall reimburse
Raclin for reasonable and necessary business and travel and
entertainment expenses that she incurs in performing
consulting services under this Agreement.


4.4 Medical/Physical Exam. 1ST Source shall reimburse
Raclin for the monthly insurance premiums required for the
purchase of Medicare supplemental insurance Plan J and shall
also reimburse Raclin for her annual physical conducted at the
Mayo Clinic or such other comparable diagnostic facility for
the period of this Agreement.


5. Deferral of Fees. In Raclin's discretion, she may elect to defer the payment of all or a portion of the consulting fees that she is to receive under this Agreement, according to the following procedures:


5.1 Election. To defer fees to be earned during a
calendar year, Raclin shall deliver a written deferral
election to 1ST Source before the beginning of that calendar
year. For the period from April 16, 1998, through December 31,
1998, however, Raclin may make such an election before the
beginning of that period. Each election shall be irrevocable
and shall designate the amount to be deferred and the date the
deferred amounts are to be paid.


5.2 Account. 1ST Source shall maintain an individual
bookkeeping account in Raclin's name on the accounting records
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