EXHIBIT 10.8
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into this
___ day of November 1998 by and between Xxxxx Xxxxxxxx (hereinafter the
"Executive") and BankUnited Financial Corporation, a Florida corporation
("BankUnited"), and its principal wholly owned subsidiary, BankUnited, FSB
(BankUnited and BankUnited, FSB are collectively referred to herein as the
"Company" and are jointly and severally obligated hereunder subject to the
provisions of Section 17.4 hereof).
RECITALS
A. The Executive possesses intimate knowledge of, and experience in,
the banking industry.
B. The Boards of Directors of BankUnited and BankUnited, FSB
(collectively referred to herein as the "Board") have determined that it is in
the best interests of the Company and its stockholders to assure that the
Company will have the services of the Executive as its President and Chief
Operating Officer, and to compensate him therefor.
C. The Company, on behalf of itself and its shareholders, also wishes
to retain well-qualified key personnel (such as Executive), and to assure itself
of the continuity of its management.
D. The Company is concerned that in the event of a possible or
threatened Change in Control (as hereinafter defined), uncertainties necessarily
arise and the Executive may have concerns about his employment status and
responsibilities, and may be approached by others offering competing employment
opportunities, and the Company therefore desires to provide the Executive
assurances as to the continuation of his employment status and responsibilities
in such event. The Company further desires to assure that, if a possible or
threatened Change in Control should arise and the Executive should be involved
in deliberations or negotiations in connection therewith, the Executive would be
in a secure position to consider and participate in such transaction as
objectively as possible in the best interests of the Company and, to this end,
desires to protect the Executive from any direct or implied threat to his
financial well-being.
E. The Board has determined that this Agreement will reinforce and
encourage the Executive's attention and dedication to the Company.
F. The Executive is willing to make his services available to the
Company on the terms and conditions hereinafter set forth, but desires assurance
that in the event of such a threatened or actual Change in Control he will
continue to have the employment status and responsibilities he could reasonably
expect absent such event and, in the event of his termination or a Change in
Control, he will have fair and reasonable severance protection on the basis of
his service to the Company at that time.
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NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties agree as follows:
1. DEFINITIONS. In addition to the words and terms defined elsewhere in
this Agreement, the following words and terms as used herein shall have the
meanings as set forth below, unless the context or use indicates a different
meaning:
(a) "DATE OF TERMINATION" means the date of receipt of a
Notice of Termination or any later date specified therein, as the case may be;
provided, however, that if the Executive's employment is terminated by reason of
the Executive's death or Disability, the Date of Termination shall be the date
of death of the Executive or the Disability Effective Date, as the case may be.
(b) "DISABILITY" means any physical or mental condition that
wholly prevents the Executive from performing his duties for at least six months
after the commencement of such condition and that is determined to be of a
permanent duration by a physician acceptable to the Company and the Executive or
the Executive's legal representative (such agreement as to acceptability not to
be unreasonably withheld). If the Company determines in good faith that the
Disability of the Executive has occurred, it may give to the Executive written
notice of its intention to terminate the Executive's employment. In such event,
the Executive's employment with the Company shall terminate effective the
Disability Effective Date, provided that the Executive shall not have returned
to full-time performance of the Executive's duties prior to the Disability
Effective Date. Any subsequent Disability, whether of a similar nature or not,
shall not be deemed a continuation of a prior Disability and, the determination
of time periods for the purposes of this provision shall recommence.
(c) "DISABILITY EFFECTIVE DATE" means the date thirty (30)
days following receipt by the Executive of notice from the Company of the
Company's intention to terminate the Executive's employment because of the
Executive's Disability.
(d) "NOTICE OF TERMINATION" means a written notice that (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
in the case of termination for Cause, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment for Cause and includes the resolution of the Board regarding the
termination of the Executive's employment for Cause, and (iii) if the Date of
Termination is other than the date of receipt of such notice, specifies the
termination date.
(e) "TERMINATION PAYMENT" means a lump sum cash payment to the
Executive by the Company in an amount which equals three times the sum of the
Executive's Base Salary for the year in which the termination occurs and an
amount equal to the last Annual Bonus paid to the Executive.
(f) "VESTED BENEFITS" means all amounts earned by and vested
in the Executive pursuant to the plans, programs, policies and practices of the
Company, including, without
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limitation, the BankUnited Financial Corporation Profit Sharing Plan, disability
insurance plan, and group and supplemental life insurance plans.
2. EMPLOYMENT.
2.1 EMPLOYMENT AND TERM. The Company hereby agrees to employ
the Executive and the Executive hereby agrees to serve the Company, on the terms
and conditions set forth herein, for the thirty (30) month period commencing on
December 1, 1998 (hereinafter the "Commencement Date") and expiring at the
conclusion of May 31, 2001 (the "Term") unless sooner terminated as hereinafter
set forth; provided, however, that commencing on June 1, 2001 and each year
thereafter (the "Extension Date"), subject to review under Section 2.4 hereof,
the Term of this Agreement shall automatically be extended for an additional
period of twelve (12) months from that date unless at least six (6) months prior
to such Extension Date, the Company shall have delivered to the Executive, or
the Executive shall have delivered to the Company, written notice that the Term
of the Executive's employment hereunder will not be extended. In the event any
such notice is delivered by the Company to the Executive or by the Executive to
the Company, thereafter, so long as the Executive is performing his obligations
pursuant to this Agreement, the Executive may begin his search and may interview
for subsequent employment, which actions shall not constitute a breach of this
Agreement by the Executive or give rise to a basis for his termination for Cause
(as such term is defined in Section 5.1 hereof).
2.2 POSITION AND DUTIES OF EXECUTIVE. The Executive shall
serve as the President and Chief Operating Officer of BankUnited and BankUnited,
FSB, and shall have powers and authority superior to any other officer or
employee of the Company or of any subsidiary of the Company (excepting the
Chairman of the Board). The Executive shall be responsible for all lines of
business and all support functions, and shall manage the affairs of the Company
on a day-to-day basis. Subject to the preceding sentences, during the Term of
employment, the Executive shall diligently perform all services as may be
reasonably assigned to him by the Board (or its Chairman) and shall exercise
such power and authority as may from time to time be delegated to him by the
Board (or its Chairman). Executive shall be required to report solely to, and
shall be subject solely to the supervision and direction of, the Board (or its
Chairman) at duly called meetings thereof, and no other person or group shall be
given authority to supervise or direct Executive in the performance of his
duties. The Executive shall devote substantially all his working time and
attention to the business and affairs of the Company, render such services
efficiently and to the best of his ability, and use his best efforts to promote
the interests of the Company.
2.3 PLACE OF PERFORMANCE. In connection with his employment by
the Company, the Executive shall be based at the Company's principal executive
offices (which shall be in Miami-Dade County, Broward County or Palm Beach
County, Florida) unless a change of location is mutually satisfactory to the
Executive and the Company, except for required travel on the Company's business.
To the extent the Executive, as a consequence of his employment, is required to
relocate from Miami-Dade County, Florida, the Company shall reimburse the
Executive for all reasonable costs incurred in connection with the relocation
including, but not limited to, moving expenses and transaction costs related to
the sale of his home, such expenses to include brokerage commissions
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and transfer costs customarily paid by sellers of residential real property.
2.4 PERFORMANCE REVIEW. It is the intent of the parties that
the Executive's performance be reviewed with the Board of Directors once each
year (as said term is defined in Section 3.2 hereof).
3. COMPENSATION.
3.1 BASE SALARY. The Executive shall receive a base salary of
$325,000 (the "Base Salary") per year during the Term of this Agreement, with
such Base Salary payable in installments consistent with the Company's standard
payroll practice for executives. On each anniversary of the Commencement Date
commencing in 1999, the Compensation Committee of the Board (or the full Board
in the absence of such committee or a replacement therefor) may engage in good
faith negotiations with the Executive concerning an increase of the Executive's
then Base Salary . The Base Salary shall not be decreased for any reason. Any
increase in Base Salary shall not limit or reduce any obligation to the
Executive under this Agreement.
3.2 ANNUAL BONUS. The Executive shall be entitled to a cash
bonus (the "Annual Bonus") for each year of the Term (for purposes of this
Agreement a "year" shall mean, with respect to the first year, the period
starting on the Commencement Date of this Agreement and ending on the first
anniversary thereafter, and for each subsequent year, a period commencing on the
day after the end of the preceding year and ending twelve (12) months
thereafter). The Annual Bonus for a year shall be based upon merit during such
year (taking into account various factors including net income, assets and
deposit growth, and such other factors as may be deemed appropriate) and shall
be determined by the Compensation Committee of the Board (or the full Board in
the absence of such Committee or a replacement therefor); provided, however,
that the minimum amount of the Bonus shall be $50,000 for the year to which the
Bonus relates. The Annual Bonus for a year shall be paid, at the election of the
Executive, in the immediately following months of December or January.
4. ADDITIONAL BENEFITS.
4.1 EXPENSE REIMBURSEMENT. During the Term, the Company, upon
the submission of supporting documentation by the Executive in form sufficient
to permit deduction thereof under applicable tax law, shall promptly reimburse
the Executive for all reasonable expenses actually paid or incurred by the
Executive in the course of and pursuant to the business of the Company,
including expenses for entertainment and all travel and living expenses while
away from home on business or at the request of the Company, provided that such
expenses are incurred and accounted for in accordance with the Company's regular
policies and procedures.
4.2 OTHER BENEFITS. The Company shall obtain or shall continue
in force comprehensive major medical and hospitalization insurance coverages,
including dental coverage, either group or individual, for the Executive and his
dependents, and shall obtain or shall continue in force disability and life
insurance for the Executive (collectively, the "Policies"), which Policies the
Company shall keep in effect at its sole expense throughout the Term. To the
extent any Policies
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have an eligibility period, Executive may maintain his existing equivalent
coverage under COBRA and the Company shall reimburse him for that expense until
the eligibility period is satisfied. The Policies to be provided by the Company
shall be on terms as determined by the Board; provided, however, that the death
benefit under the life insurance policy(ies) maintained on behalf of the
Executive shall be at least equal to a face amount of $2,000,000 and shall be
payable to beneficiary(s) designated by the Executive. In addition to the group
disability insurance coverage provided by the Company to its executive
employees, the Company shall pay to the Executive $6,000 annually to reimburse
him for the cost of an individual disability policy which would provide the
Executive monthly disability benefits of $11,125 (or such disability benefits as
the Executive individually secures with the reimbursed amount), without
deduction for any payments provided under the Company's group disability
insurance coverage. Regardless of anything herein to the contrary, if at any
time during the Executive's employment hereunder, the Company agrees to provide
or provides any benefit to any other executive officer of the Company (excepting
the Chairman of the Board), which benefit is not otherwise provided to the
Executive hereunder, or which is greater than a similar benefit provided to the
Executive hereunder, the Company shall provide such benefit to the Executive or
increase his benefit to be at least equal to such benefit agreed to be provided
or provided to such other executive officer . Nothing paid to the Executive
under any plan or arrangement presently in effect or made available in the
future shall be deemed to be in lieu of the Base Salary or Annual Bonus payable
to the Executive pursuant to this Agreement.
4.3 WORKING FACILITIES AND SUPPORT STAFF. The Company shall
furnish the Executive with an office or offices, of a size and with furnishings
and other appointments, and secretarial and such other facilities and support
services suitable to his position and adequate for the performance of his duties
hereunder. The office facilities and support staff shall substantially equal the
most favorable provided to any other officer or employee of the Company.
4.4 AUTOMOBILE ALLOWANCE. During the Term, the Company shall
provide Executive with an automobile allowance of fifteen hundred dollars
($1,500) per month, which amount is intended to compensate Executive for wear
and tear and, in addition, reimburse the Executive for all costs of gasoline,
oil, repairs, maintenance, insurance and other expenses incurred by Executive by
reason of the use of Executive's automobile for Company business from time to
time. The amount of this allowance will be reviewed by the Company and the
Executive on each anniversary from the Commencement Date during the Term,
commencing in 1999, and increased prospectively as is necessary to compensate
and reimburse the Executive for such wear and tear and costs.
4.5 VACATION. The Executive shall be entitled to four (4)
weeks vacation per year, said vacation to be scheduled so as not to materially
interfere with the performance by the Executive of his duties pursuant to this
Agreement.
4.6 COUNTRY CLUB MEMBERSHIP. The Company shall pay initiation
fees (not to exceed $20,000) and dues for the Executive's membership at a
country club of his choice, and such luncheon clubs as he deems appropriate for
the discharge of his duties hereunder.
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4.7 INCENTIVE COMPENSATION. Executive shall be granted
annually options to purchase at least 30,000 shares of the Company's Class A
Common Stock, such grants to be based upon Executive's performance and the
market price of such stock. Any such future grants shall provide that the
options immediately vest upon a Change in Control as defined in Section 6, the
Executive's termination under Sections 5.2 or 5.3, or the Company or the
Executive advising the other pursuant to Section 2.1 that the Term of this
Agreement will not be extended. Executive shall also be eligible to participate
in stock option, incentive compensation and other plans providing opportunities
to receive additional compensation.
4.8 ESTATE PLANNING. The Company shall pay the cost for
reasonable estate planning services that the Executive receives from time to
time; provided, however, that the aggregate amount of the foregoing, shall not
exceed $5000 per year.
4.9 SECURITIES GRANTS. At the first meeting of the Board of
Directors of the Company following Commencement Date, Executive shall receive:
a) a grant of 35,000 shares of the Company's Class A Common
Stock, ownership of which is to vest on January 4, 1999;
b) a grant of options to purchase 70,000 shares of the
Company's Class A Common Stock at a price of $7 1/8 and with an expiration date
of ten (10) years, which options will vest 50% at the first anniversary from the
Commencement Date, 25% at the second anniversary from the Commencement Date, and
25% at the third anniversary from the Commencement Date, subject to immediate
vesting in the event of the Executive's termination under Sections 5.2 or 5.3,
the Company or the Executive advising the other pursuant to Section 2.1 that the
Term of this Agreement will not be extended, or in the event of a Change of
Control as defined in Section 6.
5. TERMINATION.
5.1 TERMINATION FOR CAUSE. Notwithstanding anything contained
herein to the contrary, this Agreement may be terminated by the Company for
Cause. As used in this Agreement, "Cause" shall only mean (i) any action or
omission of the Executive which constitutes a willful and material breach of
this Agreement which is not cured within sixty (60) days after receipt by
Executive of specific written notice of same, (ii) the Executive intentionally
engages in dishonest conduct in connection with his performance of services for
the Company and that results in his conviction for a felony, (iii) the
conviction of Executive for, or a plea of guilty or NOLO CONTENDERE to, a
criminal act which is a felony; (iv) the Executive willfully and materially
breaches a fiduciary duty owed to the Company, for personal profit; or (v) the
Executive's willful and material breach or violation of any law, rule,
regulation (other than traffic violations or similar offenses), or final cease
and desist order in connection with his performance of services for the Company.
Notwithstanding the foregoing, the Executive shall not be deemed to be
terminated for Cause unless and until:
(a) the Board first holds a meeting, as to which the Executive
was provided ten (10) days advance notice and an opportunity to be heard, and
the Board delivers written notice to the Executive specifying in detail the
action or inaction of the Executive alleged to constitute Cause and
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demanding that he remedy such action or inaction;
(b) the Executive shall not have remedied such action or
inaction allegedly constituting Cause within twenty (20) days after his receipt
of such written notice; and
(c) there shall have been delivered to the Executive a Notice
of Termination and a certified copy of a resolution duly adopted by the
affirmative vote of at least a majority of the Board (excluding the Executive)
at a special meeting of the Board at which the Executive was given a further
opportunity to appear with legal counsel of his choosing to refute any
allegations of Cause, which meeting was called and held for the purpose of
finding that, in the good faith opinion of the Board, the Executive's action or
inaction constituted Cause and the Executive did not remedy such action or
inaction after demand by the Board.
Nothing in Section 5.1(b) shall, prior to delivery of a Notice
of Termination as provided herein, be deemed to suspend or extinguish the
Executive's entitlement to receive the compensation and other benefits provided
under Sections 3, 4, 5.2, 5.3 and 6. In the event that the Company terminates
the employment of the Executive for Cause and, within 30 days after receipt of
the Notice of Termination, the Executive notifies the Company that he disputes
such termination, the Executive shall still be subject to the obligations set
forth in Section 2 and entitled to receive the compensation and other benefits
provided under Sections 3, 4, 5.2, 5.3 and 6 until a final and binding judgment
is rendered by a court of competent jurisdiction finding that the termination
was properly for Cause, in which event all payments subsequent to termination to
which the Executive would not otherwise be entitled shall be recoverable by the
Company, except to the extent such payments constitute reasonable compensation
for services rendered.
5.2 TERMINATION FOR DEATH OR DISABILITY. This Agreement shall
terminate automatically upon the Executive's death and may be terminated by the
Company upon the Executive's Disability. Upon a termination by reason of the
Executive's Disability, the Company shall pay to the Executive or his
beneficiaries, as the case may be, (i) any compensation or other obligations
accrued for periods prior to the Date of Termination, all of which shall be paid
within 15 days after the Date of Termination, (ii) six months of Base Salary
plus an amount equal to one-half of the last Annual Bonus paid to the Executive,
all of which shall be paid in installments consistent with the Company's payroll
practice for executives, and (iii) implement the provisions for the Executive's
Vested Benefits as of the Date of Termination. If Termination is due to the
death of the Executive, the Company shall, within 15 days after the Date of
Termination, pay to the Executive's estate or beneficiaries, as the case may be,
(i) any unpaid Base Salary, Annual Bonus and benefits accrued for periods prior
to the Date of Termination, and (ii) the rights to the Vested Benefits, other
than life insurance and disability insurance, shall be provided to his spouse.
In
addition, the life insurance proceeds from the policies described in this
Agreement shall be paid to his personal representative or such other persons as
the Executive may have designated in writing.
5.3 TERMINATION WITHOUT CAUSE. At any time the Company shall
have the right to terminate Executive's employment hereunder by written notice
to Executive; provided, however, that the Company shall (i) pay to Executive any
unpaid Base Salary, Annual Bonus and benefits and
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amounts due under the programs described in Sections 4 and 6, (ii) continue to
pay Executive's Base Salary, Annual Bonus and benefits, described in Sections 4
and 6, for the balance of the then effective Term, and (iii) implement the
provisions for the Executive's Vested Benefits as of the Date of Termination. In
such event, the Executive shall be awarded an Annual Bonus of $75,000 per year
for the year to which the Annual Bonus relates for the balance of the then
effective Term. At the election of the Executive, such Base Salary, Annual
Bonus, Vested Benefits and amounts due shall be paid in one lump sum within
thirty (30) days after notice of such election is given to the Company by the
Executive. The Company shall be deemed to have terminated the Executive's
employment pursuant to this Section 5.3 if such employment is terminated (i) by
the Company without Cause, or (ii) by the Executive voluntarily as a result of
the occurrence of any of the following events which is not consented to in
writing, by the Executive prior to its occurrence or which is not cured by the
Company within thirty (30) days after its receipt of prompt written notice of
the Executive's objection to the occurrence: (a) Executive is assigned to any
position, duties or responsibilities that are diminished when compared with the
position, duties or responsibilities of the Executive on the date of this
Agreement, (b) the Executive's Base Salary or benefits are reduced or the
Executive's Annual Bonus is less than the minimum specified in Section 3.2, (c)
the Executive is requested to engage in conduct that is reasonably likely to
result in a violation of law, (d) the withdrawal from the Executive of any
authority described in Section 2.2 or a change of the reporting relationship
described in that Section, (e) the Company requiring, without his consent, the
Executive to maintain his principal office or conduct his principal activities
anywhere other than at the Company's principal executive offices in Miami-Dade
County, Broward County or Palm Beach County, Florida, (f) the failure by the
Company to obtain the assumption and agreement to perform this Agreement by any
successor as contemplated in Section 17.1 hereof, or (g) repudiation by the
Company of any material obligation of the Company under this Agreement. The
Executive shall have no duty or obligation to mitigate the obligations of the
Company (through seeking other employment or otherwise) in the event of
termination of his employment pursuant to this Section 5.3, and the Company's
obligations hereunder shall not be offset, mitigated or otherwise reduced by
reason of the Executive's subsequent employment or otherwise.
6. CHANGE IN CONTROL.
6.1 CHANGE IN CONTROL. A "Change in Control" shall be deemed
to have occurred if the conditions set forth in any one of the following
paragraphs shall have been satisfied:
(a) any person, as defined in Section 3(a)(9) of the
Securities and Exchange Act of 1934 ("Exchange Act"), as such term is modified
in Sections 13(d) and 14(d) of the Exchange Act (other than (A) any employee
plan established by any "Corporation" [which for these purposes shall be deemed
to be the Company and any corporation, association, joint venture,
proprietorship or partnership which is connected with the Company either through
stock ownership or through common control, within the meaning of Sections 414(b)
and (c) and 1563 of the Internal Revenue Code of 1986, as amended], (B) the
Company or any of its affiliates (as defined in Rule 12b-2 promulgated under the
Exchange Act), (C) an underwriter temporarily holding securities pursuant to an
offering of such securities, (D) a corporation owned, directly or indirectly, by
stockholders of the Company in substantially the same proportions as their
ownership of the Company or (E) Xxxxxx X. Xxxxxx or a group acting in concert
with him) (a "Person"), is or becomes the beneficial owner
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(as defined in Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly from the
Company) representing 25% or more of the combined voting power of the Company's
then outstanding voting securities;
(b) during any period of up to two consecutive years,
subsequent to the date hereof, the individuals who, at the beginning of such
period, constitute the Board cease for any reason to constitute at least a
majority thereof, provided that any person who becomes a director subsequent to
the beginning of such period and whose nomination for election is approved by at
least two-thirds of the directors then still in office who either were directors
at the beginning of such period or whose election or nomination for election was
previously so approved (other than a director (A) whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of the directors of the Company, as such terms are used in Rule
14a-11 of Regulation 14A under the Exchange Act, or (B) who was designated by a
Person who has entered into an agreement with the Company to effect a
transaction described in clause (a), (c) or (d) hereof) shall be deemed a
director as of the beginning of such period;
(c) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation other than (A) a merger
or consolidation that would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or any parent thereof), in combination with the ownership of
any trustee or other fiduciary holding securities under an employee benefit plan
of any Corporation, at least 51% of the combined voting power of the voting
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the beneficial owner (as
defined in clause (a) above), directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such Person any
securities acquired directly from the Company) representing 25% or more of the
combined voting power of the Company's then outstanding voting securities;
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets, other than a sale
or disposition by the Company of all or substantially all of the Company's
assets to an entity, at least 75% of the combined voting power of the voting
securities of which are owned by persons in substantially the same proportions
as their ownership of the Company immediately prior to such sale; or
(e) any "Person" (as such term is defined in Sections
407(q)(9)(A) and 408(a)(1)(G) of the National Housing Act of 1934, as amended
[the "NHA"]) or group of Persons, shall have acquired "control" (as such term is
defined in Sections 407(q)(9)(B) and 408(a)(2) of the NHA) of the Company.
6.2 PAYMENTS UPON A CHANGE IN CONTROL. Upon the first date on
which a Change
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in Control occurs:
(a) the Company shall, within thirty (30) days following the
Change in Control, pay the Executive a Termination Payment; and
(b) the Executive shall have the right, but not the
obligation, to resign and the Company shall pay the Executive any Base Salary,
Annual Bonus or other benefits accrued for dates prior to the date of
resignation and implement the provisions of the Executive's Vested Benefits;
provided, however, that the Executive must remain in the employ of the acquiring
entity for a period of time not to exceed six (6) months if the acquiring entity
so desires; and
(c) nothing in, or done pursuant to, Sections 6.2 (a) or (b)
shall be deemed to suspend or extinguish the Executive's rights under Section 5.
6.3 ARRANGEMENTS NOT EXCLUSIVE OR LIMITING. The specific
arrangements referred to herein are not intended to exclude or limit the
Executive's participation in other benefits available to executive personnel
generally, or to preclude or limit other compensation or benefits as may be
authorized by the Board of the Company at any time, or to limit or reduce any
compensation or benefit to which the Executive would be entitled but for this
Agreement.
7. GROSS-UP OF TERMINATION PAYMENTS. The parties intend that (i) the
net amount retained by the Executive (the "Net Termination Payment") upon the
receipt of the Termination Payment, after reduction for and payment of all
applicable federal, state and local income and employment taxes (the
"Withholding Taxes") or the tax (the "Excise Tax") imposed by Section 4999 of
the Internal Revenue Code of 1986 or any successor statute, rule or regulation
of similar effect (the "Code"), including interest and penalties, and payable by
or on behalf of the Executive, shall be an amount equal to three times the sum
of the Executive's Base Salary for the year in which the Executive's employment
is terminated plus the last Annual Bonus paid to the Executive, and (ii) the net
amount of all other payments or benefits retained or to be retained by the
Executive from the Company or from one of the Company's benefit plans as a
direct or indirect result of or in connection with a Change in Control or a
Potential Change in Control or in connection with a Termination, from whatever
source other than a Termination Payment (the "Other Payments"), that are or
become subject to the Excise Tax, shall be equal to the gross amount of Other
Payments payable to the Executive without regard to the reduction or payment of
any such Excise Tax, and without regard to this Section. Accordingly, the
Termination Payment shall include an amount (the "Gross-Up Payment") sufficient
that, after payment of all Withholding Taxes and Excise Tax payable by or on
behalf of the Executive in respect of the Termination Payment, the Other
Payments and any other payments payable pursuant to the provisions of this
Section (including the cumulative effect of the Gross-Up Payment on Withholding
Taxes and Excise Tax), the Executive will actually retain an amount equal to the
Net Termination Payment and will actually receive the value of the Other
Payments, without diminution for Withholding Taxes or Excise Tax.
(a) In determining the Withholding Taxes payable by or on
behalf of the Executive, the Executive shall be deemed to pay federal, state and
local income taxes on the date of Termination, at the highest marginal rates
imposed on individuals under Section 1 of the Code, with
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respect to federal income taxes, and at the highest marginal rates imposed under
the laws of the state and locale of the Executive's residence on the date of
Termination, with respect to state and local income taxes, as such laws are in
effect during the calendar year in which the date of Termination occurs. Such
federal income taxes shall be determined taking account of the maximum deduction
permitted for the payment of such state and local taxes. In addition, the
Executive shall be deemed to be subject to only the tax imposed by Section
3101(b) of the Code.
(b) In determining the Excise Tax payable by or on behalf of
the Executive, all Termination Payment and the Other Payments shall be deemed to
constitute "excess parachute payments" within the meaning of Section 280G(b)(1)
of the Code, except to the extent that, in the opinion of tax counsel selected
by the Company's independent auditors and acceptable to the Executive, such
payments (in whole or in part) do not constitute "parachute payments" within the
meaning of Section 280G(b)(2)(A) of the Code, or represent reasonable
compensation for services actually rendered or to be rendered within the meaning
of Section 280G(b)(4) of the Code.
(c) In determining the amount of the Other Payments, the value
of any non-cash benefits or any deferred payment or benefit shall be determined
by the Company's independent auditors in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code.
(d) In the event the amount or amounts of the Excise Tax or
Withholding Taxes are subsequently determined to be less than the amounts taken
into account hereunder at the time of the payment of the Gross-Up Payment, the
Executive shall repay the Company the portion of such payment attributable to
such reduction, taking into account the effect of any deductions allowable to
the Executive for such repayment, consistent with the provisions of Paragraph
(a) of this Section.
(e) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service or any other taxing authority
(collectively, the "IRS") that, if successful, would require the payment by the
Company of a Gross-Up Payment (other than a Gross-Up Payment previously paid).
Such notification shall be given as soon as practicable but no later than ten
(10) business days after the Executive is informed in writing of such claim, and
shall apprise the Company of the nature of such claim and the date on which such
claim is requested to be paid. The Executive shall not pay such claim prior to
the expiration of the 30-day period following the date on which it gives such
notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company notifies the
Executive in writing prior to the expiration of such period that it desires to
contest such claim, the Executive shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim;
(ii) take such action in connection with contesting
such claim as the Company reasonably requests in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in
order effectively to contest such claim, and
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(iv) permit the Company to participate in any
proceedings relating to such claim; provided, however, that the Company shall
bear and pay directly all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall indemnify and hold
the Executive harmless, on an after-tax basis, for any Withholding Taxes or
Excise Tax (including interest and penalties with respect thereto) imposed as a
result of such representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Paragraph (e), the Company shall
control all proceedings taken in connection with such contest and may, at its
sole option, pursue or forgo any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim and
may, at its sole option, either direct the Executive to pay the tax claimed and
xxx for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company directs the Executive to pay such claim and xxx for a refund, the
Company shall advance the amount of such payment to the Executive, on an
interest-free basis, and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further provided
that the Executive shall not be required to extend the statute of limitations
relating to payment of taxes for the taxable year of the Executive with respect
to which such contested amount is claimed to be due except with respect to such
contested amount. Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or contest, as the case
may be, any other issue raised by the IRS.
(f) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Paragraph (e)(iv), the Executive becomes
entitled to receive any refund or credit with respect to such contested claim,
the Executive shall (subject to the Company's complying with the requirements of
Paragraph (e)(iv)) promptly pay to the Company the amount of such refund or
credit (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the Executive of any such advance,
a determination is made that the Executive shall not be entitled to any refund
with respect to such contested claim, and the Company does not notify the
Executive in writing of its intent to contest such determination within thirty
(30) days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and shall be an offset against the amount of
Gross-Up Payment required to be paid.
8. CERTAIN REGULATORY CONSIDERATIONS.
8.1 If the Executive is suspended and/or temporarily
prohibited from participating in the conduct of BankUnited, FSB's affairs by a
notice served under Sections 8(e)(3) or (g)(1) of the Federal Deposit Insurance
Act (12 U.S.C. /sections/ 1818 (e)(3) or (g)(1)), (the "Act"), the Company's
obligations under this Agreement shall be suspended as of the date of service,
unless stayed by appropriate proceedings. If the charges in such notice are
dismissed, the Company shall pay to the Executive all of the compensation
withheld while the obligations under this Agreement were suspended and shall
reinstate its obligations hereunder.
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8.2 If the Executive is removed and/or permanently prohibited
from participating in the conduct of BankUnited, FSB's affairs by an order
issued under Sections 8(e)(4) or (g)(1) of the Act (12 U.S.C. /sections/ 1818
(e)(4) or (g)(1)), all obligations of the Company shall terminate as of the
effective date of the order, but vested rights of the parties hereto shall not
be affected.
8.3 If BankUnited, FSB is in default (as defined in Section
3(x)(1) of the Act), all obligations under this Agreement shall terminate as of
the date of default, but this subsection shall not affect any vested rights of
the parties hereto.
8.4 All obligations under this Agreement shall be terminated,
except to the extent determined that continuation of this Agreement is necessary
for the continued operation of BankUnited, FSB (i) by the Director of the Office
of Thrift Supervision or his/her designee (the "Director"), at the time the
Federal Deposit Insurance Corporation (the "FDIC") enters into an agreement to
provide assistance to or on behalf of BankUnited, FSB under the authority
contained in Section 13c of the Act; or (ii) by the Director, at the time the
Director approves a supervisory merger to resolve problems related to operation
of BankUnited, FSB or when BankUnited, FSB is determined by the Director to be
in an unsafe or unsound condition. Any rights of the parties hereto that have
already vested, however, shall not be affected by such action.
8.5 Notwithstanding anything herein contained to the contrary,
any payments to the Executive by BankUnited Financial Corporation, whether
pursuant to this Agreement or otherwise, are subject to and conditioned upon
their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12
U.S.C. /section/1828(k), and any regulations promulgated thereunder.
9. REPRESENTATION BY THE EXECUTIVE. The Executive will be required to
represent and warrant, as of the Commencement Date, that he is not a party to
any agreement, contract or understanding, whether of employment or otherwise, or
subject to any governmental restriction, which would in any way restrict or
prohibit him from undertaking or performing employment with the Company in
accordance with the terms and conditions of this Agreement. Executive has
disclosed that he has a contract of employment with his present employer and
that he has tendered his resignation to be effective December 1, 1998.
10. WITHHOLDING. The Company may withhold from any amounts payable
under this Agreement such federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulations.
11. ATTORNEYS' FEES. The Company agrees to pay such reasonable
attorneys' fees (not to exceed $10,000) as are incurred by the Executive with
respect to advice and counsel concerning or related to the negotiation and
preparation of this Agreement. The Company shall pay reasonable costs and
attorneys' fees incurred by the Executive in connection with any Board action
pursuant to Section 5.1 in the event that the Board does not determine that
"Cause" exists in accordance with the procedures in said Section. The Company
shall also indemnify, hold harmless and defend the Executive against reasonable
costs, including legal fees, incurred by him in connection with or arising out
of any action, suit or proceeding in which he may be involved, as a result of
his efforts, in good faith, to defend or enforce the terms of this Agreement;
provided, however, that the
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Executive shall have substantially prevailed on the merits pursuant to a
judgment, decree or order of a court of competent jurisdiction or of an
arbitrator in an arbitration proceeding, or in a settlement. For purposes of
this Agreement, any settlement agreement which provides for payment of any
amounts in settlement of the Company's obligations hereunder shall be conclusive
evidence of the Executive's entitlement to indemnification hereunder, and any
such indemnification payments shall be in addition to amounts payable pursuant
to such settlement agreement, unless such settlement agreement expressly
provides otherwise.
12. ENFORCEMENT COSTS. The Company is aware that upon the occurrence of
a Change in Control, the Board of Directors or a stockholder of the Company may
then cause or attempt to cause the Company to refuse to comply with its
obligations under Section 6 of this Agreement, or may cause or attempt to cause
the Company to institute, or may institute, litigation seeking to have Section 6
of this Agreement declared unenforceable, or may take, or attempt to take, other
action to deny the Executive the benefits intended under Section 6 of this
Agreement. In these circumstances, the purpose of this Agreement could be
frustrated. It is the intent of the parties that the Executive not be required
to incur the legal fees and expenses associated with the protection or
enforcement of his rights under Section 6 of this Agreement by litigation or
other legal action because such costs would substantially detract from the
benefits intended to be extended to the Executive hereunder, nor be bound to
negotiate any settlement of his rights hereunder under threat of incurring such
costs. Accordingly, if at any time after the Commencement Date, it should appear
to the Executive that the Company is or has acted contrary to or is failing or
has failed to comply with any of its obligations under Section 6 of this
Agreement for the reason that it regards this Agreement to be void or
unenforceable or for any other reason, or in the event that the Company or any
other person takes any action to declare Section 6 of this Agreement void or
unenforceable, or institutes any litigation or other legal action designed to
deny, diminish or to recover from the Executive the benefits provided or
intended to be provided to him under Section 6, and the Executive has acted in
good faith to perform his obligations under this Agreement, the Company
irrevocably authorizes the Executive from time to time to retain counsel of his
choice at the expense of the Company to represent him in connection with the
protection and enforcement of his rights under Section 6, including without
limitation representation in connection with termination of his employment
contrary to Section 6 of this Agreement or with the initiation or defense of any
litigation or other legal action, whether by or against the Executive or the
Company or any director, officer, stockholder or other person affiliated with
the Company, in any jurisdiction. The reasonable fees and expenses of counsel
selected from time to time by the Executive as herein above provided shall be
paid or reimbursed to the Executive by the Company on a regular, periodic basis
upon presentation by the Executive of a statement or statements prepared by such
counsel in accordance with its customary practices. Counsel so retained by the
Executive may be counsel representing other officers or key executives of the
Company in connection with the protection and enforcement of their rights under
similar agreements between them and the Company, and, unless in his sole
judgment use of common counsel could be prejudicial to him or would not be
likely to reduce the fees and expenses chargeable hereunder to the Company, the
Executive agrees to use his best efforts to agree with such other officers or
executives to retain common counsel.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
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14. NON-ALIENATION. The Executive shall not have any right to pledge,
hypothecate, anticipate, or in any way create a lien upon any amounts provided
under this Agreement, and no payments or benefits due hereunder shall be
assignable in anticipation of payment either by voluntary or involuntary acts or
by operation of law. So long as the Executive lives, no person, other than the
parties hereto, shall have any rights under or interest in this Agreement or in
the subject matter hereof.
15. NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing, and shall be deemed to have been given when
delivered by hand or when deposited in the United States mail, by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Company:
Xxxxxx X. Xxxxxx, Chairman
BankUnited Financial Corporation
000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxx 00000
If to the Executive:
Xxxxx Xxxxxxxx
00000 X.X. 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
or to such other addresses as either party hereto may from time to time give
notice of to the other in the aforesaid manner.
16. SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement or any
part thereof, all of which are inserted conditionally on their being valid in
law, and, in the event that any one or more of the words, phrases, sentences,
clauses or sections contained in this Agreement shall be declared invalid, this
Agreement shall be construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted.
17. SUCCESSORS; BINDING AGREEMENT.
17.1 The Company shall require any successor, whether direct
or indirect to all or substantially all of the business or assets of the Company
whether by purchase, merger, consolidation or otherwise, prior to or
contemporaneously with such acquisition, by agreement in form and substance
reasonably satisfactory to the Executive and his legal counsel, to assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such acquisition had taken
place (to the extent not previously performed by the Company). As used in this
Agreement, "Company" shall mean the Company as hereinbefore
15
defined and any such successor which executes and delivers the agreement
provided for in this Section 17.1 or which otherwise becomes bound by all the
terms and provisions of this Agreement by operation of law.
17.2 This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
17.3 This Agreement is personal to the Executive and, without
the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution.
17.4 BankUnited and BankUnited, FSB shall be jointly and
severally obligated under this Agreement to the extent permitted by applicable
law. BankUnited, FSB shall not be deemed to be a guarantor of payments required
under Section 7 hereof.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
19. ENTIRE AGREEMENT, MODIFICATIONS AND WAIVER. This Agreement
constitutes the entire agreement between the Company and the Executive with
respect to its subject matter and supersedes all prior negotiations, agreements,
understandings and arrangements, both oral and written, between the Company and
the Executive with respect to such subject matter including, but not limited to,
any employee manuals of the Company. No modification or waiver of any provision
of this Agreement shall be binding unless executed in writing by all parties
hereto. No waiver of any provision of this Agreement shall be deemed or shall
constitute a waiver of any other provision (whether or not similar), nor shall
any such waiver constitute a continuing waiver. The failure of the Executive or
the Company to insist upon strict compliance with any provision hereof shall not
be deemed to be a waiver of such provision or any other provision thereof.
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IN WITNESS WHEREOF, the Executive and, pursuant to the authorization
from the Board, BankUnited and BankUnited, FSB have executed this Agreement as
of the date first above written.
BANKUNITED, FSB BANKUNITED FINANCIAL CORPORATION
/s/ XXXXXX X. XXXXXX /s/ XXXXXX X. XXXXXX
By:------------------------- By:-----------------------------
Name: Name:
Title: Title:
ATTEST: ATTEST:
/s/ XXXXXXXX X. XXXXXXX /s/ XXXXXXXX X. XXXXXXX
By:------------------------- By:-----------------------------
Secretary Secretary
EXECUTIVE:
/s/ XXXXX XXXXXXXX
----------------------------
Xxxxx Xxxxxxxx
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