EXHIBIT 10.9 FORM OF CHANGE OF CONTROL AGREEMENT BY AND AMONG THE COMPANY,
REPUBLIC SECURITY BANK AND EACH OF XXXXXX X. BALLOT, XXXXX
XXXX, W. XXXXXX XXXXXXX, XXXXXXX XXXX, XXXXX XXXXXXX, XXXX X.
XXXXXXX, XXXXX XXXXXX, XXXX XXXXXXXXXX, XXXXXX XXXXXX AND XXXX
XXXXXX (FILED HEREWITH)
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CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement ("Agreement") is made and entered into as of
January 27, 1999 by and among Republic Security Bank, a commercial bank
organized and operating under the laws of the State of Florida and having its
executive offices at 000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxx Xxxx Xxxxx, XX 00000 (
the "Bank"); Republic Security Financial Corporation, a business corporation
organized and existing under the laws of the State of Florida and having its
executive offices at 000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxx Xxxx Xxxxx, XX 00000 (the
"Company"); and _______, an individual residing at _________________ (the
"Executive").
WITNESSETH:
WHEREAS, the Company and the Bank consider it essential to the best interest of
their respective shareholders to xxxxxx the continued employment of the key
management personnel of the Company and the Bank; and
WHEREAS, the Company and the Bank recognize that a third party may at some time
in the future pursue a Change of Control of the Bank or the Company and that
this possibility may result in the departure or distraction of the Bank's or the
Company's officers; and
WHEREAS, the Boards of Directors of the Company and the Bank have determined
that appropriate steps should be taken to encourage the continued attention and
dedication of the Bank's and the Company's officers, including the Executive, to
their duties without the distraction that may arise from the possibility of a
Change of Control of the Bank or the Company; and
WHEREAS, the Bank and the Company believe that, by assuring certain officers,
including the Executive, of reasonable financial security in the event of a
Change of Control of the Bank or the Company, such officers will be in a
position to perform their duties free from financial self interest and in the
best interests of the Bank, the Company and their respective shareholders; and
WHEREAS, for purposes of securing the Executive's services for the Bank (and the
Company, if applicable), the Board of Directors of the Bank ("Board") has
authorized the proper officers of the Bank, and the Board of Directors of the
Company has authorized the proper officers of the Company, to enter into a
change of control agreement with the Executive on the terms and conditions set
forth herein; and
WHEREAS, the Board of Directors of the Company has authorized the Company to
guarantee the Bank's obligations under such a change of control agreement; and
WHEREAS, the Executive is willing to make the Executive's services available to
the Bank on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
obligations hereinafter set forth, the Bank, the Company and the Executive
hereby agree as follows:
Section 1. EFFECTIVE DATE.
(a) This Agreement shall be effective as of the date first above written and
shall remain in effect for a period of two (2) years commencing on the date of
this Agreement, unless otherwise extended as hereinafter set forth. On the first
anniversary of the date first above written and on each anniversary thereafter
("Annual Anniversary Date"), the term of this Agreement shall be extended
automatically for an additional year, unless either the Board or the Executive
gives contrary written notice to the other not less than sixty (60) days in
advance of such anniversary date. If the term of this Agreement has not
otherwise terminated and if no Change of Control (as defined in section 10
hereof) has occurred or be pending, the term of this Agreement will terminate on
the date of the Executive's termination of employment with the Bank; provided
that the obligations under section 8 of this Agreement shall survive the
termination of this Agreement if payments become due hereunder.
(b) Notwithstanding anything herein contained to the contrary: (i) the
Executive's employment with the Bank may be terminated at any time, subject to
the terms and conditions of this Agreement; and (ii) nothing in this Agreement
shall mandate or prohibit a continuation of the Executive's employment following
the expiration of the Assurance Period (as hereinafter defined) upon such terms
and conditions as the Bank and the Executive may mutually agree upon.
Section 2. ASSURANCE PERIOD.
(a) The assurance period ("Assurance Period") shall be for a period commencing
on the date of a Change of Control, as defined in section 10 of this Agreement,
and ending on the second anniversary of the date on which the Assurance Period
commences, plus such extensions as are provided pursuant to the following
sentence. The Assurance Period shall be automatically extended for one (1)
additional day each day, unless either the Bank or the Executive elects not to
extend the Assurance Period further by giving written notice to the other party,
in which case the Assurance Period shall become fixed and shall end on the
second anniversary of the date on which such written notice is given.
(b) Upon termination of the Executive's employment with the Bank and, if
applicable, the Company, any daily extensions provided pursuant to the preceding
sentence, if not theretofore discontinued, shall cease and the remaining
unexpired Assurance Period under this Agreement shall be a fixed period ending
on the later of the second anniversary of the date of the Change of Control, as
defined in section 10 of this Agreement, or the second anniversary of the date
on which the daily extensions were discontinued.
Section 3. DUTIES.
During the period of the Executive's employment that falls within the Assurance
Period, the Executive shall: (a) except to the extent allowed under section 6 of
this Agreement, devote his full business time and attention (other than during
weekends, holidays, vacation periods, and periods of illness, disability or
approved leave of absence) to the business and affairs of the Bank and use his
best efforts to advance the Bank's interests; (b) serve in the position to which
the Executive is appointed by the Bank, which, during the Assurance Period,
shall be the position that the Executive held on the day before the Assurance
Period commenced or any higher office at the Bank to which he may subsequently
be appointed; and (c) subject to the direction of the Board and the By-laws of
the Bank, have such functions, duties, responsibilities and authority commonly
associated with such position.
Section 4. Compensation. In consideration for the services rendered by the
Executive during the Assurance Period, the Bank (and the Company, if applicable)
shall pay to the Executive during the Assurance Period a salary at an annual
rate equal to the greater of:
(a) the annual rate of salary in effect for the Executive on the day
before the Assurance Period commenced; or
(b) such higher annual rate as may be prescribed by or under the
authority of the Board;
provided, however, that in no event shall the Executive's annual rate of salary
under this Agreement in effect at a particular time during the Assurance Period
be reduced without the Executive's prior written consent. The annual salary
payable under this section 4 shall be subject to review at least once annually
and shall be paid in approximately equal installments in accordance with the
Bank's (and the Company's, if applicable) customary payroll practices. Nothing
in this section 4 shall be deemed to prevent the Executive from receiving
additional compensation other than salary for his services to the Bank, or
additional compensation for his services to the Company, upon such terms and
conditions as may be prescribed by or under the authority of the Board or the
Board of Directors of the Company.
Section 5. EMPLOYEE BENEFIT PLANS AND Programs. Except as otherwise provided in
this Agreement, the Executive shall, during the Assurance Period, be treated as
an employee of the Bank (and the Company, if applicable) and be eligible to
participate in and receive benefits under any qualified or non-qualified defined
benefit or defined contribution retirement plan, group life, health (including
hospitalization, medical and major medical), dental, accident and short and long
term disability insurance plans, and such other employee benefit plans and
programs, including, but not limited to, any incentive compensation plans or
programs (whether or not employee benefit plans or programs), any stock option
and appreciation rights plan, employee stock ownership plan and restricted stock
plan, as may from time to time be maintained by, or cover employees of, the
Bank, in accordance with the terms and conditions of such employee benefit plans
and programs and compensation plans and programs and with the Bank's (and the
Company's, if applicable) customary practices.
Section 6. BOARD Memberships. The Executive may serve as a member of the boards
of directors of such business, community and charitable organizations as he may
disclose to and as may be approved by the Board (which approval shall not be
unreasonably withheld), and he may engage in personal business and investment
activities for his own account; provided, however, that such service and
personal business and investment activities shall not materially interfere with
the performance of his duties under this Agreement.
Section 7. WORKING FACILITIES AND Expenses. During the Assurance Period, the
Executive's principal place of employment shall be at the location to which the
Executive is assigned on the day prior to the commencement of the Assurance
Period or within a 15 mile radius of such location, or at such other location as
the Bank and the Executive may mutually agree upon. The Bank shall provide the
Executive, at his principal place of employment, with a private office and
support services and facilities suitable to his position with the Bank and
necessary or appropriate in connection with the performance of his assigned
duties under this Agreement. The Bank shall reimburse the Executive for his
ordinary and necessary business expenses, including, without limitation, the
Executive's travel and entertainment expenses, incurred in connection with the
performance of the Executive's duties under this Agreement, upon presentation to
the Bank of an itemized account of such expenses in such form as the Bank may
reasonably require.
Section 8. TERMINATION OF EMPLOYMENT WITH SEVERANCE BENEFITS.(a) In the event
that the Executive's employment with the Bank shall terminate during the
Assurance Period, or prior to the commencement of the Assurance Period but
within three (3) months of and in connection with a Change of Control as defined
in section 10 of this Agreement on account of:
(i) The Executive's voluntary resignation from employment with the
Bank within ninety (90) days following:
(A) the failure of the Bank's Board to appoint or
re-appoint or elect or re-elect the Executive to serve in the same (or the
equivalent) position in which the Executive was serving on the day before the
Assurance Period commenced or a more senior office;
(B) the expiration of a thirty (30) day period following
the date on which the Executive gives written notice to the Bank of its material
failure, whether by amendment of the Bank's Organization Certificate or By-laws,
action of the Board or the Company's shareholders or otherwise, to vest in the
Executive the functions, duties, or responsibilities vested in the Executive on
the day before the Assurance Period commenced (or the functions, duties and
responsibilities of a more senior office to which the Executive may be
appointed), unless during such thirty (30) day period, the Bank fully cures such
failure;
(C) the failure of the Bank to cure a material breach of
this Agreement by the Bank, within thirty (30) days following written notice
from the Executive of such material breach;
(D) a reduction in the compensation provided to the
Executive, or a material reduction in the benefits provided to the Executive
under the Bank's program of employee benefits, compared with the compensation
and benefits that were provided to the Executive on the day before the Assurance
Period commenced;
(E) a change in the Executive's principal place of
employment to a location outside of Palm Beach County, Florida, or, if the
Executive's principal place of employment on the day before the Assurance Period
begins is outside Palm Beach County, Florida, then to a location outside of the
county in which the Executive's principal place of employment is located on the
day before the Assurance Period begins, without the Executive's consent; or
(ii) the discharge of the Executive by the Bank for any reason other
than for "cause" as provided in section 9(a); or
(iii) the Executive's resignation, voluntary or otherwise, for any
reason whatsoever within 90 days following the effective date of the Change of
Control, PROVIDED, HOWEVER, that if the Change of Control is of the type
described in Section 10(a) (1), such 90 day period shall not be deemed to
commence until the actual consummation of the transaction approved by the
stockholders;
then, subject to section 22, the Bank shall provide the benefits and pay to the
Executive the amounts provided for under section 8(b) of this Agreement;
provided, however, that if benefits or payments become due hereunder as a result
of the Executive's termination of employment within the three month period prior
to the commencement of the Assurance Period, the benefits and payments provided
for under section 8(b) of this Agreement shall be determined as though the
Executive had remained in the service of the Bank (upon the terms and conditions
in effect at the time of his actual termination of service) and had not
terminated employment with the Bank until the date on which the Executive's
Assurance Period would have commenced.
(b) Upon the termination of the Executive's employment with the Bank (or the
Company, to the extent the Company was making such payments prior to the
Executive's termination of employment) under circumstances described in section
8(a) of this Agreement, the Bank shall pay and provide to the Executive (or, in
the event of the Executive's death following such termination, to the
Executive's estate):
(i) the Executive's earned but unpaid compensation (including,
without limitation, all items which constitute wages under Florida law and the
payment of which is not otherwise provided for under this section 8(b)) as of
the date of the termination of the Executive's employment with the Bank, such
payment to be made at the time and in the manner prescribed by law applicable to
the payment of wages but in no event later than five (5) days after termination
of employment;
(ii) the benefits, if any, to which the Executive is entitled as a
former employee under the employee benefit plans and programs and compensation
plans and programs maintained for the benefit of the Bank's officers and
employees;
(iii) continued group life, health (including hospitalization,
medical and major medical), accident and short and long term disability
insurance benefits, in addition to that provided pursuant to section 8(b)(ii)
and, after taking into account the coverage provided by any subsequent employer,
if and to the extent necessary to provide for the Executive, for a period of two
years from the date his employments terminates, coverage equivalent to the
coverage to which the Executive would have been entitled under such plans (as in
effect on the date of his termination of employment, or on the date of the
Change of Control, whichever benefits are greater) if the Executive had
continued working for the Bank during the remaining unexpired Assurance Period
at the highest annual rate of compensation achieved during the Executive's
period of actual employment with the Bank;
(iv) within five (5) days following the Executive's termination of
employment with the Bank, a lump sum payment, in an amount equal to the salary
that the Executive would have earned if the Executive had continued working for
the Bank (and the Company, if applicable) for a period of two years from the
date his employment terminates at the highest annual rate of salary achieved
during that portion of the term of this Agreement which is prior to the
Executive's termination of employment with the Bank, such lump sum to be paid in
lieu of all other payments of salary provided for under this Agreement in
respect of the period following any such termination;
(v) within five (5) days following the Executive's termination of
employment with the Bank, a lump sum payment in an amount equal to the excess,
if any, of:
(A) the present value of the aggregate benefits to which
the Executive would be entitled under any and all qualified and non-qualified
defined benefit pension plans maintained by, or covering employees of, the Bank
if the Executive were 100% vested thereunder and had continued working for the
Bank during the remaining unexpired Assurance Period, such benefits to be
determined as of the date of termination of employment by adding to the service
actually recognized under such plans an additional period equal to the remaining
unexpired Assurance Period and by adding to the compensation recognized under
such plans for the year in which termination of employment occurs all amounts
payable under sections 8(b)(i), (iv) and (vii); over
(B) the present value of the benefits to which the
Executive is actually entitled under such defined benefit pension plans as of
the date of his termination; where such present values are to be determined
using the mortality tables prescribed under section 415(b)(2)(E)(v) of the Code
and a discount rate, compounded monthly, equal to the annualized rate of
interest prescribed by the Pension Benefit Guaranty Corporation for the
valuation of immediate annuities payable under terminating single-employer
defined benefit plans for the month in which the Executive's termination of
employment occurs ("Applicable PBGC Rate");
(vi) within five (5) days following the Executive's termination of
employment with the Bank, a lump sum payment in an amount equal to the present
value of the additional employer contributions (or if greater in the case of a
leveraged employee stock ownership plan or similar arrangement, the additional
assets allocable to him through debt service, based on the fair market value of
such assets at termination of employment) to which he would have been entitled
under any and all qualified and non-qualified defined contribution plans
maintained by, or covering employees of, the Bank, if he were 100% vested
thereunder and had continued working for the Bank during the remaining unexpired
Assurance Period at the highest annual rate of compensation achieved during the
Executive's period of actual employment with the Bank, and making the maximum
amount of employee contributions, if any, required under such plan or plans,
such present value to be determined on the basis of the discount rate,
compounded using the compounding period that corresponds to the frequency with
which employer contributions are made to the relevant plan, equal to the
Applicable PBGC Rate;
(vii) the payments that would have been made to the Executive under
any cash bonus or long-term or short-term cash incentive compensation plan
maintained by, or covering employees of, the Bank (and the Company, if
applicable), if he had continued working for the Bank (and the Company, if
applicable) during the remaining unexpired Assurance Period and had earned the
maximum bonus or incentive award in each calendar year that ends during the
remaining unexpired Assurance Period, such payments to be equal to the product
of:
(A) the maximum percentage rate at which an award was ever
available to the Executive under such incentive compensation plan; multiplied by
(B) the salary that would have been paid to the Executive
during each such calendar year at the highest annual rate of salary achieved
during the remaining unexpired Assurance Period, provided that such payments in
any event shall be in an aggregate amount not less than two (2) times the
highest annual (or annualized, if paid other than annually) cash bonus paid to
or earned by the Executive within 2 years prior to the commencement of the
Assurance Period, such payments to be made within five (5) days following the
Executive's termination of employment.
The Bank and the Executive hereby stipulate that the damages which may be
incurred by the Executive following any such termination of employment are not
capable of accurate measurement as of the date first above written and that the
payments and benefits contemplated by this section 8(b) constitute
a reasonable estimate under the circumstances of all damages sustained as a
consequence of any such termination of employment, other than damages arising
under or out of any stock option, restricted stock or other non-qualified stock
acquisition or investment plan or program, it being understood and agreed that
this Agreement shall not determine the measurement of damages under any such
plan or program in respect of any termination of employment. Such damages shall
be payable without any requirement of proof of actual damage and without regard
to the Executive's efforts, if any, to mitigate damages. The Bank and the
Executive further agree that the Bank may condition the payments and benefits
(if any) due under sections 8(b)(iii), (iv), (v), (vi) and (vii) on the receipt
of the Executive's resignation from any and all positions which he holds as an
Executive, director or committee member with respect to the Bank, the Company or
any subsidiary or affiliate of either of them.
Section 9. TERMINATION WITHOUT SEVERANCE Benefits. In the event that the
Executive's employment with the Bank (and the Company, if applicable) shall
terminate during the Assurance Period on account of:
(a) the discharge of the Executive for "cause," which, for purposes
of this Agreement shall mean willful misconduct that is materially injurious to
the financial condition of the Bank or the Company, breach of fiduciary duty
involving personal profit, conviction for a felony or the agreement of the
Executive to plead guilty to a felony or the entering of a final cease and
desist order by the appropriate regulatory authority; provided, however, that
the Executive shall not be deemed to have been discharged for cause unless and
until he shall have received a written notice of termination from the Board,
accompanied by a resolution duly adopted by affirmative vote of three quarters
of the entire Board at a meeting called and held for such purpose (after
reasonable notice to the Executive and a reasonable opportunity for the
Executive to make oral and written presentations to the members of the Board, on
his own behalf, or through a representative, who may be his legal counsel, to
refute the grounds for the proposed determination) finding that in the good
faith opinion of the Board grounds exist for discharging the Executive for
cause; or
(b) the Executive's voluntary resignation from employment with the
Bank for reasons other than those specified in section 8(a)(i) or 8(a) (iii); or
(c) the Executive's death; or
(d) a determination that the Executive is eligible for long-term
disability benefits under the Bank's long-term disability insurance program or,
if there is no such program, under the federal Social Security Act;
then the Bank and the Company shall have no further obligations under this
Agreement, other than the payment to the Executive (or, in the event of his
death, to his estate) of his earned but unpaid salary as of the date of the
termination of his employment, and the provision of such other benefits, if any,
to which the Executive is entitled as a former employee under the employee
benefit plans and programs and compensation plans and programs maintained by, or
covering employees of, the Bank (and the Company, if applicable).
Section 10. CHANGE OF CONTROL.(a) A Change of Control of the Bank ("Change of
Control") shall be deemed to have occurred upon the happening of any of the
following events:
(i) approval by the stockholders of the Company of a
transaction that would result in the reorganization, merger or
consolidation of the Company with one or more other persons, other
than a transaction following which:
(A) at least 50.1% of the common stock or equity
ownership interests of the entity resulting from such
transaction are beneficially owned (within the meaning of Rule
13d-3 promulgated under the Exchange Act) in substantially the
same relative proportions by persons who, immediately prior to
such transaction, beneficially owned (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) at least 50.1%
of the outstanding common stock or equity ownership interests
in the Company; and
At least 50.1% of the combined voting power of the
securities entitled to vote generally in the election
of directors of the entity resulting from such
transaction are beneficially owned (within the
meaning of Rule 13d-3 promulgated under the Exchange
Act) in substantially the same relative proportions
by persons who, immediately prior to such
transaction, beneficially owned (within the meaning
of Rule 13d- 3 promulgated under the Exchange Act) at
least 50.1% of the combined voting power of the
securities entitled to vote generally in the election
of directors of the Company; and
No person, or persons acting in concert, beneficially
own (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) 20% or more of the
outstanding common stock or equity ownership
interests in, or 20% or more of the combined voting
power of the securities entitled to vote generally in
the election of directors of, the entity resulting
from such transaction; and
At least a majority of the members of the board of
directors of the entity resulting from such
transaction are individuals who were described in
sections 11(a)(iv)(A) or (B) of this Agreement as of
the date of execution of the initial definitive
agreement providing for such transaction (or, if
earlier, as of the date on which the Board of
Directors of the Company authorized such
transaction).
(ii) the acquisition of all or substantially all of the assets
of the Company or beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of the
outstanding securities or of the combined voting power of the
outstanding securities of the Company entitled to vote generally in the
election of directors by any person or by any persons acting in
concert, or approval by the stockholders of the Company of any
transaction which would result in such an acquisition;
(iii) a complete liquidation or dissolution of the Company, or
approval by the stockholders of the Company of a plan for such
liquidation or dissolution; or
(iv) the occurrence of any event if, immediately following
such event, at least 50% of the members of the board of directors of
the Company do not belong to any of the following groups:
(A) individuals who were members of the Board of the
Company on the date of this Agreement; or
(B) individuals who first became members of the Board
of the Company after the date of this Agreement either:
(I) upon election to serve as a member of
the Board of directors of the Company by affirmative
vote of three-quarters of the members of such Board,
or of a nominating committee thereof, in office at
the time of such first election; or
(II) upon election by the stockholders of
the Company to serve as a member of the Board of the
Company, but only if nominated for election by
affirmative vote of three-quarters of the members of
the board of directors of the Company, or of a
nominating committee thereof, in office at the time
of such first nomination;
PROVIDED, HOWEVER, that such individual's election or
nomination did not result from an actual or threatened
election contest (within the meaning of Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents
(within the meaning of Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) other than by or on behalf
of the Board of the Company; or
any event which would be described in section 10(a)(i), (ii),
(iii) or (iv) if the term "Bank" were substituted for the term
"Company" therein.
(b) In no event, however, shall a Change of Control be deemed to have
occurred as a result of any acquisition of securities or assets of the Company,
the Bank or any subsidiary of either of them, by the Company, the Bank or any
subsidiary of either of them, or by any employee benefit plan maintained by any
of them.
Section 11. NO EFFECT ON EMPLOYEE BENEFIT PLANS OR Programs. The termination of
the Executive's employment during the Assurance Period or thereafter, whether by
the Bank or by the Executive, shall have no effect on the rights and obligations
of the parties hereto under the Bank's qualified and non-qualified defined
benefit or defined contribution retirement plans, group life, health (including
hospitalization, medical and major medical), dental, accident and short and long
term disability insurance plans or such other employee benefit plans or
programs, or compensation plans or programs (whether or not employee benefit
plans or programs) and any defined contribution plan, employee stock ownership
plan, stock option and appreciation rights plan, and restricted stock plan, as
may be maintained by, or cover employees of, the Bank from time to time;
provided, however, that nothing in this Agreement shall be deemed to duplicate
any compensation or benefits provided under any agreement, plan or program
covering the Executive to which the Bank or the Company is a party and any
duplicative amount payable under any such agreement, plan or program shall be
applied as an offset to reduce the amounts otherwise payable hereunder.
Section 12. SUCCESSORS AND Assigns. This Agreement will inure to the benefit of
and be binding upon the Executive, his legal representatives and testate or
intestate distributees, and the Bank and the Company, their respective
successors and assigns, including any successor by merger or consolidation or a
statutory receiver or any other person or firm or corporation to which all or
substantially all of the respective assets and business of the Bank or the
Company may be sold or otherwise transferred.
Section 13. Notices. Any communication required or permitted to be given under
this Agreement, including any notice, direction, designation, consent,
instruction, objection or waiver, shall be in writing and shall be deemed to
have been given at such time as it is delivered personally, or five (5) days
after mailing if mailed, postage prepaid, by registered or certified mail,
return receipt requested, or one (1) day after it is sent by reputable overnight
delivery service, addressed to such party at the address listed below or at such
other address as one such party may by written notice specify to the other
party:
If to the Executive:
If to the Bank:
Republic Security Bank
000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxx Xxxx Xxxxx, XX 00000
Attention: President
If to the Company:
Republic Security Financial Corporation
000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxx Xxxx Xxxxx, XX 00000
Attention: President
Section 14. INDEMNIFICATION AND ATTORNEYS' FEES.
The Bank shall indemnify, hold harmless and defend the Executive against
reasonable costs, including legal fees, incurred by the Executive in connection
with or arising out of any action, suit or proceeding in which the Executive may
be involved, as a result of the Executive's efforts, in good faith, to defend or
enforce the terms of this Agreement. For purposes of this Agreement, any
settlement agreement which provides for payment of any amounts in settlement of
the Bank'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.
Section 15. SEVERABILITY A determination that any provision of this Agreement is
invalid or unenforceable shall not affect the validity or enforceability of any
other provision hereof.
Section 16. WAIVER. Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant, or condition. A waiver of any provision of this Agreement must be made
in writing, designated as a waiver, and signed by the party against whom its
enforcement is sought. Any waiver or relinquishment of any right or power
hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.
Section 17. COUNTERPARTS.
This Agreement may be executed in two (2) or more counterparts, each of which
shall be deemed an original, and all of which shall constitute one and the same
Agreement.
Section 18. GOVERNING LAW.
This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Florida, without reference to conflicts of law
principles.
Section 19. HEADINGS AND CONSTRUCTION.
The headings of sections in this Agreement are for convenience of reference only
and are not intended to qualify the meaning of any section. Any reference to a
section number shall refer to a section of this Agreement, unless otherwise
stated.
Section 20. ENTIRE AGREEMENT; MODIFICATIONS.
(a) Except as set forth in Section 20(b), below, this instrument contains the
entire agreement of the parties relating to the subject matter hereof, and
supersedes in its entirety any and all prior agreements, understandings or
representations relating to the subject matter hereof. No modifications of this
Agreement shall be valid unless made in writing and signed by the parties
hereto.
(b) The parties understand that the Bank and the Executive are also parties to
an Employment Agreement dated __________ (the "Employment Agreement"). From and
after the occurrence of a Change of Control, the terms of this Agreement shall
supersede the terms of the Employment Agreement and shall control. The parties
understand and agree that it is their intent that, from and after the occurrence
of a Change of Control, the obligations of the Bank and the Company shall be
those set forth in this Agreement only, and, to the extent necessary to
accomplish this intent, this Section 20(b) shall be an amendment to the
Employment Agreement, with the effect of terminating all rights and all
obligations of all parties under the Employment Agreement upon the occurrence of
a Change of Control.
Section 21. GUARANTEE.
The Company hereby irrevocably and unconditionally guarantees to the Executive
the payment of all amounts, and the performance of all other obligations, due
from the Bank in accordance with the terms of this Agreement as and when due
without any requirement of presentment, demand of payment, protest or notice of
dishonor or nonpayment.
Section 22. MAXIMUM LIMITATIONS ON SEVERANCE BENEFITS.
Notwithstanding any other provision of this Agreement, in the event that any
payment or benefit received or to be received by the Executive in connection
with a Change of Control of the Bank or the Company or the termination of the
Executive's employment (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Company or the Bank, any person
whose actions result in a Change of Control of the Company or any person
affiliated with the Company or the Bank or such person) (all such payments and
benefits, including the payments and benefits provided under this Agreement (the
"Severance Payments"), being hereinafter called "Total Payments") would not be
deductible (in whole or in part) by the Company, the Bank, an affiliate or a
person making such payment or providing such benefit as a result of Section 280G
of the Internal Revenue Code of 1986, as amended (the "Code"), then, to the
extent necessary to make such portion of the Total Payments deductible (and
after taking into account any reduction in the Total Payments provided in such
other plan, arrangement or agreement), the cash Severance Payments shall first
be reduced (if necessary, to zero); provided, however, that Executive may elect
(at any time prior to the payment of amounts payable hereunder) to have the
noncash severance payments reduced (or eliminated) prior to any reduction of the
cash Severance Payments.
For purposes of the limitation contained in subsection (a) of this section 22,
(i) no portion of the Total Payments the receipt or enjoyment of which the
Executive shall have effectively waived in writing prior to the delivery of a
notice of termination of employment shall be taken into account, (ii) no portion
of the Total Payments shall be taken into account which, in the opinion of tax
counsel ("Tax Counsel") reasonably acceptable to Executive and selected by the
accounting firm which was, immediately prior to the Change of Control of the
Company or the Bank, the Company's independent auditor (the "Auditor"), does not
constitute a "parachute payment" within the meaning of Section 280G(b)(2) of the
Code, including by reason of Section 280G(b)(4)(A) of the Code, (iii) the
Severance Payments shall be reduced only to the extent necessary so that the
Total Payments (other than those referred to in clauses (i) or (ii)) in their
entirety constitute reasonable compensation for services actually rendered
within the meaning of Section 280(G)(b)(4)(B) of the Code or are otherwise not
subject to disallowance as deductions by reason of Section 280G of the Code, in
the opinion of Tax Counsel, and (iv) the value of any noncash benefit or any
deferred payment or benefit included in the Total Payments shall be determined
by the Auditor in accordance with the principles of Sections 280G(d)(3) and (4)
of the Code.
(c) If it is established pursuant to a final determination of a court or an
Internal Revenue Service proceeding that, notwithstanding the good faith of
Executive and the Bank and Company in applying the terms of this section 22, the
aggregate "parachute payments" paid to or for the Executive's benefit are in an
amount that would result in any portion of such "parachute payments" not being
deductible by reason of Section 280G of the Code, then the Executive shall have
an obligation to pay the Bank upon demand an amount equal to the sum of (i) the
excess of the aggregate "parachute payments" paid to or for the Executive's
benefit over the aggregate "parachute payments" that could have been paid to or
for the Executive's benefit without any portion of such "parachute payments" not
being deductible by reason of Section 280G of the Code; and (ii) interest on the
amount set forth in clause (i) of this sentence at 120% of the rate provided in
Section 1274(b)(2)(B) of the Code from the date of the Executive's receipt of
such excess until the date of such payment. If the Severance Payments shall be
decreased pursuant to section (a) hereof, and the benefits under section
8(b)(iii) which remain payable after the application of this section 22 are
thereafter reduced pursuant thereto because of the receipt by the Executive of
substantially similar benefits, the Bank shall, at the time of such reduction,
pay to the Executive the lowest of (a) the amount of the decrease made in the
Severance Payments pursuant to this section 22 hereof, (b) the amount of the
subsequent reduction in such benefits,
or (c) the maximum amount which can be paid to the Executive without being, or
causing any other payment to be, nondeductible by reason of Section 280G of the
Code.
Section 23. DUAL SERVICE WITH BANK AND COMPANY.
If the Executive performs services for the Company in addition
to the Bank, the Company shall, with respect to such services and the
compensation therefor and with respect to any termination of the Executive's
employment, have all of the same obligations imposed on the Bank under this
Agreement to the same extent and as though the name of the Company were
substituted for the name of the Bank herein and the Executive shall, with
respect to such services and the compensation therefor and with respect to any
termination of the Executive's employment, have the same rights, privileges and
duties relative to the Company as though the name of the Company were
substituted for the name of the Bank herein. Any entitlement of the Executive to
severance compensation and other termination benefits under this Agreement shall
be determined on the basis of the aggregate compensation payable to the
Executive by the Bank and the Company, and liability therefor shall be
apportioned between the Bank and the Company in the same manner as compensation
paid to the Executive for services to each of them; PROVIDED, HOWEVER, that in
no event shall the Bank bear any liability for actions of, or obligations
undertaken by, the Company under this Agreement. It is the intent and purpose of
this Section 23 that the Executive have the same legal and economic rights that
he would have if all of his services were rendered to and all of his
compensation were paid by either the Bank or the Company, but only by one of
them. This Section 23 shall be construed and enforced to give effect to such
intent and purpose.
IN WITNESS WHEREOF, the Bank and the Company have caused this Agreement to be
executed and the Executive has hereunto set his hand, all as of the day and year
first above written.
---------------------------------
Executive
REPUBLIC SECURITY BANK
By: _________________________________
Name: Xxxx X. Xxxxxx
Title: Chairman, President & CEO
REPUBLIC SECURITY FINANCIAL CORPORATION
By: ________________________________________
Name: Xxxx X. Xxxxxx
Title: Chairman, President & CEO
