EXHIBIT 10.19
RETENTION BONUS AND INSURANCE
BENEFITS PLAN AGREEMENT
Effective as of the 5th day of February, 1997 ("Effective Date"), FIRST
REPUBLIC SAVINGS BANK, a Nevada corporation (the "COMPANY"), and its parent,
FIRST REPUBLIC BANCORP INC., a Delaware corporation (the "HOLDING COMPANY"),
hereby create this RETENTION BONUS AND INSURANCE BENEFITS PLAN AGREEMENT (the
"Benefits Plan"). This Benefits Plan is intended to provide Company and Holding
Company employees (each, an "Employee") with the compensation and benefits
described herein upon the occurrence of specific events.
Certain capitalized terms used in this Benefits Plan are defined in Article
4.
Reference herein to the rights and obligations of the Company with respect
to its Employees shall also be deemed to be the rights and obligations of the
Holding Company with respect to its Employees.
The Company hereby agrees for the benefit of each Employee as follows:
ARTICLE 1
EMPLOYMENT BY THE COMPANY
1.1 Each Employee shall be eligible for the benefits herein set forth on
the Effective Date (if such Employee is employed by the Company on that date),
or on the date upon which a person subsequently is employed by the Company
during the term of this Benefits Plan.
1.2 This Benefits Plan shall remain in full force and effect for the two
year period specified in Article 5; provided, however, that the rights and
obligations contained in Articles 2 through 5 shall survive for the longer of
(i) two (2) years from the Effective Date of the Benefits Plan or (ii) one (1)
year following a Change in Control (as hereinafter defined) or such later
period as may be required so that all benefits to which Employee is entitled
under this Benefits Plan are paid or otherwise provided to Employee.
1.3 The Company wishes to set forth specified compensation and benefits
which Employee shall be entitled to receive in the event that there is a Change
in Control. Such compensation and benefits are in addition to any other
compensation and benefits an Employee may be eligible to receive in the event of
a Change in Control or events related thereto as may be provided for in any
other plan or agreement.
1.4 The duties and obligations of the Company to Employee under this
Benefits Plan shall be in consideration for Employee's services to the Company
and Employee's continued employment with the Company.
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ARTICLE 2
BENEFITS
2.1 ENTITLEMENT TO BENEFITS. Upon the occurrence of the events herein
described, the Company shall pay Employee the compensation and benefits
described in this Article 2.
Payment of any benefits described in this Article 2 shall be subject to the
restrictions and limitations set forth in Article 3.
2.2 RETENTION BONUS.
2.2.1 Each Employee, other than Senior Management Employees, shall be
entitled to receive a bonus (the "Retention Bonus") in the event that he or she
remains employed with the Company for a period of at least four months from the
date of a Change in Control. For exempt, salaried Employees, the amount of the
Retention Bonus shall be equal to 15% of the sum of: (i) the Employee's current
Annual Base Salary (as of the date of the Change in Control); and (ii) the
Employee's Bonus earned for the calendar year immediately preceding the date of
the Change in Control. For example, if the Employee's Annual Base Salary is
$50,000 and the Bonus earned for the prior calendar year was $10,000, the
Employee's Retention Bonus would be 15% of $60,000, or $9,000. For each non-
exempt, hourly wage Employee, the Retention Bonus shall be equal to 15% of his
or her annualized compensation (determined as of the date of Change in Control
by the Company's Chief Financial Officer in consultation with the Company's
independent auditors). The Retention Bonus shall be paid in a lump sum (after
deduction of applicable withholding taxes) to each Employee who has remained
employed by the Company for the requisite four month period, within 30 days
after the expiration of said four month period. Nothing herein shall require
the Company or its successor to continue any Employee's employment with the
Company for any period of time after a Change in Control, or otherwise changes
each such Employee's at will employment status. In the event the Employee is
not employed by the Company for the entire four month period (for any reason,
including but not limited to termination of employment), a Retention Bonus will
not be paid to said Employee.
DEATH OF AN EMPLOYEE. If an Employee dies after becoming eligible to
receive the payment of the Retention Bonus, but before such benefit is paid to
the Employee, such Retention Bonus shall be paid to the Employee's surviving
spouse or, if there is no surviving spouse, to the Employee's estate.
2.2.2 Automatically upon a Change in Control, the Company or its successor
shall be obligated to provide the following benefits to each Senior Management
Employee: Medical (including dental) insurance benefits, disability insurance
benefits, and life insurance benefits which as to scope and cost are either
identical to the benefits available to said Senior Management Employees (and
their children, dependents and other covered family members) immediately prior
to the date of the Change in Control, or identical to the benefits available to
senior management of the entity acquiring the Company as of the date of the
Change in Control, whichever is the greater benefit to the Senior Management
Employee. This obligation to provide medical, disability and life insurance
benefits to said Senior Management Employees and his/her children, dependents
and other covered family members shall continue with respect to any such
Senior Management Employee until he/she reaches the age of 65, and irrespective
of whether or not any such Senior Management Employee remains in the employ of
the Company or its successor entity. For purposes of this provision, the
reference to "life insurance benefits"
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shall not include the Equitable Split Dollar Life Insurance Plan benefit
currently provided by the Company to certain of said Senior Management
Employees. The Senior Management Employees shall not be required to mitigate
damages or the amount of any payment provided under this Benefits Plan by
seeking other employment or otherwise. In the event a Senior Management Employee
is no longer employed by the Company or its successor and subsequently elects
other medical and/or other disability insurance, the obligation of the Company
or its successor shall cease, but only as to the type of insurance so elected by
the Senior Management Employee.
2.3 BASIS OF PAYMENTS. All benefits under this Benefits Plan shall be
paid by the Company. This Benefits Plan shall be unfunded, and benefits
hereunder shall be paid only from the general assets of the Company.
ARTICLE 3
LIMITATIONS; OTHER RIGHTS; NON-ALIENATION
3.1 LIMITS IMPOSED BY APPLICABLE BANKING LAW. Notwithstanding any other
provision of this Benefits Plan to the contrary, the Company shall not be
obligated under this Benefits Plan to pay any benefit to the extent that such
payment would violate any prohibition or limitation on termination payments
under any applicable federal or state statute, rule or regulation promulgated,
or effective order issued, by any federal or state regulatory agency having
jurisdiction over the Company. Without limiting the foregoing, the Company
acknowledges that the Federal Deposit Insurance Corporation (the "FDIC") has
issued a regulation that prohibits payment of certain benefits under certain
circumstances, unless such payments were approved by the FDIC and any other
applicable regulator.
3.2 NONEXCLUSIVITY. Nothing in the Benefits Plan shall prevent or limit
Employee's continuing or future participation in any benefit, bonus, incentive
or other plans, programs, policies or practices provided by the Company and for
which Employee may otherwise qualify, nor, except as specifically provided
herein, shall anything herein limit or otherwise affect such rights as Employee
may have under any stock option or other agreements or plans with the Company.
3.3 No benefit hereunder shall be subject to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance or charge, and any attempt to so
subject a benefit hereunder shall be void.
ARTICLE 4
DEFINITIONS
For purposes of the Plan Agreement, the following terms shall have the
meanings set forth below:
4.1 "AGREEMENT" OR "BENEFITS PLAN" means this Retention Bonus and
Insurance Benefits Plan Agreement.
4.2 "ANNUAL BASE SALARY" means the amount of compensation provided by the
Company to Employee as base salary if the Employee is an exempt, salaried
employee according to the Company's personnel
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records. Such amount shall be determined by annualizing the highest base rate_in
effect for Employee at any time immediately prior to, on, or after the date of
the Change in Control, exclusive of any bonus or other incentive cash
compensation, income from any stock options or other stock awards, supplemental
deferred compensation contributions made by the Company, pension or profit
sharing contributions or distributions (except as provided below), insurance
payments or proceeds, fringe benefits, or other form of additional compensation,
but specifically including any amounts withheld from base salary to provide
benefits pursuant to Section 125 or 401(k) of the Internal Revenue Code or
pursuant to any other plan or program of deferred compensation with respect to
elective deferrals of compensation otherwise payable currently.
4.3 "BONUS" means the Employee's bonus compensation received for the
calendar year immediately preceding the Change in Control. For purposes of
determining a bonus compensation for the preceding calendar year, the bonus
compensation shall be attributable to the year in which the bonus was earned,
even though all or part of the bonus may have been actually paid to the Employee
in the subsequent year.
4.4 "CHANGE IN CONTROL" means the consummation of any of the following
transactions during the term of this Benefits Plan:
(a) the Company or Holding Company merges or consolidates with any other
corporation, other than a merger or consolidation which would result in
beneficial owners of the total voting power in the election of directors
represented by the voting securities ("Voting Securities") of the Company or
Holding Company (as the case may be) outstanding immediately prior thereto
continuing to beneficially own securities representing (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than fifty percent (50%) of the total Voting Securities of the
Company or Holding Company, or of such surviving entity, outstanding immediately
after such merger or consolidation;
(b) the Company or Holding Company liquidates or dissolves, or sells,
leases, exchanges or otherwise transfers or disposes of all or substantially all
of the Company's assets;
(c) any person (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than
(A) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or Holding Company, (B) a corporation owned directly or
indirectly by the shareholders of Holding Company in substantially the same
proportions as their beneficial ownership of stock in Holding Company, or (C)
Holding Company (with respect to its ownership of the stock of the Company), is
or becomes the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act), directly or indirectly, of the securities of the Company or
Holding Company representing fifty percent (50%) or more of the Voting
Securities; or
(d) (A) (1) the shareholders of the Company or the Holding Company,
approve a merger or consolidation of the Company or Holding Company with any
other corporation, other than a merger or consolidation which would result in
beneficial owners of Voting Securities of the Company or Holding Company (as the
case may be) outstanding immediately prior thereto continuing to beneficially
own securities representing (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than seventy-five
percent (75%) of the total Voting Securities of the Company or Holding Company,
or of such surviving entity, outstanding immediately after such merger or
consolidation, or (2) any person (as such term is
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used in Sections 13(d) or 14(d) of the Exchange Act), other than (a) a trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or Holding Company, (b) a corporation owned directly or indirectly by
the shareholders of Holding Company in substantially the same proportions as
their ownership of stock in Holding Company, or (c) Holding Company (with
respect to Holding Company's ownership of the stock of the Company), is or
becomes the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act), directly or indirectly, of the securities of the Company or
Holding Company representing 25% or more of the Voting Securities of such
corporation, and
(B) within twelve (12) months of the occurrence of such event, a
change in the composition of the Board of Directors of the Company or Holding
Company occurs as a result of which sixty percent (60%) or fewer of the
directors are Incumbent Directors.
"Incumbent Directors" shall mean directors who either
(A) are directors of the Company and of the Holding Company as of the
date hereof;
(B) are elected, or nominated for election, to the Board of Directors
of the Company and of the Holding Company with the affirmative votes of at least
a majority of the directors of the Company or Holding Company who are Incumbent
Directors described in (A) above at the time of such election or nomination; or
(C) are elected, or nominated for election, to the Board of Directors
of the Company or the Holding Company with the affirmative votes of at least a
majority of the directors of the Company or Holding Company who are Incumbent
Directors described in (A) or (B) above at the time of such election or
nomination.
Notwithstanding the foregoing, "Incumbent Directors" shall not include an
individual whose election or nomination to the Board of Directors of the Company
or Holding Company occurs in order to provide representation for a person or
group of related persons who have initiated or encouraged an actual or
threatened proxy contest relating to the election of directors of the Company or
Holding Company.
4.5 "COMPANY" means First Republic Savings Bank, a Nevada corporation, and
any successor thereto.
4.6 "EMPLOYEE" means a person employed as a common law employee with the
Company or Holding Company on the date of a Change in Control. For purposes of
this Benefits Plan, "Employee" excludes a person in any of the following
categories immediately prior to a Change in Control: (a) person whom the Company
or Holding Company treats as an independent contractor; (b) an individual
serving the Company or Holding Company through an agency, payroll service, sub-
contractor or other third party provider; (c) a person who is employed up to a
maximum defined term and who is employed without regular employee benefits; (d)
a seasonal employee who is employed for less than twelve (12) consecutive months
and who is employed without regular employee benefits; (e) an employee on leave
of absence after the period of time the Company or Holding Company has committed
or is required to return him or her to active employment based on the
requirements of law, written policy or Company or Holding Company practice; (f)
a part-time hourly employee who works on an unscheduled, on-call basis; and (g)
any employee acquired by the Company or Holding Company as a result of
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a merger or other business combination until the first anniversary date of the
acquisition, unless some other date is specified by agreement with the acquired
entity.
4.7 "SENIOR MANAGEMENT" or "SENIOR MANAGEMENT EMPLOYEE" means the
following Employees: President/CEO; Executive Vice President/COO; Executive Vice
President-Nevada; Senior Vice President/CFO; and Senior Vice President/General
Counsel.
ARTICLE 5
TERM OF PLAN AGREEMENT; ADMINISTRATION
5.1 TERM. This Benefits Plan shall have a term of two (2) years,
commencing as of the Effective Date.
5.2 ADMINISTRATION. This Benefits Plan shall be administered and
interpreted by a committee (the "Committee") composed of the three individuals
holding the following positions immediately prior to a Change in Control: the
Executive Vice President/COO, the Senior Vice President/CFO, and the Senior Vice
President/General Counsel. The Committee shall have the full and exclusive
discretion to interpret and administer the Benefits Plan. All actions,
interpretations and decisions of the Committee shall be conclusive and binding
on all persons, and shall be given the maximum possible deference allowed by
law.
ARTICLE 6
GENERAL PROVISIONS
6.1 EMPLOYMENT STATUS. This Plan Agreement does not constitute a contract
of employment or impose on Employee any obligation to remain as an employee, or
impose on the Company any obligation (i)to retain Employee as an employee, (ii)
to change the status of Employee as an at-will employee, or (iii) to change the
Company's policies regarding termination of employment.
6.2 NOTICES. Any notices provided hereunder must be in writing and such
notices or any other written communication shall be deemed effective upon the
earlier of personal delivery (including personal delivery by telex or facsimile)
or the third day after mailing by first class mail, to the Company at its
administrative headquarters located at 000 Xxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000: Attention: General Counsel (or to its primary office location
if no longer at the above address), and to Employee at his or her address as
listed in the Company's payroll records. Any payments made by the Company to
Employee under the terms of this Benefits Plan shall be delivered to Employee
either in person or at his or her address as listed in the Company's payroll
records.
6.3 SEVERABILITY. Whenever possible, each provision of this Benefits Plan
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Benefits Plan is held to be invalid, illegal
or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Benefits Plan will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provisions
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had never been contained herein.
6.4 WAIVER. If either party should waive any breach of any provisions of
this Benefits Plan, such party shall not thereby be deemed to have waived any
preceding or succeeding breach of the same or any other provision of this
Benefits Plan.
6.5 COMPLETE PLAN AGREEMENT. This Benefits Plan, and any other written
agreements expressly referred to in this Benefits Plan, constitutes the entire,
complete, final, and exclusive embodiment of the agreement with regard to this
subject matter.
6.6 AMENDMENT OR TERMINATION OF BENEFITS PLAN. This Benefits Plan
Agreement may be changed or terminated prior to a Change in Control only if such
change or termination has been approved by the Company's and Holding Company's
Board of Directors (in each case pursuant to which a majority of the Incumbent
Directors shall have voted in favor of such approval), and may not be changed or
terminated on or after a Change in Control without the written consent of the
affected Employee(s).
6.7 HEADINGS. The headings of the Articles and Sections hereof are
inserted for convenience only and shall not be deemed to constitute a part
hereof nor to affect the meaning thereof.
6.8 SUCCESSORS AND ASSIGNS. This Benefits Plan is intended to bind and
inure to the benefit of and be enforceable by Employee and the Company, and
their respective successors, assigns, heirs, executors and administrators.
6.9 ARBITRATION. Any and all disputes or controversies, arising from or
regarding the interpretation, performance, enforcement or termination of this
Plan Agreement shall be resolved, subject to Section 5.2 hereof, by final and
binding arbitration under the procedures set forth in the Arbitration Procedure
attached hereto as Exhibit A and the then existing Judicial Arbitration and
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Mediation Services, Inc. ("JAMS") Rules of Practice and Procedure or the rules
of practice and procedure of any successor entity to JAMS (except insofar as
they are inconsistent with the procedures set forth in the enclosed Arbitration
Procedure).
6.10 ATTORNEY FEES. In the event of any arbitration or litigation or any
other action or proceeding relating to the interpretation, performance,
enforcement or termination of this Benefits Plan, the Company, Holding Company
and Employee shall be responsible for its own fees and costs, including
reasonable attorneys' fees, incurred as a result of such action or proceeding;
provided, however, that if any Employee brings an action or proceeding hereunder
in good faith, then the Company or the Holding Company shall reimburse such
Employee for his or her fees, costs and reasonable attorneys fees in connection
therewith, regardless of the outcome of the proceeding.
6.11 CHOICE OF LAW. All questions concerning the construction, validity
and interpretation of this Plan Agreement will be governed by the laws of the
State of California.
6.12 TRANSFER OF SERVICES TO AFFILIATE. This Benefits Plan shall not
prohibit the Company, prior to a "Change in Control", from transferring
Employee's services to an affiliate of the Company, provided that the rights and
obligations of the parties hereto shall not terminate in the event of such
transfer, and provided
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further that the new entity for which Employee is performing services also shall
be bound hereby without the need for further written agreement and without
release of the Company.
6.13 NO VIOLATION OF GOVERNING BANKING LAW. Nothing in this Benefits Plan
is intended to require or shall be construed as requiring the Company to do or
fail to do any act in violation of applicable law, rule, regulation or order.
The Company's inability, pursuant to court or regulatory order, to perform its
obligations under this Benefits Plan or the modification of this Benefits Plan
by the FDIC or other bank regulatory agency through administrative action shall
not constitute a breach of this Benefits Plan. Except to the extent provided in
Section 3.1, the provisions of this Benefits Plan shall be severable. If this
Benefits Plan or any portion hereof shall be invalidated on any ground by any
court of competent jurisdiction, then the Company shall nevertheless perform its
obligations hereunder to the full extent permitted by any applicable portion of
this Benefits Plan that shall not have been invalidated, and the balance of this
Benefits Plan not so invalidated shall be enforceable in accordance with its
terms.
6.14 CONSTRUCTION OF BENEFITS PLAN. In the event of a conflict between the
text of the Benefits Plan and any summary, description or other information
regarding the Benefits Plan, the text of the Benefits Plan shall control.
IN WITNESS WHEREOF, the Company has caused this Benefits Plan to be duly
adopted as of the Effective Date.
COMPANY HOLDING COMPANY
By: /s/ Xxxxx X. Xxxxxxx, XX By: /s/ Xxxxx X. Xxxxxxx, XX
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Its: President Its: President
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By: /s/ Xxxxxxxxx August-xxXxxxx By: /s/ Xxxxxxxxx August-xxXxxxx
------------------------------ -----------------------------
Its: Executive Vice President Its: Executive Vice President
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Exhibit A: Arbitration Procedure
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EXHIBIT A
ARBITRATION PROCEDURE
1. The parties agree that any dispute that arises in connection with the
payment of benefits under this Benefits Plan or the termination of this Benefits
Plan shall be resolved by binding arbitration in the manner described below.
2. A party intending to seek resolution of any dispute under the Benefits
Plan by arbitration shall provide a written demand for arbitration to the other
party, which demand shall contain a brief statement of the issues to be
resolved.
3. The arbitration shall be conducted in San Francisco County, California
by a mutually acceptable retired judge from the panel of Judicial Arbitration
and Mediation Services, Inc. or any entity performing the same type of services
that succeeds to its business ("JAMS"). At the request of either party,
arbitration proceedings will be conducted in the utmost secrecy and, in such
case all documents, testimony and records shall be received, heard and
maintained by the arbitrator in secrecy under seal, available for inspection
only by the parties to the arbitration, their respective attorneys, and their
respective expert consultants or witnesses who shall agree in advance and in
writing, to receive all such information confidentially and to maintain such
information in secrecy, and make no such use of such information except for the
purposes of the arbitration, unless compelled by legal process.
4. The arbitrator is required to disclose any circumstances that might
preclude the arbitrator from rendering an objective and impartial determination.
In the event the parties cannot mutually agree upon the selection of a JAMS
arbitrator, the President of JAMS shall designate the arbitrator.
5. The party demanding arbitration shall promptly request that JAMS
conduct a scheduling conference with fifteen (15) days of the date of that
party's written demand for arbitration or on the first available date thereafter
on the arbitrator's calendar. The arbitration hearing shall be held within
thirty (30) days after the scheduling conference or on the first available date
thereafter on the arbitrator's calendar.
6. Discovery shall be conducted as follows: (a) prior to the arbitration
any party may make a written demand for lists of the witnesses to be called and
the documents to be introduced at the hearing; (b) the lists must be served
within fifteen (15) days of the date of receipt of the demand, or one day prior
to the arbitration, whichever is earlier; and (c) each party may take no more
than two depositions (pursuant to the procedures set forth in the California
Code of Civil Procedure) with a maximum of five hours of examination time per
deposition, and no other form of pre-arbitration discovery shall be permitted.
7. It is the intent of the parties that the Federal Arbitration Act
("FAA") shall apply to the enforcement of this provision unless it is held
inapplicable by a court with jurisdiction over the dispute, in which event the
California Arbitration Act ("CAA") shall apply.
8. The arbitrator shall apply California law, including the California
Evidence Code, and shall be able to decree any and all relief of an equitable
nature, including but not limited to such relief as a temporary restraining
order, a preliminary injunction, a permanent injunction, or replevin of Company
property. The arbitrator shall also be able to award actual, general or
consequential damages, but shall not award any other form of damage (e.g.,
punitive damages).
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