EMPLOYMENT AGREEMENT As Amended and Restated as of February 14, 2008
Exhibit
99.5
As
Amended and Restated as of February 14, 2008
This
Employment Agreement (the "Agreement") as initially entered into effective as of
March 1, 2004 (“Anniversary Date”) by and between TIB Financial Corp. (the
“Holding Company”), TIB Bank (the “Bank”), and Xxxxxx X. Xxxx (the “Executive”),
is hereby amended and restated as of December 16, 2008 and effective February
14, 2008; as follows:
WITNESSETH:
WHEREAS,
the Holding Company and the Bank (collectively the "Company") desire to retain
the services of and employ the Executive, and the Executive desires to provide
services to the Company, pursuant to the terms and conditions of this
Agreement.
NOW,
THEREFORE, in consideration of the promises and of the covenants and agreements
herein contained, the Company and the Executive covenant and agree as
follows:
1.
Employment. Pursuant to the terms and conditions of this
Agreement, the Company agrees to employ the Executive and the Executive agrees
to render services to the Company as set forth herein, all effective as of the
Anniversary Date set forth above. Notwithstanding any other provision in this
Agreement, the employment of the Executive in accordance with the terms of this
Agreement shall be subject to the prior approval, as and to the extent required
by law, of the applicable federal banking agencies having jurisdiction over the
Holding Company and the Bank. This Agreement supercedes any prior employment
agreement entered into between the Company and the Executive prior to the date
hereof, and any such prior employment agreement is hereby
terminated.
2. Position
and Duties; Records. During the term of this Agreement, the Executive shall
serve as President of the Holding Company, and shall undertake such duties,
consistent with such title, as may be assigned to him from time to time by the
Board of Directors of the Holding Company (the “Board”), serving on Board
committees as appointed from time to time by the Board, keeping the Board
informed of industry and regulatory developments regarding the Company,
coordinating with Company personnel and third parties to the extent necessary to
further the profitability and business of the Company, and assisting in keeping
the company in compliance with applicable laws and regulations. In performing
his duties pursuant to this Agreement, the Executive shall devote his full
business time, energy, skill and best efforts to promote the Company and its
business and affairs; provided that, subject to Sections 10, 12 and 13 of this
Agreement, the Executive shall have the right to manage and pursue personal and
family interests, and make passive investments in securities, real estate, and
other assets, and also to participate in charitable and community activities and
organizations, so long as such activities do not adversely affect the
performance by Executive of his duties and obligations to the
Company. Upon
termination of the Executive's employment for any reason, he shall resign as a
director of the Holding Company and the Bank, to the extent that he is serving
in such capacity at that time. All files, records,
documents, manuals, books, forms, reports, memoranda, studies, data,
calculations, recordings or correspondence, in whatever form they may exist, and
all copies, abstracts and summaries of the foregoing, and all physical items
related to the business of the Company, its affiliates and their respective
directors and officers, whether of a public nature or not, and whether prepared
by Executive or not, are and shall remain the exclusive property of the Company,
and shall not be removed from their premises, except as required in the course
of providing the services pursuant to this Agreement, without the prior written
consent of the Company. Such items shall be promptly returned by the Executive
on the termination of this Agreement or at any earlier time upon the request of
the Company.
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3.
Term. The term of employment pursuant to this Agreement shall be for
a period of three years, commencing with the date set forth in Section 1 and
expiring (unless sooner terminated as otherwise provided in this Agreement or
unless otherwise renewed or extended as set forth herein) on the third
anniversary of the Anniversary Date of this Agreement, which date, including any
earlier date of termination or any extended expiration date, shall be referred
to as the "Expiration Date". Subject to the provisions of Section 8
of this Agreement, the term of this Agreement and the employment of the
Executive by the Company hereunder shall be deemed automatically renewed for
successive periods of three years on each anniversary of the Anniversary Date of
this Agreement, until the Executive receives written notice from the Company
that the term of this Agreement will not be automatically renewed. In the event
of the Executive's receipt of such notice from the Company that the term of this
Agreement will not be renewed, the term of this Agreement shall end on the next
Anniversary Date of this Agreement occurring three years after the Anniversary
Date first occurring after the date such notice is given. As an illustration of
the foregoing, if such notice were given by the Company to the Executive on a
date in 2005 before the first anniversary date of this Agreement, then term of
this Agreement would end on the Anniversary Date of this Agreement in 2008. If
notice were given by the Company to the Executive on a date in 2005 after the
first Anniversary Date of this Agreement, then the term of this Agreement would
end on the Anniversary Date in 2009. After termination of the employment of the
Executive for any reason whatsoever, the Executive shall continue to be subject
to the provisions of Sections 10 through 17, inclusive, of this Agreement;
provided, however, that the Executive shall not be subject to the provisions of
Section 12 where the employment of the Executive is terminated pursuant to
Section 8(e), or where the term of employment is not renewed pursuant to this
Section 3. Notwithstanding anything herein to the contrary, effective
as of February 14, 2008, the term of this Agreement shall expire as of March 1,
2011, unless otherwise extended by the Company.
4.
Compensation. During the term of this Agreement, the Company
shall pay or provide to the Executive as compensation for the services of the
Executive set forth in Section 2 hereof:
(a) A
base annual salary of $360,500 during the first year of this Agreement, such
base annual salary to be subject to increase thereafter as the Board in its
discretion shall determine. The foregoing base salary shall be payable in such
periodic installments consistent with other employees of the Bank.
(b) An
annual incentive bonus for each fiscal year (commencing with the 2004 fiscal
year) up to 50% of the base annual salary for achieving or exceeding performance
goals established by the Board. The incentive bonus shall be prorated as
determined by the Board for a partial year that occurs within the calendar
year.
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5.
Benefits and Insurance. The Bank shall provide to the Executive such
medical, health, and life insurance as well as any other benefits as the Board
shall determine from time to time. At a minimum, the Executive shall be entitled
to (i) participate in all employee benefit plans offered to the Bank's employees
generally, and (ii) life insurance coverage (payable to such beneficiary as the
Executive may designate from time to time). The Executive also shall be entitled
to participate in any group disability plan maintained by the Bank, with the
Bank paying to the Executive his base annual salary during any waiting period
imposed by such plan for the receipt of disability benefits
thereunder.
6.
Vacation. The Executive may take up to four weeks of vacation
time at such periods during each year as the Board and the Executive shall
determine from time to time. The Executive shall be entitled to full
compensation during such vacation periods.
7.
Reimbursement of Expenses. The Bank shall
reimburse the Executive for reasonable expenses incurred in connection with his
employment hereunder subject to guidelines issued from time to time by the Board
and upon submission of documentation in conformity with applicable requirements
of federal income tax laws and regulations supporting reimbursement of such
expenses.
8.
Termination. The employment of the Executive may be terminated as
follows:
(a) By
the Company, by action taken by its Board, at any time and immediately upon
written notice to the Executive if said termination is for Cause. In the notice
of termination furnished to the Executive under this Section 8(a), the reason or
reasons for said termination shall be given and, if no reason or reasons are
given for said termination, said termination shall be deemed to be without Cause
and therefore termination pursuant to Section 8(f). Any one or more of the
following conditions shall be deemed to be grounds for termination of the
employment of the Executive for Cause under this Section 8(a):
(i)
If the Executive shall fail or refuse to comply with the obligations
required of him as set forth in this Agreement or comply with the policies of
the Company established by the Board from time to time; provided, however, that
for the first such failure or refusal, the Executive shall be given written
warning (providing at least a 10 day period for an opportunity to cure), and the
second failure or refusal shall be grounds for termination for
Cause;
(ii) If
the Executive shall have engaged in conduct involving fraud, deceit, personal
dishonesty, or breach of fiduciary duty;
(iii) If
the Executive shall have violated any banking law or regulation, memorandum of
understanding, cease and desist order, or other agreement with any banking
agency having jurisdiction over the Company which, in the judgment of the Board,
has adversely affected, or may adversely affect, the business or reputation of
the Company as determined by the Board;
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(iv) If
the Executive shall have become subject to continuing intemperance in the use of
alcohol or drugs which has adversely affected, or may adversely affect, the
business or reputation of the Company as determined by the Board;
(v)
If the Executive shall have filed, or had filed against him, any petition
under the federal bankruptcy laws or any state insolvency laws; or
(vi) If
any banking authority having supervisory jurisdiction over the Holding Company
or the Bank initiates any proceedings for removal of the Executive.
In the
event of termination for Cause, the Company shall pay the Executive only salary
and vacation amounts accrued and unpaid as of the effective date of
termination.
(b) The
Executive shall have the right to terminate his employment at any time during
the term of the Agreement hereof for Good Reason Absent a Change in Control (as
defined hereafter) which has not been previously consented to in writing by the
Executive. The Executive must provide written notice to the Company of the
existence of the event or condition constituting such Good Reason Absent a
Change in Control within ninety (90) days of the initial occurrence of the
event or the condition alleged to constitute “Good Reason Absent a Change in
Control.” Upon delivery of such notice by the Executive, the Company shall have
a period of thirty (30) days thereafter during which it or they may remedy
in good faith the condition constituting such Good Reason Absent a Change in
Control, and the Executive's employment shall continue in effect during such
time so long as the Company makes diligent efforts during such time to cure such
Good Reason Absent a Change in Control. In the event that the Company shall
remedy in good faith the event or condition constituting Good Reason Absent a
Change in Control, then such notice of termination shall be null and void, and
the Company shall not be required to pay the amount due to the Executive under
this Section 8(b). The Company’s remedy of any Good Reason Absent a
Change in Control event or condition with or without notice from the Executive
shall not relieve the Company from any obligations to the Executive under this
Agreement or otherwise and shall not affect the Executive's rights upon the
reoccurrence of the same, or the occurrence of any other, Good Reason Absent a
Change in Control event or condition.
“Good
Reason Absent a Change in Control” shall exist if, without Executive’s express
written consent, the Company materially breaches any of their respective
obligations under this Agreement. Without limitation, such a material breach
shall be deemed to occur upon the occurrence any of the following:
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(1)
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a
material diminution in the Executive’s authority, duties, or
responsibilities; or
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(2)
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any
other action or inaction that constitutes a material breach by the Company
of this Agreement.
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Upon
Termination of Employment by the Executive for Good Reason Absent a Change in
Control (which Termination of Employment shall occur not later than two years
from the date of such initial occurrence of such event or condition constituting
Good Reason Absent a Change in Control), the Company shall (i) for a period of
three years thereafter, continue to pay to the Executive the base annual salary
in effect under Section 4(a) on the date of said termination (or, if greater,
the highest annual salary in effect for the Executive within the 36 month period
prior to said termination) plus an annual amount equal to any bonus paid by the
Company to the Executive during the 12 month period prior to said termination,
such salary and bonus to be payable in such periodic installments (and not as a
lump sum payment) consistent with the payroll periods for the Company's payments
to its other employees; and (ii) for a period of 18 months, pay directly or
reimburse the Executive for continued coverage in accordance with the
Consolidated Omnibus Budget Reconciliation Act under the Bank's medical
insurance plan.
(c) By
the Executive upon the lapse of 45 days following written notice by the
Executive to the Company of his resignation from the Company for other than Good
Reason Absent a Change in Control; provided, however, that the Company, in its
discretion, may cause such termination to be effective at any time during such
45-day period. If the Executive's employment is terminated because of the
Executive's resignation, the Company shall be obligated to pay to the Executive
any salary and vacation amounts accrued and unpaid as of the effective date of
such resignation.
(d) If the Executive's employment is
terminated by the death of the Executive, this Agreement shall automatically
terminate, and the Company shall be obligated to pay to the Executive's estate
any salary, vacation, and bonus amounts accrued and unpaid at the date of death.
If the Executive suffers a Disability, then the Company shall have the right to
terminate the Executive's employment, in which case the Company shall be
obligated to pay to the Executive (i) any salary, vacation and bonus amounts
accrued and unpaid at the date of such termination of employment, and (ii)
continued salary payments (not to exceed 30 days) until the Executive is
eligible to receive payments under the Company's disability insurance
plan.
For
purposes of this Agreement, “Disability” means (A) the Executive is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months; or (B) the Executive is, by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, receiving
income replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Company.
(e) If
upon a Change of Control or within a period of twenty-four (24)
months thereafter, (i) the Executive's employment is terminated by the Company
(or a successor thereto), or (ii) the Executive terminates his employment for
Good Reason With a Change in Control (as defined below) and provides written
notice to the Company of the existence of the event or condition constituting
such Good Reason With a Change in Control within ninety (90) days of the
initial occurrence of the event or the condition alleged to constitute a “Good
Reason With a Change in Control” then upon such Termination of Employment (which
shall occur not later than two years from the date of such Change in Control)
the Executive shall be entitled to receive in a lump sum payment an amount equal
to three times the average base annual salary received by the Executive during
the three year period prior to such termination; provided, however, upon such
notice of Good Reason With a Change in Control termination by the Executive, the
Company shall have a period of thirty (30) days during which time it or
they may in good faith remedy the condition or event constituting such Good
Reason With a Change in Control (if, in fact such remedy is possible) and
thereafter such notice of termination by the Executive shall be null and void,
and the Company shall not be required to pay the amount due to the Executive
under this Section 8(e) with respect to such Good Reason With a Change in
Control notice. Any termination benefits due the Executive pursuant to this
Section 8(e) shall be in lieu of any other termination benefits that the
Executive would have otherwise received under any other provision of this
Section 8.
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“Good
Reason With a Change in Control” shall exist if, without Executive’s express
written consent, the Company materially breaches any of their respective
obligations under this Agreement. Without limitation, such a material breach
shall be deemed to occur upon the occurrence any of the following:
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(1)
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a
material diminution in the Executive's base
compensation;
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(2)
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a
material diminution in the Executive’s authority, duties, or
responsibilities;
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(3)
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his
employment is relocated more than 50 miles from the office of the
Executive in effect on the date of the Change in Control;
or
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(4)
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a
material diminution in the authority, duties or responsibilities of the
supervisor to whom the Executive is required to report, including a
requirement that the Executive is required to report a corporate officer
or employee instead of reporting directly to the Board of Directors of the
Company.
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For
purposes of this Agreement, a Change of Control shall mean (i) a change in
ownership of the Company under paragraph (A) below, or (ii) a change in
effective control of the Company under paragraph (B) below, or (iii) a change in
the ownership of a substantial portion of the assets of the Company under
paragraph (C) below. With respect to determination of a Change in Control,
Company shall refer to TIB Bank and/or TIB Financial Corp., the parent bank
holding company of TIB Bank.
(A)
CHANGE IN THE OWNERSHIP OF THE COMPANY. A change in the ownership of the Company
shall occur on the date that any one person, or more than one person acting as a
group (as defined in paragraph (B)), acquires ownership of stock of the
corporation that, together with stock held by such person or group, constitutes
more than 50 percent of the total fair market value or total voting power of the
stock of such corporation. However, if any one person or more than one person
acting as a group, is considered to own more than 50 percent of the total fair
market value or total voting power of the stock of a corporation, the
acquisition of additional stock by the same person or persons is not considered
to cause a change in the ownership of the corporation (or to cause a change in
the effective control of the corporation (within the meaning of paragraph (B)
below). An increase in the percentage of stock owned by any one person, or
persons acting as a group, as a result of a transaction in which the corporation
acquires its stock in exchange for property will be treated as an acquisition of
stock for purposes of this section. This paragraph (a) applies only when there
is a transfer of stock of a corporation (or issuance of stock of a corporation)
and stock in such corporation remains outstanding after the
transaction.
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(B)
CHANGE IN THE EFFECTIVE CONTROL OF THE COMPANY. A change in the effective
control of the Company shall occur on the date that either (i) any one person,
or more than one person acting as a group (as determined below), acquires (or
has acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the corporation
possessing 30 percent or more of the total voting power of the stock of such
corporation; or (ii) a majority of members of the corporation's board of
directors is replaced during any 12-month period by directors whose appointment
or election is not endorsed by a majority of the members of the corporation's
board of directors prior to the date of the appointment or election, provided
that for purposes of this paragraph (B)(ii), the term corporation refers solely
to a corporation for which no other corporation is a majority shareholder. In
the absence of an event described in paragraph (i) or (ii), a change in the
effective control of a corporation will not have occurred. If any one person, or
more than one person acting as a group, is considered to effectively control a
corporation (within the meaning of this paragraph (B)), the acquisition of
additional control of the corporation by the same person or persons is not
considered to cause a change in the effective control of the corporation (or to
cause a change in the ownership of the corporation within the meaning of
paragraph (A)). Persons will not be considered to be acting as a group solely
because they purchase or own stock of the same corporation at the same time, or
as a result of the same public offering.
(C)
CHANGE IN THE OWNERSHIP OF A SUBSTANTIAL PORTION OF THE COMPANY'S ASSETS. A
change in the ownership of a substantial portion of the Company's assets shall
occur on the date that any one person, or more than one person acting as a group
(as determined below), acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or persons)
assets from the corporation that have a total gross fair market value equal to
or more than 40% of the total gross fair market value of all of the assets of
the corporation immediately prior to such acquisition or acquisitions. For this
purpose, gross fair market value means the value of the assets of the
corporation, or the value of the assets being disposed of, determined without
regard to any liabilities associated with such assets. There is no Change in
Control event under this paragraph (C) when there is a transfer to an entity
that is controlled by the shareholders of the transferring corporation
immediately after the transfer.
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(D) Each
of the sub-paragraphs (A) through (C) above shall be construed and interpreted
consistent with the requirements of Section 409A of the Code and any Treasury
regulations or other guidance issued thereunder.
(f)
By the Company, by action taken by its Board, at any time if said
termination is without Cause. If the Executive's employment is terminated by the
Company without Cause, the Company shall (i) for a period of three years
thereafter, continue to pay to the Executive the base annual salary in effect
under Section 4(a) on the date of said termination (or, if greater, the highest
annual salary in effect for the Executive within the 36 month period prior to
said termination) plus an annual amount equal to any bonus paid by the Company
to the Executive during the 12 month period prior to said termination, such
salary and bonus to be payable in such periodic installments
(and not as a lump sum payment) consistent with the payroll periods for the
Company's payments to its other employees; and (ii) for a period of 18 months,
reimburse the Executive for continued coverage in accordance with the
Consolidated Omnibus Budget Reconciliation Act under the Bank's medical
insurance plan.
(g) Excise
Tax. In the event that any consideration or other amount paid or payable to
Executive hereunder as well as any other agreements between the Executive and
the Company constitutes or is deemed to be an "excess parachute payment" within
the meaning of Section 280G(b) of the Internal Revenue Code of 1986, as amended
(the “Code”) (or any other amended or successor provision) that is subject to
the tax imposed pursuant to Section 4999 of the Code (or any other amended or
successor provisions) ("Excise Tax"), the Company shall pay to Executive an
amount ("Gross-Up Amount") that, after reduction of the amount of such Gross-Up
Amount for all federal, state and local tax to which the Gross-Up Amount is
subject (including the Excise Tax to which the Gross-Up Amount is subject) is
equal to the amount of the Excise Tax to which such amount constituting an
excess parachute payment is subject. For purposes of determining the amount of
any Gross-Up Amount, Executive shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Amount is to be made and state and local income taxes at the
highest marginal rate of taxation in the state and locality of residence of
Executive on the date the excess parachute payment is made, net of the maximum
reduction in federal income taxes that could be obtained from the deduction of
such state and local taxes.
Notwithstanding
the foregoing, no payment under Section 8(g) shall be made later than the end of
the taxable year following the taxable year in which the taxes are remitted to
the taxing authority or, if no taxes are paid, by the end of the taxable year
following the year in which or where as a result of such audit or litigation no
taxes are remitted, the end of the taxable year following the taxable year in
which the audit is completed or there is a final and nonappealable settlement or
other resolution of the litigation.
Notwithstanding
the foregoing, payment under Section 8(g) shall only apply with respect to a payment made related to a
Termination of Employment in conjunction with or following a Change in Control
transaction. Section 8(g)
shall not be effective with respect to payment of severance compensation absent
a Change in Control transaction.
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9.
Notice. All notices permitted or required to be given to either
party under this Agreement shall be in writing and shall be deemed to have been
given (a) in the case of delivery, when addressed to the other party as set
forth at the end of this Agreement and delivered to said address, (b) in the
case of mailing, three days after the same has been mailed by certified mail,
return receipt requested, and deposited postage prepaid in the U.S. Mails,
addressed to the other party at the address as set forth at the end of this
Agreement, and (c) in any other case, when actually received by the other party.
Either party may change the address at which said notice is to be given by
delivering notice of such to the other party to this Agreement in the manner set
forth herein.
10. Confidential
Matters. The Executive is aware and acknowledges that the Executive shall have
access to confidential information by virtue of his employment. The Executive
agrees that, during the period of time the Executive is retained to provide
services to the Company, and thereafter subsequent to the termination of
Executive's services to the Company for any reason whatsoever, the Executive
will not release or divulge any confidential information whatsoever relating to
the Company or its business, to any other person or entity without the prior
written consent of the Company. Confidential information does not include
information that is available to the public or which becomes available to the
public other than through a breach of this Agreement on the part of the
Executive. Also, the Executive shall not be precluded from disclosing
confidential information in furtherance of the performance of his services to
the Company or to the extent required by any legal proceeding.
12. Noncompetition.
The Executive agrees that during the period of time the Executive is retained to
provide services to the Company, and thereafter for a period of two years
subsequent to the termination of Executive's services to the Company for any
reason whatsoever (except where the employment of the Executive is terminated
pursuant to Section 8(e), or where the term of employment is not renewed
pursuant to Section 3), Executive will not enter the employ of, or have any
interest in, directly or indirectly (either as executive, partner, director,
officer, consultant, principal, agent or employee), any other bank or financial
institution or any entity which either accepts deposits or makes loans (whether
presently existing or subsequently established) and which has an office located
within a radius of 50 miles of any office of the Bank (a "Competitive
Activity"); provided, however, that the foregoing shall not preclude any
ownership by the Executive of an amount not to exceed 5% of the equity
securities of any entity which is subject to the periodic reporting requirements
of the 1934 Act and the shares of Company common stock owned by the Executive at
the time of termination of employment. Notwithstanding any other provision in
this Agreement, if the Executive is receiving severance payments from the
Company pursuant to Sections 8(b) or (f), then the Executive shall not be
entitled to receive any such severance payments which are after two years
subsequent to the termination of the Executive's services to the Company if the
Executive following such two-year period engages in any Competitive
Activity.
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13. Nonsolicitation;
Noninterference; Nondisparagement. The Executive agrees that during the period
of time the Executive is retained to provide services to the Company, and
thereafter for a period of two years subsequent to the termination of
Executive's services to the Company for any reason whatsoever, the Executive
will not (a) solicit for employment by Executive, or anyone else, or employ any
employee of the Company or any person who was an employee of the Company within
12 months prior to such solicitation of employment; (b) induce, or attempt to
induce, any employee of the Company to terminate such employee's employment; (c)
induce, or attempt to induce, anyone having a business relationship with the
Company to terminate or curtail such relationship or, on behalf of himself or
anyone else, to compete with the Company; or (d) permit anyone controlled by the
Executive, or any person acting on behalf of the Executive or anyone controlled
by an employee of the Executive to do any of the foregoing. The Executive also
agrees that during the term of this Agreement and thereafter, the Executive will
not disparage, denigrate or comment negatively upon, either orally or in
writing, the Company, any of its affiliates, or any of their respective officers
or directors, to or in the presence of any person or entity, unless compelled to
act by subpoena or other legal mandate.
14. Remedies.
The Executive agrees that the restrictions set forth in this Agreement are fair
and reasonable. The covenants set forth in this Agreement are not dependent
covenants and any claim against the Company, whether arising out of this
Agreement or any other agreement or contract between the Company and Executive,
shall not be a defense to a claim against Executive for a breach or alleged
breach of any of the covenants of Executive contained in this Agreement. It is
expressly understood by and between the parties hereto that the covenants
contained in this Agreement shall be deemed to be a series of separate
covenants. The Executive understands and agrees that if any of the separate
covenants are judicially held invalid or unenforceable, such holding shall not
release him from his obligations under the remaining covenants of this
Agreement. If in any judicial proceedings, a court shall refuse to enforce any
or all of the separate covenants because taken together they are more extensive
(whether as to geographic area, duration, scope of business or otherwise) than
necessary to protect the business and goodwill of the Bank, it is expressly
understood and agreed between the parties hereto that those separate covenants
which, if eliminated or restricted, would permit the remaining separate
covenants or the restricted separate covenant to be enforced in such proceeding
shall, for the purposes of such proceeding, be eliminated from the provisions of
this Agreement or restriction, as the case may be.
15. Invalid
Provision. In the event any provision should be or become invalid or
unenforceable, such facts shall not affect the validity and enforceability of
any other provision of this Agreement. Similarly, if the scope of any
restriction or covenant contained herein should be or become too broad or
extensive to permit enforcement thereof to its full extent, then any
such
restriction
or covenant shall be enforced to the maximum extent permitted by law, and
Executive hereby consents and agrees that the scope of any such restriction or
covenant may be modified accordingly in any judicial proceeding brought to
enforce such restriction or covenant.
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16. Governing
Law. This Agreement shall be construed in accordance with and shall be governed
by the laws of the State of Florida.
17. Arbitration.
Except for injunctive relief as provided in Section 11 above, all disputes
between the parties hereto concerning the performance, breach, construction or
interpretation of this Agreement, or in any manner arising out of this
Agreement, shall be submitted to binding arbitration in accordance with the
rules of the American Arbitration Association, which arbitration shall be
carried out in the manner set forth below:
(a) Within
fifteen (15) days after written notice by one party to the other party of its
demand for arbitration, which demand shall set forth the name and address of its
designated arbitrator, the other party shall select its designated arbitrator
and so notify the demanding party. Within fifteen (15) days thereafter, the two
arbitrators so selected shall select the third arbitrator. The dispute shall be
heard by the arbitrators within sixty (60) days after selection of the third
arbitrator. The decision of any two arbitrators shall be binding upon the
parties. Should any party or arbitrator fail to make a selection, the American
Arbitration Association shall designate such arbitrator upon the application of
either party. The decision of the arbitrators shall be final and binding upon
the Company, its successors and assigns, and upon Executive, his successors and
representatives, as the case may be.
(b) Unless
the Parties agree otherwise, the arbitration proceedings shall take place in the
city where the headquarters of the Holding Company is located. The judgment and
determination of such proceedings shall be binding on all parties thereto.
Judgment upon any award rendered by the arbitrators may be entered into any
court having competent jurisdiction without any right of appeal.
(c) Each
party shall bear its or his own expenses of arbitration, and the expenses of the
arbitrators and the arbitration proceeding shall be shared equally. However, if
in the opinion of a majority of the arbitrators, any claim or defense was
unreasonable, the arbitrators may assess, as part of their award, all or any
part of the arbitration expenses of the other party (including reasonable
attorneys' fees) and of the arbitrators and the arbitration proceeding against
the party raising such unreasonable claim or defense.
18. Binding
Effect. This Agreement shall be binding on and inure to the benefit of the
parties hereto and their respective successors and legal representatives and
beneficiaries.
19. Effect
on Other Agreements. This Agreement and the termination thereof shall not affect
any other agreement between the Executive and the Company, and the receipt by
the Executive of benefits thereunder.
20. Miscellaneous.
The rights and duties of the parties hereunder are personal and may not be
assigned or delegated without the prior written consent of the other party to
this Agreement. The captions used herein are solely for the convenience of the
parties and are not used in construing this Agreement. Time is of the essence of
this Agreement and the performance by each party of its or his duties and
obligations hereunder.
11
21. Complete
Agreement. This Agreement constitutes the complete agreement between the parties
hereto with respect to the subject matter hereof and incorporates all prior
discussions, agreements and representations made in regard to the matters set
forth herein. This Agreement may not be amended, modified or changed except by a
writing signed by the party to be charged by said amendment, change or
modification.
22. Effect
of Code Section 409A.
(a) This
Agreement shall be amended to the extent necessary to comply with Section 409A
of the Code and regulations promulgated thereunder. Prior to such amendment, and
notwithstanding anything contained herein to the contrary, this Agreement shall
be construed in a manner consistent with Section 409A of the Code and the
parties shall take such actions as are required to comply in good faith with the
provisions of Section 409A of the Code such that payments shall not be made to
the Executive at such time if such payments shall subject the Executive to the
penalty tax under Code Section 409A, but rather such payments shall be made by
the Company to the Executive at the earliest time permissible thereafter without
the Executive having liability for such penalty tax under Section Code
409A.
(b) Notwithstanding
anything in this Agreement to the contrary, if the Company in good faith
determines, as of the effective date of Executive’s Termination of Employment
that the Executive is a “specified employee” within the meaning of Section 409A
of the Code and if the payment under Section 8 does not qualify as a short-term
deferral under Code Section 409A and Treas. Reg. §1.409A-1(b)(4) (or any similar
or successor provisions), and that an amount (or any portion of an amount)
payable to Executive hereunder, is required to be suspended or delayed for six
months in order to satisfy the requirements of Section 409A of the Code, then
the Company will so advise Executive, and any such payment (or the minimum
amount thereof) shall be suspended and accrued for six months (“Six-Month
Delay”), whereupon such amount or portion thereof shall be paid to Executive in
a lump sum on the first day of the seventh month following the effective date of
Executive’s Termination of Employment. All subsequent payments shall
be paid in the manner specified. The limitations of this Six-Month Delay shall
only be effective if the stock of the Company or a parent corporation is
publicly traded as set forth at Section 409A(a)(2)(B)(i) of the
Code.
"Specified
Employee" means, for an applicable twelve (12) month period beginning on April
1, a key employee (as described in Code Section 416(i), determined without
regard to paragraph (5) thereof) during the calendar year ending on the December
31 immediately preceding such April 1.
"Termination
of Employment" shall have the same meaning as "separation from service", as that
phrase is defined in Section 409A of the Code (taking into account all rules and
presumptions provided for in the Section 409A regulations). No separation from
service is deemed to occur due to military leave, sick leave, or other bona fide
leave of absence if the period of such leave does not exceed six months, or if
longer, so long as the Executive’s right to reemployment is provided by law or
contract. A leave of absence constitutes a bona fide leave of absence only if
there is a reasonable expectation that the Executive will return to perform
services for the Company. If the period of leave exceeds six months and the
Executive does not retain a right to reemployment under an applicable statute or
by contract, the employment relationship is deemed to terminate on the first
date immediately following such six-month period. Notwithstanding the foregoing,
where a leave of absence is due to any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than six months, where such impairment
causes the Executive to be unable to perform the duties of his position of
employment or any substantially similar position of employment, a 29-month
period of absence may be substituted for such six-month period.
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Whether a
“Termination of Employment” takes place is determined based on whether the facts
and circumstances indicate that the Company and Executive reasonably anticipated
that no further services would be performed after a certain date or that the
level of bona fide services the Executive would perform after such date (whether
as an employee or as an independent contractor) would permanently decrease to no
more than 20 percent of the average level of bona fide services performed
(whether as an employee or an independent contractor) over the immediately
preceding 36-month period (or the full period of services to the Company if the
Executive has been providing services to the Company less than 36
months). Facts and circumstances to be considered in making this
determination include, but are not limited to, whether the Executive continues
to be treated as an employee for other purposes (such as continuation of salary
and participation in employee benefit programs), whether similarly situated
service providers have been treated consistently, and whether the Executive is
permitted, and realistically available, to perform services for other service
recipients in the same line of business. The Executive is presumed to
have separated from service where the level of bona fide services performed
decreases to a level equal to 20 percent or less of the average level of
services performed by the Executive during the immediately preceding 36-month
period. The Executive will be presumed not to have separated from
service where the level of bona fide services performed continues at a level
that is a 50 percent or more of the average level of service performed by the
Executive during the immediately preceding 36-month period. No
presumption applies to a decrease in the level of bona fide services performed
to a level that is more than 20 percent and less than 50 percent of the average
level of bona fide services performed during the immediately preceding 36-month
period. The presumption is rebuttable by demonstrating that the
Company and the Executive reasonably anticipated that as of a certain date the
level of bona fide services would be reduced permanently to a level less than or
equal to 20 percent of the average level of bona fide services provided during
the immediately preceding 36-month period or full period of services provided to
the Company if the Executive has been providing services to the Company for a
period of less than 36 months (or that the level of bona fide services would not
be so reduced).
For
periods during which the Executive is on a paid bona fide leave of absence and
has not otherwise terminated employment, the Executive is treated as providing
bona fide services at a level equal to the level of services that the Executive
would have been required to perform to receive the compensation paid with
respect to such leave of absence. Periods during which the Executive
is on an unpaid bona fide leave of absence and has not otherwise terminated
employment are disregarded for purposes of determining the applicable 36-month
(or shorter) period).
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(c) Notwithstanding
the Six-Month Delay rule set forth in Section 22(b) above:
(i)
To the maximum extent permitted under Code Section 409A and Treas. Reg.
§1.409A-1(b)(9)(iii) (or any similar or successor provisions), during each month
of the Six-Month Delay, the Company will pay the Executive an amount equal to
the lesser of (I) the total monthly severance benefit, or (II) one-sixth (1/6)
of the lesser of (1) two times the maximum amount that may be taken into account
under a qualified plan pursuant to Code Section 401(a)(17) for the year in which
the Executive’s Termination of Employment occurs, or (2) the sum of the
Executive’s annualized compensation based upon the annual rate of pay for
services provided to the Company for the taxable year of the Executive preceding
the taxable year of the Executive in which his Termination of Employment occurs
(adjusted for any increase during that year that was expected to continue
indefinitely if the Executive had not had a Termination of Employment); provided
that amounts paid under this Section 22(c) must be paid no later than the last
day of the second taxable year of the Executive following the taxable year of
the Executive in which the Termination of Employment occurs, and such amounts
paid will count toward, and will not be in addition to, the total payment amount
required to be made to the Executive by the Company under Section 8;
and
(ii) To
the maximum extent permitted under Code Section 409A and Treas.
Reg.
§1.409A-1(b)(9)(v)(D) (or any similar or successor provisions), within ten (10)
days of the Termination of Employment, the Company will pay the Executive an
amount equal to the applicable dollar amount under Code Section 402(g)(1)(B) for
the year of the Executive’s Termination of Employment; provided that the amount
paid under this Section 22(c) will count toward, and will not be in addition to,
the total payment amount required to be made to the Executive by the Company
under Section 8.
(d) To
the extent that any reimbursements or in-kind payments are subject to Code
Section 409A, then such expenses (other than medical expenses) must be incurred
before the last day of the second taxable year following the taxable year in
which the termination occurred, provided that any reimbursement for such
expenses be paid before the Executive’s third taxable year following the taxable
year in which the termination occurred. For medical expenses, to the
extent the Agreement entitles the Executive to reimbursement by the Company of
payments of medical expenses incurred and paid by the Executive but not
reimbursed by a person other than the Company and allowable as a deduction under
Code Section 213 (disregarding the requirement of Code Section 213(a) that the
deduction is available only to the extent that such expenses exceed 7.5 percent
of adjusted gross income), then the reimbursement applies during the period of
time during which the Executive would be entitled (or would, but for the
Agreement, be entitled) to continuation coverage under a group health plan of
the Bank under Code Section 4980B (COBRA) if the Executive elected such coverage
and paid the applicable premiums.
14
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
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TIB
BANK
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By:
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By:
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Xxxxx X. Xxxxxx,
III
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Xxxxxxx
X. Xxxxxxxx
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Chairman
of the Board
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President
and Chief Executive
Officer
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"EXECUTIVE"
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Xxxxxx X. Xxxx,
individually
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Address:
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