Exhibit 10.8 PEOPLES STATE BANK
EMPLOYEE SEVERANCE AGREEMENT
THIS EMPLOYEE SEVERANCE AGREEMENT ("Agreement") is entered into by and
among Peoples State Bank ("Employer"), and Xxxxxx X. Xxxxxx, XX ("Employee").
WHEREAS, in recognition of Employee's prior and continuing contribution to
Employer, Employer wishes to protect Employee's position therewith in the manner
provided in this Agreement in the event of a Change in Control of the Employer.
NOW, THEREFORE, in consideration of Employee's contribution and
responsibilities, Employer hereby agrees to provide Employee with certain
severance benefits as specifically provided herein.
SECTION 1 - DEFINITIONS
(a) "Change in Control" means an event that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended ("Exchange Act") or any
successor disclosure item; provided that, without limitation, such a Change in
Control (as set forth in 12 U.S.C. Section 1841(a)(2) of the Bank Holding
Company Act of 1956, as amended) shall be deemed to have occurred if any person
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other
than any person who on the date hereof is a director or officer of the Employer:
(i) directly or indirectly, or acting through one or more other persons, owns,
controls or has power to vote 25% or more of any class of the then outstanding
voting securities of the Employer; or (ii) controls in any manner the election
of the directors of the Employer. For purposes of this Agreement, a "Change in
Control" shall be deemed not to have occurred in connection with a
reorganization, consolidation, or merger of Employer where the stockholders of
the Employer, immediately before the consummation of the transaction, will own
over 50% of the total combined voting power of all classes of stock entitled to
vote of the surviving entity immediately after the transaction.
(b) Termination for "just cause" means termination because of Employee's
personal dishonesty, incompetence, willful misconduct, material breach of
fiduciary duty, intentional failure to perform stated duties, willful violation
of any law, rule, or regulation (other than traffic violations or similar
offenses) or final case-and-desist order. In determining "incompetence," the
acts or omissions shall be measured against standards generally prevailing in
the banking industry. No act, or failure to act on Employee's part, shall be
considered "willful" unless done, or omitted to be done, by Employee not in good
faith and without reasonable belief that his action or omission was in the best
interest of Employer; provided that any act or omission to act on Employee's
behalf in reliance upon advice or written opinion of Employer's counsel shall
not be deemed to be willful.
(c) Employee may terminate his employment for "good reason" after a Change
in Control if he is demoted or there is a significant change in his title or
authority, reduction in his annual compensation, or relocation of his principal
place of employment by more than 25 miles from the location where he performed
his job functions immediately prior to the Change in Control.
(d) "Protected Period" means the term of this Agreement and one year
following termination hereof.
SECTION 2 - TERM OF AGREEMENT
The term of this Agreement shall be for two years commencing on March 1,
2002, and terminating on March 1, 2004, unless further extended or sooner
terminated in accordance with the terms and conditions set forth herein. On
February 28, 2003, and on each "Anniversary Date" thereafter, the term of this
Agreement shall be extended for one additional year, unless Employer gives
Employee written notice in advance of an Anniversary Date of its intent not to
extend the term of this Agreement.
SECTION 3 - PAYMENTS TO EMPLOYEE UPON CHANGE IN CONTROL
Following a Change in Control and within the Protected Period, if either:
(i) Employer terminates Employee's employment without "just cause;" or (ii)
Employee terminates his own employment for "good reason," Employee shall be
entitled to receive the termination benefits described in Section 4 hereof.
SECTION 4 - TERMINATION BENEFITS
(a) Upon a termination described in Section 3, Employer or its successor(s)
shall pay Employee, or in the event of his subsequent death, his estate, as
severance pay, a sum equal to two years' "highest annual base salary." For
purposes of this Agreement, Employee's highest annual base salary shall mean the
Employee's highest base salary during the three years immediately preceding
Employee's termination. Such payment shall be made in substantially equal
monthly installments on the last day of each month, or if these days are
nonbusiness days, the immediate preceding business day, commencing with the
month in which date of termination occurs. At the discretion of Employer,
Employee may receive the full amount of this termination benefit in one lump sum
payment.
(b) Upon a termination described in Section 3, Employer or its successor(s)
shall continue to provide life, health and disability coverage ("Coverage")
comparable to the coverage maintained by Employer for Employee prior to his
severance. Such Coverage shall cease upon the earlier of Employee obtaining new
employment and receiving similar Coverage through another employer, which
provides comparable coverage, or one year from the date of Employee's
termination.
SECTION 5 - SUSPENSION OF OBLIGATIONS
(a) If Employee is suspended from office and/or temporarily prohibited from
participating in the conduct of Employer's affairs pursuant to an action brought
by the Florida Department of Banking and Finance or the Federal Deposit
Insurance Corporation (either, a "Regulatory Agency"), Employer's obligations
under this Agreement shall be suspended as of the date of such action. The
obligations of this Agreement shall be reinstated if the charges of the
Regulatory Agency are subsequently dismissed, or if the Employee is otherwise
determined to be not guilty of such charges.
(b) If Employee is removed from office and/or permanently prohibited from
participating in the conduct or affairs of Employer by a final order resulting
from an action brought by a Regulatory Agency, all obligations of Employer under
this Agreement shall terminate as of the effective date of such order.
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SECTION 6 - NOTICE OF TERMINATION
Any purported termination by Employer, or by Employee shall be communicated
by a Notice of Termination to the other party hereto. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Employee's employment under the provision so
indicated.
SECTION 7 - MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except as agreed to in
writing by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future, or as to any act other than that
specifically waived.
SECTION 8 - ARBITRATION
The parties agree that any controversy or claim arising out of or relating
to this Agreement or any breach hereof, including, without limitation, any claim
that this Agreement or any portion hereof is invalid, illegal or otherwise
voidable, shall be submitted to binding arbitration before and in accordance
with the rules of the American Arbitration Association and judgment upon the
determination and/or award of such arbitrator(s) may be entered in any court
having jurisdiction thereof. Provided, however, that this clause shall not be
construed to permit the award of punitive damages to either party. The situs of
any arbitration shall be in Columbia County, Florida.
SECTION 9 - ATTORNEYS' FEES
In the event of an arbitration proceeding occurring out of or involving
this Agreement, the prevailing party shall be entitled to recovery of reasonable
attorneys' fees, expenses and costs, including fees and costs to enforce an
award.
SECTION 10 - SEVERABILITY
The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
SECTION 11 - HEADINGS FOR REFERENCE ONLY
The headings of the Sections herein are included solely for convenience of
reference and shall not control the meaning or the interpretation of any of the
provisions of this Agreement.
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SECTION 12 - APPLICABLE LAW
This Agreement shall be governed in all respects and be interpreted by and
under the laws of the State of Florida.
SECTION 13 - SUCCESSORS
Employer shall require any successor to the business and/or assets of
Employer in connection with a Change in Control to assume and agree to perform
its obligations under this Agreement in writing.
SECTION 14 - NO CONTRACT OF EMPLOYMENT
This Agreement shall not be deemed to constitute an employment contract
between Employer and Employee or to be in consideration of or an inducement for
the employment of Employee. Nothing contained in this Agreement shall be deemed
to give Employee the right to be retained in the service of Employer or to
interfere with the right of Employer to discharge Employee at any time.
SECTION 15 - LIMITATION OF RIGHTS
Neither this Agreement, nor any amendment hereof, nor the payment of any
benefits hereunder shall be construed as giving Employee or other person any
legal or equitable right against Employer except as expressly herein.
IN WITNESS WHEREOF, Employer has duly executed this Agreement this 15th day
of October, 2001.
PEOPLES STATE BANK
By: /s/ Xxxxxx X. Small
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Xxxxxx X. Small, President and
Chief Executive Officer
EMPLOYEE
/s/ Xxxxxx X. Xxxxxx, XX
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Xxxxxx X. Xxxxxx, XX
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