Contract
Exhibit
99.7
As
Amended and Restated as of January 1, 2009
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 Xxxxxxx X. Xxxxxxxx (the
“Executive”), is hereby amended and restated as of December 16, 2008 and
effective January 1, 2009; 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:
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1.
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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.
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2.
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Position and Duties;
Records. During the term of the Agreement, the Executive
shall serve as Chief Executive Officer & President of the Bank, and
shall undertake such duties, consistent with such titles, as may be
assigned to him from time to time by the President and Chief Executive
Officer of the Holding Company and/or Boards of Directors of the Holding
Company and the Bank (collectively referred to as the “Board”), including
serving on Board committees as appointed from time to time by the Board,
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 Section 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, as 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 (if he is then serving in such
capacity). 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 for 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.
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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 two 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 two 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 2007. 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 2008.
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.
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4.
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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:
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(a)
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A
base annual base salary of $265,000.00 as of the date of amendment, 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.
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(b)
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An
annual incentive bonus for each fiscal year (commencing with the 2004
fiscal year) as determined by the President and Chief Executive Officer,
subject to review and approval by the Compensation Committee of 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.
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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.
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6.
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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.
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7.
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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.
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8.
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Termination.
The employment of the Executive may be terminated as
follows:
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(a)
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By
the Company, by action taken by its Board or its President and Chief
Executive Officer, 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):
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(i)
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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 or its President and Chief Executive
Officer 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;
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(ii)
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If
the Executive shall have engaged in conduct involving fraud, deceit,
personal dishonesty, or breach of fiduciary
duty;
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(iii)
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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 or its President and Chief Executive Officer, has
adversely affected, or may adversely affect, the business or reputation of
the Company as determined by the Board or its President and Chief
Executive Officer;
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(iv)
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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 or its President and Chief Executive
Officer;
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(v)
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If
the Executive shall have filed, or had filed against him, any petition
under the federal bankruptcy laws or any state insolvency laws;
or
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(vi)
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If
any banking authority having supervisory jurisdiction over the Holding
Company or the Bank initiates any proceedings for removal of the
Executive.
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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
two 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.
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(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 two 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.
“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.
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(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.
(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.
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(f)
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By
the Company, by action taken by its Board or its President and Chief
Executive Officer, 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 two 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.
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(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.
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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.
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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.
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10.
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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.
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11.
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Injunction Without
Bond. In the
event there is a breach or threatened breach by the Executive of the
provisions of Sections 10, 12, or 13, the Company shall be entitled to an
injunction without bond to restrain such breach or threatened breach, and
the prevailing party in any such proceeding will be entitled to
reimbursement for all costs and expenses, including reasonable attorneys’
fees in connection therewith. Nothing herein shall be construed as
prohibiting the Company from pursuing such other remedies available to it
for any such breach or threatened breach including recovery of damages
from the Executive.
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12.
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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.
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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.
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14.
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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.
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10
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15.
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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.
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Governing Law. This
Agreement shall be construed in accordance with and shall be governed by
the laws of the State of Florida.
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17.
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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:
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(a)
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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.
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(b)
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Unless
the Parties agree otherwise, the arbitration proceedings shall take place
in the city where the headquarters of the Holding Company is located, and
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.
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(c)
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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.
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11
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18.
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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.
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19.
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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.
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20.
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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.
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21.
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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.
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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.
12
"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). 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). Bona fide leave of absence means that there is
a reasonable expectation that the Executive will return to perform services for
the Company.
13
(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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||||
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By:
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By:
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Xxxxxx Xxxxx
|
||||
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President
and Chief Executive Officer
|
||||
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“EXECUTIVE”
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By:
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Xxxxxxx X. Xxxxxxxx,
individually
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15
