EXHIBIT 10.22
CHANGE-IN-CONTROL AGREEMENT
This Change-in-Control Agreement ("Agreement") is entered into as of
______________, 2003 ("Effective Date") between Franklin Bank, National
Association ("Bank") and Xxxxxx X. Xxxx ("Xxxx").
IT IS AGREED as follows:
1. SEPARATION FROM EMPLOYMENT DUE TO CHANGE IN CONTROL. In the event of
a Qualifying Event pursuant to a Change in Control (as those terms are defined
below), Bank will pay to Xxxx an amount equal to (a) one (1.0) times Xxxx'x Cash
Compensation for the year, if such Qualifying Event occurs during the first
twelve (12) months of Xxxx'x employment as Senior Vice President - Director of
Human Resources with Bank or (b) one and one-half (1.5) times the average of
Xxxx'x previous three (3) years as Senior Vice President - Director of Human
Resources (or fewer years, if such employment is less than three (3) full years)
of Cash Compensation if such Qualifying Event occurs after Xxxx'x first twelve
(12) months of employment as Senior Vice President - Director of Human Resources
with Bank; provided, however, that Bank shall not be obligated to pay any
portion of this amount if it would constitute an "excess parachute payment" as
defined in Section 280G of the Internal Revenue Code or such successor
provisions. In the event of a Qualifying Event pursuant to a Change in Control,
Xxxx will thereupon be considered one hundred percent (100%) vested with respect
to any unexercised options, warrants and restricted stock grants. As a condition
to the payment by Bank under this Section 1, Xxxx must first execute and deliver
to Bank, in a form prepared by Bank, a release of all claims against Bank,
Franklin Bancorp and other appropriate parties, excluding Bank's performance
under this Section 1 and of Xxxx'x vested rights under Bank sponsored retirement
plans, 401(k) plans and stock ownership plans.
For purposes of this Section 1, "Cash Compensation" means the total of
Xxxx'x base salary and annual cash bonus paid only.
For purposes of this Section 1, "Change in Control" means the
occurrence of any of the following:
(a) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), other than a trustee or other
fiduciary under an employee benefit plan established or
maintained by Bank or Franklin Bancorp, is or becomes the
beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of
Franklin Bancorp representing more than thirty percent (30%)
of the combined voting power of Franklin Bancorp's then
outstanding securities; provided, however, that such
acquisition of more than thirty percent (30%) of the combined
voting power of Franklin Bancorp's outstanding securities will
not constitute a Change in Control if the excess is acquired
in violation of law and the acquirer by court order,
settlement or otherwise disposes or is required to dispose of
all securities acquired in violation of law; or
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(b) upon the purchase of Franklin Bancorp's Common Stock pursuant
to a tender or exchange offer at the point which results in
the sale of more than thirty percent (30%) of the combined
voting power of Franklin Bancorp's then outstanding securities
(other than a tender or exchange offer initiated by Franklin
Bancorp or a trustee or other fiduciary under an employee
benefit plan established or maintained by Bank or Franklin
Bancorp); or
(c) upon consummation and closing of a transaction resulting in
(i) a merger or consolidation of Franklin Bancorp with or into
another institution, other than a merger or consolidation
which would result in the voting securities of Franklin
Bancorp outstanding immediately prior thereto continuing to
represent (either by remaining or by being converted into
voting securities of the surviving entity) more than fifty
percent (50%) of the combined voting power of the voting
securities of Franklin Bancorp or such surviving entity
outstanding immediately after such merger or consolidation);
or (ii) a sale, exchange, lease, mortgage, pledge, transfer,
or other disposition (in one transaction or a series of
related transactions) of all or substantially all of the
assets of Franklin Bancorp which shall include, without
limitation, the sale of assets or earning power aggregating
more than fifty percent (50%) of the assets or earning power
of Franklin Bancorp on a consolidated basis; or (iii) any
liquidation or dissolution of Franklin Bancorp; or (iv) any
reorganization, reverse stock split, or recapitalization of
Franklin Bancorp which would result in a Change in Control.
For purposes of this Section 1, "Qualifying Event" means one of the
following events which occurs during the period commencing one hundred eighty
(180) days prior to the date of a Change in Control and ending on the first
anniversary of a Change in Control:
(a) the termination of Xxxx'x employment by Bank without Cause (as
defined below);
(b) resignation from employment by Xxxx as the result of his
removal from the position of Senior Vice President of Human
Resources of Bank or the material and substantial reduction of
his duties in such position or the relocation of Xxxx from
Bank's current headquarters in Southfield to a location at
least fifty (50) miles away; or
(c) resignation from employment by Xxxx due to the reduction of
Xxxx'x then current base salary or elimination of (i)
eligibility for an annual cash bonus, (ii) eligibility for
long term incentive compensation or (iii) any existing
Benefits (as defined below).
For purposes of this Agreement, "Cause" shall consist of any of the
following:
(a) Xxxx'x willful misrepresentation, fraud, willful dishonesty or
willful breach of a fiduciary duty which is intended to
result, or does result, in his or any person's or entity's
enrichment at the expense of Bank;
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(b) willful misconduct; provided, however, that conduct by Xxxx in
good faith and/or ordinary negligence shall not be considered
"Cause")
(c) failure to perform Xxxx'x duties or failure to follow any
written policy or directive of the Board of Directors of Bank
or Franklin Bancorp, any of which is not remedied by Xxxx
after receipt by him of a written notice from Bank's President
and CEO and/or the Board of Directors of Bank or Franklin
Bancorp specifying the required action and the time period
within which the action must be taken, which period shall not
be less than three (3) days;
(d) willful violation of any law, rule or regulation relating to
the operation of Bank or any of its subsidiaries or
affiliates;
(e) the order of any court or supervising governmental agency with
jurisdiction over the affairs of Bank or any subsidiary or
affiliate;
(f) if Xxxx has a written employment agreement with Bank, his
willful violation of any provision thereof;
(g) Xxxx'x conviction or no contest plea to a felony or crime
involving moral turpitude;
(h) abuse of illegal drugs or other controlled substances or
habitual intoxication; or
(i) willful violation by Xxxx of Bank's published business conduct
guidelines, code of ethics, conflict of interest or other
similar policies.
For purposes of this Agreement, "Benefits" means all Bank sponsored
retirement plans, 401(k) plans, life insurance plans, medical insurance plans,
disability insurance plans, employee stock ownership plans and such other
benefit plans generally available from time to time to other executive employees
of Bank or Franklin Bancorp for which Xxxx qualifies under the terms of the
plans.
The parties have executed this Agreement as of the Effective Date.
WITNESS:
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Xxxxxx X. Xxxx
XXXXXXXX BANK, NATIONAL ASSOCIATION
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By
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Xxxxx X. Xxxxx
Its President and CEO
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