CONSULTING AGREEMENT
This
CONSULTING AGREEMENT (“Consulting
Agreement”) is entered into, as of June 10, 2008 (the "Effective Date"), by
and between Republic First Bancorp, Inc. (the “Company”) and Xxxxxx
X. Xxxx, XX (“Consultant”).
WITNESSETH
WHEREAS,
the Company and Consultant wish to enter into a consulting relationship on the
terms and conditions exclusively set forth in this Consulting
Agreement.
NOW
THEREFORE, in consideration of the mutual covenants and promises set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Consultant hereby
agree as follows:
1. Term;
Termination.
(a) The
initial term of this Consulting Agreement shall commence on the Effective Date
and shall continue until the fourth anniversary of the Effective
Date, unless terminated sooner pursuant to Section 1(b) below (the "Initial
Term"). This Consulting Agreement shall continue in effect for
successive one-year periods thereafter, unless terminated sooner pursuant to
Section 1(b) below or unless notice is given in writing by either party to the
other party – at least 60 days prior to the fourth anniversary of the
Effective Date or prior to any anniversary of the Effective Date thereafter – of
the Company's or Consultant's desire to modify, amend or terminate this
Consulting Agreement (collectively, including the Initial Term, the "Term").
(b) Consultant
may terminate this Consulting Agreement and the Term at any time upon 10 days
advance written notice to the Company. The Company may
terminate this Consulting Agreement and the Term upon written notice to
Consultant only if (i) Consultant engages in willful misconduct or is
grossly negligent in the performance of the "Consulting Services" (as defined
below); (ii) Consultant materially fails or refuses to perform the
Consulting Services after reasonable advance request by the Company; (iii)
Consultant is convicted of, or enters a plea of guilty or nolo contendere to, a felony;
(iv) Consultant engages in any willful or intentional act that is materially
injurious to the reputation, business or business relationships of the Company
or its subsidiaries; (v) Consultant is unable, with reasonable accommodation, to
perform the Consulting Services because of physical or mental impairment; or
(vi) Consultant breaches in any material respect any of his obligations under
Section 4 below. The Term shall also end without any action by the Company upon
the death of the Consultant.
(c) Upon any
termination of Consultant's engagement as a consultant hereunder, the Company
shall pay Consultant all fees and reimburse Consultant for all reasonable
expenses incurred hereunder prior to the date of termination.
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2. Consulting
Services. From time to time during the Term, Consultant shall
provide advisory and consulting services with respect to strategic matters and
opportunities regarding the Company and its business and operations, for a
minimum of 24 hours per month (the "Consulting
Services").
3. Consulting
Fees. As compensation for the Consulting Services, the Company
will pay to Consultant a monthly fee based on a per annum rate of Two Hundred
Fifty Thousand Dollars ($250,000), payable via bank wire transfer on the last
day of each month. In addition, the Company shall reimburse
Consultant for all reasonable out-of-pocket expenses incurred by Consultant in
connection with the performance of the Consulting Services. The
Company shall reimburse all expenses due to Consultant within a reasonable
period after Consultant submits such expenses to the Company for reimbursement
provided that the expenses are incurred during the Term, are submitted to the
Company within (30) days after they are incurred, and otherwise are
substantiated in accordance with the reimbursement policy of the
Company. If any reimbursement is taxable to the Consultant, the
following provisions shall apply: The amount of expenses that are eligible for
reimbursement during the taxable year of the Consultant may not affect the
expenses eligible for reimbursement in any other taxable year. The
reimbursement must be paid to the Consultant within thirty (30) days after the
Consultant submits the related expense reports and receipts. The
right to reimbursement is not subject to liquidation or exchange for another
benefit. A taxable reimbursement otherwise will be made in a manner
intended to avoid the imposition of tax under Section 409A of the Internal
Revenue Code of 1986.
4. Restrictive
Covenants.
(a) Non-Competition.
Consultant hereby covenants and agrees that during the Term, Consultant shall
not, without the written consent of the Company, become an officer, employee,
consultant, director or trustee of any savings bank, savings and loan
association, savings and loan holding company, bank or bank holding
company or credit union, or any direct or indirect subsidiary of any such
entity, which is headquartered in the states of New York, New Jersey or
Pennsylvania or the owner of 10% or greater of the voting equity of any such
entity; provided,
however, that this shall not prohibit or restrict any investment in any
such entity by Hill Xxxxxxxx Capital or any other investment company or
fund with which Consultant is affiliated and the fund manager or advisor for
which is registered with the U.S. Securities and Exchange
Commission.
(b) Confidentiality. Consultant
hereby covenants and agrees that during the Term and for the period ending two
years after the latter of (i) the effective date of termination of this
Consulting Agreement and (ii) the date upon which the Designee ceases to serve
as a director of the Company and the Bank he shall not directly or indirectly
use or disclose, except as required by law or judicial or regulatory proceedings
or as authorized by the Company, any “Company Information” (as defined below)
that Consultant may have or acquire (whether or not developed or compiled by
Consultant) during the Term. The term “Company Information” as used
in this Consulting Agreement shall mean confidential or proprietary information
including
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strategic
plans specific to the Company and its business operations, technical and
financial information and customer or client lists, relating to the Company or
its programs or procedures, including without limitation, information received
by the Company from third parties under confidential
conditions. Notwithstanding the foregoing, the term “Company
Information” shall also include, without limitation, the Company’s computer
database, forms and form letters, form contracts, information regarding specific
transactions, financial information and estimates and long-term planning and
goals specific to the Company and its business operations. The term
“Company Information” shall not include information that has become generally
available to the public other than as a result of disclosure by Consultant in
violation of this Consulting Agreement. Consultant also agrees to
comply with the terms of the Company’s securities trading policy during the
Term. Notwithstanding anything to the contrary set forth herein, the
Company acknowledges that Consultant has been retained due to, among other
things, provide his experience and expertise in the management of the
operations, growth and strategic development of retail and commercial banking
businesses, and the restrictions on disclosure and use of Company Information
set forth in this Section 4(b) shall not be deemed to prohibit Consultant from
utilizing that experience and expertise following termination of the non-compete
covenant set forth in Section 4(a) above in connection with his acting in any
capacity or taking any action that might otherwise be prohibited during the
period of effectiveness of such non-compete covenant.
(c) Non-Solicitation. Consultant
hereby covenants and agrees that during the Term and, if
this Consulting Agreement is terminated prior to the expiration of the
Initial Term, for a period of six (6) months after the effective date of
such termination, Consultant shall not without the written consent of the
Company: (i) solicit, offer employment to, or take any other action
intended to cause any officer or employee of the Company or any of its
subsidiaries to terminate his or her employment and accept employment or become
affiliated with, or provide services for compensation in any capacity whatsoever
to, any savings bank, savings and loan association, bank, bank holding company,
savings and loan holding company, or other financial institution;
(ii) provide any information, advice or recommendation to any officer or
employee of the Company or any of its subsidiaries with respect to any savings
bank, savings and loan association, bank, bank holding company, savings and loan
holding company, or other financial institution, that is intended to
cause such officer or employee of the Company or any of its affiliates or
subsidiaries to terminate his or her employment and accept employment or become
affiliated with, or provide services for compensation in any capacity whatsoever
to, any savings bank, savings and loan association, bank, bank holding company,
savings and loan holding company, or other financial institution; or (iii)
solicit, provide any information, advice or recommendation or take any other
action intended to cause any customer (other than Consultant or any customer
affiliated with or related to Consultant as of the date of this Consulting
Agreement) of the Company or any of its subsidiaries to terminate an existing
business or commercial relationship with the Company or its
subsidiaries.
5. Independent
Contractor Relationship. The manner, means, details or methods
by which Consultant performs the Consulting Services under this Consulting
Agreement shall be solely within Consultant's discretion. The Company
shall
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not have
the authority to, nor shall it, supervise, direct or control the manner, means,
details or methods by which Consultant performs the Consulting Services under
this Consulting Agreement and nothing in this Consulting Agreement shall be
construed to grant the Company any such authority. Consultant shall
not become, by virtue of the consulting relationship described herein, an
employee of the Company. Consultant and the Company acknowledge and
agree that Consultant's relationship with the Company shall be that of an
independent contractor. Nothing in this Consulting Agreement is
intended, or should be construed, to create a partnership, agency or joint
venture between Consultant and the Company.
6. Board
Representation. Subject to the
director qualification standards of each of the Company and Republic First Bank
(the “Bank”), within 30 calendar days of the date of this Consulting Agreement,
the Company shall, and shall cause the Bank to, appoint Consultant’s designee
(the “Designee”) to the Board of Directors of the Company and the Board of
Directors of the Bank, respectively, as a Class III member to serve in
accordance with the articles of incorporation and bylaws of the Company and the
articles of incorporation and bylaws of the Bank. During the Term,
(i) with respect to each meeting of the Company's stockholders at which the
Designee's then-current term expires, the Company's board of directors shall
nominate the Designee and the Company shall recommend to its stockholders the
election of the Designee to the Company's board of directors, and the Company
shall solicit proxies for election of the Designee to the same extent as it
solicits proxies for its other nominees for the board of directors, and (ii)
with respect to each meeting of the Bank's stockholder (or any action by written
consent in lieu of such meeting) at which the Designee's then-current term
expires, the Company shall elect the Designee to serve on the Bank's board of
directors, in each case subject to the director qualification standards of the
Company and the Bank, respectively. During the Term, in the event
that the Designee is unable to continue serving as a director of the Company and
the Bank as a result of illness, incapacity, death, retirement, resignation or
any other reason, Consultant shall designate an individual to replace the
Designee as a director of the Company and the Bank, subject to the director
qualification standards of the Company and the Bank, respectively, and the
Company shall promptly take all action necessary to cause such individual to be
elected to the boards of directors of the Company and the Bank (and such
individual shall constitute the "Designee" for all purposes
hereunder). The Designee shall be entitled to the same compensation,
expense reimbursement and indemnification in connection with his or her service
as a director as are enjoyed by the other members of the board of directors of
the Company and the Bank. Upon termination of this Consulting Agreement pursuant
to Section 1(b) by the Company or by the Consultant, or, if later, on such date
as Consultant, together with (i) his affiliates, (ii) the persons listed on the
attached Exhibit A and (iii) any other person who may be deemed, with
Consultant, to constitute a “group,” (within the meaning of Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder), is not the
record or beneficial owner of at least 4.9% of the outstanding Common Stock of
the Company, Consultant shall use his reasonable best efforts to cause the
Designee to resign from service as a director of the Company and the
Bank.
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7. Other
Agreements of the Consultant. In consideration
of the provisions of this Consulting Agreement, during the Term and, if this
Consulting Agreement is terminated prior to the expiration of the Initial Term,
during the period ending on and including the date on which the Designee ceases
to serve as a director of the Company and the Bank, Consultant agrees as
follows:
(a) Obligation Regarding
Voting. To the extent permitted by law, Consultant shall vote or cause to
be voted Company stock beneficially owned by Consultant in favor of Company
proposals regarding ratification of the Company’s auditors and election of
Company nominees to its Board of Directors.
(b) Negative Covenants.
Unless required by law or court order, Consultant shall not, directly or
indirectly:
i. seek or
accept representation of more than one member of the Board of Directors of the
Company or the Bank;
ii. seek to
have any representative serve as the Chairman of the Board of directors, or
chairman of an executive or similar committee of the Company or the Bank’s Board
of Directors or as President or Chief Executive Officer of the Company or
the Bank;
iii. propose a
director in opposition to nominees proposed by the management of the Company or
the Bank for the Board of Directors of the Company or the Bank,
respectively;
iv. support,
initiate or participate in any proxy contest against the Company or the
Bank;
v. cause,
cooperate or otherwise aid in the preparation of any press release or other
publicity (other than filings required by securities laws) concerning the
Company or the Bank or its operations without prior approval of the Company
unless required by law, in which case notice of such requirement shall be given
to the Company or otherwise make any public statement in opposition to, or that
would reflect negatively against, the Company or the Bank, the Board of
Directors of the Company or the Bank, or any of the officers of the Company or
the Bank;
vi. directly
or indirectly participate or act in concert with any affiliate, group or other
person to participate, by encouragement or otherwise, in any litigation seeking
to effect or facilitate (i) a change in control, consolidation, merger or sale,
conveyance, transfer or other disposition of all or substantially all of the
property and assets of the Company or the Bank, (ii) termination or removal of
any of the Company’s officers or directors or (iii) a proposal regarding any
action described in clauses (i) or (ii) above;
vii. seek to
amend, or otherwise take action to change, the articles of incorporation,
charter, or bylaws of the Company or the Bank;
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viii. acquire
beneficial ownership of 10.0% or more of the outstanding common stock of the
Company; or
ix. assist,
aid or abet any of its affiliates or associates that are not parties to this
Consulting Agreement or act in concert with any person or company to do any of
the foregoing.
8. Specific
Performance. The parties acknowledge that the covenants set
forth in Sections 4, 6 and 7 are under all of the circumstances reasonable and
necessary for the protection of the Company and its respective business and the
Consultant, as applicable. In the event that Company or the
Consultant, as applicable, shall breach any of the provisions of Sections 4, 6
or 7, or in the event that any such breach is threatened by such party, in
addition to and without limiting or waiving any other remedies available to the
non-breaching party, at law or in equity, the Company or the Consultant, as
applicable, shall be entitled to immediate injunctive relief in any court,
domestic or foreign, having the capacity to grant such relief, without the
necessity of posting a bond, to restrain any such breach or threatened breach
and to enforce the provisions of Sections 4, 6 and 7 while such provisions are
in effect. The Company and the Consultant acknowledge and agree that
there is no adequate remedy at law for any such breach or threatened breach and,
in the event that any action or proceeding is brought seeking injunctive relief,
the breaching party shall not use as a defense thereto that there is an adequate
remedy at law. Nothing in this Section 8 shall affect or restrict or
limit any other provisions of this Consulting Agreement, including Company’s or
the Consultant’s right to terminate this Consulting Agreement pursuant to
Section 1 hereof.
9. Assignment.
The obligations under this Consulting Agreement are personal to Consultant and
may not be assigned by Consultant. This Consulting Agreement is
binding on, and will inure to the benefit of, the Company and its successors and
assigns.
10. Counterparts. This
Consulting Agreement may be executed in several counterparts, each of which is
an original. It shall not be necessary in making proof of this
Consulting Agreement or any counterpart hereof to produce or account for any of
the other counterparts.
11. Governing
Law. This Consulting Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey, without regard
to its choice-of-law rules.
12. Entire
Agreement; No Oral Modifications. This Consulting Agreement
sets forth the entire agreement between Consultant and the Company with respect
to the subject matter contained therein and supersedes any and all other prior
agreements, promises, covenants, arrangements, negotiations, communications,
representations or warranties. No waiver or modification in whole or
in part of this Consulting Agreement, or any term or condition hereof, shall be
effective against any party unless in writing and duly signed by the party
sought to be bound.
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13. Notice. For
the purposes of this Consulting Agreement, notices, demands and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when delivered or (unless otherwise specified) mailed by
United States certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to Consultant:
Xxxxxx X.
Xxxx, XX
Xxxx
& Co.
00000
Xxxxxxx Xxx
Xx.
Xxxxxx, XX 00000
If to Company:
Republic
First Bancorp, Inc.
00 Xxxxx
00xx Xxxxxx
Xxxxxxxxxxxx,
XX 00000
Attention:
Xxxxx X. Xxxxxxx
Chairman,
President and Chief Executive Officer
or to
such other address as any party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
14. Validity. The
invalidity or unenforceability of any provision or provisions of this Consulting
Agreement shall not affect the validity or enforceability of any other provision
of this Consulting Agreement, which shall remain in full force and
effect.
15. Representations
of Consultant. The Consultant hereby represents to the Company as
follows: (i) except for the Amended and Restated Employment Agreement between
Consultant and Commerce Bancorp, Inc., dated January 1, 2006, he is not bound by
the terms of any agreement with any previous employer or other party to refrain
from using or disclosing any trade secret or confidential or proprietary
information in the course of his employment with the Company or to refrain from
competing, directly or indirectly, with the business of such previous employer
or other party, or by any other agreement that could restrict the Consultant’s
ability to perform the Consulting Services contemplated hereby; (ii) his
performance of Consulting Services as an independent contractor of the Company
does not and will not breach any agreement to keep in confidence proprietary
information, knowledge or data acquired by him in confidence or in trust prior
to his engagement of providing consulting services as an independent contractor
to the Company; (iii) to his knowledge, the Consultant is not prevented from
performing the Consulting Services by any applicable statute, rule, or
regulation or regulatory authority; (iv) he has carefully read this Consulting
Agreement, understands the contents herein, and freely and voluntarily assents
to all of the terms and conditions of this Consulting Agreement; and (v) he has
had an opportunity to fully discuss and review the terms of this Consulting
Agreement with an attorney.
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16. Survival. The
provisions of Sections 4(b), 4(c) and 7 shall survive the termination of this
Consulting Agreement and shall terminate only at the conclusion of the
respective periods stated therein; provided, however, that if the Company
terminates this Consulting Agreement, the provisions of Section 7 shall not
survive. Except as set forth above, the provisions of this Consulting
Agreement shall not survive termination of this Consulting
Agreement.
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IN
WITNESS WHEREOF, Consultant and a duly authorized representative of the Company
have executed this Consulting Agreement as of the Effective Date.
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XXXXXX
X. XXXX, XX
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REPUBLIC
FIRST BANCORP, INC.
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By:
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Xxxxxx
X. Xxxx, XX
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Xxxxx
X. Xxxxxxx
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Chairman,
President and Chief
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Executive
Officer
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Exhibit
A
Xxxx
Xxxxxxxxx
Xxxxx
Xxxxx
X.X.
Xxxxxx Xx.
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