EXHIBIT 10.13
FORM OF AMENDED AND RESTATED SEVERANCE AGREEMENT
THIS AGREEMENT is made as of this 21st day of November, 1995, between
FRANKLIN BANK, NATIONAL ASSOCIATION, ("Franklin") and __________________________
(the "Director").
RECITALS
Franklin and the Director, a non-employee member of the Board of
Directors, entered into that certain Severance Agreement dated October 6, 1993,
pursuant to which the Director was provided with certain severance compensation
in the event of a change in control of Franklin. Effective November 23, 1995,
the Board of Directors approved various modifications to the original Severance
Agreement. In recognition of the Director's continued loyalty to Franklin, the
benefits that have derived to Franklin from the Director's service as a director
on behalf of Franklin and in recognition of the tremendous benefits to
shareholders of the Director continuing as a director, and possibly continuing
during any transition period involving a change in control, the Board of
Directors has determined to amend and restate that certain Severance Agreement
in accordance with the terms set forth herein (as amended and restated referred
to as the "Agreement").
Franklin's Board of Directors recognizes that in the current bank
consolidation environment, the possibility of a change in control may exist with
respect to Franklin as with any other publicly held corporation, bank or
financial institution, and that the uncertainty posed by such a possibility may
prove distracting to the Director to the detriment of Franklin, its affiliates
and its shareholders.
Franklin's Board of Directors has determined that it is appropriate to
reinforce and encourage the continued attention and dedication of the Director
to Director's service as a director without distraction in the potentially
disturbing circumstances arising from the possibility of a change in control of
Franklin. Franklin, is, therefore, willing, in order to provide the Director
with a measure of security with respect to Director's service with Franklin in
the event of a change of control of Franklin, to provide the severance
compensation set forth in detail below, so that the Director Will be in a
position to act with respect to a possible change in control of Franklin in the
best interests of Franklin and its shareholders, without concern as to the
Director's own financial security, and in order to create a non-disruptive and
successful transition in the event of a change in Control.
This Agreement sets forth the severance compensation which Franklin
agrees it will pay to the Director solely if the Director's service with
Franklin terminates under one of the circumstances described herein effective
upon or within three (3) years following a change in control of Franklin. Except
where expressly provided, this Agreement is not intended to modify and shall not
modify the terms of the Director's service with Franklin under any other
circumstances. The Agreement simply provides the Director with certain severance
benefits upon the occurrence of certain events of termination following a change
in control of Franklin.
Accordingly, in order to induce the Director to remain in the service
of Franklin prior to and following a change in control of Franklin, and in
consideration of the promises and the respective covenants and agreements of the
parties herein contained, the parties agree as follows:
1. TERM.
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This Agreement will begin on the date entered above (the "Commencement
Date") and will continue in effect through the third anniversary of the
Commencement Date. However, on the first anniversary of the Commencement Date,
and on each such anniversary date thereafter, the term of this Agreement will be
extended automatically for one (1) additional year (resulting in a continual
three (3) year term), unless, not later
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than six (6) months prior to such anniversary date, Franklin gives written
notice to the Director that it has elected not to extend this Agreement (in
which event the one (1) additional year will not be added to the term so that
the term will be for two (2) years from the anniversary of the year in which
such notice has been provided). Notwithstanding the above, if a Change in
Control as defined below occurs during the term of this Agreement, this
Agreement will continue in effect for at least thirty six (36) months beyond the
end of the month in which any Change in Control occurs.
2. CHANGE IN CONTROL.
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For purposes of this Agreement, a Change in Control of Franklin shall
be deemed to have occurred upon the occurrence of any of the events described in
Subsections (i), (ii), (iii), (iv), (v) and (vi) below, whether occurring prior
to, subsequent to or simultaneous to each other. Each event (including each
occurrence of an event within (i), (ii), (iii), (iv), (v) or (vi)) constitutes a
separate Change in Control for purposes of this Agreement.
(i) 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 Franklin, is or becomes the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of Franklin representing
more than 10% of the combined voting power of Franklin's then
outstanding securities; provided, however, that such
acquisition of more than 10% of the combined voting power of
Franklin's outstanding securities will not constitute a Change
in Control under this Subsection (i) if the excess is acquired
in violation of law and the acquiror by court order,
settlement or otherwise disposes or is required to dispose of
all securities acquired in violation of law; or
(ii) upon the first purchase of Franklin's Common stock pursuant to
a tender or exchange offer which results in the sale of more
than 10% of the combined voting power of Franklin's then
outstanding securities (other than a tender or exchange offer
initiated by Franklin or a trustee or other fiduciary under an
employee benefit plan established or maintained by Franklin);
or
(iii) upon (A) a merger or consolidation of Franklin with or into
another institution, other than a merger or consolidation,
which would result in the voting securities of Franklin
outstanding immediately prior thereto continuing to represent
(either by remaining or by being converted into voting
securities of the surviving entity) at least 90% of the
combined voting power of the voting securities of Franklin or
such surviving entity outstanding immediately after such
merger or consolidation); or (8) 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 which shall
include, without limitation, the sale of assets or earning
power aggregating more than 50% of the assets or earning power
of Franklin on a consolidated basis; or (C) any liquidation or
dissolution of Franklin; or (D) any reorganization, reverse
stock split, or recapitalization of Franklin which would
result in a Change in Control; or
(iv) if during any period of two consecutive years (not including
any period prior to the execution of this Agreement),
individuals who at the beginning of such period constitute the
Board of Directors of Franklin (the "Continuing Directors")
cease for any reason to constitute at least two-thirds
thereof; provided, however, that any individual (other than a
director designated by a person described in Subsection (i)
above) whose election or nomination for the election as a
member of the Board of Directors of Franklin by Franklin's
stockholders was approved by a vote
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of at least two-thirds of the Continuing Directors then in
office shall be deemed a Continuing Director; or
(v) nomination of a non-management sponsored director(s) for
election or appointment to the Board of Directors of Franklin;
or
(vi) any transaction or series of related transactions having,
directly or indirectly, the same effect as any of the
foregoing; or any agreement, contract, or other arrangement
providing for any of the foregoing.
3. TERMINATION FOLLOWING CHANGE IN CONTROL.
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A. COMPENSATION UPON TERMINATION. If effective upon or
within three (3) years following a Change in Control, the Director is no longer
a director of Franklin, whether, among other reasons, because of failure to
nominate or re-elect the Director or because of a termination of the Director's
service as a director either by the Director or by the Board of Directors or by
shareholders of Franklin or otherwise (except as a result of the Director's
death, Disability (as defined in Subsection 3C below), removal for Cause (as
defined in Subsection 3E below) or the director's resignation for other than
Good Reason (as defined in Subsection 3F below>>, the Director shall receive the
benefits provided in Section 4 below.
B. DEATH. If a Change in Control occurs while the Director is a
director of Franklin and within three (3) years following the Change in Control
the Director dies, this Agreement shall terminate and Franklin shall pay to the
Director's estate or beneficiary, as applicable, the Director's full salary,
full Benefit Plans, as defined below in Subsection 3F(iii), full Securities
Plans, as defined in Subsection 3F(iv), and full Incentive Plans, as defined in
Subsection 3F(v), to the extent accrued, earned or vested, in effect at the time
of death. The estate or beneficiary, as applicable, shall have all such
additional rights as may be provided under any of such Plans to the estate or
beneficiary or under separate insurance coverage. Any payment of salary or
otherwise due under such Plans shall be paid no later than ten (10) days
following the date of death.
C. DISABILITY. If, a Change in Control occurs while the Director
is a director of Franklin and within three (3) years following the Change in
Control, the Director becomes incapacitated due to physical or mental illness,
and the Director shall have been absent from twelve (12) consecutive Board of
Directors' meetings and if within thirty (30) days after written Notice of
Termination as defined in Section 3G below is thereafter given by Franklin, the
Director shall not have attended the next meeting of the Board of Directors,
Franklin may terminate this Agreement for "Disability" and shall pay the
Director the Director's full salary, full Benefit Plans, as defined below in
Subsection 3 F(iii), full Securities Plans, as defined below in Subsection
3F(iv), and full Incentive Plans as defined below in Subsection 3F(v), to the
extent accrued, earned or vested, from the commencement of the Disability period
through the Date of Termination as defined in Subsection 3H below at the rate in
effect at the time of the commencement of the disability period. In addition,
the disabled Director shall have such additional rights under any of such Plans
as are provided to a disabled Director under such Plans or under separate
insurance coverage. Any payment of salary or otherwise due under such Plans
shall be paid no later than ten (10) days following the Date of Termination.
D. TERMINATION BY DIRECTOR WITHOUT GOOD REASON. If a Change in
Control occurs while the Director is a director of Franklin and within three (3)
years following the Change in Control, the Director resigns the Director's
service as a director without Good Reason, as defined in 3F, the Director shall
provide Franklin with Notice of Termination and Franklin shall pay the Director
the Director's full salary, full benefit plans, as defined below in Subsection
3F(iii), full Securities Plans, as defined in Subsection 3F(iv), and full
Incentive Plans, as defined below in Subsection 3F(v), to the extent accrued,
earned or vested, through the Date
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of Termination as defined in Subsection 3H below at the rate in effect at the
time Notice of Termination is given. In addition, the Director shall have such
additional rights under any of such Plans as are provided to Director under such
Plans. Any payment of salary or otherwise due under such Plans shall be paid no
later than ten (10) days following the Date of Termination.
E. TERMINATION FOR CAUSE. If a Change in Control occurs while the
Director is a director of Franklin and within three (3) years following the
Change in Control, the Director is removed by shareholders for Cause as defined
below at a properly called meeting of shareholders which is called for the
purpose of removing the Director for "Cause," Franklin shall provide the
Director with Notice of Termination and shall pay the Director the Director's
full salary, full Benefit Plans, as defined below in Subsection 3F(iii), full
Securities Plans as defined in Subsection 3F(iv), and full Incentive Plans as
defined below in Subsection 3F(v), to the extent accrued or earned or vested,
from the commencement of the actions giving rise to the conviction through the
Date of Termination as defined in Section 3H below at the rate in effect at the
time Notice of Termination is given. In addition, the Director shall have such
additional rights under any of the Plans as are provided under such Plans. Any
payment of salary or otherwise due under such Plans shall be paid no later than
ten (10) days following the Date of Termination. For purposes of this Agreement,
shareholders shall have "Cause" to remove a Director only on the basis of
conviction of the Director of a felony or any crime involving embezzlement,
fraud or misrepresentation. Notwithstanding the foregoing, the Director shall
not be deemed to have been removed for Cause unless and until there shall have
been delivered to the Director a copy of a resolution duly adopted by the
affirmative vote of not less than two-thirds of the entire membership of
Franklin's Board of Directors at a regular or special meeting of the Board held
for the purpose (after reasonable notice to the Director and an opportunity for
the Director, together with the Director's counsel, to be heard before the
Board), finding that in the good faith opinion of the Board, the Director was
guilty of the conduct resulting in the conviction and specifying the particulars
thereof in detail.
F. TERMINATION BY DIRECTOR FOR GOOD REASON. The Director may
resign as a director for Good Reason. For purposes of this Agreement "Good
Reason" shall mean, without Director's express written consent, any of the
following:
(i) the assignment to the Director by Franklin of duties
materially different than those which existed immediately
prior to a Change in Control of Franklin, or any removal of
the Director from any committees he served on immediately
prior to the Change in Control, or failure to nominate the
Director as a Director, or the failure to re-elect the
Director to any of the committees he was a member of
immediately prior to the Change in Control;
(ii) a reduction by Franklin in the Director's compensation as in
effect on the date hereof or as the same may be increased from
time to time during the term of this Agreement;
(iii) any failure by Franklin to continue in effect for such
Director any benefit plan or arrangement or perquisite
(including, without limitation, payment of club dues,
providing an automobile or automobile allowance, payment of
all business expenses of operation of the automobile,
Franklin's group life insurance plan and medical, dental,
accident and disability plans) in which the Director is
participating as of the day prior to the Change in Control of
Franklin (or any other plans providing the Director with
substantially similar benefits) (hereinafter referred to as
"Benefit Plans"), or the. taking of any action by Franklin
which would adversely affect the Director's participation in
or materially reduce the Director's benefits under any such
Benefit Plan or deprive the Director of any material fringe
benefit enjoyed by the Director as of the day prior to the
Change in Control of Franklin;
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(iv) any failure by Franklin to grant Director an amount of stock
options designed to produce a value to Director substantially
consistent with the average value of stock options received by
officers of Franklin for the three years immediately prior to
the Date of Termination and any failure by Franklin to
continue in effect any plan or arrangement to receive
securities of Franklin (including, without limitation, any
plan or arrangement to receive and exercise stock options,
stock appreciation rights, restricted stock or grants thereof)
in which the Director is participating as of the day prior to
the Change in Control of Franklin (or plans or arrangements
providing Director with substantially similar benefits)
hereinafter referred to as "Securities Plans") or the taking
of any action by Franklin which would adversely affect the
Director's participation in or materially reduce the
Director's benefits under any such Securities Plan;
(v) any failure by Franklin to continue in effect any incentive
plan or arrangement in which the Director is participating as
of the day prior to the Change in Control of Franklin (or any
other plans or arrangements providing the Director with
substantially similar benefits) (hereinafter referred to as
"Incentive Plans") or the taking of any action by Franklin
which would adversely affect the Director's participation in
any such Incentive Plan or reduce the Director's benefits
under any such Incentive Plan;
(vi) a relocation of Franklin's principal executive offices outside
of Oakland County, Michigan or the relocation of the meeting
place of Directors to any place outside of Oakland County,
Michigan;
(vii) any material breach by Franklin of any provision of this
Agreement;
(viii) any failure by Franklin to obtain the assumption of this
Agreement by a successor or assignee of Franklin; or
(ix) any purported termination of (a) this Agreement because of the
Disability of the Director or (b) the Director by the Board of
Directors or shareholders of Franklin, including a failure to
nominate or re-elect Director, which is not effected pursuant
to a Notice of Termination satisfying the requirements of
Section 3H; for purposes of this Agreement, no such purported
termination shall be effective.
Director's right to terminate the Director's service as a director
pursuant to this Subsection F shall not be affected by Director's incapacity due
to physical or mental illness. Director's continued service shall not constitute
consent to, or a waiver of rights with respect to, any circumstance constituting
Good Reason hereunder.
G. NOTICE OF TERMINATION. Except with respect to the Director's
death, any termination by Director or failure to nominate or re-elect Director
or termination of Director or termination of this Agreement because of the
Disability of the Director shall be communicated by a written Notice of
Termination to the other party hereto in accordance with Section 11 hereof. For
purposes of this Agreement, a "Notice of Termination" shall mean a written
notice which shall indicate those specific termination provisions relied upon
and which sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination.
H. DATE OF TERMINATION. "Date of Termination" shall mean (a) if
the Agreement is terminated because of Director's Disability, thirty (30) days
after Notice of Termination is given (provided that Director shall not have
attended the next Board Meeting during such thirty (30) day period) and (b) if
Director's service as director is terminated for any reason other than death or
Disability, thirty (30) days after Notice of Termination is given.
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4. SEVERANCE COMPENSATION UPON TERMINATION OF EMPLOYMENT.
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If effective upon or within three (3) years following a Change in
Control, the Director is no longer a director of Franklin, whether, among other
reasons, because of a failure to nominate or re-elect the Director or because of
a termination of the Director's service as a director either by the Director or
by the Board of Directors or by shareholders of Franklin or otherwise (except as
a result of the Director's death, Disability (as defined in Subsection 3C
above), removal for Cause (as defined in Subsection 3E above) or the Director's
resignation for other than Good Reason (as defined in Subsection 3F above)),
then the Director shall receive the benefits provided below:
(1) Franklin shall pay the Director the Director's full
compensation, full Benefit Plans, full Securities
Plans, and full Incentive Plans through the Date of
Termination, to the extent accrued, earned or vested,
at the highest rate or amount in effect prior to the
Date of Termination; and
(2) In lieu of any further compensation to Director for
periods subsequent to the Date of Termination,
Franklin shall pay as severance pay to Director a
lump sum severance payment equal to $15,000 per year
of service as a Director of Franklin for each full
year and a pro rata amount for any fractional year.
In addition, Franklin shall pay as severance to
Director an amount which after applying the
provisions of Section 4999 of the Code, as amended
(or as replaced by any other Code Section) ("Section
4999") would provide Director with the same
approximate aggregate cash under Section 4 of the
Agreement that Director would have received under
Section 4 of the Agreement but for the application of
Section 4999; and
(3) In addition, in lieu of exercising or retaining the
Director's right to exercise any outstanding stock
options then held by Director, Director may elect to
surrender to Franklin the Director's rights in such
outstanding stock options (whether or not then
exercisable) then held by Director, and, upon such
surrender, Franklin shall pay to Director an amount
in cash per share equal to the aggregate of the
difference between (a) the option exercise prices of
the shares subject to such surrendered options and
the greater of (i) the average price per share paid
in connection with the acquisition of shares in
connection with a Change in Control if such shares
were acquired by the payment of cash or the then fair
market value per option share or the consideration
paid for such shares if such shares were acquired for
consideration other than cash, (ii) the price per
share paid in connection with any tender offer for
shares of Franklin Common Stock leading to a Change
in Control, or (iii) the mean between the high and
low selling prices of such stock on the NASDAQ
National Market on the Date of Termination.
Notwithstanding the requirement that Franklin pay
Director at the time or times set forth below, if
applicable, the payment shall pursuant to this
Subsection (3) be delayed so that it is paid promptly
in a manner which is in compliance with Section 16(b)
of the Exchange Act; and
(4) In addition, Franklin shall maintain in full force
and effect, for the continued benefit of the Director
for 3 years; all Benefit Plans in which the Director
was entitled to participate during the 3 years prior
to the Date of Termination, provided that the
Director's continued participation is possible under
the general terms and provisions of such Benefit
Plans. In the event that the Director's participation
in any Benefit Plan is barred, Franklin shall arrange
to provide the Director with benefits substantially
similar to those which the
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Director would otherwise have been entitled to
receive under such Benefit Plan from which the
Director's continued participation is barred; and
(5) The payments provided for in Subsections (2) and (3)
above shall initially be paid by Franklin to the
Trust referenced in Section 5 below within five (5)
days following a "Potential Change of Control". A
Potential Change of Control means: (i) Franklin
entering into or the Board of Directors authorizing
an agreement, the consummation of which would result
in the occurrence of a Change in Control; (ii) any
person publicly announces an intention to take or to
consider taking actions which if consummated would
constitute a Change in Control; or (iii) adoption by
the Board of Directors of Franklin of a resolution to
the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred. The initial
payment shall be an-estimate of the payments provided
for in Subsections (2) and (3) above (the "Initial
Payment") as determined by Franklin's independent
accountants. The actual calculation of the payments
provided for in Subsections (2) and (3) above (the
"Actual Payment") shall be made no later than 5 days
following the Date of Termination by the same
independent accountants who made the calculation of
the Initial Payment and such calculation shall be
delivered during this five (5) day period to Franklin
and to the Director. The Director may, by notice
given to Franklin no later than eight (8) days
following the Date of Termination, contest the
calculation of the Actual Payment by the independent
accountants and give notice to Franklin of the amount
calculated by the Director. In such event, the
Director may designate an independent certified
public accountant (the "Designated Auditor") to
review the calculations. The Designated Auditor and
the independent accountants who prepared the
calculation of the Actual Payment shall then select a
third independent accountant and the three
accountants shall determine the Actual Payment no
later than twenty-one (21) days following the Date of
Termination. If the three groups of accountants
cannot come to an agreement, the Actual Payment will
be the average of the calculation of each of the
three groups of accountants.
The Actual Payment (less tile Initial Payment paid to
the Trust (the "Final Payment") shall be paid by
Franklin to the Director no later than ten (10) days
following the Date of Termination, unless the
Director has contested the calculation of the Actual
Payment as provided above, in which case, the Final
Payment shall be paid by Franklin to the Director no
later than twenty-eight (28) days following the Date
of Termination. If Franklin does not timely pay the
Director, for every day it is late in payment to the
Director, and/or if Franklin causes the Trust not to
pay the Director (whether through litigation or other
means), for every day that the payment is late,
Franklin shall pay to the Director an additional five
(5.0%) percent of the Actual Payment (not including
the 5.0% late charges). In the event that the amount
of the Initial Payment exceeds the Actual Payment
determined to have been due, the Director shall
return the excess to Franklin and such excess shall
constitute a loan by Franklin to the Director on the
fifth day after demand by Franklin (together with
interest at the rate provided in Section 1274
(b)(2)(B) of the Code); and
(6) Franklin also shall pay to Director all legal fees
and expenses incurred by Director as a result of such
termination (including all such fees and expenses, if
any, incurred in contesting or disputing any such
termination) or in seeking to obtain or enforce any
right or benefit provided by this Agreement
(including, but not limited to, the expenses of any
tax counsel and independent accountants employed or
in connection with any tax audit or
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proceeding to the extent attributable to the
application of Section 4999 of the Code to any
payment or benefit provided hereunder). Such payments
shall be made within 5 days after Director's request
for payment accompanied with such evidence of fees
and expenses incurred as Franklin reasonably may
require.
5. ESTABLISHMENT OF TRUST.
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Franklin shall promptly create a Trust for the benefit of Director. In
the event of a Potential Change in Control, Franklin shall fund such Trust as
provided in Section 4 above. Among other things, the Trust Agreement shall
provide that the Trust shall not be revoked or the principal invaded without the
written consent of Director. The Trust Agreement shall also provide that upon
receipt by the Trust of notification by either the Board of Directors of
Franklin or the Director of a Change in Control and of the termination of
Director, as certified or attested to by (i) the Board of Directors, or (ii) by
the Director and Xxxxx X. Xxxxx in his individual capacity or Read X. Xxxx in
his individual capacity, the Trustee shall pay the Initial Payment to the
Director no later than the next business day following receipt of such
notification.
The Trustee shall be a national or state bank or a holding company
thereof having a consolidated net worth of not less than $10,000,000, selected
by Franklin. Nothing in this paragraph shall relieve Franklin of any of its
obligations under this Agreement, except that actual disbursements from the
Trust to the Director in satisfaction of payments under this Agreement, will be
applied to reduce Franklin's obligations under this Agreement, to the extent of
such disbursements. Any funds, including interest or investment earnings
thereon, remaining in the Trust and designated for the Director shall revert and
be paid to Franklin if (A) a court of competent jurisdiction determines that the
circumstances giving rise to that particular funding of the Trust no longer
exists; or (B) the Board of Directors of Franklin and the Director direct the
Trustee to release the funds designated for the Director. A copy of the Trust
Agreement is attached as Exhibit A to this Agreement.
Notwithstanding any other provision of this Section 5 to the contrary,
the Trust Agreement shall provide that Trustee's obligation to pay the Director
the Initial Payment shall be suspended upon receipt of a notice of determination
by the Office of the Comptroller of the Currency (the "OCC") that Franklin is in
a troubled condition at the time payment would otherwise be due and owing and
that the Severance Payments are prohibited under banking laws and regulations.
The Trustee shall thereafter hold or release the Initial Payment as directed by
the OCC.
6. NO OBLIGATION TO MITIGATE DAMAGES: NO EFFECT ON OTHER
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CONTRACTUAL RIGHTS.
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A. The Director shall not be required to mitigate damages or the amount
of any payment provided for under this Agreement by seeking other employment or
other service as a director, or otherwise, nor shall the amount of any payment
provided for under this Agreement be reduced by any compensation earned by the
Director as the result of employment by another employer, service as a director
of another corporation or otherwise, after the Date of Termination, by
retirement benefits, by offset against any amount claimed to be owed by Director
to Franklin (except as provided in Section 4(5) above), or otherwise.
B. Except as provided herein, the provisions of this Agreement, and any
payment provided for hereunder, shall not increase or reduce any amounts
otherwise payable, or in any way increase or diminish the Director's existing
rights, or rights which would accrue solely as a result of the passage of time,
under any Benefit Plan, Incentive Plan or Securities Plan, employment agreement
or other contract, plan or arrangement.
7. SUCCESSOR TO FRANKLIN.
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X. Xxxxxxxx will require any successor or assignee (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Franklin, by agreement in
form and substance satisfactory to the Director, expressly, absolutely and
unconditionally to assume and agree to perform this Agreement in the same manner
and to the same extent that Franklin would be required to perform it if no such
succession or assignment had taken place. Any failure of Franklin to obtain such
agreement prior to the effectiveness of any such succession or assignment shall
be a material breach of this Agreement and shall entitle the Director to
terminate the Director's employment for Good Reason. As used in this Agreement,
"Franklin" shall include any successor or assign to its business and/or assets
as aforesaid which executes and delivers the agreement provided for in this
Section 7 or which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law, or otherwise. If at any time during the term
of this Agreement the Director serves as a director of any institution a
majority of the voting securities of which is then owned by Franklin, "Franklin"
as used in this Agreement shall in addition include such institution. In such
event, Franklin agrees that it shall pay or shall cause such institution to pay
any amounts owed to the Director pursuant to Section 4 hereof.
B. This Agreement shall inure to the benefit of and be enforceable by
the Director's personal and legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Director should
die while any amounts are still payable to Director hereunder, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Director's devisee, legatee, or other designee or, if
there be no such designee, to the Director's estate.
8. WITHHOLDING OF TAXES.
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Franklin may withhold from any amounts payable under this Agreement all
federal, state, city, or other taxes as required by law.
9. DUTY NOT TO DISCLOSE CONFIDENTIAL INFORMATION.
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The Director acknowledges that the Director's relationship with the
Company is one of high trust and confidence, and that he has access to
Confidential Information (as hereinafter defined) of Franklin. The Director
shall not, directly or indirectly, communicate, deliver, exhibit or provide any
Confidential Information to any person, Pound Sterlinginn, partnership,
corporation, organization or entity, except as required in the normal course of
the Director's duties. The duties contained in this paragraph shall be binding
upon the Director during the time that he/she is employed by the Company and
following the termination of such employment. Such duties will not apply to any
such Confidential Information which is or becomes in the public domain through
no action on the part of the Director, is generally disclosed to third parties
by Franklin without restriction on such third parties, or is approved for
release by written authorization of the Board of Directors of Franklin. The term
"Confidential Information" shall mean any and all confidential, proprietary, or
secret information relating to Franklin's business, services, customers,
business operations, or activities and any and all trade secrets, products,
methods of conducting business, information, skills, knowledge, ideas, know-how,
or devices used in, developed by, or pertaining to Franklin's business and not
generally known, in whole or in part, in any trade or industry in which Franklin
is engaged.
10. ENTIRE AGREEMENT.
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This Agreement contains the entire agreement between the parties with
respect to the subject matter contained herein, and supersedes all prior and
contemporaneous oral and written communications and agreements with respect
thereto. Specifically, this Agreement amends and restates in its entirety that
certain Severance Agreement dated October 6, 1993 between the Director and
Franklin.
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11. NOTICE.
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For purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when delivered to the party or when mailed by United States
registered mail, return receipt requested, postage prepaid, as follows:
If To Franklin: Attention: President, CEO, Secretary or Treasurer
Franklin Bank, N.A.
00000 Xxxx Xxxxxx Xxxx Xxxx Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
If To The Officer:
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or such other address as either 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.
12. MISCELLANEOUS.
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No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by
the Director and Franklin. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement. In the event
of a conflict between any employment agreement and this Agreement, the terms of
this Agreement shall prevail. This Agreement shall be governed by and construed
in accordance with the laws and regulations of Franklin's applicable regulatory
agency. All references to sections of the Exchange Act or the Code shall be
deemed also to refer to any successor provisions to such sections. The
obligations of Franklin under Sections 4 and 5 shall survive the expiration of
the term of this Agreement.
13. VALIDITY.
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The invalidity or unenforceability of any 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 Moreover, to the extent
that any provision of this Agreement is deemed invalid or unenforceable, such
provision shall be interpreted and/or modified so as to be deemed valid and
enforceable.
14. COUNTERPARTS.
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This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
15. LEGAL FEES AND EXPENSES.
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Franklin shall pay all legal fees and expenses which the Director may
incur as a result of the breach of this Agreement by Franklin or as a result of
Franklin or any shareholder of Franklin or any federal or state agency
contesting the validity or enforceability of this Agreement or the Director's
interpretation of or determinations under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
FRANKLIN BANK, NATIONAL ASSOCIATION
By:
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Its:
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"DIRECTOR"
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