Agreement
This Agreement, entered into as of this 22nd day of December, 1998, by and
among Republic First Bancorp, Inc. ("Company"), a Pennsylvania corporation, and
First Republic Bank (the "Bank"), a Pennsylvania banking corporation, and Xxxxx
X. Xxxxxxx ("Chairman").
Whereas, Chairman has served as Chairman of the Board and Chairman of the
Executive Committee of the Company and the Bank; and
Whereas, Chairman has been involved in initiating, reviewing, analyzing,
negotiating and implementing various mergers and acquisitions on behalf of the
Company and the Bank; and
Whereas, the Company and the Bank believe that Chairman's service as
director and as Chairman of the Board of the Company, Chairman of the Executive
Committee of the Company and as a director and Chairman of the Board of
Directors and the Executive Committee of the Bank is essential for the
continuing and future success of the Company and the Bank; and
Whereas, Chairman desires to serve in such capacity for the benefit of the
Company and the Bank;
Now, Therefore, in consideration of the mutual promises contained herein,
and other good and valuable consideration, receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound, the parties agree as
follows:
1. Titles and Duties
(a) Chairman shall serve as Chairman of the Board of Directors and the
Executive Committee of the Company and the Bank and as a director of the Company
and the Bank for a period equal to the lesser of three (3) years or the balance
of his present term as a director of the Company (the "Initial Term"), and shall
continue to engage in various activities on behalf of the
Company and the Bank, including but not limited to the initiation, review,
analysis, negotiations, and implementations of possible mergers and/or
acquisitions for the Company and/or the Bank.
(b) At the end of the Initial Term, the Board of Directors of each of
the Company and the Bank shall, subject to the exercise of their respective
fiduciary duties, re-elect Chairman as Chairman of Board of Directors and the
Executive Committee of the Company and a director and Chairman of the Board of
Directors and the Executive Committee of the Bank for an additional term of
three (3) years (the "Second Term"; the Initial Term and the Second Term to be
referred to collectively as the "Term").
2. Continuing Benefits
(a) Chairman shall receive such benefits, remunerations and
reimbursement of expenses from the Company or the Bank as have been provided to
him as of December 31, 1998 as Chairman of the Company and the Bank, including,
without limitation:
(i) Initiation fees, dues and expenses for one (1) country club and
one (1) downtown club;
(ii) A luxury sedan automobile, plus reimbursement for all repairs,
insurance and parking costs, and car phone costs and expenses;
(iii) Payment of all customary, normal, and reasonable travel and
entertainment expenses necessary to fulfill his duties as Chairman,
such expenses to be reviewed and approved by the President of the
Company.
(b) In addition to the foregoing, Chairman shall be eligible for all
bonuses, stock options, compensation, and benefits now or hereafter available
for any member of the Board or previously granted to Chairman.
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3. Other Benefits
(a) In the event (i) the Chairman is removed as Chairman of the Board
of Directors of the Company prior to the end of the Term, or (ii) of a
Fundamental Change, as such term is defined below, the Chairman shall have the
right, for a period of ninety (90) days following the date the Fundamental
Change occurs, to terminate this Agreement by sending written notice to such
effect to the Company. A termination under this paragraph shall be effective ten
(10) days after the mailing of such notice to the Company. If Chairman
terminates this Agreement pursuant to this Paragraph 3(a), Chairman shall be
entitled to a payment of $250,000, to be paid within fifteen (15) days of such
notice, together with the transfer of the automobile then made available to
Chairman free of all liabilities, costs, liens, or encumbrances together with
such funds to reimburse Chairman for all federal, state, and local transfer
taxes, fees, and costs involved in the transfer of such automobile, and local
income taxes that may be assessed against Chairman (at the highest taxable rate)
by reason of the transfer of such automobile, and all Stock Options previously
granted to Chairman shall become fully vested on the date of such termination.
(b) A Fundamental Change shall mean:
(i) individuals who, as of the date hereof, constitute the Board
of the Company (the "Incumbent Board") cease for any reason to
constitute at least fifty percent (50%) of the Board; provided,
however, that any individual becoming a director subsequent to the date
hereof whose nomination for election by such Company's shareholders was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with
respect to the election or
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removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a person other than one
nominated by the Board; and
(ii) the Company or the Bank shall enter into an agreement or
agreements providing for (a) the reorganization, merger, or
consolidation of the Company or the Bank with or into another entity,
(b) the exchange of all or substantially all of the stock of the
Company or the Bank for the stock of another entity, (c) the
liquidation or dissolution of the Company or the Bank, or (d) the sale
or the disposition of all or substantially all of the assets of the
Company or of the Bank; provided that the Chairman and a majority of
the members of the Incumbent Board then remaining as members of the
Board of Directors of the Company or the Bank, as the case may be,
shall have voted against the approval of any such agreement or
agreements described in this Paragraph 3(b)(ii).
4. Miscellaneous
(a) This Agreement shall inure to the benefit of and be binding upon
the Company and the Bank and their respective successors and assigns and the
Chairman and his heirs, personal representatives, successors, and
administrators.
(b) No modification of this Agreement shall be binding or enforceable
in any court unless in writing and signed by the parties. This Agreement
represents the entire agreement and understanding of the parties with respect to
the subject matters of this Agreement, and shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania applicable to
contracts made and to be performed in Pennsylvania. Notwithstanding the
foregoing, nothing contained in this Agreement shall affect or limit any rights
accrued to Chairman under any previous contracts with the Company or the Bank.
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(c) If any provision of this Agreement shall be or shall become
illegal or unenforceable in whole or in part, for any reason whatsoever, the
remaining provisions shall nevertheless be deemed valid, binding, and
subsisting.
(d) The headings in the sections of this Agreement are for convenience
only and they shall not affect the interpretation of this Agreement.
(e) The waiver by either party of a breach or violation of any
provision of this Agreement shall not operate as or be construed to be a waiver
of any subsequent breach or violation thereof.
(f) In the event any dispute shall arise between the Chairman and the
Company as to the terms or interpretation of this Agreement, whether instituted
by formal legal proceedings or otherwise, including any action taken by Employee
to enforce the terms of this Agreement or in defending against any action taken
by the Company, the Company shall reimburse Chairman for all costs and expenses,
including reasonable attorneys' fees and costs, arising from such dispute,
proceedings, or actions, notwithstanding the ultimate outcome thereof. Such
reimbursement shall be paid within ten (10) days of Chairman furnishing to the
Company written evidence, which may be in the form, among other things, of a
canceled check or receipt, of any costs or expenses incurred by Chairman. Any
such request for reimbursement by Chairman shall be made no more frequently than
at sixty (60) day intervals.
5. Notices
(a) All notices, requests, demands, and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
if delivered by hand or mailed, certified or registered mail, return receipt
requested, with postage prepaid to the following addresses or to such other
address as either party may designate from time to time.
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If to Chairman to:
Xxxxx X. Xxxxxxx, Esquire
0 Xxxxxxx Xxxxx
Xxxxxxx Xxxxxx, XX 00000
If to the Company to:
President
Republic First Bancorp, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
If to the Bank to:
President
First Republic Bank
0000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Any such notices, requests, demands, and other communications under this
Agreement, shall be given to such other or additional Person or Persons as
either party shall have designated to the other party in writing by like notice.
F:\40035\016\hdm SEVERANCE AGREE
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In Witness Whereof, the undersigned have hereunto set their hands and seals
as of the date and year above first written.
Republic First Bancorp, Inc.
By:______________________________
Xxxx X. Xxxxx, President
First Republic Bank
By:_______________________________
Xxxx X. Xxxxx, Vice President
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Xxxxx X. Xxxxxxx
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