EXHIBIT 10.3 EMPLOYMENT AGREEMENT AMONG THE COMPANY, REPUBLIC SECURITY BANK
AND R. XXXXXXX XXXXXXXXXX AS DATED FEBRUARY 16, 1999
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EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into as of February 16, 1999 by and among Republic Security Financial
Corporation, a business corporation organized and operating under the laws of
the State of Florida and having an office at 000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxx
Xxxx Xxxxx, XX 00000 (the "Company"), Republic Security Bank, a commercial bank
organized and operating under the laws of the State of Florida and having an
office at 000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxx Xxxx Xxxxx, XX 00000 (the "Bank"),
and R. Xxxxxxx Xxxxxxxxxx, an individual residing at 000 Xxxxxxx Xxxxxx, Xxxx
Xxxxx, XX 00000 (the "Executive").
W I T N E S S E T H :
WHEREAS, the Executive has been elected as Senior Executive
Vice President and Chief Banking Officer of the Bank; and
WHEREAS, the Company and the Bank desire to assure for
themselves the continued availability of the Executive's services and the
ability of the Executive to perform such services with a minimum of personal
distraction in the event of a pending or threatened Change of Control (as
hereinafter defined); and
WHEREAS, the Executive is willing to serve the Bank on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and conditions hereinafter set forth, the Company, the Bank and
the Executive hereby agree as follows:
Section 1. Employment.
The Bank agrees to employ the Executive, and the Executive
hereby agrees to such employment, during the period and upon the terms and
conditions set forth in this Agreement.
Section 2. Employment Period; Remaining Unexpired Employment
Period.
(a) The terms and conditions of this Agreement shall be and
remain in effect during the period of employment established under this section
2 ("Employment Period"). The Employment Period shall be for an initial term of
two years beginning on the date of this Agreement and ending on the second
anniversary date of this Agreement, plus such extensions, if any, as are
provided pursuant to section 2(b).
(b) Beginning on the date of this Agreement, the Employment
Period shall automatically be extended for one (1) additional day each day,
unless either the Company and the Bank, acting jointly, or the Executive, elects
not to extend the Agreement further by giving written notice to the other
parties, in which case the Employment Period shall end on the second anniversary
of the date on which such written notice is given. For all purposes of this
Agreement, the term "Remaining Unexpired Employment Period" as of any date shall
mean the period beginning on such date and ending on: (i) if a notice of
non-extension has been given in accordance with this section 2(b), the second
anniversary of the date on which such notice is given; and (ii) in all other
cases, the second anniversary of the date as of which the Remaining Unexpired
Employment Period is being determined. Upon termination of the Executive's
employment with the Bank for any reason whatsoever, any daily extensions
provided pursuant to this section 2(b), if not therefore discontinued, shall
automatically cease.
(c) Nothing in this Agreement shall be deemed to prohibit the
Bank from terminating the Executive's employment at any time during the
Employment Period with or without notice for any reason; provided, however, that
the relative rights and obligations of the Company, the Bank and the Executive
in the event of any such termination shall be determined under this Agreement.
Section 3. Duties.
The Executive shall serve as Senior Executive Vice President
and Chief Banking Officer of the Bank, having such power, authority and
responsibility and performing such duties as are prescribed by or under the
By-Laws of the Bank, or assigned by the Board of Directors of the Bank or the
President of the Bank, and otherwise as are customarily associated with such
position. The Executive shall devote his full business time and attention (other
than during weekends, holidays, approved vacation periods, and periods of
illness or approved leaves of absence) to the business and affairs of the Bank
and shall use his best efforts to advance the interests of the Bank.
Section 4. Cash Compensation.
In consideration for the services to be rendered by the
Executive hereunder, the Bank shall pay to Executive a salary at an initial
annual rate of TWO HUNDRED THOUSAND DOLLARS ($200,000), payable in approximately
equal installments in accordance with the Bank's customary payroll practices for
senior officers. At least annually during the Employment Period, the Board of
Directors of the Bank, or the Compensation Committee thereof, shall review the
Executive's annual rate of salary and may, in its discretion, approve an
increase therein. In no event shall the Executive's annual rate of salary under
this Agreement in effect at a particular time be reduced without his prior
written consent. In addition to salary, the Executive may receive other cash
compensation from the Bank for services hereunder at such times, in such amounts
and on such terms and conditions as the Board may determine from time to time.
The Executive and the Bank understand that the maximum amount available for such
other cash compensation for the first year of the term hereof shall be ONE
HUNDRED THOUSAND DOLLARS ($100,000), and the amount actually paid shall be at
the discretion of the Board or the President in accordance with goals to be
established by the President and/or the Board.
Section 5. Employee Benefit Plans and Programs.
(a) During the Employment Period, the Executive shall be
treated as an employee of the Bank and shall be entitled to participate in and
receive benefits under any and all qualified or non-qualified retirement,
pension, savings, profit-sharing or stock bonus plans, any and all group life,
health (including hospitalization, medical and major medical), dental, accident
and long term disability insurance plans, and any other employee benefit and
compensation plans (including, but not limited to, any incentive compensation
plans or programs, stock option and appreciation rights plans and restricted
stock plans) as may from time to time be maintained by, or cover employees of,
the Bank, in accordance with the terms and conditions of such employee benefit
plans and programs and compensation plans and programs and consistent with the
Bank's customary practices.
(b) The Bank understands that the Executive will exercise his
right (under COBRA) to continue medical benefits under his previous employer's
plan until such time as he is eligible to receive such benefits under the Bank's
plan (the "Benefit Eligibility Date"). The Bank shall reimburse the Executive
for the cost of such benefit continuation, less the amount the Executive would
have had to pay with respect to medical benefits provided by the Bank, for a
period beginning on the date that the Executive's coverage under COBRA begins
and ending on the Benefit Eligibility Date.
Section 6. Indemnification and Insurance.
(a) During the Employment Period, the Bank shall cause the
Executive to be covered by and named as an insured under any policy or contract
of insurance obtained by it to insure its directors and officers against
personal liability for acts or omissions in connection with service as an
officer or director of the Bank or service in other capacities at the request of
the Company or the Bank. The coverage provided to the Executive pursuant to this
section 6 shall be of the same scope and on the same terms and conditions as the
coverage (if any) provided to other officers or directors of the Company and the
Bank.
(b) To the maximum extent permitted under applicable law,
during the Employment Period, the Bank shall indemnify the Executive against,
and hold him harmless from, any costs, liabilities, losses and exposures to the
fullest extent and on the most favorable terms and conditions that similar
indemnification is offered to any director or officer of the Bank or any
subsidiary or affiliate of either of them.
Section 7. Other Activities.
The Executive may serve as a member of the boards of directors
of such business, community and charitable organizations as he may disclose to
and as may be approved by the President of the Company or the Bank (which
approval shall not be unreasonably withheld); provided, however, that such
service shall not materially interfere with the performance of his duties under
this Agreement. The Executive may also engage in personal business and
investment activities which do not materially interfere with the performance of
his duties hereunder; provided, however, that such activities are not prohibited
under any code of conduct or investment or securities trading policy established
by the Company or the Bank and generally applicable to all similarly situated
executives.
Section 8. Working Facilities and Expenses.
The Executive's principal place of employment shall be at the
Bank's executive offices at the address first above written, or at such other
location within Palm Beach County or Broward County, Florida at which the Bank
shall maintain its principal executive offices, or at such other location as the
Company, the Bank and the Executive may mutually agree upon. The Bank shall
provide the Executive at his principal place of employment with a private
office, secretarial services and other support services and facilities suitable
to his position with the Bank and necessary or appropriate in connection with
the performance of his assigned duties under this Agreement. The Bank shall
provide to the Executive for his exclusive use an automobile owned or leased by
the Bank and appropriate to his position, to be used in the performance of his
duties hereunder. All costs of operation, maintenance and insurance shall be
paid by the Bank. The Executive shall account for the use and expenses of the
automobile in accordance with the policies and procedures of the Bank in effect
from time to time. The Bank shall reimburse the Executive for his ordinary and
necessary business expenses, including, without limitation, all expenses
associated with his business use of the aforementioned automobile, fees for
memberships in such clubs and organizations as the Executive and the Bank shall
mutually agree are necessary and appropriate for business purposes, and his
travel and entertainment expenses incurred in connection with the performance of
his duties under this Agreement, in each case upon presentation to the Bank of
an itemized account of such expenses in such form as the Bank may reasonably
require.
Section 9. Termination of Employment with Severance Benefits.
(a) The Executive shall be entitled to the severance benefits
described herein in the event that his employment with the Bank terminates
during the Employment Period under any of the following circumstances:
(i) the Executive's voluntary resignation from employment with
the Bank within ninety (90) days following:
(A) the failure of the Board of Directors of the Bank to
appoint or re-appoint or elect or re-elect the Executive to the offices of
Senior Executive Vice President and Chief Banking Officer (or a more senior
office) of the Bank;
(B) the expiration of a thirty (30) day period following the
date on which the Executive gives written notice to the Bank of its material
failure, whether by amendment of the Bank's Articles of Incorporation or
By-laws, action of the Bank's Board of Directors or the Bank's stockholders or
otherwise, to vest in the Executive the functions, duties, or responsibilities
prescribed in section 3 of this Agreement as of the date hereof, unless, during
such thirty (30) day period, the Bank cures such failure; or
(C) the relocation of the Executive's principal place of
employment, without his written consent, to a location outside of Palm Beach
County or Broward County, Florida;
(ii) the termination of the Executive's employment with the
Bank for any other reason not described in section 10(a).
In such event, the Bank shall provide the benefits and pay to the Executive the
amounts described in section 9(b).
(b) Upon the termination of the Executive's employment with
the Bank under circumstances described in section 9(a) of this Agreement, the
Bank shall pay and provide to the Executive (or, in the event of his death
following such termination, to his estate):
(i) his earned but unpaid compensation as of the date of the
termination of his employment with the Bank, such payment to be made at the time
and in the manner prescribed by law applicable to the payment of wages but in no
event later than thirty (30) days after termination of employment;
(ii) the benefits, if any, to which he is entitled as a former
employee under the employee benefit plans and programs and compensation plans
and programs maintained for the benefit of the Bank's officers and employees;
(iii) continued group life, health (including hospitalization,
medical and major medical), dental, accident and long term disability insurance
benefits, in addition to that provided pursuant to section 9(b)(ii), and after
taking into account the coverage provided by any subsequent employer, if and to
the extent necessary to provide for the Executive, for a period of two years
from the date his employment terminates, coverage equivalent to the coverage to
which he would have been entitled under such plans (as in effect on the date of
his termination of employment, or, if his termination of employment occurs after
a Change of Control, on the date of such Change of Control, whichever benefits
are greater), if he had continued working for the Bank during the Remaining
Unexpired Employment Period at the highest annual rate of compensation achieved
during that portion of the Employment Period which is prior to the Executive's
termination of employment with the Bank;
(iv) within thirty (30) days following his termination of
employment with the Bank, a lump sum payment in an amount equal to the salary
that the Executive would have earned if he had continued working for the Bank
for a period of two years from the date his employment terminates at the highest
annual rate of salary achieved during that portion of the Employment Period
which is prior to the Executive's termination of employment with the Bank, such
lump sum to be paid in lieu of all other payments of salary provided for under
this Agreement in respect of the period following any such termination;
(v) within thirty (30) days following his termination of
employment with the Bank, a lump sum payment in an amount equal to the excess,
if any, of:
(A) the present value of the aggregate benefits to which he
would be entitled under any and all qualified and non-qualified defined benefit
pension plans maintained by, or covering employees of, the Bank, if he were 100%
vested thereunder and had continued working for the Bank for a period of two
years from the date his employment terminates, such benefits to be determined as
of the date of termination of employment by adding to the service actually
recognized under such plans an additional period equal to the Remaining
Unexpired Employment Period and by adding to the compensation recognized under
such plans for the most recent year recognized all amounts payable under
sections 9(b)(i), (iv), and (vii); over
(B) the present value of the benefits to which he is actually
entitled under such defined benefit pension plans as of the date of his
termination;
where such present values are to be determined using the mortality tables
prescribed under section 415(b)(2)(E)(v) of the Code and a discount rate,
compounded monthly, equal to the annualized rate of interest prescribed by the
Pension Benefit Guaranty Corporation for the valuation of immediate annuities
payable under terminating single-employer defined benefit plans for the month in
which the Executive's termination of employment occurs ("Applicable PBGC Rate");
(vi) within thirty (30) days following his termination of
employment with the Bank, a lump sum payment in an amount equal to the present
value of the additional employer contributions (or if greater in the case of a
leveraged employee stock ownership plan or similar arrangement, the additional
assets allocable to him through debt service, based on the fair market value of
such assets at termination of employment) to which he would have been entitled
under any and all qualified and non-qualified defined contribution plans
maintained by, or covering employees of, the Bank, as if he were 100% vested
thereunder and had continued working for the Bank for a period of two years from
the date his employment terminates at the highest annual rate of compensation
achieved during that portion of the Employment Period which is prior to the
Executive's termination of employment with the Bank, and making the maximum
amount of employee contributions, if any, required under such plan or plans,
such present value to be determined on the basis of a discount rate, compounded
using the compounding period that corresponds to the frequency with which
employer contributions are made to the relevant plan, equal to the Applicable
PBGC Rate;
(vii) within thirty (30) days following his termination of
employment with the Bank, a lump sum payment in an amount equal to two times the
higher of (A) the highest cash incentive compensation or bonus (annualized, if
paid for a period other than annually) paid to the Executive during or accrued
with respect to the Executive for either (i) any of the two years immediately
preceding that in which, or (ii) the year in which, Executive's employment with
the Bank terminates, or (B) the highest cash incentive compensation or bonus
(annualized, if paid for a period other than annually) so paid or accrued in
respect of either (x) any of the two years immediately preceding that in which,
or (y) the year in which, a Change of Control (as hereinafter defined) occurs.
The Company, the Bank and the Executive hereby stipulate that the damages which
may be incurred by the Executive following any such termination of employment
are not capable of accurate measurement as of the date first above written and
that the payments and benefits contemplated by this section 9(b) constitute
reasonable damages under the circumstances and shall be payable without any
requirement of proof of actual damage and without regard to the Executive's
efforts, if any, to mitigate damages. The Company, the Bank and the Executive
further agree that the Company and the Bank may condition the payments and
benefits (if any) due under sections 9(b)(iii), (iv), (v), (vi) and (vii) on the
receipt of the Executive's resignation from any and all positions which he holds
as an officer, director or committee member with respect to the Company, the
Bank or any subsidiary or affiliate of either of them.
Section 10. Termination without Additional Company or Bank
Liability.
(a) In the event that the Executive's employment with the Bank
shall terminate during the Employment Period on account of:
(i) the discharge of the Executive for "cause," which, for
purposes of this Agreement (I) prior to a Change of Control (as hereinafter
defined) shall mean: (A) gross negligence or willful misconduct by the Executive
in connection with his employment hereunder or the business of the Bank; (B) the
Executive's misappropriation of the Bank's assets or property; (C) the Executive
willfully fails or refuses to perform his duties under this Agreement, or fails
to comply with any material term, covenant or condition contained herein; (D)
the Executive breaches his fiduciary duties to the Bank for personal profit; or
(E) the Executive's willful breach or violation of any law, rule or regulation
(other than traffic violations or similar offenses), or final cease and desist
order in connection with his performance of services for the Bank; and (II),
upon and after a Change of Control, shall mean (A) the Executive intentionally
engages in dishonest conduct in connection with his performance of services for
the Company or the Bank resulting in his conviction of a felony; (B) the
Executive is convicted of, or pleads guilty or nolo contendere to, a felony or
any crime involving moral turpitude; (C) the Executive willfully fails or
refuses to perform his duties under this Agreement and fails to cure such breach
within sixty (60) days following written notice thereof from the Bank; (D) the
Executive breaches his fiduciary duties to the Company or the Bank for personal
profit; or (E) the Executive's willful breach or violation of any law, rule or
regulation (other than traffic violations or similar offenses), or final cease
and desist order in connection with his performance of services for the Bank;
(ii) the Executive's voluntary resignation from employment
with the Bank for reasons other than those specified in section 9(a) or 11(b);
(iii) the Executive's death; or
(iv) a determination that the Executive is eligible for
long-term disability benefits under the Bank's long-term disability insurance
program or, if there is no such program, under the federal Social Security Act;
then the Company and the Bank shall have no further obligations under this
Agreement, other than the payment to the Executive (or, in the event of his
death, to his estate) of his earned but unpaid compensation as of the date of
the termination of his employment, and the provision of such other benefits, if
any, to which he is entitled as a former employee under the employee benefit
plans and programs and compensation plans and programs maintained by, or
covering employees of, the Bank.
Section 11. Termination Upon or Following a Change of Control
(a) A Change of Control ("Change of Control") shall be deemed
to have occurred upon the happening of any of the following events:
(i) approval by the stockholders of the Company of a
transaction that would result in the reorganization, merger or consolidation of
the Company with one or more other persons, other than a transaction following
which:
(A) at least 50.1% of the common stock or equity ownership
interests of the entity resulting from such transaction are beneficially owned
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) in
substantially the same relative proportions by persons who, immediately prior to
such transaction, beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act) at least 50.1% of the outstanding common
stock or equity ownership interests in the Company; and
(B) At least 50.1% of the combined voting power of the
securities entitled to vote generally in the election of directors of the entity
resulting from such transaction are beneficially owned (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) in substantially the same
relative proportions by persons who, immediately prior to such transaction,
beneficially owned (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) at least 50.1% of the combined voting power of the securities
entitled to vote generally in the election of directors of the Company; and
(C) No person, or persons acting in concert, beneficially own
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) 20% or
more of the outstanding common stock or equity ownership interests in, or 20% or
more of the combined voting power of the securities entitled to vote generally
in the election of directors of, the entity resulting from such transaction; and
(D) At least a majority of the members of the board of
directors of the entity resulting from such transaction are individuals who were
described in sections 11(a)(iv)(A) or (B) of this Agreement as of the date of
execution of the initial definitive agreement providing for such transaction
(or, if earlier, as of the date on which the Board of Directors of the Company
authorized such transaction).
(ii) the acquisition of all or substantially all of the assets
of the Company or beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of the outstanding securities
or of the combined voting power of the outstanding securities of the Company
entitled to vote generally in the election of directors by any person or by any
persons acting in concert, or approval by the stockholders of the Company of any
transaction which would result in such an acquisition;
(iii) a complete liquidation or dissolution of the Company, or
approval by the stockholders of the Company of a plan for such liquidation or
dissolution; or
(iv) the occurrence of any event if, immediately following
such event, at least 50% of the members of the board of directors of the Company
do not belong to any of the following groups:
(A) individuals who were members of the Board of the Company
on the date of this Agreement; or
(B) individuals who first became members of the Board of the
Company after the date of this Agreement either:
(I) upon election to serve as a member of the Board of
directors of the Company by affirmative vote of three-quarters of the members of
such Board, or of a nominating committee thereof, in office at the time of such
first election; or
(II) upon election by the stockholders of the Company to serve
as a member of the Board of the Company, but only if
nominated for election by affirmative vote of three-quarters of the members of
the board of directors of the Company, or of a nominating committee thereof, in
office at the time of such first nomination;
provided, however, that such individual's election or nomination did not result
from an actual or threatened election contest (within the meaning of Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents (within the meaning of Rule
14a-11 of Regulation 14A promulgated under the Exchange Act) other than by or on
behalf of the Board of the Company; or
(v) any event which would be described in section 11(a)(i),
(ii), (iii) or (iv) if the term "Bank" were substituted for the term "Company"
therein.
In no event, however, shall a Change of Control be deemed to have occurred as a
result of any acquisition of securities or assets of the Company, the Bank, or a
subsidiary of either of them, by the Company, the Bank, or a subsidiary of
either of them, or by any employee benefit plan maintained by any of them. For
purposes of this section 11(a), the term "person" shall have the meaning
assigned to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.
(b) In the event of a Change of Control, the Executive shall
be entitled to the payments and benefits contemplated by section 9(b) in the
event of his termination of employment with the Bank under any of the
circumstances described in section 9(a) of this Agreement or under any of the
following circumstances:
(i) resignation, voluntary or otherwise, by the Executive at
any time during the Employment Period following his demotion, loss of title,
office or significant authority or responsibility, or following any reduction in
any element of his package of compensation and benefits;
(ii) resignation, voluntary or otherwise, by the Executive at
any time during the Employment Period following any relocation of his principal
place of employment or any change in working conditions at such principal place
of employment which the Executive, in his reasonable discretion, determines to
be embarrassing, derogatory or otherwise adverse;
(iii) resignation, voluntary or otherwise, by the Executive at
any time during the Employment Period following the failure of any successor to
the Company or the Bank in the Change of Control to include the Executive in any
compensation or benefit program maintained by it or covering any of its
executive officers, unless the Executive is already covered by a substantially
similar plan of the Company or the Bank which is at least as favorable to him;
or
(iv) resignation, voluntary or otherwise, for any reason
whatsoever within 90 days following the effective date of the Change of Control,
provided, however, that if the Change of Control is of the type described in
Section 11(a) (1), such 90 day period shall not be deemed to commence until the
actual consummation of the transaction approved by the stockholders.
Section 12. Tax Limitations.
(a) Notwithstanding any other provision of this Agreement, in
the event that any payment or benefit received or to be received by the
Executive in connection with a Change of Control of the Bank or the Company or
the termination of the Executive's employment (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with the Company or
the Bank, any person whose actions result in a Change of Control of the Company
or any person affiliated with the Company or the Bank or such person) (all such
payments and benefits, including the payments and benefits provided under this
Agreement (the "Severance Payments"), being hereinafter called "Total Payments")
would not be deductible (in whole or in part) by the Company, the Bank, an
affiliate or a person making such payment or providing such benefit as a result
of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"),
then, to the extent necessary to make such portion of the Total Payments
deductible (and after taking into account any reduction in the Total Payments
provided in such other plan, arrangement or agreement), the cash Severance
Payments shall first be reduced (if necessary, to zero); provided, however, that
the Executive may elect (at any time prior to the payment of amounts payable
hereunder) to have the noncash severance payments reduced (or eliminated) prior
to any reduction of the cash Severance Payments.
(b) For purposes of the limitation contained in subsection (a)
of this section 12, (i) no portion of the Total Payments the receipt or
enjoyment of which Executive shall have effectively waived in writing prior to
the delivery of a notice of termination of employment shall be taken into
account, (ii) no portion of the Total Payments shall be taken into account
which, in the opinion of tax counsel ("Tax Counsel") reasonably acceptable to
the Executive and selected by the accounting firm which was, immediately prior
to the Change of Control of the Company or the Bank, the Company's independent
auditor (the "Auditor"), does not constitute a "parachute payment" within the
meaning of Section 280G(b)(2) of the Code, including by reason of Section
280G(b)(4)(A) of the Code, (iii) the Severance Payments shall be reduced only to
the extent necessary so that the Total Payments (other than those referred to in
clauses (i) or (ii)) in their entirety constitute reasonable compensation for
services actually rendered within the meaning of Section 280(G)(b)(4)(B) of the
Code or are otherwise not subject to disallowance as deductions by reason of
Section 280G of the Code, in the opinion of Tax Counsel, and (iv) the value of
any noncash benefit or any deferred payment or benefit included in the Total
Payments shall be determined by the Auditor in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code.
(c) If it is established pursuant to a final determination of
a court or an Internal Revenue Service proceeding that, notwithstanding the good
faith of the Executive and the Bank and the Company in applying the terms of
this section 12, the aggregate "parachute payments" paid to of for the
Executive's benefit are in an amount that would result in any portion of such
"parachute payments" not being deductible by reason of Section 280G of the Code,
then the Executive shall have an obligation to pay the Bank upon demand an
amount equal to the sum of (i) the excess of the aggregate "parachute payments"
paid to or for the Executive's benefit over the aggregate "parachute payments"
that could have been paid to or for the Executive's benefit without any portion
of such "parachute payments" not being deductible by reason of Section 280G of
the Code; and (ii) interest on the amount set forth in clause (i) of this
sentence at 120% of the rate provided in Section 1274(b)(2)(B) of the Code from
the date of Executive's receipt of such excess until the date of such payment.
If the Severance Payments shall be decreased pursuant to section (a) hereof, and
the benefits under section 8(b)(iii) which remain payable after the application
of this section 12 are thereafter reduced pursuant thereto because of the
receipt by the Executive of substantially similar benefits, the Bank shall, at
the time of such reduction, pay to the Executive the lowest of (a) the amount of
the decrease made in the Severance Payments pursuant to this section 12, (b) the
amount of the subsequent reduction in such benefits, or (c) the maximum amount
which can be paid to the Executive without being, or causing any other payment
to be, nondeductible by reason of Section 280G of the Code.
Section 13. Confidentiality.
Unless he obtains the prior written consent of the Company and
the Bank, the Executive shall keep confidential and shall refrain from using for
the benefit of himself, or any person or entity other than the Company or any
entity which is a subsidiary of the Company or of which the Company is a
subsidiary, any material document or information obtained from the Company, or
from its parent or subsidiaries, in the course of his employment with any of
them concerning their properties, operations or business (unless such document
or information is readily ascertainable from public or published information or
trade sources or has otherwise been made available to the public through no
fault of his own) until the same ceases to be material (or becomes so
ascertainable or available); provided, however, that nothing in this section 13
shall prevent the Executive, with or without the Company's consent, from
participating in or disclosing documents or information in connection with any
judicial or administrative investigation, inquiry or proceeding to the extent
that such participation or disclosure is required under applicable law.
Section 14. No Effect on Employee Benefit Plans or Programs.
The termination of the Executive's employment during the term
of this Agreement or thereafter, whether by the Bank or by the Executive, shall
have no effect on the rights and obligations of the parties hereto under the
Bank's qualified or non-qualified retirement, pension, savings, thrift,
profit-sharing or stock bonus plans, group life, health (including
hospitalization, medical and major medical), dental, accident and long term
disability insurance plans or such other employee benefit plans or programs, or
compensation plans or programs, as may be maintained by, or cover employees of,
the Bank from time to time.
Section 15. Non-Competition and Non-Solicitation.
(a) Non-competition. During the Employment Period, the
Executive agrees not to engage, directly or indirectly, in any aspect of the
financial institutions business, including without limitation engaging in
business activities for or on behalf of state, national or foreign banks, state
or federal savings associations or savings banks, credit unions, mortgage or
loan companies or any other entity which makes or acquires loans or takes
deposits or engages in any other business engaged in by the Bank on the date
hereof (the "Banking Business"), other than the Bank, whether as stockholder
(except for immaterial interests in publicly-traded institutions), partner,
director, officer, employee, agent, consultant or otherwise. In the event of
termination of the Executive's employment hereunder prior to a Change of
Control, the Executive, until one (1) year after the date of such termination,
agrees not to engage, directly or indirectly, in the Banking Business in any
capacity in any city, town or county in which the Bank or the Company has an
office or has filed an application for regulatory approval to establish an
office, determined as of the date of this Agreement.
(b) Non-solicitation. The Executive hereby covenants and
agrees that, for a period of one (1) year following his termination of
employment with the Bank, he shall not, without the written consent of the Bank,
either directly or indirectly:
(i) solicit, offer employment to, or take any other action
intended, or that a reasonable person acting in like circumstances would expect,
to have the effect of causing any officer or employee of the Company, the Bank
or any affiliate, as of the date of this Agreement, of either of them, 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 institution engaged in the business of accepting
deposits, making loans or doing other business done by the Bank, doing business
in any city, town or county in which the Bank or the Company has an office or
has filed an application for regulatory approval to establish an office,
determined as of the date of this Agreement;
(ii) provide any information, advice or recommendation with
respect to any such officer or employee to any savings bank, savings and loan
association, bank, bank holding company, savings and loan holding company, or
other institution engaged in the business of accepting deposits and making
loans, doing business in any city, town or county in which the Bank or the
Company has an office or has filed an application for regulatory approval to
establish an office, determined as of the date of this Agreement, that is
intended, or that a reasonable person acting in like circumstances would expect,
to have the effect of causing any officer or employee of the Company, the Bank,
or any affiliate, as of the date of this Agreement, of either of them, to
terminate his or her employment and accept employment or become affiliated with,
or provide services for compensation in any capacity whatsoever to, any such
savings bank, savings and loan association, bank, bank holding company, savings
and loan holding company, or other institution engaged in the business of
accepting deposits and making loans; or
(iii) solicit, provide any information, advice or
recommendation or take any other action intended, or that a reasonable person
acting in like circumstances would expect, to have the effect of causing any
customer of the Bank to terminate an existing business or commercial
relationship with the Bank.
Section 16. Successors and Assigns.
This Agreement will inure to the benefit of and be binding
upon the Executive, his legal representatives and testate or intestate
distributees, and the Company and the Bank and their respective successors and
assigns, including any successor by merger or consolidation or a statutory
receiver or any other person or firm or corporation to which all or
substantially all of the assets and business of the Company or the Bank may be
sold or otherwise transferred.
Section 17. Notices.
Any communication required or permitted to be given under this
Agreement, including any notice, direction, designation, consent, instruction,
objection or waiver, shall be in writing and shall be deemed to have been given
at such time as it is delivered personally, or five (5) days after mailing if
mailed, postage prepaid, by registered or certified mail, return receipt
requested, or one (1) day after it is sent by reputable overnight delivery
service, addressed to such party at the address listed below or at such other
address as one such party may by written notice specify to the other party:
If to the Executive:
R. Xxxxxxx Xxxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
If to the Company:
Republic Security Financial Corporation
000 X. Xxxxxxxxxx Xxxxxx
Xxxx Xxxx Xxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Chairman & CEO
If to the Bank:
Republic Security Bank
000 X. Xxxxxxxxxx Xxxxxx
Xxxx Xxxx Xxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Chairman & CEO
Section 18. Indemnification for Attorneys' Fees.
The Bank shall indemnify, hold harmless and defend the
Executive against reasonable costs, including legal fees, incurred by him in
connection with or arising out of any action, suit or proceeding in which he may
be involved, as a result of his efforts, in good faith, to defend or enforce the
terms of this Agreement.
Section 19. Severability.
A determination that any provision of this Agreement is
invalid or unenforceable shall not affect the validity or enforceability of any
other provision hereof.
Section 20. Waiver.
Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant, or condition. A waiver of any provision of this Agreement must be made
in writing, designated as a waiver, and signed by the party against whom its
enforcement is sought. Any waiver or relinquishment of any right or power
hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.
Section 21. Counterparts.
This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same Agreement.
Section 22. Governing Law.
This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Florida applicable to contracts
entered into and to be performed entirely within the State of Florida.
Section 23. Headings and Construction.
The headings of sections in this Agreement are for convenience
of reference only and are not intended to qualify the meaning of any section.
Any reference to a section number shall refer to a section of this Agreement,
unless otherwise stated.
Section 24. Entire Agreement; Modifications.
This instrument contains the entire agreement of the parties
relating to the subject matter hereof, and supersedes in its entirety any and
all prior agreements, understandings or representations relating to the subject
matter hereof. No modifications of this Agreement shall be valid unless made in
writing and signed by the parties hereto.
Section 25. Survival.
The provisions of sections 6, 9, 10, 11, 12, 13, 14, 18, 20,
22, 26, 27 and 28 shall survive the expiration of the Employment Period or
termination of this Agreement.
Section 26. Equitable Remedies.
The Company, the Bank and the Executive hereby stipulate that
money damages are an inadequate remedy for violations of
sections 6(a), or 13 of this Agreement and agree that equitable remedies,
including, without limitations, the remedies of specific performance and
injunctive relief, shall be available with respect to the enforcement of such
provisions.
Section 27. Required Regulatory Provision.
(a) Notwithstanding anything herein contained to the contrary,
any payments to the Executive by the Company or the Bank, whether pursuant to
this Agreement or otherwise, are subject to and conditioned upon their
compliance with section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C.
ss.1828(k), and any regulations promulgated thereunder.
(b) Nothing in this Agreement shall be construed to subject
the Bank or its assets to any contractual obligation undertaken by the Company
hereunder or to liability for any breach by the Company.
Section 28. Guarantee.
The Company hereby irrevocably and unconditionally guarantees
to the Executive the payment of all amounts, and the performance of all other
obligations, due from the Bank in accordance with the terms of this Agreement as
and when due without any requirement of presentment, demand of payment, protest
or notice of dishonor or nonpayment.
IN WITNESS WHEREOF, the Company and the Bank have caused this
Agreement to be executed and the Executive has hereunto set his hand, all as of
the day and year first above written.
REPUBLIC SECURITY FINANCIAL CORPORATION
By:
Name: _________________________________________
Title: _________________________________________
REPUBLIC SECURITY BANK
By: ____________________________________________
Name: _________________________________________
Title: _________________________________________
R. Xxxxxxx Xxxxxxxxxx
