CHANGE OF CONTROL EMPLOYMENT AGREEMENT
Exhibit 10.19
AGREEMENT by and between Seacoast Banking Corporation of Florida (the “Company”) and Xxxxxxx
X. Xxxxx (“Executive”), dated as of the 18th day of July, 2006.
The Board of Directors of the Company (the “Board”), has determined that it is in the best
interests of the Company and its stockholders to assure that the Company will have the continued
dedication of Executive, notwithstanding the possibility, threat or occurrence of a Change of
Control (as defined below) of the Company. The Board believes it is imperative to diminish the
inevitable distraction of Executive by virtue of the personal uncertainties and risks created by a
pending or threatened Change of Control and to encourage Executive’s full attention and dedication
to the Company currently and in the event of any threatened or pending Change of Control, and to
provide Executive with compensation and benefits arrangements upon a Change of Control which ensure
that the compensation and benefits expectations of Executive will be satisfied and which are
competitive with those of other corporations. Therefore, in order to accomplish these objectives,
the Board has caused the Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions.
(a) The “Effective Date” shall mean the first date during the Change of Control Period (as
defined in Section l(b)) on which a Change of Control (as defined in Section 2) occurs. Anything
in this Agreement to the contrary notwithstanding, if a Change of Control occurs during the Change
of Control Period and if Executive’s employment with the Company has been terminated either by the
Company without Cause or by Executive for Good Reason (as such terms are defined in Section 5)
within six months prior to the date on which the Change of Control occurs, and unless it is
reasonably demonstrated by the Company that such termination of employment (i) was not at the
request of a third party who has taken steps reasonably calculated to effect the Change of Control
and (ii) did not otherwise arise in connection with or anticipation of the Change of Control, then
for all purposes of this Agreement the “Effective Date” shall mean the date immediately prior to
the date of such termination of employment.
(b) The “Change of Control Period” shall mean the period commencing on the date hereof and
ending on the first anniversary of the date hereof; provided, however, that commencing on the date
one year after the date hereof, and on each annual anniversary of such date (such date and each
annual anniversary thereof shall be hereinafter referred to as the “Renewal Date”), unless
previously terminated, the Change of Control Period shall be automatically extended so as to
terminate one year from such Renewal Date, unless at least 60 days prior to the Renewal Date the
Company shall give notice to Executive that the Change of Control Period shall not be so extended.
2. Change of Control. For the purposes of this Agreement, a “Change of Control” shall
mean the occurrence of any of the following events:
(a) individuals who, at the Effective Date, constitute the Board (the “Incumbent Directors”)
cease for any reason to constitute at least a majority of the Board, provided that any person
becoming a director after the Effective Date and whose election or nomination for election was
approved by a vote of at least a majority of the Incumbent Directors then on the Board (either by a
specific vote or by approval of the proxy statement of the Company in which such person is named as
a nominee for director, without written objection to such nomination) shall be an Incumbent
Director; provided, however, that no individual initially elected or nominated as a
director of the Company as a result of an actual or threatened election contest (as described in
Rule 14a-11 under the 1934 Act (“Election Contest”) or other actual or threatened solicitation of
proxies or consents by or on behalf of any “person” (as such term is defined in Section 3(a)(9) of
the 1934 Act and as used in Section 13(d)(3) and 14(d)(2) of the 0000 Xxx) other than the Board
(“Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election
Contest or Proxy Contest, shall be deemed an Incumbent Director;
(b) any person is or becomes a “beneficial owner” (as defined in Rule 13d-3 under the 1934
Act), directly or indirectly, of securities of the Company representing 25% or more of the combined
voting power of the Company’s then outstanding securities eligible to vote for the election of the
Board (the “Company Voting Securities”); provided, however, that the event
described in this paragraph (b) shall not be deemed to be a Change in Control of the Company by
virtue of any of the following acquisitions: (A) any acquisition by a person who is on the
Effective Date the beneficial owner of 25% or more of the outstanding Company Voting Securities,
(B) an acquisition by the Company which reduces the number of Company Voting Securities outstanding
and thereby results in any person acquiring beneficial ownership of more than 25% of the
outstanding Company Voting Securities; provided, that if after such acquisition by
the Company such person becomes the beneficial owner of additional Company Voting Securities that
increases the percentage of outstanding Company Voting Securities beneficially owned by such
person, a Change in Control of the Company shall then occur, (C) an acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any Parent or Subsidiary,
(D) an acquisition by an underwriter temporarily holding securities pursuant to an offering of such
securities, (E) an acquisition pursuant to a Non-Qualifying Transaction (as defined in paragraph
(c) below), or (F) a transaction (other than the one described in paragraph (c) below) in which
Company Voting Securities are acquired from the Company, if a majority of the Incumbent Directors
approve a resolution providing expressly that the acquisition pursuant to this clause (F) does not
constitute a Change in Control of the Company under this paragraph (b);
(c) the consummation of a reorganization, merger, consolidation, statutory share exchange or
similar form of corporate transaction involving the Company that requires the approval of the
Company’s stockholders, whether for such transaction or the issuance of securities in the
transaction (a “Reorganization”), or the sale or other disposition of all or substantially all of
the Company’s assets to an entity that is not an affiliate of the Company (a “Sale”), unless
immediately following such Reorganization or Sale: (A) more than 50% of the total voting power of
(x) the corporation resulting from such Reorganization or the corporation which has acquired all or
substantially all of the assets of the Company (in either case, the “Surviving Corporation”), or
(y) if applicable, the ultimate parent corporation that directly or indirectly has beneficial
ownership of 100% of the voting securities eligible to elect directors of the Surviving Corporation
(the “Parent Corporation”), is represented by the Company Voting Securities that were outstanding
immediately prior to such Reorganization or Sale (or, if applicable, is represented by shares into
which such Company Voting Securities were converted pursuant to such Reorganization or Sale), and
such voting power among the holders thereof is in substantially the same proportion as the voting
power of such Company Voting Securities among the holders thereof immediately prior to the
Reorganization or Sale, and (B) no person (other than (x) the Company, (y) any employee benefit
plan (or related trust) sponsored or maintained by the Surviving Corporation or the Parent
Corporation, or (z) a person who immediately prior to the Reorganization or Sale was the beneficial
owner of 25% or more of the outstanding Company Voting Securities) is the beneficial owner,
directly or indirectly, of 25% or more of the total voting power of the outstanding voting
securities eligible to elect directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation), and (C) at least a majority of the members of the board of
directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) following the consummation of the Reorganization or Sale were Incumbent Directors at
the time of the Board’s approval of the execution of the initial agreement providing for such
Reorganization or Sale (any Reorganization or Sale which satisfies all of the criteria specified in
(A), (B) and (C) above shall be deemed to be a “Non-Qualifying Transaction”); or
(d) approval by the stockholders of the Company of a complete liquidation or dissolution of
the Company.
3. Employment Period. The Company hereby agrees to continue Executive in its employ
of the Company, and Executive hereby agrees to remain in the employ of the Company subject to the
terms and conditions of this Agreement, for the period commencing on the Effective Date and ending
on the first anniversary of such date (the “Employment Period”).
4. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, (A) Executive’s position (including status, offices, titles
and reporting requirements), authority, duties and responsibilities shall be at least commensurate
in all material respects with the most significant of those held, exercised and assigned at any
time during the 120-day period immediately preceding the Effective Date, and (B) Executive’s
services shall be performed at the location where Executive was employed immediately preceding the
Effective Date or any office or location less than 35 miles from such location.
(ii) During the Employment Period, and excluding any periods of vacation and sick leave to
which Executive is entitled, Executive agrees to devote reasonable attention and time during normal
business hours to the business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to Executive hereunder, to use Executive’s reasonable best efforts to
perform faithfully and efficiently such responsibilities. During the Employment Period it shall
not be a violation of this Agreement for Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) engage in other business activities that do not represent a conflict of
interest with the full execution of his duties to the Company, and (C) manage personal investments,
so long as such activities do not significantly interfere with the performance of Executive’s
responsibilities as an employee of the Company in accordance with this Agreement. It is expressly
understood and agreed that to the extent that any such activities have been conducted by Executive
prior to the Effective Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be
deemed to interfere with the performance of Executive’s responsibilities to the Company.
(b) Compensation.
(i) Base Salary. During the Employment Period, Executive shall receive an annual
base salary (“Annual Base Salary”), which shall be paid at a monthly rate, at least equal to 12
times the highest monthly base salary paid or payable, including any base salary which has been
earned but deferred, to Executive by the Company and its affiliated companies in respect of the
12-month period immediately preceding the month in which the Effective Date occurs. Any increase
in Annual Base Salary shall not serve to limit or reduce any other obligation to Executive under
this Agreement. Annual Base Salary shall not be reduced after any such increase and the term
Annual Base Salary as utilized in this Agreement shall refer to Annual Base Salary as so increased.
As used in this Agreement, the term “affiliated companies” shall include any company controlled
by, controlling or under common control with the Company.
(ii) Annual Bonus. In addition to Annual Base Salary, Executive shall be awarded,
for each fiscal year ending during the Employment Period, an annual bonus (the “Annual Bonus”) in
cash at least equal to Executive’s highest annual bonus for the last three full fiscal years prior
to the Effective Date (annualized in the event that Executive was not employed by the Company for
the whole of such fiscal year). Each such Annual Bonus shall be paid no later than the end of the
third month of the fiscal year next following the fiscal year for which the Annual Bonus is
awarded, unless Executive shall elect to defer the receipt of such Annual Bonus.
(iii) Incentive, Savings and Retirement Plans. During the Employment Period,
Executive shall be entitled to participate in all incentive, savings and retirement plans,
practices, policies and programs applicable generally to senior executive officers of the Company
and its affiliated companies (“Peer Executives”), but in no event shall such plans, practices,
policies and programs provide Executive with incentive opportunities, savings opportunities and
retirement benefit opportunities, in each case, less favorable, in the aggregate, than the most
favorable of those provided by the Company and its affiliated companies for Executive under such
plans, practices, policies and programs as in effect at any time during the 120-day period
immediately preceding the Effective Date or if more favorable to Executive, those provided
generally at any time after the Effective Date to Peer Executives.
(iv) Welfare Benefit Plans. During the Employment Period, Executive and/or
Executive’s family, as the case may be, shall be eligible for participation in and shall receive
all benefits under welfare benefit plans, practices, policies and programs provided by the Company
and its affiliated companies (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel accident insurance plans and
programs) to the extent applicable generally to Peer Executives.
(v) Expenses. During the Employment Period, Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by Executive in accordance with the
policies, practices and procedures of the Company applicable to Peer Executives.
(vi) Fringe Benefits. During the Employment Period, Executive shall be entitled to
fringe benefits in accordance with the plans, practices, programs and policies of the Company
applicable to Peer Executives.
5. Termination of Employment.
(a) Death, Disability or Retirement. Executive’s employment shall terminate
automatically upon Executive’s death or Retirement during the Employment Period. For purposes of
this Agreement, “Retirement” shall mean normal retirement as defined in the Company’s then-current
retirement plan, or if there is no such retirement
plan, “Retirement” shall mean voluntary termination after age 65 with ten years of service. If
the Company determines in good faith that the Disability of Executive has occurred during the
Employment Period (pursuant to the definition of Disability set forth below), it may give to
Executive written notice in accordance with Section 13(b) of this Agreement of its intention to
terminate Executive’s employment. In such event, Executive’s employment with the Company shall
terminate effective on the 30th day after receipt of such notice by Executive (the “Disability
Effective Date”), provided that, within the 30 days after such receipt, Executive shall not have
returned to full-time performance of Executive’s duties. For purposes of this Agreement,
“Disability” shall mean the inability of Executive, as determined by the Board, to perform the
essential functions of his regular duties and responsibilities, with or without reasonable
accommodation, due to a medically determinable physical or mental illness which has lasted (or can
reasonably be expected to last) for a continuous period of six (6) months during any continuous
twelve (12) month period.
(b) Cause. The Company may terminate Executive’s employment during the Employment
Period with or without Cause. For purposes of this Agreement, “Cause” shall mean:
(i) the willful and continued failure of Executive to perform substantially Executive’s
duties with the Company (other than any such failure resulting from incapacity due to physical or
mental illness, and specifically excluding any failure by Executive, after reasonable efforts, to
meet performance expectations), after a written demand for substantial performance is delivered to
Executive by the Board of Directors of the Company which specifically identifies the manner in
which such Board believes that Executive has not substantially performed Executive’s duties, or
(ii) the willful engaging by Executive in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the Company.
For purposes of this provision, no act or failure to act, on the part of Executive, shall be
considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without
reasonable belief that Executive’s action or omission was in the best interests of the Company.
Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the
Board or based upon the advice of counsel for the Company shall be conclusively presumed to be
done, or omitted to be done, by Executive in good faith and in the best interests of the Company.
The cessation of employment of Executive shall not be deemed to be for Cause unless and until there
shall have been delivered to Executive a copy of a resolution duly adopted by the affirmative vote
of not less than three-fourths of the entire membership of the Board of the Company at a meeting of
such Board called and held for such purpose (after reasonable notice is provided to Executive and
Executive is given an opportunity, together with counsel, to be heard before such Board), finding
that, in the good faith opinion of such Board,
Executive is guilty of the conduct described in subparagraph (i) or (ii) above, and specifying the
particulars thereof in detail.
(c) Good Reason. Executive’s employment may be terminated by Executive for Good
Reason or for no reason. For purposes of this Agreement, “Good Reason” shall mean:
(i) without the written consent of Executive, the assignment to Executive of any duties
inconsistent in any material respect with Executive’s position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities as in effect on the Effective
Date, or any other action by the Company which results in a diminution in such position, authority,
duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent
action not taken in bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by Executive;
(ii) the Company’s requiring Executive, without his consent, to be based at any office or
location that is more than 35 miles from the location where Executive was employed immediately
prior to the Effective Date;
(iii) a reduction in Executive’s Base Salary and benefits as in effect on the Effective Date
or as the same may be increased from time to time;
(iv) the failure by the Company (a) to continue in effect any compensation plan in which
Executive participates as of the Effective Date that is material to Executive’s total compensation,
unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been
made with respect to such plan, or (b) to continue Executive’s participation therein (or in such
substitute or alternative plan) on a basis not materially less favorable, both in terms of the
amount of benefits provided and the level of Executive’s participation relative to other
participants; or
(v) any failure by the Company to comply with and satisfy Section 12(c) of this Agreement; or
(vi) the material breach of this Agreement by the Company.
For purposes of this Section 5(c), any good faith determination of “Good Reason” made by
Executive shall be conclusive. Anything in this Agreement to the contrary notwithstanding, a
termination by Executive for any reason during the 30-day period immediately following the six (6)
month anniversary of the Effective Date shall be deemed to be a termination for Good Reason for all
purposes of this Agreement.
(d) Notice of Termination. Any termination by the Company for Cause, or by Executive
for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with this Agreement. For purposes of
this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination of
Executive’s employment under the provision so indicated and (iii) specifies the termination date
(which date shall be not less than 60 days after the giving of such notice). If a dispute exists
concerning the provisions of this Agreement that apply to Executive’s termination of employment,
the parties shall pursue the resolution of such dispute with reasonable diligence. Within five (5)
days of such a resolution, any party owing any payments pursuant to the provisions of this
Agreement shall make all such payments together with interest accrued thereon at the rate provided
in Section 1274(b)(2)(B) of the Internal Revenue Code of 1986, as amended (the “Code”). The
failure by either party to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of such party hereunder
or preclude such party from asserting such fact or circumstance in enforcing such party’s rights
hereunder.
(e) Date of Termination. “Date of Termination” means (i) if Executive’s employment is
terminated other than by reason of death or Disability, the date of receipt of the Notice of
Termination, or any later date specified therein, or (ii) if Executive’s employment is terminated
by reason of death or Disability, the Date of Termination will be the date of death or the
Disability Effective Date, as the case may be.
6. Obligations of the Company upon Termination.
(a) Good Reason; Other Than for Cause, Death or Disability. If, during the
Employment Period, the Company shall terminate Executive’s employment other than for Cause or
Disability, or Executive shall terminate employment for Good Reason, then in consideration of
Executive’s services rendered prior to such termination:
(i) the Company shall pay to Executive in a lump sum in cash within thirty (30) days after
the Date of Termination the aggregate of the following amounts:
A. the sum of (1) Executive’s Base Salary through the Date of Termination to the extent not
theretofore paid, (2) the product of (x) Executive’s highest annual bonus from the Company,
including any bonus or portion thereof which has been earned but deferred, for any of the last
three full fiscal years prior to the Date of Termination (such amount being referred to as the
“Highest Annual Bonus”) and (y) a fraction, the numerator of which is the number of days in the
current fiscal year through the Date of Termination, and the denominator of which is 365, (3) any
accrued vacation pay to the extent not theretofore paid, and (4) unless Executive has elected a
different payout date in a prior deferral election, any compensation previously deferred by
Executive (together with any accrued interest or earnings thereon) to the extent not
theretofore paid (the sum of the amounts described in clauses (1), (2), (3) and (4) shall be
hereinafter referred to as the “Accrued Obligations”); and
B. the amount equal to one (1) times the sum of (x) Executive’s Annual Base Salary at the rate
in effect on the Date of Termination, and (y) Executive’s Highest Annual Bonus;
(ii) for a period of one (1) year from the Date of Termination, the Company will allow
Executive and/or Executive’s eligible dependents to continue to participate in any medical and
other welfare plans described in Section 4(b)(iv) of this Agreement to the same extent and upon the
same terms as the Executive and/or Executive’s eligible dependents participated immediately prior
to the Date of Termination; provided that, in the event the Board determines that Executive’s
and/or Executive’s eligible dependents’ continued participation is not permissible under the terms
and provisions of such plans, the Company shall take such actions as may be necessary to provide
Executive and/or Executive’s eligible dependents (without additional cost to the Executive and/or
Executive’s eligible dependents) with benefits outside such plans having terms not less favorable
than those provided under the Company’s medical and other welfare plans as of the Date of
Termination. If Executive becomes re-employed with another employer and is eligible to receive
medical or other welfare benefits under another employer provided plan, the medical and other
welfare benefits described herein shall be secondary to those provided under such other plan during
such applicable period of eligibility; and
(iii) all unvested stock options to acquire stock of the Company and all awards of restricted
stock of the Company held by Executive as of the Date of Termination shall be immediately and fully
vested as of the Date of Termination and, in the case of stock options, shall be fully exercisable
as of the Date of Termination; and
(iv) to the extent not theretofore paid or provided, the Company shall timely pay or provide
to Executive any other amounts or benefits required to be paid or provided or which Executive is
eligible to receive under any plan, program, policy or practice or contract or agreement of the
Company and its affiliated companies (such other amounts and benefits shall be hereinafter referred
to as the “Other Benefits”).
(b) Death, or Disability or Retirement. If Executive’s employment is terminated by
reason of Executive’s death, or Disability or Retirement during the Employment Period, this
Agreement shall terminate without further obligations to Executive or Executive’s legal
representatives under this Agreement, other than for payment of Accrued Obligations and the timely
payment or provision of Other Benefits. Accrued Obligations shall be paid to Executive’s estate or
beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. With
respect to the provision of Other Benefits, the term Other Benefits as used in this Section 6(b)
shall include, without limitation, and Executive or Executive’s estate and/or beneficiaries shall
be entitled to receive, benefits under such plans, programs, practices and policies relating to
death or disability or retirement, if any, as are applicable to Executive on the Date of
Termination.
(c) Cause or Voluntary Termination without Good Reason. If Executive’s employment
shall be terminated for Cause during the Employment Period, or if Executive voluntarily terminates
employment during the Employment Period without Good Reason, this Agreement shall terminate without
further obligations to Executive, other than for payment of Accrued Obligations (excluding the
pro-rata bonus described in clause 2 of Section 6(a)(i)) and the timely payment or provision of
Other Benefits.
(d) Expiration of Employment Period. If Executive’s employment shall be terminated
due to the normal expiration of the Employment Period, this Agreement shall terminate without
further obligations to Executive, other than for payment of Accrued Obligations and the timely
payment or provision of Other Benefits.
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit
Executive’s continuing or future participation in any plan, program, policy or practice provided by
the Company or any of its affiliated companies and for which Executive may qualify, nor, subject to
Section 13(f), shall anything herein limit or otherwise affect such rights as Executive may have
under any contract or agreement with the Company or any of its affiliated companies. Amounts which
are vested benefits or which Executive is otherwise entitled to receive under any plan, policy,
practice or program of or any contract or agreement with the Company or any of its affiliated
companies at or subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program or contract or agreement except as explicitly modified by this
Agreement.
8. Full Settlement. The Company’s obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may
have against Executive or others. In no event shall Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable to Executive under
any of the provisions of this Agreement and, except as explicitly provided herein, such amounts
shall not be reduced whether or not Executive obtains other employment.
9. Costs of Enforcement. In any action taken in good faith relating to the
enforcement of this Agreement or any provision herein, Executive shall be entitled to be paid any
and all costs and expenses incurred by him in enforcing or establishing his rights thereunder,
including, without limitation, reasonable attorneys’ fees, whether suit be brought or not, and
whether or not incurred in trial, bankruptcy or appellate proceedings. Executive shall also be
entitled to be paid all reasonable legal fees and expenses, if any, incurred in connection with any
tax audit or proceeding to the extent attributable to the
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application of Section 4999 of the Internal Revenue Code to any payment or benefit hereunder. Such
payments shall be made within five (5) business days after delivery of Executive’s respective
written requests for payment accompanied with such evidence of fees and expenses incurred as the
Company reasonably may require.
10. Confidential Information. Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge or data relating to the
Company or any of its affiliated companies, and their respective businesses, which shall have been
obtained by Executive during Executive’s employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts by Executive or
representatives of Executive in violation of this Agreement). After termination of Executive’s
employment with the Company or such affiliated companies, Executive shall not, without the prior
written consent of the Company or as may otherwise be required by law or legal process, communicate
or divulge any such information, knowledge or data to anyone other than the Company and those
designated by it.
11. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding and except as set forth below,
in the event it shall be determined that any payment or distribution by the Company to or for the
benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional payments required
under this Section 11) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of
the Code or any interest or penalties are incurred by Executive with respect to such excise tax
(such excise tax, together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”), then Executive shall be entitled to receive an additional payment
(a “Gross-Up Payment”) in an amount such that after payment by Executive of all taxes (including
any interest or penalties imposed with respect to such taxes), including, without limitation, any
income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Payments.
(b) Subject to the provisions of Section 11(c), all determinations required to be made under
this Section 11, including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be used in arriving at such determination, shall be made by
Ernst & Young LLP or such other certified public accounting firm as may be designated by Executive
(the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company
and Executive within 15 business days of the receipt of notice from Executive that there has been a
Payment, or such earlier time as is requested by the Company. In the event that the Accounting
Firm is serving as accountant or auditor for the individual,
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entity or group effecting the Change of Control, Executive shall appoint another nationally
recognized accounting firm to make the determinations required hereunder (which accounting firm
shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant
to this Section 11, shall-be paid by the Company to Executive within five days of the receipt of
the Accounting Firm’s determination. Any determination by the Accounting Firm shall be binding
upon the Company and Executive. As a result of the uncertainty in the application of Section 4999
of the Code at the time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company should have been made
(“Underpayment”), consistent with the calculations required to be made hereunder. In the event
that the Company exhausts its remedies pursuant to Section 11(c) and Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to
or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than ten business days after
Executive is informed in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. Executive shall not pay such claim
prior to the expiration of the 30-day period following the date on which it gives such notice to
the Company (or such shorter period ending on the date that any payment of taxes with respect to
such claim is due). If the Company notifies Executive in writing prior to the expiration of such
period that it desires to contest such claim, Executive shall:
(i) give the Company any information reasonably requested by the Company relating to such
claim,
(ii) take
such action in connection with contesting such claim as the Company
shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to contest such claim,
and
(iv) permit the Company to participate in any proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
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shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income
tax (including interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation of the foregoing provisions
of this Section 11(c), the Company shall control all proceedings taken in connection with such
contest and, at its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of such claim and may,
at its sole option, either direct Executive to pay the tax claimed and xxx for a refund or contest
the claim in any permissible manner, and Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company shall determine; provided, however, that if the Company
directs Executive to pay such claim and xxx for a refund, the Company shall advance the amount of
such payment to Executive, on an interest-free basis and shall indemnify and hold Executive
harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties
with respect thereto) imposed with respect to such advance or with respect to any imputed income
with respect to such advance; and further provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s
control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be
payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to
Section 11(c), Executive becomes entitled to receive any refund with respect to such claim,
Executive shall (subject to the Company’s complying with the requirements of Section 11(c))
promptly pay to the Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by Executive of an amount advanced
by the Company pursuant to Section 11(c), a determination is made that Executive shall not be
entitled to any refund with respect to such claim and the Company does not notify Executive in
writing of its intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
12. Successors.
(a) This Agreement is personal to Executive and without the prior written consent of the
Company shall not be assignable by Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal
representatives.
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(b) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.
(c) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession had taken place. As
used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor
to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
13. Miscellaneous.
(a) Waiver. Failure of either party to insist, in one or more instances, on
performance by the other in strict accordance with the terms and conditions of this Agreement shall
not be deemed a waiver or relinquishment of any right granted in this Agreement or of the future
performance of any such term or condition or of any other term or condition of this Agreement,
unless such waiver is contained in a writing signed by the party making the waiver.
(b) Severability. If any provision or covenant, or any part thereof, of this
Agreement should be held by any court to be invalid, illegal or unenforceable, either in whole or
in part, such invalidity, illegality or unenforceability shall not affect the validity, legality or
enforceability of the remaining provisions or covenants, or any part thereof, of this Agreement,
all of which shall remain in full force and effect.
(c) Status Prior to Effective Date. Executive and the Company acknowledge that,
except as may otherwise be provided under any other written agreement between Executive and the
Company, the employment of Executive by the Company is “at will” and, subject to Section 1(a)
hereof, prior to the Effective Date, Executive’s employment may be terminated by either Executive
or the Company at any time prior to the Effective Date, in which case Executive shall have no
further rights under this Agreement. However, absent termination of employment of Executive, this
Agreement may not be terminated by the Company during the Change of Control Period and before the
Effective Date. From and after the Effective Date, this Agreement shall supersede any other
agreement between the parties with respect to the subject matter hereof, including without
limitation any then-current employment agreement between the Company or any of its subsidiaries and
Executive.
(d) Governing Law. Except to the extent preempted by federal law, and without regard
to conflict of laws principles, the laws of the State of Florida shall govern this Agreement in all
respects, whether as to its validity, construction, capacity, performance or otherwise.
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(e) Notices. All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly given if delivered or
three days after mailing if mailed, first class, certified mail, postage prepaid:
To the Company:
|
Seacoast Banking Corporation of Florida | |
| 000 Xxxxxxxx Xxxxxx | ||
| Xxxxxx, Xxxxxxx 00000 | ||
| Attention: Chief Executive Officer | ||
To Executive:
|
Xxxxxxx X. Xxxxx | |
| P. O. Xxx 000 | ||
| Xxxxxx, XX 00000 |
Any party may change the address to which notices, requests, demands and other communications shall
be delivered or mailed by giving notice thereof to the other party in the same manner provided
herein.
(f) Amendments and Modifications. This Agreement may be amended or modified only by a
writing signed by both parties hereto, which makes specific reference to this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Change in Control
Employment Agreement as of the date first above written.
| SEACOAST BANKING CORPORATION OF FLORIDA |
||||
| By: | /s/ Xxxxxx X. Xxxxxx, III | |||
| Xxxxxx X. Xxxxxx, III | ||||
| Title: | Chairman | |||
| EXECUTIVE: |
||||
| /s/ Xxxxxxx X. Xxxxx | ||||
| Xxxxxxx X. Xxxxx | ||||
