EXHIBIT 10.2
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is
made and entered into as of November 17, 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 Xxxxxxx X. Xxxxxxx, an individual residing at 0000 Xxxxx
Xxxx., Xxxxxx Xxxxxx, XX 00000 (the "Executive"). The Agreement amends and
restates in its entirety that certain Employment Agreement by and between
Republic Security Financial Corporation and the Executive dated April 1, 1992,
as amended February 1, 1998, and as amended and restated as of January 27, 1999.
W I T N E S S E T H :
WHEREAS, the Executive has been elected as Senior Executive Vice
President and Chief Financial Officer of the Company and 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 Company and 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 Company and the Bank agree 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
three years beginning on the date of this Agreement and ending on the third
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
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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 third 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 third anniversary of the date on
which such notice is given; and (ii) in all other cases, the third anniversary
of the date as of which the Remaining Unexpired Employment Period is being
determined. Upon termination of the Executive's employment with the Company and
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 Company
and 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
Financial Officer of the Company and 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 Company or the
Bank or the President of the Company or 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 Company and the Bank and shall use his best efforts
to advance the interests of the Company and the Bank.
SECTION 4. CASH COMPENSATION.
In consideration for the services to be rendered by the Executive
hereunder, the Company and the Bank shall pay to Executive a salary at an
initial annual rate of ONE HUNDRED SEVENTY THOUSAND DOLLARS ($170,000), payable
in approximately equal installments in accordance with the Company's and the
Bank's customary payroll practices for senior officers. At least annually during
the Employment Period, the Board of Directors of the Company and the Bank, or
the Compensation Committees 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 Company and
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. Such amount shall
generally be computed as a percentage (to be determined by the mutual agreement
of the Executive and the Company and the Bank) of the Company's quarterly
consolidated net income before taxes (excluding extraordinary items as defined
in APB #30 and excluding restructuring charges and other charges relating to
mergers, acquisitions or transactions of similar effect).
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SECTION 5. EMPLOYEE BENEFIT PLANS AND PROGRAMS.
(a) During the Employment Period, the Executive shall be treated as an
employee of the Company and 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 Company or 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 Company's and the Bank's customary practices.
(b) The Company or the Bank shall own and pay the costs of premiums on
life insurance insuring the life of the Executive in an amount not less than
$200,000, and the Company or Bank shall designate the beneficiary of such policy
as such person or persons named by the Executive from time to time.
SECTION 6. INDEMNIFICATION AND INSURANCE.
(a) During the Employment Period, the Company and 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 Company and 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 Company and 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
Company or 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.
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SECTION 8. WORKING FACILITIES AND EXPENSES.
The Executive's principal place of employment shall be at the Company's
and 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 Company
and 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 positions with the Company and 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 Company and the Bank terminate
during the Employment Period under any of the following circumstances:
(i) the Executive's voluntary resignation from employment with the
Company and the Bank within ninety (90) days following:
(A) the failure of the Board of Directors of the Company or
the Bank to appoint or re-appoint or elect or re-elect the
Executive to the offices of Senior Executive Vice President
and Chief Financial Officer (or a more senior office, if any)
of the Company and the Bank;
(B) the expiration of a thirty (30) day period following the
date on which the Executive gives written notice to the
Company and the Bank of its material failure, whether by
amendment of the Company's or the Bank's Articles of
Incorporation or By-laws, action of the Company's or the
Bank's Board of Directors or the Company's 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;
(C) the expiration of a thirty (30) day period following the
date on which the Executive gives written notice to the
Company or the Bank of its material breach of any term,
condition or covenant contained in this Agreement (including,
without limitation, any reduction of the Executive's rate of
base salary in effect from time to time and any change in the
terms and conditions of any
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compensation or benefit program in which the Executive
participates which, either individually or together with other
changes, has a material adverse effect on the aggregate value
of his total compensation package), unless, during such thirty
(30) day period, the Company or the Bank cures such failure in
a manner determined by the Executive, in his discretion, to be
satisfactory; or
(D) 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; or
(E) the failure of the stockholders of the Company or Bank to
elect or re-elect the Executive to the Board of Directors of
the Company or the Bank, respectively, or the failure of the
Board of Directors of the Company or the Bank (or the
nominating committees thereof) to nominate the Executive for
such election or re-election;
(ii) the termination of the Executive's employment with the Company
or the Bank for any other reason not described in section 10(a).
In such event, the Company or the Bank (in such proportions as they may mutually
agree upon) 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 Company
and the Bank under circumstances described in section 9(a) of this Agreement,
the Company and the Bank (in such proportions as they may mutually agree upon)
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 Company and 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 Company's or 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 three 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
Company and Bank during the Remaining
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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 Company and the
Bank;
(iv) within thirty (30) days following his termination of
employment with the Company and 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 Company and the Bank for a period of
three 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 Company and 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 Company and 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 Company or the Bank, if he were
100% vested thereunder and had continued working for the
Company and the Bank for a period of three 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 Company and 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 Company
or the Bank, as if
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he were 100% vested thereunder and had continued working for the
Company and the Bank for a period of three 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 Company and 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 Company and the Bank, a lump sum payment in an
amount equal to three 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 Company and 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 Company and
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 Company and the Bank; (B) the Executive's
misappropriation of the Company's or 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 Company or the Bank for personal profit; or (E) the
Executive's willful breach or violation of any law, rule or regulation
(other
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than traffic violations or similar offenses), or final cease and desist
order in connection with his performance of services for the Company or
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
Company or 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 Company or
the Bank;
(ii) the Executive's voluntary resignation from employment
with the Company and 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 Company or the Bank; PROVIDED, HOWEVER, that, in the
event of the Executive's death, the Company or the Bank shall pay to his estate
an amount equal to three months' cash compensation within thirty days of the
appointment of the executor of such estate.
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
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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
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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
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(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 INDEMNIFICATION.
(a) This section 12 shall apply if the Executive's employment is
terminated upon or following (i) a Change of Control (as defined in section 11
of this Agreement); or (ii) a change "in the ownership or effective control" of
the Company or the Bank or "in the ownership of a substantial portion of the
assets" of the Company or the Bank within the meaning of section 280G of the
Code. If this section 12 applies, then, if, for any taxable year, the Executive
shall be liable for the payment of an excise tax under section 4999 of the Code
with respect to any payment in the nature of compensation made by the Company,
the Bank or any direct or indirect subsidiary or affiliate of the Company or the
Bank to (or for the benefit of) the Executive, the Company or the Bank shall pay
to the Executive an amount equal to X determined under the following formula:
X = E x P
------------------------------------
1 - [(FI x (1 - SLI)) + SLI + E + M]
where
E = the rate at which the excise tax is assessed under section
4999 of the Code;
P = the amount with respect to which such excise tax is
assessed, determined without regard to this section 12;
FI = the highest marginal rate of income tax applicable to the
Executive under the Code for the taxable year in question;
SLI = the sum of the highest marginal rates of income tax
applicable to the Executive under all applicable state and
local laws for the taxable year in question; and
M = the highest marginal rate of Medicare tax applicable to the
Executive under the Code for the taxable year in question.
With respect to any payment in the nature of compensation that is made to (or
for the benefit of) the Executive under the terms of this Agreement, or
otherwise, and on which an excise tax under section 4999 of the Code will be
assessed, the payment determined under this section 12(a) shall be made to the
Executive on the earlier of (i) the date the Company, the Bank or any direct or
indirect subsidiary or affiliate of the Company or the Bank is required to
withhold such tax, or (ii) the date the tax is required to be paid by the
Executive. The determination of the amount due hereunder shall be made by Ernst
& Young, or such other accounting firm as the parties may mutually agree upon
(the "Accounting Firm"). In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting the Change
of Control the parties shall appoint another nationally recognized accounting
firm to make the determination required hereunder (which accounting firm shall
then be referred to as the Accounting
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Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company.
(b) Notwithstanding anything in this section 12 to the contrary, in the
event that the Executive's liability for the excise tax under section 4999 of
the Code for a taxable year is subsequently determined to be different than the
amount determined by the formula (X + P) x E, where X, P and E have the meanings
provided in section 12(a), the Executive or the Company or Bank, as the case may
be, shall pay to the other party at the time that the amount of such excise tax
is finally determined, an appropriate amount, plus interest, such that the
payment made under section 12(a), when increased by the amount of the payment
made to the Executive under this section 12(b) by the Company or the Bank, or
when reduced by the amount of the payment made to the Company or Bank under this
section 12(b) by the Executive, equals the amount that should have properly been
paid to the Executive under section 12(a). The interest paid under this section
12(b) shall be determined at the rate provided under section 1274(b)(2)(B) of
the Code. To confirm that the proper amount, if any, was paid to the Executive
under this section 12, the Executive shall furnish to the Company and the Bank a
copy of each tax return which reflects a liability for an excise tax payment
made by the Company or the Bank, at least 20 days before the date on which such
return is required to be filed with the Internal Revenue Service.
(c) The Executive shall notify the Company and the Bank in writing of
any claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of additional amounts hereunder. Such notification shall
be given as soon as practicable but no later than ten business days after the
Executive is informed in writing of such claim and shall apprise the Company and
the Bank of the nature of such claim and the date on which such claim is
requested to be paid. The Executive shall not pay such claim prior to the
expiration of the thirty day period following the date on which it gives such
notice that any payment of taxes with respect to such claim is due. If the
Company or the Bank notifies the Executive in writing prior to the expiration of
such period that it desires to contest such claim, the Executive shall:
(i) give the Company or the Bank any information reasonably
requested by the Company or the Bank relating to such claim;
(ii) take such action in connection with contesting such claim as
the Company or the Bank 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 or the Bank;
(iii) cooperate with the Company or the Bank in good faith in order
effectively to contest such claim; and
(iv) permit the Company and the Bank to participate in any
proceedings relating to such claim;
PROVIDED, HOWEVER, that the Company or the Bank shall bear and pay directly all
costs and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the 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. Notwithstanding the foregoing,
the Executive shall control the conduct of any such proceeding and all decisions
relating to the settlement or other disposition thereof.
(d) The provisions of this section 12 are designed to reflect the
provisions of applicable federal, state and local tax laws in effect on the date
of this Agreement. If, after the date hereof, there shall be any change in any
such laws, this section 12 shall
12
be modified in such manner as the Executive and the Company and the Bank may
mutually agree upon if and to the extent necessary to assure that the Executive
is fully indemnified against the economic effects of the tax imposed under
section 4999 of the Code or any similar federal, state or local tax.
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 or the Bank's
consent, from participating in or disclosing documents or information in
connection with any judic 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, the Company or by the Executive,
shall have no effect on the rights and obligations of the parties hereto under
the Company's or 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 Company or the Bank from time to time.
SECTION 15. HEALTH AND MAJOR MEDICAL INSURANCE.
(a) Notwithstanding anything herein to the contrary, upon the first to
occur of (i) a Change of Control (excluding a Change of Control in connection
with which Executive enters into any employment agreement with the Company or
the acquiring entity with a term of at least three years), (ii) termination of
Executive's employment hereunder by the Company or Bank other than for cause, or
(iii) termination of Executive's employment by reason of retirement at age 65
(or at age 55 through age 64 provided that a majority of the Board of Directors
of the Company confirms that this subsection 15(a) shall be effective in
connection with the retirement), the Company or the Bank shall thereafter
provide Executive with health and major medical insurance through the date on
which Executive shall be eligible to receive Medicare (or any successor
governmental health insurance program) and, after such eligibility date,
Medicare supplemental insurance for life. The Company or the Bank shall not
provide such health and medical insurance during any period, after a termination
of Executive's employment by the Company or Bank other than for cause, during
which Executive is employed by an employer which provides health and major
medical insurance in which Executive is qualified to participate. If insurance
is provided to Executive under this subsection 15(a), the Company's or the
Bank's obligation to provide Executive any such
13
health or major medical insurance otherwise referred to in this Agreement shall
terminate.
(b) The Company and the Bank shall not be obligated to provide any
insurance pursuant to subsection 15(a) to the extent that the cost thereof
exceeds the amount which would accrue at the rate of $7,700 per annum from
October 1, 1995. In the event the cost of such insurance exceeds such accrual,
Executive, at his option, may continue the insurance by paying, at his own
expense, the amount in excess of such accrual.
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:
Xxxxxxx X. Xxxxxxx
0000 Xxxxx Xxxx.
Xxxxxx Xxxxxx, 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.
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The Bank and the Company 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.
15
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, PROVIDED, HOWEVER, that any options granted to the Executive in any
agreement entered into prior to the date hereof in any agreement styled as an
Employment Agreement shall remain available for exercise by the Executive in
accordance with the terms thereof. 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, 15, 18, 20, 22, 26
and 27 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. 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.
16
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: /s/ Xxxx X. Xxxxxx
--------------------------------------
Xxxx X. Xxxxxx
Chairman, President & CEO
REPUBLIC SECURITY BANK
By: /s/ Xxxx X. Xxxxxx
--------------------------------------
Xxxx X. Xxxxxx
Chairman, President & CEO
/s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxxx
17
