February 12, 1999
Xx. Xxxxxx X. Xxxxx
00 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Dear Bob:
I am very pleased that you have agreed to join the Republic First Bancorp, Inc.
("RFB") team as President and Chief Executive Officer of our subsidiary, First
Republic Bank ("FRB") (together, "the Company"). The purpose of this letter is
to outline the key details of our agreement as to the basis for your employment
as President and Chief Executive Officer of First Republic Bank.
Your starting date will be no later than Tuesday, February 16, 1999. As of your
starting date, you will be elected a member of the Board of Directors of FRB as
well as appointed as a member of its Executive Committee. You will be invited to
attend meetings of the Executive Committee and the Board of Directors of RFB.
You will become employed by FRB as of your starting date.
You will report directly to me administratively in my role as President and
Chief Executive Officer of RFB. You also will have organizational reporting
responsibilities to the Board of Directors of FRB and to its Chairman, Xxxxx
Xxxxxxx.
As President of FRB, your initial annual salary will be one hundred and
seventy-five thousand dollars ($175,000.00), payable bi-weekly in accordance
with the normal practices of FRB. For the year 1999 only, you will also be
eligible for a cash incentive bonus of up to fifty thousand dollars
($50,000.00). Of that amount, twenty-five thousand dollars ($25,000.00) will be
earned upon the completion of your first year of employment with FRB. The
balance of up to twenty-five thousand dollars ($25,000.00) will be payable in
whole or in part at the sole discretion of the Board of Directors of FRB based
upon both your individual performance and the financial results for FRB in 1999.
The cash bonus for 1999 will be payable on or before March 31, 2000. You may
also be eligible for additional equity incentive in the form of stock options,
based upon your performance and that of the company for the year, at the sole
discretion of the Company's Board of Directors.
We have discussed the need to review on a priority basis the Company's short
term and long term incentive compensation programs. You will be eligible to
participate in any such program which presently exists or which may be adopted
by the Company, including any incentive stock option program.
Within the first ninety (90) days of your starting date, we will mutually agree
on the benchmarks which will be the basis of your performance goals for 1999.
After the first year of your employment with FRB, we will evaluate your
accomplishments and mutually agree on the appropriate incentive compensation
parameters for the next evaluation period. You will also be reviewed for
performance and possible salary increase no later than thirty days after your
first anniversary with FRB.
You will be eligible to participate in all insurance, health, retirement and
such other benefit programs as are now maintained or as may hereinafter be
adopted by the Company and which are appropriate for your position. If you are
not eligible for immediate coverage under FRB's health insurance program, FRB
will reimburse you for the premium cost to you of continuing your current
coverage until you are covered by FRB's policy. You will be entitled to vacation
in accordance with the standard policy of FRB for Senior Executives, which at
the present time is four weeks for your position. I am forwarding to you with
this letter of copy of FRB's benefits and employment policies for your
information.
Xxxxxx X. Xxxxx
February 12, 1999
Page 2
As an additional part of your compensation package, your will receive a car
allowance of one thousand dollars ($1,000.00) per month, plus reimbursement for
a parking space convenient to your FRB office and a car or cellular telephone.
You will also be reimbursed for all reasonable expenses incurred by you in
fulfillment of your duties on behalf of FRB, including travel expenses other
than automobile expenses, entertainment, business meals and other reasonable
business expenses in accordance with FRB's policies. In addition, FRB will
reimburse you for your expenses of membership in a Center City luncheon club and
a country club, to be mutually agreed upon. All of the expenses described in
this paragraph shall be submitted for payment by FRB through a monthly expense
account, which shall be approved by me.
FRB agrees, to the extent possible, to continue the arrangements currently in
effect for you under the Mellon Bank Optional Life Insurance Plan (the "Life
Insurance Plan"). In order to continue such arrangement, FRB shall make such
payments to Mellon Bank to the extent payment by you to Mellon would otherwise
be required in order to continue Executive's coverage under the life insurance
policy or policies (the "Life Insurance") in effect under the Life Insurance
Plan upon your termination of employment with Mellon Bank. Following such
payment by FRB to Mellon Bank, FRB shall continue the arrangement with respect
to the Life Insurance, shall make such payments of premiums as would have been
made by Mellon Bank under the Life Insurance Plan, and shall have the same
rights to repayments of amounts paid in connection with the Life Insurance as
Mellon Bank would have had with respect to the Life Insurance under the terms of
the Life Insurance Plan if you had continued to participate in the Life
Insurance Plan and had not terminated employment with Mellon Bank and you agree
to execute such documents and/or agreements, which may include an agreement with
the insurance company or companies issuing the Life Insurance, as may be
necessary or appropriate in order to continue the Life Insurance in effect under
the arrangements and on the terms described above.
Consistent with the Company's existing hostile change of control policy, a copy
of which is attached, you will be eligible to receive a severance payment equal
to two times your annual base salary in the event of a change of control of FRB
or RFB, as defined in such policy. In the event of a change of control of the
Company as defined in such policy, but which is approved by a majority of The
Incumbent Board, you will be eligible to receive a severance payment equal to
your annual base salary, except that in the event of such change of control
during the first two years of your employment, you will be eligible for a
severance payment equal to two times your annual base salary. In the event that
your severance is initiated by FRB or RFB, other than for cause or through a
change of control, your salary will continue for an additional six (6) months
from the date of the discharge. If there is a change of control of the Company
within six (6) months following your severance under the preceding sentence,
then you will be eligible for the severance payment applicable under this
paragraph to such change of control as if you were still employed by the
Company, less any severance payment made to you prior to such change of control.
If you voluntarily terminate your employment with FRB, no severance payment will
be made.
You agree that following the termination of your employment with the Company,
other than due to a "hostile" change of control as defined in the preceding
paragraph of this letter, you shall not: (1) for a period of sic (6) months
provide services directly or indirectly (as a consultant, officer, director,
shareholder or otherwise) to any other person or entity engaged in the
commercial or consumer banking or finance or savings and loan industry in
competition with the Company in Philadelphia, Xxxxxxxxxx, Bucks, Xxxxxxx or
Delaware counties in Pennsylvania or in New Castle County in Delaware; and (ii)
for a period of one (1) year, you will not solicit, entice or contact the
Company's executives or employees for the purpose of having such executives or
employees leave their employment with the Company or engage in direct
competition with the Company.
Xxxxxx X. Xxxxx
February 12, 1999
Page 3
In addition, you hereby acknowledge that, in the course of your employment by
FRB, you will have access to confidential information, trade secrets and unique
business procedures which are the valuable property of the Company. You agree
not to disclose for any reason, directly or indirectly, any confidential, trade
secret or other proprietary information, as determined by the Company in its
reasonable discretion, at any time, during or after the period of your
employment by the Company, for any purpose other than to perform your assigned
duties on behalf of the Company.
The provisions of the two immediately preceding paragraphs shall survive the
termination of this letter agreement. The signers of this letter recognize that
a violation of the preceding two paragraphs may cause irreparable harm to First
Republic Bank or Republic First Bancorp and, therefore, either FRB or RFB shall
be entitled to injunctive relief for your failure to comply with the terms
thereof, together with all other legal or equitable remedies available to FRB or
RFB.
Upon joining FRB, you will receive a grant of forty thousand (40,000) options to
purchase stock of RFB at the market price on the date of grant. Ten thousand
(10,000) options will vest immediately and an additional ten thousand (10,000)
options will vest on each of the next three anniversary dates of your employment
with FRB, on the condition that you are still employed by FRB on such vesting
dates. Upon any change of control, all options not yet vested will immediately
vest. Additional terms and conditions of such stock options are set forth in the
Incentive Stock Option Agreement which will be provided to you.
This letter is not intended to represent an employment contract. Your employment
by FRB is at will and is subject to termination at any time, by the Company or
by you, with or without cause.
Enclosed are two copies of this letter. As an indication of your understanding
and acceptance, please sign and return one copy of this letter to me on or
before and keep the other copy for your records.
If you have any additional questions about your employment by FRB, please do not
hesitate to call me or Xxxxx Xxxxxxx. I am excited that you will be joining the
Company and look forward to working with you in your new role.
Sincerely,
Xxxx X. Xxxxx
President & CEO
Republic First Bancorp, Inc.
Agreed and Accepted By:
_________________________________ __________________
Xxxxxx X. Xxxxx Date
