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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 7, 1997
Regent Bancshares Corp.
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(Exact name of registrant as specified in its charter)
New Jersey 0-17753 23-2440805
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
1430 Walnut Street, Philadelphia, Pennsylvania 19102
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 546-6500
N/A
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
Effective April 14, 1997, pursuant to an employment agreement dated
April 7, 1997 (the "Employment Agreement"), Robert B. Goldstein was appointed
the President and Chief Executive Officer of the Registrant and Chairman of the
Board and Chief Executive Officer of the Registrant's subsidiary, Regent
National Bank (the "Bank"), for an initial term of three years, such term to
extend automatically for additional periods of one year unless terminated by one
of the parties to the Employment Agreement. Mr. Goldstein is also a director of
both the Registrant and the Bank. These appointments will become effective upon
receipt of all approvals required under applicable federal banking regulations.
From November 1993 until he joined the Registrant and the Bank, Mr. Goldstein
had served as President and Chief Executive Officer and as a director of
Lafayette American Bank, Bridgeport, Connecticut. Mr. Goldstein served as Vice
Chairman of the Board of National Community Banks, Inc. in West Paterson, New
Jersey from January 1992 to November 1993 and as President and a director of
Crossland Savings Bank in Brooklyn, New York from March 1991 to January 1992.
From 1974 to 1991, Mr. Goldstein served as Senior Vice President and
subsequently as Executive Vice President of First Interstate Bank of Texas, in
Houston, Texas. Mr. Goldstein has been engaged in commercial banking for more
than 30 years. For further information regarding the terms and conditions of the
Employment Agreement, reference is made to the Employment Agreement filed as
Exhibit 1 hereto and incorporated herein by reference.
On April 14, 1997, Barbara H. Teaford, Executive Vice President of the
Registrant and the Bank since 1986, Secretary of the Registrant since March 1990
and a director of the Registrant and the Bank since 1986, commenced service as
President of the Bank.
On April 16, 1997, the Bank sold 1,120,000 shares (the "Shares") of
common stock of the Bank, par value $1.00 per share, (the "Bank Common Stock")
at $8.50 per share in a private placement to selected institutions and other
investors meeting certain suitability requirements through Keefe, Bruyette &
Woods, Inc. acting as the Bank's placement agent. The gross proceeds to the Bank
from the sale of the Shares was $9,520,000, total placement agent fees were
$340,400, and the net proceeds to the Bank, after payment of estimated offering
expenses of $100,000, was approximately $9,080,000.
The Bank Common Stock sold in the offering is exchangeable for common
stock, par value $.10 per share, of the Registrant (the "Regent Common Stock")
at the rate of 1.41666 shares of Regent Common Stock for each share of Bank
Common Stock at the discretion of the Registrant, at any time after (i) the
average of the closing bid price for Regent Common Stock has equaled or exceeded
$12 per share for 15 consecutive trading days and (ii) the Regent Common Stock
issuable in exchange for the Bank Common Stock has been registered under the
Securities Act of 1933, as amended.
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Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses
acquired:
Not applicable.
(b) Pro forma financial information:
Not applicable.
(c) Exhibits:
10.1 - Employment Agreement dated as of
April 7, 1997 among Regent Bancshares
Corp., Regent National Bank and Robert
B. Goldstein.
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
REGENT BANCSHARES CORP.
By: /s/ Robert B. Goldstein
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Robert B. Goldstein, President
and Chief Executive Officer
Dated: April 24, 1997
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EXHIBIT INDEX
Exhibit
Number Description
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10.1 Employment Agreement dated as of April 7, 1997
among Regent Bancshares Corp., Regent National
Bank and Robert B. Goldstein. (This is a
management contract.)
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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
DATED AS OF APRIL 7, 1997
AMONG REGENT BANCSHARES CORP.,
REGENT NATIONAL BANK AND ROBERT B. GOLDSTEIN
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EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement") dated as of April 7, 1997 among
Regent National Bank, a national banking association located at 1430 Walnut
Street, Philadelphia, Pennsylvania 19102 (the "Bank"), Regent Bancshares Corp.,
a New Jersey corporation having its principal place of business at 1430 Walnut
Street, Philadelphia, Pennsylvania 19102 ("Regent") and Robert B. Goldstein, an
individual residing at 2 Canterbury Close, Westport, Connecticut 06880 (the
"Executive").
WITNESSETH:
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WHEREAS, the Bank is a wholly owned subsidiary of Regent;
WHEREAS, the Bank and Regent (collectively, the "Employers") desire to
employ the Executive, and the Executive desires to be employed by the Employers,
all in accordance with the terms and subject to the conditions set forth herein;
and
WHEREAS, the parties are entering into this Agreement to set forth and
confirm their respective rights and obligations with respect to the Executive's
employment by the Employers;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto, intending to be legally bound
hereby, mutually agree as follows:
1. Employment and Term. (a) Effective on the later of April 14, 1997 or
the date of receipt of all approvals (or the waiver thereof) required for the
Executive's assumption of the Position (as hereinafter defined) pursuant to
Section 914 of the Financial Institutions Reform, Recovery and Enforcement Act
of 1989 and, unless waived by the Executive, required under applicable federal
banking regulations in order for the Employers to make the payments provided for
in paragraphs 1 through 3 hereof (the "Effective Date"), (i) the Bank shall
employ the Executive, and the Executive shall be employed by the Bank, as the
Chairman of the Board and Chief Executive Officer of the Bank and (ii) Regent
shall employ the Executive, and the Executive shall be employed by Regent, as
the President and Chief Executive Officer of Regent (with all such positions
described in clauses (i) and (ii) hereof being collectively referred to herein
as the "Position"), in accordance with the terms and subject to the conditions
set forth herein for a term (the "Initial Term") which shall commence on the
Effective Date and, subject to paragraphs 1(b), 1(c) and 1(d) hereof, shall
terminate, notwithstanding the provisions of paragraph 1(e)(i) hereof, on the
third anniversary of the Effective Date, provided that, if the Effective Date
shall not have occurred by June 30, 1997, this Agreement shall terminate as of
June 30, 1997. Regent and the Bank shall be jointly and severally liable to the
Executive with respect to (i) all liabilities of the Bank to the Executive
hereunder and (ii) all liabilities of Regent to the Executive hereunder;
provided, however, that Regent shall not be responsible for any liability of the
Bank to the Executive to the
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extent that such liability has been discharged by the Bank, and the Bank shall
not be responsible for any liability of Regent to the Executive to the extent
that such liability has been discharged by Regent.
(b) Unless written notice in accordance with this paragraph 1
terminating the Executive's employment hereunder is given by either the
Employers or the Executive not less than 90 days in advance of the termination
date of this Agreement, this Agreement shall be automatically extended for
successive terms of one year (each, a "Renewal Term"). The Initial Term and each
Renewal Term are collectively referred to herein as the "Term," and, unless
otherwise provided herein or agreed by the parties hereto, all of the terms and
conditions of this Agreement shall continue in full force and effect throughout
the Term and, with respect to those terms and conditions that apply after the
Term, after the Term.
(c) Notwithstanding paragraph 1(b) hereof, the Employers, by
action of their Boards of Directors (the "Boards") and effective as specified in
a written notice thereof to the Executive in accordance with the terms hereof,
shall have the right to terminate the Executive's employment hereunder at any
time during the Term hereof, but only for Cause (as defined herein) or on
account of the Executive's death or Permanent Disability (as defined herein) as
of the date of such death or Permanent Disability.
(i) "Cause" shall mean (A) the Executive's willful and
continued failure substantially to perform his material duties with the
Employers, or the commission by the Executive of any activities constituting a
violation or breach under any material federal, state or local law or regulation
applicable to the activities of the Bank or Regent, in each case, after notice
thereof from the Employers to the Executive and a reasonable opportunity for the
Executive to cease such failure, breach or violation in all material respects
(B) fraud, breach of corporate opportunity, dishonesty, misappropriation or
other intentional material damage to the property or business of the Bank or
Regent by the Executive, (C) the Executive's repeated absences other than for
physical or mental impairment or illness, (D) the Executive's admission or
conviction of, or plea of nolo contendere to, any felony that, in the
reasonable judgment of the Boards, adversely affects the Bank's or Regent's
reputation or the Executive's ability to carry out his obligations under this
Agreement or (E) the Executive's non-compliance with the provisions of
paragraphs 2(b) or 6(b) hereof after notice thereof from the Employers to the
Executive and a reasonable opportunity for the Executive to cure such
non-compliance. Notwithstanding the foregoing, the Employers may not terminate
the Executive's employment hereunder for Cause unless the Executive is given (A)
written notice, in accordance with the By-laws of the Employers, of a special
meeting of the Boards to consider the termination of the Executive's employment
hereunder for Cause and (B) the opportunity for the Executive to address such
special meeting.
(ii) "Permanent Disability" shall mean a physical or
mental disability such that the Executive is substantially unable to perform
those duties that he would otherwise be expected to continue
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to perform and the nonperformance of such duties has continued for a period of
150 consecutive days, provided, however, that in order to terminate the
Executive's employment hereunder on account of Permanent Disability, the
Employers must provide the Executive with written notice of the Boards' good
faith determination to terminate the Executive's employment hereunder for reason
of Permanent Disability not less than 30 days prior to such termination which
notice shall specify the date of termination. Until the specified effective date
of termination by reason of Permanent Disability, the Executive shall continue
to receive compensation at the rates set forth in paragraph 3 hereof. No
termination of this Agreement because of the Permanent Disability of the
Executive shall impair any rights of the Executive under any disability
insurance policy maintained by the Employers at the commencement of the
aforesaid 150-day period.
(d) The Executive shall have the right to terminate his
employment hereunder at any time during the Term hereof for Good Reason or in
the event a Change in Control occurs. As used herein:
(i) "Good Reason" shall mean the Executive's Position or
the scope of the Executive's authority, duties or responsibilities are
materially diminished without the Executive's written consent, excluding for
this purpose any action not taken by the Employers in bad faith and which is
remedied by the Employers promptly following written notice thereof from the
Executive to the Employers; (B) a material breach by either Employer of its
respective obligations to the Executive under this Agreement which breach is not
cured in all material respects to the reasonable satisfaction of the Executive
within 30 days (except in the case of a payment default for which the cure
period shall be 10 days), in each case following written notice thereof from the
Executive to the Employers, (C) any termination of the Executive's employment
hereunder without Cause or (D) any failure of the shareholders of Regent to
elect the Executive as a director of Regent but only if such failure occurs
because the members of the Boards did not vote all shares of Regent Common Stock
and Regent Preferred Stock beneficially owned by them for the election of the
Executive; and
(ii) "Change of Control" shall mean (A) the acquisition
of shares of Regent (or of the Bank if the Bank is a successor to Regent) by any
"person" or "group" (as such terms are used in Rule 13d-3 under the Securities
Exchange Act of 1934 as now or hereafter amended) in a transaction or series of
transactions, but excluding any exchange of Common Stock of the Bank for Common
Stock of Regent, that result in such person or group directly or indirectly
first owning beneficially more than 35% of Regent's Common Stock (or of the Bank
if the Bank is a successor to Regent) after the date of this Agreement, (B) the
consummation of a merger or other business combination after which the holders
of voting capital stock of Regent and the Bank do not collectively own 50% or
more of the voting capital stock of the entity surviving such merger or other
business combination or the sale, lease, exchange or other transfer in a
transaction or series of transactions of all or substantially all of the assets
of the Bank, but excluding therefrom the sale and reinvestment of the Bank's
investment portfolio or (C) as the result of or in connection
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with any cash tender offer or exchange offer, merger or other business
combination, sale of assets or contested election of directors or any
combination of the foregoing transactions (a "Transaction"), other than a
Transaction between the Bank and Regent, the persons who constituted a majority
of the members of the Boards on the Effective Date and persons whose election as
members of the Boards was approved by such members then still in office or whose
election was previously so approved after the Effective Date, but before the
event that constitutes a Change of Control, no longer constitute such a majority
of the members of the Boards then in office. A Transaction constituting a
Change in Control shall only be deemed to have occurred upon the closing of the
Transaction.
(e) (i) If (A) the Employers terminate the Executive's
employment hereunder for any reason other than for Cause or fail to renew this
Agreement for any reason other than for Cause and such termination or failure
occurs as of a date that is within 270 days preceding or within 180 days after
the consummation of a Change in Control (such 270-day period and such 180-day
period being hereinafter collectively referred to as a "Change in Control
Period"), (B) this Agreement is terminated as a result of the death or Perma-
nent Disability of the Executive effective as of a date within a Change of
Control Period, (C) the Executive terminates his employment hereunder for Good
Reason effective as of a date within a Change in Control Period or (D) the
Executive terminates his employment hereunder within 180 days after the
consummation of a Change in Control, the Employers shall pay to the Executive or
his Estate promptly after the event giving rise to such payment occurs an amount
equal to the sum of (x) (1) the Executive's Base Salary (as defined herein)
accrued through the date of termination of the Executive's employment hereunder,
(2) any Bonus (as defined herein) required to be paid to the Executive pursuant
to paragraph 3(b) hereof, (3) any amount in respect of excise taxes required to
be paid to the Executive pursuant to paragraph 2(f) hereof and (4) the present
value of all other rights and benefits available to the Executive under employee
compensation and benefit arrangements of Regent or the Bank in which the
Executive was a participant on the effective date of termination, determined in
accordance with the terms and conditions of such arrangements, with such
payments, rights and benefits described in clauses (x)(1), (x)(2), (x)(3) and
(x)(4) hereof being collectively referred to herein as the "Accrued Obligations"
and (y) a severance payment equal to 2.99 times the sum of (1) the Executive's
annual Base Salary as of the effective date of termination of the Executive's
employment hereunder and (2) the maximum Bonus earned by the Executive pursuant
to paragraph 3(b) hereof for the year in which such termination is effective.
(ii) If (A) the Employers terminate the Executive's employment
hereunder for any reason other than for Cause effective as of a date that is not
within a Change in Control Period or (B) the Executive terminates his employment
hereunder for Good Reason effective as of a date that is not within a Change in
Control Period, the Employers shall pay the Executive an amount equal to the sum
of (w) the Accrued Obligations, (x) the amount of Base Salary the Executive
would have received had he remained employed hereunder during the period (the
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"Subsequent Period") from the date of his termination through the later of April
13, 2000 if such termination occurs during the first two years of the Initial
Term or the first April 13 occurring at least 90 days after the date of such
termination if such termination occurs after the first two years of the Initial
Term, (y) if the date of such termination occurs during the First Year (as
defined herein), the sum of $50,000 less the amount of Bonus (up to $50,000), if
any, payable to the Executive with respect to the First Year and (z) an amount
equal to the aggregate premiums that would be payable by the Executive to
maintain in effect throughout the Subsequent Period (assuming no increase in
insurance premium rates) the same medical, health, disability and life insurance
coverage provided to the Executive by the Employers immediately prior to the
date of such termination.
(iii) If (A) the Employers terminate the Executive's employment
hereunder for Cause, (B) the Executive terminates his employment hereunder for
any reason other than Good Reason, his death or Permanent Disability or (C)
this Agreement is terminated as a result of the death or Permanent Disability of
the Executive effective as of a date that is not within a Change in Control
Period, the sole obligation of the Employers shall be to pay the Accrued
Obligations to the Executive.
(f) Excise Taxes. In the event that the independent public
accountants of either of the Employers or the Internal Revenue Service
determines that any payment, coverage or benefit provided to the Executive
pursuant hereto is subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code") or any successor
provision thereof or any interest or penalties incurred by the 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"), the
Employers, within 30 days thereafter, shall pay to the Executive, in addition to
any other payment, coverage or benefit due and owing hereunder, an amount
determined by multiplying the rate of Excise Tax then imposed by Section 4999 by
the amount of the "excess parachute payment" received by the Executive,
determined without regard to any payments made to the Executive pursuant to this
paragraph 2(f), and dividing the product so obtained by the amount obtained by
subtracting the aggregate local, state and federal income and FICA and health
insurance taxes applicable to the receipt by the Executive of the "excess
parachute payment" and taking into account the deductibility for federal income
tax purposes of the payment of state and local income taxes thereon (as affected
by those provisions of the Code which act to reduce the deductibility of
itemized deductions), from the amount obtained by subtracting from 1.00 the rate
of Excise Tax then imposed by Section 4999 of the Code, it being the intention
of the parties hereto that the Executive's net after tax position (after taking
into account any interest or penalties imposed with respect to such taxes) upon
the receipt of the payments provided for by this Agreement be no less
advantageous to the Executive than the net after tax position to the Executive
that would have obtained had Sections 280G and 4999 of the Code not been
applicable to such payment.
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(g) Any notice of termination of this Agreement by the
Employers to the Executive or by the Executive to the Employers shall be given
in accordance with the provisions of paragraph 10 hereof.
(h) The Employers agree to reimburse the Executive for the
reasonable fees and expenses of the Executive's attorneys and for court and
related costs in any proceeding to enforce the provisions of this Agreement in
which the Executive is successful on the merits.
2. Duties of the Executive. (a) Subject to the ultimate control and
discretion of the Boards, the Executive shall serve in the Position and perform
all duties and services commensurate with the Position. Throughout the Term, the
Executive shall perform all duties reasonably assigned or delegated to him under
the By-laws of the Bank and Regent or from time to time by the Boards consistent
with the Position. Except for travel normally incidental and reasonably
necessary to the business of the Bank and Regent and the duties of the Executive
hereunder, the duties of the Executive shall be performed in the greater
Philadelphia, Pennsylvania metropolitan area.
(b) The Executive shall devote substantially all of the
Executive's business time and attention to the performance of the Executive's
duties hereunder and, during the term of his employment hereunder, the Executive
shall not engage in any other business enterprise which requires any significant
amount of the Executive's personal time or attention, unless granted the prior
permission of the Boards. The foregoing provision shall not prevent the Execu-
tive's purchase, ownership or sale of any interest in, or the Executive's
engaging (but not to exceed an average of five hours per week) in, any business
which does not compete with the business of the Bank or Regent, the Executive's
taking actions permitted by paragraph 6(b) hereof or the Executive's involvement
in charitable or community activities, provided, that the time and attention
which the Executive devotes to such business and charitable or community
activities does not materially interfere with the performance of his duties
hereunder and that a material portion of the time devoted by the Executive to
charitable or community activities are devoted to charitable or community
activities within the Bank's market area.
(c) The Executive shall be entitled to 30 days of vacation
leave during each calendar year with full compensation, and to be taken at such
time or times, as the Executive and the Bank shall mutually determine. Unused
days of vacation may not be carried over from year to year or received in cash.
3. Compensation. For all services to be rendered by the Executive
hereunder:
(a) Base Salary. The Employers shall pay the Executive a base
salary (the "Base Salary") at an annual rate of (i) Two Hundred Thousand Dollars
($200,000) during the first 12 months of the Initial Term (the "First Year"),
(ii) Two Hundred and Thirty Thousand Dollars ($230,000) during the second 12
months of the Initial Term (the "Second Year"), (iii) Two Hundred and Sixty-Four
Thousand Five
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Hundred Dollars ($264,500) during the third 12 months of the Initial Term (the
"Third Year") and (iv) during each Renewal Term, not less than Two Hundred and
Sixty-Four Thousand Five Hundred Dollars ($264,500), plus such other
compensation as may, from time to time, be determined by the Employers. Such
salary and other compensation shall be payable in accordance with the Employers'
normal payroll practices as in effect from time to time.
(b) Annual Bonus. The Employers agree that during the Initial
Term, the Executive shall receive an annual bonus (the "Bonus") payable in cash
equal to a percentage of his annual Base Salary upon satisfaction of the
objectives specified in this paragraph 3(b) for the period specified. After the
Initial Term, the Executive shall receive, upon satisfaction of Board-approved
objectives, such Bonuses as may be fixed by the Boards.
(i) For the First Year, the Executive shall be entitled to
receive a Bonus equal to:
(A) 25% of the Executive's annual Base Salary for the
First Year if either (x) (i) the written agreement (the "Regulatory Agreement"),
dated October 10, 1996, between the Bank and the Office of the Comptroller of
the Currency (the "OCC") is terminated by the OCC not later than March 31, 1998
and (ii) the OCC field examiner shall have recommended (the "Recommendation")
that the Bank's CAMEL rating be increased to not less than 2 as of the conclu-
sion of the OCC's examination of the Bank most recently preceding March 31, 1998
or (y) Regent's consolidated return on average stockholders' equity ("Regent's
ROE") for the twelve-month period ending March 31, 1998, equals or exceeds 10%;
or
(B) 50% of the Executive's annual Base Salary for the
First Year if either (x) (i) the Regulatory Agreement is terminated by the OCC
not later than March 31, 1998, (ii) the Recommendation has been made and (iii)
Regent's ROE for the twelve-month period ending March 31, 1998 equals or exceeds
10%, or (y) the Market Value (as defined herein) of the outstanding Common Stock
of Regent plus any outstanding Common Stock of the Bank that is by its terms
exchangeable for Common Stock of Regent as of March 31, 1998 equals or exceeds
$22.5 million, or if the Bank realizes its deferred tax asset of $1.3 million
during the twelve-month period ending March 31, 1998, $23.8 million; or
(C) zero if none of the objectives set forth in the
foregoing clauses (i)(A) or (i)(B) are satisfied.
(ii) For the Second Year, the Executive shall be entitled
to receive a Bonus equal to:
(A) 25% of the Executive's annual Base Salary for the
Second Year if Regent's ROE for the twelve-month period ending March 31, 1999
equals 13%, and if Regent's ROE for the twelve-month period ending March 31,
1999 exceeds 13%, an additional bonus equal to 5% of the Executive's annual Base
Salary for the Second Year, but not to exceed 50% of such annual Base Salary for
the Second
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Year, for every 0.5% increment by which Regent's ROE for the twelve-month period
ending March 31, 1999 exceeds 13%; or
(B) 50% of the Executive's annual Base Salary for the
Second Year if the Market Value of the outstanding Common Stock of Regent plus
the outstanding Common Stock of the Bank that by its terms is exchangeable for
Common Stock of Regent as of March 31, 1999 equals or exceeds $28.5 million, or
if the Bank realized its deferred tax asset of $1.3 million during the
twelve-month period ending March 31, 1998, $29.8 million; or
(C) zero if none of the objectives set forth in the
foregoing clauses (ii)(A) or (ii)(B) are satisfied.
(iii) For the Third Year, the Executive shall be entitled
to receive a Bonus equal to:
(A) 25% of the Executive's annual Base Salary for the
Third Year if Regent's ROE for the twelve-month period ending March 31, 2000 is
equal to 13%, and if Regent's ROE for the twelve-month period ending March 31,
2000 exceeds 13%, an additional bonus of 5% of the Executive's annual Base
Salary for the Third Year, but not to exceed 50% of such annual Base Salary, for
every 0.5% increment by which Regent's ROE for the twelve-month period ending
March 31, 2000 exceeds 13%; or
(B) 50% of the Executive's annual Base Salary for the
Third Year if the Market Value of the outstanding Common Stock of Regent plus
the outstanding Common Stock of the Bank that by its terms is exchangeable for
Common Stock of Regent as of March 31, 2000 equals or exceeds $35 million, or if
the Bank realized its deferred tax asset of $1.3 million during the twelve-month
period ending March 31, 1998, $36.3 million; or
(C) zero if none of the objectives set forth in the
foregoing clauses (iii)(A) or (iii)(B) are satisfied.
(iv) In the event this Agreement is terminated for any
reason during the First Year on any date other than the last day of the First
Year, (A) the Executive's eligibility for a Bonus pursuant to paragraph 3(b)(i)
hereof shall be determined by (x) substituting the date of termination for March
31, 1998 each time that such date appears in paragraph 3(b)(i) hereof and (y)
determining the status of the Regulatory Agreement and the Recommendation and
the Market Value as of the date of such termination; and (B) if the Executive is
eligible for such Bonus, the amount of such Bonus shall be the amount determined
pursuant to paragraph 3(b)(i) hereof multiplied by a fraction, the numerator of
which shall be the number of days from April 1, 1997 through the date of such
termination and the denominator of which shall be 365.
(v) In the event this Agreement is terminated for any
reason during the Second Year on any date other than the last day of the Second
Year, (A) the Executive's eligibility for a Bonus pursuant to paragraph 3(b)(ii)
hereof shall be determined by (x) substituting
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the phrase "Regent's ROE, calculated on an annualized basis, for the period
commencing on April 1, 1998 and ending on the date of termination of the
Executive's employment hereunder" for the phrase "Regent's ROE for the
twelve-month period ending March 31, 1999" each time that such phrase appears in
paragraph 3(b)(ii) hereof and (y) analyzing the Market Value as of the date of
such termination; and (B) if the Executive is eligible for such Bonus, the
amount of such Bonus shall be the amount determined pursuant to paragraph
3(b)(ii) hereof multiplied by a fraction, the numerator of which shall be the
number of days from April 1, 1998 through the date of such termination and the
denominator of which shall be 365.
(vi) In the event that this Agreement is terminated for
any reason during the Third Year on any date other than the last day of the
Third Year, then (A) the Executive's eligibility for a Bonus pursuant to
paragraph 3(b)(iii) hereof shall be determined by (x) substituting the phrase
"Regent's ROE, calculated on an annualized basis, for the period commencing on
April 1, 1999 and ending on the date of termination of the Executive's
employment hereunder" for the phrase "Regent's ROE for the twelve-month period
ending March 31, 2000" each time that such phrase appears in paragraph 3(b)(iii)
hereof and (y) analyzing the Market Value as of the date of such termination;
and (B) if the Executive is eligible for such Bonus, the amount of such Bonus
shall be the amount determined pursuant to paragraph 3(b)(iii) hereof multiplied
by a fraction, the numerator of which shall be the number of days from April 1,
1999 through the date of such termination and the denominator of which shall be
365.
(vii) The "Market Value" of one share of Common Stock of
Regent as of any date shall mean the average of the closing bid price of one
share of Common Stock of Regent for the 20 consecutive business days ending no
more than five business days before the date in question, as adjusted for any
stock dividends, split, combination or reclassification that took effect during
such 20-business day period, or, in case no sales took place on any day in
question, the average of the last bid and asked prices on such day, in either
case on the principal national securities exchange on which the Common Stock of
Regent is listed or admitted to trading, which shall include the Nasdaq National
Market System ("Nasdaq NMS"), or if the Common Stock of Regent is not listed or
admitted for trading on any such exchange or Nasdaq NMS on any day in question,
then such price as shall be equal to the last bid price quoted on the National
Association of Securities Dealers Automated Quotations System ("Nasdaq") on
such day, or, if, on any day in question, the Common Stock of Regent shall not
be quoted on Nasdaq, then such price shall be equal to the last reported bid
price on such day as reported by the National Quotation Bureau, Inc. ("NQB") or
any similar reputable quotation and reporting service if such quotation is not
reported by NQB; provided, however, that if the Common Stock of Regent is not
traded in such manner that the quotations referred to in this clause (vii) are
available for the period required hereunder, the "Market Value" shall mean the
product of the book value per share of Common Stock of Regent as of such date
multiplied by 1.5%. Any computation of Market Value for purposes of this
paragraph 3(b) shall be determined on the assumption that all shares of Common
Stock of the Bank issued in the
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Private Placement (as defined herein) shall have been exchanged for Common Stock
of Regent.
(viii) Any Bonus payable to the Executive pursuant to
paragraphs 3(b)(i), 3(b)(ii) or 3(b)(iii) hereof shall be paid by the Employers
to the Executive within 30 days following the last day of the First Year, the
Second Year or the Third Year, as the case may be. Any Bonus payable to the
Executive pursuant to paragraphs 3(b)(iv), 3(b)(v) or 3(b)(vi) hereof shall be
paid by the Employers to the Executive within 30 days following the date of
termination of the Executive's employment hereunder.
(c) Additional Bonus. In additional to the base salary
stated in paragraph 3(a) hereof, upon the Effective Date, the Employers shall
pay to the Executive additional cash compensation in the amount of $50,000 (the
"Additional Compensation"). If the Executive voluntarily terminates his
employment with the Employers during the first year of the Initial Term
otherwise than because of Good Reason, a Change in Control or the Executive's
death or Permanent Disability, the Executive or his estate, as the case may be,
shall pay to the Employers not later than 30 days after the date of such
termination, an amount equal to the product of (i) the amount of the Additional
Compensation, as reduced by all federal, state and local income and employment
taxes paid or payable on the Additional Compensation by or on behalf of the
Executive and (ii) a fraction, the numerator of which is the number of days
between the day after such termination and the date which is one year after the
date hereof, and the denominator of which is 365. If the Employers terminate the
Executive's employment hereunder for Cause during the First Year, not later than
30 days after the date of such termination, the Executive shall pay to the
Employers the full amount of such Additional Compensation.
(d) Stock Options. Upon the later of the Effective
Date or the date on which the Bank shall have received not less than $6,000,000
in gross proceeds from a private placement (the "Private Placement") of Common
Stock of the Bank for which Keefe, Bruyette & Woods, Inc. shall have acted as
the Bank's placement agent, Regent shall grant the Executive options, which
shall be non-qualified stock options, to purchase an aggregate of 150,000 shares
of Regent's Common Stock exercisable at the closing bid price of one share of
Regent Common Stock as reported by Nasdaq on the date of such grant. Such
options shall have the following principal terms:
(i) Such options shall be exercisable for a period of five
years from the date hereof in installments as follows:
(a) 50,000 shares on or after the first anniversary
of the Effective Date;
(b) 50,000 shares on or after the second anniversary
of the Effective Date; and
(c) 50,000 shares on or after the tenth business day
preceding the third anniversary of the Effective Date;
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(ii) the options shall become immediately exercisable and
remain exercisable for the remainder of their term in the event of (A) a Change
in Control, (B) a termination of this Agreement by the Employers without Cause
or (C) a termination of this Agreement by the Executive for Good Reason;
(iii) the options shall terminate immediately in the event
of a termination of this Agreement by the Employers for Cause or (B) a
termination of this Agreement by the Executive without Good Reason;
(iv) the options shall remain exercisable until the
earlier of the expiration of their term or three years after the termination of
this Agreement by the Employers because of the Executive's death or Permanent
Disability and the options shall become immediately exercisable if such
termination occurs during the 270 days preceding consummation of a Change in
Control;
(v) the options shall be transferable by gift to members
of the Executive's family or to entities controlled by such family members or by
will or by the laws of descent and distribution;
(vi) the options shall be subject to customary anti-
dilution adjustments as to the exercise price and the number of shares
purchasable in the event Regent issues its Common Stock at a price less than the
then prevailing market value thereof, as determined by Keefe, Bruyette & Woods,
Inc.;
(vii) if Regent adopts an option plan for its employees
that provides for terms more favorable to the optionees thereunder than the term
of the options to be granted to the Executive, then, in such event, the term of
the options to be granted to the Executive shall be amended so that the terms
thereof incorporate such more favorable terms of such option plan; and
(viii) promptly following the grant of the options
contemplated hereby to the Executive, Regent shall file a Form S-8 registration
statement with respect thereto with the Securities and Exchange Commission and
shall use its best efforts to cause such registration statement to remain
effective for as long as any of the options granted to the Executive remain
exercisable.
(e) Housing Allowance. In connection with the
Executive's establishment of a residence in the Philadelphia, Pennsylvania area,
the Employers agree to reimburse the Executive up to $4,000 per month for
housing expenses during the Term.
(f) Other Benefits. From and after the date hereof and
throughout the Term:
(i) the Employers shall provide the Executive with an
automobile at the Employers' sole cost and expense. Such automobile shall be
owned or leased by Regent or the Bank and shall be a Mercedes-Benz E420 or a
substantially equivalent automobile acceptable to the Executive and shall be
replaced every two years or every
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60,000 miles, whichever first occurs. The Employers shall bear all gas,
insurance, repairs, maintenance and other operating expenses for the automobile.
To the extent any of such benefits are taxable to the Executive, the Executive
shall be solely responsible for such taxes.
(ii) The Employers will pay the annual dues for the
Executive's membership in tennis and fitness clubs up to an annual maximum of
$10,000. In addition, the Employers shall pay any reasonable club usage charges
related to the Employers' business upon submission by the Executive of
appropriate verifying information. The Employers shall also pay any bond,
admission or initiation fee which may be required for membership, up to a
maximum of $5,000, provided however that upon refund to the Executive of all or
any portion of such bond, admission or initiation fee, the refunded amount shall
be promptly remitted by the Executive to the Employers to the extent such bond
or fee had been paid by the Employers. The Employers shall also provide the
Executive with access to luncheon and dinner clubs reasonably designated by the
Executive in the Philadelphia, Pennsylvania area for the purpose of enabling the
Executive to entertain customers of the Employers, and the Employers shall pay
any reasonable club usage charges related to the Employers' business upon
submission by the Executive of appropriate verifying information.
(iii) The compensation provided for in this paragraph 3
shall be in addition to such rights as the Executive may have, during the
Executive's employment hereunder or thereafter, to participate in and receive
benefits from or under any benefit plans the Employers may in their discretion
establish for their employees or executives.
4. Expenses. The Employers shall promptly reimburse the Executive for
(a) all reasonable expenses paid or incurred by the Executive in connection with
the performance of the Executive's duties and responsibilities hereunder, upon
presentation of expense vouchers or other appropriate documentation therefor,
(b) all reasonable expenses incurred by the Executive since February 1, 1997 in
establishing a residence in the Philadelphia, Pennsylvania area, including,
without limitation, travel, moving and relocation expenses, (c) professional
fees and disbursements, up to a maximum of $7,500, incurred by the Executive in
connection with the preparation, negotiation and execution of this Agreement,
(d) all reasonable professional expenses, such as licenses and dues and
professional educational expenses, paid or incurred by the Executive during the
Term and (e) the costs of a personal computer, fax machine and home security
system for the Executive's residence in the Philadelphia, Pennsylvania area.
5. Indemnification. The Employers shall indemnify the Executive, to
the fullest extent permitted by law, for any and all liabilities to which the
Executive or his Estate may be subject as a result of, in connection with or
arising out of his service as an employee, an officer or a director of the
Employers hereunder or his service as an employee, officer or director of
another enterprise at the request of Regent or the Bank, as well as the costs
and expenses (including
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attorneys' fees) of any legal action brought or threatened to be brought against
him or the Employers as a result of, in connection with or arising out of such
employment. The Employers will advance professional fees and disbursements to
the Executive in connection with any such legal action, provided the Executive
delivers to the Employers his undertaking to repay any expenses so advanced in
the event it is ultimately determined that the Executive is not entitled to
indemnification against such expenses. Expenses reasonably incurred by the
Executive in successfully establishing the right to indemnification or
advancement of expenses, in whole or in part, pursuant to this paragraph 5,
shall also be indemnified by the Employers. The Executive shall be entitled to
the full protection of any insurance policies which the Employers may elect to
maintain generally for the benefit of their respective directors and officers.
The rights granted under this paragraph 5 shall survive the termination of this
Agreement.
6. Confidential Information. (a) The Executive understands that in the
course of his employment by the Employers, the Executive will receive
confidential information concerning the business of the Employers, and which the
Employers desire to protect. The Executive agrees that he will not at any time
during or after the period of his employment by the Employers reveal to anyone
outside the Bank or Regent, or use for his own benefit, any such information
that has been designated as confidential by the Employers or understood by the
Executive to be confidential, without specific written authorization by the
Employers. Upon termination of this Agreement at the request of the Employers,
the Executive shall promptly deliver to the Employers any and all written
materials, records and documents, including all copies thereof, made by the
Executive or coming into his possession during the Term and retained by the
Executive containing or concerning confidential information of the Employers and
all other written materials furnished to and retained by the Executive by the
Employers for his use during the Term, including all copies thereof, whether of
a confidential nature or otherwise.
(b) During the Executive's employment with the Employers, the
Executive shall not be engaged as an officer, director or employee of, or in
any way be associated in a management or ownership capacity with, any
corporation or other entity that has its corporate headquarters within a 50-mile
radius of Philadelphia, Pennsylvania and conducts a business in competition with
the business of the Bank or Regent during the Term, provided, however, that the
Executive may own not more than 4.99% of the outstanding securities, or
equivalent equity interests, of any class of any corporation or other entity
which is in competition with the business of the Bank or Regent, which
securities are listed on a national securities exchange or traded in the
over-the-counter market.
7. Representation and Warranty of the Executive. The Executive
represents and warrants that he is not under any obligation, contractual or
otherwise, to any other firm or corporation, which would prevent his entry into
the employ of the Employers or his performance of the terms of this Agreement.
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8. Entire Agreement; Amendment. This Agreement contains the entire
agreement between the Employers and the Executive with respect to the subject
matter hereof, and may not be amended, waived, changed, modified or discharged
except by an instrument in writing executed by the parties hereto.
9. Assignability. The services of the Executive hereunder are personal
in nature, and neither this Agreement nor the rights or obligations of the
Employers hereunder may be assigned by the Employers, whether by operation of
law or otherwise, without the Executive's prior written consent. This Agreement
shall be binding upon, and inure to the benefit of, the Employers and their
permitted successors and assigns hereunder. This Agreement shall not be
assignable by the Executive, but shall inure to the benefit of the Executive's
heirs, executors, administrators and legal representatives.
10. Notice. Any notice which may be given hereunder shall be in writing
and be deemed given when hand delivered and acknowledged or, if mailed, one day
after mailing by registered or certified mail, return receipt requested, to
either party hereto at their respective addresses stated above, or at such other
address as either party may by similar notice designate, provided that a
photocopy of such notice is dispatched at the same time as the notice is mailed.
Copies of such notices also shall be sent to the Employers' counsel, attention:
Frederick W. Dreher, Esq., Duane, Morris & Heckscher, 4200 One Liberty Place,
Philadelphia, Pennsylvania 19103-7396 (telecopier no.: 215-979-1213) and to the
Executive's counsel, attention: Peter H. Ehrenberg, Esq., Lowenstein, Sandler,
Kohl, Fisher & Boylan, 65 Livingston Avenue, Roseland, NJ 07068-1791 (telecopier
no.: 201-992-5820), as the case may be.
11. Specific Performance. The parties agree that irreparable damage
would occur in the event that any of the provisions of paragraph 6 hereof were
not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of paragraph 6 hereof and to
enforce specifically the terms and provisions of paragraph 6 hereof, this being
in addition to any other remedy to which any party is entitled at law or in
equity.
12. No Third Party Beneficiaries. Nothing in this Agreement, express or
implied, is intended to confer upon any person or entity other than the parties
(and the Executive's heirs, executors, administrators and legal representatives
and the permitted transferees of the options to be granted to the Executive) any
rights or remedies of any nature under or by reason of this Agreement.
13. Successor Liability. The Employers shall require any subsequent
successor, whether direct or indirect, by purchase, merger, consolidation or
otherwise, to all or substantially all of the business and/or assets of the
Employers to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Employers would be required to perform it
if no such succession had taken place.
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14. Mitigation. The Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise, nor shall the amount of any payment or benefit provided for in
this Agreement be reduced by any compensation earned by the Executive as the
result of employment by another employer or by retirement benefits payable after
the termination of this Agreement, except that the Employers shall not be
required to provide the Executive and his eligible dependents with medical
insurance coverage as long as the Executive and his eligible dependents are
receiving comparable medical insurance coverage from another employer.
15. Arbitration. Any dispute which may arise between the parties hereto
shall be submitted to binding arbitration in accordance with the Rules of the
American Arbitration Association; provided that any such dispute shall first be
submitted to the Boards in an effort to resolve such dispute without resort to
arbitration, and provided, further, that the Boards shall have a period of 60
days within which to respond to Executive's submitted dispute, and if the Boards
fail to respond within said time, or the Executive's dispute is not resolved,
the matter may then be submitted for arbitration.
16. Waiver of Breach. The failure at any time to enforce or exercise
any right under any of the provisions of this Agreement or to require at any
time performance by the other parties of any of the provisions hereof shall in
no way be construed to be a waiver of such provisions or to affect either the
validity of this Agreement or any part hereof, or the right of any party
hereafter to enforce or exercise its rights under each and every provision in
accordance with the terms of this Agreement.
17. No Attachment. Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to
execution, attachment, levy or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect; provided, however, that nothing in this
paragraph 17 shall preclude the assumption of such rights by executors,
administrators or other legal representatives of the Executive or his estate and
their assigning any rights hereunder to the person or persons entitled hereto.
18. Severability. The invalidity or unenforceability of any term,
phrase, clause, paragraph, restriction, covenant, agreement or other provision
hereof shall in no way affect the validity or enforceability of any other
provision, or any part thereof, but this Agreement shall be construed as if such
invalid or unenforceable term, phrase, clause, paragraph, restriction, covenant,
agreement or other provision had never been contained herein unless the deletion
of such term, phrase, clause, paragraph, restriction, covenant, agreement or
other provision would result in such a material change as to cause the covenants
and agreements contained herein to be unreasonable or would materially and
adversely frustrate the objectives of the parties as expressed in this
Agreement.
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19. Survival of Benefits. Any provision of this Agreement which
provides a benefit to the Executive and which by the express terms hereof does
not terminate upon the expiration of the Term shall survive the expiration of
the Term and shall remain binding upon the Employers until such time as such
benefits are paid in full to the Executive or his Estate.
20. Construction. This Agreement shall be governed by and construed in
accordance with the internal laws of the Commonwealth of Pennsylvania, without
giving effect to principles of conflict of laws. All headings in this Agreement
have been inserted solely for convenience of reference only, are not to be
considered a part of this Agreement and shall not affect the interpretation of
any of the provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
REGENT BANCSHARES CORP.
By: /s/ David W. Ring
---------------------------
David W. Ring,
Chairman of the Board
REGENT NATIONAL BANK
By: /s/ John J. Lyons
---------------------------
John J. Lyons,
President
/s/ Robert B. Goldstein
---------------------------
Robert B. Goldstein
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